By Polly Mikula
The second public hearing for Killington’s TIF bond was about half as well attended as the first hearing on Jan. 30, but drew many new attendees. About eight residents attended in person at the Public Safety building with 27 others attending via Zoom.
The hearing again began with an overview of Killington Forward, specifically focused on the first phase, which voters are being asked to approve via a bond at Town Meeting Day, March 7 — Article 5.
Town Manager Chet Hagenbarth read Article 5 to the audience Monday night, “Shall the Town Select Board be authorized to … secure indebtedness … not to exceed $47,000,000 … with the understanding that tax increment from the properties within the TIF District shall be pledged and appropriated for the payment of such indebtedness or direct costs of the improvements?”
Selectman Chris Karr said the plan meets both the town’s needs and the developer’s. Killington needs municipal water, improved roads, and more housing at all levels; the developer for Six Peaks Village needs basic water and road infrastructure to get the project off the ground, he explained.
“If voters approve Article 5, they will be approving needed municipal infrastructure at no cost to taxpayers,” Select Board member Jim Haff added. “It’s the added value of the land in the TIF district that will cover the cost of the town’s bond payments over time — and that’s guaranteed.”
All of Phase 1 (water and road) will be paid for with Tax Increment Financing (TIF) — a tool for approved municipalities to finance public infrastructure serving a designated TIF district and spur private development that wouldn’t happen “but for” that initial municipal investment. New private development incrementally increases the value of the grand list and that increment is used to pay the municipal bonds.
Thus, it does not raise municipal taxes.
By the numbers
Stephanie Clarke, vice president of White + Burke, real estate advisor to the Killington Forward project again explained how the TIF math for Phase 1 works specifically at the hearing Monday:
$52 million in infrastructure investment ($47 million of which to be voted on for debt in Phase 1) will produce an estimated $295 million in increased property value. Taxes on that increased value will be used to pay off the bond debt.
Additionally, the town has secured $2.3 million from an ARPA grant and $3.6 million in drinking water in an “Emerging Contaminants” forgivable loan.
The long awaited Six Peaks Village has an Act 250 permit for over 32,000 square feet of commercial space, approximately 239 new units of housing consisting of condos, townhomes, and single-family homes. (The town’s financing plan requires only a portion of the village to be developed to cover its Phase 1 investment costs — only 180 units.)
Great Gulf, the developer, has guaranteed the minimum bond payment in a development agreement with the town signed Oct. 28, 2022. Great Gulf is the second largest private home builder in the United States, building about 5,000 units a year in the U.S.
“The developer has agreed for us to raise their property value to pay for the bond,” Haff explained. “If the developer doesn’t pay, it goes to a tax sale, and … the developer is pledging 180 units will be sold, if they’re not they still have to cover that cost.”
The annual cost to pay off a debt of the $47 million bond, starts at $2.5 million and grows to $4 million, Michael Sneyd, president of the North American Resort Residential division of Great Gulf further specified.
What’s in it for residents?
In short: a municipal water system that ensures water quality and quantity along Killington Road and a new and improved Killington Road, including new sidewalks, bus pull-offs, pedestrian crosswalks, intersection improvements, lighting, new fire hydrants, and landscaping improvements (all of which were needed, but would have been an unreasonable burden to taxpayers without TIF).
Another common concern among resident is the need for workforce housing.
“Municipal water and sewer are required before housing trusts will talk to us,” said Haff. “We have sewer, but we need a plan for water before we can even begin the conversation about workforce rate development. All this is contingent on a positive vote on Article 5. We simply need that to get started.”
At the Resort’s communityupdate this Thursday, Feb. 16, an announcement is expected to be made regarding plans and possibly the location for a planned workforce housing development.
If Article 5 passes on Town Meeting Day, March 7, projects will begin this coming spring and summer 2023. Those projects include the beginning of the municipal water system in “The Flats,” the road from Route 4 to Anthony Way and the dry water line in that section for future use and the beginning of the Six Peaks Village. The new road in the village will be constructed in 2024. The first phase of the municipal water system is expected to be completed by the end of 2024 or early 2025.
For more information and past stories related to TIF and Killington Forward, visit: mountaintimes.info/tif.