[S]OUTH BURLINGTON — It’s no secret. Both Burlington and South Burlington would like to have a long-anticipated multi-purpose stadium that would host the University of Vermont hockey and basketball teams.
Last February, South Burlington and UVM announced they were exploring the possibility of a stadium that would replace the University Mall or the Rick Marcotte Central School.
Then in May, Burlington asked UVM to consider building the stadium on Main Street at the current site of Memorial Auditorium and adjacent parcels, including a city parking lot and some private property.
If UVM were to partner with either municipality for a new sports arena, the school would turn Patrick Gymnasium and Gutterson Fieldhouse into fitness centers and the teams would still use the facilities for day to day practice.
Three separate reports from consultants on the feasibility of a stadium on campus or in either city are expected to be completed in the coming months and will help guide UVM to a final decision expected sometime in early 2017, according to university officials.
The future location of Catamount hockey and basketball could be determined by which city is willing to raise more in taxes to pay for an arena.
Thomas Gustafson, UVM vice president for relations and administration, said the decision is likely to be based on the answer to a single question: “‘What’s the rent?’”
“Looking around the country, these projects do not pay for themselves … and many don’t pay for their ongoing operating costs,” said Burlington Mayor Miro Weinberger, adding successful arena projects rely on another guaranteed revenue source.
Estimates released last February by South Burlington and UVM for the construction of a new arena were $50 million to $60 million.
UVM, which expects to host roughly 60 events annually at the new arena, would defray some of those costs, but both Burlington and South Burlington officials say they would look to raise taxes to help pay for the arena and upkeep.
Both municipalities are looking at similar revenue sources, too. South Burlington City Manager Kevin Dorn said South Burlington would look to increase its local option tax on meals, rooms and alcohol by 1 percent.
Weinberger was more cagey, but he acknowledged that he sees a “nexus” between a new arena and Burlington’s gross receipts tax, which covers roughly the same items as South Burlington’s local option tax.
When people pour into the city for a sporting event, concert or conference at the new arena, the municipality stands to see a spike in gross receipts, the mayor said.
Despite the substantial new economic activity, Weinberger said there are limits to what he and the City Council would support to see the arean built in the Queen City.
“We’re not going to get into some kind of bidding war with South Burlington over this,” Weinberger said.
Local elections seen as indicators in arena discussion
The competition between the two municipalities will be shaped, in part, by questions in each city on the Nov. 8 ballot.
In South Burlington, residents will vote on whether to approve $5 million in tax increment financing to pay for the reconstruction of Market Street from Dorset Street to Hinesburg Road, and the creation of a nearby public park.
Tax increment financing pays for public infrastructure that spurs private development. Municipalities issue bonds that are repaid with a portion — or increment — of new, additional property tax revenue based on the increased property value of private developments.
The private development must occur in a defined area known as a TIF district.
The new public amenities would be a step toward South Burlington’s long planned City Center, a bid to create its own vibrant mixed-use downtown.
The November TIF vote will be a “signal as to how serious (South Burlington) voters are about creating this new district they’ve been talking about for years,” Gustafson said at a recent meeting of a UVM Trustees work group on the planned event center.
If the measure were voted down, Gustafson said that would leave the University Mall as South Burlington’s only viable option for a stadium. Dorn downplayed the significance of the TIF vote for a South Burlington arena, saying it has only a “modest connection” to the city’s arena plans.
That’s because South Burlington has already shifted its focus to the mall location because of uncertainty as to whether the Marcotte School will be up for sale, he said.
It doesn’t appear the South Burlington School District will make a decision about whether and how to close or consolidate its two elementary schools, making a sale unlikely on a timeline that would work for the arena, Dorn said.
“I’m not at the point of ruling (the Marcotte School) out completely, but we’re shifting our focus over to the mall property,” Dorn said.
An arena at the University Mall would “shift the center of gravity” in South Burlington’s nascent downtown from the east side of Dorset Street to the west side, where the mall is located, Dorn said.
Still, the November TIF vote is important, Dorn acknowledged, because the $5 million of improvements east of the mall would help the city center to straddle Dorset Street.
While Burlington’s ballot Questions 3 and 4, which will decide the future of its own proposed mixed-use mall redevelopment, won’t have any direct bearing on the proposed arena site, the vote could be seen as a bellwether for Burlington’s appetite for public-private development projects.
City Councilor Dave Hartnett, I-North District, is among several Burlington leaders who has raised the specter of emerging downtowns in South Burlington and elsewhere in the region as lending urgency to new investment in Burlington’s downtown.
Mall site in foreclosure
There is an additional complication to the University Mall site: The property is currently in foreclosure.
Finard Properties, the current owners, are interested in a mixed-use redevelopment of the property, Dorn said, and would gladly host an arena if they’re able to retain the land. Dorn said he expects clarity on whether there will be a sale by the end of the year.
“We think that anybody who emerges with the property is going to want an event center stadium there,” he said.
South Burlington is likely to ask the Vermont Economic Progress Council, which oversees the state’s TIF program, to add the 55-acre mall to its existing City Center TIF district, Dorn said, which would allow public investment to further spur development in the area.
Both cities say their site has advantages
The Gateway Block, the block where Memorial Auditorium is located, is already part of a TIF district located in a downtown that has many of the amenities South Burlington is hoping to create for its future, Weinberger said.
The Burlington site also more accessible to pedestrians currently and many UVM students already live in the area — a plus that was echoed by UVM’s Gustafson.
South Burlington is in talks with the Chittenden County Regional Transportation Authority about building a foot bridge over Interstate 89, making their preferred site for the new arena accessible to pedestrians too, Dorn said.
Both sites are roughly equidistant from the UVM Davis Center.
The mall site has the advantage of being privately owned, Dorn said. A privately developed arena at the University Mall property wouldn’t need to go through the same municipal approval process that a project on public land would.
The Gateway Block is largely city property, though Burlington has said it would look to partner with a private developer to build and manage the arena.
Another issue is parking. The University Mall has has plenty of existing on-site parking. Burlington’s Gateway Block has on-site parking challenges, which Gustafson described as “significant but not insurmountable.”
Weinberger said there are other university or city-owned parking lots that could alleviate the need of on-site parking at a Gateway block arena.