Photo: Rendering of proposed CityPlace hotel at Bank and St Paul Streets. Courtesy photo.
by Bruce Edwards, Vermont Business Magazine Despite the challenging times, Burlington Mayor Miro Weinberger remains an optimist.
That’s not so easy when the city you lead is facing a steep drop in revenues and your budget is $62 million.
It’s the new normal or at the very least the temporary COVID-19 normal.
Weinberger said the local option tax provides the city with a significant amount of revenue from visitors to the city and from locals who regard Burlington as the place to go for dining and entertainment.
“Our growth in the dining sector has really been dramatic in the last decade,” he said. “So when it stopped suddenly and the bars closed suddenly as they did on St. Patrick’s Day our revenues just stopped.”
To address the looming budget shortfall for the fiscal year that begins July 1, the city resorted to budget cuts and tapped into its reserve fund.
Weinberger said the city was able to submit a balanced budget without “raising people’s taxes … water, sewer, stormwater, electric rates.”
The caveat to that is the voters in March approved tax increases for public safety and a new housing trust fund payment. Weinberger said he has asked the City Council to defer those tax increases until next year.
He also said at this point there are no plans to furlough or lay off city workers but cautioned “a bad case scenario” could change that in the year ahead.
Taking a conservative approach, Weinberger is assuming a 15 percent reduction in the budget will suffice over the course of the next fiscal year.
Congress is debating another stimulus bill that could include money for cities and towns.
“If the Democrats get their way it would fund cities like Burlington that have lost revenue would provide very substantial relief,” he said. “That would allow us to undo a lot of the cuts that we’ve had to make to get through this.”
So far, congressional Democrats have not been able to move the Senate Republicans to enact another COVID spending bill.
(The current federal pandemic funding allocated to the state can only be used to reimburse municipalities for emergency-related expenses not lost revenue).
CityPlace
The long-delayed CityPlace project is facing an uncertain future.
The developer, Brookfield Asset Management, was making progress in moving the project forward when the coronavirus hit.
Late last year, a frustrated Weinberger gave Brookfield a list of demands which he said have been met.
“Like many things with coronavirus things kind of stalled out again,” he said.
The city and Brookfield continue to have high level discussions through the pandemic.
“The next big deadline that I would say people should be focused on is by the end of July, which isn’t long from now, we want an updated development agreement between Brookfield and the city that puts them back in compliance (with the agreement),” Weinberger said.
He said Brookfield has paid the city hundreds of thousands of dollars for its failure to make good on its commitment to have the project under construction.
“I would like a new agreement that acknowledges that the project has changed since our previous agreement, acknowledges that the deadlines have changed in which they are making new financial commitments to the city about how we’re going forward,” Weinberger said.
Weinberger said Brookfield has already scaled back the original project proposed by Don Sinex, which Brookfield considered too ambitious.
Having said that, it is still a massive project: 357 Housing units, including 72 affordable units; a 196-room hotel; 45,000 square feet of street level retail; reconnect St Paul and Pine Streets; 550 parking spaces (297 bike parking spaces); on 763,200 total gross square feet.
Another project the city is heavily involved with is the estimated $30 million overhaul of Burlington Memorial Auditorium.
A November ballot item that would move the project forward is questionable given the city’s financial challenges.
“It would be very hard for us to do that now given that we just haven’t been able to put any time into that complicated project since mid-March,” Weinberger said.
City taxpayers would be asked to bond for no more than $15 million of the cost with the rest coming from TIF tax increment financing.
But the TIF component has an expiration date.
Unless state lawmakers extend the deadline, Weinberger fears the city will miss out on a critical funding source for the project.
Given the financial fallout municipalities are facing from the pandemic, he said it’s just commonsense to extend the deadline by another year.
“Everybody understood we were dealing with an unprecedented emergency,” he said.
According to Weinberger, there was an indication lawmakers would work with cities and towns to extend the deadlines. But now he says there’s some question whether lawmakers are having second thoughts.
One project that is moving forward is the $5.7 million repurposing of the former Moran plant on the waterfront.
Construction is expected to begin shortly which will take a year. Weinberger said that will be the beginning “to transform the building into this sculptural landmark that will over time become more and more functional as well.”
Burlington, population, 42,819; median household income, $50,324.