By Lani Duke and Katy Savage
RUTLAND—The former Rutland Herald building in downtown Rutland could become the city’s first downtown hotel.
DEW Construction, of Williston, has an option to purchase the building for $620,000.
“That’s considered to be a depressed area,” said DEW Vice President Peter Kelley. “We felt like there was an opportunity to at least evaluate a downtown hotel.”
The agreement is pending qualifications for new market tax credits, a necessary piece to make it financially feasible, Kelley said.
Vermont Rural Ventures oversees tax credits in the state. The tax credit would cover about 20 percent of the funding, explained Rural Ventures Vice President of Community Investments Beth Boutim. DEW would need to seek other financing for the remaining funds.
Boutim said the hotel project has been through preliminary board reviews. It could be approved as soon as March 2019.
“It’s going to add vibrancy to the downtown as a whole,” said Rutland Rural Development Executive Director Tyler Richardson.
The site sits on about ¾ of an acre on Wales Street. It was occupied by the Berwick Hotel until the building burned down in January 1973. It’s considered a brownfield site for environmental clean-up, estimated to cost $500,000.
A downtown hotel has been discussed by various agencies in the Rutland community in the past.
The Rutland Redevelopment Authority hired PFK Consulting in 2013 to study the potential market for a downtown hotel.
PFK considered two sites—one on the Berwick property and the other on Evelyn Street.
PFK did not consider the environmental ramifications at that time, but the report said the benefits to the Berwick site were its proximity to downtown amenities, such as the Paramount Theatre, restaurants and shops. The disadvantage was the size of the property.
When the property was auctioned in October 2016, local developer Joe Giancola submitted the winning bid of $600,000 but declined to follow through. He cited the high cost of site decontamination and an inability to gather financing. After Giancola’s abdication, the Mitchell family contacted the second-highest bidder, a Long Island enterprise, who also turned down the purchase.
DEW was the third-place bidder. The company paid $20,000 more than Giancola’s winning bid. The Mitchells began negotiating with DEW in early 2018, Rob Mitchell said. Initially, the state told the developer the project was ineligible for tax credits, but community support apparently compelled the state to reconsider when the company re-submitted its plan.