Lawmaker criticizes St. Albans office deal

Rep. Cynthia Browning, D-Arlington, who sits on the House Institutions Committee, said she is concerned about a financing plan approved by the Emergency Board for an office building in St. Albans during a House Committee on Corrections and Institutions meeting Friday. Photo by John Herrick/VTDigger

Rep. Cynthia Browning, D-Arlington, who sits on the House Institutions Committee, said she is concerned about a financing plan approved by the Emergency Board for an office building in St. Albans during a House Committee on Corrections and Institutions meeting Friday. Photo by John Herrick/VTDigger

A complicated financing plan for a new state office building in St. Albans is moving ahead, but the current plan, as recommended by the administration, could slow other capital improvements, Rep. Cynthia Browning, D-Arlington, says.

The state will sell its current state office building in St. Albans at 20 Houghton St., which houses 200 employees from the Department of Labor and the Agency of Human Services, and relocate them to a newly constructed building.

The Emergency Board in September authorized the state to take $5.5 million from the Corrections Department’s budget and give it to the Vermont Economic Development Authority so it could make a loan, at a 0.1 percent interest rate, to the private developer, Re-Arch, who was hired to build a new office complex in which the state would then lease space.

This complex financing plan, approved just days after the plan was announced, caught some lawmakers off guard, Browning said during a House Committee on Corrections and Institutions meeting Friday. Browning serves on the Institutions Committee.

Typically, the state would have put the money received from the sale of the old office building into the Capital Fund. The Legislature would then sign off on where that money went next, lawmakers said.

However, Lawrence Miller, secretary of the Agency of Commerce and Community Development, said the administration recommends that the Vermont Economic Development Authority “safeguard” the $5.5 million from the sale in a new capital account to accumulate over the next 10 years. This money would then be used to pay for the new building.

This means that there was no guarantee that this money would be in the budget for FY 2015, which Browning said means money for capital projects will not be available.

Browning said she was under the impression that the $5.5 million taken from the Corrections Department’s budget would be paid back at the moment of the sale.

“I think that was the wrong way to do it, I don’t think it was transparent, and I don’t think it was accountable, and if I have anything to say about it, I’m going to try to make sure it doesn’t happen again,” Browning said.

In January, the Legislature will decide how the money from the $5.5 million sale will backfill the Corrections Department’s budget hole, Buildings and General Services Commissioner Mike Obuchowski said.

The construction of a the new office building in St. Albans is set to begin Dec. 4, one day after the financing plan is settled, Obuchowski said.

He said the state will lease the new building for up to 20 years, with the option of buying it back in 10 years for a total of $10,470,217, a price that will not change with inflation.

The lease rate is about $19 per square foot, Obuchowski said, down from the previous $24 per square foot estimate.

John Herrick

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