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CityPlace Burlington developer Don Sinex and his three local partners have a new plan to get the money they need to build their project and fill the empty pit in downtown Burlington left by the demolition of the Town Mall Center.
They are going after union money – the AFL-CIO Housing Investment Trust, a $ 6.7 billion union backed fund. On its website, the trust touts its 35-year history of “worker” performance, while improving the country’s housing stock and providing “good union jobs”.
Sinex partners are Dave Farrington, president of Farrington Construction Company in Shelburne; Al Senecal, owner of Omega Electric Construction in Essex Junction; and Scott Ireland, President and CEO of SD Ireland Companies, which includes SD Ireland Concrete Construction Corp.
The announcement of a new funding route for people in difficulty, long-standing project received a mixed reception from Mayor Miro Weinberger.
“I see it as I see most of the preliminary announcements on project funding,” Weinberger said. “It’s interesting.”
Relations between Weinberger and Sinex have been poisoned by the setbacks suffered by CityPlace. It’s been seven years since Sinex and a former partner bought the Burlington Town Center Mall from General Growth Properties for $ 25 million and demolished it, and all the city has to show is an embarrassing void in the middle of downtown. city.
The most recent setback has been the abandonment of the project by Brookfield Properties, the global real estate company that has partnered with Sinex. Weinberger was counting on Brookfield’s deep pockets to bail out CityPlace. When Brookfield gave up, the city sued BTC Mall Associates, the partnership behind CityPlace.
HUD must sign before union money flows
The first step for Sinex and its new partners in their quest for union funding is to gain approval from the US Department of Housing and Urban Development for the CityPlace project. The Housing Investment Trust requires this approval, along with the use of union labor, to build any project it supports.
“The developer signs an agreement that all construction jobs are unionized,” said David Van Duesen, president of the AFL-CIO in Vermont. “It’s not for debate or future conversation. That’s how it works.”
No problem, Sinex said, when asked to comment on the Burlington Free Press. Sinex also spoke on behalf of its local partners.
“We are not opposed to paying union wages in exchange for partnering with the AFL-CIO to fund the CityPlace project in its entirety,” Sinex said.
Sinex added that the payment of union wages would not burden the project “in any way”.
Union wages for a job like CityPlace will start at around $ 40 an hour, including benefits, according to Tim LaBombard, president of the Vermont Construction and Building Trades Council.
“Everyone who works (on CityPlace) is working for their pension,” said LaBombard. “They will do their best. We have everything to gain and everything to lose.”
Office space is dead; housing comes to the fore
In addition to paying union wages, the CityPlace project would be even more geared towards housing because of AFL-CIO funding. The project is now planned in three phases and will require $ 35 million in cash from Sinex and its partners, in addition to the $ 140 million HUD loan guaranteed by the Housing Investment Trust.
The total cost of the completed project will be $ 175 million.
The first phase of CityPlace will consist of building 181 apartments, 14,500 square feet of retail space and a 424-car parking garage, at a cost of $ 70 million. Sinex said 20% of the apartments built throughout the project will be considered “affordable”.
Phase 2 will bring 175 additional apartments and 7,500 additional square feet of retail space. The third and final phase will add 70 additional apartments, for a total of 426 units, plus 20,000 square feet of retail space, for a total of 42,500 square feet.
“No office space,” Sinex said. “The office is dead. COVID took care of it all.”
There will also be a rooftop restaurant and public observation deck, and more importantly, St. Paul and Pine streets will reconnect with Bank and Cherry streets, restoring the downtown grid blocked by construction. from the Town Center Mall in the 1970s.
Weinberger said the “superblock” created by the mall was unhealthy for the downtown area.
“For a healthy city, you want porosity,” he said. “Everything to the north (of the mall) was cut off and the whole area suffered. To re-knit, heal that part of town would see a big improvement in that area.”
Where will the money come from to pay for the new streets?
Reconnected streets are at the heart of the city’s lawsuit against BTC Mall Associates. The original and “elegant” plan, Weinberger said, was to foot the $ 21 million street bill with a TIF, or tax increase funding, a bond taken out by the city.
The way the link works is that the new property taxes from the completed CityPlace project would pay for the streets. Burlington taxpayers would not lose a penny. The TIF, granted by the state legislature, has a deadline of June 2022. Originally the deadline was June 2021, but the legislature extended the TIF to the entire state due to the pandemic of COVID-19.
The city of Burlington is expected to have contracted the debt for the streets by June 2022, which means the CityPlace project is expected to be completed. Everyone agrees that this won’t happen, especially now that it will most likely be built in three phases.
In its lawsuit against BTC Mall Associates, the city is demanding that developers build the streets at their own expense, arguing that project delays have rendered the TIF moot. Sinex said he would never agree to this.
“We will either be reimbursed or not do them,” he said of the street.
Weinberger said it wasn’t a start.
“I have never been willing to put taxpayers at risk of delays or other complications with private developments,” he said. “This is how municipalities have had problems with TIF projects in the past.”
Property tax revenue set to halve under new plans
There is another, perhaps more significant, issue resulting from the revised and scaled-down plans for CityPlace Burlington. The completed project will no longer generate the tax revenue necessary to repay a TIF bond, even if it could be issued.
Weinberger said the original project, comprising 14-story towers and much more square footage of retail space, as well as offices and a hotel, would have generated $ 2.5 million in property taxes per year. The new plan, Weinberger said, will generate less than half of that amount, roughly $ 1.2 million.
“There might still be a way through this,” Weinberger said. “This is what we explore in mediation.
The first mediation session will take place on November 23, and there will be another one a week later, on November 30. Both Weinberger and Sinex have said they will attend.
How to pay for the new streets connecting Bank and Cherry streets will be the focus of the mediation. Max Tracy, chairman of Burlington City Council, has said he will not sit at the negotiating table but considers the street issue “non-negotiable.”
“They have to pay,” Tracy said.
An online petition and new developers
In the meantime, Sinex and its partners are collecting signatures for an online petition supporting CityPlace. As of November 18, about 630 people have signed the petition, which includes a letter from Dave Farrington. Sinex said it hopes to collect 2,000 signatures.
“In a city where the mayoral election is decided by 300 to 500 votes, if you get 2,000 people, that’s a significant number,” Sinex said.
For his part, Weinberger said he was encouraged by the fact that since Brookfield announced its withdrawal from CityPlace, “at least five different credible, experienced and well-capitalized developers” have shown “significant interest” in the project.
“It should reassure the Burlingtonians,” Weinberger said. “Something great will be built here.”
Learn about other Burlington development news:
Contact Dan D’Ambrosio at 660-1841 or [email protected]. Follow him on Twitter @DanDambrosioVT. This coverage is only possible with the support of our readers.
