Montpelier — The City Council directed the acting city manager to continue negotiating lease agreements with the Community Sports Hub ("the Hub") for the Elks Club building and an adjacent acre-and-a-half, and approved a set of amendments limiting the ground-lease option to protect taxpayers.
The council reviewed terms the city and the Hub had negotiated: a phased building lease modeled on the Turtle Island agreement (10 years with two 5-year extensions for Phase 1, a $21,000 annual rent estimate, utility charges and shared maintenance), a $14,000 option payment to reserve 1.5 acres for a future sports barn, and a proposed 35‑year ground lease (with a subsequent 30‑year extension) if the Hub exercised the option.
Hub representatives said the plan starts with two indoor simulated-sports bays and a small snack bar this winter, then — if financing and grants allow — would build a larger sports barn serving tennis, soccer practice and multiuse activities. The Hub expects revenue from memberships, program fees and grants and said the land-option would improve fundraising capacity by offering site control.
Council members asked detailed financial and legal questions: whether the Hub would pay property tax if it built, whether a nonprofit like the Hub would be tax-exempt, what collateral a bank would want if the Hub borrowed to construct the sports barn, and how the city would be protected in the event of default. Hub representatives said the land-lease draft includes protections (city approval of uses and contractual default provisions) and that banks typically step into the lessee’s obligations on foreclosure.
To address council concerns, the body adopted an amended negotiating framework. Rather than a renewable 5‑plus‑5 year option on the ground lease, the council required a single three‑year option period; the Hub would have to demonstrate financing and post an assurance (the council asked for an assurance mechanism such as a surety bond) before converting the option into a long-term (30‑year) ground lease. The council also clarified that any renewal after the first long-term term would require mutual agreement rather than an automatic renewal.
Councilor Ben said the biggest risk was tying up prime developable land for years on a modest option payment; other members stressed that a staged start with the simulated-sports operation could activate the site and produce near-term community benefit. Mayor Jack McCullough said the city will continue negotiations and bring a revised lease back for council approval.
The council voted to proceed under that framework and asked staff and the Hub to incorporate the three changes — a single 3‑year option, demonstrated financing before a long-term lease, and an assurance bond or equivalent — in the next draft for legal review and a future council vote.