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Newport yet to gain control of EB-5 ‘pit,’ must deal with contamination

by Daniel Duric, for the Newport Dispatch

NEWPORT — More than a decade after Vermont’s largest financial fraud left a hole in the middle of downtown Newport, Mayor Rick Ufford-Chase says a plan is taking shape to finally fill what residents have long called simply “the pit.”

In a recent question-and-answer session, Ufford-Chase acknowledged the frustration that has built up around the empty block, even as he tried to put a more optimistic spin on it.

“I prefer to call it the development opportunity block,” he said. “But we all hate it, and we all want to know what’s going to happen to it.”

The lot has sat vacant for more than 10 years, a casualty of the EB-5 investment scandal that ensnared developers across the region. Business people with ambitious plans for the block, the old Bogner ski apparel building in Newport and projects tied to the Jay Peak and Burke Mountain ski resorts were unable to complete the work they had envisioned, the mayor said, and Newport’s downtown lot was among the projects left unfinished.

The city does not yet control the property. It remains in the hands of the federal courts, where a court-appointed receiver is working to bring a sale to a judge. The receiver’s mandate, Ufford-Chase said, is to recover as much money as possible “so that they can pay back some of the defrauded investors from the EB-5 scandal.”

Gaining control is only the first step. The mayor said officials expect contamination on the site and will need to conduct Phase I and Phase II environmental studies, then clean up whatever they find, before the city can sign an agreement with a developer. He estimated it could take three to five years to break ground on a major project, most likely housing built above ground-floor commercial space.

Paying for it is the harder question, and the one Ufford-Chase said he hears most. As an empty lot, the block generates a fraction of the tax revenue a developed property would, and the mayor was blunt about the financial obstacles.

“The math just doesn’t math in a lot of instances,” he said.

Building out the downtown would require new water and sewer lines along Main Street, a new streetscape and additional parking, all of which carry significant costs. The city plans to pursue a mix of grant money it would not have to repay and borrowing that would be paid back through the higher tax revenue a finished development is expected to produce.

The goal, Ufford-Chase said, is “to do this in a way that does not end up hitting the Newport taxpayers in their own wallets.”

He framed the project as a chance to rebuild Newport as the commercial center of Vermont’s Northeast Kingdom, with an emphasis on serving local residents rather than catering only to visitors.

“We are not just building a downtown for outsiders,” he said.

The key, the mayor argued, is getting more people to live downtown, since local foot traffic is what keeps shops in business. He said the plan calls for additional housing and a walkable, pedestrian-friendly center that residents will enjoy.

The tourists, he added, will come too. Newport’s lake already draws visitors, and “we can always use their support as well.”

Here’s the full video, where the mayor addressed these questions:

https://www.facebook.com/watch/?v=1713557036322721

# contentMap.en
Newport yet to gain control of EB-5 ‘pit,’ must deal with contamination

by Daniel Duric, for the Newport Dispatch

NEWPORT — More than a decade after Vermont’s largest financial fraud left a hole in the middle of downtown Newport, Mayor Rick Ufford-Chase says a plan is taking shape to finally fill what residents have long called simply “the pit.”

In a recent question-and-answer session, Ufford-Chase acknowledged the frustration that has built up around the empty block, even as he tried to put a more optimistic spin on it.

“I prefer to call it the development opportunity block,” he said. “But we all hate it, and we all want to know what’s going to happen to it.”

The lot has sat vacant for more than 10 years, a casualty of the EB-5 investment scandal that ensnared developers across the region. Business people with ambitious plans for the block, the old Bogner ski apparel building in Newport and projects tied to the Jay Peak and Burke Mountain ski resorts were unable to complete the work they had envisioned, the mayor said, and Newport’s downtown lot was among the projects left unfinished.

The city does not yet control the property. It remains in the hands of the federal courts, where a court-appointed receiver is working to bring a sale to a judge. The receiver’s mandate, Ufford-Chase said, is to recover as much money as possible “so that they can pay back some of the defrauded investors from the EB-5 scandal.”

Gaining control is only the first step. The mayor said officials expect contamination on the site and will need to conduct Phase I and Phase II environmental studies, then clean up whatever they find, before the city can sign an agreement with a developer. He estimated it could take three to five years to break ground on a major project, most likely housing built above ground-floor commercial space.

Paying for it is the harder question, and the one Ufford-Chase said he hears most. As an empty lot, the block generates a fraction of the tax revenue a developed property would, and the mayor was blunt about the financial obstacles.

“The math just doesn’t math in a lot of instances,” he said.

Building out the downtown would require new water and sewer lines along Main Street, a new streetscape and additional parking, all of which carry significant costs. The city plans to pursue a mix of grant money it would not have to repay and borrowing that would be paid back through the higher tax revenue a finished development is expected to produce.

The goal, Ufford-Chase said, is “to do this in a way that does not end up hitting the Newport taxpayers in their own wallets.”

He framed the project as a chance to rebuild Newport as the commercial center of Vermont’s Northeast Kingdom, with an emphasis on serving local residents rather than catering only to visitors.

“We are not just building a downtown for outsiders,” he said.

The key, the mayor argued, is getting more people to live downtown, since local foot traffic is what keeps shops in business. He said the plan calls for additional housing and a walkable, pedestrian-friendly center that residents will enjoy.

The tourists, he added, will come too. Newport’s lake already draws visitors, and “we can always use their support as well.”

Here’s the full video, where the mayor addressed these questions:

https://www.facebook.com/watch/?v=1713557036322721