House committee weighs CHIP bill changes as Springfield school reuse is offered as test case

The Vermont House Committee on Commerce and Economic Development continued its review Friday of draft legislation to create a Community Housing Infrastructure Program, or CHIP, with developers and regional representatives urging flexibility on housing-percentage requirements and eligible uses of tax increment financing.

Bob, a representative of the Springfield Regional Development Corporation, told the committee the former Park Street School in Springfield could be a CHIP pilot if the bill allows more flexible, mixed-use conversions. "It's historic, but no. Why? Because the math doesn't work," Bob said, describing a plan that would convert roughly 20–30% of the 90,000-square-foot building into about 25 housing units and require roughly $18,000,000 more in investment for housing and energy upgrades. He said SRDC spent about $70,000 this winter just to keep the building heated and noted the site contains a historic gymnasium and auditorium whose occupancy has been limited by code.

David White, president of Whitework Bridal Estate Advisors (testifying on a volunteer basis), pressed the committee to keep the CHIP application process simple and to avoid complex affordability compliance requirements that would create ongoing administrative burdens. "I come down pretty solidly on the side of don't have those affordability requirements," White said, adding that requiring income certification and long-term compliance reporting would deter smaller developers. White proposed alternate approaches including a lower minimum housing threshold (he suggested 40% rather than 60%) or no fixed minimum, and urged that the existing VEPSI review process be used rather than creating a separate oversight board.

Brett Long, deputy commissioner at the Department of Economic Development, said employers routinely report that job offers are not accepted because potential employees cannot find housing nearby. "Pretty much every week, we hear from an employer who has made an offer to somebody, and the person doesn't take the job because they can't find housing," Long said, framing CHIP as a tool to help communities recruit and retain workers.

Committee members and witnesses debated several core choices in the draft: whether to set a minimum share of a redevelopment project’s floor area that must be housing (the draft had proposed a 60% threshold), which public or private infrastructure items should be eligible for TIF proceeds, and whether VEPSI's existing board and staff have the technical capacity to review waiver requests or whether a new CHIF board is needed. White argued VEPSI staff can assess square footage and basic project viability and that the VEPSI board's existing review process provides substantial due diligence before applications reach the board level.

Panelists discussed allowable improvements that TIF proceeds could fund. Witnesses asked the committee to preserve flexibility rather than enumerate a closed list of eligible improvements. White said the statute should require that funded improvements "directly serve the housing project" and cautioned against a prescriptive list that could exclude legitimate site-specific needs such as a small playground, energy upgrades, EV charging, sidewalks or stormwater work. Bob asked that energy- and building-envelope work be clearly eligible, citing the Park Street School's outdated oil and coal-converted boilers and the need for modern HVAC and envelope improvements to enable all-electric systems to function.

Other technical items discussed included: the mechanics of multi‑tranche borrowing for phased projects; an applicant-facing five-year approval window with possible extensions (committee staff noted five years plus a three‑year extension is contemplated); the concept of a special-assessment contingent credit enhancement to make project debt more marketable; and suggested retention caps on tax increments (witnesses proposed a common approach that would limit education‑increment retention to no more than 80% while allowing municipalities to retain the municipal increment at levels no less than the education retention). David White recommended the legislation require good‑faith cost and debt estimates rather than precise principal, interest and fee amounts that are unknowable until the municipality goes to market.

Speakers also discussed affordability guardrails. Several committee members said they want to discourage CHIP from being used for strictly luxury housing. White floated a compliance-lite alternative to income certification: requiring applicants to state proposed sales prices or rent levels in the application, tied to local median sales or rental statistics, so applications could be judged against stated pricing intent without ongoing tenant income verifications.

Why it matters: The CHIP draft would allow municipalities or developers to use tax increment financing to pay infrastructure and related costs for single-site housing projects that otherwise would not be financially viable. The committee's decisions on thresholds, eligible improvements, oversight and compliance will determine whether the tool is practical for small rural communities and adaptive reuse projects such as the Park Street School.

The committee did not take a final vote. David White asked the legislative counsel to incorporate his suggested edits and signaled willingness to return with additional detail; the committee will continue its review in subsequent meetings.