This story by John Flowers was first published in the Addison Independent on Aug. 20, 2026.
MIDDLEBURY — Middlebury last week became the first community to dip its toe into Vermont’s new Community & Housing Infrastructure Program. Through CHIP the town would be able to borrow money to build municipal infrastructure and pay down that debt over 20 years with tax money raised from the 74 future new homes in the Stonecrop Meadows neighborhood that would be served by that new infrastructure.
The board voted 5-0 — with selectboard member Fred Dunnington abstaining and member Farhad Khan absent — in favor of a housing infrastructure agreement with Summit Properties, the developers of Stonecrop Meadows, a new mixed-income neighborhood off Seminary Street Extension that’s eventually to include around 250 homes.
The agreement, among other things, allows Middlebury Town Manager Mark Pruhenski to submit, to the Vermont Economic Progress Council, Summit’s application to use CHIP as a tax increment financing tool to pay for infrastructure — such as roads, streetlights and sidewalks — for the next 74 homes (phase two) of Stonecrop.
Workers are currently finishing the first phase (61 units) of what’s to be the biggest residential subdivision in the county’s shire town.
Summit Chief Operating Officer Zeke Davisson and Chief Executive Officer Tom Getz have been looking for resources for Stonecrop’s phase two infrastructure. They told the selectboard at an Aug. 4 public hearing that they can’t pass along those estimated $4.4 million in costs to future Stonecrop renters and homebuyers, due to the mixed-income commitment.
The duo returned to the board Aug. 11 seeking Middlebury’s buy-in on what will be the state’s first CHIP application to help underwrite phase two’s curbed roads, water and sewer lines, sidewalks, public space and stormwater treatment.
In short, the CHIP program — administered by VEPC — allows municipalities to leverage tax increment financing from municipal property taxes and state education fund property taxes to help pay for infrastructure that enables new housing development on a single parcel or a group of contiguous parcels.
Starting in the first year in which the developer incurs debt for the housing infrastructure, Middlebury would annually remit to Summit 85% of the municipal property tax increment generated by parcels located within the Stonecrop site, according to the CHIP agreement between the town and Summit. This would occur annually for up to 20 years, or until the phase two infrastructure debt is paid off.
What makes the agreement more attractive, according to town and Summit officials, is that the CHIP program also harnesses state education fund dollars to pay down infrastructure debt. Specifically, the education tax will cover 60% of the infrastructure debt, Getz said.
The state developed CHIP as a tool to encourage more residential construction during the current housing crisis.
But while the state would cover a majority of the debt, the cost to Middlebury wouldn’t be inconsequential.
In exchange for new housing and the promise of an expanded grand list, Middlebury would be forgoing some municipal tax revenue at a time when the demand for services from new residents would be rising.
Pruhenski said town staff estimated the Stonecrop growth could add 1.5 cents to the tax rate during the early years and 2.5 cents toward the end of the potential 20-year tax increment finance period. A penny on Middlebury’s tax rate raises roughly $100,000.
Data furnished by Pruhenski shows $164,500 in potential annual service cost increases generated by the phase two Stonecrop homes, ranging from $10,000 for the library to $40,000 for road maintenance and snow removal.
Pruhenski acknowledged that calculating the cost of future municipal services is an inexact science.
“There is no tool we found to perfectly capture municipal costs. We tried to quantify them to the best of our ability,” he told board members. “The goal here was to illustrate that there is a municipal cost, so you’re going into this with eyes wide open.”
Alex Armani-Munn, executive director of Addison County Economic Development Corp., has been helping Summit and the town navigate the CHIP program. He’s seeking a consultant to perform an independent economic impact analysis that will provide the town with more information about the financial implications of CHIP.
He noted that VEPC, during its 90-day review of the Stonecrop application, will also take a deep dive into the cost variables.
Dunnington, the selectboard member who abstained, asked Davisson how Summit would proceed if the board said no to its CHIP request.
“We wouldn’t build as many houses,” he replied.
Dunnington voiced concern about the potential CHIP impact on municipal property taxpayers, particularly those who are struggling.
He also asked about the impact of potential future CHIP requests — such as one that will soon be submitted for the Middle Housing project.
“If other (developers) come along and ask, how would we say ‘no’ to them?” he asked.
“I don’t think it sets a precedent that if we say ‘yes’ to one, that we’re going to say ‘yes’ to every single one,” selectboard member Isabel Gogardy replied.
Selectboard member Dan Brown agreed.
“We can say ‘no’ to whoever we want. But the choice here is if we don’t do this, we don’t build houses, we don’t increase the grand list, and we don’t see anything with future taxes. And then we’re still in a housing crisis,” he said.
Selectboard Chair Andy Hooper argued that the tax increment financing provision of CHIP is analogous to Middlebury’s current capital improvements process: The town each year prioritizes road, culvert and sidewalk work in various neighborhoods using money provided by all municipal taxpayers.
“In this case, the (Stonecrop) residents haven’t arrived yet,” he said.
The selectboard on Aug. 11 seemed prepared to endorse the Stonecrop CHIP application and then plug in a specific tax increment financing cap for the phase two infrastructure later — after the upcoming study on its economic impacts. But Davisson and Getz persuaded the board to approve a not-to-exceed number of $4 million. Having a specific number provides predictability in a housing industry that has seen its share of upheaval recently, they said.
That $4 million number — and other provisions of the agreement — could change during VEPC’s upcoming review of the CHIP application.
“This is just the next step in a process,” Armani-Munn said.
