[B]URLINGTON — A local developer has issued a stark warning to the City Council: Reconsider the assessment on a major apartment complex or his firm would be unlikely to build any more rental housing in Burlington.
Erik Hoekstra, with the real estate firm Redstone, delivered that message to the council last week after receiving what he said was an eye-popping assessment of $3 million — about $1 million more than he had expected. The council was meeting in its role as the Board of Civil Authority.
The Board of Tax Appeals, a citizens panel appointed by the council, had already knocked the assessment down to $2.7 million, according to a report in Seven Days.
In addition to 22 apartments, the building on North Winooski Avenue is home to the restaurant Butch + Babe’s.
In a memo to councilors, Hoekstra wrote that the tax bill is still more than 20 percent of the net income from the property. Such high taxes could have dire policy consequences for Burlington, Hoekstra wrote in his appeal to the Board of Civil Authority.
“If the assessment is upheld on this new rental project in the Old North End then no new rental housing buildings will be built in Burlington in the future,” Hoekstra wrote in the appeal.
At a Jan. 25 City Council meeting, Hoekstra told councilors that it’s rare for a property owner to take a case to the Board of Civil Authority. Most go to court to challenge an assessment when they’ve been rejected by the Board of Tax Appeals.
Hoekstra said he chose the unconventional route so councilors would be aware of the precedent they were setting and the potential consequences for housing development going forward.
“Everything we’ve done over the last five years was done before this assessment came out, and if this assessment sticks, we’re done,” Hoekstra told the councilors. Redstone has built three apartment buildings in the Old North End and one downtown, according to Seven Days.
“You don’t have to care about me. You don’t have to care about Redstone. But you just spent months and months developing a housing action plan to try to reduce the significant housing problem that we have in Burlington,” he added.
City officials sometimes describe the lack of available housing as having reached crisis proportions. Burlington has a 1 percent vacancy rate for renters, and typical renters spend 44 percent of their income on rent, according to a 2014 city report.
Councilors in their role as the Board of Civil Authority will meet with Hoekstra and his attorney Monday in private to hear his appeal. Hoekstra must convince them the assessment is “clearly erroneous” for it to be overturned.
In a separate case, Hoekstra and a group of prominent landlords are suing the city over high taxes on 31 properties they say were gerrymandered into two newly created commercial tax districts.
The city has defended the reassessment, arguing that the properties in question were previously “significantly under assessed.”
Correction: An earlier version of this story stated that the property tax bill on the North Winooksi Avenue property was $3 million, later reduced to $2.7 million. That is the assessed value of the property.
