Business & Economy

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.

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  • Dave Bellini

    If the corrections budget has an extra 5.5 million dollars just laying around, why doesn’t the administration give all correctional officers sick days and health insurance? There’s never enough money to convert full time temporary correctional officers to permanent but there’s plenty of money to give to his pet projects.
    It’s wrong to “kick state employees in the teeth” when there’s so much extra money to go around.

  • Cynthia Browning

    My recollection is that the sale of the current state office building was approved by the Legislature with the understanding that the proceeds would come back to the Capital Bill to be used in other projects.

    Instead, if the Administration’s recommendations are followed, the proceeds will have been loaned to the developer to keep the lease costs lower and will be paid back only slowly over 20 years. (The money has already been taken from Corrections and loaned — the proposal is to pay Corrections back with the $5.5 m from the sale that should have gone to the Capital Bill.)

    So there will likely be $5.5 m less in Capital Funds next year to use to finance new projects or Irene recovery, or to cover the cost overruns in other projects or to meet school construction needs or clean water needs or anything else that Vermonters need in capital improvements — and spending on those projects would have created jobs as well.

    I devoutly hope that this project helps downtown St. Albans and that many new jobs are created there. But when a state is engaged in complicated public/private real estate deals, it is very important to be sure that the use of public money is transparent and accountable.

    I will be looking into possible ways to limit the ability of an Administration to do this in the off session in the future, and I will also be trying to figure out a way to hold this Administration accountable for the cost overruns of so many projects in a concrete financial way.

    Rep. Cynthia Browning, Arlington

  • Bob Orleck

    Sounds like a sweetheart deal here! Maybe a prosecutor should take a closer look at the details and the relationships of the parties involved.

  • Duncan Kilmartin

    Cynthia Browning is disliked intensely by her own party because she tells the truth and they do not want to hear it or have others see it.

    Her integrity and intellectual skills, both noticeably lacking in the Shumlin administration, often silence the Shumlin administration parrots of their perpetual chant that we all should be enamored of the Emperor’s New Clothes. Yeah, Duncan, don’t you just wish!

    Well, we can wish that were the result, but Larry keeps up the chant and Shumlin thinks his surrogates can continue the stupid distraction from the truth.

    If you want the naked truth about the “deals” that go down at taxpayer expense for Shumlin’s friends, go to Cynthia.

    Now, as to prosecutors looking into this? Lots of luck! Sorrell, as even handed and non-partisan as you can get? TJD who sent Burlington telecom to Sorrell who sent it up to Orleans County, and it finally went back to TJD three years later.

    Oh, no, Duncan, are you suggesting that our prosecutors are not independent and fearless…how dare you say that.

    Yup, I did. But you examine the evidence and you be the judge.

    • Rep. Kate Webb

      Duncan – In no way is Rep. Browning “disliked by her own party because she tells the truth.” Cynthia is a very valuable member of our caucus. As the majority sets the course, Cynthia can be counted on to help point out the rocks. Though members may not always agree with her, that is a far car from disliking her. I rarely agree with you, Duncan, but I must say I appreciate your perspective, as long winded as it may be!

      • Bob Orleck

        Duncan is right. It is rare indeed for liberal Democrats to buck their leadership. They go in lock-step. The insane liberal agenda could not move forward if these people were free to make their own judgements and decisions. It defies statistics to have such agreement on such crazy legislation that gets passed by the super liberal Democrat controlled legislature. I keep telling folks who keep electing them that these are not “your father’s Democrats”. They are power hungry control freaks who will do anything to get elected. They do not care about you or me and you better wake up and throw them out when the next election comes or things will keep getting worse. I applaud this Democrat for standing up for her conscience, a rare thing indeed! I only wish there were more like her.

  • Tony Redington

    What is bat-carp-crazy here is the end product: paying over $2,000 a year by the State for decades for a couple of hundred parking spaces for public workers! Bet a lot of those workers would find some way not to bring a car to work if provided a $1,000 cash incentive! and the State would save over $1,000.

  • Cynthia Browning

    My impression is that the use of the $5.5 m in sale proceeds for the loan instead of for reallocation to other projects in the Capital Bill was made necessary because of the unexpectedly high cost of the project. The current rental costs are around $450,000 (fee for space that the state pays itself) and the lease costs for the new building went to around $1.3 m. Given all the budget pressures, this was not good. So they plan to shift the high cost into the Capital Bill instead through that loan. This gets the lease cost down to $1.1 m.

    In terms of the investment in this project:

    Public cost of project $21.5 million

    $13 m St Albans parking garage
    $5.5 m Vermont loan from old building sale proceeds
    $3 m Federal tax credits

    Private cost $12 million

    $4 m private developer for new building
    $8 m Mylan buying old building

    So this project is putting a burden on the Capital Bill and the Budget. Hope those jobs materialize.

    If anyone wants my memo on this subject just let me know at [email protected] . I also have the materials given to the Emergency Board to justify the financial manipulations.

    In terms of Corrections, this budget is very large but they spend it in an even way across the year. So since there was a sudden need for funds out of legislative session, the Emergency Board allocated a certain amount from the Corrections budget line and will then repay it with the $5.5 m sale proceeds later in Budget Adjustment in the winter.

    Rep. Cynthia Browning, Arlington

    • David Dempsey

      I always read your comments and it is refreshing to know there are some representaives who actually read and study the issues instead of blindly following the lead of Shumlin and Shap Smith. 2 of my reps told me they feel obligated to follow party lines.
      I agree with Senator Benning about the budget adjustment bill coming up in the 2014 session. The way this administration often operates, If the money is actually available it could end up anywhere. When Shumlin talks to the press about where the money went, he will start by saying “let me be perfectly clear” and then he will proceed to confuse the hell out of everybody so much that they don’t even know what questions to adk him. We need people like you to keep him honest.

  • Margaret Harrington

    Representative Cynthia Browning is the only legislator with concerns here about the lack of transparency in this real estate deal in which taxpayer money has been diverted from the Corrections Department to a private developer. No one is sure if and when the taxpayer money will be given back to the Corrections Department.
    Where are the legislators who claim they are concerned about our prison system, both the treatment of prisoners and the working conditions and benefits for state corrections staff?
    All of this juggling of funds is being done so Mylan Technologies can make big profits in St Albans. Mylan Technology is a subsidiary of a multi-billion dollar global company.
    Representative Cynthia Browning has my commendation for bringing this issue of tranaparency to light.
    Also I would appreciate more articles in Vermont Digger about the present state administration’s juggling act and why there are no other legislators on the job looking after the people’s interest and the democratic process.

  • Rep Michel Consejo

    Cynthia is not the only Rep concerned about the situation, I am looking and listening as well, and will formulate a position when I truly understand the deal.

    • Bob Orleck

      Rep. Consejo: I hope you do not just accept any spin on this to make it explainable. It would give those of us who have lost confidence in our governing leaders to see some (Democrats) who are willing to stand up and be counted for what is right and not just because their leadership tells them to do this or believe that. Next I hope there are many (Democrats) who will take a hard look at the other insanity that this Governor who believes he is not accountable is doing with health care, wind turbines destroying our environment, assisted suicide (a nightmare law) and others. Thanks for being willing to speak up for what is right. (I hope)