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Developer pulls out; Burlington’s CityPlace project in doubt

Published: Jul. 22, 2020 at 4:44 PM EDT|Updated: Jul. 23, 2020 at 6:49 PM EDT
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BURLINGTON, Vt. (WCAX) - Burlington city councilors say they’re frustrated but not surprised to hear the CityPlace developer, Brookfield, is backing out of the stalled project.

On Wednesday, Mayor Miro Weinberger announced Brookfield is “pursuing steps to abandon management of the project and return Don Sinex and his Devonwood Investors group to that role. " Weinberger says he has directed the city’s attorney to write a “default letter documenting Brookfield’s failure to perform pursuant to the Development Agreement and alleging bad faith and fraud.”

This comes after two years of delays and broken promises from Brookfield.

Progressive councilor Jack Hanson says this is the outcome he didn’t want but he predicted all along. He says he was always skeptical of Brookfield and felt they were not transparent and forthright.

WCAX News asked Hanson why Brookfield was given authorization in the first place if there was skepticism.

“I think that’s a question for the mayor and a question for those who really promoted this project and really marketed this project to the community,” Hanson replied.

Hanson was not on the council when the city first negotiated with Brookfield, but he says he watched the process play out and disagreed with the way Mayor Miro Weinberger and the city council at the time handled negotiations.

I felt like the approach, though, was more like begging this developer to come in and ‘We need you to do this’ and ‘You’re the one doing us a favor so we’re not going to demand too much because we don’t want to scare you away,’” he said.

Now, the city is threatening a lawsuit—something Hanson thinks should’ve happened months ago.

Democratic councilor Joan Shannon disagrees. She feels it was wise for the city to exhaust all other options before resorting to a legal battle.

“Yes, because the legal action doesn’t give the community the development that was envisioned,” she said. “It doesn’t give the community the streets that were envisioned and the benefits that were envisioned. It gives us compensation for what we’re not going.”

Shannon believes the city did protect itself in the development agreement. She also says the city is not losing any money.

“The city hasn’t invested money here. The city has invested our hopes and dreams in this site. And we were going to use TIF funds to build the streets and the infrastructure to make that a possibility,” she said.

The Mayor’s Office says if the city does pursue a lawsuit, it would, at a minimum, seek City ownership of the land for the reconnection of St. Paul and Pine Streets and damages for the developer’s failure to rebuild and upgrade eight blocks of public infrastructure in time to use Tax Increment Financing (TIF). The TIF law includes certain deadlines that may be impossible to meet because of the developer’s inactions and thus endangers the ability to construct the planned $20.8 million in new public infrastructure. Brookfield has paid and reimbursed the City for approximately $500,000 of costs since its delays began, compensating the City for all expenditures related to the developer’s delays and supporting downtown marketing efforts, and the City will pursue continued reimbursement for the City’s additional costs as this process.

WCAX reached out to Mayor Weinberger’s office for his reaction to the city councilor’s comments Wednesday night. On Thursday, he released a statement that said: “From the very beginning of this project, when Devonwood Investors bought the failing mall in the heart of our downtown, it was clear that this project could be transformative and also that, like many projects with great potential, it would involve considerable risk. That’s why the City spent many months carefully negotiating a detailed Development Agreement that has protected the City from those development risks. While it is extremely frustrating to see the developers’ mismanagement and dysfunction result in this site continuing to be dormant, the costs of the project delays are borne by the developer, not taxpayers. The Development Agreement also positions the City to achieve public goals of this project, including building new streets and public infrastructure, through legal action if it comes to that.”

__________________

The big development project in downtown Burlington may be dead.

The developers of CityPlace informed the city they are abandoning the project, leaving doubts about when the big hole in downtown Burlington will be filled. Our Christina Guessferd has details on how the city is responding.

Burlington Mayor Miro Weinberger says Brookfield Properties informed the city over the weekend of their intention to pull out of the $200 million project.

Weinberger says leaving the gaping hole in the middle of the city any longer is simply unacceptable and promised the company will suffer consequences.

The mayor says Brookfield wants to give project authority back to Don Sinex of Devonwood Investors, the former manager of the project. Most of the project is private property and the mayor says it's unclear whether Devonwood will move forward with the commercial development.

It also leaves unclear whether the infrastructure improvements included in the project will move forward. CityPlace agreed to reconnect Pine and St. Paul streets through the former mall property. The city has issued a default letter to Brookfield documenting its failure to make good on its promises, alleging bad faith and fraud.

Click here to read the letter.

Weinberger says if the company does not respond with a proposal to move forward with the project in a “short window of time,” which he says should be within the next few days or weeks, the city will sue for ownership of the land to reconnect the public right-of-way between St. Paul and Pine streets plus damages.

The mayor says the indefinite delay endangers the city's ability to construct the planned $20.8 million in new public infrastructure.

“It’s shocking that we are here two years later and the largest developer in the world has not found a way to make an investment in one of the most vibrant downtowns in America. It is a great disappointment and hopefully, they will change course. Clearly, this is within their ability to change course and get a project done,” said Weinberger, D-Burlington.

Weinberger says to the best of his knowledge, the activity seen at the CityPlace construction site over the last couple days is an effort by Brookfield to restore the right-of-way between St. Paul and Pine streets.

Weinberger says the city will do whatever it can to transform the pit into a "vibrant, mixed-use neighborhood as soon as possible." And because the land is privately owned, that will take aggressive legal action.

WCAX News reached out to get Brookfield's side of the story. They declined to comment.

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