BRATTLEBORO -- The $23 million Brooks House redevelopment project inched forward Tuesday after the Brattleboro Selectboard approved an eight year tax stabilization agreement with Mesabi LLC, the group of local investors who want to redevelop the property.
The board voted 5-0 to enter into the agreement which will save developers about $300,000 during the eight years.
Bob Stevens, one of the investors involved with Mesabi, told the board that while the group was getting closer, the complex deal is not yet done and he thanked the board for approving the tax stabilization agreement.
"We are gaining speed, and things are aligning," Stevens said. "But the project remains fragile. The debt we are taking on probably exceeds what we should be doing so every dollar helps."
Under the agreement that the two sides agreed to Tuesday, the owners of the Brooks House would pay a reduced tax rate on the non-residential portion of the property, which makes up about 67 percent of the building.
About $4.8 million of the building would come under the agreement in 2014, with that value climbing to $7.5 million in 2021, the final year of the agreement.
The town will assess the property in years four and seven, looking at the previous year's operations.
If there is a more than 10 percent change in the building's value, then the base value will be adjusted to reflect the change.
Town Manager Barbara Sondag said that when the project is completed the Brooks House will bring in more tax revenue than the building did before the April 2011 fire shut it down.
Selectboard member David Gartenstein said the board, and town officials, have been meeting with the developers in executive session over the past few weeks to work out details on the tax stabilization agreement.
Gartenstein said that while the board did not want to draw up a tax stabilization agreement to "enrich private investors," the building was a very important part of downtown.
"We want to make sure the reduction is appropriate and is not more than what is needed," Gartenstein said. "Having the Brooks House back is a huge priority to the town government and to the town as a whole."
And Chairman Dick DeGray said the vacant building has had negative impacts all over town and he wanted to help the town do what it could to get the doors open again.
"I am a big supporter of this," said DeGray. "I hope it brings growth and vitality to downtown."
The board's action Tuesday followed an announcement by Stevens earlier in the day that developers had reached the pre-lease threshold set by the bank that was taking on the role of lead lender.
Mascoma Savings Bank told the members of Mesabi LLC that they would need to have agreements for at least 70 percent of the available space before developers would be able to close.
Stevens said that following the Brooks House open house last week about 75 percent of the building had been spoken for and Stevens was confident the developers would be able to close on the deal in the coming few weeks.
Stevens said not all of the lease agreements had been signed, but there were verbal commitments in place, he said, and he hoped to continue moving forward toward purchasing the property with his partners.
The Brooks House has been vacant since April 2011, when a five alarm fire damaged the structure, driving the businesses and tenants out of the historic Main Street landmark.
The owner, Jonathan Chase, announced almost a year later that he would not be able to come up with the funding needed to redevelop the building and Mesabi LLC has been trying ever since to put the pieces together for the complex $23 million project.
Community College of Vermont and Vermont Technical College have announced that the Brooks House will be the site of their new downtown campus and renters and business owners have also agreed to being a part of the project.
The Selectboard's decision Tuesday to enter into a tax stabilization agreement with developers, along with the prelease agreements, mark two more important milestones as the developers look toward starting reconstruction of the Brook House this spring.
Howard Weiss-Tisman can be reached at email@example.com, or 802-254-2311, ext. 279. You can follow him on Twitter @HowardReformer.