Council OKs revised tax agreement for Blanchard Block
By David Delcore
Staff Writer | August 25,2012
BARRE — The Granite City’s tax stabilization situation was resolved this week, and this time everyone left City Hall happy — even the guy who voted against an agreement that will set the assessment on the historic Blanchard Block at $618,600 for the next 10 years.
“I’m just happy it passed,” City Council member Michael Boutin said moments after casting the only vote against a 10-year tax stabilization agreement with the local development company that was scheduled to seal the deal Friday to buy the four-story brick building overlooking City Hall Park from Alan Goldman.
Given his vote, Boutin’s was an odd comment that capped an odd 10-day process that featured a lot of lobbying, a flurry of emails and a few missteps.
It ended Thursday night during a relatively brief and nearly drama-free meeting in the lobby of the Barre Opera House — a lobby that happens to share a third-floor door with the massive building whose new owners say will receive a multimillion-dollar makeover.
With nearly two dozen people in the audience, including several who spoke in favor of the request, a short-handed council narrowly agreed to authorize City Manager Steve Mackenzie to write and execute the agreement with Granite City Developers, a limited liability corporation owned by Barre Town residents Mark and Robin Nicholson and Montpelier residents John and Pam Benoit.
Though the 4-1 approval wasn’t close on the surface, it could not have been any closer on a council that requires four affirmative votes to do anything. Dominic Etli’s recent resignation coupled with the absence of Anita Chadderton meant four of the five remaining council members had to be on board with an agreement that had undergone a makeover since they were rushed into approving a 15-year version last week.
That unwarned action was undone Tuesday when councilors, who voted 5-1 for the agreement last week, unanimously rescinded it after learning that its duration exceeded the 10-year limit established in the city’s charter, as well as state law.
Boutin, who last week was with the majority, switched sides after learning Wednesday that some of what the council was told Tuesday night probably isn’t true.
Councilors were told Tuesday that the city’s taxpayers at large wouldn’t be on the hook for the education taxes that would otherwise have been paid to the state based on the fair market value of the Blanchard Block after its renovation. They learned Wednesday that is unlikely.
Mayor Thomas Lauzon reiterated that point Thursday, suggesting that after consulting with state officials, he couldn’t find anyone who would tell him otherwise.
“I believe the city is going to be held liable for the education taxes,” said Lauzon.
Based on an estimated assessment of $1.9 million for the renovated building, Lauzon said that amounts to a 10-year subsidy of roughly $150,000 — between $17,000 and $20,000 for eight of the contract’s 10 years.
According to Lauzon’s estimates, increased property taxes generated by the building when it is taxed at its fair market value would “make the city whole” five years after the stabilization agreement lapses and would generate more than $355,000 in new revenue over the next 25 years.
While the new information prompted Boutin to switch his vote, it seemed to satisfy Michael Smith, who voted against the 15-year agreement last week.
Smith, who was troubled by the process and openly skeptical that the city taxpayers wouldn’t be required to pay the education taxes on the upgraded property, said he was supportive of the redevelopment project and believed the council was finally in a position to make an informed decision.
Smith, who offered the motion that was ultimately approved, said he was excited about Granite City Developers’ plans to invest in a basement-to-attic renovation of one of downtown Barre’s oldest, largest and most prominent buildings.
Smith had plenty of company, including several residents who urged the council to approve an agreement they argued would have a profoundly positive effect on the city’s central business district.
“Skip” Poczobut, a local banker and longtime resident, said the project represented a rare opportunity to revitalize a historic building and bring jobs and businesses to the community, while helping merchants who are already downtown.
“I just think it’s a great project,” he said.
That was echoed by three local merchants, resident Ed Stanak and Darren Winham, executive director of Barre Area Development Corp.
“I think there’s no doubt that this is a win for the city,” said Bob Nelson, owner of Nelson Ace Hardware. “I think it would be a great disservice if this didn’t happen.”
Mary Jane Magnan, who owns Richard J. Wobby Jewelers, and Bob Sager, proprietor of Bob’s Camera & Video, said they shared that view.
Stanak, who had raised questions about the process, said he had no problem with the project.
“I fully support this project,” he said.
Lauzon quickly ticked through the “parameters” of an agreement that gives Granite City Developers until Oct. 1, 2014, to invest at least $3 million in the Blanchard Block. That figure, he said, includes the $800,000 purchase price.
Mark Nicholson and John Benoit both indicated that renovating and restoring the 1904 building would likely cost $3 million.
Both men attended Thursday’s meeting and said they were eager to turn their attention to fixing up the long-vacant building, which once housed Lash Furniture.
“We’re really going to make you proud,” Benoit vowed as the special council meeting was coming to a close.