The parties in the court appeal of city and state permits issued for a proposed new 345-space city parking garage to serve shoppers, workers, and customers of a planned new Hampton Inn hotel have been told to be ready for trial by Aug. 1, under a Feb. 4 scheduling order issued by Superior Court Judge Tom Walsh.
The case has been delayed by limited court activities during the pandemic, according to attorneys for the city and the appellants, and it appears the legal proceedings could drag on quite a while longer, perhaps pushing the start of construction into 2023, if the project is ultimately approved and if the city decides at that point to move forward.
While the court order says that a four-day trial may begin Aug. 1, one of the attorneys representing the city of Montpelier — David Rugh — said he thought the trial would likely start in late summer or early fall. It may take the Environmental Division of the Superior Court a while after the trial to issue a decision, and an appeal to the Vermont Supreme Court is likely, potentially adding another year to the legal timeline for a final resolution of the case.
City Manager Bill Fraser said he and city officials have been “frustrated” by the legal delay in the construction of the garage, which was okayed by city voters in November 2018 when they approved a $10.5 million dollar bond for the project by a margin of roughly 57 percent to 43 percent. In a presentation last May, Fraser said the cost of the project had risen to $12 million at that time because of legal costs, rising construction costs, site complications, and costs related to a brownfield on the site.
Asked how the city would make up the difference between the bond amount and the higher costs, which could keep rising, Fraser said the city could seek grants, tweak the garage design further, or go back to the voters for another bond vote.
Even if the city wins its appeals, there is no certainty the project will go forward. The construction of the garage depends on the construction of the hotel going ahead, and vice-versa. The pandemic has raised questions both about the demand for hotel rooms and for parking in Montpelier, including by state workers who are currently working from home.
Fraser said he believes state workers will eventually start using their offices in Montpelier again. “It is state policy to prioritize downtowns,” he said. “It would be shocking if they abandoned their buildings here.”
Even if there are fewer cars in the city in the future, the parking garage could reduce demand for parking in other parts of the city, Fraser noted. That means existing surface parking could be used for housing or commercial buildings, he said. “Some on-street parking could be converted to bike lanes and/or parklets or other amenities,” he continued. “Again, these options are only in play if, as some predict, the number of cars — and therefore parking demand — greatly drops. That is not a guaranteed scenario.”
Fraser said he is confident the city will win the legal case in the end, and said that at that point the city will re-evaluate whether to go forward with the project based on the demand for a hotel, whether the demand for parking has changed, and the projected construction costs.
As of last May, the city had spent $250,000 on fees related to the appeal, including payments to lawyers, architects, and engineers, and had a total of $850,000 invested in the project. Fraser could not estimate what the total appeal bill will be if the case goes to the Vermont Supreme Court, but said he is not in favor of re-evaluating the project now in light of the pandemic, even if that would potentially save appeal costs.
“We have a voter-approved project which, all things being equal, is advantageous to the city,” he said. “Stopping now would mean starting all over again in the future when conditions are favorable. Or foregoing the opportunity.”
Fred Bashara, Sr., president of the Capital Plaza Corporation that has permits to build an 81-room Hilton-affiliated Hampton Inn behind its existing hotel, said he is not paying a lot of attention to the legal proceedings and is trying to focus on his existing businesses.
Bashara said that his firm’s decision to make the existing Capitol Plaza hotel part of the Hilton Tapestry Collection and to upgrade to Hilton standards has worked out well. “We’ve gotten top reviews,” he said. “It has been really good.”
But he said the pandemic has been hard on most of his business interests, which include the hotel, J. Morgan’s Steakhouse, and movie theaters in Montpelier and Barre. Asked where he would be now if the garage permit had not been appealed and the new hotel had already been constructed, he joked “we would probably be bankrupt.”
The idea of building a city parking garage came after Capitol Plaza got permits to build both a new hotel and a parking garage of its own. When the projected cost of the garage proved to be more than the business could afford, the City of Montpelier stepped in and developed plans for a larger parking garage on land donated by the corporation and valued at $500,000 that would both provide more parking spaces for Montpelier shoppers and workers and provide spaces for the hotel’s customers. Two hundred spaces are supposed to be reserved for Hampton Inn use, but would be available to others when not being used by the hotel.
A group of 13 Montpelier residents filed an appeal of the city zoning permit that had been obtained by the city for the garage. The court later ruled most of the residents did not have standing to appeal, but allowed two of them — Les Blomberg and John Russell — to intervene in the zoning case under a separate provision. Blomberg and Dan Costin are the appellants of record for the Act 250 appeal. The appeals of the zoning permit and the Act 250 case have been combined into one court proceeding.
The appellants have a variety of complaints about the garage, including its effect on the aesthetics of the downtown, the fact it perpetuates reliance on automobiles, the potential for increased traffic caused by the garage, and its cost, but the appeal has become focused on more narrow legal issues.
The court has already ruled that the city did not need an Act 250 permit, saying it qualifies for an exemption for municipal projects on under 10 acres, according to appellants’ attorney James Dumont. City attorney Rugh declined the talk about the details of the case, but Fraser said the city originally applied for an Act 250 permit at the suggestion of the local Environmental Commission.
Dumont disagrees with the court’s conclusion, saying the parking garage is part of a related plan that includes the hotel, and should be subject to Act 250. He said the city is expected to file a motion to dismiss the Act 250 part of the case, which would allow Dumont to appeal that issue to the Vermont Supreme Court soon.
The zoning permit appeal of the parking garage involves both subdivision approval and site plan approval, according to Dumont. The subdivision dispute has involved whether the city application can be made the subject of limited subdivision review and whether the new street to the garage must have sidewalks on both sides.
The site plan review appeal involves whether the garage will change the character of the area, for example by impacting views of the State House from several locations in Montpelier, Dumont said. If they lose on the zoning issues, the appellants could appeal those issues to the Vermont Supreme Court too, and possibly the court’s rulings on standing, he said.
Dumont said he thinks spending precious resources on a parking garage in light of climate concerns is inappropriate. “Millions are being spent on a project with a lifespan of 20 to 30 years that has no public transportation component, not even for employees, he said. “The hotel and garage rely completely on passenger vehicles,” with no provision for shuttle parking for employees or guests. (Fraser said the lifespan of a parking garage is 50 years.)
Earlier this year, the city sought to have the appellants disclose documents and other material related to anyone providing financial support to the appellants’ case, a request Dumont opposed. The court ruled in December that information about third parties was not relevant to the city’s defense and was not necessary for a full and fair determination of the appeals.
Dumont said it would have been a “horrible precedent” to force public interest litigators to disclose who was paying for a case and would have violated First Amendment free speech rights. Fraser said the city was simply seeking transparency. “We thought it would have been useful information for the public to know,” he said.