Artist rendering of CityPlace. Courtesy.
by Bruce Edwards, Vermont Business Magazine Burlington has been holding its collective breath for a transformative housing, retail and commercial project in the heart of the downtown to literally get off the ground and get vertical.
But over the ensuing year the city’s hopes have been met with disappointment and frustration, leaving a gaping hole in the city center where the pedestrian mall once stood.
This time, however, developer Don Sinex promises a different outcome.
At one point, Sinex had turned over the project to his partners Brookfield Asset Management. But Brookfield backed out of the project leaving Sinex once again in charge with three local partners.
Financing for the project had been a problem and the pandemic that reared its head last year made matters worse.
Now Sinex has submitted a redesigned and smaller project that he says is far more financially doable.
What started as a $225 million, 1.2 million-square-foot commercial, retail and housing complex with 288 apartments and 960 parking spaces has been redesigned.
The redesigned $160 million project includes 426 apartments, 45,000 square feet of retail and 422 parking spaces for a total of 700,000 square feet.
Gone is the commercial office space that would have been occupied largely by the University of Vermont Medical Center.
Sinex toyed with the idea of a hotel to fill the UVMC void but COVID’s impact on the hospitality industry made that impossible.
Sinex instead turned his focus to housing and away from commercial and some retail.
“Residential remains strong in Burlington and it was the least impacted by COVID,” he said. “It scares the lenders the least of all the different components. Retail they’re scared of. Hotels they’re definitely afraid of and office they’re definitely afraid of.”
Sinex's plan now is to build out CityPlace with its 420 apartments in three phases.
“The first phase will be about 150 apartments,” he said. “Once those are built, leased and absorbed, we’ll do a second stage, about another 150. In addition, another 80 apartments are being set aside as affordable housing.”
He said on the south side of the site another building will be constructed to house another 50 to 70 units.
“We are considering maybe the southern building being a condo building so there could be for-sale housing,” he said. “Although now it’s designed as all rental.”
He said compared to the first iteration the redesigned CityPlace is about 25 percent smaller in size. He also said the new design will have less impact on the Burlington skyline.
“Instead of 14-stories, it’s nine stories,” he said.
The project also includes 45,000 square feet of street level retail and a garage with 422 parking spots.
Sinex is confident that despite the hit bricks and mortar retail has taken, made worse by the pandemic, that he’ll be able to fill the space set aside for retail.
Financing has been the stumbling block, even for Brookfield, Sinex’s former partner and one of the largest real estate developers.
But the new CityPlace should be able to more easily obtain the necessary financing because it’s being done in phases, he said.
Sinex estimated the Phase 1 cost between $45 million and $55 million.
He said that’s doable given the equity already invested and the project’s focus.
“So the lenders out there like residential,” he said.
The AFL-CIO Housing Trust has been mentioned as a possible lender.
But Sinex said that may prove difficult given the tight construction schedule.
He said the union’s housing trust would want a HUD loan guarantee which would take up to 18 months for approval.
He said he’s pursuing other lenders and remains confident he’ll have the necessary financing in place.
Sinex said he needs to begin construction by September 21 so the city still qualifies for $8 million to $10 million in TIF (tax increment financing) for public infrastructure improvements.
Because of the delay in getting the project built, Sinex agreed to pay the city between $300,000 to $450,000 in lost tax revenue.
Photo: Don Sinex, with Mayor Miro Weinberger in April 2016, initially proposed a massive $225 million development to replace the downtown Burlington mall. Because of financing and the new normal created by the pandemic, the plans are scaled back about 25 percent and focus much more on residential development. VBM Photo.
Parking
City government has approved the project.
But several opponents represented by Burlington attorney John Franco are upset about what they call inadequate parking. When the original project was proposed, opponents reached a settlement with Sinex for 960 parking spaces.
Franco said while 960 spaces are no longer needed, the 422 spaces are not adequate.
He argued that Sinex was obligated to come back and renegotiate the agreement.
He also pointed out that when Sinex demolished the parking garage it left the city with fewer downtown parking spaces.
Franco said the settlement agreement had a provision so that the parties did not have to “perpetually re-litigate this. That any amendment or change had to have our written consent, both parties’ written consent.”
He said the project’s redesign makes sense but more parking is needed. Franco made a proposal as an “equitable adjustment” but declined to say what that is.
Sinex, however, noted that “the original settlement agreement is irrelevant because we’re not building the project that presupposes that agreement and we weren’t obligated to build that project.”
He argued that CityPlace residents will be living in a walkable area with public transportation. He also said it’s likely that at least some affordable housing residents won’t own a car.
“I think we’re going to end up with plenty of parking because of the nature of the site, the nature of who our tenants are likely to be and the fact we’re not going to get demand for one space per unit,” Sinex said.
He warned that an appeal by opponents could throw the project into question.
Scott Gustin, Burlington’s principal planner, said the Development Review Board granted zoning approval for the project.
“Since the original permit was granted several years ago the city changed its parking standards to eliminate minimum onsite parking requirements in the downtown and mixed-use zones,” Gustin said.
Although the project’s new zoning application could be construed as an amendment, he said the new application “is substantially different and comes in under today’s standards.”
Gustin said under the new standards CityPlace doesn’t have to provide any onsite parking. The city required a transportation demand management plan which the developer submitted, he said.
Franco, however, cited a 1981 Vermont Supreme Court decision that said a zoning ordinance in effect at the time of a permit application is binding.
Bruce Edwards is a freelance writer from Southern Vermont.