Rutland City residents will be casting their votes Tuesday on a $3.9 million bond for infrastructure upgrades as a part of a large-scale economic revitalization effort downtown.
If approved by the voters, the city will have the funds to upgrade the wastewater system, bury power lines, widen sidewalks and lay the groundwork for a proposed hotel project, housing and other private investment downtown, said Rutland Redevelopment Authority Executive Director Sean Adkins.
The vote is the next step in the development of Rutland’s Tax Increment Financing District, after the Vermont Economic Progress Council’s approval of the first phase of the city’s plans for the district in July. The hotel and infrastructure plan is the first in a series of potential projects proposed to revitalize Rutland’s downtown through the Tax Increment Financing, or TIF, program.
While the bond requires voters’ approval, paying off the $3.9 million debt would not increase tax rates for city property owners, according to Rutland City Planning Director Ed Bove. Instead, the state’s TIF program allows the bond to be repaid out of the additional taxes generated by the planned economic development projects as they are completed.
In this case, local property developers have agreed to create a four-story hotel with 25 units of market-rate housing, a ground floor restaurant and a rooftop bar in the long-vacant parking lot called “the pit” in downtown, Bove said.
The difference between the property value before and after development, or tax increment, will go toward paying back the bond over 20 years, as well as the municipal general fund and the state education fund.
Development downtown including the hotel is dependent on infrastructure updates, Adkins said. Rutland City’s dilapidated, old wastewater pipes are in desperate need of renovation, and burying power lines downtown and widening the sidewalks will help modernize the city, Adkins added.
If the bond request is voted down, Rutland’s Department of Public Works would still recommend the wastewater infrastructure upgrades, but a larger bond would be necessary and the cost would fall on the Rutland City taxpayers, Adkins said.
What’s at risk in a ‘no’ vote is a $3 million Northern Borders grant and $500,000 in sales tax reallocation, which may be in jeopardy if the vote does not go through, Bove said.
Rutland also has 10 years to take out additional bonds through the Tax Increment Financing District, Adkins said. A no vote would shorten the window of opportunity for the city to use the TIF district as a tool for economic development, he said.
While the infrastructure projects will only start in the spring of 2026, Adkins said the developers are waiting in the wings to start constructing the hotel project if Rutland residents approve the bond on Tuesday.
Maintaining momentum on downtown development projects through obtaining TIF District approval and getting the hotel project over the finish line was central to Rutland Mayor Mike Doenges’ campaign message before his reelection on Town Meeting Day in March.
“This is really our moment,” Doenges said on Thursday. “We get to take advantage of programs like the TIF to make improvements to our city.”
Rutland City Board of Aldermen member Michael Talbott said he learned about the Tax Increment District in St. Albans four years ago and got the ball rolling to approve the district in Rutland, which came to fruition earlier this year. Talbott said there has been years of momentum building up to Tuesday’s vote.
“This is a real inflection point for Rutland,” Talbott said. “Once this happens, and this hotel and downtown living project gets built, all kinds of other investment and development is going to follow it, so I think it’s going to be really, truly transformative when we look back 20 years from now at this moment.”
