BURLINGTON — The majority owner in the CityPlace project is expected to acquire a train line passing through the Queen City as part of plans to purchase a multinational railroad holding company.
Brookfield Asset Management has finalized an agreement for the purchase of Genesee & Wyoming, which operates more than 100 short-line railroads in the U.S. and owns 13,000 miles of track across the globe. The deal is pending while federal regulators evaluate the proposed $8.4 billion transaction.
Brookfield is a large, international corporation based in New York that manages more than $385 billion in assets, according to its website. The company is the majority owner in the stalled CityPlace development in downtown Burlington.
Brookfield announced in July that it will redesign the development, changing the size and scale of the project. While the redesign will cause additional delays, Mayor Miro Weinberger said the changes will address criticisms of the original 14-story plan for the block-sized building.
Construction has been stalled since the conclusion of the demolition of the mall in August 2018 amid financing challenges. Brookfield became more involved in the day-to-day operations of the project late last fall and has taken complete control of the project from developer Don Sinex.
Brookfield is partly owned by the government of Qatar and also bailed out President Donald Trump’s son-in-law, Jared Kushner, on a Manhattan property deal, according to Reuters.
Genesee & Wyoming’s holdings include the New England Central Railroad, which runs from the Canadian border in Alburgh to New London, Connecticut, passing through Vermont.
Part of the railroad includes the line running between Burlington’s Union Station and Essex Junction. The six miles of track between the two stations is in need of upgrades, but could be used to link additional passenger rail to the city once service to Montreal resumes.
Carl Fowler, National Association of Railroad Passengers vice chair and a member of the Vermont Rail Action Network, said the rail line has been controlled by various holding companies since the late 1980s.
Fowler said Brookfield must think the operation is viable, given the purchase price.
“We who love railroads all hope that they won’t disinvest and follow the hedge fund manual for you to load it with loads of debt and strip all the assets again, and then you dump it,” he said. “I hope they won’t do that.”
Brookfield’s new rail line runs along the Burlington waterfront less than half a mile from its planned CityPlace project.
Will Voegele, senior vice president for development of Brookfield Properties, did not respond to a request for comment on whether railroad acquisition would have any effect on the CityPlace development.
The deal to take over Genesee & Wyoming has yet to be finalized. On July 22, the Surface Transportation Board put a hold on the deal to evaluate if it should grant a request from both parties to exempt the transaction from board review, which is typically the case when an acquisition does not include two railways.
Brookfield sent the board a letter urging approval of the exemption by Sept. 5, arguing the board has typically granted the exemption in similar circumstances, Trains magazine reported.
Tom Torti, president of the Lake Champlain Regional Chamber of Commerce, said he thinks the purchase is probably more “happenstance” than a strategic move into the area.
“Will it have a bearing in any way on CityPlace, my guess is no,” he said. “I think the rail division is probably separate.”
