BARRE — From the city’s perspective, all the pieces are now in place for City Place.
Thursday night city councilors did everything they could to pave the way for the multimillion-dollar downtown redevelopment project. All that stands in the way of a formal groundbreaking is a complex series of land transactions that was postponed earlier.
Barring any surprises, those closings will occur in domino fashion Monday — putting DEW Properties LLC in a position to start work on the four-story, 78,000-square-foot structure it has proposed to build across North Main Street from Depot Square.
Councilors at Thursday’s special meeting set the stage for the looming land deal, which involves one seller and three buyers for commercial properties on both Merchant and Summer streets that were marketed as a package.
Among other things, councilors approved a promissory note that will allow the city to loan itself $625,000 to buy and temporarily hold one of the three properties.
Councilors also put the finishing touches on a 10-year tax stabilization agreement with DEW for City Place, a building they expect will be worth roughly $8 million.
And they authorized City Manager Steve Mackenzie to execute the “ground lease” that will enable the Williston development company to begin work — perhaps as soon as next month — on a patchwork of properties that are either city-owned or soon will be on an interim basis.
Three of those parcels — all part of the same vacant lot between Studio Place Arts and the Paramount Theater — are already owned by the city. An adjoining property that is home to a pair of now-vacant apartment buildings will come under temporary city ownership if Monday’s 1 p.m. closings go according to script.
At this late stage, Mayor Thomas Lauzon said it is hard to imagine anything will derail a project that is expected to bring roughly 300 jobs, most of them with the state, into downtown Barre.
“There’s no reason to believe this isn’t going to go forward as scheduled,” he said, admitting that he worries more than most.
“I probably won’t breathe easy until they’re opening the door” of the building, he said.
According to Lauzon, the value of the project to the city’s central business district cannot be overstated.
“To have 300 people working and shopping and running around our downtown all day will be huge,” he said, adding the project will provide a welcome jolt to the city’s grand list.
Still, there have been some odd twists along the way, including the recent detection of contaminants. Some are believed to be linked to a defunct dry-cleaning business that was once located on Depot Square.
In hopes of leveraging an estimated $260,000 in state funding to help cover the cost of dealing with the contamination, the city has essentially agreed to retain until November 2013 the vacant lot it planned to sell to DEW for $1 and to buy the adjoining property on Merchant Street on an interim basis.
The city on Monday will buy that property with $625,000 of the money that former Barre businessman Charlie Semprebon left the community for unspecified “civic improvements.” DEW has agreed to repay the so-called Semprebon Fund, with 3.25 percent interest, when it acquires the property sometime next year.
Mackenzie said that payment will likely come sooner rather than later in the form of a one-time lease payment. He said that payment could be made as early as next month and that when the property actually changes hands next year it will likely be for $1.
Meanwhile, DEW has agreed to buy and hold for two years a Summer Street property that the company doesn’t need. DEW is scheduled to buy the property, which includes two apartment buildings, for $370,000 and eventually sell it to the Central Vermont Community Land Trust for that group’s planned campus.
The land trust has agreed to manage the rental properties for DEW and plans to acquire an adjoining Summer Street property for $330,000.
All three properties are owned by CDW Properties LLC and are cross-collateralized. They were marketed and are being sold as a package.
Unlike that series of transactions, the tax stabilization agreement is relatively simple.
“It’s a good deal for the city, and it’s a good deal for DEW,” Lauzon said.
Starting April 1, 2014, the assessment on the land and building at City Place, which is expected to be finished by then, will be set at just over $1.65 million. Based on the current tax rate, Lauzon said, that would translate into an annual tax bill of about $50,000 — about $36,000 more than the city now receives for the properties in question.
Under the agreement, the assessment would remain unchanged for the first five years before beginning to increase in annual increments of about $1.27 million over the next five years. In the final year of the contract the building would be taxed on its full fair-market value, which is estimated at $8 million.
The agreement stabilizes the assessment for both municipal and state education tax purposes.
After reviewing the documents presented for the council’s approval, Lauzon said he was satisfied the city’s interests are protected and taxpayers would be insulated from any significant financial risk.
“I’m comfortable with what we’ve done here,” he said.
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