Burlington to vote on financing for downtown redevelopment

Burlington officials are putting final touches on an ambitious proposal. If approved by local voters next March, it will allow city officials obligate up to $10 million in debt for downtown public improvements designed to generate tax revenue.

The idea is to subsidize and stimulate promising redevelopment ideas at locations within a defined area, particularly if they can generate additional taxes to retire the debt and help fund other projects. A draft resolution, reviewed by the City Council on Monday, describes a tax incremental financing (TIF) district covering much of downtown Burlington as “a critical tool for the City to have in its economic toolbox to provide revenues beyond normal municipal revenue sources.”

“Beyond normal” means raising “supplemental” funds with revenue bonds or other debt instruments, and using the money for public improvements that promote private investments. Under state law, the debt must be incurred within five years, or by 2016.

The resolution is scheduled for a council vote at the next session on Dec. 5. If it passes, local voters will decide whether to “finance public improvements by pledging credit of the city” on March 6, the same day they select a new mayor.

Possible projects could include a public parking facility on the TD Bank block and infrastructure improvements in under-developed or distressed areas, according to Stephanie Hainley, a member of the City’s TIF Team. Mayor Bob Kiss suggested Memorial Auditorium could be added to the TIF list, while Ward Four Democrat David Hartnett described the 1928 era structure as a “money pit.”

The downtown TIF district includes at least 17 contiguous blocks, between Pearl and Maple Streets, and from Union to Battery Street near the waterfront.

Larry Kupferman, director of the Community and Economic Development Office, said the TIF is a way to “prioritize the city’s investments in infrastructure.” Although voter approval would allow the City Council to incur up to $10 million in debt, each project would be reviewed and approved separately.

An FAQ on Burlington’s TIF released by CEDO forecasts three “substantial public infrastructure projects.” But no decisions have been made, according to the document, and ideas will be handled on a “first-come, first-serve basis” by the Council, with the basic aim of finding “redevelopment potential.”

The basic approach, sometimes known as value capture, has been around for at least 50 years, and it is often linked with gentrification. Once a development or infrastructure project is finished, the value of surrounding real estate tends to increase and investments in new or re-purposed buildings become more attractive.

Cities use TIFs for everything from demolition, planning, storm drainage, street construction and lighting to landscaping, curb and sidewalk work, park improvements, and parking structures.

The concept has already become a campaign issue. When Mayoral candidate Miro Weinberger proposed a TIF district around Centennial Field to fund improvements, Tim Ashe, the other front runner for the Democratic nomination, called the idea a “swing and a miss.” It would threaten Burlington’s downtown TIF, he warned, and nearby neighborhoods could not attract enough private investment to pay down the debt.

Weinberger shot back that developing an “ownership structure” with the University of Vermont might attract new investors, and legislative rules can change.

After hearing the basics from CEDO, members of the council offered some direction. Ward One Independent Sharon Bushor advised that residents “will want to be reassured that there is no exposure for the city,” and Ward Two Democrat Bram Kranichfeld asked about the type of debt the city is likely to incur.

Although there are several options, Kupferman said the most likely tool would be revenue bonds.

Mayor Kiss pointed out that Burlington is among “an elite group of municipalities that have this opportunity.” Newport, Milton, Colchester and Hartford also have state approval for TIFs, and Burlington has a similar district covering most of the waterfront, Kiss said, but this TIF gives the city more latitude in developing various elements within the district.

The proposed language for the March 6 ballot item asks:

“Shall the City Council be authorized to finance public improvements within the newly established Downtown TIF District by pledging the credit of the City in an amount not to exceed Ten Million Dollars utilizing new tax increment revenues from within the district for repayment, with the City liable for full repayment of the indebtedness, subject to future approval of each debt obligation by the voters or City Council as required by law?”

A good effort in tense times

In recent weeks, Kiss has quietly won Council backing for most of his administration’s proposals. Even the occasional veto has been upheld. At Monday’s session, some members of the council went even farther, praising how the mayor handled a tense confrontation between police and Occupy Burlington protesters in City Hall Park after an untimely death on Nov. 10.

“It’s not an us-or-them contest,” Kiss said, referring to the dynamic between protesters and the city. It was a rare moment of public reflection on recent events. Kiss sees the situation as a “balancing process” between people who are “trying to build a better world” and his responsibility for public health and safety. His hope is that the community will be able to move forward “without rancor,” while also addressing the economic inequality and concentrated wealth targeted by the movement.

Kiss shared the praise for handling negotiations over camping in the park with staff and leadership at both the Police and Parks Departments. Once the local Occupy encampment began on Oct. 28, he explained, “there was a team that continually met to develop the public response.”

Police Chief Michael Schirling and Police Commission Chairman Jerome O’Neil were on hand for praise from several members of the board. “I’ve never been more proud of the Police Department,” beamed Kurt Wright, Republican candidate to replace Kiss. The police showed “proper restraint in dealing with an incredibly tense situation,” he said.

Ward Three Progressive Vince Brennan offered a clear commendation for a job well done. “Violence was quelled by your actions,” he said. Brennan also praised local Unitarians, who opened their church a few blocks away to protesters. “That gave the opportunity for individuals to take a time out,” he explained.

It was largely a night of mutual admiration and good news. Police Department leaders reported on recent awards for victim services and civil rights from the International Association of Chiefs of Police. And Wright, the GOP mayoral candidate, congratulated the contenders who are vying for the Democratic bid, especially front runners Ashe and Weinberger who came out on top at the recent caucus.

Late Wednesday, Burlington Democratic leaders announced that the caucus, which ended in a third round tie between Ashe and Weinberger, will reconvene Dec. 11, beginning at 1 p.m. The vote will take place at around 4 p.m. Only residents who registered and participated in the first round of the caucus on Nov. 13 can participate in the fourth ballot.

“It’s been a good week for Burlington,” Democrat Joan Shannon concluded at the council meeting, referring to the record caucus turnout as well as the peaceful resolution of the City Park encampment.

There was even positive news about Burlington Telecom, normally a source of recriminations. Faced with competition from Comcast, which plans to offer low-cost Internet service and $150 computers for qualified customers, the Board learned that BT will be able to match Comcast’s rate and plans to partner with Recycle North to make basic $49 computers available.

BT lessons remain illusive

The only debate of the evening nevertheless concerned the beleaguered municipal utility. It began with the introduction of a BT resolution by Ward Six Independent Karen Paul, titled “Lessons learned and moving forward from Burlington Telecom.”

The proposal called for review of any future project “that involves a marketplace competitive aspect” by an independent group of public and private sector experts, along with stronger oversight to protect taxpayers and “restore trust and faith in government.”

Despite the upbeat mood, Kranichfeld called the proposal “superfluous,” Ward Seven Republican Paul Decelles said he found it confusing, and Bushor concluded that the idea “is not ready for prime time.”

Although somewhat more encouraging, Shannon disagreed with Paul about what has been learned. “What has more oversight than BT?” she asked.

Ward One Democrat Ed Adrian made the observation that it’s often difficult to get resolutions passed without cultivating “buy in” from other councilors in advance. Paul reminded her colleagues that it has been nine months since a public hearing was held on BT’s troubles. A month ago she “gave notice” that she planned to offer a resolution, she added, and solicited comments in anticipation of the discussion.

Most members were sympathetic, but not enough to support the resolution. Toward the end, Kranichfeld concluded that the basic problems, honesty and integrity, can’t be legislated.

Hartnett mentioned the optimistic forecast Kiss offered three years ago. “The mayor said how successful this would be,” he recalled. “He told us it was the biggest city asset.” Although he appreciated the intentions behind Paul’s resolution, Hartnett said, “I just want him [the mayor] to be open and honest with the public. That’s all I want.”

Moments later, the resolution failed in a 10-3 vote.

In a nod to the Occupy movement, the night ended with Board President Bill Keogh asking the councilors to vote for adjournment by wiggling the fingers of their upraised hands.