BRATTLEBORO -- There are a million reasons why the Brooks House project should not have gotten off the ground.
Actually there are about 14 million reasons, which is about the number of dollars invested in the project which will exceed the final value of the rehabilitated real estate. When the project is complete developers will have invested about $23 million into a building which will be worth about $8.5 million. Along with the risky investment there have been months of delays brought on by 150 years of shoddy renovations and additions to the historic Main Street property.
Editor's note: This is the second of a two-part feature.
A community steps up
The project received its biggest setback to date when Eastern Bank of Boston pulled out, saying that the complex federal and state tax credits created too much risk for the bank. Under terms of the federal tax credit program the collateral put up by the investors is placed in front of the banks, and with millions of dollars on the line the banks were not too excited to get involved.
"We were asking for $5 million for an empty building that we did not yet own. Their decision was understandable," Stevens said. "But this was a total surprise. It was shocking. We thought the banks would lend us this money.
During this time the group was burning up about $30,000 to $40,000 per month on design costs, maintenance and deferred rental payments.
Stevens admits that without strong community support and encouragement it could have likely fell through at any time.
"We had some very difficult meetings during this time. There were tense talks when we discovered problems and I did not know how we were going to get over this," said Stevens.
Once again the group needed help, but this time the big guns were called out. Gov. Shumlin and House Speaker Shap Smith spoke to banks across the region trying to find one that would be willing to become the main lender for the Brooks House project.
The expected December closing date came and went and Chase was getting nervous, Stevens said. They sent out more than 20 applications to banks across New England. Most of the banks looked at the application and said simply that they had no idea how the federal and state tax credits worked.
"We broke some new ground on this," he said. "It's a community project and the numbers don't really work. Most banks could not help."
Finally in March 2013 Mascoma Savings Bank said it would provide the funding. But as Stevens and his partners learned throughout the process, with each gain there usually follows another challenge. Mascoma agreed to be the primary lender but it first wanted about $1.5 million in cash in a contingency account, and it also required Stevens and his partners to have signed rental commitments for 70 percent of the Brooks House.
"We had a shell of a building. I had nothing to even show people," Stevens said. "How am I going to get it up to 70 percent rented when we don't even own the building?"
Once again, he said, the community stepped up. Local businesses agreed to rent office space. Resident tenants signed on with only an architectural rendering to consider. And when they need that $1.5 million the investors asked community members with the means to provide the cash to appease the bankers.
"People were willing to take that risk, because like us, they believed in this project," said Stevens. "We needed the community. We needed the state. We needed the town to help us manage all of this, and everybody saw how important this was. Everybody was willing to take a risk and help."
The group was up front about the situation and held a publicity event in the winter to try to bring in more commitments.
Eventually they met all the requirements and on July 12, 2013 the investors announced that they had closed on the deal with Chase and the Brooks House was under new ownership. Shumlin was in town later that week, with a hard hat on his head, to ceremoniously knock down a wall and get the project started.
As a civil engineer Stevens was used to meeting most of his challenges on the first day of construction.
It had been more than two years since the fire. The rehabilitation cost was now at $23 million and Stevens and the investors had already been through more than two years of tense and frustrating fundraising. Then, as soon as work started on the structure construction crews uncovered one surprise after the next.
"As soon as construction started we uncovered issue after issue," he said. "I have never seen a project as complex as this."
There was mold in the basement that originally was going to cost $500,000 to clean up, though it was done for much less in the end. When workers tore into the wall upstairs they found layers of rotted wood which added cost and time.
After 150 years countless additions and renovations were done to the Brooks House and Stevens said almost every time a wall or ceiling was taken down engineers uncovered surprises that required additional time and money. Additional designers and engineers had to be called in tackle the problems, but with the colleges expecting to move in August 2014, Stevens could not delay the project.
He was able to come up with a plan, working with Breadloaf Construction, to change the work schedule so that crews took care of the south side of the building instead of moving from floor to floor. Over the past few months subcontractors were pulling double shifts and at the most frenzied period up to 75 workers were on site laying plumbing and wiring, putting up dry wall and getting the space ready for the college staff members, who moved in, on schedule, last week.
Stevens is sleeping a little easier these days, even though the numbers still don't work. There are still residential and commercial spaces to fill, but he said he believes, just as he did back when he walked through the burned out hulk in April 2011, that Brattleboro needs the Brooks House.
"It's been nerve wracking, and I'm not sure I would want to tie all of my personal wealth up in something like this again, but it was great opportunity," he said. "We started out with the faith that we could do this as a community project and we believed we should do it because it would be great for the town."
Howard Weiss-Tisman can be reached at email@example.com or 802-254-2311, ext. 279. Follow him on Twitter @HowardReformer.