VERGENNES — The Vergennes City Council recently took two actions intended to help developer Peter Kahn build workforce housing in the city.
Councilors on April 9 approved a $100,000 loan from the city’s Revolving Loan Fund to Kahn that could help him move forward with a 14-unit apartment building on Armory Lane. That building would be next to an existing 10-unit apartment complex now under construction.
They also agreed to support Kahn’s effort through Sen. Peter Welch’s office to obtain $5 million of Congressionally Directed Spending to help fund a proposed 130-unit apartment building on 14 acres off North Main Street, behind the city’s police station. City Manager Ron Redmond called that possibility “a longshot,” but one worth pursuing.
Kahn, known for developing Commodore Drive off West Main Street (among other projects), told the council last week the Revolving Loan Fund loan was critical to his plans to add a second workforce housing building on Armory Lane.
More than the direct funding, he said, approval would demonstrate city support for the additional 14 units and help him obtain a vital, larger loan from the Vermont Housing Finance Agency (VHFA).
“They want to see participation from the municipality,” Kahn told the council.
The VHFA loan would be for about $2 million, he said, and come with a below-market interest rate. Because workforce housing rental fees would be lower than full market value and construction costs have risen, Kahn said the project hinges on obtaining the lower-cost VHFA backing. If that funding is not forthcoming, he said he wouldn’t accept the city loan and rethink the project.
He listed benefits to the city of supplying the loan: the units would house needed “potential employees” for businesses, and provide up to $40,000 in annual tax revenue, a roughly $18,000 sewer hookup fee, and about $12,000 in annual sewer/water fees.
“From a business standpoint, it makes sense for Vergennes,” Kahn said.
After making sure the project was allowed under the Revolving Loan Fund’s bylaws, councilors approved the $100,000 loan with 4% interest, with the balance to be paid off after 10 years.
Kahn said if the VHFA loan came through, he’d approach the Vergennes Development Review Board right away, and work could begin as soon as this fall. The project would not require Act 250 review, he said, because it’s sited in the city’s new Neighborhood Development Area, thanks to the efforts of the Vergennes Planning Commission, and because of changes in Act 250 provisions.
Councilors also agreed to ask Welch’s office for Congressionally Directed Spending (formerly known as an earmark) to help support construction costs of the first 60 of a proposed 130-unit project off North Main Street. Kahn clarified to the council that this is a “totally different project” than the Armory Lane efforts.
Provisions of the request call for “funds to be administered by the city and applied solely to hard construction costs, covering approximately 30% of the overall funding needed.” The project cost estimate mentioned at the April 9 meeting was $17 million.
Redmond said the idea was first floated by Addison County Economic Development Corp. Director Fred Kenney. If awarded after what Redmond described as a highly competitive process, he said the earmark would help ensure the housing would be targeted at price that local workers could afford.
ODDS & ENDS
In other business on March 9, the council also:
• Heard from Redmond that contrary to some local scuttlebutt, the bridge over Otter Creek remains safe to use, and the Vermont Agency of Transportation wouldn’t allow its use “if it wasn’t safe.” Parent Construction will be doing work to shore it up to make sure it remains so, he added.
• Heard from Redmond that he’d received a request from Ferrisburgh officials to consider extending sewer service to Gaines Insurance on Monkton Road. Redmond said he’d politely decline it, and advised the question of sewer extension be tabled until ongoing upgrades were complete and system capacity could be evaluated.
• In other Ferrisburgh news, heard from Redmond the two communities were pooling planning grants to hire surveyor Tim Cowan to work on establishing their boundaries.
• Endorsed a $150,000 application by the Friends of the Vergennes Opera House to Vermont Community Development Program for an Accessibility Grant to support the theater’s All Access Project, which will also upgrade access to city hall.
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