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Elks Club Bond Supporters Cite Housing Needs; Opponents Have Varied Objections To Purchase

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Montpelier's City Council approved a $2 million bond proposal to purchase the 138-acre Elks Club property. The bond is up for vote at Town Meeting. Photo by Cassandra Hemenway
Montpelier residents continue to debate a $2 million bond vote that would permit the city to buy the 138-acre former Elks Club property. Many arguments in favor of the plan focus on the need for new housing as much as — or more than — on a location to build a new recreation center, the original idea behind the possible purchase. 

The evolution of the debate mirrors a change in thinking among city officials. At first plans centered on the property as a site for a recreation center, including a basketball court, child care center, art and activity rooms and more. City officials now see the purchase as a way to eventually build an entirely new mixed-income neighborhood with access to trails and recreation facilities, according to Montpelier City Manager Bill Fraser.

“In our early conversations, we thought this was a good place for a recreation center, but as we got thinking about it, it became clear that if we purchased the entire property and did not operate it as a golf course, there would be room for housing as well as a rec center and open space,” Fraser said. New housing is a top priority for the City Council, he noted.

The possibility of new city-sponsored housing development comes at a time when real estate inventory and apartment rentals are very tight, also as a relatively large number of housing projects are being proposed in Montpelier.

Fraser said the city has reached an agreement in principle with the owners of the former Elks Club property if the March 1 bond vote passes. He noted that nothing is signed yet and the deal also depends on an appraisal still in progress.

Fraser acknowledges the ultimate price is likely to be in the $2.5 to $3 million range, but he says the city has funds set aside for a new recreation center that could make up the gap above the $2 million bond. The current recreation building on Barre Street is in bad shape, he said, and would cost $6 million or more to rehabilitate. He said the city has been looking at potential locations for new construction and concluded this is the best option. The cost of building a new recreation center is unknown, but could be $6 million or more, depending on amenities.

The Elks Club

The Elks Club, which operated a golf course on the property for many years, sold the property to Citi Properties, LLC on May 25, 2016 for $1.2 million, which means the owners could more than double their money in six years if this deal goes through. Fraser has been negotiating with Steve Ribolini, a member of and registered agent for Citi Properties. Ribolini is also involved with Blueberry Associates, LLC, which owns 7.5 acres of land adjacent to and west of the Elks Club parcel.

The Elks property, which includes a large one-story building, is assessed by the city for $1.55 million. Average assessments in Montpelier are currently set at 81% of fair market value, according to state calculations, but those calculations are somewhat dated. All Montpelier properties will be reassessed to fair market value in 2023.

Pros and Cons Debated on Front Porch Forum

The proposed bond and purchase – Article 14 on the ballot – have generated more discussion on Front Porch Forum and elsewhere than any other item on this year’s city ballot. Proponents argue the city badly needs new housing as well as a new recreation center, and that the city should move now to secure the property while it is available. Fraser said Ribolini told him at one point that he planned to put the property on the market, although it has not yet been listed for sale.

Opponents have a wide variety of complaints about the bond that they have described in many posts on Front Porch Forum: that the city should have more defined plans for the property before buying; that the public has not been adequately informed or consulted about the project; that the recreation center and housing would be too far from downtown and generate significant additional car traffic; that the cost of buying and building on top of other bonds and a proposed 6.8% municipal tax increase is more than those on fixed incomes can afford; that the city has a poor record of managing large projects like this; and that the city has more pressing infrastructure needs and may need to build new schools in the future.

Fraser, who has attempted to rebut many of those arguments on Front Porch Forum, says reasonable people can disagree about the wisdom of the purchase. But he maintains that buying the land is a rare opportunity in a city where there are few large parcels left, and that the purchase would allow the city to control the type of development that occurs on the property.

“Current economics of housing development only support the construction of very expensive homes or subsidized affordable housing,” Fraser wrote in one of his postings, “City ownership can help change that equation.”

Real Estate and Construction

Fraser expressed hope that the city could encourage construction of a mix of affordable and market rate housing, including some moderate-income housing, although developers have found that building moderate-income housing is quite challenging due to high construction costs. Fraser suggested the city could help developers by building roads and other infrastructure to serve any housing on the property.

Real estate prices – and rents – have risen steadily in Montpelier in recent years, as they have nationally. According to the Montpelier appraiser’s report for the new city annual report, “the average residential sale price has risen over 16% in the past three years.” The average sale price of $326,797 in 2021 was up 2.6% from $318,595 in 2020, the report states, with the highest sale price in 2021 being $645,000. 

Realtors say the biggest issue in the current real estate market is a shortage of houses for sale. Out-of-staters have been flocking to Vermont since the pandemic started, some to avoid urban COVID-19 outbreaks, some because they can now work remotely, and some who say they are climate refugees. They compete against local millennials trying to buy their first home and retirees seeking to relocate from the country, creating a surplus of buyers in Montpelier even as many potential sellers have been reluctant to put their homes on the market and move during the COVID-19 era, preferring to sit tight.

Other Housing Proposals 

The housing crunch has prompted several new housing projects to be proposed. Montpelier zoning changes headed to City Council in late March could allow for construction of a 3-story, 50- to 60-unit affordable housing project on the east side of Northfield Street, proposed by Central Vermont Habitat for Humanity. Also proposed is a possible construction of 22 apartment units in four buildings on Heaton Street to serve families of Washington County Mental Health Services clients. 

Additionally, controversial Burlington landlord Rick Bove has been talking with city zoning administrator Meredith Crandall about constructing a 4-story, 42-unit market-rate apartment building on Northfield Street at the site of the old Brown Derby Restaurant.

Barre investor and developer Thom Lauzon has considered building a 12-unit mid- to higher-end apartment building next to the Pavilion Office Building, although no application had been submitted to the Planning Department as of last week. Christ Church has been talking for some time about building affordable housing on its downtown property. And the owners of the 94-acre Sabin’s Pasture have reportedly hired an architect and are thought to be working on development plans, according to Fraser.  

In addition, two large parcels of land that have been for sale for years are now shown as “contingent” on Realtor.com. One is a 72-acre parcel on Isabelle Circle listed for $1 million and the other is an 8-acre parcel on nearby Hebert Road that is listed at $250,000. Crandall said a developer had been in touch with the city about the parcels.

Meanwhile, the state is funneling many millions of new dollars into affordable housing projects, much of it coming from federal stimulus funds and also from strong state revenues. Some of it could be applied to these Montpelier projects if they meet state qualifications, or to new ones.

It is an open question whether all these plans will come to fruition. Permitting and finance issues can hold up projects, and the high cost of construction and expected sharp increases in interest and mortgage rates could make life difficult for developers. The same issues could conceivably frustrate the city’s plans to build housing on the Elks Club property.

But Fraser takes the long view. Figuring out what the city will do on the property – if the purchase goes through – could take a couple years or more, he said, and the city would be able to develop or sell off the land in stages, if it wanted.

Asked about all the projects being proposed in Montpelier, Fraser said housing often gets built in cycles. “Much of the housing in Montpelier was built during the 1960s and 1970s, other than the more historic homes, but then things slowed down,” he said. “Maybe we are at another time when we will add 200 or 300 or 400 new housing units.”

The Hub

The possibility the city could end up directing a large housing development only arose after a private group called The Hub began talking with Citi Properties about buying or leasing enough space at the Elks Club to build a new structure to house tennis and pickleball courts, as well developing other facilities, including outdoor tennis courts, virtual golf, a restaurant, a retail space, and maybe an outdoor pool for use by members of the nonprofit club, according to Hub President Ethan Atkin. 

City officials were supportive of the idea. Mayor Anne Watson even joined the Hub board for a short time, but quickly resigned when the possibility of the city getting involved emerged, Fraser said. City officials saw the location as big enough for a new recreation center and associated parking, and concluded a public/private partnership in which the city owned the property but leased some of it to The Hub could be beneficial for both the city and The Hub.

“For example, if the rec department wanted to offer tennis lessons, we might be able to buy a block of time on their courts,” Fraser noted. One possibility was buying only enough land for the rec center and The Hub, but then city officials began to focus on the possibility of housing.

The Cost to Taxpayers

In January, a bond proposal that originally asked for $1.5 million to buy the property for a rec center was amended by City Council to ask for $2 million to buy the land “for potential housing, recreation, and other uses.”  Bond payments will average $122,000 over the course of the 20-year bond.

In addition to fears that property taxes (and, indirectly, rents) will rise too fast with the additional spending on the land (and later a new recreation center) plus other city spending increases, another prominent complaint on Front Porch Forum has been that the city has not done enough planning.

For example, former City Councilor Steve MacArthur wrote on Front Porch Forum: “I simply can’t imagine how the taxpayers of Montpelier can be asked to support such an expenditure, such a grand project affecting our city’s future for years to come, without significant hearings, discussions, debate, and consideration. It certainly is not a ‘process’ I would have had any support for when I served on City Council.”

Another resident, Joe Castellano, warned against buying in a “frothy” real estate market and wrote: “In this case, we, the taxpayers, are being asked, based on just the proposal of possibly locating a new rec center and maybe affordable housing at the Elks Club site, to approve spending $2,000,000 without having any sort of plan in place. If the City of Montpelier were to go to a bank with this proposal, any reasonable banker would tell them to come back when they have a plan in place that they could review and consider.”

Fraser compares the situation to a “chicken and egg problem.” The city could put a lot of effort into developing plans for this site, he said, only for the land to be sold (he says Citi Properties is not open to a long-term option). He thinks it makes sense for the city to buy the property now while it is available, then figure out what sort of recreation center to build and what housing might be appropriate. He said he realizes some people think voting for the bond is like giving the city a blank check.

“There are a lot of opportunities here,” said Fraser. “But if the voters don’t want to buy the property, that is their prerogative.”

The City Council will be holding a public informational hearing on the city budget and bond proposals, including the Elks Club bond, at 6:30 pm on Wednesday, Feb. 23, according to Fraser. The meeting will only be accessible via a Zoom link that will be posted on the city’s website and Front Porch Forum, he said.

Voting on this bond and others, on the city and school budgets, and on local elections will take place on Tuesday, March 1. Early voting is available via the City Clerk’s office.

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