LEWISTON — As the president and chief executive officer of the Lewiston-Auburn Metro Chamber of Commerce, Shanna Cox sees and hears a lot in the business community. She has access to investors, city officials, developers, corporations and entrepreneurs from just about every category of business and government.

The Sun Journal asked her to share her views on the Lewiston and Auburn business climate in the past year and what’s to come in 2025 and beyond.

Cox prefers to stay away from a broad-brush approach of ‘was it a good or bad year,’ saying the local economy is more nuanced than that. What she did say is the community is positioning itself for big changes in the near future, but they will not happen overnight.

MANUFACTURING, HOSPITALITY AND SMALL BUSINESS

Manufacturing and light industry continues a positive trajectory and Cox believes that will continue. “Particularly with the incoming new president and some of the policies that are being proposed — I think there’s a lot of continued benefit to our manufacturing sector.”

Elmet Technologies, Auburn Manufacturing, Poly Labs and Panolam Surface Systems have all been in the spotlight — Panolam among the four companies recognized statewide with a Governor’s Award for Business Excellence last month. Elmet was among the four companies recognized by Gov. Janet Mills in 2023.

It was not a great year for small business, but that’s reflective of a national trend.

“I think small businesses had a hard year locally in 2024,” Cox said. Yes, inflation was a factor here and elsewhere, but there was something else that happened. “Really what we saw and what most businesses talked about in 2024 was that there’s finally a stabilization of the labor market.”

Labor costs can account for as much as 70% of total business costs, according to the U.S. Bureau of Labor Statistics. So, any stabilization means an opportunity for businesses to keep costs down. The hospitality industry, however, continues to struggle with staffing shortages, another reason Cox said to stay away from generalizations, or broad-brush strokes.

“That’s a real problem for the industry but that’s not a labor market problem — that is that particular industry.”

One factor she mentioned is the Oct. 25, 2023, mass shootings at a bowling alley and a bar and grill at a time when the hospitality industry here was just starting to stabilize in the wake of the COVID-19 pandemic.

“These two shootings happened within hospitality-based businesses, family hospitality-based businesses and it rippled,” she said.

The effect hit Lewiston and Auburn very hard. “I mean we saw businesses in hospitality down 60% year over year, six months out from Oct. 25,” she explained.

Today, that number is down to around 10% below where it was two years ago. “It is two years later with six months of complete loss of business, loss of reserves, loss of morale, loss of staff. So, it’s not ‘oh, we can sustain being down 9%,’ it’s can we sustain being down 9% after two years of feeling this pain plus the pandemic.”

Inflation piled on further, Cox said, because hospitality has disproportionately been affected by the high cost of food in a business that traditionally has high overhead and very thin profit margins.

The closure of Side By Each Brewing in Auburn last week is emblematic of a larger, national trend acknowledged by the Brewers Association. For the first time, there were more new brewery closings than openings in 2024. Changing consumer habits, competition from alternative drinks, nonalcoholic offerings and spirits are among the reasons for the decline.

Cox said she feared there will likely be more small business casualties in the year ahead. Just two days after her interview, bon Vivant restaurant on Lisbon Street announced online that it permanently closed after just 17 months in business.

Among the bright spots, Cox pointed out that Rancourt & Co.’s handcrafted shoes went to the Olympics again made especially for Team USA. While specialty manufacturers like Rancourt and Quoddy cater to a high-end market, they too have issues with staffing and modernization.

Rancourt, like other manufacturers in the Lewiston and Auburn area, is looking to New Mainers to fill open positions. The decision by Panolam to hire New Mainers was a factor in receiving this year’s Heritage Industry Award, according to an insider.

“We have a great blue-collar sector,” Cox said, “and that has only been improved by some of the changes in our demographics when you look at some of the folks that are really participating in the manufacturing workforce. That workforce has benefited from a diversified population.”

The CEO points out that Zion Childcare became the first such facility in the area to offer third-shift child care in 2024, speaking to the synergy of increased manufacturing.

RETAIL SECTOR LARGELY FOLLOWED NATIONAL TRENDS

The closure of two Walgreens in the past year or so had less to do with the local economy than it did the pharmacy retailer’s national woes, looking to close 1,200 stores by 2027.

Auburn-based Agren Appliance opened a nearly $10 million distribution center in 2024 at Exit 75 on the Maine Turnpike, cementing its footprint in the Lewiston and Auburn area, consolidating warehousing and operations and expanding its ability to serve its customers.

Retail is still struggling to find its way in a post-pandemic world, which brought online shopping, delivery and curbside pickup to the forefront. “There’s this convenience of having everything delivered to our home and a recognition that that’s absolutely impacting kind of traditional Main Street-style small business,” Cox offered.

But it’s not a temporary change, she said.

“During the pandemic people learned how to prepare their own food, make their own bread, knit their own products … appreciated staying at home … spending time with their loved ones. That behavior change — I don’t know when we’ll see it shift back … that is not going be a short cycle of behavior change.”

HEALTH CARE AND HOUSING

Consolidation continued in 2024 at St. Mary’s Regional Medical Center, which ended its maternity and women’s health services in 2022, decided to close its oncology and intensive care units in 2024. Cox says that’s not necessarily a bad thing.

“You have two health care systems that have, you know, competed and operated really independently for decades,” Cox said. Now they are collaborating or least engaging each other in their strategic planning and defining what their delivery of services will be, which for St. Mary’s is a larger emphasis on behavioral health, she said.

“You’re seeing policy changes that show implications for investments in behavioral health that makes what I think is a wise business choice for St. Mary’s,” Cox said. “There’s an intersection of not just health care but our economy where I think that there’s going to be some really decisive moments in the next year or two in health care. That’s really important.”

St. Mary’s and Central Maine Medical Center are big employers and what happens in health care can affect the ability to attract new and young employees to the area as well as retirees, who are very focused on the availability of good health care. It’s also one of the reasons the community has been cited as one of the best communities to retire, according to Cox.

The other part of that equation is housing, which like most places remains tight. But there is light at the end of the tunnel, with up to 2,000 units opening in Lewiston and Auburn by the end of 2025 and many more in the pipeline.

The Picker House Lofts at 2 Cedar St. in Lewiston is the tip of the iceberg in the redevelopment of the former Continental Mill complex; 72 units for the former and 377 for the latter.

A 55-plus community of 208 units is approved between Farwell and Charles Streets in Lewiston.

There are 102 units at Mt. Auburn Apartments set for occupancy in 2025, despite a fire Sept. 8 that destroyed one of two buildings.

Smaller projects include 18 units at 186 Main St. and 20 units at 405 Center St., both in Auburn.

There are projects in both cities big and small, single-family homes and condominiums going up and more in the permitting stage.

Mortgage rates remain high as does the cost of financing for developers.

“What we really need to see is lending costs come down and investment into the creation of new housing, particularly for some of our larger economic roles in this region,” Cox said. “We’re one of the few regions in Maine that is actively growing our population.”

What people need to understand is that fixing a decadeslong issue simply will not happen overnight, she said. “It takes time from the time somebody says, ‘we’re going to start this development’ to people moving in. It can be three-and-a-half, four years.”

Cox said she is a firm believer in a blend of affordable housing — not just subsidized — where a second-year teacher and a first-year firefighter can pay a third of their salary to their housing and still have a place to live and start a family.

Changes are coming to the commercial real estate market here as well, specifically office space and retail. Cox said independent landlords realize long-term leases are coming up for renewal and many will opt for less space or simply not renew.

“I think one of the things to be on the lookout for is when we’re seeing a lower price of commercial office per square foot, which I suspect that we will see, that’s been a long-term trend (with) post pandemic workforce changes. Is that space going to get changed or converted to housing? Is it going to get converted to light industrial?”

LOOKING AHEAD

New housing and the people who fill it will become the driving force for change in Lewiston and Auburn in the coming years, Cox predicted. When thousands of workers lived and worked in the mills, downtown was vibrant. That changed when the mills shut down, but reappeared when call centers were established and brought thousands of workers back to the area.

“The reality is 5,000 employees were working in these mills four years ago,” Cox said. “They were able to go buy lunch. They were able to go to happy hour after work. They were getting their spouse a bottle of wine on the way home. And those 5,000 employees aren’t there anymore.”

Cox said a changing downtown doesn’t need the workforce, but something different.

“We need those people to live here and get breakfast three days a week and to get coffee two days a week and to get dinner twice a week,” she said.

Until then, hospitality will continue to face an uphill battle, especially downtown, she said.

“There is a lot to be optimistic about in Lewiston and in Auburn. And yes, I’m a big cheerleader for this area, but my overall outlook is highly optimistic. If you ask where we’re going to be in three or four years, I think it would be a really incredible place.”

No doubt a generational shift is underway, even if not everyone sees it. “The aging of the owners of most of our small businesses is real and is happening,” Cox said. The changes in our overall real estate inventory is significant and has been happening for four years because of the pandemic and the changes in the workforce. You’re going to see all of these things start to be shaken out over the next two or three years. All of that will give us a population base with diverse and higher income.”

U-Haul’s annual migration trends report came out this week, with Maine rising to 13th state in growth nationally, up 18 spots. Auburn is among the top growth cities in Maine in the same survey, which is based on each state’s net gain or loss of customers utilizing one-way U-Haul equipment in a calendar year.