Home News and Features A Message from City Hall: The Hotel and Parking Garage Project

A Message from City Hall: The Hotel and Parking Garage Project

Most people, by now, have read or heard that the proposed 80-room Hampton Inn and 345-space parking garage located mostly on Capitol Plaza property has been sidelined primarily because of litigation delays as well as COVID-related economic concerns. Hilton, the hotel chain which includes Hampton Inn, decided to withdraw its sponsorship because of the uncertain time frame and expenses related to the appeal process.

Following the announcement, there have been many comments and questions on various social media platforms. Here is a summary of these issues so that the community may be accurately informed.

What are the financial consequences?

City taxpayers will need to repay approximately $1.25 million in bond costs for project expenses to date. This money would have come from Tax Increment Financing (TIF) for the new hotel and parking revenues from garage use had the project been completed.   The total expenses include design and engineering, permit applications, environmental testing, as well as legal. This projects to slightly more than $70,000 annually in bond payments over 20

The city will not receive approximately $170,000 in building permit fee revenue from the hotel and garage.

The city will not receive the estimated $30,000 to $50,000 annually in room taxes from the new hotel. We will also not receive any additional annual meals and alcohol taxes generated from visitors staying at the hotel.

Local businesses will not realize additional sales from hotel guests or visitors who seek convenient parking.

Are there other consequences?

160 net new parking spaces and 80 new hotel rooms in downtown are lost.

The loss of the opportunity to retire the aging high-pressure waterline under the garage building and North Branch (which is the reason we can’t remove the coffer dam under the new bike path bridge). This was going to happen as part of the hotel/garage project and had received a project-related grant to help finance it. 

20 new electric vehicle charging stations were to be built in the new garage using grant funding. Additionally, the garage was designed to allow for EV stations at all 345 spaces in the future.

There will be no direct connection from State Street to the new Bike Path. Access will remain as it is currently, only from Main Street or Taylor Street.

Environmental brownfields exist in the present involved parking lots. These would have been remediated as part of the project.

There is currently no stormwater treatment from the existing surface parking lots. The project would have installed a state of the art treatment system to improve river water quality.

The city has held preliminary discussions regarding downtown development and investment opportunities. The status of these potential projects is now unknown due to loss of parking.

Christ Church has been considering a 30-unit affordable housing project which was using the new garage to meet parking requirements — necessary for both tenants and for obtaining financing. The impact of this decision on the potential housing is unknown.

The recently completed Downtown Master Plan laid out enhanced bicycle lanes and pedestrian walkways. These would have used existing on street parking spaces. The plan specifically states that the designs are predicated with the assumption that a new parking garage will be built. Without new parking, these designs cannot be practically implemented.

What is the legal status of the permits and appeals?

The hotel and garage have been granted all necessary zoning, Act 250, historic preservation, and environmental permits.

A group of individuals (first 16, then 12, then reduced to three by the court) appealed the zoning (both site plan and subdivision) and Act 250 permits. The group was reduced to three because the court ruled that the others did not have legal standing to bring the appeal.  

The parking garage was found to be exempt from Act 250 because it is a municipal project under 10 acres. Only the hotel remains in the Act 250 appeal. Appellants continue to oppose the hotel project.

After a series of court decisions, the remaining issues to be litigated are:

Act 250 Appeal

  • Issues left in the appeal were the new hotel’s conformance with criteria 5 (traffic) and 8 (historic sites).
  • Capitol Plaza had filed a renewed motion to dismiss the appellants on standing/party status grounds since the requests for party status were based on the garage, not the hotel.  The appellants disagree with this assertion.
Parking Garage Subdivision Appeal

  • Whether the proposed, new +/−0.55-acre lot to be subdivided from the Capitol Plaza lot (the “New Lot”) has an undue adverse impact on the environment, neighboring properties, or character of the area and is compatible with the UC-1 zoning district’s Downtown Business Neighborhood.
  • Whether the New Lot is consistent with the planned settlement pattern of the area.
  • Whether the New Lot had to comply with street tree standards.
  • Whether the landscaping design surrounding the New Lot respects the historic character of the Downtown Business Neighborhood.
Parking Garage Site Plan Appeal

  • Whether the parking garage satisfies river setback and riparian buffer requirements, depending on whether the North Branch is “channelized” in this location.
  • Whether the site plan respects view corridors and significant vistas, including gateway views of the city and State House.
  • Whether the aspects of the parking garage that are allowed to be regulated (building bulk, yards, courts, setbacks, landscaping, etc.) are in harmony with the character of the UC-1 zoning district.
  • Whether the redesign of the 60 State Street lot conformed with the regulations to the maximum extent feasible given its physical characteristics, including parking lot landscaping, walkway width and location, and parking lot shading requirements.
  • Whether the site plan complied with the zoning regulations’ outdoor lighting standards and whether the parking garage lighting was compatible with the character of the neighborhood.
The following issues were raised by appellants but have either been voluntarily withdrawn or dismissed from the case:

  • Claims that the parking garage is subject to Act 250 jurisdiction. The appellants contended that the two structures were part of a joint venture, but the court found them to be separate since the city was solely financing, constructing, owning, and operating the parking garage. Appellants strongly contend that this decision was wrong and will be overturned on appeal to the Vermont Supreme Court.
Appellants have lost or withdrawn their challenges to: 

  • the parking garage allegedly being a conditional and/or nonconforming use;
  • the subdivision having an alleged lack of adequate road frontage;
  • claim that the parking garage causes unreasonable traffic congestion;
  • claims that sidewalks on both sides of the access road are required;
  • claims that insufficient bike access or facilities are provided (bicycle amenities are outside the scope of review of a municipal project).

Other questions/comments that have been posed

Would the proposed garage sit on or obstruct access to either the Winooski or North Branch rivers? No. The garage would sit on the State Street side of the railroad tracks and on existing parking lots. All river access would remain exactly the same as it is today.

Would the proposed structure block views of the State House dome? While this is a remaining issue to be litigated, the answer is no. View analysis from all directions shows no obstruction of view. No evidence to the contrary has been produced to date.

Was the voter turnout for this bond vote unusually small? No. Just the opposite.  4,336 people voted on this November election issue, which is very high turnout. In fact, the 2,459 YES votes cast for this bond exactly equals the 20-year average of ALL votes cast in March city elections.

Please feel free to contact me or your elected officials with questions or comments about the city government.  I can be reached at wfraser@montpelier-vt.org or 802-223-9502. Other city officials’ email addresses and phone numbers are available on the web.