BURLINGTON — A much anticipated redevelopment of the former Moran coal-fired power plant on the waterfront appears to have hit another snag.
Redstone Commercial Group, a prominent real estate firm assisting with the redevelopment, says the city has asked it to step aside because of an apparent conflict of interest.
New Moran, which is redeveloping the waterfront landmark, signed a memorandum of understanding with the city in 2014 to plan a renovation of the former industrial site that was expected to include retail, coworking and event space.
City voters approved $6.3 million in tax-increment financing, or financing that uses a portion of the increased taxes resulting from the project, for the Moran redevelopment in 2014 as part of a larger package of tax breaks for waterfront development.
The city and New Moran were supposed to have a development agreement in place last year, but a deal has yet to be signed.
Mayor Miro Weinberger has expressed some doubt about whether the New Moran will be able raise enough money for the project.
In March, Seven Days reported that the development firm Redstone had signed on to help the New Moran team, Tad Cooke, Erick Crockenberg and Charlie Tipper. None of the three men have experience developing a project of this magnitude.
Redstone convinced New Moran to scale back the project. The firm suggested dropping plans for a glass addition and the co-working space. Those two changes lowered construction costs from more than $30 million to roughly $20 million.
Redstone was to handle much of the design, permitting and construction work and help the team secure complex and competitive federal tax credits for redeveloping low-income areas.
The addition of Redstone’s experience, and New Moran’s willingness to rein in the scope of its project, appeared to breath new life into the venture.
But Erik Hoekstra, a development manager at Redstone, who was working with New Moran, said in an interview Thursday that his firm would no longer play an active role in the redevelopment project.
That’s because, Hoekstra said, city officials decided this week that it would be conflict of interest for Redstone to continue working with New Moran, [and build a concert venue in Winooski] because both projects have a performing arts component.
According to the city, both projects were courting the same tenant to fill their performing arts space.
Mayor Miro Weinberger declined multiple interview requests Friday, but provided a statement. “Redstone’s prioritization of the Winooski project over the Moran project presented a clear conflict of interest, at least in the short-term, since both projects were seeking commitments from the same tenant,” Weinberger said. “Since this became clear, the city and New Moran, Inc. have been reviewing all options for resolving the future of the building in the months ahead, and expect to announce a clear path soon.”
The tenant in question is Higher Ground, the concert venue and nightclub in South Burlington. Co-owner Alex Cruthers recently told the Burlington Free Press that he’s in discussions with Redstone about collaborating on the Winooski project.
Hoekstra said from the outset Redstone made clear that it would continue to be involved in other development projects in the region that would look at similar uses and funding sources as New Moran.
“We really didn’t see a conflict,” Hoekstra said.
“We disclosed that we’ve worked with Alex Cruthers from Higher Ground,” Hoekstra said, “As soon as we started working on the Winooski project, we shared it with the Moran guys and they thought it was OK. The city had a different opinion.”
Hoekstra said New Moran made real progress during the time he was working with the nonprofit development company, but “a lot of the fine details hadn’t really been worked out yet.”
Tad Cooke, one of the developers leading the Moran redevelopment, downplayed the situation in an email Friday.
“After pausing to evaluate any potential conflict and re-assessing project plans, we believe there is a path forward where the Moran Plant project complements a Redstone developed Winooski venue,” Cooke said.
On Monday, the City Council held an executive session to discuss the Moran project, and were leery to say what that meeting meant for the project’s future — though several councilors had already expressed reservations about the redevelopment.
“I’m a huge supporter of seeing new life in the Moran plant,” said Selene Colburn, P-East District, but she said there have been “questions raised” about the timetable and whether the developers are meeting goals.
Colburn said she hopes the city’s deliberations will come out of executive session soon so that more information will be available to the public.
“The plans for this space have gone up and down and on and off, and the public deserves to know what’s going to happen,” she said.
New Moran has raised more than $4 million as part of an $11 million capital campaign. Seven Days has reported that only roughly $900,000 is in cash and the rest is coming in as pledged donations. The group is hoping to secure another $14 million in federal tax credits.
Cooke said in an email that “we’ve continued to distill our project budget and capital campaign goal, but we have not been actively soliciting funds.”
