Retail Heads Down; For Sale Signs Rise

What These, and Other Numbers, Say About the Future of the Vineyard Is Subject of MVC Forum


The Island economy is changing dramatically, a panel of business leaders told a forum of the Martha's Vineyard Commission last week, and in a discussion that was both frank and wide-ranging, they shared numbers to back up their claims.

* Seasonal retail business is down. "If I had to venture a guess, come Sept. 30, I would guess that the customer count, coming through the door, is going to be down approximately 15 per cent," said Steve Bernier, owner of the Cronig's supermarkets in West Tisbury and Vineyard Haven. "Earnings may be down in the range of 30 to maybe 40 per cent, because of the tip-of-the-iceberg concept - the fixed expenses don't change. So when the volume is off, it isn't proportionate to the bottom line.

"Can we do enough in the off-season to compensate for this? I don't think so."

* Real estate inventory is suddenly up, after years of depletion under buying pressure from wealthy purchasers of second homes. "I'm not sure what's going on right now," said Judy Federowicz, principal broker at Landmarks Real Estate in Vineyard Haven. After falling to a low of 230 properties on the market Islandwide in the last quarter of 1999, inventory has jumped sharply this spring and summer, she said. "Right now there are 400 properties on the market," Mrs. Federowicz said. "Two hundred and one of those are priced over $1 million."

Until recently, Mrs. Federowicz said, a weekly tour of homes new to the market typically involved visiting three or four houses. Now, she said, homes are coming on the market at the rate of 15 and 16 per week.

* The tourist trade is weak across the board this summer, said Renee Balter, director of the Oak Bluffs Association. "The inns are suffering; the restaurants are not doing the business they usually do; retail business is down - it's just a very, very slow summer."

And Mrs. Balter said she believes she knows the reason why: "We have priced ourselves out of the market. People who were once willing to make the extra effort to get here are simply not coming."

* The seasonal labor shortage is serious, it's getting worse, and Island businesses are tremendously grateful for the contributions of the Brazilian working community. "There's plenty of work here," said Norman Rankow, an Edgartown contractor and president of the Martha's Vineyard Chamber of Commerce, which cosponsored Wednesday's forum. "We need more tradesmen - we have them coming over every day because we can't find enough qualified people on the Island. What I call our international community, they have the work ethic that we don't have today."

* Patterns of summer visitation to the Island have changed profoundly: The visits are shorter, and so is the time window for planning them. And more people each year are planning their whole vacation on the Internet.

Wendy Northcross, CEO of the Cape Cod Chamber of Commerce, the evening's keynote speaker, said her office used to get tubs full of mail every day from people asking about vacation places. Now the mail is just a trickle. "Now people are going online, and most people are doing it on Thursdays between 11 and 2. It's Thursday afternoon at the office - let's go online and see what special deals are on the Vineyard this weekend."

Continued Ms. Northcross: "Consumers become very educated and very empowered. The Internet has empowered them to go online and get a great deal. Since 9/11, everyone wants their vacation to be at sale prices, and they know they can get it."

The growing syndrome of the last-minute vacationer is every hotel owner's nightmare, but it's not going away, Ms. Northcross warned. "The phenomenon now is the five to ten-day planning time frame. So when I get a call from the Boston Globe in February asking me, how's the season looking, I say I don't know - call me in September and I'll tell you how it went."

Mr. Bernier said he's seen evidence of the trend toward shorter vacations in the buying habits of his supermarket customers. "They are here for a shorter stay," he said. "The Steamship Authority figures give us a head count, but they don't give us a duration count. But we can see that the people coming to the Island are a little different, and each year it changes a little bit more."

Put all these changes together, and you have the makings of a seismic shift that may rival, in its magnitude, the Island's transition to tourism from a fishing and farming economy some fourscore years ago.

"I think there's been more change in the last five years than in the last 30 years put together," said Mr. Bernier. "We're in a different place now, and we've got to shift gears and start dealing with it."

Ms. Northcross said that as burgeoning retirement communities, the Cape and Islands are test-tube pioneers for the graying of America. "The biggest problem," she said, "is that when people come to retire here, they need people to wait on them, people to serve them, to be physicians and attorneys and stockbrokers."

‘Fundamental' Experiences

Panelist Jim Athearn, proprietor of Morning Glory Farm, vice president of the Martha's Vineyard Agricultural Society and chairman of the Martha's Vineyard Commission, spoke up for the importance of the Island's farming and fishing culture, even if they may represent a tiny slice of the economic pie.

"I believe that the presence of agriculture is hugely important to the entire economy of the Vineyard," he said, "as it forms the natural space for the scenic and open space values that attract people here. Admittedly, many people are here for the coastal resources as well, but you don't want to be going through an asphalt parking lot on the way to the beach, either."

Mr. Athearn continued, "Beyond the superficial qualities of the scene from the road, I believe that the deeper qualities of character and culture that agriculture contributes to the Vineyard are just as important."

He noted that Ms. Northcross had cited surveys which found that tourists want real, authentic places to visit, including villages and rural areas. "It's not enough to look good," he said. "The place you're visiting, you want to know that there's something substantive, something of value going on there. In Menemsha you see the fishing equipment up on the beach, the rusty dredges and trawls and lobster pots, and that feels good - somebody is working hard, wresting food from the ocean with that equipment. It's real work, not something that's put on as a show for the tourists. Similarly with agriculture: These are things that make the community feel like a real place."

Interest in farming is cyclical, Mr. Athearn said, and right now it's hard to find people willing to take on the hardship of a career in agriculture. "But as long as the community hangs onto the resources," he said, "when that mood comes around again and the right human resources present themselves, agriculture can continue, as I think it should. Food will never go out of style, and farming and fishing are always going to be fundamental to the Island experience."

Ms. Northcross agreed: "It's our unique beauty and marine environment that needs to be protected - that's what brings people here, that's what keeps people here, and if we spoil that, we will harm our ability to live here and make a living."

Affordable Housing and Rents

The issue of affordable housing came up repeatedly during Wednesday's forum, but Ms. Northcross started the meeting by putting it in context. In fact, she said, affordable housing is the one problem the Cape and Islands have which is almost universal across Massachusetts.

And Linda Sibley, a member of the commission and proprietor of the Radio Shack store in Vineyard Haven, broadened the problem to include the cost of real estate in general, pointedly including commercial rents.

"I run a retail business that's franchised," Mrs. Sibley said, "and every year I meet with people who run similar businesses all over the United States. And I pay twice as much per square foot for rent than the most expensive other franchise I can find - and three or four times as much as many other people. So it's a huge factor."

Mrs. Federowicz said she could remember when, in the 1980s, the average price of a house on the Vineyard crossed the $200,000 mark. "Today, on the Island," she said, "the average cost of a house is $999,121. The median is $583,000. It's one of those startling figures that's really hard to understand.

"Young families are trying so hard to find a way to stay here, and they can't. These are physical therapists and nurses, they're plumbers and teachers, they're people that we all need to survive on the Island. If you stand at the Steamship Authority at 7:15 in the morning and see who gets off the boat, it's pretty amazing."

Concluded Mrs. Federowicz, "In real estate, do I sell houses - yes. Do I sell land - yes. But more than that, I deal with people and their lives and real issues. And it's heartbreaking sometimes to deal with these issues.

"With all that is being done with affordable housing, the focus on it - the Dukes County Housing Authority, Houses on the Move - truly there is an awakening. We realize we have this crisis, and I think we are taking positive action for it."

Needed: Information

One theme that ran throughout the two-hour forum, in discussions on every topic from patterns in real estate sales to trends in tourism, was the need for better information.

* Admitted Ms. Northcross, in her discussion of segments of the tourist market: "The daytripper is somebody we still don't have a real good handle on."

* Agreed Mark London, director of the Martha's Vineyard Commission: "We need to understand more. I hear different people give their impressions of how important different sectors of the economy are. They say, daytrippers: ‘We could do without daytrippers. All they do is clog the sidewalks; they come across to buy a T-shirt; they leave again. Who needs them?' Other people would say that their impact, in fact, is limited. They don't bring their cars; they do spend a certain amount of money. But we don't really know."

Mr. London said the MVC did a survey of ferry passengers last summer, and that results will be ready in a few weeks. The commission also surveyed Island businesses jointly with the chamber of commerce, and is planning another survey of Island residents this summer.

The Question of Limits

At one point, the panelists and audience briefly entertained one of the most compelling questions raised by the current pattern of changes in the Island economy: Is it possible that after half a century of unprecedented growth, the Vineyard is beginning to hit its natural limits?

Ms. Northcross said, "For some reason, it's in our lexicon that it's only good if it's more. When do we actually analyze what's sustainable?

"The carrying capacity of the Cape in theory is one thing, but we think that in reality we've already exceeded that. Transfer of development rights, for example, is a whole long conversation Mark [London] and I had on the ferry coming over this afternoon. There are some theories that work on paper but in reality, when you have property rights that are so strong, and you have people who have a love for a place and want to stay there, there are trade-offs. There are things people on Cape Cod will do to live there that they won't do in other communities. Just think how many people here have two, three, four sources of income because that's what it takes to live here."

Judy Crawford, the program's moderator, agreed: "There is a critical mass - a point where we can grow and grow, and build and build, and keep getting more people. But at some point we're going to hit that critical mass where we start losing our whole identity - we start losing what it is that is Vineyard, what it is that people come here for, and move here for. So looking for that critical point is important, and I don't think it's that easy to identify."

From the audience, Joan Ames of West Tisbury took up the theme, citing a 1987 Louis Harris poll commissioned by the Vineyard Gazette. "The majority of people in 1987 wanted a one-year moratorium on all building. That's how strongly they felt. They also strongly trusted the commission, and a majority were willing to organize Vineyard towns under one government. That's how desperate people were in 1987."

Looking Ahead

As the forum closed, Mr. London hazarded some thoughts on what might lie ahead for the Vineyard economy.

"I do think we have to think about longer-term, bigger changes," Mr. London said. "It isn't just, this year we have fewer tourists than last year. We have to ask ourselves where are we going to be? Where we were in the 19th century was very different from in the 20th century, and the 21st century might be very, very different. Rather than chasing after the small changes, a few more tourists or a bit more promotion to get them, maybe we have to be seeing what those big changes are.

"We happen to have a certain number of hotels, motels and bed and breakfasts on Martha's Vineyard. It's perhaps, to a certain extent, a reflection of the market, but it's probably also a reflection of all kinds of other historical circumstances. Is it the right number? What would happen if we had only half as many tourists in a generation from now? Would we have a lot more retirees? Would we have more year-round people because technology lets people be footloose and fancy-free, and they can locate where the quality of the environment is higher? Maybe we won't need as many people to work in the T-shirt shops if the economy evolved that way."

Ms. Northcross had a quick response to Mr. London's reflections, reminding him that tourism as an industry won't be going away any time soon:

"I think as long as you have such a beautiful place, and we still have freedom to travel in this country, people will want to come here just to see it. You will always have that dynamic, and Cape Cod will be the same way. I think you have an opportunity to preserve your absolutely stunning beauty and village qualities by finding and supporting some of these entrepreneurial and niche businesses that [people] can create in their own homes, export to the globe, hire or subcontract a few other people, and pay the same rate as the guy who's coming over in his Lexus and staying for a week."