Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good morning, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Wednesday, 04/01/2026. It's 09:02 in the morning. So we're beginning our day to start taking a deep dive into S-three 27, which is the economic development bill we received from the Senate. You'll notice there is a new section that Rick has added. We don't have the equipment this morning, but we'll be talking while we have Commissioner Gibson with us to talk about the bill as a whole. Good morning, Commissioner. Thank you for joining us.

[Lyle Jepson]: Good morning. Thank you for wrapping us. Here with Nick Grimley, who is the Deputy Commissioner, and Jess Articleton, who is our Pepsi Executive Director, and we would be happy to talk to you about any and all. We only have three hours, so let's

[Herb Olson]: go. Two

[Lyle Jepson]: minutes. Two hours. What would you like to address first? I've got a couple of suggestions for changes if you are so willing. We can walk through each component. What would be the best

[Michael Marcotte (Chair)]: I think let's start looking at you know, there's a lot of deleted sections in there, but wherever you'd like to start. Alright.

[Lyle Jepson]: Well, there are particularly four different sections of this, one of which is a report that Nick and I will be putting together as soon as the bill passes in its current form, where we would like to highlight the different levels of support the businesses will need all the way from finance ideation to maturity and scale or passing on to some other entities. There has been some question out there as to what supports are available, what financial supports are available, where do people get marketing support, those types of things. We have a plethora of organizations in the state of Vermont that are very helpful. And if you go to the secretary of state's office, you can actually see a lot of those. But I'm not sure that everyone knows they can go to the secretary of state's office to see all those. And then what do you do with it once you get there? So Nick and I will be, hopefully, will commission us to do a study and come back to you in December with an outline of how we would like to communicate all of the good things that are out there right now. And we may have suggestions as far as other things that we would like to see happen that would be supportive of getting businesses either growing or moving into the state. Part of it is also a financial piece where can people get financial support, whether that's through VITA or other options, grants, so forth. But we'd like to put that together in a piece that is a little bit more dynamic that people can take a look at and reference as they work through their business. Change I would like to make, if you are so willing, it is under where it says report, and it's number four. It says determine how best to market and to initiate inventory and resources. Respectfully ask that you take the word market out because that implies that we are going to spend money to go out and market this somehow. We don't have a budget for that, but we do have a mechanism to communicate all of that. So we would like to be able to come back and show you how we're going to keep communicating what we're creating in the absence of a budget to actually get that.

[Michael Marcotte (Chair)]: Do you

[Lyle Jepson]: have any more comment? Yes.

[Jonathan Cooper]: So I appreciate that. That's actually number four was the one that I was the most focused on. All of them are really important, and it is a nice comprehensive way to think about business in Vermont, really from the inception, funding, what happens. I appreciate that, but that was the piece that knowing the folks in my community who have started small businesses, and when I mentioned some of the supports that are available to them, there. Yes. Yes. How do I find that? And so communicate publicize, something more than just communicate, I think it's going be helpful. And I appreciate market might not be the right word. But are you thinking a website? Are you thinking a one stop shop? What are and I know we're before a report, before you've even done an inventory.

[Lyle Jepson]: But That will be the end of the day. One thing that I would like to very closely with is the RDCs because they are our boots on the ground, and we would love to have businesses going to the RDCs for that first point of contact. Because what really what you're describing in that look that

[Jonathan Cooper]: you gave

[Lyle Jepson]: me is an in person look. Yes. And I am confused and I don't know where to go. We want to have that in person activity available to people. And Jonathan down in Bennington may or may not know exactly who to go to next, but he is the dock connector, and he would be able to then research where that person should be looking for information. We would like to have that information in a pool of opportunity that all of the people who are the boots on the ground out there can then go to. Is that that is?

[Michael Marcotte (Chair)]: We're not quite sure.

[Jonathan Cooper]: Yeah, I just So my gut reaction to that, which we don't always trust but we kind of listen to all the time, is most people are starting on their device and not in a face to face. And so when you start thinking about it, look around when it's there and your device, whatever device it happens to be and as addicted to them as we are, is the way that we start. And so I would hope that that resource is high on your chart of how to ensure that the information is available to folks.

[Lyle Jepson]: Easily accessible to go on Yeah, your

[Jonathan Cooper]: from my couch. Mean, I'm not going to open business anytime soon.

[Lyle Jepson]: Frankly, that's where that happens. It happens at midnight that I need something, and where do I look?

[Jonathan Cooper]: I just had this great idea. Yeah. It doesn't work.

[Nick Grimley]: For the record, Nick Grimley, Deputy Commissioner of Economic Development. I'd just like to add that we've recognized that some people talk about a one stop shop, and

[Michael Marcotte (Chair)]: I don't think that's how

[Nick Grimley]: people operate. There is no one stop shop for this type of thing. What we are aiming to do is identify the different entry points, and then make sure that we are communicating to all those different entry points, so that the person that is sitting on their couch and maybe going to the Think Vermont website is finding it, or maybe they're reaching out to SPDC and they're getting the information, or through the RDC, basically mapping out what those different end users are and then coming up with a plan to communicate and publicize that information out to those channels.

[Anthony “Tony” Micklus]: I just wanna echo what Edye has said. Having started four businesses in the state, I had no idea until a few years ago that there were any of these resources available. What I see more, as I continue to look for technical support on running my business, to Edye's point, like on my phone, like on the internet, but the first thing out of my, when I type in my problem and I see a list that comes up, I'm like, are these companies even legit or are they gonna rip me off? So one of the things I think is really important in doing what you're doing is integrity is huge. I would love to go to a place and like you said, not necessarily a one stop shop, but maybe a place where you have companies that at least gone through some level of betting, at least verify that they are in the state of Vermont. I mean, where I can go to that site, I can kind of look at what I need, and I have a list of people that are experts in that field that I can go to that I know at least there's been some betting on.

[Lyle Jepson]: Official site.

[Herb Olson]: Becky.

[Emily Carris Duncan]: I think just to bounce off what Tony was saying, I think there ends up being a need to be at the top of the SEO stack and making sure that it is easily searchable. And so there may, on the whole marketing, communicating with conversation, there may need to be some investment since it's showing that our official Vermont state properties are the culmable circles.

[Kirk White]: Yeah, thank you for doing this. I appreciate that you want to, you're going to at least engage the rural development corporations, because I think they do have boots on the ground. My experience, especially in my district, is that the RDC only has its boots on the ground for towns of a certain size. Once they get to be really small, they never hear from the RDC. They never see the RDCs. Some of them don't even basically tell that the RDCs is. And so I want to make sure that you reach out to those smaller, less than 2,000, maybe less than 1,000. I have a town that's 300 people who don't exist. And even if you did, they don't have the resources to take advantage of any of it. And so for my piece, I think the bigger ones take care of themselves better than the little ones. You need to look out for the little ones. So

[Abbey Duke]: can you sort of talk a little bit about what you see qualifies as a resource? I feel like just the language in here is a little on the broad side. So when you're thinking about envisioning the study, what do you think of as how broad is the definition of resource?

[Lyle Jepson]: One of the things that we will do is we'll sit down and we're going to create that stakeholder list, because like this board behind you, there are a wide variety of opportunities out there. From VMAC to the small business development center, it would get just a mispief when I start suggesting all the resources. We need to look at the categories that we're going to socialize with those, whether it's a startup, whether it's a mid level business, whether it's a mature business, and types of activities that are out there that are supporting them. Too often I think we forget about the organizations that are already there, like the Small Business Development Center. We need to communicate that and get it in front of people in an easy way so that they are aware that it's there. To go back to your point, wasn't even aware that it was there. We'll be defining this a little bit more as we go through, and I think some of the definitions will become more self evident as we investigate all the different stakeholders. As a former RDC person, I'd like to think that I know

[Emily Carris Duncan]: all of them

[Lyle Jepson]: that are out there. I'm pretty sure I don't know all of them that are out there, not that I'm in a different position right now. And so it will take some time. And I'm not specifically answering your question because we're just getting started.

[Emily Carris Duncan]: I'm curious to know about your relationship with the Cypriot C files, because I also find that the vast majority and I could be wrong, A lot of businesses have to get registered. So I'm wondering, will that be a part of this? Is that at least a point of contact that people would be like, oh,

[Michael Boutin]: you're starting to get lost?

[Lyle Jepson]: Next looking, Nancy, back on it. Sure, no.

[Nick Grimley]: Yes, so several years ago, we worked with the Secretary of State's office. It initially started as a letter or an email that would get sent to every business that registered in the state of Vermont, introducing them to the Commissioner of Economic Development and the different services that are offered through the department. That has since expanded to become an email that goes out with resources throughout the state that are available for businesses. It includes a wide range of organizations. So over the years, we have worked with the Secretary of State's office to develop that, and they will certainly be a stakeholder in

[Megan Sullivan]: this discussion as well. It's

[Jon Copans]: like building up in terms terms, right?

[Nick Grimley]: Yes. We engaged with David Hall there.

[Michael Marcotte (Chair)]: If you remember the One Stop portal, we went live in the Secretary of State's office last year, and last so that's something that we had worked on in here for, I don't know how many years since, to get it going, where it's a one stop, so when you're creating your business, it's gonna populate a list of where you might need to go for a permit, you can go for licenses, where you need go for help, that kind of thing. So that's, like I said, let's continue through the call.

[Anthony “Tony” Micklus]: I just wanted to bounce off of Kirk with the RVCs. I have not been particularly thrilled with our I live in a population of 11,000 people, and I don't remember seeing, I haven't seen anyone from RBC in like ten years. And I work in the planning commission, I'm chair of the planning commission. And I work pretty closely with the select board and the cabinet manager. I don't know if there needs to be a realignment of responsibilities or whatnot, but I know, you know, from my perspective in planning, I don't feel like I've gotten a whole lot of support from our DCs. Our PC has been great.

[Lyle Jepson]: Great for the conversation in the future.

[Megan Sullivan]: Yes.

[Anthony “Tony” Micklus]: And to bounce off of what you were saying, it it mean every time someone creates a, you know, creates a business, usually you get a response. Seems like that'd be a really good place for them to say, hey, here's here's a receipt of your of your fee. Here are some resources to help you with your business.

[Michael Marcotte (Chair)]: So it sounds like we wanna do something similar to the opposite workforce strategy. Well, that's exactly the issue that we had when we created the software, was we didn't know who was doing what, where are the resources, and what they're doing now is creating that inventory of And I think what the proposal is here is to do something similar to that, is to let's find out how many organizations are out there to help businesses. How do you get in touch with them? Where are the resources? You know, resources that we provide to you and other resources that may be out there from nonprofits to help communities, to help businesses thrive. We're

[Lyle Jepson]: cross pollinating their economic community as well, working on that. That workforce component is key to business development, that we need to know about the Vermont Training Program and other things that are out there that are being public. Yeah,

[Abbey Duke]: and I think when you're thinking about resources and also service providers, it includes trade groups and business organizations. I'm learning about a new place that, oh, they provide very specific, sector specific advice, for example. And so, yeah, I guess that's the big thing is I think it really needs to be thought of as beyond just the usual suspects to all the different touch points.

[Lyle Jepson]: To your point, stakeholders, the association of builders and contractors. AGC. AGC just opened a new facility in Windersky, I believe, where they're doing education and training for the trades. Those types of things need to be honored. Yep.

[Michael Boutin]: Thanks. So part of the challenge of studies is already talking about a snapshot of the world as it was on or before 12/15/2026, and those things are always changing and formal networks and informal networks are moving around a lot. The first thing I want to know is if based on what's in all of these eight points, is December 15 a reasonable amount of time? So that's one more question. And then question two is, I guess something that should be articulated when this materializes, is, what is the appropriate level of scrutiny we think about, or is that an option we had at a later date, where there's, The impressionist painting does not have every single detail, but if you step back you can see it perfectly, what is the sort of granularity that you'd be able to work

[Lyle Jepson]: to? First question first, timeframe. When we were asked, we'd said by Senate, they suggested that there would be a two year study. And our response really was, why don't we want to take two years? Let's go out and stay on board. So this is not necessarily a study. This is an important report of what currently is alive or living out there, and it's an opportunity. From that, we will then come back to folks and say, here are some recommendations as we move forward. There might be recommendations for funding. There might be recommendations. We don't know yet. But we would like to come back to you with that initial work because I think that will be the launching point to what you're describing, which is scrutiny. Needs to be living somehow so that we can add to this and subtract them. Last time I was here, think I said Vermont's great. It started something when we have a problem, but then that organization or committee never goes away, and then they start looking for other things to do. We want to make sure that some things maybe do go away that are no longer necessary, the things that are necessary to continue to be

[Michael Marcotte (Chair)]: addressed. I

[Nick Grimley]: would just add, I don't think we want to make this the kitchen sink and throughout everything. It does need to, in order for

[Michael Boutin]: it to be useful, does need to be strictly hidden supply. And it's meant to form these committees. Yes.

[Emily Carris Duncan]: I'm curious to know how exactly the work that the Office of Workforce Development is doing, or if this is a duplication of efforts.

[Lyle Jepson]: That would be a subset. They are very focused on the workforce.

[Emily Carris Duncan]: Okay, so this is designed as a subset of the workforce?

[Lyle Jepson]: Ours is probably more broad. Theirs would fill in a piece of workforce development within businesses, because the workforce development piece is critical to whatever size business you have, and there will be opportunities and options out there for education and training that those levels of businesses will need, whether that's a vision grant through the Vermont Economic Progress Council or the Vermont Training Programs or something through the Department of Labor. Right now, as I look at it, it's a plate of spaghetti, and we want to make sure those pieces are connected very effectively.

[Jonathan Cooper]: So one other question, and this is probably a segue to our next topic. When you're looking at how do we support business growth, Veggie is one of the ways that we are supporting business growth. And we know that it only works well in times say it differently. It works less well in times when our unemployment rate is as low as it is today than it does when our unemployment rate is high. And so what we've talked about in that committee often is, are there other economic development, business development incentives that we can put in our state to grow business at other times, too, to grow the economy at other times, too? And I'm wondering if there is a spot in this study, because we've talked about all these other groups that are getting together, think groups that are getting together to talk about what do we need? Do we need to hire someone? We've heard from lots of different consultants and people can plug and play from other states. And Vermont is, we're small. We have small business. And every time we try to grow big business, it's just not really supporting as many, I don't know. Anyway, I'm waxing here. But is there a part of your study that lends itself toward what other economic incentives would be beneficial?

[Lyle Jepson]: I don't know what the report is going look like at the end of the day, but I'm going to suggest that there probably are going to be holes, and there are going to be things that the report will identify as opportunities for the future. We have looked, mean, last year we had an intern, looked at many, many different states about all the different things that are out there and what would be an opportunity for the state of Vermont. As you know, we don't have a lot of incentives. We would like to

[Michael Marcotte (Chair)]: have more incentives.

[Lyle Jepson]: But as we think about that, if I say TIP and CHIP works so well, is that there's not necessarily money to put in. And so we don't have to add to the budget to do that. So those might be the things we'd be looking for. Can we add that will not necessarily cause the budget to go weak? Jonathan, I'm to talk around your question a little bit, because we don't know what the report is actually going to tell us at the end of the day.

[Jonathan Cooper]: How opposed to having a sentence leading you in that direction would be in

[Lyle Jepson]: the language Recommendations.

[Jonathan Cooper]: Yeah. I mean, there's a sentence for recommendations for legislative action, maybe something about recommendations for economic growth incentives.

[Lyle Jepson]: We're going to get back to time and how much time, because in our mind, correct me if I'm wrong, this was going be a report about what is currently here. And from that and the reason we wanted to do that first was we didn't want to wait two years to come back and do the report and potential recommendation. I think some recommendations will come from this, but I don't want to promise that within the time frame that we have to do.

[Jonathan Cooper]: Maybe we put it in findings or legislative intent on the voyage or something like that.

[Michael Marcotte (Chair)]: Well, I don't want to go on the report, but comes back in. Did you report in there, report it this under and then finally report it a year later if there's more things that need to loop our task.

[Michael Boutin]: So you can see that the final item in this report is identified. This is here on page three. Identify investor education opportunities for high net worth individuals interested in investing in remote businesses. Seems less reporting. Mean, seems like

[Jon Copans]: an example of a

[Michael Boutin]: recommendation. When I read that, I wasn't sure how I didn't love it, I was just wondering if that's the kind of thing. I saw that as a thing that could be a big rabbit hole as identifying investor reputation opportunities for high number of individuals who are interested in doing these investments. And I was just thinking, there's a lot of different pieces to that sentence. And that struck me as a thing that would be a hard December situation. Know some people are like, hey, you're proposing adding sentences. Was wondering, obviously, maybe we could add a sentence if we bring a set of shits. That one didn't seem to follow or fit, hopefully in the reports.

[Jon Copans]: You feel stimulated about that or how well does that December 8 match with the reporting?

[Lyle Jepson]: You can comment on that, Nick. Drew and I talked about that.

[Nick Grimley]: Yeah. So the senate was interested in exploring that. I think it is I don't think it's a heavy lift for us, knowing what I know and having been involved in the venture capital space for a number of years, I don't think that's a heavy lift for us. I'm glad to hear. Okay.

[Abbey Duke]: So piggybacking a little bit about what Brett Brannington was talking about. I guess the way I'm thinking of this is almost like a SWOT analysis, where you're really cataloging what's out there, so looking at strength. And then also cataloging it all, and then maybe identifying what are our strengths, what are our weaknesses, what are some Maybe not saying, here are the economic incentives we could do, but you're saying, hey, there maybe is an opportunity for an economic incentive for legacy manufacturers, whatever. And also saying, What are some threats? And that seems like a way that then the legislature next year, sort of going into it, becomes a bit of a construct to help identify where to focus. So maybe there's this report of all the resources and weaknesses. There's no website in which you can go that is always updated and that somebody can Whatever it is. So you're not doing it, but you're identifying something. An opportunity. So I don't know that maybe that somehow We can put it sort of in the intent of the report that we're really looking for, okay, now we know that

[Michael Boutin]: Here's a

[Abbey Duke]: lay of the land. What's next? How do we because I appreciate that it's not a two year report, that it's six months or nine months, whatever, and with the idea of being it's the first step.

[Nick Grimley]: I was gonna just add, I think that if you're looking for the full, absolute landscape of what could possibly be done, that's pretty broad. If you're, for us to identify some low hanging fruit where we could see some impact, then I think a doable way to say.

[Abbey Duke]: Yeah, so it's like iterations and continuous improvement, kind of my insight.

[Lyle Jepson]: There's four other perks, I said there were only four perks in here, actually there are five. One is the veggie piece. I'll start with Bennington here, and she can speak to any of the questions you have about, does it learn about veggie? We would like to think that it's time to keep this forevermore and not keep bringing this up year after year. It is a successful program. We have businesses that are accessing it. Jess could speak to the positives. Would you like to, do you want to talk about that, or just say, yep, we're in agreement, we're moving forward?

[Michael Marcotte (Chair)]: I don't know that we're there yet.

[Lyle Jepson]: I'd be happy to help you get there if that's the other. We'll talk to judge. Keep on your agenda. Great. The next part is a study that will, a culinary institute study that will be undertaken by the opposite of

[Michael Marcotte (Chair)]: the first kind of development.

[Lyle Jepson]: That will be their Chairman. I don't know if I can answer any specific questions around that, but the focus was to determine what if we should, and how would we if we should have a school of culinary arts again here in

[Michael Marcotte (Chair)]: the state. I think we had an impromptu discussion a little bit with Sabina yesterday, and I don't know that we think that the Office of Workforce Strategy and Development is the right convener. I worry that they still have a lot of work to do and it's only a two person office, and I'm kind of skeptical about putting one on their plate right now, and so we may change that, because it seems like that might be more for the state university than it is for Subhana and Drake to take on. But we do see there's a potential there, so I think we need to understand if we can do something like that, it didn't work last time, but it was a for profit, and they're not doing well throughout the country anyway. But if they're an opportunity for the state universities to take it on and maybe develop some certification programs that can help people that are coming out of the CTB centers that continue to upgrade their skills. We'll have that done. I guess we'll continue to talk about that.

[Lyle Jepson]: Having been in the public education system, particularly in TechEd, there are different variations of common hard programs at different tech centers. I'm not sure they're all consistent in how they're delivering what they're delivering, so that's certainly the biggest conversation. The next piece was something else that we are not necessarily involved with, which is connecting Vermont to New York.

[Michael Marcotte (Chair)]: We'll have hospital care, couch transportation, we'll be having a conversation with transportation as well. Great.

[Lyle Jepson]: And then the final part here is the credit conversation. With regard to the acting

[Michael Marcotte (Chair)]: on to the army,

[Lyle Jepson]: is there a counterpart to your agency or somebody from the court that we should get involved in this discussion? Sure there is, but I would leave that to transportation to reach out to whomever they felt that would be the most appropriate counterpart. What would you like to address? Well,

[Michael Marcotte (Chair)]: we haven't had a walk through of it yet. Rick was unavailable, but maybe you can Sure. We can all look at it at the same time, I guess. Alright.

[Lyle Jepson]: So currently, we started out with a $5,000,000 out of funding to support primarily the economic development organizations that would like to further develop industrial parks or industrial property. It was at the time a loan, and or currently is a loan, not a grant. What this would do is it would turn the process into a grant as opposed to a loan, and currently you would need to put in a deed if you were to purchase land, you would need to have a deed or restriction on the property, because if someone were to purchase that money's going

[Jon Copans]: to come back because of the loan property.

[Lyle Jepson]: We would eliminate the deed component, we would turn it into a grant, and then there are a couple other pieces of this that would change. Right now, it's a eightytwenty split where you can get 20% of, let's say, million dollars, you could get $200,000 but you need to bring $800,000 to the table. One of the reasons that all of that $5,000,000 is not out right now is because of that, that there is difficulty on the part of whether it's a RBC or another development corporation to come up with the 80%. We would like to change that to 50%. We believe it's important for people who are developing to have some skin in the game, and so we would like to have it be a fiftyfifty. And another major change in this process is that federally impacted program federally impacted properties would benefit from this fund as well. And you'll see further near the end how that plays out, that we would change the program to a 50%, and I'm going all the way to I guess it's page 13 is what I'm looking at, line 17. We changed the award to being the lesser of a million dollars and 50% match to that. Federally impacted programs would be able to go to $2,000,000 and what this currently reads is that there would be no match required. We believe that there should be a match to that, again skin in the game. So if you were to ask what recommendation we might have, changing that to 50% instead of 100% would be a recommendation. One of the reasons for that is that this fund will get used up pretty quickly and we do not have a source for additional funding. Currently, we have about 2 and a half million dollars left in the fund, and there are some federally impacted properties out there that would love to access this, and you probably know them already. They could pretty quickly use this fund up just with a couple different projects. And we are aware that if you changed it to a fiftyfifty split, there are other locations around the state of Vermont that have development corporations that would like to gain access to that. So, next leaning forward, I know you have a couple of comments. Yeah, I'd like to. Okay, there's another piece to this that particularly around the federally impacted property, if you go to page 14, number six, where it says, there are three criteria for which a federally impacted property would benefit from this program, one of which is it would be in a designated downtown, It would be in a zone, and then it would be or it would be in a federally declared natural disaster area over the from the last two years of declarations. A potential federally impact impacted property would need to have two of those three. We would recommend that you allow us to look into or change the two year criteria for the disaster relief to at least a three year because we wanna make sure that the that we don't run off the clock on the opportunity to give these these funds.

[Michael Marcotte (Chair)]: And I think the intent was actually to look at, like, in a five year period.

[Herb Olson]: Yeah. So I'm trying to understand the sort of structure of the funding of the program. You said, I think you had I think you said you had 2 and a half million left for those purposes. Correct. I was looking at some features of the program, the grant program and everything. That would be up pretty quickly, wouldn't it? I mean, if you have a million for the non federally impacted and then 2,000,000 or whatever for the

[Lyle Jepson]: federally impacted, so

[Herb Olson]: what's the history? Are those part of your annual appropriation or is it one time? What's the sustainability of that fund?

[Lyle Jepson]: Yeah. There was a one time appropriation of $5,000,000 and I think it was 23, Nick, was it? Okay. I believe so. Yeah. And since then, we've had three different approved grants, one for a million, one for 220,000, another for a 157,000, which kinda adds up to that 2 and a half million that was already out the door. We are recognizing that there will be demand into the future. And we also recognize that we have a federally impacted properties issue that we're trying to address. We do not have the crux of it is we do not have a revenue source for this. And so, yes, we can very quickly use that up in the next nine months, but we would be back to this table again in the following year saying, this really worked, and so we need x number of dollars based on the three applications that we got for this.

[Michael Marcotte (Chair)]: That would be a great thing.

[Anthony “Tony” Micklus]: I would I would also

[Nick Grimley]: I would also note that the original, program with the deed restriction, that really made it hard for smaller RDCs to access the funding, especially with the E-twenty split. So getting rid of the deed restriction actually accomplishes two things. The deed restriction technically makes it a loan and the agency of Commerce and Community Development is not empowered to make loans. Two, changing the split to fiftyfifty allows those smaller RBCs to access the program.

[Lyle Jepson]: And someone out there is wondering, why are we doing this anyway? And the purpose of this is to increase the stock of commercial property. We have and it's just off the office. We have old stock in the safer mine. And when people came to me at the RTC in Rutland, said, I need overhead doors, three phase power, 20 foot ceilings. There's not a lot of that out. And so the goal is to have RGCs and other development corporations be able to create that. At the same time, we're looking at issues around the state with federally impacted property. So wisely, somebody came up with the idea and said, well, not putting this in here as well? And could we do something with for example, Newport is here to talk about their downtown. Also right here in Montpelier, there's an issue with the federal building the Culver Post Office. There are probably other buildings out there as well. And so I would like us to think about where is the funding source in the future. We can solve some problems right now, but we will be creating an issue, which is we will have a program with no money. And I'm not here to ask you to put anything in this year, but potentially in the future we would need to come back.

[Jonathan Cooper]: So we're sort of doing this a little bit out of order because we didn't talk about the original program and then the changes to it. So can you just and I wrote myself a note to have Rick take us through it. So right now, it's a revolving loan fund, or it's a grant program right now?

[Lyle Jepson]: Right now, it is a loan. And so the development organization that comes in would need to come in with $0.80 on the dollar to access 20¢. And that has been problematic because the organizations out there just don't have that available cash to come to the table to do projects. That's why we'd like to make those changes. And there are a couple organizations that are out there that are big enough to be able to do that. It's the smaller organizations, as Nick was pointing out, that just don't have the access to capitals to make that work. So we're trying to tweak the program enough so that it will actually be statewide and not just in a particular pocket within the state.

[Jonathan Cooper]: So it's originally designed as

[Emily Carris Duncan]: a $5,000,000 revolving loan fund.

[Nick Grimley]: I would that, is that it is not

[Michael Marcotte (Chair)]: a revolving loan fund in

[Nick Grimley]: the sense where we're making term loans that are paid back to that specified time. The only thing that makes it a loan program is that there's a deed restriction that says, if at some point in the future this is sold, then the principal is returned to the agency. So if they never sell the property, or they sell it in forty or fifty years, somebody who is not Lyle or I is going to be sitting there receiving a check going, Where did this come from?

[Jonathan Cooper]: So it wasn't designed originally to be a fund that is When

[Nick Grimley]: we proposed it in the legislature originally, economic development program, and then there was discussion within the session, and that was added in because there was feelings that the money, the principal needed to be returned, but the structure of it was a little strange. And it also, I don't think anybody realized that it made it a loan and that the agency isn't empowered to make loans.

[Lyle Jepson]: This is the was a percentage of interest that was going to be due of 2%, and we would have to figure that out down the road as well. Great idea to have it a perpetual fund, but there would be no perpetual fund because the money was going to go out. RDCs were not going to sell the building anyway. It was going to be in a deed, and nothing was going come out at the end

[Michael Marcotte (Chair)]: of the day.

[Jonathan Cooper]: Yeah, and it had to be held in a different space. Have plenty of bodies across the state that can do loans. Somebody else could have held it if it was designed in a

[Jessica Hartleben]: different way.

[Lyle Jepson]: It is anxious to think about it.

[Jonathan Cooper]: Lots of thoughts. Thank you.

[Michael Marcotte (Chair)]: More context to it because I think I was doing. When we developed that program, we knew that the RDC's probably won't be wouldn't be selling the property, so they wouldn't have to pay that. But if they did sell the property, then the money could come back and then be used again. So that's why we did it that way. Make sure that the RDC, at 20%, to help try to build some of these buildings that need to be put in their industrial cars.

[Lyle Jepson]: Chittenden is a great concept. Even the cost of construction, as you've heard many people come in here and probably talk about, has made that, has precluded that. So

[Michael Marcotte (Chair)]: I think the language that we have here doesn't change anything with the 50% idea. What the change is, it's looking at properties that are possibly in Newport and possibly in Montpelier to have them be able to access which funds at 100%. But the program itself, that 50% would still stay the same, and of course turn it into a grant as well.

[Lyle Jepson]: I'm going to push back and argue a little bit to, don't know, Rick, you would love to have it be 100%. I would encourage us to think about having that be consistent with a 50% batch of some kind.

[Michael Marcotte (Chair)]: And I'll argue back.

[Lyle Jepson]: Not gonna argue back.

[Michael Marcotte (Chair)]: What I can tell you is that Newport has been on the hook for the last ten years, eleven years now, with a hole in the ground on Main Street that has gone from nowhere. And if we have the opportunity, in my mind, to be able to help Newport purchase that property from the receiver, so that or Newport or another organization within Newport to be able to purchase that property and turn it into something, then I think, in my mind, the state owns Newport Bay because this was an EB-five disaster that happened, and it was not on Governor Scott's watch, but it still falls on the state of Vermont, in my mind. That's where I'm coming from.

[Lyle Jepson]: As Mike knows, as a former graduate of North Country High School, I'm all in on Newport, and Rick knows that as well. Just our concern, my concern, is that we will fund gold feed depletion. And if

[Michael Marcotte (Chair)]: it is, I'm hoping that you also get applications in that will show us that changing that to a 50% grant will work and and that in next year's budget, some money can be put in there to to fund those projects, because I think it'll work. I agree with you. I think that the RDCs and others, we can start building some commercial properties in our industrial parks that we can help bring in new business.

[Michael Boutin]: $5,000,000 is a pretty small bet that you won't get to a lot of the artists. You won't see it moving out because of that scale that we're now dealing with. And what I like to hear was having over subscription implies that every problem is bought, but also implies that the body money was rather small for the intended purposes. And if it needs to be larger investments into our development infrastructure, I think that's a really good outcome, a really

[Ben Doyle]: good idea.

[Michael Boutin]: So hopefully you'll have that whatever the number is, you know that demand is greater than that. And that's we have, we have 5,000,000 to

[Ben Doyle]: play before 2,500,000 to play this.

[Michael Boutin]: There may be a temporary level of participation is three or four, we're done, but my sense is I think that since this conversation has been ongoing, from, you've been hearing from organizations, the the numbers were frustrating the barrier to entry, ultimately we get in applications, I think there's much more out there, much more upside to more substantial investments.

[Lyle Jepson]: Don't hear me saying that I would be disappointed if Ben is able to buy the post office and Rick is able to buy the pit. So that would those would be two wonderful out guys. To be clear,

[Anthony “Tony” Micklus]: just wanna mention that these percentages could go either way. I mean, maybe 10%, 90% grant, 10 skin in the game. It doesn't necessarily be fiftyfifty. So I think I don't think we should leave anything off the table, anything from zero to a 100.

[Lyle Jepson]: And not to go down a different rabbit hole, but of the reasons that we do need commercial property and industrial property is we have increasingly great relationships with Canada. And so there is a need and your support of our $150,000 for a relationship with the office of Canada is really important. Sure.

[Michael Marcotte (Chair)]: Any questions for the audience? Commissioners, thank you. Megan has to be somewhere by eleven and I want to make sure that she gets testified. Sounds

[Abbey Duke]: like you can have mercy.

[Jonathan Cooper]: I'm here for the duration.

[Megan Sullivan]: Morning. For the record, Megan Sullivan, Vice President of Government Affairs for the Vermont Chamber of Commerce. And so exciting this morning that I'm testifying about economic development in here, and then I'm going across the hall to testify about economic development in energy. So it's like Christmas for the Vermont Chamber today, and then we're on the big factory day. So I'm just it's a good day. Thank you for having me. We're really excited to see a great economic development bill and vehicle moving and to start digging into that in this committee. I sent Jonathan our priorities that we had set out at the beginning of the session. And I was thinking, do I just want to have comments on the shelf? Should I talk about our priorities? Obviously, we're months in, so priorities that started at the beginning of the session shift greatly. But I thought I do want to sort of talk about what we came into this session thinking about and where this bill is currently really well aligned, where there are good things happening and where there could also be additional opportunities for conversation. And where we came in at the beginning of the session was looking at three different things we had going on. One was the annual business climate survey that And most of these are through the Vermont Futures Project, which is the foundation of the Vermont chamber. The business climate survey, where we reach out to businesses across the state and get a feel for how are things going? How are you feeling about doing business in Vermont? What are the areas that you're most concerned with? What are the biggest opportunities? And I would say the feeling on

[Jessica Hartleben]: the ground was sort of middling.

[Megan Sullivan]: It was about a 2.8% out of five. What's your general feeling? So folks aren't feeling great, but it's not like this is the worst economic situation that they're feeling across the state. Their top concerns were around workforce, non surprising, permitting and taxation, regulatory environment, housing. So nothing too surprising there either, but it is sort of a good litmus test of where we're focusing our energy. And then I think getting into this report that's in this bill, how are you feeling like you're being heard in Montpelier? Are you feeling like people understand the economics that you're facing in the building and are sort of responsive to say, how are we going help them be successful? Not great results there. And I think part of that, because we're here every day and we see the programs that you all are creating that are intended to be helping businesses, helping the workforce. And I think they don't always make it outside these very thick stone walls. Do the good work. And that's something that we've been talking about for years in our testimony, we've been finding it. We've to elevate our achievements. We've done these things. And then if they sit four pages down on a website, on an agency, even if people are using their devices, it's not just about are we communicating it? And I think this is where we don't have to use the term marketing if buys a budget. But how are we communicating it? Are we communicating in a way that meets people where they are to say, not only is this program here, but here is how you can use it for retention. Here's how you can use it for recruitment. How are we using language that meets people where they are that's not, again, four pages down government speak or regulation. It's really about saying, what is the customer service we're providing to ensure that these programs are used as intended? So the other piece that the futures project has done is obviously the economic action plan. We did not bring copies of it today because at this point you may have provided three or four copies, but I can bring more copies, certainly, if the committee would like a refresher on that, would encourage you to have Kevin Chittenden to talk about all the different things the future project is working on. But that's really to say, where are we at now? And then what is a way that we can build that economy of the future that brings all the months together and moving from a scarcity to an abundance mindset? And then the last piece is a competitive mismatch work that the futures project put together to say, how are we faring competitiveness wise with other states? Where do we rank? And there were some places where we ranked well. We are one of the most progressive states in how our tax system is set up. Some areas were not doing this well. We're fifty first out of 50 states. I mean, that's brutal in economic momentum. There's only up, which is great, right? That's the opportunity. And we're seventh in our regulatory environment. So we're really thinking about that and like, okay, before we add and this gets to our first priority before we add to our regulatory environment, can we have an understanding of where we are? And can we ask our agencies that are regulatory bodies that are enforcing? It's great we have a one stop shop where someone can say, Okay, what are all the permits we need? But as a state, do we have handle on what that is, on how many different regulations we're asking people to go through. Is there duplication where you're having to get a permit? And you certainly see this in housing, but I think our employers are saying they're feeling it too, where I'm going to three different places for the same thing and everyone wants cut. And then there's some where it's like, well, they want me to do it this way and they want me to do it this way and no one's talking to each other. And I think that's where the frustration is. So one of our first priorities is, can we really get a report on what's going on here? In here, we talk about agencies taking it on. It's also something that Vermont Chambers is working on taking off. There is a consultant who works nationally and has done this in other states like Colorado, who's doing a deep dive into what is the regulatory environment at the state level, at the local level, and focusing on specific industries to really try and figure out. It's not anti regulation. It's not we shouldn't regulate. But it's saying where are those pinch points where there may be multiple agencies who are overseeing the same thing? And what is the cost of all of that? So that's something that we are looking to do. And as we get that off the ground, we'd love to make sure that there's positive things. We want it to be useful. And we're looking at housing, health care, manufacturing as some of the industries that Lauren started on there. There's additional opportunities for that. Having the instructions on what we're looking at there. I

[Lyle Jepson]: was just curious, getting

[Michael Marcotte (Chair)]: back to the whole sort of referral type stuff.

[Anthony “Tony” Micklus]: Yeah. Is that a common thing you have is people call you and say, Hey, I want to start a business. Where do I start? Is that something you commonly see at the Vermont Chamber or is it more people that have already established themselves? We get that a little bit.

[Megan Sullivan]: We'll get someone who wants to start a business or someone from out of state who's thinking about moving to Vermont and wants to know who they should be talking to. And we can make those referrals. And it's sort of that institutional knowledge that we have of like, well, Megan's been working at development for twenty years. Amy's been doing it. And so our team is looking to us to put that together. And I think what we see the need for is not just to say the SVDC is a resource, but to know that whether someone goes to the Vermont Chamber or they go to the SVDC or they go to the Center for Women and Enterprise, or they go to the town manager, that all of those folks have been given this information about, hey, did you know that the federal government just passed a tax credit for businesses that invest in childcare. So you're thinking about childcare and you know about what the state's done, but here's another opportunity where you can invest and get a tax credit for it. And so how are we packaging all of those things where it's and as Representative Brandy mentioned, we're a small state. We need to think innovatively about the tools in our toolbox because Veggie works for some companies, but not everybody, not a lot of people. Training program looks for us on premise, but not everybody. But we are doing things that can be used as recruitment and retention. How are we telling not only the businesses, but the different organizations that support them that say, make sure when you're getting those incoming calls, here's that resource piece so that whoever your trusted person is, in some cases it's the RDC, some cases, it's somebody different. But we're disseminating that information in a way that reaches people where they are. So it's not just a bottom up. Let's make sure one group has the information. We should go to the SBDC, but also does the SBDC, those 12 counselors, know what's coming through this building? Do they know the workforce development opportunities that are being invested in? Do they know the housing? Employers we're talking to are really trying to figure out, I'm losing employees because they can't access housing. Okay, do you know about these tools that you can talk to your employees about for a down payment assistance fund? For employers that are saying, I think I'm just going to build housing. Well, there are some challenges to be an employer and a landlord, but do you know about the rental revolving loan fund where you can invest in housing that can be built in your community, which will help your employees indirectly without the funds. So in our newsletter, we put out a here are 10 new tools that you can use for recruitment and retention, which is great for our members to read our newsletter. But I think a little more concerted effort in that report of beating the anvil of, I think, representative, due to your question, what are the resources as a small state? Our hope at the chambers of that is really thought about in a broad way in starting that recognition for a small state. We do have resources. They're not all sort of the traditional economic development resources, but thinking about all of those things. And if we don't want to call it happening, how do we creatively and innovatively communicate those so it's reaching people where they are? Sort of So the next piece is really about the workforce investments. But I would say that this report goes broader than that, and I love that. Never So cheat. Yeah, sort of check.

[Michael Marcotte (Chair)]: But I think, how do we cross train? Yep. Right? So how do we cross train in the training program so that if an employer has other questions, so anybody that's working in the training program, we'd say, Oh, can go here, you can go to Department of Labor for this. Same thing with Department of Labor. You can go over here to ACCD. There's some applications for FEDGI, and there's some issues that they're having for finding out where they can get workforce help. Send them over to Department of Labor. And then how do we push that down into the municipality?

[Emily Carris Duncan]: Just to add to that, think it's something that I feel like you're breaking up, is the diversity of concerns for business owners is exacerbated over time. Work becomes this kind of other catchall, like community resource, for things like healthcare for housing, for childcare, education, all of these things. So I think you're bringing up a lot of the weaker points that you've made for that you are. I

[Megan Sullivan]: think it's an opportunity to really start thinking broadly about those resources, because we have limited resources. We have limited funds in the state. And so the things that we are investing in, if we can be thinking innovatively about how we communicate them, how we talk about them. Would include transportation in that as well as a struggle employers and employees are facing. I think it's an important piece. We're happy to be part of the conversation.

[Emily Carris Duncan]: About that.

[Megan Sullivan]: The late and break Green Mountain Trust program, I put in the bucket of one of those that it didn't make it into the governor's budget. It's not something that we understand the university has capacity to continue. So we're sort of willing to see it go away as opposed to expansion. Oh,

[Jessica Hartleben]: God, it's like I set you up for

[Megan Sullivan]: that question. Yes, that makes the point. This was a program that you all invested in three or four years ago, that a graduate from a Vermont State College with a bachelor's or above would be able to, an employer that hired would have access to a reimbursement. So an employee could get $5,000 off of their loans for working for a Vermont employer. We really push this as a recruitment tool for businesses. We do a lot for students, a lot of loan repayments for need industries, which are phenomenal. And those are really student focused. I really thought of this as a business focused. This is a tool for businesses to recruit graduates because you could say in your marketing, homework for us, it will help $5,000 off. And maybe it's a chance to say, this is a great matching opportunity. We'll get $5,000 through the state program and we'll do another $5,000 on top of it. And all of a sudden, this young person who's saying, oh, cost of living is high, wages aren't as high. All of a sudden, that's a meaningful package that can compete with other states. There was money in this program for a while because nobody knew about it. Right? Like it was living at UVM and students are their focus. Employers aren't their focus, rightfully so. They've done a big job to do with the students. And it was, I think, missed opportunity for folks. And we tried to push it out again in our newsletter saying, this is a recruitment tool. You should be using this to recruit people. But whether it's legislators or business owners or state officials, people were saying, what is that program? And I think that's an example of like, here's a really good program that you all invested in and put money in for a really specific purpose. Lived on the website and nobody knew about it. And it was a missed opportunity. Now the money is now gone because it got a push this year. But I think that's it. And I'm sad that it is likely going away for now.

[Emily Carris Duncan]: This is kind of a That example makes me wonder about the civic user experience in Vermont. And this question about how we're messaging, how we're able to work out, how we're able to communicate with all of the good services that we seem to have. I guess that would bring me to the issue, also, one problem with having so many different communication channels, and as organizations that are kind of hubs for this information, how exactly they fit to disseminate out or create trusted channels that you know her launches will come to, so that we're not having to spend it out over five different social media. I

[Megan Sullivan]: think those are important questions of how we do that. I think if organizations are getting helpful information and it's never say branded in a way, but it's provided in a way. It's not like, if I get

[Jessica Hartleben]: something, I'm like, well, I gotta do a little

[Megan Sullivan]: prejudice. I'm gonna to judge this if we're gonna send it out. Then maybe it changes something, but if it's prejudged and Agency of Commerce are expert shooters, I will say, and you look at how they represent Vermont as place to visit, I think there's great opportunity there. And it is going to take some interagency working because these programs live in different places. But I think it's an opportunity to say how we're really communicating fast. I'm hoping this CPASE, this energy efficiency financing tool, I'm going to go testify about across the hall, if that gets passed. That's going to be a great new financing tool for modernizing industrial and commercial and affordable housing projects. That one I'm already like, how are we going to tell people about it? Assuming it's past week.

[Michael Boutin]: Veggie.

[Megan Sullivan]: We've talked about hygiene over the years. I think it is a bit of a self regulating program, right? Like when it's tough to find employees, you don't necessarily see as much uptake of it. But that doesn't mean we should shut it off because it is self regulating. People that are applying for it are doing so because they have a confidence they can grow in Vermont. And if they don't meet their targets, they don't receive the incentives. And it is really important for the businesses that have used it, of beta technologies. This was a key piece for them in Vermont. And I think part of the challenge about having that next conversation is when folks are always fighting about, will it end this year? The fight for folks to see this as a really important tool in the toolbox has to be about how do we preserve this incentive for what we have. And if we can say, like, we have this, and it's gonna work for some types of businesses and it's gonna work really well for them, let's stop arguing about whether it sunsets at the end of this year or not, that can really open up a fuller dialogue of, and then what do we need for times like right now, where employment is low, where demographics are challenging? And I think we would love to see that conversation happen.

[Emily Carris Duncan]: It was part of what

[Megan Sullivan]: came out of the policy retreats that we had this fall and where we've seen some companies who have been able to grow through automation are saying, our workforce is getting older and the manual input that it takes is more challenging. And automation allows those folks to stay here longer to upscale. And we see the stories nationally where automation can lead to job loss. I think in Vermont, what we see automation lead to is job preservation, business investment and growth. And so how we can look at supporting that is a really important question. Important for especially our manufacturing sector right now to be thinking about how we do that in a way that meats our manufacturers where they are right now because we're seeing some scary numbers. We'll talk more about what those numbers show in like tomorrow, but I think there is a pressing need to figure out how we support manufacturing stability and growth in Vermont. That needs the time. And so we have a proposal in here about some of the folks that should be at the table. We know that the treasurer has this 10% for Vermont fund, which is for housing and economic development. And there may be ways to do this that are different. I think manufacturers are a little bit less averse to debt, but if we can meet that lower low interest debt, there's opportunities there that recognize our financial districts in the state. So we have a proposal here. Happy to talk more about what that is or to incorporate into the report that's coming or if that's a report with a different stakeholder group that obviously includes the agency. That's what we're thinking. Culinary Institute. We totally understand where the committee is coming from with the amount of work that the office of workforce has on their plate. We do see this as really important for our hospitality industry. Restaurants have been talking to us for years as the Vermont independent restaurant group about the workforce challenges that they have seen since methi closed. And the CTE directors of culinary arts have been talking to us about it. Their students either have to go out of state, and there are programs out of state that offer in state tuition to those students. And that's really hard to get them back. It's brilliant by those other states. Or the equity question of the students that can't afford to go out of state because they need to live at home, don't have that option. The students that can afford can go that next level of training in culinary arts. Students that can't afford it don't have options. So if there is an opportunity to get to that next level of training in Vermont, we'd love to first get in that conversation.

[Jonathan Cooper]: Green Mountain Job is a program that I've gotten a lot of different feedback on, mixed feedback, more students graduating from University of Vermont, staying in Vermont. The last couple of years, they're finally gathering data. People are very excited about it. We're not funding it anymore this year. We've added money, maybe it'll stay in the budget for freedom and unity, which is so you don't have loans after. So it's really hard to know. It's almost like we misaligned almost incentives, right? Or maybe we're looking at two different things. Maybe it's the same thing. I'm not sure. Again, thinking out loud. We want more of our kids to have access to education. So we don't want them to be burdened with the debt. We also want these kids to stay in Vermont. And so is there a way to incentivize both? And that's really the thinking that I'm trying to kind of bring in here. Because getting an education, yes, we want that and we want you to stay right now. And so Green Mountain Dogs did that more than Freedom and Unity maybe, But is there a,

[Megan Sullivan]: I don't know. So I'm

[Jonathan Cooper]: just putting that out there as a let's keep thinking about this and let's figure out how we incentivize more at our kids to stay.

[Megan Sullivan]: Yeah. Well, I think that's the frame for me, the Green Mountain jobs, obviously it's about the student because they're getting the loan repayment, but the focus of that program was on the business. This was about being able to work business. In my Chamber of Commerce mind, that tool was about giving a business a tool to recruit college graduates to stay and work for them instead of going out to state. As opposed to the framing being, here's how we support the student with their bones. And so maybe it's looking at freedom unity as that second framing too of like, okay, well, is if we're going to make this an economic development tool, not just a student tool, how do we frame it that way? So I would say for me, the Green Mountain Jobs success is about that employer who's able to access a recent graduate that maybe they wouldn't have able that

[Michael Marcotte (Chair)]: tool.

[Megan Sullivan]: But happy to be thinking more about how we innovatively how do we use our programs as economic development tools. And where do we house? I think that's another important issue.

[Jessica Hartleben]: Okay. Great. Thank you for having me.

[Lyle Jepson]: I'd

[Ben Doyle]: be happy to. Is there any chance that John and I can co present? Sure.

[Michael Boutin]: Jonathan, should we be I was trying to follow-up my slides on to

[Ben Doyle]: Should we do that or can share the slides?

[Michael Boutin]: You should do the slides first, if you can't, if I can try it.

[Jonathan Cooper]: He's gonna come up and join you.

[Michael Boutin]: Yeah, I'm just trying to help with the slides too, so that goes.

[Ben Doyle]: Sorry, thanks for your geez. I work for historic preservation organizations, so technologies in Texas. Building a bridge to the nineteenth century.

[Megan Sullivan]: The tech stuff is always like anxiety

[Abbey Duke]: points. Kind of thing like this, the tech stuff is always like anxiety points.

[Megan Sullivan]: Those are the things Well,

[Herb Olson]: I mean, the device knows that you're anxious. You know? Yeah.

[Nick Grimley]: In just

[Abbey Duke]: the day of AI, I definitely know.

[Emily Carris Duncan]: It's taking advantage of it. I

[Herb Olson]: celebrate every time I actually post it. It's a Sunday.

[Michael Boutin]: That's the one I have to do. And

[Michael Marcotte (Chair)]: it all works.

[Herb Olson]: Yeah,

[Ben Doyle]: thanks. Sorry. I'm gonna share my slides. Thank you. Thank you. I apologize for that. Thanks so much for having us. My name is Ben Doyle. I'm the president of the Preservation Trust of Vermont.

[Jon Copans]: I think I've met with

[Ben Doyle]: you before about various issues. In this capacity, I'm representing the Preservation Trust of Vermont, but I also serve on the board of the Foundation for Resilient Montpelier. I happen to also be a member of the city council here at Montpelier. Can you introduce yourself?

[Jon Copans]: Yeah, and I'm Jon Copans. I am the Executive Director of Foundation for Resilient.

[Ben Doyle]: So what we're here today to talk about is earlier this morning, you were talking about the RIDDIP program and some changes related to that program that could potentially help support the redevelopment of federally impacted properties. And that's, I think, the most important thing to define right off the bat is what is a federally impacted property? We're suggesting that federally impacted property is some kind of property in Vermont that has been significantly adversely impacted by either government action or in many cases, government inaction. Federal properties either owned by the General Services Administration or by a federal receiver, play an outsized role in a number of our downtown communities. And the redevelopment of those properties, particularly as the federal government frankly receives from economic development at the state and local level, becomes enormously challenging. So what are needed are new tools to help spur that redevelopment. I'm going to very quickly specifically talk about 87, which is the federal building in Montpelier, the former post office. But I really want to emphasize that we're using this as kind of an example. This is a unique situation, but I fear that it's going to become a more common one, that's why it's important to have the kind of tools ready at our disposal. So I'm gonna talk about maybe the history of this site a little bit, and then John's gonna talk about at the commission the Montpelier Foundation for Resilient Montpelier, the work that we've done to try and move a redevelopment of this project over. So this is the believe it or not, this is the original post office in Montpelier.

[Rick Ufford-Chase]: It's not changing on It's

[Michael Boutin]: not changing on the screen. There

[Michael Marcotte (Chair)]: you go. There we go.

[Ben Doyle]: Just gonna do this. That's okay. Can you guys see that alright? Yep.

[Emily Carris Duncan]: This is the original post office, and

[Lyle Jepson]: I'll put

[Ben Doyle]: it This was this was built in 1891, Romanesque style, by a local architect. Again, was Christian's in 1891, and at the time, the Watchman, which was the local Central Vermont newspaper, said that this with the exclusion of this building that we're sitting in now, was the finest public building in Vermont. So this was a customs house, post office for many years. Here's another iteration of it. As you can tell, it really was an incredible gem. In 1962, progress marches on. It was decided that this building was no longer sufficient for the needs of Montpelier or Front State. And so this building was commissioned, designed by Julian Goodrich, a local architect in the modernist style. It does have echoes of the kind of classical columns, but clearly a very different style. It was completed in 1964, which you can see here. And this was envisioned as both a post office, a courthouse. There was a federal courthouse on the Top Floor, and then numerous federal agencies worked in this building as well. And full disclosure, I'm formerly the Assistant State Director at USDA Rural Development. I worked in this building for a number of years. Nothing ever happened to me. It's important to know that literally hundreds of federal workers worked at this building. I

[Michael Marcotte (Chair)]: worked

[Ben Doyle]: at USDA, we had 54 employees between the two jurisdictions of Vermont and New Hampshire. Now there are 12. None of them work in this building. Federal Highway Administration's in this building. Small Business Administration's in this building. The courthouse was in this building. Post office was in this building. It's a huge economic engine for Downtown Oculier. And most importantly, I believe, signaled federal engagement in our community and in our state. It was important for the federal government to be anchored in the capital of the state of Vermont. So when you see this, this was dedicated under Bill Hawk's administration, talking about that it was actually the symbol, says a quote here from Governor Hawk, Government rose almost before our eyes with the construction of this building. Here's a more recent photo of the building. And then as all of you know, in 2023, Montelier experienced a devastating flood, as did much of Vermont. This is a overhead shot of the city. And you see

[Nick Grimley]: the Federal Building right

[Ben Doyle]: here. This is the parking lot along Port Street, State House, of course, being over here. This is actually a photo that I

[Lyle Jepson]: took the morning after the flood

[Ben Doyle]: of Port Street. You can see that the building was completely inundated. It's important to know there was about four feet of water on the 1st Floor of this building. Of course, are basements, so those areas were completely inundated, about

[Lyle Jepson]: four feet of water on

[Ben Doyle]: the 1st Floor. Here's another iteration. In December 2024, the federal government This building is owned by General Services Administration that manages properties for the federal government. They announced that they were going to dispose of this property after already having done some remediation to the building. Frankly, we don't know how much they invested in this property to stabilize it, but we can surmise that it was significant. They completely remediated Bottom, they put back the utilities, the heating systems, everything was reinvested in this building, presumably with the intent to return federal workers and the post office to this building. They chose ultimately not to and to dispose of the building. And maybe from there, John, I'll let you take it, Do

[Jon Copans]: you mind advancing the slides? Sure. Thanks, Ben. So let me just give you some context about sort of who I work for, Foundation for Resilient Montpelier. You've seen pictures of the flood, you all are familiar with what this city experienced. Coming out of the flood, we formed an organization in this city that's not part of the municipality, but works very closely with the municipality. At the time it was called the Montpelier Commission for Recovery and Resilience. They hired me as the executive director in March 2024. And the idea around this organization was that it was singularly focused on the recovery and resilience of this city, and it had a two year charge to do that work here in Montpelier. In December 2024, the federal government decided they were gonna dispose of this building. And for lack of another entity in this city or in the state to step forward and really consider what was going to happen to this pivotal property, stepped in to play a role in really thinking about redevelopment of the property. And that included really engaging stakeholders and trying to marshal all of the forces we could and can to really think together about what is the future of this piece of property. And so the way the GSA process works is that before a building like this that they are disposing of goes to public auction, there is something called a negotiated sale, and that's really a misnomer, but the idea is that either the municipality itself or the state has an opportunity to purchase this building for a public benefit before it goes to public auction. The advice we got, and in fact, we quickly raised about $50,000 in private funds, hired two excellent real estate consultants by the name of Jeffrey Glassberg and Samantha Dunn, and part of what we quickly came to understand was that we really needed to use this negotiated sale process essentially to do due diligence and understand what are the opportunities and challenges with redeveloping this building. And so one of the things we did is actually we came over here last session. We worked successfully both on the House side and the Senate side to get $100,000 appropriation to Central Vermont Regional Planning Commission to supplement that $50,000 that we had raised privately. And essentially, we used the last year to do due diligence to really understand what the opportunities and challenges are with this building. You know, one of our goals, right, we're very focused on the resilience of Downtown Montpelier. Montpelier lies at the confluence of the North Branch and main branch of the Woduleski. The truth is our downtown is tremendously vulnerable. So is our capital complex, as you know. So one of our goals is to increasingly add to the portfolio of properties that can withstand a future flooding event. And that is really one of our goals with this property here at the Federal Building. A couple of statistics about it, it's got about 50,000 square feet of usable space. It sits on 1.6 acres of property. And when you think about sort of it's, right, it's basically equidistant from right here at the State House and sort of the core of a downtown at State Main Street. I mean, you all probably walk by this building on a daily basis. We think it has tremendous significance, not just for Downtown Montpelier and the vitality of Downtown Montpelier, but also very much in terms of its proximity to the capital complex as well, right? What we don't want and what we fear as a community is a building sitting stagnant for decades. And we think that's a very real and serious possibility, and that's why we're taking this proactive approach of really thinking about development. So our goals are two, one is to really reactivate the building itself. Essentially, it is a building that is, it has a ton of interior space. It's not a great candidate, and this is part of the analysis we did with due diligence. It's not a great candidate for turning into housing, because it's got all of that interior space, so really it is suited as commercial space. So our hope and intention is to reactivate it as commercial space, but then on the balance of the parcel, our analysis shows that we can fit about 70 to 80 units of housing on the back parcel. And so in fact, we've already engaged Vermont Housing and Conservation Board in a conversation. They are reactivating something called a land bank, and in part they're doing that with the hope, I wouldn't say quite the intention, but the hope is we would be able to essentially carve out the back portion of the parcel to add 70 units of housing right here in Downtown Montpelier. Again, that is something that is not just city priority, but I would argue a regional and state priority as well in terms of adding houses. So a couple of other things to mention. One is that due diligence process allowed us to better understand some of the environmental challenges of the building. In fact, we hired a local firm that coincidentally, and this was a really lucky coincidence for us, fortunately they had a subcontractor who had already been in the building on behalf of GSA, and they had already done a report for GSA. If we did not know that fact, we wouldn't have asked for that report. Sadly, what that report shows is there's a pretty significant level of PCB contamination in this building. So that's one of the other wrinkles. That never would have come to light if we hadn't been able to use that due diligence time and worked with an environmental consultant, again with the use of state code to do that. So at this point, GSA offered to sell us the building for $2,400,000 and I tell you, us, it was really the agency of commerce and development that raised their hand to say they were interested in negotiating. We don't think 2,400,000.0 given the environmental contamination did not make any sense financially. And so essentially, we were no longer interested in negotiating at that and frankly GFAC showed no indication that they were willing to negotiate off of that $2,400,000 They essentially have brought the negotiated sale portion of the process to a close, which means that the building is headed to auction likely on the spring or summer timeframe. We are doing two things at this point as we prepare for that scenario. One is we are actively recruiting people to form what's called a local development corporation, because that is essentially the vehicle designated in state statute by which we redevelop properties like this. There are many examples, all of our RDCs are actually already local development corporations, but there are also examples where other local development corporations are formed for the explicit purpose of redevelopment property. We've had very productive conversations with a number of entities about forming the board of that local development corporation and the function of that LDC will be to acquire the property and then to carry it through a redevelopment process. And so when we talk here today about this RIDP program, we I think really want to impart upon you all why we believe this is vital for the

[Emily Carris Duncan]: future of our state

[Jon Copans]: of Honkiel here, and not just that but also for the capital city. Yeah, and I

[Ben Doyle]: would just say, one point I really kind of want to bring home is that we believe that the changes to the grid X program in general from an economic development point of view are good ones, right, to see greater uptick in the program and not have capital just sit there and not be deployed. But we believe that the federal set aside or federal criteria are required given the extraordinary circumstances that we're dealing with. The reality is, not to put too fine a point on it, is that the federal government has left a giant burning dumpster fire in our downtown and just said, it's an as is where is sale. Good luck. And that's just unacceptable. And we at the local level have done really everything that we can. We've been working on this for years now, trying to make something happen. But the reality is we need public investment and we need the state to provide the opportunity to do that. We know that in the previous legislative session, there have been funds set aside to mitigate federal cuts and impacts. We believe that this is one such instance, but in this moment, there's capital sitting there in the fund right now that we think needs to be quickly deployed. Similarly for our partners in Newport, it's a similar situation in which the actions of the federal receiver really have left Newport in a lurch for over a decade at this point. And Montpelier, Newport, these are critical downtowns in the state of Vermont that require, frankly, a fair shake to be able to move forward. And that's really what we're asking for. To John's point, the fact that we were able to do this due diligence with the support of the legislature and discovered that there is significant environmental contamination, that GSA won't even let us into the building to categorize, that means that there's no private market solution here. No one, no responsible investor is going to purchase a building without being able to have an opportunity to understand the environmental contamination. We would be willing to go out to corporate partners, community, and say, we wanna raise capital to buy this building. We can't do that in good conscience without having it categorized. By putting it in the ownership of an LDC model and doing the purchase in this way, we're providing the ownership structure that allows us to do that brownfield categorization and have access to funding through the Brownfields program that can really help make this development happen. And I'm looking at Representative Cooper here, the way that I've been thinking about this is this is our Putnam block moment. This is the Brooks House moment for Montpelier. It's that kind of all hands on deck moment that is gonna be required to move this forward. And we believe really after years of looking at it, that this is the best tool available to us to get this ball rolling. I really respect my colleague,

[Lyle Jepson]: I'm sorry.

[Jon Copans]: Lyle, I just want to say Lyle.

[Ben Doyle]: My good friend Lyle, I totally appreciate the idea of wanting to have a match and skin in the game. I need you to know we have skin in the game. Redevelopment of this size is going to take literally tens of millions of dollars. What we need is our foot in the door to be able to get acquisition to really make a run at that redevelopment.

[Michael Boutin]: So I wanted to ask, I know that you've done all this homework already, so this will help me just catch up. The federal government must have to conform to

[Jon Copans]: mean, wow, we don't

[Michael Boutin]: have to worry about the circle stuff, they can sell the tenancy bill. They don't have that obligation as a

[Jon Copans]: They have literally said there's nothing in the law that prevents us from selling. The

[Michael Boutin]: exact same way.

[Ben Doyle]: We haven't worked for the attorney general's office. With D and C. We really

[Jon Copans]: We will engage the building in the RELA program. We're doing all of the steps to deal with after the fact that really in any commercial real estate transaction, you're going to have the opportunity to inspect and to characterize contamination. This is not a conventional real estate transaction because it's a federal government.

[Michael Boutin]: Which was the so I know the GSA is in this right now. Was it the Postal's USPS's home? Which federal entity

[Ben Doyle]: had the building? GSA has always owned the building. Postal services was just a tenant or really a leased space in the building, as did Federal Highway Administration, Small Business Administration. So

[Jonathan Cooper]: I really appreciate the thinking right behind this, the planning behind this, the desire to ensure that Montpelier doesn't end up with buildings that are closed off, right, boarded up, all of that. I think that's incredibly important. And without understanding the cost, This feels really financially scary, red flaggy. I don't know how to characterize it. I don't have the words for it. And I'm just, how

[Jessica Hartleben]: do we make sure that we aren't

[Jonathan Cooper]: supporting a project? Right. That is, and maybe it's not we, maybe it's me. But what happened? How do we do that?

[Ben Doyle]: Yeah, I really appreciate that question. I like to think of this optimistically of there's an enormous opportunity here to redefine the economic engine of Downtown Montpelier with housing and flood resilient housing. So there's this optimistic vision behind this that it feels great. On the other hand, what we're really trying to avoid, as John said, is to see this go to auction and an undercapitalized speculative investor purchase this building and then handcuffed to do anything with it for decades. We could walk within five blocks of this building and I could show you a half a dozen buildings that are sitting vacant because of undercapitalized speculative investors in this community. To answer your question, the only way a responsible redevelopment of this site is going to happen, I believe, is through this LDC structure with a public private partnership. Even if a private investor comes in and purchases the building at auction, they're still going to want access to the financing available through VITA that an LDC structure provides or access to Brownfields funding or the fact that if it's owned by an LDC, it doesn't have to pay property tax during the redevelopment. There are all these economic development tools that will be available as a result of this investment. I hear you, it is scary, but the point is, this is where, and this is a philosophical thing, but this is where the federal government has failed us. And this is where the local government does not have the capacity to step in. And so that it really falls to the state to make this initial investment. I believe that we can take two years to put together the development group that can move this forward. We're talking to downstream, to Evernorth, to all of the partners on the LDCs. I think that there's the opportunity to do it, but it starts with site control and remediation. And that's what this investment would allow to happen.

[Jon Copans]: The other point I would make is that, in fact, our environmental consultant is giving us a range for cleaning up the basic piece. That range is somewhere between 1.1 and $3,000,000. That's a lot of uncertainty when you're going in, if you're a private purchaser of a piece of real estate. But we actually, we've gone through the pro form a exercise of considering, okay, if it's 3,000,000, what are the public sources for doing the cleanup of that contamination? And then what are the other investments we need to make to make the building more resilient? So in fact, we do have a better sense of what the costs are when it comes to what we develop. This is really what we're talking about here is the first piece, which is acquisition so that we have site control because without site control, we can't start on that remediation path. And then the second piece is some holding costs because the truth is a building like that needs to be looked after, it needs to be cared for. We don't wanna simply have money for acquisition. We really have to have money to hold the building for a few years if we kick this into care.

[Jonathan Cooper]: And I appreciate that complete planning, right? Because personally, after the flooding, I understood why Montpelier needed to rebuild where it was and all of the red flags of how do we afford to maintain Montpelier where it is in perpetuity, because we know it's going to flood again. So, like, it's, yeah, we're in a lot of Canucks.

[Jon Copans]: Well, and I might say here, we're answering that exact question related to the Capitol Complex. Think about the millions of dollars of damage to the pavilion and other buildings in the Capitol So in fact, BJS has charted the ports there. They're still working with FEMA, but, like, you can make these buildings that are vulnerable vulnerable to flooding resilient to flooding. That is possible. And in fact, that's our vision for the future of this city. And 87 State Street, the former post office, is one of the places where we really want to do that work.

[Ben Doyle]: And just to get real, like, technical on it, these are, you know, the original drawings of the the building. We've contracted with architects through the Regional Planning Commission to actually do what would it take to mitigate this building against future flooding. This first story is actually about a 20 foot ceiling. And so you could actually elevate the floor to a foot above flood stage and then change the entryway so that you actually could make this building. When you look at the transit center here in Montpelier that has affordable housing above, that building wasn't damaged. It was built in such a way that it was flood resilient. We believe that this building could be mitigated to do that. And then when you look at this, and this is just massing. This isn't really what it's going to look like. But this contemplates two decks of parking down below so that in the future, if it were to flood, yeah, it would be a mess and

[Jon Copans]: you'd wash it out. But the

[Ben Doyle]: point is that you would have the housing that was up above would be flood resilient and those people would be safe.

[Jonathan Cooper]: It's easier to replace a car

[Emily Carris Duncan]: than a building. Exactly. Or a home. Whole discussion is also making me sit here and think about if this is an issue about publicly owned buildings, both federal or local or state owned buildings. So it also is tiptoeing into the education conversation and the potential for towns, cities, municipalities to be on the hook for a variety of publicly owned buildings.

[Jon Copans]: And wondering what kind of

[Nick Grimley]: forward moving plan we have

[Emily Carris Duncan]: to help towns mitigate these issues.

[Michael Boutin]: We'll just be probably on the of the LDD segmental housing to spread this index and this is not something you know.

[Emily Carris Duncan]: That's also part of the conversation Yeah, for I think

[Ben Doyle]: our involvement is to try and ensure that something actually does happen. And by having an LDC with a board of directors from local institutions and local partners, help shape a public benefit. And we primarily see that really as

[Emily Carris Duncan]: the

[Ben Doyle]: housing component we feel is the number one public benefit. But to answer your question around the tax base, absolutely, Montpelier has a stagnant tax base and has for a very long time. And again, we believe that building in our downtown core where we already have infrastructure in proximity to the two state government is a way to increase economic vitality and ultimately the tax base. I mean, right now the federal government is not paying taxes If on that we were able to get it into privately held hands, put it on the tax rolls, that would be a benefit for her.

[Jon Copans]: The

[Michael Marcotte (Chair)]: PCB, it's very concerning. You know, we're going through that issue with the work with, you know, Tempe High School and we're at a point where we've, I think, state has invested $8,000,000 and tried to remediate it and it's not working. And now we've found it's in the ground as well, and I don't know how in-depth your report is that you receive from GSA, but we're at a point where we have to tear it down and rebuild on another piece of property. And so, it's concerning of, you know, just a one point a $1 to $3,000,000 remediation. I'm just wondering how bad the PCBs really are and would you have to take the building down or would you just build on property?

[Jon Copans]: Well, so step one is it'll cost about $150,000 to fully characterize the PCBs. There will be a decision point for the LBC at that point because then we will know much more clearly what the remediation costs are. It's entirely possible that they look at the economics of actual remediation and they say, you know what, it's more viable in terms of what happens with this parcel to actually demolish and remove that material. So like, we don't want to get over our skis in terms of the key is we have to take ownership to fully characterize the contamination and make some hard decisions about it.

[Michael Marcotte (Chair)]: I guess from our experience at North Country, there's no way to remediate PCBs. We've done a whole bunch of different things, painting and trying to seal it, it doesn't work. And where are we at? Big charting line?

[Jon Copans]: In some of the other drawings we've got actually show the massing we see here, you take that building out and then, you know, it creates another opportunity. Right? Yes, it's a challenge, but it's also another opportunity because frankly turning that into a green field as opposed to a brownfield that could actually be advantageous in terms of large public bathroom.

[Michael Boutin]: I've been sort of cheered by Bennington that was transferred into this whole ownership, did undergo some PCB remediation, and was that mix of paints, etcetera, agreeing on what an appropriate level is now that we're in the twenty first century, and we had to go to the twentieth century to get there,

[Rick Ufford-Chase]: and that means these things are very hard.

[Michael Boutin]: Let's be careful about where we put the picture, know, of that nature to like, know, dealing with the scenes and

[Kirk White]: the paint. What I was wanting to hear a little

[Michael Boutin]: bit more about if I could, is what the timeline is for when you would need to have what we're discussing now, that sort of capital deployed to do what? Would you have to have that by this time of year, that time of year? And the reason I wanna mention all that is I'm thinking back to the Putnam blocking, that in 2014, with a little

[Lyle Jepson]: bit of

[Michael Boutin]: leftover childfeeds money, the town submitted a area wide plan. That was something that existed within that sort of Brownfield Street EPA sphere to get a sense of what do people wanna see that public process that highlights where a focus ought to be for any subsequent development entity. And what came out of it

[Jon Copans]: was where we thought would come

[Michael Boutin]: out of it there, in this area, but that did give a kind of ballast to institutions in the area, to potential lenders, etcetera, that there's been a process by which we all get nervous with real estate development in Vermont, that someone will butter, someone will throw, will pull the rip cord, and the whole thing goes into an appeals process, and now we're delayed for the sixth or seventh time. And this was giving people some sense of community support for a project. I doubt that you're Latin for community support, but I'm just curious how that has been kind of working with the RPC, working with the entities, how we're getting that sort of momentum to show as well to people that are looking at the project and the outside looking in. That's also why I was interested in your time taking it for when you would be looking to deploy things in your capital.

[Ben Doyle]: I think maybe that is the question to start with, is that we're driven here by GSA's timeline, right? Like that is reality and they're not changing their timeline for us, right? So the auction, the building is listed as coming soon. We anticipate the auction opening in May. May timeframe. Sixty day auction. Sixty day auction and then if we had a successful bid, we'd have to put a 10% down payment down and then I believe we have sixty or ninety days to close in. So the robust community engagement process that you're really talking about to get buy in, I I will say I do sit on city council, we've updated city council on this. The commission that the Foundation for Resilient Montpelier just started after the floods when 1,000 people in Montpelier came together through community forums to talk about what is the future of our city? And this has been one of the most visible projects that we've been a part of. People are aware of it. I think there is a lot of anxiety of like, wait, is the city buying the post office? No, that's not been happening, but I think there is support for it, but the timeline is forcing us to deploy capital now to get site control, after which point we're gonna have time to categorize the contamination, make those hard decisions that John was talking about and fully engage the public about what do we wanna see here. It sounds

[Michael Boutin]: like there's public mandate there. It was what I

[Jon Copans]: was over here. Honestly, this is not a city that is afraid to debate certain projects. This is not a project where we find much public opposition to the role that we are playing and the vision we've outlined, which is just sort of reactivating the building and putting housing there as well. I would also say having conversation with potential partners to form the LDC has been positive And they have a sense of the commodity and they're not about to wade into a project that they feel like, oh boy, we're gonna And so to some degrees, those are some key stakeholders around the table as well.

[Ben Doyle]: Just to kind of bring on one of your time, and I know that we've got Rick here too, is just that we really believe that these changes to the RIDDIT program are necessary to address this very specific, really disaster that's of the federal government's banking. And it's instance like this where we don't currently have a tool in the economic development toolbox to address these things. This tool seems appropriate. We hope that this fund will continue to be recapitalized by the state, and ideally there will be revolving funds in nature. But the bottom line is if we don't, as a state, invest in these signature downtowns and these transformational projects in an appropriate way and an appropriate timeline, we're going to be setting ourselves back years.

[Emily Carris Duncan]: Yeah, I know that I appreciate that you guys are really up against it. I'm hoping that you're also getting some help from our federal delegation. Definitely. It's awesome to hear. This probably, given the timeline, isn't going to be it, but I do hope that this opens an opportunity for us to think about what a framework for insisting these public, mostly PCV driven buildings into the future, because they are falling on the dominant demands no matter how you got it. Totally. And I will

[Ben Doyle]: just say, as a quick aside, last year for the Rural Caucus, the Conservation Trust put forward a series of

[Jon Copans]: case studies of public school buildings that

[Ben Doyle]: have been transitioned to public use. I do believe there's this kind of anecdotal sense of like, well, it can be a community center and that'll be wonderful. And yet, are we resourcing those communities to be able to, number one, make that transformation and two, to sustain it. What's the business model that doesn't require public subsidy? Those are really important questions.

[Emily Carris Duncan]: Yeah, I have one in Wilmington that's doing amazingly well, but they also, because we're experiencing shifts in demographic and brand list values and that sort of thing, it shifts what money is available to them. And it's taken over a decade

[Nick Grimley]: for them to get into that. Absolutely.

[Lyle Jepson]: You, Thank you.

[Michael Marcotte (Chair)]: Thank you, Jessica. You're very welcome.

[Rick Ufford-Chase]: Yes, Jessica, thanks for your participation.

[Megan Sullivan]: Good morning, everyone. Good morning.

[Rick Ufford-Chase]: And thank you all for your long attention to this conversation. I'm Rick Effer Chase, I'm the mayor of Newport, and I'm here representing a totally unified city council, which should be given our case is important to say because that has not always been the case. It doesn't even recently been the case. I mean, we have an entirely new council in the last two years and mayor, and this council is united in their commitment that we are gonna change Newport's story. And we've been working to that end for some significant time. We spent the year of 2024 creating a new detailed master plan that lays out an ambitious plan for the next ten to fifteen years of Downtown Newport's development. We do that because there is really no other option for Newport to have a future other than a revitalization of our downtown. This is a city that's roughly seven square miles. Almost all the land in the city has been developed in one way or another already. We have 4,400 residents. We're the ninth highest taxed city, our tax rate in the state of Vermont. In one of the poorest communities in the state of Vermont. Our median income, I think this year is something that's somewhat

[Emily Carris Duncan]: in the neighborhood of $48,000 household income in Newport.

[Rick Ufford-Chase]: So we have, there are just a huge number of challenges in front of this community. There's no way out of it in my judgment after a year of serving as mayor and being deeply inside these questions. The only way out of it is a long term strategy for redevelopment. That detailed master plan called for four ten units of new housing to be built in our downtown core, which is basically three blocks of Main Street and then crossing the Causeway for those of you who know the community and going north as far up through the Waterpark Plaza area and up to Eastside Restaurant. In addition to that, it called for something like 90,000 new square commercial feet of space and retail facing, a new hotel on the waterfront, the only hotel that would be really oriented toward visitors and our downtown core and a lot of other stuff as well. It's really quite a remarkable feat or challenge that's before us. So, question is what has to happen in order for that vision to be realized? The city council passed that plan in December 2024, but roughly fourteen, fifteen months ago now. The next month, we signed a contract with Weidenberg Real Estate Advisors to explore the possibility of a tax increment financing district for our downtown. We have been working those numbers and having a lot of conversations weekly with a lot of people trying to make the numbers work. And though I don't think our advisors at White Merck are quite ready to put their feet down and make this statement quite as boldly as I would. It's my judgment after working with him for a year, by the way, I think they are phenomenal people. Stephanie Clark is our lead partner in that work and she's been amazing. My judgment after a year of doing this work is that short of some economic miracles that we can grab out of a hat somewhere, this cannot work. Newport just doesn't have the ability to create enough increment to cover the level of public infrastructure development that would be necessary to turn this community around. And that really is the framework for why we're here to have this conversation with you this morning. If we could take the big ticket items off the table, the purchase of the distressed block that's now been controlled by a federally appointed receiver for the last almost eleven years now. If

[Emily Carris Duncan]: we

[Rick Ufford-Chase]: can get that off the table, if we can do, who knows how much, but roughly 3 to $4,000,000 worth of public infrastructure work, that would be subsurface water and sewer and above surface transportation funding needed to redevelop that three block long corridor of our downtown in order to allow all this other development to happen. We can get that off the table. If we could get the cost of a new parking garage, which we envision going on this block as kind of a foundation for a mixed use building that would have maybe 80 units of housing and maybe a courthouse beside it, the state, if we could work that out with the state. That building is gonna cost us, we figure somewhere between 9 and $12,000,000 And there's no way in the world that we're gonna create enough increment out of TIFF to try and make that garage happen. So we've just been invited by NBRC to work out a full on proposal for a $3,600,000 project to do the street work of which NBRC would be potentially available to help us with $3,000,000 of that project and 80% match on to do a bunch of that infrastructure work. We've written proposals in the last two weeks with help from some of the folks in our federal delegation offices to senators Sanders and Welch asking them to consider the possibility of a congressionally directed spending grant between their offices of $9,000,000 to help us get this garage built. If we could get those two things done and we can get control of the block, which we figure is a million dollar project. And I'll tell you more about that in a moment. Then maybe there's a way that we can make the rest of the TIF opportunity work for the community. And if we can't, we are not done. I wanna be really clear, whatever decision gets made here in this legislature, we are not gonna back down. This community wants to take control of its own destiny. It's been the object of forces beyond its control for far too long. And one way or another, we are gonna turn this community around. How long that takes is the primary question. How we're gonna do it is the big money question for us. So what's going on with the development block as we prefer to call it, as opposed to the pit or the hole. We have been in post conversation with the court appointed receiver, Michael Goldberg, since July, who

[Emily Carris Duncan]: drove to Boston last summer, three of us from the city of Newport and met with him in an office in Boston

[Rick Ufford-Chase]: to begin to build a relationship. We've communicated with him basically monthly ever since. I spoke with him as recently as yesterday in person, not in person, but actually at video conference. And yesterday I said to him, I think that there is a way that with help from the state and the RITA program, we can make this thing happen. What's the number that is going to make this work? Because I'm not gonna go negotiate with our colleagues in Mont Pelier for a number that isn't going to work for you. And he said, don't bring me anything that doesn't have a one in front of me, which is to say we're talking about a million dollar purchase price on this plot, which is roughly what we had been assuming. We made an offer just so you know, on this property at about two thirds that price or three quarters that price back in November. But it was an offer contingent on a TIF approval because the only way we could have funded it was state TIF. And basically he said, yeah, that's not gonna work for me. I'm not taking one, the offer's too low. Two, even if it were high enough, I can't afford to say yes to you and then wait to see if the TIF process works itself out. The other thing he said to us yesterday was he is insistent that this project, the judge is becoming insistent that his work the EB-five scandal related properties has to be complete by the end of this year. And we are the last project on the table. So we have a very tight timeline. So what are our options? We have effectively almost no resources. There's no tradable asset owned by the city of Newport that we can use to try and make this project happen. We're sitting on about $300,000 or a little bit more than we have shepherded very carefully in Walmart money that we took in when the Walmart was built in Derby. And so there's money still sitting there that we are using basically as matches, wherever we can get grant money, we use that money as a match to try and get things like renderings of buildings drawn or engineering studies on the block that we're talking about. So we've been spending that money and shepherding it very, very carefully, but it's not enough money to make a serious dent and to purchase price of this property. So really there are no other places to turn in my judgment. We've turned over every rock we can think of. I will also say that when I became mayor a year ago, I think I came and met with you all just about that time. If I looked a little shell shocked then in hindsight, I had good reason. I discovered, we discovered in the course of a serious level of investigation over the last year, that a series of missteps by city leadership had dug a very deep, we've just about driven the city financially over the cliff. We have gone back to the voters and gotten permission to manage accumulated deficits that total well over $3,000,000 plus the cost of another $2,600,000 that we just got approval for a bond from the Vermont Bond Bank to pay off a water tower that was approved by the voters five years ago. That's now complete, but had no one had worked out the financing on that. So in the last year, I've signed an awful lot of loans as recently as last week with that $2,600,000 loan. So what I can tell you is that while we don't have any money sitting there as assets, we have our shit together. We understand what our problem is. We've dealt with the accumulated deficit. We've created a new chart of accounts that is intelligible to the average person so that the city council can get reports out of a renewed, in a new, using Nemrack in a new way, and we actually can see what is going on. And we passed a budget that I am fully confident is actually based in reality for next year, as opposed to the budgets we've passed for the last eight years, which have been entirely divorced from reality. This city in the water and sewer budget, allowed a $500,000 a year deficit to go unchecked for the better part of eight years without raising the rates. Those days are gone. We're taking the political heat. We've raised our sewer and water rates by over 40% in the last year in order to make sure that we are no longer deficit spending in this community. And our budget for this year, we had to increase it by 11% over last year, seven percent of that increase was entirely attributable to payments on debt that we had to take on in order to manage accumulated deficit. So I say all of that because one of the things I've been really clear about with everyone locally and here in Montpelier is I will not lie to you about the situation that we confront. We have big challenges in front of Newport. And if we wanna turn this community around, it is not an overnight project. I cannot promise the people of Newport that they're gonna see their taxes go down next year or the year after that. The only solution is a long term development strategy that creates a downtown that returns to its once held role as the downtown for all of the Northern NEK. So really, we're not trying to build a downtown for 4,400 people. We're trying to build a downtown for 20,000 people who orient like my family has for generations from the village of Lowell toward Newport for all of their economic activity. So here's our bottom line, without this project, without the writ of support, I see no way that Newport digs its way out of the first step of this hole. With this support, if we had a million dollar or close to million dollar commitment from RIDDIP, we can see our way through from how we get from here to a purchase and control of that block before the end of the year. And yesterday, Mr. Doldberg made it clear to me that he has no intention of going looking for another buyer. We are the option that he is most committed to if we can meet those terms of the timeline and the $1,000,000 price tag. If we don't change the 50% threshold, I'll just say, Milo and I spoke as recently as yesterday afternoon and while we may be playing a little bit of good cop, bad cop this morning, we are clearly united in our desire to see Newport turnaround and we will do whatever it takes. But if we don't get, if all we get is that 50%, then we're gonna have to go look for the other 500,000 somewhere else. The best way to go at that at the moment appears to be in my judgment, a difficult but potential plan. And I'll just rehearse that. Basically, if we got $500,000 through RITA that is going to NVDA Northeast and Vermont Development Association is our primary economic development partner and they are fabulous partners. They are more than happy to play this role. Then they have turned in an application to a pre application to NBRC for another $500,000 The challenge that creates for us is twofold. On the front end, NBRC money triggers the need for a full NEPA study that is likely drag on for months. Even if we fast track it, it's likely to drag on for months. And I don't have confidence at this point that we can make this happen on the receiver's timeline with that challenge in front of us. On the other end, it creates another challenge, which is that once we take NBRC money, it means that NVDA or the municipality have to hold control of that property for twenty years, which ties our hands in our very next conversation, which is who's the developer that's gonna come in and help us to develop what needs to be on that property. Can those problems be overcome? Yeah, I mean, I hope so. And we will do everything possible to make that happen. But the truth is my number one priority right now is I need a million bucks to get that property under our control. Last thing I'll say about that is that we know what it looks like if we don't get control of that property. Ben was describing it, what it looks like here in ocular. We have two properties currently owned by private individuals that are vacant and one of them has been vacant for a decade and allowed to simply fall down around itself. We cannot allow this key linchpin property for the city of Newport to languish for another decade. So this is our moment. We have the political will locally to make this happen. We have phenomenal partners at the state level and here in legislature. Every single one of our delegation from the Northern NDK is rock solid in their support that this is the only way forward for the city of New York. And we've got a receiver who is anxious to deal, which Newport has not had. I mean, Newport has been the last in a very long line for a decade now while he's been working on these other issues. So I've dumped a lot on you. I'll stop there and take any questions air any other dirty laundry you'd like to hear about.

[Michael Marcotte (Chair)]: Questions for the mayor?

[Michael Boutin]: I know Because I disagree.

[Emily Carris Duncan]: I told Lamo, he can leave

[Rick Ufford-Chase]: on speaking for him, but here on out.

[Michael Marcotte (Chair)]: So,

[Herb Olson]: he inspired me thinking, what the chair said, I think about an obligation on the part of federal and state government to clean up the mess or the mistakes or whatever, might not be a legal obligation, right? But I think it's a moral obligation and that counts for a lot, certainly in my mind. So, that needs to be, I'm wondering, so that's one point, separate point. You're looking for a grant of million dollars. Usually, have, and I'm sort of mixing moral obligations, legal obligations and stuff like that. Have you talked at all with the corrections and institutions around that kind of an issue? They found a lot of obviously state capital, kind of stuff. This isn't quite that, it's not state. But then I'm getting back to the idea of, it's a moral obligation. Have you talked about that, your need with them at all?

[Rick Ufford-Chase]: With corrections and it's, you're talking about with

[Herb Olson]: I'm talking about the capital.

[Michael Marcotte (Chair)]: Discussions been had with BGS.

[Rick Ufford-Chase]: So if you're talking about BGS, we've dialogue been with BGS on an every other week basis since August. So I meant to start and I should have started with a comment that Secretary Clark, Secretary Kerley, and Commissioner Justin, Commissioner Rinoldi have been significant and important dialogue partners for us for the last ten months, almost nine months. So we're meeting with them and with their staff regularly. And part of our development vision for that block is that nearly half of it or half of it will end up being a location for a new courthouse that everybody knows we need in Newport. Yes, we're definitely in conversation. One of the challenges we have there, we actually started the conversation last fall with BGS about the possibility of Newport trying to purchase and subdivide to make a property available. Then we talked about, well, maybe it's BGS purchased the whole thing and makes part of it available to Newport. Honestly, the problem there is timing. It just takes, there's wheels of those processes grind exceedingly slowly. And so given the urgency, we're anxious to get this deal underway with the receiver. And if we work it out by the end of the year, my guess is NVDA buys the property. They do phase one and two mitigations, ground floor mitigations on the proper testing, and then begin to do mitigation. And then we divide the property and look for a way to carry on the conversation with BGS about a possible work facility there. Other

[Michael Marcotte (Chair)]: questions?

[Jonathan Cooper]: I, again, appreciate the thoroughness and

[Jessica Hartleben]: the not

[Jonathan Cooper]: sugarcoating situation. Truly appreciate that and I wish more people came here with that unvarnished perspective. One of the things probably has nothing to do with us or this committee, but one of the things that comes to mind is vacancy taxes or on those kind of things. Can Newport do that on its own? Is tool that that you can do?

[Megan Sullivan]: I know that's outside of our

[Rick Ufford-Chase]: Are you asking about taxing vacant properties?

[Megan Sullivan]: Yeah.

[Rick Ufford-Chase]: So one of the things that I should add to my unvarnished storytelling that we haven't had a city manager in a year and a half. So I've been acting city manager for the last year and it's given me a very, very deep and intimate look into the kind of the workings of all kinds of stuff, including how we manage vacant properties. In my judgment, we are not managing them well. And it's on our list of things that the council wants to work on this year to try and figure out how we're going to begin to look at blighted properties and create enough cost so that it's worth people's while to make sure they don't become blighted. It's a priority,

[Emily Carris Duncan]: but it's not yet risen to the highest level of priority.

[Megan Sullivan]: So

[Herb Olson]: when you're looking at the stress properties, things like that, and I think there's some legal structures for dealing with that. Have you encountered any obstacles in terms of being able to access those statutes to deal with distressed properties and being able to acquire them so they can subsequently use them for commercial housing? I think it's unlikely that we're gonna end up in

[Emily Carris Duncan]: the business of trying to acquire those

[Rick Ufford-Chase]: properties. Likelihood is that what we're doing is forcing a sale. Yeah,

[Herb Olson]: no, I understand. It might not be right on point, but I got roped into a working group, a land bank kind I of think it's mostly for us, it's on housing, but they raised a bunch of different procedural issues for any owner, whether it's the city or some other entity, to be able to identify, show that it's distressed and then work through the process. Does any of that come up on the radio screen?

[Rick Ufford-Chase]: No, effectively not yet. Mean, will say that we've got a downtown that is a third vacant at this point. We also have some really key assets in our downtown. Pick n Shovel is an incredible asset. The work comments at Green Mountain Natural Food Cafe. So we have some really committed business people who are really working with us to help try and bring this downtown back to life. We have a couple of key properties, the most significant of them being the JJ Newbury Apartments store building that is literally, I mean, it's been unattended for so long that we're now worried about safety. And the conversation we wanna have with the owners on that one is, look, let's just make either sell it to someone who wants to develop it because it's a clear development opportunity or bring it up to speed yourself. You gotta do one or the other or we're gonna make it painful for you. I think those are the kinds of conversations we're about to have.

[Emily Carris Duncan]: What, so you're a weak mayor system?

[Rick Ufford-Chase]: Yes. We should have a city manager. Our city council has had a a a city manager council form of government since 1967. And we are right now in a we just started a search with Dominic Cloud from VLC team. So I expect that we God, hope we'll have a city manager in place by the June. Bless your heart.

[Emily Carris Duncan]: Sorry you're having to go see that.

[Lyle Jepson]: Yeah,

[Emily Carris Duncan]: sorry. And as for the JJ Newberry's building, I feel you're paying on that because we had our JJ Newberry's closed down.

[Rick Ufford-Chase]: Yes, I was, you're in Berry's. Yeah, I've been watching the Berry conversation too. That's been a lot of interest.

[Emily Carris Duncan]: Do you have the same problem with the owner of the building? You can buy it for $1,400,000 So I don't

[Rick Ufford-Chase]: know yet because we haven't had serious money to put on the table what that owner might really be able to be willing to accept. I'm not sure, but we're trying to maintain a positive relationship there and I've been in conversation with the RM most times. So I think a lot of what we got, we just keep saying we need our first crane on mainstream, honest to God. We just got to show people both locally and developers that yes, Newport has a trajectory that's headed up and not down. I think some of those folks will likely come around in that process. So

[Michael Boutin]: think sitting back to the opportunity zone. Yeah.

[Rick Ufford-Chase]: The word yes. If you have

[Michael Boutin]: that made an important decision, of the two sides stretch, of them both for auctioning zones. What kind of thing? How do you help zones work out in state? Is very much one market to the next. Did you see much action to opportunity funds qualified investors to that? Because they're only telling you, so it's hard to know sometimes, but I was wondering

[Rick Ufford-Chase]: how that played out. So I'm new enough to not really be able to fully answer that question. I've only been on the scene really in Newport for two years, but my judgment is that Newport was not, for whatever reason, was not able to really capitalize on the opportunities in the previous iteration. My hope, I have a lot of hope actually that in opportunities on two point zero, we're gonna see a new day.

[Michael Boutin]: So that sort of thing of where working with entities like, okay, where are we gonna go to new market tax credits, appetite for that, really animated by changing the tax code. Opportunity comes up. But I'm just curious if you're thinking along the lines of where do we take this? It's so hard to focus on acquisition and then we're ready to go to it.

[Rick Ufford-Chase]: That's a great question. Yes, the answer is absolutely. We've been meeting with developers since, actually since before August with one developer in particular. And one of the challenges that is really clear is that let's say we get control of this property. The truth is that right now getting numbers to pencil for any developer on any project in the state is not an envious task. Like it is hard, hard work. So we know that we're gonna have to do herculean effort every single step

[Megan Sullivan]: of the way. One of the

[Rick Ufford-Chase]: things I wrote in my notes, as I was thinking, as I came down this morning, I was thinking about what I wanted wanted to say to y'all. And one of things I wanted to make clear is if we are to be successful, there will be a series of heroic movements that have to happen from now through the next ten to fifteen years. And I can't even begin to foresee most of them. But I'll tell you what, this is clearly the first, right? If I can get us over this first hurdle, it keeps us in the game for the next conversation, number one after that. And what I can commit to you is that this is a community whose time has come. They are clear that they're ready to really take this on.

[Michael Marcotte (Chair)]: The other question for the mayor.

[Rick Ufford-Chase]: Great, thank you. I am so grateful be invited into this conversation. So thank you all. It's nice to actually begin to feel like I have some people around the table that I recognize the last couple of years. And Jessica, I apologize for you because having made you wait so long, I have to rush back to Newport. It's great to see you all. Thank you.

[Jon Copans]: Thank you.

[Lyle Jepson]: You.

[Megan Sullivan]: And

[Abbey Duke]: there's mandarins,

[Jessica Hartleben]: Yes, miss the metric. All

[Megan Sullivan]: right. Monique. Good morning, Josh. Thank you, everyone. Nice to see you all.

[Jessica Hartleben]: So for the record, I'm Jessica Hartleben. I'm the executive director of the Vermont Economic Progress Council. I am here today to talk to you about the Veggie program. But before I talk to you about that, Tara Marco asked me to give you a brief update about the CHIP program. So I feel like I will start with that because yeah. So I was here a joint hearing on January 9, and it was about two weeks before the launch of the CHIP program. We launched the CHIP program on January 30, and that was our official opening of the portal. And that was the sign for remote communities that they could access the program and began looking at the application to see what municipalities would need to start creating their CHIP applications. So I just want to give you an update. And again, thank you for your hard work, last legislative session, and what we have been up to since the last sixty days, sixty days since we launched the program. So just to kind of level set, I just really think it's so unique that CHIP isn't a program that has existed anywhere else in the state of Vermont. It's actually a program that's unique to anywhere in The United States. We do have other TIF programs throughout The United States that focus on affordable housing. But this is a program that has taken a lot of different elements of TIF, and we've kind of morphed it into making it our own. So for that, we are unique. Every one of the pieces had to be purpose built for Vermont's very specific statutory frameworks. And with our now team of three at BEPC, we have worked with partners across ACCD, across the Agency of Digital Services, and other state agencies to build out this program in that very compressed timeline. Since January, we have had webinar series that cover how TIF works. We've used national case studies of communities that have used TIF for housing and infrastructure programs and that have used those specific rules and requirements that have helped municipalities outline Vermont's CHIP program. The sessions are all recorded and they're posted on our CHIP webpage for municipalities that missed those live sessions. So you can go online and you can watch them at any time. Additionally, we have worked with the Vermont League of Cities and Towns. The Vermont League of Cities and received a $500,000 NBRC grant to launch a technical assistance program. It's called CHIP in Vermont. And I would encourage you to invite in Katie Buckley and Bonnie Boninger. They are leading the charge for that technical assistance program. And if you want to get the specifics about that, they are experts in talking about that three year initiative. We did partner with them to do a delivery of an introductory CHIP webinar that drew over 100 attendees for municipalities and municipal leaders. The session covered how CHIP works, why municipalities might want to apply for the CHIP program, explanations about brand list growth, an overview of

[Rick Ufford-Chase]: the CHIP

[Jessica Hartleben]: guidelines. VLCT committed to doing webinar series throughout 'twenty six and into 'twenty seven, covering a variety of topics from project readiness, pre development planning, bond campaigns, risk management, and compliance. We have an ongoing partnership with them. So we feel like this will help municipalities have that structured support that they will need through every stage of this program and also ensuring that municipalities of every size will be able to get the support that they're going to need. Additionally, BEPSI staff, offered office hours throughout the month of February to ensure that application process was clear and accessible for communities of every size. These were not passive sessions. We offered assistance to municipalities. We also provided a train the trainer for VLCT so that we could troubleshoot how to log into the GEARS portal, but also how to access the application and answer any questions that the user guide, which is also on our

[Megan Sullivan]: website, could not answer. We

[Emily Carris Duncan]: hope

[Jessica Hartleben]: to offer those again in the future some time in the spring or summer. Additionally, we've had direct stakeholder engagement alongside our large format webinars. We have presented to a wide range of groups in the last sixty days. We've presented to the Regional Development Corporation at their monthly meeting. We've presented to many regional planning commissions, including we are going on April 14 to the Northwest Regional Planning Commission to the Town of St. Albans. We've presented to the Housing and Homeless Alliance of Vermont, the Vermont Bankers Association Commercial Lending Committee, the Southern Vermont Economic Development and Municipal Leaders Conference in Wilmington, and we presented to the Newport Downtown Development Housing Committee. In total, our team has presented to over a dozen formal presentations since October 2025, and we've reached audiences in every corner of the state of Vermont. And we hope to continue that engagement throughout 2026. So this is kind of what we've been seeing in the last sixty days. It's still early, but the data that we're seeing reflects genuine geographical diversity from our municipalities. VEPC has received 10 interest forms. BLCT has noted that they have received interest from municipalities spanning 10 counties. We have had webinar attendance of all two fifty municipalities and webinars from two fifty participants. We provided six office hour sessions and VLCT is beginning office hours starting in April. Additionally, interest is coming from not just Chittenden County. It's really outside Chittenden County. The population range of interested communities spans municipalities with population densities as low as 1,100 and as large as 22,000. So both rural communities and more large population centers are engaged in the process. The projects are both contemplating affordable and middle income housing, as well as the market rate housing. CHIP is being seen as a full spectrum for housing needs in the state, not just what type of housing.

[Herb Olson]: Yeah, can you go back to the density issues and numbers? And I kinda have

[Lyle Jepson]: a joke of figuring out density for what it might look like.

[Emily Carris Duncan]: It's a camp. But what was the range? I think you said 1,100 per what else?

[Jessica Hartleben]: Population. So density is the population of the town.

[Rick Ufford-Chase]: Oh, you meant population. Not like the

[Jessica Hartleben]: density, like

[Herb Olson]: the downtown. The population of 11, let's say,

[Emily Carris Duncan]: to 22,000. Okay. The

[Jessica Hartleben]: pre interest application form that we created with BEPTI is not just the sign up sheet. The pre interest application form collects data and allows our staff to engage not only the municipal interest, but identify where technical assistance might be needed so that we can then forward that to VLCT so that VLCT can follow-up with those municipalities to then help municipalities with that particular technical assistance that they may need in order to bring back to Betsy an efficient application and review when those projects are then filed and brought forward to the staff for a formal review. So what comes next? On our municipal side, the communities appear from VLCT's feedback to be moving through these pre development process. They seem to be refining project narratives, working with VLCT through their technical assistance program as that is getting ramped up. On the BEPC side, our team is continuing to build out the system portal. Are launching the Imagination with just one piece of that portal. This portal is going to help us not only with applications, but it's gonna be the place where municipality will be able report information, upload data, and help us to prepare the reports that the legislature needs in order for us to be able to report that information back to you and for us to be able to calculate, increment, and also work with the facts. So we are in the process of designing those processes. Never in my education did I think I would be a software developer, but here we are. So we are designing those processes to be rigorous, to be efficient, so that municipalities can use those in a timely and efficient way. Upcoming engagements for our Vet C team include the Vermont Community Development Association Summit, which is happening on April 15 here in Montpelier, the Southern Vermont Economy Summit in May, and then continued regional presentations throughout the state. Our team is really committing to making sure every Vermont community that wants to use CHIP has access to the information and the support that it needs to do so. So we are committed to working with the RDCs and the RPCs. We coordinated with the town of St. Albans. They're hosting the event, but it's coordinating with the Northwest Regional Planning Commission, the RDC in Grand Isle County, and the RDC in Franklin County to help us do the promotion so that that region is covered. We've done similar events in Chittenden County, Rutland County, Windham and Bennington Counties. So that is our sixty day update. Again, I just want to close by thanking you for the work that you did last year, and that we really have created a powerful tool. And I'm really excited to see what the summer is going to bring, and that we're hoping that we start seeing the first round of applications in the next maybe ninety days or so. Okay. Any questions? They received a $500,000 MBRC grant to provide three years of technical assistance. And they were standing up that program separate from the agency of commerce or from VetCity. It seems important

[Michael Boutin]: for us to remember that there is that support is in there and to see who's gonna come through that system, how will it benefit them in getting through and participating in CHIP. Just the most important things, think, from the community to bear in mind that we have a half $1,000,000 grant went into assisting VLC to do this work.

[Jessica Hartleben]: Yeah, I will say that ACCD did apply for a half $1,000,000 in congressionally directed spending to Senator Welch and Senator Sanders for a feasibility study for municipalities under 5,000 to assist with those upfront costs to help those municipalities that may not have the budgets to fund those upfront costs that are eligible related costs that could be repaid with CHIP government, but maybe not something that those municipalities could afford at the outset. So What kind of The agency of commerce submitted that request, I believe, or the governor's office submitted that request to Senator Sanders and Senator Welch's office, I believe, last week. So, yeah.

[Kirk White]: Yeah, thank you for that. Thank you for, again, trying to help those smaller communities. I guess I just want to encourage you to continue to do more on that, because you said the population of the range from 1,100 to 10,000 and the mode, remember, median, mode, the most common population size in Vermont is less than 1,000. If it's 1,100 and more, you're missing

[Jessica Hartleben]: most of the towns. Right. And that number actually came from VLCT, towns that had reached out to VLCT. I will tell you, when I was in Wilmington, actually, we did a speaking engagement with

[Emily Carris Duncan]: the It's the Southern Vermont The Deerfield Valley Chamber?

[Megan Sullivan]: It was the The Windham Works?

[Jessica Hartleben]: It was a Southern Vermont combination of both of the RDCs, Southern Vermont, the ACRC and the BDCC. And we talked to a community as small as Wordsboro, which I think is about 200 So BEPC has numbers, ELCT has numbers. I just was trying to be efficient at that.

[Megan Sullivan]: Yes, just want

[Kirk White]: to make that reminder.

[Jessica Hartleben]: You for reminding us, because that's always in the back of my mind. Having said that, I have ten minutes to go through what I

[Megan Sullivan]: was originally here

[Jessica Hartleben]: to And talk to you about I am happy to come back and do a deeper dive into veggie.

[Michael Marcotte (Chair)]: Saw the report just

[Lyle Jepson]: came out.

[Abbey Duke]: Yes. Yeah. Yeah. She sent it.

[Michael Marcotte (Chair)]: Yeah.

[Jessica Hartleben]: I sent the veggie report that actually was submitted to the legislature in September Okay. Of 2020.

[Michael Marcotte (Chair)]: We haven't had a chance to go through

[Jessica Hartleben]: Would she probably right. Right. It's summer and reports come out in September. So have fun reading that 50 page report. And I will just give you some highlights of that 50 page report in my presentation today. And then happy to come back again and go into a deeper dive. Because I like coming to this committee. Like coming and talking. As you may or may not know, the Vermont Economic Progress Council is an independent board of Vermont citizens. Nine are appointed by the governor, two are appointed by the general assembly. You have one of our members here in this committee, Representative Abbey Duke, and Senator Wendy Harrison from Windham County as our Senator. We also have two nonvoting representatives from each region, and one is designated by the Regional Development Corporation, and one is designated by the Regional Planning Commission. We are the approval body for not only the budget program, but also the TIP program and the CHIP program. We are a lean staff. The council is served by one executive director, one program manager, and one CHIP specialist. We do receive our administrative support from not only the Agency of Commerce and Community Development, but also from the Vermont Department of Taxes. And we rely heavily on the Vermont Department of Taxes for the Veggie program. So the legislative purpose of Veggie is really important. Veggie is a revenue sharing arrangement. The state only shares tax revenues that would not exist without this program. Veggie The thing that distinguishes Veggie from all other programs is that Veggie isn't a subsidy. The but for test is the test that is kind of the elephant in the room. It is the policy debate that has stood for the test of time. It is the one that has been talked a lot about in this building way before he and probably will live on past my time. Having said all of that, before BEPC authorizes a single dollar, the BEPC Council must make affirmative decisions that the proposed jobs, the payroll growth, and the capital investments would not occur in Vermont, or would occur in a significantly less beneficial way to the state of Vermont, except for this incentive. If a company is coming to Vermont anyway, they don't qualify for this program. There is no exception to that. In fact, we regularly meet with businesses. We screened 27 businesses last year. Of those 27 businesses, two made it through the program to the final application. There is a screening process that happens. It happens for a reason. BEPSI staff work with the state economist, and we use let's go here we use the REMI model, which is the same model that the state uses for its own fiscal analysis, to project new tax revenues that the job expansions will generate. The incentive is only authorized if those projected revenues exceed the cost. Vermont must come out of ahead in the cost benefit analysis model. It's a statutory requirement. It's built right into the program. It's not a policy preference. It's not something the can deviate from. It's a requirement. It's a safeguard that's built into the program. Once the incentives are approved by the council, the business must then do what they say they're going to do. The Department of Tax has to verify actual payroll records before any incentive payment is given to the business. The incentive is then paid as a credit against their withholding taxes. The state is essentially returning a portion of the new tax revenues that only existed because the expansion happened. If the performance targets are not met, nothing is paid. If employment collapses or the business leaves, previously paid incentives are recaptured by the Department of Tax. Veggie is a tax expenditure. It's worth contextualizing the program's cost. Veggie is classified as a tax expenditure. In 2023, Vermont's total individual income tax expenditures, because that's where this program is categorized in the JFO report, was approximately $378,000,000 Of that, VEGI represented 0.6% of that total. Annual incentive payments have a range between 1,970,000.00 and 3,200,000.0 over recent years. This is a modest targeted state investment. And if you want some additional data, I would encourage you to look at pages 29 through 33 of the VEGI report, which shows slightly more detail about the claims data. So this is what that modest state investment has produced between 2,007 and twenty twenty three. More 10,000 new qualifying jobs have been created, dollars $613,000,000 in new qualifying payroll, dollars 1,200,000,000.0 in new capital investment, 41,500,000.0 in total new incentives paid. For every dollar that's paid out in earned VEGI incentives, dollars 42.7 is generated in payroll and capital investment that otherwise would not be occurring in Vermont. All qualifying positions must also have three employment benefits in addition to the minimum wage thresholds. In 2023, the average wage for new VEGI qualifying jobs was over $83,000 That's compared to the Vermont statewide average range of $62,000 It could be argued that Vermont is driving above average wage growth in the state. So I just want to give you a concrete example, and I realize I have three minutes. Weidman Electrical Technology in St. Johnsbury has operated in Vermont's Northeast Kingdom for over fifty four years, and they are highlighted in our Veggie report. They produce transformer board. Transformer board is found in over 80% of electrical transformers worldwide. I didn't know this until I went with representative Marcotte last summer and saw the transformer board. The only place in The United States where it's manufactured is right here in Vermont. When Weidman was evaluating where to expand globally to meet the surging demand from aging electrical infrastructure and new data centers, Veggie was an integral part of their decision to invest here in Vermont or go out of state or frankly in another part of the world. The result was a $43,000,000 project that is now underway, creating 67 new jobs and creating local construction with local Vermont contractors. And this photo is from the construction that was happening when we went there last summer to do a flight visit. Less than a year after the approval of this Veggie award, Weidman had already welcomed in 38 new employees far ahead of their first year targets. This is the Boutin four test in action. Without that Veggie incentive, that investment would likely have gone elsewhere. S-three 27 is going to eliminate the sunset, making Veggie a permanent program while maintaining annual reporting and continued legislative oversight. BEPC supports this approach for three reasons. First, a permanent structure creates predictability for employers and for the state. As we've heard from Megan and also from Commissioner Jefferson today, economic development requires long term planning. Second, S-three 27 preserves that continual annual reporting and evaluation by the legislature. The transparency and accountability remain fully intact and it's necessary to preserve that for maintaining public trust in this program. Thirdly, and most importantly, in my opinion, an independent evaluation of VEGI that was conducted by the Center for Regional Economic Competitiveness, which we hired to come as part of our BEPC retreat this fall, confirmed that the program has significant program strengths, but also identified areas where we can explore some programmatic opportunities. Those programmatic opportunities, however, cannot happen efficiently when the program's very existence is perpetually in question. If you make Veggie permanent, it frees up BEPC and BEPC staff to improve the program, not just to be continually coming back here to defend it. So I just will leave you, and I know I'm a minute over, with some closing thoughts. There's already very strenuous, strong safeguards in place. The BUT-four test and the RME fiscal analysis are applied rigorously before any incentive is authorized. There is no rubber stamping of this program. Regular reporting to the legislature is required by statute, as you have evidenced in your email by a 59 page annual report that you will now have the pleasure of reading. Critically and most importantly, the Department of Tax has to verify per the statute, all payroll performance before incentives are paid. If you don't meet your targets, you do not receive the money. CREC found that VEGI's pay for performance structure and the ROI analysis is one of the most fiscally rigorous of any comparable program in the Northeast. Additionally, I just want to mention one other point that DRC also mentioned. Vermont is the only state in our region without a permanent broad based business incentive program. And that is important when we're thinking about businesses and keeping businesses here in Vermont. Every peer state, New York, Massachusetts, North Carolina, Connecticut, operates its equivalent program on a permanent basis. CREC found that we were at a competitive disadvantage every year the sunset uncertainty continues. And that was an important piece for me in that report, that we want, in order to remain competitive and keep our businesses here, the other piece that CREC found is that businesses that we are attracting to Veggie are not businesses that are moving here. They're businesses that are expanding here. And they're looking elsewhere to expand. And Veggie is keeping them here. And so in order to remain economically competitive and to keep them here so that they'll expand here, keeping this program on a permanent basis allows for that to continue.

[Emily Carris Duncan]: I'm four minutes over.

[Jonathan Cooper]: Thanks. You waited all morning for us.

[Megan Sullivan]: I'm sorry. That's

[Jessica Hartleben]: my super high level overview. I would be happy to come back with the Department of Tax to give you a deeper dive into the claims and how that works. If you are wanting more information about the CREC analysis, I know that Bob Isaacson and Tyler Baines were our presenters. I did give their information to some economic development, and I'm happy to give it to Jonathan, and they could come and talk to you as well.

[Michael Marcotte (Chair)]: I think that would be an interesting conversation.

[Jessica Hartleben]: Yeah. Just to better understand incentives and why they matter and how they keep us competitive as a state. I'm going stop sharing

[Megan Sullivan]: my screen. I think they did a great job at the retreat.

[Emily Carris Duncan]: Very knowledgeable. Any

[Michael Marcotte (Chair)]: questions for Jessica? I

[Jonathan Cooper]: guess, I'm sorry to keep everybody here. It's my stomach that's going to be fully first for sure. In the report, in 2023, there are a lot of zeros in the amount of incentives that were given out or payroll amounts, things like that. Is that just because it was a dip, right, where the unemployment rate is so low, it was really hard for employers to meet the targets that they hit that year? Or is it because data just wasn't available at the time of the report? I

[Jessica Hartleben]: guess I'd want to know where the zeros are. Yeah, starting on page 33, I think. It might just yeah, it probably was

[Megan Sullivan]: might not have been available.

[Jessica Hartleben]: 2023 target.

[Michael Marcotte (Chair)]: Yeah, it's every

[Emily Carris Duncan]: It

[Jessica Hartleben]: may not been available. I can get back to you on that. I can ask tax and get back to you on that. Happy to come back. These reports, we get the information and then we have to submit it by September 1.

[Jonathan Cooper]: My guess was that it just wasn't available, but maybe there's a better way than putting a zero there, just to say it didn't have available. So nobody looking at it is wondering. Right.

[Emily Carris Duncan]: A big deal. No,

[Jonathan Cooper]: I mean, there are lots of reasons that it could be a zero, but if it is just because the data isn't available, it's different.

[Jessica Hartleben]: I'll get back to you on that for that answer. Thank you.

[Michael Marcotte (Chair)]: Anything else to address?

[Jonathan Cooper]: It's so important to go through the report and see the variety of locations across the state that businesses are using the incentive. Yeah.

[Emily Carris Duncan]: It's a

[Jonathan Cooper]: very detailed report and it's really helpful. So thank you. And thank Ellie. Yeah.

[Michael Marcotte (Chair)]: We've seen there have been slow applications in Veggie.

[Jessica Hartleben]: We have three that are interested in applying currently this year for '26. We had two successful applicants in 2025.

[Michael Boutin]: Good,

[Michael Marcotte (Chair)]: but still shows employment rates are low. It's hard for businesses to get people to work. There's a lot of different reasons why. It's a commitment, too. Yeah, and it's, for the unsure supply of workers, it's tough for a business to take on. It's hard for them to fill their needs right now and then to take on additional workers that they might not need, but they want to put a new program together, then there's a lot of reasons.

[Jessica Hartleben]: Right. But then we have that argument, but then we also have Weidman as an example of an enormous success. So there is that. You can appreciate that tension.

[Michael Marcotte (Chair)]: I'm not suggesting we get rid of the program, not at I think it's important, it's valuable. I think we need to keep it. Yeah. Programs run very well. Thank

[Emily Carris Duncan]: you.

[Michael Marcotte (Chair)]: So there's a lot of confidence in that's supposed to work.

[Abbey Duke]: I was just going say, as a member of the board, I've been really impressed at the way it's managed, the rigorous nature of the analysis. And it is really a very small number of companies that the companies it works well for, it can work really well for. But those, I mean, we've all been talking about that. It is really a very small subset of companies for a variety of reasons that it can work for. But we have some very big success stories like White. So anyway, I've learned a lot being on

[Jessica Hartleben]: the board, so thank you. We appreciate your participation on the board. We're a valued member. Well, thank you. And I am appreciative of the work that is being proposed in S-three 27 of the commissioner and the deputy commissioner. They might have taken a holistic look and start the conversation.

[Lyle Jepson]: Okay.

[Michael Marcotte (Chair)]: Great. Well, we're ten minutes over, so we have a little less time for lunch, but we're on the floor at one. I think it has us estimated to be done by two, so we're back in here. You will hear from the Vermont Trailways on a piece that's in 03/27. Rick will walk us through the new language that's in 03/27, and then at 03:30 Stofie will come in. We'll talk about S-one 173, the bulk rehab worker comp bill.

[Abbey Duke]: K.

[Michael Marcotte (Chair)]: Kind of see where So with

[Lyle Jepson]: that, we go off the line.