Downtowns: Assets that attract people and investments

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Downtowns: Assets that attract people and investments

Mon, 10/14/2019 - 10:05am -- tim

Photo: Putnam Block redeveloped rendering. Courtesy photo.

by Olga Peters, Vermont Business Magazine

Large projects like the Putnam Block can create ripples of confidence.

Photo: Bob Stevens, Principal, M&S Development. Courtesy photo.

Bob Stevens, of Stevens & Associates, said that when people see the investments people are making, and they see things improving. They become more willing to make their own investments figuring that the market is becoming stronger and will pay their investments back. Stevens is part of the Bennington Redevelopment Group. He helped lead the rehabilitation of the Brooks House in Brattleboro after a fire in 2011.

The ideal outcome for the town as a whole, in Steven’s opinion, would be that the Putnam project spurs other investors to renovate other areas of downtown.

“If so,347373737 that would be a huge success,” he said.

“The multiplier factor may be larger than the Brooks House,” Stevens said.

In the case of the Brooks House, the project replaced a working building that had residents and businesses located in it.

Bennington’s downtown, however, had several empty buildings. The Putnam Block’s upper floors had been empty since the 1980s.

The Brooks House fire might have rocked the Brattleboro community, he said. But the building’s damage was relatively short, Stevens added. “Bennington had a 30 year fire.”

Photo: Hotel Putnam in the Putnam Block, Bennington VT. Courtesy photo.

The Putnam Block is in phase one of a multi-phase rehab project. This stage will rehabilitate approximately 80,000 square feet — or — three out of five historic buildings on the street: the old Court House, the Putnam Hotel, and the Winslow Block. Now in its construction phase, Stevens anticipates this part of the project to cost $31 million.

Phase two, he anticipates will total more than $20 million. Phase two is in the development stage and includes redeveloping a building next to the former Putnam Hotel. The building will house medical offices and three floors of housing.

For phase three, the team is working on adding a hotel to the block and is discussing an affordable housing project with Shires Housing, located in Bennington, and Housing Vermont, from Burlington.

“They’re very, very complex projects,” Stevens said. “We believe the benefits go beyond the projects themselves.”

These rehabilitation projects don’t make financial sense up front which is why they need a combination of federal, state, and private funding, he added. Overall, the construction cost for these large historic properties run $300 per square foot. Yet, these buildings are located in towns with appraised market values around $100 per square foot, Stevens said.

When the economy is weak, people can’t pay high rents. Over time, landlords make fewer investments in their properties because they don’t have the money to make those investments, Stevens believes.

The reality is an investor won’t get $1.10 for their $1 investment, Stevens said of the upside down building market.

For example, the commercial rents at the Brooks House are at almost the same level as before the 2011 fire.

To attract financial or human capital, however, rural communities need active, vibrant, and walkable downtowns, he said. “Without that asset, nothing else really works.”

Studies that Stevens has read show that Baby Boomers and Millennials both want these types of amenities.

Stevens believes that rehabilitating empty downtown structures into mixed-use buildings that include retail, offices, and housing is scalable to communities across the country.

Large businesses like the former Vermont Yankee Nuclear plant in Vernon represent a lot of business eggs in one economic basket. In comparison, mixed-use buildings are more resilient in Stevens’ opinion because if the building loses a business, it still has 20 other tenants to ensure the building endures.

For an example, Stevens said that the upper floors of the Brattleboro’s Brooks House are always full. The Brooks House has 23 apartments and a waiting list of 60 people, he said.

Retail on the ground floor has proved more challenging, he admitted.

Stevens said the team behind the Brooks House does its best to support the businesses on the ground floor including helping business owners develop their business plans and pointing them in the direction of capital.

“We figure out how to help them,” he said. “And to create a supportive ecosystem for retail.”

Because of this resiliency and their ability to support downtown revitalization, projects like the Putnam Block help get to the root of economic stagnation, Stevens said.

It’s important to realize that it takes the community to step up and invest in itself. Because the economy is so upside down, the community will need to save itself by contributing to new projects, community events, and other things that make life in town better.

Olga Peters is a freelance writer from Windham County.