Board authorizes mayor to sign Letter of Intent for Downtown Hotel and Living Project

The Rutland City Board of Aldermen on Feb. 18 authorized Mayor Dunges to sign a nonbinding Letter of Intent (LOI) with the private development team for the Downtown Hotel and Living Project, moving the plan toward a development agreement, tax‑increment financing (TIF) filings and a future public vote.

The LOI lays out reciprocal commitments from the city and the developer and is intended to clear the way for a phased TIF filing to the Vermont Economic Progress Council (VEPC). Stephanie Clark, a real‑estate consultant with White & Burke who represented the development team, described the LOI as a roadmap that sets expectations and next steps. “This is a public‑private partnership because there has to be that public support,” Clark said, adding the LOI is nonbinding and is a step toward a development agreement and phased state filing.

The LOI and accompanying materials estimate roughly $8 million in infrastructure work could be needed to bring the parcel to market, with a current estimate of $2.8–3.5 million in TIF to be requested as part of the capital stack. Clark said additional funding sources being explored include a Northern Borders Catalyst grant and sales‑tax reallocation. The presentation also noted roughly $750,000 in fee waivers and tax stabilization over the life of the project the city is considering to make the project financially viable given an estimated $5 million in soil remediation costs.

Alderman McCamp moved to suspend the rules and take up the LOI that night; the motion passed, and the board later moved to approve the LOI and authorize the mayor to sign. Alderman McCann highlighted the comparison between the city’s estimated foregone revenue and the remediation costs, calling it “a pretty good investment.” Alderman Davis requested the motion be amended to specifically authorize the mayor to sign; the amendment was accepted and the motion carried without recorded opposition.

Clark and other presenters stressed that the LOI is not the final vote. The next steps described to the board include finalizing a development agreement, filing a phased TIF application with VEPC, continuing engineering for public infrastructure (waterline replacement, sewer restructuring, burying overhead utilities) and voter education ahead of a future ballot decision. Clark estimated the project would generate new annual tax receipts to the general and education funds after the TIF period and cited a 20‑year horizon for debt service and eventual return of full tax receipts to the city.

The board received a two‑page handout of talking points and Clark said additional public outreach would occur before any voter decision. No public vote on the development agreement or TIF phase filing was held that night; the LOI vote authorizes the next procedural steps.