Barre’s City Place needs paperwork changes
BARRE — Two key documents needed to advance a private developer’s plans for City Place have yet to be approved and will be modified by Mayor Thomas Lauzon and circulated to the City Council by Friday.
Acting out of what he characterized as an abundance of caution, Lauzon urged the council not to authorize City Manager Steve Mackenzie to execute the documents, which involve the city’s unexpected role in a complex series of land transactions later this month. Those transactions will pave the way for a massive downtown redevelopment project that will be built directly across North Main Street from Depot Square.
This week Lauzon said he believed two of the draft documents presented to the council for its consideration need work and he wasn’t prepared to authorize Mackenzie to sign either of them.
“I’m not there yet,” he said Tuesday night.
According to Lauzon, neither document — both of which involve the city’s plan to purchase and temporarily hold a commercial property on Merchant Street that is vital to the City Place project — is in its “final and appropriate form.” He argued the council should have an opportunity to thoroughly review the final documents before authorizing Mackenzie to sign them.
Mackenzie wondered whether that was necessary. He said Lauzon has and will continue to play an active role in drafting the documents and worried that any last-minute “wordsmithing” by the council could be problematic given uncertainty about the timing of a closing date. The closing, he said, has slid once, is tentatively scheduled for Nov. 28, but could happen sooner.
Lauzon said he wasn’t proposing a potentially deal-breaking delay and vowed the council would move swiftly — warning an emergency meeting on four hours notice if need be — to accommodate all of the parties involved in a $1.3 million transaction that will require three cross-collateralized properties to change hands simultaneously.
“We’re not going to hold anyone up,” he said.
Though the seller — CDW Properties LLC — is the same, the three buyers are all different, and the fact that the city will be one of them requires an extra level of vigilance on the part of the council, Lauzon said.
“This is one of the most important things we will do,” he told councilors. “It’s one of the most important things I will do as mayor, and if that means I will have to dedicate six hours in the middle of my day to reviewing a purchase and sales agreement so that I can say: ‘I have reviewed it thoroughly,’ then I think you all accept that’s what you have to do.”
Lauzon said he had yet-to-be-addressed concerns about a proposed purchase and sales agreement between the city and developer DEW Properties LLC, involving the Merchant Street property, and, to a lesser extent, a lease-purchase agreement involving that same parcel. Both documents, he said, are critical in light of the council’s recent decision to buy and temporarily hold the Merchant Street property, which is currently home to two soon-to-be-razed apartment buildings.
Last week the council agreed to tap the Semprebon Fund to buy the property, which is located directly behind the now-vacant city-owned lot where the four-story City Place building has been proposed. Councilors were told Tuesday night that, due to the delay in the previously scheduled closing, the price will tick up from $600,000 to $610,000.
However, Lauzon stressed that money will be repaid, with interest, by DEW when it buys the properties from the city next year.
“The one promise we made when we started down this road over a year ago … is that the city taxpayers would never be on the hook and that we would mitigate any risk to the city,” he said.
The only way to do that, Lauzon said, is through an unambiguous purchase and sales agreement that unconditionally requires DEW to buy the Merchant Street property from the city by a date certain — preferably June 30 — next year.
“That’s why this document is so important,” he said. “It’s the document that’s going to give our constituents assurance that … even if City Place didn’t move forward the City of Barre is not going to own this property on Merchant Street.
“The risk isn’t with the City of Barre,” he added. “The risk is appropriately with the developer.”
At least it will be when Lauzon finishes modifying the documents that don’t yet reflect his desire to specifically have DEW — not just some limited liability corporation — guarantee the agreement.
“This purchase and sales agreement needs to be unconditionally guaranteed by DEW Properties and DEW Construction,” he said. “That’s a major change to the document.”
Lauzon said he discussed that change with DEW President Donald Wells and did not expect that it would be a problem.
According to Lauzon, the draft documents refer to City Place LLC — a limited liability corporation that he created more than a year ago and described as a “non-entity” Tuesday night — as the buyer.
Lauzon said he would modify the documents and get copies of them to council members by Friday with the expectation they review them over the weekend and come to next Tuesday’s meeting prepared to authorize Mackenzie to sign them.
Councilors were able to approve two related documents that were also on Mackenzie’s pre-closing checklist. Those documents involved the other two properties that are part of the purchase and sales contract that Lauzon initially obtained more than a year ago and later assigned to the city when it appeared the City Place project could actually happen. But for the fact that they are being sold as part of a package deal, neither of the other two properties — both located on Summer Street — will be part of the City Place project.
The Central Vermont Community Land Trust is prepared to purchase an apartment building located at 8 Summer Street for $330,000 as part of its future plans to develop a campus in that area.
Meanwhile DEW has agreed to buy a neighboring property located at 20 Summer Street that would eventually be needed for the CVCLT campus for $370,000. DEW will hold the property, which includes two apartment buildings, for two years so CVCLT can maximize the tax credits that will help fund the campus project. In the interim CVCLT will enter into a lease agreement that will make it responsible for managing the rental properties.
Lauzon described the council’s decision to partially assign its purchase and sales contract to DEW and CVCLT as something of a “non-event.”
“That is what the city has intended to do all along,” he said.
The same can’t be said of the Merchant Street property. The city never intended to buy and temporarily hold that property, though councilors recently agreed to after being told the transaction would help leverage additional state funds to clean up contamination detected on the adjoining city-owned lot where City Place will be built.
The four-story building, which has been identified as the future home for the entire state Department of Education, as well as a Barre branch of the RehabGYM, and possibly a downtown grocery store, is expected to bring more than 200 employees into the heart of downtown Barre. DEW representatives have said they plan to break ground next month and work will continue through the winter months.
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