[B]URLINGTON — Brookfield Asset Management is backing away from a June 1 start date for construction of the downtown CityPlace development.
At a city council meeting Monday, representatives from the company declined to say when construction would start.
Will Voegele, the senior vice president for development of Brookfield Properties and Chelsea Ziegelbaum, a development manager, said Brookfield had made “significant progress.” All construction documents are out for bid and Brookfield is seeking financing from the Bank of the Ozarks, Voegele said. The bank has issued an “executed term sheet” or financial proposal in preparation for a final agreement. That means if bids exceed the estimated project budget, it could complicate the financing further.
“I will tell you, term sheets don’t come easily from banks,” Voegele said. “An executed term sheet is no small thing.”
Voegele said that Brookfield could not commit to a timeline for starting construction.
Financing for the project has been a major concern. The Burlington City Mall was torn down before developer Don Sinex had financing lined up. Church Street Marketplace, the city’s main retail area, has featured a block-sized hole in the ground surrounded by chain link fence since last summer and residents have grown increasingly worried about the impact on local businesses and tourism.
Voegele sought to reassure city councilors.
“It is a very complicated project, there are things we are still working through, there are certain key milestones as I mentioned that we need to hit, and as we do we will have more clarity for you on specific timing of things going forward,” he said. “However, everything we’re doing, all of our focus, is 100 percent tied to reaching that milestone and getting this project under construction.”
Sinex told VTDigger in March that construction would start around May 6, and city officials told the council in a memo shortly afterward that Brookfield anticipated a June 1 start.
The approximately $220 million, 14-story CityPlace project will feature a mix of retail, commercial and residential space and will replace the former mall in the city’s downtown. (The project also has approximately $20 million in public funding, including improvements to Pine Street.)
In January, Brookfield officials appeared before the council to say that the company was taking a more active role in the day-to-day operations of the project. Prior to that, Sinex had been the front person. Brookfield is the majority partner of the project, with 51 percent control, to 49 percent for Sinex.
While a majority of councilors welcomed Brookfield with a sense of relief and renewed confidence in January, the reception on Monday was more wary.
Councilor Max Tracy said Brookfield had not lived up to its promise to provide monthly updates, and the lack of communication had fostered public doubt about the future of the project.
Voegele said he understood the frustrations and that Brookfield was committed to more communication with the public moving forward. He said Brookfield has had a “tremendous amount” of communication with Jeff Glassberg, the consultant the city hired to manage its side of the project.
“Our goal is to communicate with you as frequently and as effectively as we possibly can,” he said. “But we want to make sure we have something to say that has substance so your questions aren’t left without an answer.”
Voegele said that Sinex remains a valued partner in the project, but that his claim of a May 6 construction start date was not accurate.
Councilor Chip Mason asked Voegele if he could say generally when construction would start — one month, six months or a year?
“We’re legitimately getting comments about the hole in the ground with a public that is skeptical that this project is actually going forward,” Mason said. “I respect how much you are doing behind the scenes, but that’s not visible, so the push for dates is to prove to the public that this is real.”
But Voegele said he could not answer Mason’s question.
“What we don’t want to do is give you conjecture, I can just say nothing has changed in regards to our motivation to get the project under construction,” he said. “We just need to make sure that we check the boxes.”
Councilor Adam Roof asked Brookfield to provide a checklist of the “milestones” it needs to reach before starting construction, which Voegele said he would provide.
Councilor Karen Paul said city residents are worried about the project, and the lack of communication from Brookfield had been difficult.
“It’s disheartening to the community because we don’t always have the answers we would like to have,” she said.
After the meeting, Voegele said he thought the questions from the council were fair and that he understood the concerns raised.
“The reality is, though, we’re pleased with the progress we’ve made, and we were happy to report that progress today and happy to reinforce the communication,” he said.
Voegele also said that Brookfield has been working closely with the University of Vermont Medical Center, the project’s key tenant, since some of the dates laid out in the hospitals initial deal had passed.
“We’ve just had a wonderful working relationship with them, and worked to address the things that needed to be updated,” he said. “They, frankly, wanted to see the same kind of progress that we reported on today, and that’s gone very well.”
Tracy said he was frustrated with Brookfield’s presentation.
“I feel like they said a lot and said nothing,” Tracy said. “I don’t feel like I gained any additional information or knowledge of the project that would instill a greater sense of confidence in the developer’s ability to execute.”
Tracy said that he wasn’t sure how Brookfield could say they were 100 percent confident in the project if they could not provide a clear timeline on how it will progress.
Roof said he was glad that Brookfield committed to providing the list of next steps necessary before construction starts.
He said that while he understands the frustrations that there is no concrete start date, he remains reassured that the project will happen.
“We have more than enough evidence to make a fair assessment that the project at this point is going to move forward,” Roof said. “I can’t imagine this firm has grown to where it is today by making public promises and then walking away.”
