The Coalition for a Livable City alleges in a lawsuit filed Friday that the language on the Nov. 8 ballot describing the financing mechanism was “false, illegal, and void.”
Voters approved the ballot item — known as Question 4 — authorizing $22 million in tax increment financing to pay for streets to be built in connection with the Burlington Town Center mall redevelopment.
The CLC had mounted a sustained opposition to Question 4 — and to another that revised local zoning to enable the Town Center project — in the months leading up to Election Day. Both measures passed, and the TIF ballot item garnered 59 percent support.
Burlington now plans to take on $22 million in debt for capital improvements that is to be paid back using a portion of increased property taxes on parcels in the designated Waterfront TIF District.
“The ballot language voted on was something the city didn’t have the authority to do,” said Burlington attorney John Franco, who filed the suit on behalf of the coalition. “It’s a horse of a whole different color.”
The suit alleges that the ballot language falsely stated that all the properties in the established Waterfront TIF District would work to pay off the debt, when in fact the Legislature’s approval of the TIF project designated just three parcels.
By not clearly laying out the property tax payback plan, the suit alleges that voters weren’t informed of the true financial risk of the TIF bond, as taxpayers must pay off any unpaid debt if the project doesn’t come to fruition.
“This type of misrepresentation of resources should sound familiar,” Franco said in a news release announcing the suit Monday. “It is similar to the claim by Citibank N.A. that the city had misrepresented the amount of city resources available to support the Burlington Telecom project. Citibank’s suit was later settled for almost $11 million.”
A copy of the ballot is available here.
All three designated payback properties, according to the suit, are owned by Burlington Town Center. The mall is owned by Don Sinex, and his redevelopment plan is a major part of the proposed downtown project.
Burlington Town Center is named as a defendant in the suit, as is the city of Burlington.
In addition to the charge that the city misrepresented the financial risks of the TIF bonding, the suit alleges that the project did not receive the required approval from the Vermont Economic Progress Development Council, which is tasked with approving TIF projects.
The suit also claims the city did not follow the proper transparency requirements and procedures when pitching the TIF project to the public.
One specific transparency request in the suit demands the full economic feasibility study around the project after a partly redacted copy was made public.
“We received the Coalition for a Livable City complaint this afternoon and have begun to evaluate it,” Mayor Miro Weinberger said in a statement Monday. “From what we have been able to review, the complaint seeks to invalidate a decision to fund public infrastructure that was supported by nearly 60 percent of Burlington voters following a long public process. The complaint appears to be based on a basic misunderstanding of tax increment financing law. I fully expect the city will dispute this complaint.”
A spokeswoman for the mayor said there would be no further comment around the suit, adding that the city was preparing its legal response.
