CityPlace Burlington developer Brookfield Properties pushed back on Mayor Miro Weinberger’s assertions that the developer had committed fraud, saying they were “deeply troubled” by the mayor’s claims.
In a letter sent to the city on July 10, the developers said concerns about market conditions and investment returns led Brookfield to determine it would abandon the uncompleted project. The document was obtained by VTDigger through a public records request.
Adrian Foley, Brookfield Residential’s president and COO, wrote that the company had invested “thousands of hours” and “tens of millions of dollars” into the project and disputed claims of fraud and misrepresentation.
“We are deeply troubled by your letter’s references to fraud and misrepresentation with respect to our conduct,” Foley wrote. “Through the many challenges faced by all development projects, and working closely with you and your civic colleagues and stakeholders, we remained committed to achieving the development goals, continuing to invest in the Project in the face of these obstacles.”
Foley wrote that the company determined it was “no longer possible to achieve the goals for which we originally partnered in the Developer of the Project” and that the company was considering returning the project’s direction, control and ownership back to developer Don Sinex, the minority partner.
City officials are leery of Sinex’s return to the project. The developer made little progress on the prominent downtown site, and the project has been stalled for nearly two years, leaving an enormous block-sized hole in the middle of downtown.
“This is not the result any of us had hoped for, but given the market conditions and the investment returns, this has become a necessary path for us to consider,” Foley wrote. “If pursued, this would allow the Project to carry on under Devonwood’s direction.”
The letter from Foley says Brookfield’s exit would settle its ongoing partnership dispute with Sinex and Devonwood. The nature of that dispute is unclear.
City officials threatened to sue in a letter to the developer July 18, arguing that the company had breached the development agreement and had acted with “bad faith and fraud.” Brookfield has suggested it will pursue a robust legal defense if the city moves forward with its threatened lawsuit.
Both Brookfield and Sinex have declined to comment following Weinberger’s announcement last week.
VTDigger received 217 pages of communications between Brookfield, the city and consultant Jeff Glassberg, who is managing the project for the city, as the result of a public records request covering the period from July 6 to July 23, the day following Weinberger’s announcement.
The records show increasingly blunt communication from Glassberg in recent weeks.
In an email July 9 to Matt Elsesser, Brookfield Residential’s COO, Mixed-Use East, Glassberg wrote that the lack of action by the developer was “deafening.”
Glassberg highlighted the lack of progress on a right of way restoration plan and the development agreement revisions, along with other initiatives. He noted that Brookfield had committed to appear before the City Council in early August.
“Based on where we are today, without progress, BTC has not prepared the ground for that update, but rather, made it likely that a Council already so inclined will move to declare a default under the Development Agreement,” Glassberg wrote. “We are there. No more time. Two years gone since construction ceased with nothing to show for it except a trail of broken promises. No way to keep the cork in this bottle any longer.”
In a July 18 email to City Council President Max Tracy, P-Ward 2, Glassberg wrote that he was “deeply disappointed” but not surprised about the status of the project.
“Ultimately, despite extended good faith efforts by the City to move the planned agreement forward, there was never a trustworthy counterpart on the BTC side with whom we could reach accord,” he wrote. “Trust is the lubricant that makes the gears turn, and by their words and deeds, the multiple and ever-changing cast of characters for BTC are not deserving of the City’s Trust.”
Glassberg wrote that despite efforts to make the developer make good on their promises, it was now time to move on.
“Let’s take the streets and get the outcomes the City bargained for another way,” Glassberg wrote.
Weinberger said last week that the city would give Brookfield a short period of time to come forward with an acceptable proposal on moving forward before filing a lawsuit.
