Rachel Pierce
A newly formed development corporation and a retrofitted state program may help keep the federal building at 87 State Street in local hands.
After a negotiated sale fell through this spring, the Foundation for a Resilient Montpelier moved to the next phase of its plan: competing for the building at auction. Led by Executive Director Jon Copans, the foundation had spent the past year recruiting 10 of the region’s largest institutions to join the effort and persuading the Vermont Legislature to rewrite a state program to help pay for it.
On June 15, the U.S. General Services Administration opened online bidding on the three-story, 70,000-square-foot building with a starting bid of $500,000. Administrator Edward C. Forst framed the auction process as a way to “cut waste and save American taxpayer dollars.” As of press time, no bids had been placed.
The strategy hinges on a local development corporation formed “explicitly for the potential acquisition and redevelopment of the property,” according to Copans. The board reads like a who’s who of central Vermont institutions — the insurers National Life, Vermont Mutual, and Union Mutual; Central Vermont Medical Center, the region’s largest employer; the housing nonprofit Downstreet; the Central Vermont Economic Development Corporation; the Central Vermont Regional Planning Commission; the Preservation Trust of Vermont; the city of Montpelier; and the Foundation itself. None were asked to contribute money, only time. “CVMC’s role here is less about capital and more about partnership, perspective, and showing up with a long-term commitment,” said Jay Ericson, the medical center’s representative on the board.
If the development corporation were to bid on the building, the money would come from a source engineered by the foundation. Working with Sen. Andrew Perchlik and the broader Washington County delegation, the foundation advocated to expand the state’s Rural Industry Development Program to include “federally impacted properties,” a category that now makes 87 State Street eligible. This change increased the maximum award for such properties to $2 million and waived the program’s usual matching requirement. It was also paired with an appropriation in the budget that the governor signed.
The development corporation is preparing to apply for up to $2 million from the program, although the final decision rests with the Agency of Commerce and Community Development. Copans called it a “global number” meant to cover acquisition, holding costs, and early redevelopment. It is not a bidding budget.
With a funding path in place, attention shifts to the building itself. The foundation’s earlier due diligence revealed an undisclosed report documenting widespread PCB contamination in the building’s original materials. It has been estimated that remediation of the PCB contamination alone could cost up to $2.5 million, but the full extent of the contamination is difficult to determine. The General Services Administration will allow prospective buyers to walk through the building but will not permit materials testing. The board must decide whether to bid, and if so, how high, before the auction closes on Aug. 5.
What brought insurers, a medical center, and a housing nonprofit to the same table is a shared interest in Montpelier’s future. A vacant landmark downtown weighs on the local economy, the housing supply, and a community still rebuilding from the 2023 flood. The redevelopment vision centers on 70 to 80 units of housing on the vacant lot behind the building, while the former post office itself would likely remain commercial.
Regardless of the board’s decision, the auction could still go to a buyer with deeper pockets — one willing to overpay for the Statehouse-adjacent site and deal with the contamination later, if at all. That’s the outcome the local development corporation was formed to avoid. Win or lose, the foundation pushed to share the contamination report on the auction website so that buyers know what they’re taking on. “What nobody wants is a building sitting stagnant right there on State Street, a stone’s throw from the Statehouse … That’s not an option, honestly,” said Copans.
