Don Sinex, right, listens to comments from Mayor Miro Weinberger when the original CityPlace project was announced outside the then-still-standing mall in April 2016. VBM photos.
Vermont Business Magazine writer Bruce Edwards queried developer Don Sinex about his plans for Burlington’s CityPlace project. Sinex and his company Devonwood Investors LLC has once again taken control of the project after partner and lead developer Brookfield Properties informed Mayor Weinberger in July that it was pulling out of the project.
VBM: What is the time frame for Devonwood to reacquire the CityPlace property? Will Brookfield retain any equity or role going forward? Do your local partners Scott Ireland, Dave Farrington and Al Senecal have an equity stake?
Sinex: The deal to acquire Brookfield’s interest is in escrow now and will close shortly. The closing is subject to normal closing conditions, otherwise fully binding on the parties. I expect this closing to occur next week or the week after at latest.
VBM: If Brookfield didn’t think the project - given the current climate - was doable, why do you think you and your partners can line up financing? How long would it take to acquire funding at this point? Can the project come in at the current Brookfield estimate of $110 million?
Sinex: Brookfield is busy with a large portfolio that has been impacted by the COVID-19 and Brookfield is actually reducing the number of deals it is involved with at this time so that it can address its portfolio with great focus. Devonwood on the other-hand is only engaged with this deal at this time - I concentrate on one deal at a time. I have both the vision, passion and ability to get this deal completed. Secondly, we have revised the development plan removing all uses that are more challenged today - office and hotel and instead concentrating on the market demand that continues to be very strong in Burlington - housing. I have every confidence in our ability to get the delayed project moving ahead and completed, including arranging financing. No doubt Covid-19 has changed everything in Burlington as it has changed everything throughout the world, but I remain extremely confidant given my new partner’s commitments, the revised plan which better aligns with the demand in Burlington and our collective experiences to get this project moving again and completed. I trust no one thinks that we are putting millions of additional dollars into this project, and at the same time we do not it can succeed - now that is silly.
VBM: Do you plan on changing the scope of the project? If so, what changes to you envision?
Sinex: Yes, we are revising the plan. We had planned a boutique hotel as part of the redesigned project that was presented to City Council and the general public in January and February (2020) but the hotel industry has been particularly hard-hit by Covid-19 and financing for a new hotel is very challenging today. So we will be changing-out the hotel for additional housing and a small amount of very specialized commercial space. The commercial space is very small and amounts to app 2% of the project. Our objective is to design and develop a project that will succeed and a hotel at this time will not assist us in achieving that goal. We plan to include a hotel in a later phase of the project, assuming market conditions for the hotel industry improve dramatically.
VBM: UVM Medical Center was the anchor tenant so to speak. Given the losses the medical center has absorbed as a result of the pandemic, what happens if they decide not to go through and occupy CityPlace? Do you have a backup plan or potential tenant in mind?
Sinex: We have eliminated all office space in the initial phase of construction except for a small amount of special commercial space - very limited (2% of the project). You are correct UVMC has been hard hit by Covid-19 and consequently UVMC is and responsibly must reassess its office needs at this time. Like all office space users UVMC is looking at the option of working from home and trying to understand how that affects demand for office space. Once UVMC has a clear understanding of its office needs then together with UVMC we will analyze and best determine how our project can accommodate UVMC office needs, either in this first phase or in a future phase of construction. We certainly understand the Covid-19’s impact to UVMC and we will work with and assist UVMC to figure-out what is best for UVMC and how our project can best assist UVMC.
VBM: Lastly, given Mayor Weinberger’s skepticism regarding your involvement in the project and the past history, why should he or the city believe you and your partners can pull this off? In the past as the lead developer, would you have done anything differently?
Sinex: I have worked for 6 years to bring this project to fruition. It was me that brought Brookfield into the project and then at its insistence gave Brookfield total control over the project and in doing so I had truly hoped that Brookfield would move the project ahead, but that did not happen. I have not been involved in any manner except supporting the project from the sidelines during the past 18 months, while the Mayor worked exclusively with Brookfield during this same 18 month period, yet nothing has been accomplished by the Mayor. I am now putting more capital and more time into this project and I am doing so along with my partners solely to get it started and completed - and not for any other reason.
Devonwood is not the cause of the project’s delay during the past 18 months but I do want to get the project restarted again and do so very soon. Brookfield made a business decision to withdraw and is selling its interest in the project to our new partnership and by selling to us Brookfield indirectly is enabling the project to move ahead. Everyone needs to accept Brookfield’s decision, which decision in my opinion was made in good faith and for good and reasonable business reasons by Brookfield. If the Mayor and the City want to see a project that includes the public improvements then my only suggestion is for both to work with Devonwood.
Another important fact to remember is that this project is an overwhelmingly private development that needs no City involvement. The City’s involvement in the project is limited to the TIF and public improvements, which represents app 10% of the project. Devonwood understands that the TIF and the public improvements are important to the City and to date we have offered to work with the City to preserve the TIF and the public improvements as an important and integral part of the project. Devonwood and each us individually truly desire to work with the City to ensure the public improvements and TIF remain a part of the project but the Mayor it seems is reluctant to work with Devonwood. For our part, we only want to see the project move ahead. In fact, I even offered to sell the project to another developer who the Mayor would prefer to work with instead of Devonwood; again just to ensure that the project moves ahead. The Mayor seems to be bent on punishment instead of cooperation. I suggest that instead of focusing on punishment, which will be a colossal waste of time and a huge expense to the City, which will ultimately fail, the Mayor should recognize that the only way to move the project ahead is to work with Devonwood and our new team. For our part, we stand ready, willing and very able to work with the Mayor and the City on these important matters. However, if an atmosphere of hostility remains, and I trust everyone will understand this fact, it will become impossible at some point to finance and move the project ahead.
By August 2018 most of the old mall was demolished and the site today looks little different than it did two years ago.