Burlington Mayor Miro Weinberger said Wednesday that Brookfield Properties is planning to abandon the long-delayed CityPlace project and return management to Don Sinex of Devonwood Investors, the original developer.
Brookfield had been the managing partner of CityPlace, represented at Burlington City Council meetings by Aanen Olsen, a vice president of the company, one of the largest real estate developers in the world.
Brookfield Properties formed a partnership, known as BTC Mall Associates with Sinex. Both companies are based in New York City.
Weinberger said the city learned of Brookfield’s plans to sell its interest in the project late last week and sent a letter of default to Brookfield on Saturday.
In the letter, attorney Jeremy Farkas writes that the city relied on the assurances and commitments made by Brookfield and Sinex that the project would be built to authorize the demolition of the Burlington Town Center Mall and parking garage. Now the city expects those commitments to be honored.
“But for those assurances and commitments, the City would not have released permits authorizing the demolition work,” Farkas writes.
Weinberger said Wednesday the city has reached out to Brookfield to explore how to avoid litigation.
“We’ve had brief conversations with them since,” he said. “I do think there are numerous ways Brookfield can avoid litigation, but they have very little time for that after so much time has passed and given recent actions.”
Neither Sinex nor Olsen returned calls or emails requesting comment from the Burlington Free Press on Wednesday.
Will Brookfield suffer consequences?
Weinberger’s announcement was preceeded on Tuesday with the arrival of construction equipment on the CityPlace site for the first time in months. The “pit,” as the site is commonly referred to by Burlington residents, has taken on the appearance of an abandoned project since work stopped nearly two years ago.
Weinberger explained Wednesday that the equipment is going to be used to further reduce the impact on the public rights of way on Bank and Cherry streets caused by the CityPlace project.
Brookfield’s intention to walk away from CityPlace was characterized by Weinberger as a “breach of faith and betrayal of trust.”
“Brookfield should keep its commitment and see the project through to completion as it repeatedly promised,” Weinberger said. “If not the city will do everything in its power to see they suffer consequences.”
Yet the city would seem to have little leverage over the privately owned site should Brookfield follow through with its intention to abandon the project.
Asked what the city could do to pressure Brookfield, Weinberger said “they are losing their window” for the city to invest up to $21 million in public infrastructure connected to the project — reconnecting St. Paul and Pine streets.
“We are not satisfied with the current state of engagement,” Weinberger said. “If they care about that investment they better change directions quickly.”
Back when there was a plan
Brookfield’s Aanen Olsen told the Burlington City Council at the end of January he hoped to begin construction of CityPlace in the late summer or early fall of this year.
At the time,Olsen cautioned there was a “long road” of permitting on the city and state level to travel before construction began — as well as a lawsuit that must be settled. He estimated it would take six months to get through the permitting process.
Olsen said the existing permits for CityPlace Burlington had to be amended because the project was changing substantially. Its 14-story towers would be replaced with 10-story towers, and all of the office space would be moved into the former Macy’s building in a separate project.
The redesigned project had more housing than the original project, with 357 units, 72 of which would be affordable as defined by the city. The rental apartments would be available in studio, 1-bedroom and 2-bedroom versions, which would be 550, 820 and 1,150 square feet respectively.
The new design also included a 196-room hotel, with a top-floor observation deck and restaurant that would be open to the public, accessible via elevators in the hotel lobby.
Retail was de-emphasized in the new design, taking up a total of 45,000 square feet, all of it at street level. Both St. Paul and Pine streets would be reconnected. The new plan had 550 parking spaces for cars, along with 297 parking spaces for bicycles.
Mayor threatens aggressive legal action
Weinberger acknowledged Wednesday that he had seen Brookfield as the company with the resources to build CityPlace, after years of a contentious relationship with Don Sinex of Devonwood Investors.
“We ended up in a place where construction started, then stopped and we’ve had two years of a dormant site,” Weinberger said. “That history came as a result of attempting to work with Don. I do have concerns about trying that again, for sure.”
The project has been stalled since August 2018, when demolition of a portion of the outdated Burlington Town Center mall was completed.
In a lawsuit, the city would, at a minimum, seek ownership of the land for the reconnection of St. Paul and Pine streets, according to Weinberger. The city would also seek damages for BTC Mall Associates’ failure to rebuild and upgrade the streets in time to take advantage of public financing,
Asked about taking over city ownership of the entire site, Weinberger said the options are “less clear and are hemmed in by state law and decisions the Legislature made to limit our ability to exercise eminent domain.”
Weinberger said that in response to the default letter sent on Saturday, 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,” Weinberger said in a statement. “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.”
Weinberger declined to specify what he meant by a “short window” of time.
Contact Dan D’Ambrosio at 660-1841 or firstname.lastname@example.org. Follow him on Twitter @DanDambrosioVT. This coverage is only possible with support from our readers. Sign up today for a digital subscription.