The Burlington city government has reached a settlement agreement with the developers of CityPlace, the long-delayed multimillion-dollar downtown apartment and retail complex.
In September, the city announced that it would sue CityPlace developer BTC Mall and Associates for breaching the original development agreement and for not meeting construction deadlines. CityPlace was supposed to replace the Town Center mall, which was torn down in 2017. Since then, no construction has occurred and the project’s main financier, Brookfield Asset Management, backed out last summer.
The agreement announced Friday ensures that the streets surrounding the project — Pine and St. Paul streets — will be built as originally planned through tax increment financing or on the developers’ dollar, if the project continues to stall. The agreement also ensures that the city will be reimbursed for property taxes it lost because of the unanticipated delays, at the rate of $150,000 a year.
The city is expected to take in between $300,000 to $450,000, depending on how the project moves forward.
The city’s lawsuit ultimately aimed to compel construction of the public improvements that CityPlace developers had promised. At a press conference Friday afternoon, Mayor Miro Weinberger framed the agreement as a win for the city at no cost to taxpayers.
“No matter what happens now with the project that the developer is pursuing, the city will get our streets,” Weinberger said.
In 2016, Burlington voters approved $21.8 million in tax increment financing bonds to fund the work on the streets surrounding CityPlace. Under the financing arrangements, the bonds will be paid off from tax revenue produced by the new development, now scheduled to be completed by 2026. The developers have until June 2022 to use the TIF bonds; otherwise, they will expire.
The settlement agreement states that, if the street construction does not begin in two years, the developers will have to pay for completion of the streets themselves under a “legally enforceable contract,” and won’t be eligible for TIF reimbursement.
Because the project plans have changed and been scaled down, the TIF investment has decreased from $21 million to between $8 million and $10 million.
The payout of $300,000 to $450,000 to the city will make up for loss of tax income on CityPlace land, Weinberger said. He called this the “one financial impact” that the city has felt because of the project delays.
When the old mall was demolished, the developers negotiated a $150,000 decrease in their property tax bill, off a total bill of about $800,000 Weinberger said.
He said that agreement was made for only one year, because construction was expected to start, thus bringing up the property valuation.
“History didn’t unfold that way,” Weinberger said. So the city has asked for three years in lost property tax revenue. It might gain a fourth year, depending on how quickly construction proceeds.
In addition, the city has brokered a new development agreement with BTC Mall and Associates, given that timelines and details in the old agreement are no longer relevant to what’s being proposed now. That settlement agreement, and the new development agreement, need approval from the city council, which will discuss them Monday night.
Don Sinex, the managing member of the CityPlace development team, has been involved in the project from the beginning. He has brought in three new local developers for the latest iteration of the project: Dave Farrington, owner of Farrington Construction; Al Senecal, owner of Omega Electrical Construction Co.; and Scott Ireland, owner and president of S.D. Ireland Concrete Construction.
The current plan is for 426 apartments and 45,000 square feet of retail space, built in phases. A financier has yet to be secured, but Sinex is eyeing a partnership with the AFL-CIO Housing Investment Trust.
“We are excited that now we can move the project forward, pending
approval by the City Council in February,” said Sinex in a statement issued Friday evening. Once under way, he said, “the project will provide a desperately needed economic ‘shot-in-the-arm’ to Downtown Burlington and surrounding Chittenden County, as well as a much needed stimulus following the devastating impact caused to the community by the COVID-19
pandemic.”
At the afternoon press conference, Weinberger wouldn’t say directly how confident he is that CityPlace will move forward. Over the years of delays, Weinberger has publicly expressed frustrations that the project remained stalled for so long with Sinex at the helm.
The tone of the press conference was cautious optimism. Weinberger said the public aspects of this public-private venture — the surrounding streets — have now been protected through this new agreement. Now it’s up to the private sector, he said, to ensure that it can deliver the new homes and economic activity the project promised to Burlington.
“We think it’s a credible, feasible path forward,” Weinberger said. “We think it could succeed and we wish the developers well and we’ll be supportive of them going forward.”
Editor’s note: This story was updated to include a statement released Friday evening by managing development team member Don Sinex.
