by Timothy McQuiston Vermont Business Magazine One of the final remaining questions involving the re-development of the Burlington Town Center – where’s the money coming from? – has been answered. Rouse Properties, a leading owner and operator of retail and lifestyle centers across the country, today announced in a press release that it plans to enter into a joint venture agreement with Devonwood Investors LLC, owner of the Burlington Town Center, to redevelop and completely transform “this outdated, suburban-style shopping mall, which is located in the core of Burlington, Vermont, into a state-of-the-art mixed use center that will feature high quality neighborhood apartments, shops, restaurants, services, and offices.”
The project met with much planning scrutiny that resulted in some revisions and vocal opposition from some residents because of the scale of the project, which they felt was too large for the city, especially in regards to the 14-story height.
City voters nevertheless passed a zoning change last November 54 percent-46 percent, as well as a related bonding question.
The redevelopment project has received zoning approval from the Burlington Development Review Board. Groundbreaking is expected mid-2017, with the project completed in phases over three years.
The joint venture is expected to close within the coming weeks and will then begin construction on the $225 million project, “which will transform the way people live, work, and shop in downtown Burlington and the historic Church Street Marketplace.”
From left: Jay Fayette, senior VP of PC Construction; Mayor Weinberger and Don Sinex last December when PC was named GC. VBM photo.
“I am so pleased that Rouse is joining us for this transformation of Burlington Town Center,” said Don Sinex, Managing Director of Devonwood Investors, in the release. He said he will continue to lead the development of the project. “Rouse is a premier name in real estate, synonymous with development innovation, urban creativity and rebirth as well as environmental leadership, so it is fitting that they will join us to bring this wonderful project to reality for the City of Burlington.”
Sinex told Vermont Business Magazine via email that Rouse’s investment amount isn't being disclosed, but Rouse will be the only institutional equity partner in the deal with Devonwood.
He said there will also be a construction loan (term sheets are in; Devonwood is hoping to complete that process within about a month or so).
“As you know,” Sinex said in the email, “typically these deals would have 65-75 percent of the total capital requirement needed in the form of lender financing. The balance would be equity. Here that equity comes from Devonwood and Rouse. Although a few key subcontractors and materials are still being costed-out, the project looks to still be solidly $225-235M all in – so that gives you a sense of where things stand, though the amount of Rouse's commitment is not public.”
He called this a “traditionally financed deal.”
PC Construction of South Burlington will be the general contractor.
Sinex said Rouse will take an ownership stake as a joint venturer with Devonwood and Devonwood/Don Sinex will stay in the lead on getting the project accomplished.
Rouse's interest evolved over time as they watched the project evolve, Sinex said, and they are familiar with him and the property, “and are excited to participate in the project.”
“I congratulate Don Sinex and the Burlington Town Center redevelopment team for securing the participation of Rouse in this project,” said Burlington Mayor Miro Weinberger in the press release. “This transformative project is now on the cusp of replacing a dated and failing suburban mall with a vibrant mixed use neighborhood. It will create much needed downtown jobs and homes, restore lost streets, help clean-up the lake, and generate substantial new revenues for the City and State.
“After years of public process and debate that have vastly improved the project, it is time to start rebuilding the core of our downtown for the benefit of all our residents.”
Brian L Harper, Chief Executive Officer of Rouse Properties, said in the press release: “We were intrigued by the strength and soundness of the vision Devonwood outlined for the new Burlington Town Center and impressed by the leadership of Don Sinex. We agree strongly that Devonwood has the right plan to revitalize this outdated mall and are confident that this redevelopment will be an economic and retail boon for the Burlington community.”
Harper added, “Burlington, which is Vermont’s most populated city, is the economic and cultural hub of Chittenden County, home to a strong mix of leading companies and institutions including Seventh Generation, Burton Snowboards, Ben & Jerry's, Dealer.com, the University of Vermont and UVM Medical Center. We look forward to joining this community and meeting the needs of this thriving market through a revitalized Burlington Town Center.”
Rouse’s planned equity investment in the joint venture, coupled with upcoming lender financing, ensures that the Burlington Town Center redevelopment project will have the funds needed (approximately $225M) to proceed with and complete the project.
“This significant investment from Rouse is a testament to the strength of this redevelopment project,” said Porter Terry, Director at Holliday Fenoglio Fowler, L.P. (HFF) and financing agent for the Burlington Town Center redevelopment. “There continues to be strong interest from the market for this project from many qualified and interested parties, and I look forward to finalizing the lending commitment shortly for this truly transformational development.”
“This redevelopment will ensure that the City of Burlington remains a leader in urban design and sustainable development,” Sinex said. “I look forward to getting started and delivering to this community a project that we all will be proud of.”
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About the Burlington Town Center redevelopment project:
Burlington, Vermont, on the shores of beautiful Lake Champlain just west of the Green Mountains, is a vibrant city of arts, entrepreneurship, and outdoor recreation that hosts 3.5 million visitors annually. The Burlington Town Center project is located on five acres in the heart of the downtown, next to the iconic Church Street Marketplace, and near the University of Vermont, Champlain College, and the UVM Medical Center. The redevelopment project will create approximately 270 new apartments, with 20% of the units dedicated permanently affordable, plus new office, services, retail space and two new public streets. The project will create hundreds of jobs during construction and through the businesses that will locate in the new project. The project, which is utilizing Vermont-based construction, engineering, architecture, and other professional services, will incorporate state of the art storm water protections, LEED Gold construction, renewable energy and energy efficiency measures, and will serve as lead partner in Burlington’s District Energy initiative. For more information, please visit www.newbtvtownctr.com.
About Devonwood Investors
Devonwood is a private real estate investment and development company managed by Donald F. Sinex, a 37 year veteran of real estate investing and development. Prior to the formation of Devonwood, Mr. Sinex was a senior executive with JMB Realty Corporation and managed the firm's investments and developments in New York City. Devonwood specializes in visionary developments such as the redevelopment of the Burlington Town Center.
About Rouse Properties
Rouse Properties is one of the country's largest regional retail center owners, with a geographically diverse portfolio that spans the United States. Owned by affiliates of Brookfield Asset Management, the Company operates 34 retail centers in 19 states encompassing nearly 24 million square feet. Rouse Properties was founded on a legacy of innovation and creativity. For more information, please visit: www.rouseproperties.com.
About HFF
Holliday Fenoglio Fowler, L.P. (“HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 24 offices and is a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
Source: Rouse and Devonwood. NEW YORK and BURLINGTON, Vt. – April 11, 2017