By Polly Mikula
The Vermont Economic Progress Council (VEPC) met with the town of Killington and its residents via Zoom Thursday, Jan. 27, for a public hearing on the town of Killington’s tax increment financing (TIF) application. The town hopes to utilize future incremental municipal and education property tax revenue to finance planned infrastructure that would serve property development within the TIF district as established by the town on Jan. 4.
VEPC will spend the next two months reviewing the town’s application and qualifications before making a decision on whether to permit the district to use tax increment financing as a tool to spur development.
The hearing Thursday was the only one that includes public comment.
The meeting began with an overview presentation by Stephanie Clarke, of White + Burke Real Estate Advisors. She explained that the $66.5 million plan includes two crucial infrastructure projects over an eight-year period. The first bond is projected to be $39 million and would spur an estimated $300 million in increased property value. Initial financial projections indicate that the TIF fund would be cash positive in three years, with 70% of the state property tax going to the TIF fund and 30% to the education fund (this would also net the state $27.5 million of additional tax revenue).
But such development will not happen without VEPC’s approval for the town to use future incremental municipal and education property tax revenue from development within the district to finance the public infrastructure costs needed to get those projects off the ground. The proof is in the stop-and-start history of a planned Killington village, Clarke stated.
First, in the 1970s-1980s Preston Smith tried to get the village off ground but failed. Then, in the mid-’90s American Ski Company (ASC), which split to be a ski company and property company, tried and failed. In 2004 when SP Land took over the land company, there was a letter of intent for development with a reputable destination property company. That company spent from 2005 to 2007 trying to find a way for it to work, but in the end also abandoned the project in favor of doing a project at Loon Mountain. That project was completed in nine months because infrastructure was there.
Most recently, over the past few years, once again a development company had looked at the opportunity to invest in Killington’s planned village — with all the permits in place, it seemed promising — but after a few years of trying, they also had decided that the lack of public infrastructure made it too costly to begin.
It was the town that reached back out to them, Selectman Jim Haff explained. They’re now interested again if the public infrastructure can be built (municipal water is crucial both to the village development and for affordable housing, the road reconstruction supports both and is important to future development, safety and multi-modal access).
The town is fairly confident that once it receives approval for its TIF district from VEPC, then development agreements will be worked out within six months. The town is hoping to hold its first bond vote in November 2022 or March 2023 after all infrastructure design is complete.
After the project overview, Killington Town Manager Chet Hagenbarth gave the council a virtual tour via drone of the proposed water line and TIF district by phases.
VEPC board members then had the opportunity to ask questions, which were answered by members of the Select Board, town manager or Clarke.
After a brief lunch break, a public comment period ensued. Five community members had signed up to speak to the council and were limited to seven minutes per person.
Art Malatzky spoke first and was the only resident to speak against the project. He began and concluded his comments by asking that the town withdraw its application or the VEPC board deny it in its entirety (his full speech is published as a letter on page 10).
Malatzky argued that this meeting was not properly publicized to encourage public comment. While he acknowledged that it “may all meet the legal requirements of providing notice under law” he said “it certainly does not publicize nor encourage comments from town residents and taxpayers.”
He then pointed to a conflict of interest as White + Burke Advisors is employed by both SP Land and the town of Killington. “It cannot be denied that, at least initially, the single largest beneficiary of the millions of dollars of funds available through a TIF district would be SP Land. An impermissible conflict therefore exists, if not legally then in appearance,” he said.
Then he highlighted the financial risk to the town, calling the development timeline unrealistic: “The development plan for SP Land’s ski village envisions an eight year build out in four phases. Experience clearly suggests that this vision is strained, to say the least. Not only is it unrealistic to assume a two year build for each phase, it is almost impossible given that there are no concrete plans currently presented for even Phase 2… revenues will not be able to pay for the bonds, both interest and principle, until at least Phase 3 is completed,” he said.
Killington Resort President Mike Solimano spoke next. “I got here 21 years ago and that’s the year that the Killington village was supposed to take place, that’s what they told me at the time. I was the finance person then,” Solimano said. “I’ve seen the ups and downs of trying to get something going. From my perspective, being a numbers guy… I think this TIF project is really the catalyst that’s going to get this project going and I don’t think it’s going to happen otherwise.”
Solimano went on to outline how the resort has invested heavily in the mountain since Powdr bought it in 2007 (for about $80 million). But he said their purview is limited.
“We’ve been investing a substantial amount of money trying to grow the resort and make it a year round business. We’ve put in around $140 million into the business in that time [since 2007]… we grew our mountain bike business from 2,000 visits at that time to about 50,000. Now we’re the fifth largest mountain bike resort in the U.S.,” he said. “We’ve also been investing in employee housing as we continue to struggle with staffing, like many businesses. We’ve bought a couple different hotels for employee housing — and we’re about to complete a 200-bed acquisition of a local motel, but the downside when we do this is that it takes out rooms available for skiers that want to come here… that’s definitely a challenge.”
The resort bought Mendon Mountain Lodge on Route 4 in 2018. It houses about 60 employees in the 30-room lodge. The resort’s acquisition of Hillside Inn — a 200 bed hotel off Killington Road — is underway. In all, the resort has spent over $4.2-$4.5 million on employee housing, Solimano said.
In summary Solimano said: “I guess the main point for me is that the mountain has been investing but the village isn’t something that we’re going to be able to get going… from my standpoint I don’t think this will ever happen if we don’t move forward with this project. They [the town] has been working on this plan for a long time and it looks pretty well thought-out to me.”
Lyle Jepson, executive director of Chamber and Economic Development of the Rutland Region (CEDRR) spoke next. He focused on the need for housing across the region.
“You heard [Killington selectman] Chris Karr speak of the housing need from a business perspective earlier and I’m just here to say the housing need is real. “This is not a ‘build it and they will come’ project. People are visiting and they want to stay but they can’t find a place to live. People want to come here and work and enjoy our quality of life but there’s no place to go. The infrastructure in Killington and along the Killington Road was put in decades ago and will no longer support the growing needs of the community or our region. But for the TIF — and I’ll go back to emphasize that ‘but for’ piece that you hear and you want to hear — but for the TIF people will go someplace else. We’d like them to come to Rutland County, which includes Killington,” Jepson said.
“Rutland County needs additional housing stock… New housing is not being brought online and we need that desperately. The housing supply in Rutland County has been declining over time… growth has been relatively stagnant since the 1980,” he continued.
“Add to this the trend of short-term rentals, which you hear a lot about. From 2015 to 2019 short-term-rentals in Rutland County rose tenfold… So what does that do? In essence it takes them off the market for long term availability,” he said.
“We are in desperate need of workforce and market rate housing for our Rutland County population. The Killington TIF district proposal will help that. There’s demand for housing at all levels. The solution is to increase the supply. The solution is multi-faceted and it is in our control to resolve. A transformative step forward for housing is the approval of the Killington TIF district. The numbers speak for themselves. The TIF is an economic development tool that is needed in Rutland County, and I applaud Killington for being innovative and proactive in their planning. We support their efforts and stand with them requesting your support of the TIF district. Just look at the numbers!”
Mary Guggenberger, principal at Killington Elementary school, addressed the council next.
“The quality of life offered here in Killington is sought after by many young families and people really desire to raise a family here and work and play in this community,” she said. But “professionals looking to work at my school have had to decline positions, such as school nurses, because they can’t find affordable housing within a reasonable driving distance to the school and that’s a real hardship to our school community right now.
“Since the pandemic our enrollment has increased as more heads of households are able to work remotely … those with homes already here have moved here permanently, but my sense is that we’ve plateaued in our enrollment because there is no housing,” she said.
“Additionally, the vitality that the project will bring with the road connectedness will bring our community together, it will make everything more central and improve getting around in the town of Killington… the TIF project is the first step to getting us there.”
Gerrie Russell, a retired resident, trustee of the Sherburne Memorial Library, and director of the Killington Active Seniors, was the last member of the public to comment.
“Some fear that this will raise our taxes,” she said. “I’m a senior citizen on a fixed income. When you’re retired you don’t get bonuses, you don’t get raises. I would not welcome higher taxes,” she emphasized. “The new development will hopefully increase our grand list keeping taxes at the current rate or, maybe even lower. I also trust the Select Board and the town manager to do what they’ve said, which is to put all the checks and balances in place so that we are not left with our taxes to pay for all of it.
“One more thing: I would urge the town to apply for more grant money specifically for the purpose of eliminating the electric poles and lines. When the road is already torn up that’s the perfect time to do this. This is my adopted home and I want Killington to be the best it can be. Sometimes you have to step out of your comfort zone and move forward. I wholeheartedly support this and I will encourage everyone to be knowledgeable and informed so that they can make a good decision when it’s time to vote.”
After the public comment period, Wayne Elliott, president of Aldrich + Elliott water resource engineers, gave the council an update on the proposed water system and its capacity to serve the TIF district. He also touched upon the ongoing water quality issues that many businesses have faced recently — particularly the discovery of high PFOAs confirmed at about a dozen locations.
VEPC members did not have any questions for Elliott.
Abbie Sherman, executive director of VEPC, then concluded the meeting by reminding council members of the criteria for TIF districts and how the Killington application hopes to meet those qualifications.
She then suggested that VEPC pursue a master determination like TIF districts in Hartford and Burlington did. That determination would mean the district fits “general compliance,” but would then submit a financing plan for its phases.
The next VEPC meeting is scheduled for March 3, when the council will continue to review Killington’s application.
On March 31 a potential determination on Killington’s application is expected to be issued, assuming any follow-up information requested is provided in a timely fashion, Sherman said.