Phil Dodd
Montpelier is in the midst of considering which of four development proposals for the Country Club Road property (CCR) to select, but an actual buildout of the property still depends on the city finding grants to regrade the CCR access road, install water and sewer pipes from the roundabout to the site, raise U.S. Route 2 by nearly three feet, and potentially pay for a new pump station.
The city has already been granted $3 million toward what looks to be an $11 million project to get infrastructure up to the property. It has another $10.5 million in pending grant applications.
In addition, the city expects to use the new state CHIP tax increment financing law to build infrastructure on the site itself. That would require a bond issued by either the city or the developer. Just one of the developers — Execusuite — has said they would be willing to issue the CHIP bond, which if it happened would reduce the risk to Montpelier taxpayers if the project runs into trouble.
Originally, the city had hoped to get all the funding for the CCR road infrastructure work through Community Development Block Grant–Disaster Recovery (CDBG-DR) funds, a $67.9 million pool of money the state received from the federal government to help with flood recovery. In a pre-application meeting before the Sept. 30 deadline for the first round of funding, the city was told the state wanted to fund only shovel-ready projects and suggested the city find a developer and apply in the second round of flood grant funding.
That sparked Montpelier’s search for a developer. By April 22, the city council now plans to choose one of four developers who have submitted proposals. The public can offer feedback on those proposals through March 16 using an online form found online at bit.ly/ProposalsCCR. The feedback form is on the same website page as the proposals.
In a pre-application meeting with the state for the second round of flood grants, the state said the most Montpelier could get was $5.2 million for CCR road-related infrastructure, although the full cost of the project — including a $3.5 million pump station — is estimated at $11 million.
The state has about $14.4 million in flood grants left to disperse. Applications for that money totaled $19.5 million and included requests for $5 million or more for projects in Montpelier, Barre, and Plainfield. A decision on the grants could be reached on April 2 during a meeting of the state’s Community Development Board.
$3M Grant
Meanwhile, the city also applied for a Northern Borders grant to help with the same project and was awarded $3 million on Dec. 8. And, seeking back-up funding in case a state flood grant money request does not come through, the city additionally applied for $5.3 million through the federal BUILD transportation grant program, Montpelier Planning Director Mike Miller said. The BUILD program provides funding for surface transportation projects with a significant local or regional impact.
City critic Stephen Whitaker maintains the CCR road project does not meet the requirements of the BUILD program for a variety of reasons, but Miller said city consultant Vanasse Hangen Brustlin, Inc. — which the city is paying $26,000 to work on the application — thinks it is “a good fit.” A decision on the BUILD grant is not expected until June.
If Montpelier gets both the state grant and the federal grant, “then we would have the opportunity to decide which one is more favorable to the project,” Miller said. If it gets neither, the city would have to consider other options, such as finding another grant, issuing a city bond, or using CHIP financing.
Miller said replacing the pump station near the roundabout, which was damaged in the 2023 flood, was removed from the CDBG-DR and BUILD grant applications, but he said some of the Northern Borders grant would cover the cost of the pump station and that there are other sources the city could tap to pay for the pump station.
CHIP Financing
The state’s new Community and Housing Infrastructure Program (CHIP), which was signed into law June 12, is designed to encourage development of primary residences for low- and moderate-income households. It could finance up to $200 million per year of statewide infrastructure projects, such as water and sewer lines and roads.
CHIP is a smaller version of the state’s existing tax increment financing program, known as TIF, but focuses on one project at a time, unlike TIF, which requires setting up larger districts. Money borrowed for CHIP infrastructure projects is paid back by the increased municipal and education property tax revenue generated by newly built housing that uses the infrastructure. That means most of the tax revenue from new development does not flow to the municipality or the state Education Fund until the bond is paid off, usually in 20 years.
If CCR ultimately does get developed, CHIP is being eyed as the tool to enable financing infrastructure there, including water and sewer pipes and roads. A CHIP application has to be approved by both the municipality and the state before the system kicks in.
Under CHIP, the bond used to finance infrastructure can be issued by the municipality or the developer. If it’s the municipality, the bond has to be approved by the city council and also by residents in a city-wide vote. If the developer issues the bond, the CHIP plan only has to be approved by the city council. The upside for taxpayers: a developer-issued bond puts the risk of a failed project on the developer rather than the city.
Of the four developers who submitted proposals for CCR, only Execusuite indicated they would issue the bond themselves. In its application, Execusuite said “We can secure all necessary equity, debt, and public funding for the development,” and it suggested it would seek to use CHIP financing.
Chinburg’s proposal states: “Our concept assumes that the city is funding public roads and utilities to create buildable lots with the development.” DEW said: “We request that the city assist in delivering internal development infrastructure to the greatest extent possible.”
Pennrose said of the internal roads at the site: “[B]ecause this road will serve public recreation facilities and provide general public access through the site, we believe its construction should be funded by the city as public infrastructure.”
Miller said the city is seeking additional financial information from the four developers. The first question that will be studied, he said, is whether each of the projects is financially viable.
The next step is “to start looking at the CHIP viability, regardless of who’s taking out the bond,” he said. “Are they generating enough tax increment to pay for the infrastructure needed to support the project? Our financial consultant and [real estate consultant] White + Burke will be really digging in to make sure that the CCR subcommittee has the answers to those questions.”
