This is the second chance for New Moran Inc. to make something of the property.
After an open call for proposals in 2013, the nonprofit company came away with a memorandum of understanding giving it an exclusive opportunity to build a mixed-use development in the city-owned former industrial edifice.
Burlington dissolved that agreement in July. At the time, Mayor Miro Weinberger said New Moran had failed to secure commitments from long-term tenants that would make the project viable and was no longer working with an experienced development team.
The Community Economic Development Office issued a new request for proposals to redevelop the Moran plant and began studying demolition costs. CEDO Director Noelle MacKay said New Moran was the only company to respond to its new request.
City officials initially said they would give New Moran until November to come up with a viable development plan, but MacKay said Monday night that they hope to have finished evaluating New Moran’s latest proposal by April.
During a presentation to city councilors Monday night, the New Moran developers said their project would now have a total cost of $15.4 million, down from the initially proposed $33.7 million project.
“Burlington needs vibrant affordable community space and year-around activities for families” on the waterfront, he said.
The group has signed letters of intent with the anchor tenants needed to give the project a sustainable business model, Cooke said. The owners of Higher Ground and the Burlington Farmers Market are expected to occupy the first two floors, he said.
The third floor, which was originally slated to be a co-working space, will initially remain empty, but the construction will allow New Moran to expand into the top floor with minimal additional work, Cooke said.
The farmers market would use the first floor as a year-round marketplace for local artisans and food producers in a way that would allow the main summer market to remain downtown, Cooke said.
Alex Kruthers and Alan Newman, the owners of Higher Ground, said they would take a “big tent” approach to operating the community event space, looking to provide a venue for arts presenters who can’t fill venues such as the Flynn Center.
“There’s a lot of things (the Flynn Center) has to pass on because their space is too big, or the production doesn’t work, or the costs are too high. So, the idea is to design a space that can fill a void in the market,” Kruthers said, adding that the planned space would be roughly half the size of the Flynn.
The mayor had said he was concerned that Redstone Group, which was previously consulting for New Moran, had a conflict of interest because it was working with Higher Ground to open a venue in Winooski.
Kruthers and Newman dismissed that notion Monday, saying the Winooski venue would be a replacement for their current location in South Burlington, and Higher Ground won’t compete for the same acts as the New Moran event space.
“Even if we wanted to do Higher Ground on the waterfront, the public trust doctrine would prohibit it anyway,” Newman said. Having 150 rock concerts annually would be a nonstarter, he added.
The public trust doctrine is a legal principle stating that some resources, such as shorelines, must be available for public use. The doctrine applies to the land where the Moran plant sits and requires that the development provide community benefit.
Michael Greitzer, with the firm Hemisphere Development LLC, is now consulting for New Moran. He told councilors that New Moran has worked with attorneys to make sure the proposed business structure, with a nonprofit management company renting space to for-profit and nonprofit tenants, will adhere to the public trust doctrine.
Greitzer also said New Moran’s updated plans to pay for the project are solid and avoid the use of complex new market tax credits that are highly competitive, making them an unreliable funding source.
New Moran’s plan now calls for $5.8 million in tax increment financing already approved by voters, $6 million in private donations — including $4 million the group previously said it had raised — and $2.2 million in historic tax credits.
The nonprofit worked with city officials and Sen. Patrick Leahy, D-Vt., to secure a $1.4 million grant from the U.S. Economic Development Administration to the city for waterproofing and flood resiliency at the site, rounding out the project’s $15.4 million budget.
New Moran has also received a bid for a maximum-cost construction contract with PC Construction to build the project.
“If there’s one thing we know at PC it’s the Moran building,” said Jay Fayette, PC Construction senior vice president. He said the company has been involved with various proposals to redevelop the Moran plant over more than a decade.
“This current development team has a project that’s affordable, that’s viable, that’s doable,” Fayette said.
The mayor said he appreciated that “a new partner has stepped forward,” referring to Hemisphere Development, to help address the city’s concerns with the project. CEDO will be evaluating “whether enough progress has been made,” Weinberger added.
If New Moran is able to reach a new development agreement with the city during the second quarter of the year, Cooke said, the nonprofit expects to be able to complete fundraising within nine months and have enough money to start construction before the end of the year.
