BENNINGTON — The $53 million Putnam Block project slowly built momentum during 2017, only to hit pause in December as investors waited to learn whether the Republican federal tax overhaul would decimate programs considered vital to the redevelopment plan.
Business and institutional leaders began meeting two years ago to promote downtown development as a way to enhance the area’s economy. They soon focused on six buildings on 4 acres around the former Putnam Hotel at the Four Corners intersection.
By January 2017, the Bennington Redevelopment Group LLC was moving from the initial planning stages toward an agreement to purchase the former hotel, two adjacent historic structures and other buildings owned by the Greenberg family.
By February, the group — including Bennington College, Southern Vermont College, Southwestern Vermont Health Care, the Bank of Bennington, Global-Z International Inc., and other businesses and individual investors — announced it had an agreement to purchase the property.
An easement issue that moved slowly through Superior Court for several more months was resolved in time for the $2 million sale to be completed in September.
Meanwhile, the development group — working with the town, the Bennington County Regional Commission and the Bennington County Industrial Corp. — secured $1.2 million in grants for environmental remediation work on the property, along with historic preservation and new market tax credits that are considered vital to the financing package, supplying more than 40 percent of financing for the first phase.
For a time, the tax credits were considered in jeopardy, as the Republican-controlled U.S. House and Senate debated tax overhaul measures. The final version did leave intact the credits the Putnam developers are counting on. Meanwhile, a planned groundbreaking ceremony for Phase 1 of the project — renovating the three historic structures — was postponed from late fall to spring, allowing investors time to learn whether the financial plan was still sound.
The developers now say they believe the tax credits and grant funding will still be available for the Putnam Block.
Bennington County Regional Commission Assistant Director Bill Colvin said in a news release last week: “The (tax) bill preserves the 2018 and 2019 new markets tax credit allocation application rounds and historic tax credits — funding relied on for the Putnam Block renovations to move forward.”
Colvin added that with “all necessary approvals for approximately $3.5 million in federal historic tax credits, completion of the new tax bill removes a significant barrier that could have potentially derailed the project.”
Asked in early December about prospects for the project, Colvin said the Putnam financing package remained in place and 70 percent of the space to be renovated has been leased.
“The development group remains as committed today as ever to see the project through,” he said.
TIF district approved
Town officials were simultaneously busy last year working to establish a tax increment financing district in the downtown. The TIF district received approval from the state Vermont Economic Progress Council in late November.
With a district in place, the town can bond for infrastructure projects that would enhance private development in the district and pay back the loans using new tax revenue generated by the redeveloped property.
The Selectboard is expected to bring a proposal for infrastructure funding to the voters during the annual town meeting in March.
The Putnam Block effort was the impetus for the town seeking a TIF district and is listed first among about 15 possible downtown projects that could benefit from TIF funding to upgrade or add infrastructure.
In its application, the town listed a total of $6.4 million in possible infrastructure work to support private development and more than a dozen other possible private project sites.
The new Bennington TIF district totals about 70 acres and includes 155 parcels in the downtown. The town’s application for a district identified about 17 potential sites for public infrastructure work to support private projects — totaling an estimated $5.8 million.
If successful, the Putnam project and the TIF district could have a transformative effect on the downtown and the Bennington area economy, supporters believe.
“From my perspective as a longtime town employee, this is the opportunity of my lifetime,” Town Manager Stuart Hurd told the Vermont Economic Progress Council during a hearing on the plan. “If we are not successful with this project and with this entire district, I think Bennington will continue to decline. Perhaps, if we’re lucky, we’ll become stagnant. So this project, this application, means a whole lot to me personally.”
