BENNINGTON — The town is “on a short timeline” to create a tax increment financing district to support the Putnam Block redevelopment, a consultant told about 30 downtown business owners and other residents.
Stephanie Hainley, chief operating officer with Burke & White Real Estate Investment Advisors, which is helping shepherd Bennington’s TIF proposal through the application process, and Gail Henderson-King, a senior project manager with the Burlington-based firm, gave a noontime presentation on TIF districts Wednesday and answered questions.
Noting the stepped-up schedule, Hainley urged the business owners to become “TIF ambassadors” for the initiative. “We have to sell progress, not just to ourselves but to the community as well,” she said.
The consultant also noted that “this is the largest crew I have ever seen come out for one of these meetings. It shows a lot of passion.”
Assistant Town Manager and Planning Director Daniel Monks said later in the session that Bennington indeed “has an aggressive timeline. We hope to do this in six months or less. We want to get this to the Selectboard as soon as possible.”
Hainley, whose firm has worked on four other Vermont TIF proposals, said districts usually take longer to form, but her firm wants to help Bennington meet the challenges of an expedited process.
With a district in place, a community can bond for public infrastructure improvements that will encourage private development and pay off that debt by using a percentage of the additional tax revenue generated through resulting increases in property values. The money used to pay off the debt ordinarily would go to the state education fund.
In Bennington, the proposed $54 million-plus Putnam Block project was the catalyst for talk of a TIF district. A consortium of community-oriented investors, including local colleges, the hospital and other institutions and private investors, is expected to close soon on six downtown buildings and land around the historic former Putnam Hotel. The group hopes to begin construction later this year.
Asked what type of public investment might enhance the project, Monks said that could include brownfields remediation work, parking and streetscape improvements, and water, sewer or electric utility work. Those ideas are under consideration he said, particularly for Phase 2 of the Putnam project. The second phase will focus on a former lumberyard and its parking lot and surrounding spaces, located west of the former hotel and two adjacent historic structures.
The first phase of the project includes redevelopment of the hotel building and adjacent properties; Phase 2 includes a medical office building, grocery store and housing.
Henderson-King, who has worked on TIF district projects in downtown St. Albans, said, “One of the keys is you have to have projects that are actually going to happen.”
In describing the TIF application process, the Burke & White representatives said the community must supply a detailed plan for infrastructure projects and for paying off the loans with the estimated increase in property tax revenue. Applications go to the Vermont Economic Progress Council, which issues district approvals and annually reviews progress toward the financial and other goals of the projects.
Before voting on the plan, the council will hold at least three meetings on it, including one in Bennington, to gather information and review the TIF proposal, they said. That will include some tough, specific questions concerning projected revenue and the commitments of private developers, Hainley said.
She added that the council also “wants to hear from the people impacted by this,” not only town officials or those involved in centerpiece projects.
Local approvals concerning the district will come from the Selectboard and town voters, who must approve any bonding for infrastructure work. A community would have a window of 10 years to bond for projects, and not all infrastructure projects are typically undertaken at once.
The women said key issues will include marking the exact boundaries of the downtown district and winnowing a list of potential private development projects, including and beyond the Putnam Block plan. Hainley said potential development is usually categorized as imminent to possible in the future and ranked as such.
Henderson-King also stressed that TIF financing is only one of the development tools used to promote private investment. Others include Community Development Block Grant or other grant funding, historic preservation, affordable housing or other tax credits, and brownfields remediation funding, she said.
While there is a national trend toward developing urban areas for housing, retail and entertainment and employment opportunities, Hainley said those types of projects are also “are extremely hard,” because of the higher cost of redeveloping existing structures in the middle of a downtown with aging infrastructure. The profit margin for private investors is thin, she said, which was an impetus for economic development tools like a TIF district.
A concern voiced Wednesday was whether everyone within a district could expect a tax increase. The consultants said private properties for which the value rises due to redevelopment could, as is normal, pay more in taxes. If the value of property in the entire district or town rises, that would add to the grand list but not necessarily to higher taxes, they said.
Officials said a slideshow presentation on the town’s TIF proposal will be posted on the town of Bennington’s website.
