The gaping hole in downtown Burlington, left behind by the stalled CityPlace development, has become so infamous it has its own Google listing.
The PIT, as it’s referred to by the search engine, is said to be open 24 hours a day — even though the block-sized demolition area is surrounded by a chain-link fence. Local reviewers have given the listing 3.8 stars out of five.
“A truly spectacular and authentic display of modern commercial development,” one reviewer wrote. Four stars.
“Very good pit. Best pit in Burlington,” another posted. Four stars.
“I often see passersby throwing pennies in it,” said another. “I assume they’re making wishes for something to be built.” Five stars.
The mockery is no doubt a coping mechanism for the exasperation many Burlington residents and officials feel about the project. The failure of the developers and the city government to make progress on CityPlace, which was once touted as a grand $200 million project that would transform the city’s downtown, has been a recurring theme in city news for years. Every few months a new announcement raises the prospect of progress, and then it sputters out once again.
At a splashy press conference in November 2014, Mayor Miro Weinberger and developer Don Sinex unveiled what would become one of the most ambitious development projects in Burlington history. Sinex, managing partner of Devonwood Investors LLC, bought the parcel of land along Bank Street that was once the site of the Burlington Town Center mall, an outdated retail space a block away from the city’s signature Church Street marketplace.
Over the next three years, Sinex and the city worked to rezone the parcel to change the height limit, allowing for a 14-story structure. Residents were promised a new state-of-the-art, mixed residential project with office and retail space and parking. In 2017, the old mall was demolished, leaving behind a dirt pit that city officials were told would soon be filled with a shiny new structure.
In 2018, problems began to emerge. After the structure was razed, city officials found out that financing had not been secured for the new development. Sinex and city officials bickered. Sinex fought with PC Construction, the first contractor. Then development financier Brookfield stepped in to fund the project, raising hopes that CityPlace might finally be built. But the firm backed out in the summer of 2020.
Last fall, the city sued Sinex for violating the development agreement and not hitting construction deadlines. A settlement was announced last week that requires CityPlace developers to complete construction on streets surrounding the site and pay the city $150,000 per year for lost property tax revenue.
CityPlace was supposed to be finished in 2018. Then 2019. Then 2021. Then 2023. Now, the latest projections are that construction will begin in 2021 and be finished by 2026.
Seven years after Sinex first pitched the project, he is still seeking funding, and his relationship with city officials has soured.
The gaping hole on Church Street has hurt local retailers and restaurants. To get from one part of downtown to another, pedestrians have to take circuitous routes around the Pit.
The implications for the project have swelled to the size of its ambition. Not only has the CityPlace hole left Burlington without the economic development it was once promised, it’s raised questions about political accountability at a time when Weinberger is facing six challengers to his reelection on Town Meeting Day. And Burlington’s officials and politicians have developed their own narratives about how the project has fallen so far behind.
So how will CityPlace move forward? And why did things go so wrong?
Is CityPlace Weinberger’s pit?
Weinberger is adamant that he’s fulfilled his central responsibility with CityPlace: protecting Burlington from the financial consequences of the project’s potential collapse.
“The delays have not been caused by the city,” Weinberger told VTDigger.
“We had some tough, hard things to do. And we did them. We had to put new zoning in place for this project to be possible. We had to secure voter approval and legislative approval for tax increment financing,” he said, referring to a 2016 vote to greenlight $21.8 million in TIF bonds to make public improvements to the streets surrounding the project.
The bonds are supposed to be paid off from tax revenue brought in by the new development. The TIF bonds approved by voters were set to expire in June 2021, but the Legislature extended the timeline to June 2022, due to the Covid-19 pandemic.
“We prepared for the possibility of delays and twists and turns, setbacks, and protected the city from that,” Weinberger said. “I think I could have maybe done a better job of communicating that and preparing the public for the possibility that these timelines might not be met.”
Central to his claim is the city’s development agreement with BTC Mall Associates, the company led by Sinex that oversees the CityPlace development. The agreement set expectations for when construction should have begun after demolition. The city also used the contract in its suit against BTC Mall Associates to compel the company to move ahead with street construction.
While Weinberger is now distancing himself from the project’s failure, it’s not surprising that many residents associate his administration with CityPlace, given his initial confidence in it. His political opponents are shaping the failed project into a hallmark of his tenure, despite his argument that the city is not at fault for the delays.
When the partnership between the city and Sinex was announced in 2014, it was described as a key element of the PlanBTV downtown and waterfront master plan. That plan presented a vision for the growth Burlington was expected to see over the next decade and was developed during Weinberger’s first term as mayor. The vision provided an opportunity for a leader with a background in housing development to transform the community he was now governing.
And Weinberger had glowing projections for the future of CityPlace. “I am excited that, just one year later, Don Sinex has stepped forward with a creative, public-private redevelopment concept that implements the PlanBTV vision,” Weinberger said the day the project was formally unveiled.
In 2016, Weinberger used a political action committee, which had supported his mayoral race, to campaign for voter approval of a zoning change to raise the height limit on downtown buildings and approve TIF financing for CityPlace.
Four years later, as delays mounted, Weinberger’s opinion of CityPlace — and Sinex — soured.
The mayor points to three main reasons for the delays. First, the original concept relied heavily on office space and proposed upward of 1,000 new parking spaces. Weinberger said there wasn’t enough market demand to fill all that office space. At one point, the University of Vermont Medical Center was interested in occupying half of the proposed office space, which would have added a $1 million expense to operations.
The second relates to the project’s revolving-door financing. In 2017, Sinex said he was close to securing financing with the New York-based firm Rouse Properties. In a bit of foreshadowing, the company was a subsidiary of Brookfield Asset Management. But Rouse had also merged years earlier with General Growth Properties, the company that had sold the unwanted Town Center mall property to Sinex in the first place. (Brookfield did not respond to multiple requests for comment.)
In 2018, multibillion-dollar development firm Brookfield emerged as a potential financier for the project. At this point, the mall had already been demolished and the evolving mix of people involved with the project — which Weinberger described as “corporate turmoil” — added more confusion.
In 2020, Brookfield pulled out of the project altogether, prompting the city to accuse the firm of fraud. Weinberger said Burlington is still mulling legal action against Brookfield, which is known as one of the most secretive and powerful development firms in the world.
The third factor Weinberger cites in explaining the delays is that Sinex came into conflict with the contractor, PC Construction, in 2018. (According to PC Construction Vice President Nicole LaBrecque, “PC strongly believes that it met all of the requirements of the contract between PC and BTC Mall Associates, and that PC went above and beyond industry standards for an experienced and responsible contractor in working with BTC Mall Associates.”)
Weinberger also pointed to an explanation that is commonly used to justify CityPlace’s slow pace: A project of this size and ambition is bound to have delays.
Even as a former real estate developer himself, the mayor said it’s unusual for a developer to demolish a building before securing full financing for subsequent construction.
“I’ll tell you that when I was a developer, I never would have been able to do that because you have to have substantial financial capacity,” Weinberger said. “Oftentimes projects, you can’t move forward at all until everything is buttoned up and every detail is resolved.”
But CityPlace was able to move forward with demolition and a foundation without securing full financing because his administration and the City Council had given the developer permission to do so.
Weinberger said the city was protected from the risk of that decision. The development agreement, he said, ensures the city isn’t obligated to begin paying back the TIF bonds until public improvements — the redevelopment of the surrounding streets — are complete and the development is built and bringing in tax revenues.
While greenlighting the building’s demolition was unusual, Weinberger still argues that it was the right decision.
“I think we are in a better place,” he said.
He recognized the CityPlace delays are frustrating, but he argues its demolition needed to happen to eventually build a better structure for Burlington’s downtown. “It means there’s no going back,” he said. “It puts us substantially closer to the day in which we finally have a vibrant neighborhood in this part of the city again for the first time since the 1960s.”
When the project was proposed, the city projected it would bring in $6 million in real estate revenue, $7.2 million in sales tax revenue and $450 million in economic activity annually — none of which has so far materialized.
Did the City Council exacerbate CityPlace woes?
City Council President Max Tracy, who is running against Weinberger for mayor in this March’s local elections, disagrees with his opponent’s assertion that the city has been wholly protected from the consequences of the CityPlace development.
“I do believe the city has lost on this deal,” Tracy said. “I mean, we’ve had a hole in the ground for the last two-plus years in the heart of our downtown. We absolutely have lost.”
Tracy, a Progressive, has been a Ward 2 councilor since 2012, the same year Weinberger was elected mayor, giving him a front-row seat to the CityPlace saga. As the project has somersaulted into notoriety, akin to the hole in Newport resulting from the Jay Peak development scandal, Tracy has the good fortune of being able to say he opposed the project from the beginning.
When the development agreement was proposed to the City Council in 2017, Tracy cast the lone no vote. And in 2018, when BTC Mall Associates requested authorization to pour the foundation after demolition despite not having financing, Tracy again voted no.
He didn’t support the project because he thought it wasn’t inclusive or beneficial to Burlington residents. He said the development should have included more affordable housing units. And he thought that the project was out of scale for the city — that it was too big and didn’t meet market demands, which ultimately proved to be the case.
Tracy said the council and the Weinberger administration were too hasty in approving CityPlace and moving it forward to reap the financial benefits that a massive project like this was expected to bring to Burlington.
“That’s been unfortunately kind of the overriding logic that’s happened here,” Tracy said. “Where people have just wanted to go for what they thought was the most expedient thing, without demanding accountability. And so, I very much feel like we’ve gotten played in this whole thing.”
Tracy said the rush to approve CityPlace grew out of Weinberger’s intent to build political capital from the project’s presumed success. He pointed to the mayor’s campaign to get the TIF bonds approved by voters.
“I think they went into promotional mode far too quickly,” Tracy said. “And even stayed in promotional mode up until this year.” He said he thinks the city should have pursued legal action against BTC Mall and Associates much sooner than last fall.
But Kurt Wright, a Republican who previously was the North District city councilor, argues that it’s “revisionist history” to say that the body rushed the CityPlace planning process.
“I mean, how could anybody say this project has been rushed?” Wright said. “Here we are talking about how long it’s taken and now you want to say that it was rushed? No. We had a very lengthy public process throughout.”
Wright, who was the city council president from 2018 to 2020, participated in many public and private meetings about the CityPlace project. As for the retail and office space being an ill-conceived business model, Wright said it was a “grandiose plan,” but opponents of the project couldn’t have foreseen the project collapsing.
“I do not believe Max had the knowledge at the time to know whether that was going to work or not,” Wright said.
The central destabilizing factor for CityPlace was Brookfield, Wright said. The firm’s half-in, half-out commitment kept the project from moving forward. He said the intent behind amending the development agreement to allow a foundation to be poured was to get things going. But Brookfield never financed it.
Former Progressive City Councilor Jane Knodell was also involved with the CityPlace process from the beginning. Like Wright, she doesn’t think the approval of the development agreement was rushed. “It was a very thorough vetting process,” she said.
Knodell said it took three or four months of meetings for the council to initially approve the agreement, and councilors fought to include provisions that were important to them, such as requiring apprenticeship and union workers to be involved with construction. This vetting process also included an economic analysis of the project, which Knodell can’t remember anyone objecting to at the time.
She said she doesn’t regret the council’s decision to permit a CityPlace foundation without financing. Even if Sinex had decided to abandon the project at that point, the work he had done would only benefit the next developer who wanted to use the land.
“If they had poured the foundation and still had to walk away from the project for whatever reason,” Knodell said, “then that capital, spent in addition to the site removal, that would not have been on a future project.”
John Franco, a local attorney who has opposed CityPlace from the start and has filed several lawsuits against the project, says he thinks the city’s central blunder was allowing the demolition to occur.
The city had granted a permit to demolish the old Town Center Mall, and the tear-down began in December 2017. The CityPlace development agreement lays out requirements developers had to meet in order to proceed with demolition, such as providing the city with a “letter of assurance” committing equity to the project and proof of construction contracts that covers demolition and foundation work.
Franco said he doesn’t believe Weinberger held developers to account for all those requirements.
“Miro Weinberger is one of the unindicted co-conspirators in that,” Franco said. “They had the ability to stop the hole in the ground in their hands by the development agreement.” He also criticized the council for granting a permit without proof of full financing for the project. He said it’s a “blessing” the foundation was never laid because it would have pigeonholed the structure into a design that was later shown to be unfeasible for the market.
Olivia LaVecchia, Weinberger’s spokesperson, said the city was provided a letter of assurance by Rouse Properties, which was at the time the proposed financier for the project, and three contracts that also met the development agreement’s requirements. VTDigger was given a copy of this letter of assurance, but was not provided copies of the contracts by the Weinberger administration.
LaVecchia said two of the contracts were reviewed by City Attorney Jeremy Farkas, but he was not given copies to keep. The third contract, requiring that construction work be secured for “site work, foundation work and soils work,” could not be found, LaVecchia said.
Weinberger called Franco a “chief obstructionist” of the project and said that he’s “either misinformed or deliberately misconstruing the facts.”
“The city has done everything it was supposed to do correctly under the development agreement,” Weinberger said, “and is holding the developer accountable for its performance failures.”
Knodell and Wright defended the council’s decision to grant the foundation permit in an effort to move the already delayed project forward. They said they were advised to do so by Jeff Glassberg, a real estate development consultant hired by the city to advise on the CityPlace project.
Councilor Ali Dieng, I-Ward 7 and a candidate for mayor this year, said he remembers Glassberg advising the council to support the permit. He voted in favor, a decision he now says was a mistake.
“Most of the time we do rely on the facts that Mayor Weinberger was providing, and also Jeff Glassberg,” Dieng said. “I am now questioning whether or not they were true.”
Glassberg’s industry perspective
The city hired Glassberg to oversee the CityPlace project in September 2018, just as things were beginning to fall apart.
He was originally hired for 10 months on a $70,000 contract. He has now worked for the city for 28 months, and his total compensation has come to $188,343.75. (Glassberg said his fees have been covered by a payout from Brookfield to the city amounting to $500,000 for the project delays.)
Glassberg stands by his recommendation to city councilors to grant a permit for a foundation, without secured financing. First, the city had a letter of assurance that the project would be financed. Second, allowing the developers to lay a foundation would prove, from Glassberg’s perspective, whether it was a viable project.
“What it did was put the ball in BTC’s court to call the question about whether they were willing and able to proceed with construction of a project they had designed,” Glassberg said.
Glassberg said the original CityPlace design was flawed and unsustainable. There wasn’t enough demand to fill the proposed office space, and retail space was becoming more and more outdated as online commerce exploded, he said.
“By its nature, real estate development is risky,” Glassberg said. “The scale of the project coming into this marketplace, in this size, made it riskier than a smaller project.”
Glassberg, who has consulted on real estate projects across the country, said developers always have to collaborate with neighbors and quell their concerns. And CityPlace saw its fair share of vitriol from neighbors. Years of lawsuits led by Franco, and a contested settlement agreement, haunted the project. The legal fights, Glassberg said, no doubt stymied CityPlace progress.
Personal quarrels also hurt CityPlace. Email exchanges between Glassberg and council president Tracy obtained by VTDigger illustrate the infighting between the city and the developers.
When Brookfield announced it was pulling out of the project, Glassberg had sent Tracy an email in July 2020 about the city’s plans to accuse the investment firm giant of fraud.
Glassberg wrote that the city had a default letter prepared “for months.”
“I am deeply disappointed but not surprised we are where we are. Ultimately, despite extended good faith efforts by the city to move the planned agreement forward, there was never a trustworthy counterparty on the BTC side with whom we could reach accord,” Glassberg wrote.
“Trust is the lubricant that makes the gears turn, and by their words and deeds, the multiple and ever-changing cast of characters for BTC are not deserving of the city’s trust,” he said.
Glassberg told VTDigger that dealings with the developers went south in 2018 after the old mall was razed and progress stalled. The only glue holding the project together was legal obligations under the city’s development agreement.
“Trust makes relationships work,” Glassberg said. “But none of this has been based on trust. It’s based on verifiable [legal] documents.”
The lack of trust stems directly from Sinex’s personality, said one official who has been closely involved with the project and asked not to be identified in order to speak candidly about the matter. Sinex took a tough-guy approach in his dealings with the city that “absolutely” damaged relationships with city staff who worked with him and ultimately led to more delays.
“People have reached out to me of their own accord, to share with me their unsatisfactory — boy, that’s diplomatic — experiences with Don,” the person said. “So when Don got into trouble and needed friends, he really hadn’t made a whole lot of friends.”
Former councilor Wright said he disagrees that Sinex’s personality alone could have derailed the CityPlace project.
“Somebody’s personality doesn’t stop a project,” he said.
The personality issues emerged in 2018, when fiery emails to Neale Lunderville, then director of the Community and Economic Development Office, were disclosed. (Lunderville is a board member of the Vermont Journalism Trust, which does business as VTDigger.)
In one email exchange, Lunderville had requested a meeting with Sinex and Brookfield to discuss the issues he was having with PC Construction, which were holding up progress.
“There will be no conversation with Brookfield on this matter whether you want it or not,” Sinex wrote. “Brookfield is investing $56 million in the city and you do not know the frustrations and problems we have suffered with PC and I leave it up to Brookfield to make its decision regarding PC with no influence from or by the city.”
He added: “I manage this project and I am not a schoolchild.”
At one point, Sinex threatened to shut down the project if it wasn’t approved for a foundation permit. But that permit couldn’t be issued until the city council approved the amended development agreement, which allowed the project to move ahead without financing.
“… At that pace, I might as well shut the job down and start from scratch,” Sinex wrote.
In an emailed response to VTDigger, Sinex said some of his responses to Lunderville were “regrettable.” He said some of the outbursts were spurred by frustrations with Lunderville as they worked through refunds for sales taxes on construction costs through a state program for private developments. Sinex thought Lunderville’s offer of a $300,000 sales tax break was too low for the $4 million to $5 million he paid the state in sales tax. He said the offer “shocked” him and indicated the city didn’t support the project.
“In retrospect, yes I was too harsh in my response to Neale and he did not deserve to receive my outburst and for that I have regret,” Sinex said. “Neale is a great guy.”
Lunderville provided VTDigger with an emailed comment, stating the tension between him and Sinex came from the city’s efforts to hold him accountable.
“Our job was to hold the developer accountable and protect Burlington’s interests. That led to some tension when the developer wasn’t able to do what he wanted prior to securing financing for the project (as was stipulated in the development agreement),” Lunderville stated. “It was that lack of financing that held up the project. I’m hopeful that the recent settlement clears the way for the project to proceed.”
Sinex: ‘I feel partly responsible’
Dialing into a Zoom call from his home in Palm Beach, Florida, Don Sinex reflected on why CityPlace had become such a fraught project and how he intends to proceed.
Does he deserve some of the blame for the way things turned out?
“Well, I’ll say yes to that,” he said. “Because I chose Brookfield. I brought them in. I gave them control, and nothing happened. So in that sense, yes, I feel partly responsible.”
Sinex speculated that Brookfield ultimately pulled out of the project because the firm realized CityPlace wasn’t worth the effort compared to the scores of other development projects worth billions of dollars it was also involved in. Brookfield had also scooped up more acquisitions worth billions, such as Oaktree Capital Management in 2019 and Forest City Realty Trust in 2018.
“I’m sure it was chaotic from an organizational perspective,” Sinex said, referring to the hundreds more employees being brought into the organization. “Burlington was a small project for them,” he said. “And I think they generally started reassessing their interest in the project.”
He also faulted market conditions brought on by Covid-19. In late 2019, Brookfield had announced a redesign of the project. CityPlace would shrink from 14 stories to 10 stories. There would be less office, retail and parking space. It would have 280 to 300 housing units, similar to the original plan. A 175-room hotel also was added.
But few people are traveling during a pandemic. Office space has at least temporarily become obsolete as most white-collar employees work from home. In-person shopping has become severely limited during quarantines and stay-at-home orders.
These market conditions also spooked Brookfield, Sinex said.
But they haven’t spooked Sinex into abandoning the project. Which is why he has brought in three local developers who now own 50% of the project — Dave Farrington, owner of Farrington Construction; Al Senecal, owner of Omega Electrical Construction Co.; and Scott Ireland, owner and president of S.D. Ireland Concrete Construction.
None of the new developers responded to requests for comment for this story.
Now the plan for CityPlace has changed again. This time the proposal consists of housing and retail space split between two 9- and 10-story towers. Originally, 318 apartments were planned; now it’s 426 apartments and 45,000 square feet of retail space. The project would also have a rooftop restaurant and a “community space.”
Sinex said the previous hotel idea was axed because no one was sure when traveling would be safe again. Focusing the project largely on housing would be the safest option — both to attract financing and to move CityPlace forward.
Sinex said he doesn’t want to wait for post-Covid “normalcy.” He wants progress. He said he thinks waiting to begin again on construction would be “unfair” to the city.
Which is why he also has a new financing plan. He’s now attempting to build the structure in three phases: The first is expected to cost $74 million, the next $56 million and the third $44 million — for a total of $174 million. Sinex said the smaller amounts are more attainable.
And because private investors are wary of new projects during the pandemic, Sinex said he’s turning to the federal government for assistance. The Department of Housing and Urban Development has a competitive program that housing builders can apply for that provides a guarantee to their lender that they won’t lose any money on their loan if the project defaults.
Which is also why Sinex is turning to the AFL-CIO Housing Investment Trust for a partnership. The trust invests its $6.7 billion mutual fund only in federally backed programs. Vermont AFL-CIO president David Van Deusen said he’s been talking to Sinex about this proposal and said — if the HUD guarantee is approved — he is “ extremely confident” the trust will invest.
The controversies attached to CityPlace are “water under the bridge” to Van Deusen. He sees the project as an opportunity to employ hundreds of union construction workers at liveable wages, during a time when many are struggling due to Covid. (An opportunity that would also further attract City Council President Tracy to the project, he said.)
Still, Sinex said he’s not confident about getting the HUD guarantee. “HUD is a creature of habit. It’s an institution in and of itself. It has its own ways of viewing things, its own ways of looking at things, its own ways of rationalizing things, its own way of underwriting things,” Sinex said. “And I’m just not familiar with what they are.”
Plan B is to go the traditional private financing route. He said there’s a “financing house” in Burlington that is also interested in getting involved in the project, but he didn’t identify the firm.
In addition to acquiring financing, the new team needs to acquire the trust of city officials and residents who have grown wary of the CityPlace saga. To that end, Sinex has renewed a marketing campaign to educate residents about the project.
The CityPlace website has been revamped to promote the project — its homepage features a link to a petition, which currently has around 2,000 signatures, asking supporters to endorse “breaking ground as soon as possible.” And Pomerleau Real Estate, one of the largest real estate firms in Vermont, has purchased several pieces of paid content in Seven Days promoting the new CityPlace redesign. The head of the firm, Ernie Pomerleau, said he has no financial stake in the project; he’s a supporter who is excited about the new local involvement.
After years of work, squabbling, wasted money and time, why is Sinex still committed to the ever-evolving CityPlace project?
“It’s my Irish stubbornness more than anything,” he said.
“I like to get things done that I say I’m gonna do,” he continued. “I started with this, I sent it over to Brookfield, they disappointed me, they disappointed the mayor. I feel responsible for them. I want to see it done. I want to get it done.”
