Category Archives: Burlington

Not Repeating Mistakes of the Past

Oh, what tangled interwebs we weave.

We hear a lot these days from some politicians – new and old – that when it comes to Burlington Telecom, that we should not “repeat the mistakes of the past.”

I couldn’t agree more.

For those of who have not followed the BT story closely for the last eight years, here is a quick summary of how BT got into trouble. I break it down into these key five reasons:

  • Mismanagement at BT, worsened by a lack of true public oversight;
  • An international financial crisis that stalled a necessary refinancing;
  • Unauthorized actions by Mayor Bob Kiss and CAO Jonathon Leopold to loan $17 million of taxpayer dollars;
  • A City Council that failed to recognize what was going on until long after the fact; and,
  • A City Council that played politics rather than refinance BT’s debt, thus compounding BT’s financial troubles.

There’s very few pols then, and now, who will admit or apologize for their roles in BT’s early troubles. The fact remains, however, that despite a faulty start – BT is healthy, growing, and is primed to expand beyond Burlington under a new, community cooperative ownership.

Given BT’s financial strength today – with a $3 million-plus profit expected this year – it is clear that had the Council approved the refi deal in 2009 that BT would not only have survived, along with the city’s credit rating, but would be larger and much stronger than it is today. Instead, it was left to default on its CitiCapital loan, and then turned over to a private holding company, and placed up for sale.

Now, once again thanks to councilors playing politics, Burlington could lose our telecom; the one we voted in 2000 to create, because we saw it as an important public utility.

How did we get here? Let’s rewind to late 2009.

In November 2009 – two months after I first reported that BT had been “loaned” $17 million by Leopold without truly acknowledging it publicly – the City Council was presented with a refinancing offer that would have bundled up BT’s debt, repaid taxpayers, paid off CitiCapital, and then worked with a new financier to bring itself back to break-even and then profitability.

In a contentious, two-and-a-half hour meeting the City Council, led by council Democrats and GOP allies, shut down debate and killed the proposed refinancing deal.

It was a clear political move, and here’s how it went down (as I wrote at the time):

Led by Councilors Joan Shannon and Ed Adrian, the council Democrats, using parliamentary procedures, split the resolution into two parts and then, blocking debate, approved a repayment clause while then rejecting the refinancing proposal. Which meant, that BT would have to repay its bills out of it’s own cash and not borrow more – from anyone.

In addition:

Councilor Sharon Bushor (I-Ward 1) said the council action could force BT into insolvency. That it can’t borrow money from the cash pool until a refinancing deal is approved leaves BT pretty much hamstrung.

“I hear people saying they are here to protect taxpayers, but you could easily end up leaving people with a huge debt and no Burlington Telecom,” said Bushor. 

Leopold, too, said he was “appalled” by the action, calling it a partisan ploy designed to embarrass the administration. “Do you really want to destroy a $50 million investment and the credit rating of the city?” asked Leopold. “Because that’s what this could do.”

From the beginning of the BT scandal it was clear to anyone paying attention that there was a faction on the city council who wanted to use BT as a political bludgeon against Progressives, and to kill BT slowly in the process.

One councilor who was part of that subterfuge – Republican Kurt Wright – went so far to suggest in 2011 when he was running for Mayor that the city should sell Burlington Electric Department in order to repay BT’s debts, and shore up the city’s pension fund.

Despite the political gamesmanship at the time, in early 2010, the Blue Ribbon Committee on Burlington Telecom—formed after the refi deal was nixed as a way to determine whether BT had a viable future—concluded very simply:

“The Committee does not recommend the outright sale of Burlington Telecom to a third party. Both consultants, HBC and Stratum, advised that the sale of Burlington Telecom was not in the best interest of the community or the taxpayers.”

The consultants also made it clear that, while troubled at the time, BT was too valuable an asset to sell at a “fire sale” price—or at all. And, that even at break-even, BT could meet its debt obligations as well as it investment strategy to expand.

The conditions under which BT was created, and its reasons for existing, have not changed. We, the people of Burlington, should be able to control a key utility that will drive our civic life and economy in the 21st Century.

To be honest, BT has never been served well by politicians.

We should not allow the same political gamesmanship that nearly sunk BT in 2009 be what drives a decision on selling BT in 2017.

Especially since our options are so limited and risky.

If you want to know what happens when you sell to an outside venture capital-funded company, lust look at what happened to Magic Hat.

As BT finances were melting down due to the financial crisis of 2008, an eerily similar predicament was playing out across town at Magic Hat. It expanded by buying another brewery and as a result became heavily leveraged by vulture capitalists who then called in their notes. It led to locally owned and controlled Magic Hat being sold to first one huge beer conglomerate until, two years later, it was gobbled up by an even bigger beer conglomerate. While it’s still here in VT, it’s about as far from locally owned as it can get.

That is BT’s future if we sell it to Schurz or Ting/Tucows.

If you don’t think so, I have a bridge for sale.

Let’s Keep BT Local.


Just Say No to Privatizing Burlington Telecom

In just a few weeks, Burlingtonians will learn the fate of their public telecom utility – Burlington Telecom (BT) – when the City Council makes a final decision on who will be the next owner of BT.

Will it continue to be the people of Burlington or some outside, private company?

There appears to be a lot of insider and consultant pressure on the City Council to privatize Burlington Telecom. In public sessions, a number of “advisors” to the City Council have been dismissive of the coop’s financing plan, it’s cooperative structure, and other red herrings.

A final decision will be made by on Oct. 16, with the current four finalists winnowed down to two on Oct. 2. The names of all bidders will be released this week.

Clearly, the public in support of the Keep BT Local Cooperative’s bid to keep our public utility in the hands of the community.

In less than three weeks, nearly 600 people have signed an online petition urging the Council to work with KBTL to ensure that BT remains in local hands. Another 200-plus people have signed printed petitions asking the same.  Consider signing this petition if you haven’t yet.

In addition, KBTL has raised nearly $450,000 in pledges via Milk Money Vermont. These pledges are from Vermonters who believe in the coop’s vision to buy BT and expand it beyond the Queen City.

Why is fully privatizing Burlington Telecom a bad idea? Here’s three reasons:

Reason 1. Burlington wants a local telecom. The Keep BT Local cooperative is the only bidder that is structured to carry out the original vision of BT – a telecom by and for the people of Burlington.

No other bid truly complies with the City’s criterion for local control. In both surveys and comments before the Burlington Telecom Advisory Board, Burlingtonians were EXPRESSLY CLEAR that local ownership was their Number 1 priority. Not concern about interest rates on loans, but LOCAL OWNERSHIP.

A cooperative offers both local ownership, and a governance structure that is responsive to its members – the BT subscribers themselves.

Reason 2. Privatizing BT will eventually lead Burlington to becoming beholden, again, to Comcast.

Any private investment has an exit strategy in order to make money* on one’s investment, and that almost always means selling out to a bigger company, and this is especially true in the private telecom marker. No private bidder can guarantee that privatizing BT is anything more than a temporary stopping point on the way to Comcast.

Comcast. That’s right – the company now suing the State of Vermont because it doesn’t want to live up to its obligations under state law. Is that what we want to become of BT?

Let’s be clear: BT was and is Burlington’s “exit strategy” from an extractive telecom market that did not, and does not, care about investing in our community, only taking from it.

Reason 3: We, the city of Burlington, should be profiting off of BT’s success.

Any other bid is for the purpose of sucking money out of Burlington, while the coop is designed to keep our money here.

Any difference in payout now is a pittance compared to the long-term perpetual payout that the coop offers – to our taxpayers by way of lower costs to our city and schools, to dividends for our member-owners.

Finally, cheerleaders and “experts” for the private telecom industry fought BT every step of the way: it’s creation, it’s source of funding, the services it could offer, and we were told that it could never be profitable and would only be reliant on taxpayer dollars. BT will post a net profit of $3 million this year. Hmm.

These same cheerleaders and “experts” now want us to believe only by privatizing BT (and handing over those healthy profits to them) can we ensure its future. Double hmm.

How about this: We proved these so-called experts wrong once about BT, so let’s prove them wrong again.

Let’s Keep BT Local.

Full disclosure: I am a member of the Coop and at one point served on its board of directors.

* Let’s be clear that this mythical return on an investment that is glorified by the private market will be derived from our tax dollars through money paid to BT’s owners by the city and schools, as well as the rates that individual Burlington businesses and residents will pay. That money will simply be siphoned off to make money at the close of a sale, we won’t see any return on that investment – only the new owner will. That would not be the case in a cooperative.

Just Say Whoa

It’s time to Just Say Whoa.

We’re down to the final days before election day, and I thought I’d recap why Burlington should vote down ballot items #3 and #4 and say “Whoa” to a project built on false promises, false fears, and false information.

I’ve always lived by the belief that if something seems too good to be true, it probably is. And, this project smacks of it:

While I understand that any new taxes raised within the TIF can’t be used for anything but what’s located in the TIF, I still question greatly the pre-determined spending of the money to benefit one developer. And, I question whether leaving new taxes unspent until the end of the TIF is a bad idea for Burlington schools, and schools throughout the state.

Given how much money is at stake from our wallets (and the state education fund’s wallet) – I think state lawmakers should enact legislation to loosen the TIF’s restrictions on what kinds of infrastructure we can spend on.

If we’re worried about bonding to rebuild our own crumbling schools: Why not make improving schools and school buildings (to care for those new kids) an allowable public infrastructure investment?

If we’re worried about how to afford more, permanent low-income housing: Why not make creating permanent, affordable housing (i.e., subsidized units to keep them perpetually affordable for truly low-income, senior, and disabled residents of the city) an allowable public infrastructure investment?

The $22 million, or most of that, we’re being asked to spend on a couple of streets would (if not for the TIF) go to the state education fund when the TIF expires. And, guess what? Despite the fearmongering by some of the proponents, a significant chunk of that money comes back to Burlington – for property tax relief, and for direct aid to pay for our schools, etc.

And, can anyone explain to me that if the TIF is supposed to keep our taxes from going up while it’s in place, why our taxes have gone up in Burlington despite having two active TIFs – one downtown and one on the “waterfront.”?

I could go on, but this project – as it stands – and the unknown, negligible or negative effects on our community (as it’s currently planned)  are too risky a scheme.

If someone wants to develop one of the most prime commercial real estate parcels in Vermont, and is asking for this many special favors from us – a change in zoning, $22 million of our tax money, and an expedited approval process, then we should be getting more out of this than we are. So either the folks in the city are the worst possible negotiators, or they just don’t want to try.

Let’s be clear – the project “benefits” that are being touted by proponents are the bare minimum standards that we as a community have set for development – inclusion of affordable units, reconnected streets, etc. Minimum. Yet, this developer wants more than the maximum we already offer in terms of how, and what, he can legally build.

What’s wrong with this picture?

Finally, let’s do away with the “this is our only chance” bullshit. Personally, I’m tired of the fearmongering and Chicken Little-esque statements from so-called “leaders” in this community.

Come on – like no one is going to want to develop the most prime piece of commercial real estate in Vermont in a way that the community wants? That’s why we have zoning standards, and it’s what our elected officials should be telling developers. If Sinex can’t do it, it’s because he’s a shitty developer. In fact, I’d just as soon see the city buy it off his hands if he keeps whining about it, and then put the project out to bid. Let’s see what other, local developers could do with that property.

It’s time to say No to #3 and #4, and Whoa to this strong-armed process being put forward by the Mayor and a select few. If (or when) this ballot goes down — leaders on both / all sides of this debate NEED to come together and work toward creating a better project and a community vision for this prime commercial parcel of real estate so that it benefits EVERYONE in our community, both today and into the future.

We’ve done it before, and we can do it again.

And, if these ballot items do pass, I would highly recommend that the supporters not gloat and ridicule, but find ways to incorporate the many, and legitimate concerns, into a public benefits agreement, and the final designs for the project. Doing that will go a long way toward healing divisions in the community, and put us on the path toward making the next big development project — Memorial Auditorium perhaps? — less of a battle, and more of a true community dialogue about what’s best for ALL city residents.

Get Miffed about the TIF

When Bernie Sanders—the former Mayor of Burlington—was running for president, a constant campaign refrain was to end corporate welfare for the millionaires and billionaires, and make government work for ordinary people.

He was, and is, right.

The tax money of hard-working folks should be used to pay for essential and shared services that make a community vibrant and livable—for everyone. The tax money of hard-working folks shouldn’t be used to pay for things that only serve one developer.

That said, even Bernie can be wrong form time to time and the current debate over the massive upscaling of the downtown mall is like deja vu all over again.

When Bernie was first elected mayor he got behind a massive waterfront re-development plan (called the Alden Plan) that would have privatized much more of the waterfront than we have today. What happened? Citizen concern and a demand that we do better for the public at large, not just a few wealthy developers.  From that community debate evolved Waterfront park, the crown jewel of downtown Burlington and a joy to residents and tourists alike. Just look at the number of festivals and sunset pictures on Instagram for evidence.

When we faced challenges with the academic and social climate at our two center city schools we didn’t jump at the first choice which was forced busing from the “poor” part of town to more “middle income” parts of town. Instead, we went back to the drawing board and created two magnet schools that are held up by national publications like The Atlantic as the model of the modern public school.

Why did these projects happen and become shining examples for other communities to model?

Because we took a step back, took a deep breath and decided to do what was right and best, not what was quick and expedient. We didn’t allow ourselves to be pressured by successful salespeople, like Mayor Miro Weinberger or Don Sinex, or past mayors and developers.

That’s the Burlington way.

Today’s Alden Plan – or massive publicly funded development scheme – is the Sinex redevelopment of our downtown and the “public” improvements / benefits are largely centered around reconnecting Pine and St. Paul streets from Cherry and Bank streets, making wider sidewalks, burying utilities, and updating some sewer and stormwater utilities. Why “public” in quotes? Because Sinex needs these streets rebuilt in order to accommodate the hundreds of daily car trips he’s creating with new housing and commercial tenants. In other words, without these improvements—his project doesn’t work.

Before asking our approval the mayor signed a pre-development contract agreeing to issue $22 million in bonds to repay Sinex for those street improvements if they are built to the city’s approval. And, the bond would be repaid from the hoped-for new tax revenue from the Sinex development, which is being built in the Waterfront Tax Increment Financing District.

So, what is a TIF? It’s a special assessment district that allows a city or town to siphon off new tax money that would instead go to schools and the town and pay off bonds or invest directly in other public improvements: parks, skate parks, public access, bike paths, sidewalks, street improvements etc.

It would seem that we’re putting the cart before the horse, eh? I mean, getting voter approval to subsidize a developer for work he already needs to complete in order to build.

Clearly the project COULD go forward without the city spending millions of this newfound tax manna. So, why not let it? Why not spend our new tax dollars more wisely as we see proof that the developer can actually pull off what he’s duly noted he’s never done before (as in build a project of this scale). We could use that new tax money to pay off other street improvements in other parts of the city OR go toward our schools (which really need the money – more than Sinex).

So, in November, Burlington voters are going to be asked two questions about the TIF and we can send a strong message if we believe the project needs to be reined in:

  • One question will ask us to extend the duration of the current Waterfront District TIF (which, oddly, this Mall project is considered to be part of) to allow for tax money to be collected from the Sinex project and used to pay for “public” improvements.
  • The second question will ask us to approve $22-plus million in spending (paid back over decades) to make those “public” improvements, some of which are needed.

If you’re not fond of corporate welfare, or a lack of accountability and transparency when it comes to spending OUR money in the city—then it’s simple. Vote NO against the TIF on the November ballot, and vote against the bond.

A No vote would impede the project and hopefully get the Mayor and Sinex to come back to voters with a better plan in March.

But, regardless of how you vote, here are some questions we should be asking elected officials between now and November:

  • Why not have more community input on just how the money could be used to improve downtown streets for cars, buses, pedestrians, public green spaces, and bikes rather than just these two street re-connections?
  • Why not set aside incremental city tax revenues and put them toward improvements that we, as a community, decide that are not so focused on this one project?
  • Why are we taking needed money from schools (since the TIF district siphons money from both city and school revenue streams) all at once? Don’t the schools (here in Burlington and statewide) need money more than a Wall Street developer?
  • Why isn’t the developer paying for some of these improvements as they will largely benefit his project, along with his housing and commercial clients?
  • Why are taxpayers being asked to subsidize a project that doesn’t truly conform to the human-scale city zoning standards of PlanBTV?

I’m sure there are more questions—especially with this project. Too many questions, to be honest, to be ready to have a vote on spending this much of OUR money, in my humble opinion.

While it’s true it may increase the overall grand list of the city, it’s also true that most of gains to the school and city coffers will be minimal because the loan has to be repaid first. That loan won’t be paid off for at least 20 years. So, this generation of taxpayers will see scant benefit. Good luck to the next generation, too!

Don’t get me wrong—some aspects of the public improvements have merit: Such as reconnecting streets that were destroyed by Urban Renewal. As a biker and pedestrian, I think this would be great for getting around town. But, given the sheer number of cars that this project will foist on downtown street grids make me wonder just how wonderful these improvements will be in the short or long-term. It seems as if we’re only making a few needed improvements for one developer rather than looking more expansively at how people and cars move through and around downtown. Why not more one-way streets to allow for more bike and pedestrian traffic? More green space or public areas to hang out for everyone – especially if you’re not just downtown to shop.

I say: let’s bring the Mayor and City Council back to the table and get them to be more hard-nosed in their negotiations with this developer. It’s time that the hard-working people of Burlington had someone on their side in these talks, not just someone looking for ways to spend their money to benefit a single developer.

A Down Town

I’ve been thinking a lot lately about the multitude of projects planned, or underway, in Burlington, and thought I should add my voice to those who have expressed concerns with this downtown re-development.

In short, I think we need more information from the developer, city leaders, and this community would benefit from slowing the process down to ensure that the entire Burlington community can benefit from this project.

This isn’t just another housing development like on the old Burlington College property, or Hotel Vermont, or the housing built on No. Winooski Ave. in recent years. This about, in many ways, undoing what went wrong post-Urban Renewal for downtown Burlington.

We’ve gotten a lot right in the past 30 years, which is why this community is ranked among the most livable communities in the US, and why we have such a creative, vibrant city.

I’ve read through the scant information online and the nice promo flyers, but there is some nitty gritty details missing, which is fueling a lot of necessary skepticism that taxpayers aren’t going to see the benefits everyone claims.

And, let’s be honest: Despite the Trump-esque messaging from some in the business community that this project will somehow make Burlington “great again,” it couldn’t be further from the truth. Look at what Melinda Moulton and Main Street Landing have accomplished on the waterfront, largely thanks to the public assets that WE as a community ensured would exist.

There is a lot of building activity in Burlington (throughout the city) and plenty of big projects in the pipeline. Why else would Sinex be proposing this project if there isn’t already a vibrant community in place?

I’m not opposed to downtown development, or building up. I supported the new height allowances adopted several years ago; a reasonable compromise given what some wanted from both sides. That’s when things work best in Burlington – a robust public debate and discussion.

In the past 30 years, Burlington has gone from a big little city to one of the most decorated cities in the country for livability, raising families, starting businesses, and retiring. Not a bad mix.

No one project made that happen. And the projects that did help make that happen had a strong public participation component, as well as inclusion and a visible public benefit. Church Street Marketplace, City Market, the Waterfront (both park cleanups, and new development that came later through Main Street Landing and the housing).

I’d ask the council to take a step back, and really consider the long-term impacts of the project. At a minimum, we should be doing more due diligence, that includes:

  • More details about the financing of the project. If we’re being asked to set aside public money to build it, we need more transparency and details BEFORE we say yes.
  • A little more skin in the game from the developer in terms of the public infrastructure and public good that comes with this project.
  • Make the TIF improvements benefit everyone – like we’ve done on the waterfront – and not just a self-selected crowd of downtown boosters who seek to create a boutique image.
  • The environment! Climate change is real, it’s happening and we should be doing more to reduce cars downtown, increase bikes, pedestrians and public transportation, integrate food forests, rooftop gardens and farms, and require moving to a net zero construction model to keep our city’s carbon footprint at a minimum.
  • Truly put this project in context with all of the other projects being planned, or built, to boost housing and business space. There’s more happening than we’re willing to perhaps acknowledge.
  • Slow things down a little – there’s no real rush here. And, if that’s the developer talking because of a financing window, then maybe we need to question the viability of said financing plan and the demands of investors.

So, let’s ask the hard questions now. And, maybe we take a step back and build in the public equity component from the start?

Height & Design
[As an aside: I agree with Bruce Seifer that the developers should raise balloons to provide a visual demonstration of the building’s dimensions (corners and peak). A little 3D model on a table or a PowerPoint “fly by” do not it justice.]

Why not build within the community standards we have set? Couldn’t we be more creative rather than just simply allowing someone to go up 160’ in the air? Think that’s the first we’ll hear of this kind of variance? Not likely.

Secondly, this development seems dull and vision-less, derived from a decades-old hack design that lacks the vibrancy and creativity that has come to define Burlington. Hide a parking garage, plant a few trees and extend the look and feel of the Marketplace? Oy. For a city as creative and vibrant as Burlington, the design seems pretty bland and suburban – like a denser version of MapleTree Place. Seriously?

Public Good
Put aside the notion that taxpayers should lose out on new taxes in order to fund the public improvements the site needs to be redeveloped. Why shouldn’t the developer pay for it?

The Waterfront TIF that allowed for Hotel Vermont has done wonders for improving the public portion of the waterfront. I don’t see that same being applied here.

Where are the enhanced bike lanes throughout downtown? Or, one-way streets with wider bike lanes and sidewalks? Or, a public bike locker for downtown workers to store their bikes and gear safely a la Boulder? Integrated rooftop farms/gardens? Permanent downtown farmer’s market? Net zero construction? District-heating rather than using more natural gas and power and increasing the city’s carbon footprint?

These things matter, especially in the age of resource constraints, oil depletion, climate change, and when the city itself is sourcing its power from renewables. We need regenerative approaches to development, and realize the slow growth will be the norm in the coming decades. Overbuilding now will only come back to haunt our children’s generation, as we’re seeing it hit our own generations today.

Public Financing should Equal Public Good
If it’s all about financing, then the developer should be upfront and transparent about the financing deal they are pulling together if they want public welfare, er, resources to benefit their project. And, we should see that BEFORE the council approves anything, and before voters approve the TIF expansion.

If you want to create affordable housing – enact rent control, get the colleges to build more on campus housing. Hold developers feet to the fire to work with Champlain Housing Trust, COTS, and other nonprofits to build truly affordable, permanent housing. Building these apartments won’t magically open doors for low-income renters or the homeless. Or help addicts. It’ll make a few people richer, a few businesses healthier, and we’ll just wait for the trickle down – if it happens – while the TIF payments keep paying off the corporate subsidy to Sinex.

We’ve let developers off the hook repeatedly to commit to inclusionary zoning – and now some developers are point to that as a sign it’s not working! Come on, people. Stand up for the values that we’ve imbued into the charter over a period of decades and realize that like developers before him, Sinex will understand that our vision is what is working best – not a bunch of out-of-state financiers.

Personally, I think the developers should be the ones to finance any public improvements that they need to have done; that shouldn’t be on us to make it happen. If they can’t get the financing for all of that, then they should sharpen their pencils.

Burlington will still be here – thriving, creating jobs, opportunity, and attracting people. The market will be here for them, but let’s get it right out of the gate rather than trying to fix things a decade from now and regret seizing an opportunity to make our downtown open to ALL Burlington residents, not just a select few who fit the boutique-ness that is emerging from Church Street and its environs.

I also worry greatly about the future, not just because I have kids, but because the news isn’t all that good when it comes to the climate. There are serious resource constraints, and without forward-thinking development today – not just planting a few trees and adding a bike lane – but truly rethinking how “growth” looks, feels, and benefits a community needs to happen. DeGrowth may be the norm within 20 years, which means doing more with what we have, and giving back to the planet (and people) we’ve taken from for centuries.

Burlington could start living up to that model of growth and development rather than continuing with a failing model.