[B]URLINGTON — For two novice developers with a central role in remaking the city’s waterfront, continued collaboration with professionals and public support will be critical to their success.
“The great thing about Vermont is so many people have been willing to share their expertise with us,” says 24-year-old Tad Cooke, a principal with nonprofit New Moran Inc., an organization that over the next two years aims to redevelop the 87-foot-tall former coal-fired plant on the Burlington waterfront.
Cooke and his business partner, Erick Crockenberg, also 24, are going to need all the help they can get to secure the $33.7 million they need to pay for their ambitious plan that would, they say, transform the dilapidated structure many consider an eyesore into a self-sustaining “net-zero” building that would serve as a “cultural center” for civic-minded businesses.
The plant has been empty since power production stopped in 1986.
The collaboration began in 2013 with an open call for proposals to redevelop the Moran plant, sponsored by city officials. The two recent University of Vermont graduates brought unbridled energy to that process, says Charlie Tipper, who joined them as a third partner in New Moran. Tipper, a veteran of historic preservation projects, is 56.
Tipper says Cooke and Crockenberg’s enthusiasm for the project is infectious and it’s a large part of what has helped New Moran bring together a team of architects, developers, engineers and consultants who are invested in seeing the redevelopment succeed.
“All of our professional team, all of our consultants, everyone working on this project has skin in this game in some capacity,” Tipper said. Either they’ve donated money or worked pro bono or at reduced rates to help move the redevelopment forward, he said.
Mayor Miro Weinberger said there’s no doubt that the hulking structure on the waterfront must be renovated, especially as other waterfront projects, such as the revamped bike path and nearby skate park, come online. “We are going to get resolution on this one way or another,” he said.
The city is prepared to help New Moran, having earmarked $6.3 million in voter-approved tax increment financing (TIF) for the project, and while Weinberger says he’s “rooting” for the young developers, their vision is a long way from becoming a reality.
“It’s a big, complicated, expensive plan, and it is not a done deal yet,” the mayor said recently after cutting the ribbon on the skate park. Other planned TIF projects, including a new marina and sailing center, are much further along, he added.
“I have a lot of respect and appreciation for Tad and Erik,” Weinberger said. “The way they’ve gone about this is different than anything I would have imagined when I was a developer. They’ve galvanized a huge community outpouring of interest and appreciation in the building.”
Weinberger said the pair reminds him of Joshua David and Robert Hammond, two New York City residents that started Friends of the High Line, which was eventually able to redevelop an unused rail spur in Manhattan’s Chelsea neighborhood into an innovative urban park.
“I’m hoping that’s the story that plays out here,” Weinberger said.
New Moran’s development plan calls for $11 million in private donations. Their fundraising is already well under way, having garnered $4.1 million thus far, they said. The nonprofit plans to launch an online fundraising tool in the coming days, which they hope will push the ball forward.
They’re also seeking $14.4 million in federal tax credits. Those tax credits are awarded on a cycle with the federal fiscal year, which begins Sept. 30. As a result, New Moran has set that date in 2016 for its financial closing. The 12-month construction process is expected to begin in October of that year.
That leaves the intervening 12 months for the New Moran team to finish its construction design work, get the necessary city permits, raise millions of dollars and secure millions in federal tax credits.
“We know what we need to do to make it happen,” Cooke said, in the conference room at the College Street office New Moran is leasing from a supporter of the project.
“Now we have a year to get there,” he added.
The concept for a “New Moran”
Converting an uninsulated structure riddled with contaminants from decades of industrial use, while still preserving some of the industrial features that give it character, into a building that produces more energy than it uses — hence “net zero” — is a tall order.
Cooke said they’re fortunate to benefit from years of environmental study and remediation by the city, which has cleared the site of asbestos, and has a state-approved remediation plan for the basement, which is the largest source of contamination within the building. However, New Moran has substantial work to do, if it wants to operate on renewable energy.
“We’re using a combination of solar, geothermal and a minor contribution from three small vertical axis wind turbines,” said Cooke. The building will also rely on highly efficient insulation so that it will require little heating and cooling throughout the year.
The business plan for New Moran makes use of the building’s three-tiered structure, with each floor serving a different purpose.
The first floor would host a market hall that New Moran envisions as similar to Faneuil Hall in Boston or the Ferry Building in San Francisco. It would provide space to local food and craft retailers and combine waterfront recreation with educational opportunities.
The second floor would be a 1,500-person event space, a capacity on par with the Flynn Center. The venue would focus on attracting concerts, conferences and community events — such as a farmer’s market — as well as large-scale installations and performances.
The third floor would house a shared workspace similar to Burlington’s The Generator or Karma Birdhouse maker spaces, with the intent of providing space for “mission driven” businesses, nonprofits or potentially public agencies or departments, Cooke said.
New Moran plans to obtain a lease on the building from the city, and partner with a management entity that would sublease and manage subtenants on each floor.
Tipper said New Moran has a letter of intent from a company that wants to manage the event space, but he would not say who. They have “strong interest” from potential managers for the other two floors as well, he added.
Locking up those management entities will be crucial to securing the tax credits that the project will rely on, he said.
Getting to $33 million with a little help from their friends
New Moran is in the process of applying for two types of federal tax credits that combined will provide nearly half of the money they need for the project. Those tax credits are for historic preservation and what’s known as new markets.
“They’re both credits that enable the redevelopment of buildings and sites that are challenging and otherwise would not be done, or would be done in a way that doesn’t provide value for the community,” Cooke said.
They’re looking to secure $4.8 million in historic preservation tax credits, by committing to preserving aspects of the building’s industrial past. The historic preservation tax credit, awarded by the National Parks Service, are earned, Cooke said, meaning if a project meets the criteria it will receive the credit.
That’s not the case for the $9.6 million in new market tax credits they’re seeking. Those are far more complex to obtain and convert into cash that can be used to finance construction. The new market tax credits are part of a $3.5 billion program run by the U.S. Treasury to help revitalize low-income communities.
The program works by awarding the credits to so-called “Community Development Entities,” which then solicit investors — often financial institutions — that buy the credits for cash. The investors are able to use the credits to reduce their federal tax liability.
The exchange allows the Community Development Entities (CDEs) to then fund projects such as New Moran. However, obtaining the tax credits is a highly competitive process.
Mayor Weinberger, a developer himself who has worked on projects supported by new market tax credits, warns that they’re “a challenge to secure.”
“The deal chart for these new market plans look sort of like those diagrams that Arlen Specter put together for the Clinton health care plan. They’re extremely complex and they take a lot of time to put together and that is certainly one of the challenges that these guys have bitten off here,” Weinberger said.
Cooke, who recently attended a conference for CDEs in Chicago, said he’s optimistic that New Moran can secure the cash they need upfront through the new market program. Their project checks a lot of boxes on any CDEs list, he said.
They have the opportunity to develop the waterfront in the Old North End, a low-income neighborhood, and provide needed services and employment opportunities, Cooke said. It’s also a brownfield site with a historic preservation component, he added.
If New Moran is able to pull it off and secure the tax credits they need, it still won’t be enough for the redevelopment without completing a successful fundraising campaign. Most nonprofit fundraising campaigns aim to raise roughly 75 percent of their goal in a so-called “silent phase” from major donors before taking a campaign public.
New Moran has solicited money from the public “basically since the city accepted our plan,” Cooke said, that is after receiving the $6.3 million in tax increment financing being held in reserve for the project in March 2014.
Since that time they’ve led close to 2,000 people through the building to garner support for the project and recruited 58 Moran “Plant Champions,” people who “champion” the project as volunteer advisers, ambassadors and charitable supporters, said Crockenberg.
The majority of that activity was compressed into the last four months, Cooke said. “We basically went from zero to having a nonprofit structure and an organization that could raise $11 million in since August,” he said. With $4.4 million in hand, the team plans to launch a crowdfunding website, while they continue to make “the big asks” from potential large donors.
The website will allow members of the public to make small donations that generate digital “building blocks,” which Cooke describes as “unique piece of content” that will reside on the New Moran website. The blocks will also have an associated hyperlink, making them easily shareable across social media platforms.
“If someone sees your donation, and then they decide to donate, you’re then linked together and it starts building a network of everyone that’s contributed,” Cooke said. The web-based application will also allow people to follow the campaigns progress toward its goal.
“The idea is that it’s as much a show of hands as it is a financial metric,” Crockenberg said. “It’s taking the idea of a petition and applying it to crowdfunding.”
Correction: An earlier version of this story stated that New Moran has a letter of intent for the market hall. The letter of intent is for the event space. The amount of private donations New Moran has raised was also misstated.
