© 2018 Montpelier Development Corporation

Montpelier eyes TIF funds for building boom

 

MONTPELIER — On the eve of the anticipated approval of a new state-sanctioned downtown development zone in the Capital City, officials were cautiously optimistic about establishing a new Tax Increment Finance district to help fund future projects.
After months of preparation by the city, state officials will consider an application for a TIF district at a meeting of the Vermont Economic Progress Council at National Life on Thursday at 9:30 a.m.


Approval of TIF funding would pave the way for other new development that is waiting in the wings. And it would follow the start of several other projects that already herald a new building boom in the city. TIF funding, using municipal education property tax income to support infrastructure improvements — such as roads, sidewalks, sewer, water and utilities — can encourage a developer to build in the city because of reduced overheads.


One major project waiting for TIF-district approval is the planned Hampton Inn & Suites hotel and garage complex behind the Capitol Plaza Hotel & Conference Center on State Street. The Bashara family has a permit to build a $17 million, 81-room, five-story hotel and adjoining parking garage on 2.8 acres behind the Capitol Plaza. But the family needed help with the cost of the garage and asked the city to partner on the project. To make the hotel project TIF-eligible, it must include a public infrastructure component with a public benefit, such as the garage.


The city has agreed to do so but has increased the size of the proposed garage from 230 to 350 parking spaces to accommodate the parking needs of both hotels and a proposed nearby housing project planned by Christ Episcopal Church. It would mean a net increase of 160 spaces in a city that has suffered a perennial parking problem.
The project will still be contingent on approval of a $10 million bond to build the garage that voters would be asked to approve in the November election, if the TIF district is approved.


Mayor Anne Watson said she was hopeful of TIF approval, leading the way for other new development. She also pointed to several other projects already underway and others to follow that signaled that “Montpelier is open for business,” in the words of former Councilor Jean Olson.


Watson said a wide range of new projects was a sign of major change in the city landscape.


“On the larger picture, cities are living entities and they need to keep adapting and evolving,” Watson said. “I think it’s really exciting we’re seeing the next evolution of what Montpelier is going to look like.


“I think all of these projects are a reflection of our values, in that we value our downtown businesses and having a thriving economic downtown, and we value being outdoors,” she added.


Other major projects include:


— The Taylor Street transit center and housing complex, a $12.5 million project to build a bus terminal and housing complex with 30 apartments. It also includes a recreation path linking an existing path to the east with a new path between Granite Street and Gallison Hill Road. A Confluence Park at the junction of the Winnoski and North Branch rivers is also planned. Work on the project started this month.


— The Caledonia Spirits Distillery, a project of the Hardwick-based company to build a new, $9 million, 26,000-square-foot plant on 4.3 acres off Barre Street, across from Sabin’s Pasture. Supported by infrastructure improvements and a 10-year tax-stabilization agreement, the new distillery would create 25 to 30 new jobs paying an average of $30,000 a year, company officials said. Work began in July and is expected to be completed in fall 2019.


— The French Block Apartments, a revival of an 1875 Federal-style building on Main Street creating 18 studio and one-bedroom apartments — four market-rate rental units, nine affordable units based on income sensitivity, and five units for homeless people. Work on the $6.1 million project began in January and is expected to be completed Dec. 31.


“Cities around the country have really terrible shortages of affordable housing, so it makes me really proud to have a place that is going to be affordable,” Watson said. “It’s a step in the right direction, especially in terms of using our existing infrastructure wisely, after that building was empty for so long.”


Acknowledging the $10 million bond vote for the parking garage in November, Watson noted that officials hope to cover the cost with TIF financing and parking revenue over the life of the loan.


Voters will also be asked to approve a proposed $16.1 million upgrade to the wastewater treatment facility — and the possibility of another request for a $3.6 million “Organics-to-Energy” project to turn high-strength waste into fertilizer that would generate additional tipping fees to help pay for the project.

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