TIF Is a Subsidy to CityPalace Investors

 

The state's explanation of TIF says:

"Current statute requires that the municipality pledge at least 85% of the incremental municipal property taxes to the TIF debt and a maximum of 70% of the incremental Education Property Tax."

Residential taxpayers in 2021 are assessed 2.0576% of the value of their property going to the state's Education Fund; 0.9002 to the municipal fund. Roughly, two-thirds of property tax goes to the Ed Fund. For 20 years, 70% of the incremental value in the entire downtown district, including the smaller portion that would be enhanced by the developer and by City investment, will repay the City's debt created by the TIF.  That means that for 20 years or until the City's TIF debt is paid, the state's Ed Fund won't be getting 70% of the increased tax revenue from the district. The bankers who loaned the City money for project-associated streets and sidewalk improvements will get it. Residents will have to make up the difference if they want additional public improvements beyond what TIF pays for or to simply keep up with maintenance. Thus it is certain that the municipal budget will increase and with it the municipal side of the property tax.

When construction is finished, where will the taxpayer be? We will have paid Sinex $4.3 million for the roadbeds; we will have assumed the full cost of building the two roads that exclusively service the Sinex development (unlike other large developers who pay for their roads and utility infrastructure); and we will have a development that we may not like since the DRB has a history of approving all large developments. Had there been no TIF, normal increases in property values would have delivered 2/3rds of any rising tax revenue to the Ed Fund for 20 years. The Ed Fund is apportioned around the state, including to Burlington, will Vermonters will surely get less than with non-TIF development.

While the State anticipates that the property values in the entire Downtown TIF District will increase over 20 years from $170 million to $290 million, there is no guarantee that this will happen. In fact, Covid-19 tells us that a municipal economy can collapse unexpectedly, especially its commercial real estate values. In such a case, taxpayers will still owe the banks what was borrowed to give the developer the streets and sidewalks that add to the value of his/her new project. Indeed, are essential for access to that project.

What's the bottom line? Because property values can be generally expected to increase over 20 years if only due to inflation, the TIF diversion of incremental tax money to the bankers depletes the flow of revenue for education state-wide, instead channeling subsidies to the developer/players. Because commercial property values are now eroding and the economic engine of Church Street is weak--there's a need to replace paving; there's closed retail and restaurants; there's a need to support retail and restaurants with additional structured parking that isn't on the developer's horizon--it is likely that the forecast of $4.3 million in incremental taxes after 20 years will not materialize, will be delayed, or will be sharply reduced. That means that street improvements, normal maintenance, and the social support costs of hundreds of new residents (those fire trucks, school rooms, wastewater treatment capacity, etc.) brought by the development will be shouldered by taxpayers.

At best, TIF is a bet that the retail/commercial/residential economy will improve enough to pay for a subsidy to the developer. At worst it is a slight-of-hand manipulation in which what are termed civic enhancements "free to the taxpayer" are simply deferred costs that then increase due to debt service charges.

Charles Simpson

MAYOR BARELY CLEARS 40% THRESHOLD, AGENDA HAS MINORITY SUPPORT

 Mayor Weinberger's vision of Burlington garnered a minority vote from residents in the recent election. 129 votes short of electing a progressive mayor, 60% of voters backed all of the progressive ballot items. This should give City Palace investors pause and send the developers back to the Neighborhood Planning Assemblies for a check in. The project is costing taxpayers $23 million in TIF debt, and we want a say in what gets built there.

Opposition to the various pit projects put forth by Sinex and Weinberger has been constant since day 1. The mayor ands CEDO made an undisclosed deal with Sinex in October 2013. The deal would require up-zoning of the property, millions in TIF funding, and selling Burlingtonians a vision of $225 million sugarplums dancing around a palace with towers 16 stories high, featuring high rent apartments and offices, more bars, restaurants, and shops, and a hotel.

The mayor says it will replace the Champlain Street neighborhood that was displaced by urban renewal in the 70's. Say what? Refresh your memory of that neighboirhood. The documentary is available online here: https://www.youtube.com/watch?v=jCKj58HHWEs</a></a

Well, in spite of Council's last minute approval of the latest development agreement, and the DRB's quickie rubberstamp, there is unfinished business to be reckoned with: 

Reckoning: https://m.sevendaysvt.com/OffMessage/archives/2021/03/05/dispute-over-parking-could-delay-cityplace-burlington-construction

DRB Quickie Review:  https://www.cctv.org/watch-tv/programs/burlington-development-review-board-353  *Note that BTC is referred to as 75 Cherry Street.

5 FLAWS IN THE NEW REVISED DEVELOPMENT AGREEMENT

2/23/2021 Special City Council Meeting Item 3.01 

 Resolution: “Authorization To Resolve Litigation And Execute Amended And Restated Development Agreement With BTC Mall Associates” (sponsored by Councilors Paul, Paulino, Mason, Shannon and Carpenter). 

Burlington is more than ready to see something happen with the excavated pit in the center of downtown. Concerns are not about the new building designs as these can be addressed during the Development Review Board process.

Concern is that the terms contained in these documents are not in the best interests of the City and will cause the City to repeat its three prior failures. Past City Councils were induced to sign similarly immature and obfuscated development agreements. The predictable bad outcome has been exacerbated by the City's lax TIF accounting procedures . That’s why we have nothing but a pit today.

First reason to vote “No”:

There is no looming deadline in the Chittenden Superior Court case that forces a rushed decision on these documents. City Council must take the necessary time to understand them.

Second reason to vote “No”:

The City must first resolve the problems with the City’s accounting procedures for TIF-funded projects. Ten years of Auditors' warnings about the City's accounting problems asnoted in the annual Management Letters must end.

Third reason to vote “No”:

The history of three prior failed Development Agreements with BTC Mall Associates should have taught us a lesson . The City must take care to avoid following the same pathway to failure

Fourth reason to vote “No”

The disorganized and confusingly identified documents provided to City Council for this consequential decision has resulted in obfuscation of the contract terms being approved.

Fifth reason to vote “No”:

The Litigation Resolution Agreement includes an overly broad Mutual Release of liability for all claims against BTC Mall Associates that might exist under any of the prior failed agreements, and which might be discovered after the new versions of the development documents are approved.

Details as follows...---->

New Development Agreement WARNING!

THE PIT

Council tabled the new development agreement. The trust is just not there. The labor issue has given councilors and residents time to actually read the agreement, including the confidential MOU.

Is the mayor acknowledging that part of the deal is a release of all potential claims "from the beginning of the world" (really, translated from the Latin for us) against Don Sinex and the other BTC/CityPlace parties, related to any other Development Agreements? 

The release would go back as far as 2013 when there was a verbal commitment between the City and Sinex, affirmed by this email. The fix was in, building height and commitment to TIF, and we're supposed to believe the project was what we want? No, it is what we were sold.

The issue of union jobs opened up a can of worms, created time for Councilors and public to read the agreement, and WAKE UP!  Miro is a developer and he is not representing working people, taxpayers, or residents of Burlington well. Only Council is potentially on our side?

This is about trust, and trust is just not here. Remember Pizzagalli Construction (PC)? They have two complaints in arbitration that Sinex sought to subsume in the Mutual Release. (Judge denied it.) PC was a partner in the project until it got trumped. (Ireland, Farrington, Senecal, be wary.) Trust? Note this paid news ad, disguised as a Seven Days article:   https://www.sevendaysvt.com/vermont/new-team-behind-cityplace-burlington-includes-three-vermont-business-owners/Content?oid=31683502

I'm no lawyer, but with two lawyers on Council, I hope at least the Councilor from the NNE will give this new development agreement an honest read.

Deadwood rejects union labor and increased affordable housing in City Palace

 "Every few months a new announcement raises the prospect of progress, and then it sputters out once again." VT Digger 

Update: the story put out by CityPlace about new owners and union financing plus HUD financing was another vision of sugarplums from Sinex, Pomerleau and the incumbent mayor to gloss over the empty Pit before the election. Now the story is unraveling.

The winds have changed... [re the CityPlace agreement between the Mayor and the Developer.]  Labor wants this MOU to be voted down, as it does NOT provide for Union labor on the project.  Nor has Devonwood been willing to sign an agreement with us providing for Union labor on the project.   

 

"This agreement does not provide for union jobs, does not provide for prevailing wage jobs, does not provide for jobs with family sustaining benefits, and does not guarantee apprenticeship opportunities for BIPOC communities, and we therefore need you to VOTE NO on this agreement.  Please vote NO and ask the Mayor to instead negotiate an agreement with Devonwood that guarantees that UNION labor will build CityPlace."

-David Van Deusen, VT AFL-CIO President

PROJECT SEEKS UNION FINANCING -- UNION WAGES, BUT NOT ENOUGH AFFORDABLE FAMILY HOUSING.

Note: Hotel and Office space deleted, but still no neighborhood, no family housing, no affordable space for small retail and service businesses. 20% not enough!!!

CityPlace developers pursue labor union money; impasse with city remain. Dan D'AmbrosioBurlington Free Press

The first phase of CityPlace will involve 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 more apartments and an additional 7,500 square feet of retail. The third and final phase will add 70 more apartments, for a total of 426 units, plus 20,000 more square feet of retail, for a total of 42,500 square feet.

"No office space," Sinex said. "Office is dead. COVID took care of all that."

There will also be a rooftop restaurant and public observation deck, and most critically, St. Paul and Pine streets will be reconnected to Bank and Cherry streets, restoring the downtown grid blocked by the construction of the Town Center Mall in the 1970s.

https://www.burlingtonfreepress.com/story/news/2020/11/18/cityplace-burlington-afl-cio-provide-construction-loan-union/6315587002/

No Amendments to Just Cause Eviction Charter Change

 I urge you to demand of the committees so informed (ChaCha and CDNR) that they revisit the Charter Change and, if not without any changes, forward this language to the city council for a clear and empowering mandate to address the needs of tenants and landlords for a clear and just regulatory framework. 

Stephen Marshall, Burlington Vermont. 

Advocate for People Without Homes.

Charter Change Proposal to Empower the Burlington City Council to Regulate the Conditions Under Which Evictions From and Non-renewal of Leases for Residential Properties Shall Occur. 

Commentary: 

To call for a charter change requires good cause and clear language, and it must be empowering to the City Council, providing the broadest possible discretion within the limits of its purpose.