By Polly Mikula
On Thursday, May 26, the town of Killington presented a revised Tax Increment Financing (TIF) district to the Vermont Economic Progress Council (VEPC) after changes were made to its first proposal, presented in March. A final determination on the town’s application for a Master TIF District is expected at the next VEPC meeting, June 30, according to Abbie Sherman, VEPC executive director.
Phased filings would be submitted to the council with specific financing plans thereafter for approval.
Members of the VEPC council toured the proposed infrastructure development in Killington Thursday, May 26. The origin of the municipal water system is wells across the river behind the Mountain Times offices, where the group posed for this photo. Pictured from left, Abbie Sherman, (VEPC executive director), Angie Farrington (VEPC programs manager), Stephanie Clarke (White + Burke Real Estate Advisors), John Russell (VEPC member, Rutland), Charlie Kimble (Windsor County House of Representatives appointee), Chris Karr (Killington selectmen), Jim Haff (Killington selectmen), Michael Bennington, John Davis (chair of VEPC, South Burlington), Randall Szott (VEPC member, Barnard), Lisa Davis (Killington planning consultant), Chet Hagenbarth (Kil- lington town manager), Cheryl Hooker (Rutland County Senate appointee).
“I want to start with what hasn’t changed,” said Stephanie T. Clarke, vice president of White + Burke Real Estate Advisors, in her opening remarks Thursday. “The initiative we’re working toward is called Killington Forward, which is a bigger comprehensive plan. The TIF district is the funding source for a component of this Killington Forward initiative that the town has set. The vision is for job creation, development of the village, and to create workforce and affordable housing (that is desperately needed), to provide clean water and to improve the safety and accessibility of Killington Road. That is the initiative. That is the big vision. And that has not changed. What has changed is some of the funding component,” she explained to the council and citizens present.
The revised plan decreased the TIF district geographically, concentrating it around the proposed Six Peak Killington village at the base of Snowshed and Ramshead. In the new plan, only the first phase of the water infrastructure — from the flats of Route 4 up to the proposed village and down to the Lookout Tavern — are included as TIF infrastructure, as only that portion is needed to catalyze the village development. The other three phases of the municipal water system (down Killington Road) is planned to be financed by grants. All four phases of the road infrastructure will continue to be financed with TIF.
“We have amended our boundaries. We have reduced the number of infrastructure projects that will be funded with this funding mechanism. And we’ve scaled back the expectation for which private development projects will help to repay the debt for those infrastructure projects and that has altered the financing plan somewhat,” explained Clarke.
The revisions were made at VEPC’s request to fit more squarely in TIF’s parameters. The state agency did not feel that the original plan (a linear district stretching all the way down Killington Road and onto a portion of Route 4 to the west) met TIF’s compact and high-density requirement, nor would the municipal water line serving that extended area be crucial for the private development at Six Peaks Killington. (Catalyzing development that wouldn’t happen “but for” municipal infrastructure investments, is the main requirement for TIF.)
On Thursday, the council and citizens in attendance also got to hear from Great Gulf, the likely private developer of Six Peaks Killington. Prior to this, only SP Land had been involved publicly, however, that company has been working to find a buyer for the development for many years.
Michel Sneyd, president of Great Gulf Resort Residential, introduced himself and reinforced the “but for” component. While he professed the company’s “excitement to be developing Killington,” he added: “Financing for the development of the village will not be possible without the big public investment in the road and water infrastructure. So consequently, I believe this committee’s work is critical for the future of Killington.”
Up until March of this year, Sneyd had worked for Replay Destination, a company that was founded by Intrawest executives, who had previously hoped to develop Six Peaks Killington. That company ultimately walked away from the deal in 2019, citing too-high initial infrastructure costs.
“I first started analyzing the Killington opportunity while I was at Replay Destination,” Sneyd said. “After nine months of analysis, Replay concluded this project could not be financed as a result of the cost of the [municipal] infrastructure required to start the development,” he said. “Then in January of this year, the town’s Select Board approved moving ahead with this tax increment financing application. And given that I joined Great Gulf in March, I was able to get them very interested to acquire the Killington development lands from SP Land. And through our due diligence process, we’ve come to the same conclusion as Replay: financing for the development of the village will not be possible without the big public investment in the road and water infrastructure… Before this project can be developed, Killington Road needs to be moved, reconstructed, and improved. And potable water must be brought in to both serve the future village and also the existing community,” he emphasized.
When Sen. Cheryl Hooker asked to further clarify the “but for” qualification.
Selectman Jim Haff answered. “We’ve been living the ‘but for’ alternative for the past 50 years, since 1958 when the resort was formed.”
At least six different villages have been planned at the base of Killington since the resort was first conceived, starting with founder Preston Smith’s plans. Each time, the plans have fallen through.
“The only reason Michael is here today is because of TIF,” summarized Lyle Jepson. “None of this development can happen without this investment [in public infrastructure] and it’s exciting to see it finally coming to a point where something can happen.”
Financing the infrastructure
In total, the water and road infrastructure projects are estimated to cost about $62.3 million, which are in turn projected to catalyze $285 million in increased property value in the village area alone — “an incredible return on investment,” Clarke has noted, but one the small town of Killington would not be able to finance on its own.
“Tax increment financing is a municipal tool used to build infrastructure that catalyzes development. It’s a financing tool,” explained Clarke at the last public hearing for the town May 2. “What happens is the town can invest in infrastructure and build that infrastructure, taking out the debt service to do so. And the resulting development (the new development) pays taxes on the new value (the incremental increase) and those taxes go to pay down the debt service on the infrastructure. So, there is no new tax, or new tax rate. Simply put, no new taxes are collected. There is just a new diversion of new taxes that do not exist now and would not otherwise exist, but for the investment into the infrastructure.”
The overarching Killington Forward plan specifically includes: a municipal water system that extends all the way down Killington Road and onto a small portion of Route 4 to the west, the redevelopment of Killington Road and to catalyze affordable housing (once municipal water can be secured for the proposed area). “The provision of clean water, a safe and accessible Killington Road, the creation of the village and affordable housing is the essence of Killington Forward. Tax Increment Financing … is a funding mechanism that’s going to make components of this possible but it’s just one of the concurrent paths that the town is taking to achieve its missions,” Clarke explained May 2.
Also, the total costs will be reduced by grants once received. A draft of the Vermont Clean Water State Revolving Fund Intended Use Plan by the Agency of Natural Resources, indicates that the town of Killington has the greatest need on the ARPA Village Water & Wastewater Project Priority List for its community drinking water system. The draft budgets four years of allocations from SFY2022-2025 for a total grant of $23,489,430.
The town expects to hear officially about this grant award “any day now,” according to Selectman Jim Haff.
Requirements of the grant include a fast timeline — ideally, beginning in March 2023 with a completion date by 2025, per the financing allocation.
Assuming that the water grant is secured and the TIF district is approved at the end of this month, the town will then work to finalize public-private development agreements, then pass a bond vote in November to authorize Phase 1.
Map shows path of Phase 1 of Water and Phases 1-4 of road.
If all that happens, construction could begin next spring.
“Things are hurtling forward, we’ve got pieces in place and a lot of momentum here,” said Clarke, Thursday. “But the TIF district is a critical component.”
With municipal water comes the option for affordable housing development.
“Something that we’ve learned along the way is that affordable housing developers will not go to a site that does not have a water — you must have water, sewer, and zoning. We have the zoning and sewer. We need the water,” Clarke said. “So that’s number one, the onus is on the town to get the water to the sites that are the most viable for housing… the town has been just taking steps to make it as appealing as possible for these particular sites for a developer to come in. That’s all I’m really at liberty to say at the moment but there’s a lot of stuff happening behind the scenes right now,” she added.
Who is Great Gulf?
By way of introducing Great Gulf to the council and public, Sneyd presented an overview of the company, its multiple divisions and growth over the past few decades at Thursdays VEPC hearing.
“Great Gulf was established in 1975 as a regional home builder, and now they’re a multi-disciplined company,” he began. “In total, they’ve developed over 80,000 residential units. And today we have around 8,000 units under development and 5,000 single family homes, on our commercial side. We’ve developed 30 million square feet and have 5 million square feet in development right now,” he said. “We also have in-house construction management Tucker High Rise… We have an architectural team called Draft, in-house marketing and sales and a home technology group that runs a 200,000 square foot plant in Toronto that manufactures all of the floors and all of the walls both internal and external.”
“We have a division in the United States called Ashton Woods. And while Great Gulf is a private company, Ashton Woods issues public statements… in only 10 years, it’s grown from startup to be the second largest private home builder in America,” he added.
Of the company’s mission, Sneyd said: “Great Gulf creates places for people to live, work and play. We love to enhance value for our customers, our investors, and the communities in which we work and in so doing we strive to become the developer of choice for communities throughout North America.”
“Each of our business units within Great Gulf were started internally and grown organically,” he added. “Right now, we operate in 18 cities within North America within eight states and two provinces. And I look forward to making that nine states very soon with Vermont.”
“We’re looking currently throughout North America for new locations that combine residential resort activities for families to basically enjoy themselves together,” Sneyd continued. “Killington is really a location that has everything Great Gulf is looking for,” he said.
“We are excited to be developing Killington and, in short, to be making this rendering a reality,” Sneyd concluded hopefully, showing a slide of the planned village.
Estimated timeline:
- June 21, 2022: Final day for public testimony to be submitted
- June 30, 2022: Final determination on Killington TIF is expected at next VEPC meeting, according to Sherman
- Finalize development agreements, complete design for water/road infrastructure
- Fall: submit first VEPC phased filing
- November 2022 bond vote for Phase 1
- March 2023 “shovel ready” for Phase 1.
