CityPlace Burlington remains locked in impasse despite new proposal from developers

Construction vehicles showed up in the long dormant CityPlace Burlington work site on Tuesday, July 21, 2020.

What now for CityPlace Burlington?

The $180 million development project downtown remains locked in an impasse between city officials and developers. 

The pit, as the site has become known, is a stark reminder that all is not well in downtown Burlington when its core is an empty lot of weed-infested dirt hosting a pile of unused steel beams. 

The news last week that the original developer, Don Sinex of New York City-based Devonwood Investors, had taken on three local partners did not provide renewed momentum for the project. Neither has a new proposal from the partners this week to change the way city streets that are part of the project are paid for.

More:Evolution of CityPlace Burlington

Local contractors Scott Ireland of S.D. Ireland, Dave Farrington of Farrington Construction, and Al Senecal of Omega Electric joined Sinex in a new partnership, Devonwood CityPlace Investors.

Real estate consultant Jeffry Glassberg said Friday the new partnership is proposing to sell the land required to reconnect St. Paul and Pine Streets to Cherry Street to the city at an appraised value of $4-5 million, and turn responsibility for building the streets over to the city.

Glassberg works on the city’s behalf on the CityPlace project.

How will the streets be paid for?

The development agreement currently in place, Glassberg said, calls for the developers to complete the project to reconnect the streets at a cost of $21.8 million and then be reimbursed from the property taxes flowing from the completed project.

That scenario appears to be untenable at this point because the instrument from the state required to pull it off — a TIF, or tax increment financing, bond— expires next June. No one believes the project will be completed in time for that.

A car heads west on Bank Street past the construction site for CityPlace Burlington on Monday, april 30, 2018.

For the new proposal, Sinex explained in an email that Devonwood would “take a note” for the land so the city would not have to “come out of pocket for any funds upfront.” 

“We think this new approach is better for the overall success and smooth construction of the project,” Sinex wrote.

Devonwood would use the land during construction of CityPlace before turning it over to the city about six months before completing the project, expected to take about two years. That would give the city plenty of time to put tax increment financing into place, Sinex said.

More:Mall demolition makes way for CityPlace Burlington

Glassberg confirmed Friday he discussed the new proposal with Farrington. He said he would convey the plan to the mayor and City Council. The City Council would have to agree to the change.

Glassberg said that while the new approach simplifies things for the developers, “it doesn’t simplify it for the city.”

“Again, the structure was buying completed improvements once all the development was done and the property tax revenue was flowing,” he said. “While I appreciate some of the aspects of this proposal, it in fairness opens up the city to a whole other series of risks, and the city has to assess whether it’s comfortable taking on risks against a backdrop of a troubled project.”

No evidence of success

In late July, Sinex’s former partner, Brookfield Properties, one of the largest real estate developers in the world, decided to abandon the project because of COVID-19 concerns. 

Sinex said the new partnership already owns the neighboring Macy’s building and will close soon on a deal to buy out Brookfield’s interest in the CityPlace site. 

Burlington Mayor Miro Weinberger, left, and Burlington Town Center owner Don Sinex announce in May 2016 an agreement to redevelop the downtown mall.

Far from reassuring the city administration, however, Sinex’s announcement was met with skepticism, and in the case of City Council President Max Tracy, outright rejection. Tracy said he didn’t trust Sinex and didn’t want to work with him. 

Mayor Miro Weinberger said in a statement the new partnership “has provided no evidence that they will be able to produce better results in the future than a Don Sinex-led partnership has delivered over the last six years.”

Run, don’t walk

Ernie Pomerleau, scion of the first family of real estate development in Vermont — his father was the late, legendary Tony Pomerleau — has watched with exasperation as recent events surrounding CityPlace unfolded.

Pomerleau said he is a fan of Weinberger, and credits the mayor with righting the ship of Burlington financially after some disastrous years that included the debacle of Burlington Telecom, secretly propped up with millions of dollars of city funds.

Ernie Pomerleau speaks during a ceremony to celebrate the construction of the Burlington YMCA's new home on College Street in Burlington on Thursday, November 1, 2018.

But on this one, Pomerleau said, he disagrees with the mayor.

“If it were me … I would celebrate the opportunity to put this project back online as quickly as possible,” he said. “I would suggest to everyone they run, do not walk, to work with a local team prepared to move quickly.”

Pomerleau also advised against suing Brookfield, as Weinberger has threatened to do, mostly because he sees no basis for a lawsuit. Also, Brookfield has deep legal pockets. Even if Burlington prevailed in court, he said, Brookfield would appeal, tying the city up for years and costing many thousands of dollars.

“I do not want to see another four years, or 40 years, of a hole,” Pomerleau said. “What is the benefit of suing Brookfield when you have the owner of the land taking back the project, and you have three very competent local developers?”

Beyond repair?

One of those local developers, Dave Farrington, said he was “stymied” by the reaction to Sinex’s announcement of their involvement in CityPlace and “confused as to why people aren’t getting behind this.”

“We are standing here, open-armed, looking for support and cooperation,” Farrington said. “We are ready to jump into this thing, work out the issues and get the project started.”

Brian Pine

Farrington also wanted to make it clear that he, Ireland and Senecal are all in on CityPlace — a reaction to Weinberger’s characterization of their “potential involvement” in the project.

“Just so it’s out there correctly,” Farrington said. “We’re not hopeful. We are partners. We have an LLC (limited liability corporation) we are all members of and it’s real. It’s not a pipe dream. It’s not a ploy. We are going ahead with (the project).”

City Councilor Brian Pine said Thursday that early on, from 2014 through 2016, Sinex and CityPlace forged a great “synergy” with the Burlington community, promising “rebirth” for the core of downtown.

“Things were great,” Pine said. “If they had continued to focus on essentially delivering on the possibility that came from that synergy, leveraging lots of public and private resources to pull off this project, I think we’d be in a very different place.”

Now, it’s a different story, in Pine’s view.

“Things have not gone at all according to plan,” he said. “Promises made were not kept. Trust that was built has been shattered. I’d say we are very skeptical of the ability to repair that relationship.”

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT. This coverage is only possible with support from our readers. Sign up today for a digital subscription.