City sends notice of default to developer of CityPlace Burlington

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City sends notice of default to developer of CityPlace Burlington

Wed, 07/22/2020 - 4:05pm -- tim

Vermont Business Magazine Today, Mayor Miro Weinberger released the following statement on the failure of the CityPlace Burlington developer to fulfill its obligations. The mayor is giving developer Brookfield Properties "a short window of time to return with an acceptable proposal for moving forward with the project." If not, the city will find Brookfield in default. Mayor Weinberger in a letter made public today said if the developer abandoned the project it would constitute "a breach of faith and betrayal of trust." The mayor said the city would consider taking some of the land, would demand reimbursement of costs and would pursue "aggressive legal action."

Brookfield owns 51 percent of the property. Weinberger's letter suggests that Brookfield intends to hand the project back to original developer Don Sinex of Devonwood Investors.

Mayor Weinberger: "For nearly two years Brookfield Properties, the largest real estate developer in the world in 2019 and managing partner of the CityPlace Burlington project, has made public, private and written commitments to resume the stalled project and complete a transformative redevelopment of the former mall.

"Since November, these commitments have included providing materials in support of the City’s testimony to the Vermont Economic Progress Council describing Brookfield’s intention to start construction of a modified project in August, meetings with members of the public making similar representations in January and February, and a letter to me on June 4 confirming the company’s intention to work in good faith to put a new development agreement in place by the end of this month.

"Despite repeatedly affirming its commitment to the project, and with its promises to the City unfulfilled, at the end of last week it became clear that Brookfield is pursuing steps to abandon management of the project and return Don Sinex and his Devonwood Investors group to that role.

"That result would be unacceptable to the City of Burlington because it would constitute a breach of faith and a betrayal of trust. Brookfield should keep its commitments to the people of Burlington and see the project through to completion as it has repeatedly promised. If it does not, the City will do everything in our power to see that Brookfield suffers consequences for this breach.

The post demolition mall site in 2018. VBM file photo. Above, artist rendering of proposed CityPlace hotel at St Paul and Bank streets. Courtesy.

"On Saturday, after consultation with City Council President Max Tracy, I directed our attorneys to issue a default letter documenting Brookfield’s failure to perform pursuant to the Development Agreement and alleging bad faith and fraud. Further, the default notice includes a hold on the destruction of communications and documentation to preserve materials for possible litigation. I am releasing this default letter publicly today.  [The letter is below].

"In a lawsuit the City would, at a minimum, seek City ownership of the land for the reconnection of St. Paul and Pine Streets and damages for the developer’s failure to rebuild and upgrade eight blocks of public infrastructure in time to use Tax Increment Financing (TIF). The TIF law includes certain deadlines that may be impossible to meet because of the developer’s inactions and thus endangers the ability to construct the planned $20.8 million in new public infrastructure. Brookfield has paid and reimbursed the City for approximately $500,000 of costs since its delays began – compensating the City for all expenditures related to the developer’s delays and supporting downtown marketing efforts – and the City will pursue continued reimbursement for the City’s additional costs as this proceeds.

"In addition, the City will use all available mechanisms to ensure that this site, though privately owned, is transformed into a vibrant, mixed-use neighborhood as soon as possible.

"In response to the notice of default, Brookfield’s attorneys have initiated new contacts with the City. We will give the developers a short window of time to return with an acceptable proposal for moving forward with the project.

"If an acceptable proposal is not forthcoming, I will protect the City’s interests and achieve the City’s long-standing public goals for this project through aggressive legal action."

Source: Burlington, VT – Mayor Miro Weinberger 7.22.2020