Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Welcome everybody to this is the General and Housing Committee, and today is the fourteenth Today is the 01/14/2026, and we are continuing to moment our initial hearing, which are addressing the issue of sort of a broad look at our legislation, past and present and future. What is working, what is not working, what direction should we choose to go? And this morning, our first witnesses are from New Vermont National Resources Council, or BMRC. Are two of you going to testify at the same time?

[John Groveman (Vermont Natural Resources Council)]: That's okay.

[Marc Mihaly (Chair)]: Yeah, just grab that chair and put it next to the other.

[John Groveman (Vermont Natural Resources Council)]: Maybe you should take the main sit ups of a summit show, really. I'll

[Katie Gallagher (Vermont Natural Resources Council)]: go first and then jump.

[Emilie Krasnow (Ranking Member)]: I'm share

[Katie Gallagher (Vermont Natural Resources Council)]: some slides if that's okay.

[Marc Mihaly (Chair)]: Okay, why don't you, well go ahead and get your slides set, and then for the record, give us your name, etcetera.

[Katie Gallagher (Vermont Natural Resources Council)]: My name is Katie Gallagher, I direct the Sustainable Communities Program with the Vermont Natural Resources Council.

[John Groveman (Vermont Natural Resources Council)]: And I'm John Groveman. I'm the Policy and Water Program Director with BNRC.

[Katie Gallagher (Vermont Natural Resources Council)]: So as folks might know, BNRC is a statewide environmental advocacy organization. We work on a variety of different natural resource topics. And one of those areas is sustainable communities, which I help to manage. And sustainable communities program is really focused on how we build and use our land. The way that we think about that is really kind of from a two sided land use approach. So one side is where we should be developing, where we should be growing our communities, building our homes. And the other side of that is where we should be having our open lands for farming, for forests, for natural resources. And that's not to say that those are two totally distinct things, but when we talk about housing, it's very much an environmental issue for us. And so that's why we are very appreciative to be invited in today to talk about how we feel like we're doing for housing as an environmental and climate solution. So a little bit of background, and I'm gonna go through these fairly quickly, but just to give a sense of where we have been coming at this issue from. Where we grow matters just as much as kind of how and how much. So it's not just about the number of homes, but where those homes are located, as well as the types of homes. This is a graphic from VTrans study a couple of years ago from, again, the environmental perspective. This is showing that where we grow matters because it is a source of climate pollution. Transportation from sprawling development accounts for 40%, the largest source of our greenhouse gas emissions. So it's an important component there, but it also matters significantly in terms of affordability. This is two side by sides of my account at Waterbury looking at the Waterbury Downtown And our other village center in Waterbury Center, which is where I live, it's only less than two miles from the Downtown, but it has much larger, lots of land, less homes, less infrastructure. And you can see that because it requires us to have more cars and making those cars, it's almost $7,000 more annually in transportation costs. So when we talk about housing as an affordability issue, it really matters that we're also thinking about where those homes are located because of these additional costs. So obviously that we're having this conversation because we need more problems and that is obvious for a variety of different reasons. I don't think I need to tell you all about what those reasons are. The good news is that we are building off of some pretty strong bones here in the state. We, for better or for worse, haven't grown into kind of suburbia sprawl like a lot of other states. We have this historic settlement pattern of these village downtown areas that are surrounded by our rural countryside, farms, our forests. And that remains our statutory planning goals, that remains in our town zoning goals as well. And so that's kind of where we are launching off from. But it's been really hard to achieve these goals. Part of where we are coming from is that, yeah, we've had these goals, we've had

[Emilie Krasnow (Ranking Member)]: a lot

[Katie Gallagher (Vermont Natural Resources Council)]: of investment and still it's been really difficult. And I know that you all have heard about the variety of different reasons why it's been so difficult to build housing from labor shortages and materials. Some of those pieces that are more within our control is the fact that we made it illegal to build a lot of the types of homes that you would see in this graphic here. It's relatively small, whether it's a duplex or four unit building, even a small apartment building, adding on an ADU for many, many years, our local and our state land use laws made this not possible. So I think it's important to recognize that that's kind of a place where we are starting from is that it until recently has not been possible in many of our towns to build even a two family home, let alone a 20 unit apartment building. I also wanna point out that this is a kind of cultural issue that when we talk about Mindyism is one piece of it, but also this is a poll from a couple of years ago now that I think about a lot, which says that three quarters of Americans, but I'm sure it's very similar for Vermont too, believe that it's better for the environment if homes are built farther apart. And you can kind of imagine why we might think that. And of course we all being Vermonters love being able to maybe see deer out of our window and go walk down to the pond. But it is true that it is actually better for the environment when homes are built closer together. But we're kind of stuck in this place of more homes, more density is going to be bad potentially for our communities because we don't want those people here, or it's bad for our environment because there might be more pollution or more buildings that's gonna block our view, etcetera. So again, we are kind of going against the cultural momentum here. So when we make it illegal and we undermine public investments and make it so that we envision everybody needs to have five to 20 acres of their own, we end up with downtowns that have lost their investments that undermine our local businesses. It also means that we have fewer homes because again, when every home requires X amount of land, we only have so much buildable land to begin with. So that's gonna result in less homes. Those homes are gonna be more expensive. You're gonna require people to have to drive and all of those things make it pretty expensive. And so just another note, I guess before I get to that piece of it, this again is really an affordability issue. These homes being placed further out, again, going back to why it matters where we build, it means that you have unfortunately larger and larger homes, going back to the cost of housing, we're not building those small starter homes anymore. So now you have more home to take care of. You have higher heating and cooling costs. You have those car costs. Our property taxes are going up because now we've built out accounts that are required to have more extensive and expensive infrastructure. And ultimately those lower density homes can't pay back those costs that municipality is now spending. If anybody's familiar with the organization, Strong Counts, they call this the growth Ponzi scheme, where essentially we're tricking ourselves into thinking that we can continue to sprawl out and pay for it through our municipalities when we can't. And just another note that this is, we have even more pressing affordability and municipal funding challenges with the costs of climate and healthcare and education and all of these things. So we cannot afford to continue to build out in this way. So get into the good news. And I know that you all have heard some of this overview already this session. Starting with the Home Act in 2023, I won't go into all the details because again, I think that you've heard many of them, but this was a really significant piece of legislation. When you look across the country at the highlights of what states are doing to address housing, the things that we did in the Home Act and Act 181 are those things. Vermont has been a leader in this way where we are re legalizing, again, legal to build the type of housing that we see in these pictures below. Some of these are new, like in the case of Fairly, some of these are not new, but in many cases, if you were to go look at any given Vermont downtown and say, do our zoning bylaws allow for this to be built today? The answer would be no. And so the Home Act made those changes for municipal zoning to say at the very least, these lower unit multifamily homes need to be allowed where we have existing infrastructure. And I can go into more detail if folks have questions, but this second piece again, so going up more to the state level land use, we made those changes at the municipal level, act one hundred eighty one and twenty twenty four brought it up a level. We talk a lot about the impact and the modernization of Act two fifty, but I think just as importantly, we need to talk about the changes made to the state designation program and the changes made to the regional and municipal planning process. And that overall this package really overhauled our planning framework as a state. And just to touch on the history of Act two fifty for a second, Act two fifty as a regulatory system was built with the intention of having a land use map that accommodated it. And we quickly got rid of that. And so we've been doing Act two fifty for all of these years without that map to help guide the growth and conservation. And so part of what we were able to do with Act 181 and the updates to regional and municipal planning is bring back that mapping component, but also really do it from the ground up and say communities, where do you want to be prioritizing growth in your towns? And that's what we refer to now as the tier one areas. And I think it's also important to talk about which tools we need for which communities. Not all of our communities are going to benefit from the same tool and Act two fifty is not the thing that will help all of our communities. So for our smallest towns, really, I think that the biggest benefit that we're getting is through some of the changes that were made to the state designation program where many of our smallest village centers are being automatically brought into the process. They've simplified it and made it easier so that towns can go kind of up this step ladder and DHCV can provide more information about those details. But that's providing the technical and financial assistance needed for towns to do a lot of the work that would get them external investment for housing. Whereas right now, we're struggling to get housing investments even in our larger towns.

[Marc Mihaly (Chair)]: Forgive my ignorance on this, but does it mean that a town that isn't in tier one but is in tier two could create a village center?

[Katie Gallagher (Vermont Natural Resources Council)]: Yes, absolutely.

[Marc Mihaly (Chair)]: And that's under existing law?

[Katie Gallagher (Vermont Natural Resources Council)]: Yes, that is, so there was the existing state designation program. The way that that worked previously is that towns would have to opt in, it would go through the, what is now the Community Investment Board. The regional peak year land use mapping process is identifying, it's a little difficult to read and see, but these from the downtown center to the village area, all of those are eligible to be a center or a neighborhood. Those downtowns and village centers, including the ones that are already existing will just be automatically brought in as a state designated center. They will

[Marc Mihaly (Chair)]: Even if they're in tier two.

[Katie Gallagher (Vermont Natural Resources Council)]: Even if they're in tier two. Yeah. So getting into the tier one areas a little bit more,

[Emilie Krasnow (Ranking Member)]: I don't wanna go too

[Katie Gallagher (Vermont Natural Resources Council)]: much in detail, but just because we've heard a lot of the concerns that have come up about these areas and in particular are they supporting our most rural and small towns? So I wanted to try to address some of those issues. And I guess just to go back for a second and say, maybe I have another graphic here somewhere. But the tools for our smallest towns is where we really need to be focused on a lot of the work, for example, that DHCD is leading related to missing middle housing. So how do we help build those units that are those duplexes, tri quadplexes? At two fifty, it was previously triggered for 10 units. Now it's going up to 50 units for those tier 1B areas. And that isn't really helping our smallest town because they weren't getting those larger development projects anyway. So that's why I'm saying that we need to be focused our support for those smaller towns on these technical and financial assistance issues. Again, just as a reminder for what qualifies for tier one B areas, the map just to not be very confusing, the map is not of tier 1B areas, but is of towns that have a confirmed planning and local land use regulation on the books. They might not have both zoning and subdivision bylaws, which is a requirement of tier-

[Marc Mihaly (Chair)]: But I can't read it. What is the pink and what's the green?

[Katie Gallagher (Vermont Natural Resources Council)]: Sorry, yeah. The pink is confirmed planning process and zoning or subdivision bylaws. The green is confirmed planning, but no land use regulation. So most towns in Vermont, almost every town has a town plan. Most towns in the pink have a plan and they have land use regulation, at least zoning and subdivision, most have both. And then those in green are those that are kind of starting from a point where they don't have zoning. It would be a little bit more difficult for them to, in a short term, opt into tier 1B.

[Emilie Krasnow (Ranking Member)]: What are the black? I don't know

[Katie Gallagher (Vermont Natural Resources Council)]: if that's just where they don't have data. That's a good question. Or they don't have a plan at all, but I would be I surprised if it was that thought there were 90 towns that didn't have any zoning.

[Marc Mihaly (Chair)]: Yeah, that's what we've heard in other

[Unidentified committee member]: Oh, right, we talked about it. I have

[Katie Gallagher (Vermont Natural Resources Council)]: a really bad perception of space. Please understand that, but that does not look like 90 green towels. So this is from DHCD's planning atlas. So I will double check that, but we'll get back to you. Okay. I appreciate that. Thank you.

[Emilie Krasnow (Ranking Member)]: Have a question too. When you say, has water wastewater or adequate soils for development, Is that any water, any wastewater? Or can it be a partial waterwastewater?

[Katie Gallagher (Vermont Natural Resources Council)]: So it's public water or wastewater. So it's not necessarily municipal water. It could be a private system that is publicly available. Or it could be that they don't have any existing system, but the soils in that area are the way that the locust interpreted it is tier,

[Unidentified committee member]: not tier, but

[Katie Gallagher (Vermont Natural Resources Council)]: level one through three soil so that they would accommodate dense housing development if you were to put a community system in that area.

[Marc Mihaly (Chair)]: You mean a community septic system? A community, yes.

[Emilie Krasnow (Ranking Member)]: What about an area that has some, but not complete? Does it count if it exists even one drop? Right. Or is it does it have to be a a whole system? I

[Katie Gallagher (Vermont Natural Resources Council)]: don't know.

[John Groveman (Vermont Natural Resources Council)]: I mean, it would it would would be be to be sufficient to serve whatever the growth entity that, you know, it's a practical issue. Yeah. So you'd have to show that there was capacity. You're talking about water when you say one drop or

[Emilie Krasnow (Ranking Member)]: I'm just saying that if I'm just asking the question of the definition of water or wastewater, whether it has to be in whole or in part.

[John Groveman (Vermont Natural Resources Council)]: I think it's enough to serve whatever the, remember these are maps that are maps of growth. So I think you'd have to make the demonstration that there was enough either public or private water and sewer systems or the capacity in the soils to accommodate the density of growth that is being proposed in maps. LORD can analyze that and have a back and forth with the regional planning commission, and the regional planning commission works with the local planning commissions. They'd have to make that show that information to the LERB, and then the maps would reflect where there was capacity to serve the growth that they are looking to sell to.

[Emilie Krasnow (Ranking Member)]: Thank you.

[John Groveman (Vermont Natural Resources Council)]: Does that

[Marc Mihaly (Chair)]: make sense?

[Thomas "Tom" Charlton (Member)]: Yes. Joe, is there an overlap between prime ag soil and prime soil for septic systems?

[John Groveman (Vermont Natural Resources Council)]: I think that often the farm soils are pretty work pretty well and, you know, they're pretty they could accommodate wastewater. So But one in the same piece of the land a lot of that? Yeah. I mean, I think it's a matter you know, that's why you see funds, they're very right for development. Right? If the farmer wants to stop funding because they are they can They can. I think it's a matter of the case to the peers and where we want to grow and I don't know how many farms are, like, and they're taking the tier one areas, there's probably many more in tier two. And then tier three is actually not even fully focused. It's mostly tier two. But as we look at over time the housing that gets developed and we need more housing, there'll be a discussion about expanding the areas and it's important to preserve our front axles. Do we want to expand out there? That would be, I guess, a debate. Is that what we prefer?

[Katie Gallagher (Vermont Natural Resources Council)]: Yeah, and I'm not sure if this is what you're thinking about, but I know that you heard testimony you can only access an opportunity for it to We really appreciated their working up and coordinating with them. The issue of where there is prime ag soils in community centers where we might wanna have some community accessible farms at the end of Burlington, for example. That is a zoning issue, not something that's addressed through Act 181 or the regional planning level. And so that I think is just an example of why it's still very important that these areas have zoning bylaws as to account for those types of issues.

[Marc Mihaly (Chair)]: Just so you guys know, you have until, we've allocated you until the hour. Okay. I'm almost done. I think we probably, yeah, until ten.

[Katie Gallagher (Vermont Natural Resources Council)]: So this is just an example. I chose Richford because I have a friend who just moved there, but just as an example of the change in scale. So on the left here is the historic village center with a quarter mile radius around it. On the right, same kind of scale, but you can see the pink area is that proposed tier with the area is much more significant. I'm gonna skip through these. The darker blue color is the proposed tier 1B areas for the Northwest RPC where Richford is. And then again, just to kind of go back to the point of where for more rural communities we should really be focusing our energy is how do we support those multifamily units with lower number of units, those missing middle homes that we know we have a really high demand for both our seniors who wanna downsize, smaller families. Northwest has gotten a couple, and I think it makes sense then that you see this, a lot of their towns are looking for 1B areas. Just to show another example of Rutland, you have far less towns opting into tier one B. We've heard that there's a concern that not enough towns or not as many towns as we would like are opting into tier one. We also want more towns to opt into tier one, but I think that we don't need to It's helpful to understand why they're not opting in. And so again, as an example here in Rutland, there has been almost no development of multifamily homes in the county that are under five units. So again, they wouldn't necessarily be benefiting from that tier 1B area at this moment, whereas they would be benefiting from us investing in their capacity to build out the infrastructure or the other things that they would need to have greater housing.

[Marc Mihaly (Chair)]: So are you saying that it's not

[Unidentified committee member]: the

[Marc Mihaly (Chair)]: cause there of not opting in is that even if they did, they can't build the housing because they don't have the infrastructure?

[Katie Gallagher (Vermont Natural Resources Council)]: That's partly it. I've also heard some towns who are just in the process of updating their town plan or updating bylaws or they wanna do more community engagement. It is a relatively, again, going back to the difference in the trigger for Act two fifty, it's a pretty big difference in what communities have experienced before. So it makes sense. I think that many want to make sure that their communities are aware of what changes are being proposed and think really thoughtfully about what those boundaries are. So we should be encouraging them to opt into these areas. But yes, they might not be seeing those immediate benefits even if they did. So I just don't wanna put too much weight specifically on those tier one areas for the more rural towns. So I'm going to jump ahead and hand it over to John because there are other things that we

[John Groveman (Vermont Natural Resources Council)]: can do. Thanks, Katie. So I really want to talk about a little bit, because I know you've heard about So Act 181, as Katie said, was a comprehensive update of Vermont's land use laws and really positive one we think. And I think you've heard in testimony from across the spectrum that people do agree that it's really moving in the right direction. But it's really important to look at both all of the changes we made to planning in Act two fifty and there's where do we wanna grow and this program that Katie described about encouraging growth, especially housing growth in areas based on good planning. But there were also conservation gaps in Act two fifty. And they were also, they're just equally important to the law. And those provisions are mostly found in, and I know you've heard about this in the tier three areas and the change adding a criteria to Act two fifty to protect intact forest areas and forest blocks and a jurisdictional tool that is called the road rule. And those were all policies analyzed for years that, as I said, they were developed because there was identified gaps in Act two fifty. So there were flaws in Act two fifty in terms of how we were applying it in growth areas and identifying growth areas. And as Katie said, we didn't have the land use map that was supposed to overlay Act two fifty in the first place. And that map was supposed to these very two things. It was supposed to say, where do we wanna grow and where do we really wanna apply Act two fifty and state resources? But where do we want conservation? And we want to be careful about growth and we want to make sure that we preserve our wildlife habitat and our water quality. And when Act two fifty was created, it was before climate change was really discussed. And what we've seen over the last couple of decades is the impacts of climate change that have really made even more urgent looking at what are our critical natural resources, where there are gaps in protection gaps in Act two fifty, gaps in ANR's programs. And I would venture to say that certainly if you talk to the ecologists at ANR, in addition to environmental experts, just the NRC, but the Nature Conservancy Audubon that there just gaps that in 1970 we didn't really address. And so there's a tier one process that's going on, but also there was a process that you heard to identify tier three resources. So that has been a robust process. The NRC has been a stakeholder along with dozens of other entities. And we made a lot of progress. I think the law identified 10 to 12 potential critical natural resources for protection to fill that gap in protection that we have. And the land distribution board has really zeroed on three resources, habitat connectors, significant natural areas, and headwaters, and have begun the process of trying to map out those areas to determine how we can draw maps to fill those protection gaps and protect those critical natural resources.

[Marc Mihaly (Chair)]: Is ongoing That

[John Groveman (Vermont Natural Resources Council)]: and it's been slower than the law required I think by February 1, a couple of weeks from now for a rule to be filed with LCAR identifying these tier three resources and the jurisdictional maps. And we're just not ready for that. And VNRC agrees, it just takes time to do this the right way. We want to get it right. I think there's been a lot of misconception in the public and it's just because this is going, this is very new and it's complicated and it's in flux. So I think there's a lot of misconceptions about what are the tier three areas are going to be, what the jurisdictional triggers are going to be, how is this going

[Dominic Cloud (City Manager, St. Albans)]: to work.

[John Groveman (Vermont Natural Resources Council)]: So we agree, so we need more time. I think the lurb is asked to push back the following a final rule with LPAR to September 1 and we support that. Like I said, want, I think it is working the process. I think it's, we've had some really interesting and difficult and complicated discussions at times from business groups to environmental groups to the state scientists who are really guiding the process with data and information. But we do need more time. But in the end, I'm confident that we're gonna end up with a rule that is not going to affect where we wanna build dense housing. It's not gonna affect people who reasonably wanna build housing on land that is going be well outside of the tier one areas. But the goal of tier three is not to prevent people from building developments on their land to accommodate a house or two or three or whatever, anything like that. So I just would ask for patience from the committee and letting this process play out. And I agree, the law was pretty aggressive in thinking that by February 1 that we would have it all done. Similarly, we're working on developing that forest protection criteria, which was a significant gap in Act two fifty. There's no criteria in Act

[Unidentified committee member]: two

[John Groveman (Vermont Natural Resources Council)]: fifty that deals with forest protection per se. And we're seeing more stress on our forests, both through climate change, but also we're getting we've seen demographic shifts and we're gonna continue to see them in these planning processes hopefully will get us the housing stock that we need and sustainable communities in the way Katie and other people who are expert land use planners have identified, but also make sure that we protect what's special about Vermont, forests sequester carbon, forests help slow flood waters, meat. This is the, I think the smartness of the act 181 changes, filling these gaps and doing both of these things at the same time. And again, the new criteria is not even, you have to trigger jurisdiction of active 50 to have the criteria even apply to you. And the intent is having good planning and site design even for single family homes being built in these areas, even though that's not really gonna solve the housing crisis in terms of the density and the type of developments we don't have, the multifamily, more dense developments. But if you're in these critical resource areas or your trigger act two fifty and there are issues around forest health that you address those issues. And then lastly, the road rule is really just another tool to make sure that we're not seeing long roads going deep into especially forest areas and harming forest health and fragmenting forests. The road rule, the the statute, EC one eighty one, authorized the the land use review board to either issue guidance about

[Marc Mihaly (Chair)]: the road rule or a rule

[John Groveman (Vermont Natural Resources Council)]: to say how the road rule would work. The the LERB decided to go with guidance They proposed some guidance. They're still working through it. It's very preliminary. I think it was just really kind of made public a few weeks ago. They had a meeting yesterday about it and they raised some ideas and they're going to result. And I think some changes to the guidance and the LERB identified a number of issues with regard to how the road rule will work. The big issue with the road rule is defining a road versus a driveway in terms of the trigger. And I don't wanna get too gee, I don't know how much you know about the details of the road rule and how much you wanna know. I don't wanna go down that rabbit hole as you want me to, but I'm happy to. But basically it's really important how we define what the jurisdictional trigger is gonna be and we don't know how it's gonna work yet because the learn really, they need to in guidance or a rule really set forth how this is gonna work when active 50 is triggered. But what I do feel confident in saying is that at the end of the day, the guidance is gonna result in only long roads that are fragmenting forests that are gonna be pulled into active 50. And really the goal is to have good site design and to avoid those impacts, not to prevent or preclude development or housing development on parcels. You could build, think at the end of the day, if you have a driveway, how that gets defined, you could have nineteen ninety nine foot driveway serving one house and you would trigger active 50. I'm confident in saying that's not going to be what the road was not going to require like an 800 foot road to one house or driveway rather, I'm saying myself, to trigger active 50. But those are the issues we're working out. VNRC supports taking the time to do that. We don't want to rush this, we want to get it right. We understand the public has concerns and it's hard to follow all of this and they're really important issues because it affects how we live on the land. But that's where we are right now and I think it is, the process is working and we just need more time to get through it.

[Marc Mihaly (Chair)]: Question for you. We've heard first of all, does the road rule auto I mean, is there a date in which it becomes effective?

[John Groveman (Vermont Natural Resources Council)]: 07/01/2026. This Do

[Marc Mihaly (Chair)]: you think that should be extended?

[John Groveman (Vermont Natural Resources Council)]: I think I want to see I think we have to really if the LERB is not making so we're sitting here basically mid January and the guidance is very nascent. So if we can't get the guidance together, I think we have to have a conversation about how to deal with that.

[Unidentified committee member]: Go ahead. Marc's chair stole part of my question. He's a mind reader, I heard. Was part of my question. And then, next part is, is it too early for either of you to say what a timeline might look like? Or you just really want to gather more place. But, you know, just I'm not saying this personally, but others might say and maybe I am. I don't know. Others aren't. Just that we continue to keep So, do you have a timeline where, you know, because if we just leave loose ends, like, do you have, like I know you can't, like, you don't have a magic eight ball to see how But do you have kind of

[John Groveman (Vermont Natural Resources Council)]: Yeah, I mean I think for tier three, the Lurb is saying September, I think that that makes sense. Maybe it needs to be a little longer than that, but no sooner than that, we support that. I think with the road rule, I just want to talk to some of my colleagues, but I definitely want to get it right. I listened to learn to talk about the road rule just yesterday, they had a meeting. And they're at the beginning. They're talking about how do you define a road or a driver, what are the triggers going to be, and there are lots of different ideas. I was telling Katie this morning, ideas that I'd never even thought of before. It was interesting, but that shows you that it's still early. If we need more, I think in a couple of months when the legislature is still here, we'll have a better handle on a date that we could pick, but we're supportive of not, we don't want to rush this through. Definitely

[Unidentified committee member]: So maybe we'll circle back. I do know that there just because I'm nerdy and read all the bills in both house and senate, there will be I don't know if they'll move, but there's different legislation being proposed around the road rule that I read, some different things. So it sounds like we'll circle back after we

[John Groveman (Vermont Natural Resources Council)]: I would appreciate it. We just want us to create context. We're aware of the different proposals. The point I'm trying to convey is we want to get this right. But these are important provisions that are equally important in terms of our planning process that we invented in Act twenty eighteen.

[Unidentified committee member]: No, I understand and I appreciate you're not just saying that you just want to take.

[John Groveman (Vermont Natural Resources Council)]: Yeah, Tom, so could

[Thomas "Tom" Charlton (Member)]: you clarify the road rule in this respect? So say there's an 810 foot road, there's going to be a house and an accessory dwelling at the end of that. A driveway. Depending on how they

[Marc Mihaly (Chair)]: Yeah.

[John Groveman (Vermont Natural Resources Council)]: Right. I think

[Unidentified committee member]: if

[Thomas "Tom" Charlton (Member)]: if however they whatever criteria they finally arrive at, let's say that triggers an application process. Right? Two fifty is the active 50 permit for the road or is it for the road and the housing?

[John Groveman (Vermont Natural Resources Council)]: No. It would would be for the development that

[Thomas "Tom" Charlton (Member)]: yeah. Okay.

[Dominic Cloud (City Manager, St. Albans)]: But I think

[John Groveman (Vermont Natural Resources Council)]: I, you know, I wanna stress that I was that the point I was trying to make. I don't think that an 800 foot I think it would be a driveway serving a house and an ADU and it wouldn't trigger. I think that's one of the questions is it should it be serving two or more houses, three or more houses, how many? Those are sort of the considerations. I do think that there is also a discussion that's happening in tier three as well. So it's not only the mapped area but then drawing a line around the footprint. What are you taking jurisdiction of? If it really is affecting a resource. So those conversations are part of it. What are the resources at play? And you take jurisdiction if you're not in an area ultimately where there is intact forests or habitat resources. I think those ideas are being played. Certainly in the tier three context is like We don't want to take jurisdiction for jurisdiction's sake. We're doing this to protect these critical natural resources.

[Katie Gallagher (Vermont Natural Resources Council)]: And don't need to necessarily go through the entire Act two fifty.

[John Groveman (Vermont Natural Resources Council)]: Right, maybe not all the criteria would apply, depending. So there's all kind of issues that are being discussed to try to narrow in on what we're trying to protect and what the limits of the review would be. The idea is to protect those resources, but also to encourage avoidance. If you could do a 600 foot or if let's say, let's change your hypothetical to eight ten feet serving four lots. The idea, you know, could you make that road a little shorter and then you would avoid that two fifty, right? Or something like that, right? So that's, you know, that's sort of the goal of this, you know, one of the goals.

[Thomas "Tom" Charlton (Member)]: Yeah. That's the goal. It's not really the design of the road. The goal is how far

[Marc Mihaly (Chair)]: Yeah.

[John Groveman (Vermont Natural Resources Council)]: The development that will, you know, be in areas where there are, you know, these critical natural resources and especially intact forest areas. Road rule statute mentions forest fragmentation really as the resource in question that is the reason why we want to look at these longer roads going into these areas. However the road ever ends up being defined, it's 800 feet. But if it's a drive, otherwise it's 2,000 feet of accumulative roads and drivers, which is a lot. That's a lot to trigger a larger, that becomes a larger development, obviously. John, we're almost out

[Marc Mihaly (Chair)]: of time, but I'm just trying to understand what you just said. Are you saying that under consideration now is the possibility that someone with a long driveway more than 800 feet, that they might not have to go through Act two fifty if I mean, we might end up in a place where they don't have to go through Act two fifty if they're simply not implicating a critical resource area. Potentially.

[John Groveman (Vermont Natural Resources Council)]: I mean, certainly in tier three, that's gonna be part of the conversation. What's the footprint of some of the development? Is there a de minimis or under a certain size of a footprint where the risks are not so great that you would still need to take Act two fifty jurisdiction? This is why we need more time.

[Marc Mihaly (Chair)]: Yeah, we'd have to figure out who decided that.

[John Groveman (Vermont Natural Resources Council)]: Well, now it's in the hands of the LERB.

[Marc Mihaly (Chair)]: Yeah, right. Yeah. Anything else? Any final questions? Thank you so much.

[Unidentified committee member]: Thank you very much. Yeah.

[John Groveman (Vermont Natural Resources Council)]: That be helpful, and please have us back as these questions arise if you find it helpful. You. Thank you.

[Marc Mihaly (Chair)]: Our next witness, after which we will take a break before we have our 11:00 security briefing, is Dominic Cloud. Welcome, Dominic. Yeah. Dominic, what I would suggest is we're I'll explain sort of what's going on here, and then we'll introduce ourselves to you because you haven't been before us. And then you can introduce yourself and take it away. Alright? Can you hear us? We can't hear you. Let's make sure we can hear you. We still can't hear you. Is there anything on our end that's a problem?

[Deborah "Debbie" Dolgin (Member)]: What?

[Unidentified committee member]: Just Debbie to speak, so

[Katie Gallagher (Vermont Natural Resources Council)]: it's not a speaker issue.

[Marc Mihaly (Chair)]: Hey, Debbie. Could you say something so we make sure it's not a speaker issue on our end? Dominic, we still we can't hear you. Oh, you can hear us, but we can't hear you. Yeah. No. No. You're muted. Or for us, you're muted. You think there's a way for you to unmute yourself? I think that testimony wouldn't work if we can't hear you since we're not lip readers. Do we have a way of testing our own speakers?

[Katie Gallagher (Vermont Natural Resources Council)]: He's gonna rejoin for the video. He's

[Marc Mihaly (Chair)]: gonna rejoin, yeah.

[Thomas "Tom" Charlton (Member)]: So you'll unplug it and plug it back in?

[Marc Mihaly (Chair)]: Yeah, blowing it? The best there is.

[Thomas "Tom" Charlton (Member)]: No, just unplug it.

[Katie Gallagher (Vermont Natural Resources Council)]: Best is when you get

[Emilie Krasnow (Ranking Member)]: plugged It could be. The best is when you can share

[Marc Mihaly (Chair)]: I have seen IT people see t shirts that say, turn it on, turn it off. That's right. Turn it on. Reboot.

[Katie Gallagher (Vermont Natural Resources Council)]: Hello, we still can't hear you.

[Marc Mihaly (Chair)]: Let's see, how about now, Dominic?

[Dominic Cloud (City Manager, St. Albans)]: You better?

[Katie Gallagher (Vermont Natural Resources Council)]: There we go. There you are.

[Marc Mihaly (Chair)]: You might turn it up a little. Can we turn it up here? Try again, Dominic, say something. Hello, whatever.

[Dominic Cloud (City Manager, St. Albans)]: Sure, is that any better?

[Marc Mihaly (Chair)]: Perfect. That's great, perfect. So, what's going on here is that we have the General and Housing Committee has been holding an initial, you know, we just started our session last week. And so we've been holding an initial set of hearings on given the legislation that we've passed, what's working, what isn't, and what should we do in the future? What direction should we take? And we thought we might, among other things, wanna hear from a city manager from outside of Chittenden County, which is certainly you, and your name came up. And why don't I have our committee introduce itself? Tom, you wanna start with you?

[Thomas "Tom" Charlton (Member)]: I'm Tom Charlton. I represent Athens, Chester, Grafton, and Windham. Joe Parsons, nice to have you in here today.

[Leonora Dodge (Member)]: Leonora Dodge from Essex Town, city of Essex Junction. Hello. Ashley Bartley, Fairfax in Georgia. So your neighbor, real close.

[Marc Mihaly (Chair)]: And I'm Marc Mihaly, I I represent kind of in the middle of the state, Callis Plainfield and Marshfield.

[Dominic Cloud (City Manager, St. Albans)]: Excellent.

[Mary E. Howard (Clerk)]: I'm Mary Howard, and I represent Rutland City District

[Emilie Krasnow (Ranking Member)]: 6. I'm Emilie Krasnow, and I represent Chittenden 20 in Colchester.

[Marc Mihaly (Chair)]: And we have a couple of others who are gonna join us possibly during your testimony, but we'll see. But we do have a quorum, so we're gonna proceed. So take it away. Tell us who you are for the record and what your thoughts are.

[Dominic Cloud (City Manager, St. Albans)]: Sure. Thank you. Good morning. Nice to be with you all. My name is Dominic Cloud. I'm the city manager in Saint Albans. And for the last fifteen years, we've been actively engaged in community led redevelopments with a particular focus on housing. As we were emerging from the pandemic, it became clear that housing was a critical piece of infrastructure. Housing was infrastructure. And if we were going to grow our population and grow our tax base, we needed to participate directly in the development process. And so while planning and regulation, traditional governmental roles are defensive strategies that can shape and stop projects, we needed to really go on the offensive and participate in the development process in order to get the projects that the community envisioned. And so I've got some slides that I think can tell a really great story about some some live projects and demonstrate some of the things that are working, some lessons lessons that we've learned, and what might be emerging issues for the future. And I think the outcomes, I think, just really speak for themselves. The city set a goal of doing 200 housing units within five years. We're not at the five year mark, but we are on right now we're at about 189. We're on track to hit 300. And we're having a conversation of what's the new target. Is it 400 or 500? So with all due humility, imagine if communities across the state were adding 500 housing units. We'd have a different Vermont. So let me show you some slides and tell you some stories. This is always the hardest part.

[Marc Mihaly (Chair)]: If you need help, can get it here.

[Dominic Cloud (City Manager, St. Albans)]: Thank you. How's that? You see Well, what

[Marc Mihaly (Chair)]: we see is we see both. Do you is there a way we see just the larger

[Unidentified committee member]: Yeah. People make it full screen.

[Marc Mihaly (Chair)]: You wanna make it full screen because at the moment, half the screen is you. As much as we enjoy your wonderful face, it means that your slide is kind of small.

[Dominic Cloud (City Manager, St. Albans)]: Usually takes me a little longer to be asked to leave the room.

[Marc Mihaly (Chair)]: Oops. Now we don't see Yes. Perfect.

[Dominic Cloud (City Manager, St. Albans)]: Okay. Excellent. So this was our first project. There, I'm having trouble advancing.

[Marc Mihaly (Chair)]: There we go.

[Dominic Cloud (City Manager, St. Albans)]: Okay. Buildings are important elements of branding and identity for communities. This is the St. Albans House, which is located in Downtown St. Albans. Had a rich history as a saloon, as a brothel, and transitional housing. It was, as I often say, the first mixed use building. But it fell into disrepair and because it was literally called the St. Albans House, it became a symbol of decline, a symbol of the fact that we were a community that was eroding, not growing. And so I toured every developer in Northwestern Vermont through this building. I was a new city manager and none of them would touch it. Even with a long time horizon, there was no way this project made sense. The redevelopment costs were too high, the rents were too low, the risk was too high, and the return was negligible. And then I met a guy who had some experience with the state and federal historic tax credits, and he was close to making a pro form a work, but he needed a little bit of help. And the city had an old redevelopment fund with a couple 100,000 in it. And I said to him, well, how about if we gave you 50,000 to fix up the outside and we lent you another 100 and you only paid interest for the first five years and then in five years, there'd be a takeout. Would you do the project? And he said, well, let me call my wife. And lo and behold, he called me back later that night and said, Yeah, we have a deal. And that's how the St. Albans redevelopment model was born. That's what it looks like today. It's fully leased up. It's got commercial space on the 1st Floor, a office on the 2nd, and the balance is all residential market rate units. Now we would call it workforce housing. The building was worth about 50,000 mostly for the land value at the moment. We had on grand list for 75 or so. It's what he paid for it. And today it's worth 1,000,003 in the recent reappraisal. So it started at $75,000 As I mentioned, we gave him 50,000 lent him 100,000 He borrowed $866,000 The state and federal historic tax credits are really important. That's real money when you partner with a bank. Along the way, it's in hindsight many times that you realize what you're doing in life. But along the way we realized this is how we can do community driven economic development with a focus in particular on the type of housing that we envision. We put skin in the game. We share risk. We participate in the development process and we measure our returns both qualitatively and quantitatively. This was a big lift in year one for us. It was 150,000 at a time when community was in crisis, but it was the first time we got some points on the board and showed that the city council and the city staff could accomplish some things And the voters began to give us even more authority and expect more from us. Two years went by, we were able to obtain a tax increment finance district. And an opportunity emerged right on Main Street. This was the window, the view out my window at the time. It's actually right behind me as I speak today. This is the Congress in Maine project. And at Congress in Maine we realized that there was significant redevelopment potential if we could assemble these lots, demolish the buildings that were on-site, recruit developers. There were two different developers that participated in this site. And we could do a combination of a commercial building on the front of the site on Main Street and two residential buildings on the back of the site. And the city would own and operate the parking in the middle. There's about 90 spaces that could be accommodated there. And if we owned and operated it in common, all that development could happen. And so that was the vision that we came up with. On the top part of your screen there is Main Street. It was a commercial building. If you look closely you can see how that building cantilevers over the parking underneath it. The bottom of your screen is 70 units of housing. 35 deeply subsidized and operated by the Champlain Housing Trust. On the left side of the screen is the another 35 units of workforce housing, which is leased at area median income wages to predominantly young professionals in the community. Last picture of the affordable housing. Right next to it is the market rate housing. There's the commercial building on Main Street. It's got an award winning restaurant on the 1st Floor. Northwestern Medical Center on the top and CCV in the middle. And these are the numbers. It's about a million 4 to start. We put 2.5 in in tax increment financing. It's analogous today to the chip program. But that's never enough. You always need additional funding sources, and so the city brought together another 4,500,000.0 from other sources. So you see that capital stack gets pretty large there. 35 units of low to moderate income housing, 35 units of workforce housing, 20,000 square feet of office and restaurant. And today it's worth 10 and a half million dollars. That's only possible with some of the tools that the legislature has provided. And I would argue that it's only possible when you have a community driven approach to housing development like St. Albans has developed. The returns aren't strong enough. The risks are too great for a private developer to take this on by themselves. And so it's our belief in experience you can do bigger projects faster with greater certainty when the community takes the lead. Our current project is the Fonda redevelopment project.

[Marc Mihaly (Chair)]: Sorry. The what? Foundry.

[Dominic Cloud (City Manager, St. Albans)]: Foundry? Okay. Fonda, f o n d

[Marc Mihaly (Chair)]: Yeah.

[Dominic Cloud (City Manager, St. Albans)]: And Fonda was a large paper manufacturer. Many of us have direct experience with this company because they made the red solo cup that you might have encountered in college.

[Katie Gallagher (Vermont Natural Resources Council)]: They

[Dominic Cloud (City Manager, St. Albans)]: pulled out of St. Albans and left us with 120,000 square foot vacant brownfield with high demolition costs. And so the city had to consider not just the cost of doing something, but what are the costs of doing nothing. And this building was another symbol of a community in decline. When you drive by that every day and the windows get boarded up and it begins to fall down and people start vandalizing it, etc. We all have buildings like that. That spreads. So the city bought it. We bought it way back in the Obama administration and we didn't yet know what we were going to do with it. And I think that's an appropriate exercise for a community. So I often say you can always sell it, you can't always buy it. And so we bought it for $350,000 We paid for that with our short term borrowing. Every city has significant short term borrowing relationships with their local bank or can easily establish that. Banks like to diversify their investment pool with a taxable entity such as the city. That means an entity with a taxable tax authority. And eventually we put together a vision to do 120 units of housing there. And so one of our housing philosophies and practices is we follow a housing for all approach. We don't have to have every deal have everything. But when we're doing a large deal like this or like Congress in Maine, communities are built with a diversity of housing. And your housing partners have different strengths. Your nonprofit, more deeply subsidized partners can bring more cash to the table on day one. But those buildings are usually worth about half as much. Your market rate developers can bring less cash to the table on day one, but those buildings are usually worth twice as much. And so here we envisioned in broad strokes about 35 units of mixed income senior housing. We approached Cathedral Square for a partnership there. And we envisioned another 85 or so units of market rate workforce housing that was responding to what our employers were telling us they needed. Housing for nurses, housing for the workers in the industrial park, housing for the new expansion that Beta Technologies is doing at the former energy energizer plant. This is a five acre site that would have languished for years without the city buying it, and it languished too long because the city took too many incremental steps, in my opinion. One of the lessons I've learned here is get the buildings down sooner rather than later. And the Cathedral Square senior housing portion together came together fairly quickly. That building is up, fully leased, very successful. We did one and we're talking with them about doing another. But what makes the project work is the market rate units. Remember they're worth twice as much. That's what provides the increment to service the debt. And that's been tougher to bring to the table. The city is offering to the development community free land fully cleaned of all environmental contaminants, with the city willing to assume the ongoing responsibility for any environmental issues that might emerge. No water and sewer fees or any other upfront costs. And we've secured $10,000,000 in LIAC funding through the treasurer's office and the partnership with the legislature and VHFA. And it still hasn't been enough to get this across the goal line because in large part nobody is yet building market rate residential units outside of Chittenden County. So the banks have some trepidation and we've had trouble getting our capital stack, our funding stream through the agencies that are lending the money. We've been shovel ready for a year, but we're still having trouble getting to closing on this project. I'm confident we're going to get there this year, but with every year the increment that gets generated is worth less. The same is true with the CHIP program. You can only retain increment for a limited time period. So literally in a public private partnership that's relying on the creation of increment to service debt, time is money. But we're going to get there. I think we'll be breaking ground on this this summer. This will be 40 odd units in phase one and another 40 odd in phase

[Katie Gallagher (Vermont Natural Resources Council)]: two. Is

[Marc Mihaly (Chair)]: that a question?

[Katie Gallagher (Vermont Natural Resources Council)]: No, sorry.

[Dominic Cloud (City Manager, St. Albans)]: Okay. No, it's alright.

[Marc Mihaly (Chair)]: But I have a question here. So just to clarify for the committee, when you say that the increment is kind of there's fewer years, I assume what you're referring to is that when the tip when the tax increment district was created, it had a lifetime, and any bonds that would be issued would have to be within that lifetime, and that as time goes by, that lifetime gets, you know, we're further into the lifetime. Is that the case?

[Dominic Cloud (City Manager, St. Albans)]: That's exactly correct. And just to drill down a little bit, your retention period is twenty years. Your debt issuance period is ten years. And the further you go into the life of your district, you have a shorter time horizon to generate increments. And so we're at about year 12 or 13. And so when projects slip further out into that retention period, they get less and less viable. So there's an incentive and practical reality to get it done now, which I like programmatically. There's a saying in the business, time kills all deals. So we have a housing crisis. We want the program to be structured to get it done and get it done now. But it's just important that all of our partners and everybody at the table realize, you know, we really need to be acting with a sense of urgency both from a policy perspective and a practical perspective.

[Marc Mihaly (Chair)]: So just to to conclude this point, what you're saying is when you started the the TIF District, it had a life of twenty years, meaning that the tax increment, the increment between what it was worth is that old building and the new value, potential new value, the retention period is the period in which you are allowed retain that increment and keep it out of the education fund, keep it out of the general tax of the town, and devote it to this redevelopment area. That is twenty years, and we're already how far into that?

[Dominic Cloud (City Manager, St. Albans)]: We're about year thirteen or so.

[Marc Mihaly (Chair)]: Yeah. Thirteen. Now all you in terms of your bond authorization, it's ten years, but you can't even use the ten years because you've only got seven left?

[Dominic Cloud (City Manager, St. Albans)]: Not quite. That's close. Last bit, know, your state retention period is twenty years, but you can go beyond that period on the municipal side if need be.

[Marc Mihaly (Chair)]: That is Not on the Ed's Not on the Ed's side, but the municipal side.

[Dominic Cloud (City Manager, St. Albans)]: Correct. Correct. Okay. In

[Marc Mihaly (Chair)]: fact, so that's why you figure you can issue a million bucks in tax increment finance, but not more for this big deal because you just can't do it because of those limitations.

[Dominic Cloud (City Manager, St. Albans)]: 100%. 100%. That's okay. Thank you. Sure. And, you know, seven years of increment is still a powerful tool. It triples your taxing capacity overnight and it can only be used for this purpose. So 10 is better than eight, but eight is better than nothing. So here's how this deal shapes up then. Starts out at about $350,000 in an original taxable value. We put a million bucks of TIF funds into it. We brought another 5,000,000 to the table. And so in round numbers here, it's a five acre site. We've got 6,000,000 in public investment. It's north of 1,000,000 an acre to get this development ready. And those are all sunk costs. So we need to get this thing across the goal line. And I and our team takes the responsibility to create increment very seriously. It's a generational opportunity. It's a gift from the state of Vermont. Our obligation is to go get it done. And this is a real flagship project ultimately. You see the senior housing developers put in $19,000,000 Market rate developers are to put in a little that project is going to cost a little bit more than that. All told we're going to have 120 units of senior mixed and market rate housing. Previously we had 120,000 square foot vacant warehouse worth $3.50. Now we're going to have 120 units of housing for all with a projected taxable value of 25,000,000. That's a good day at the office. That's a good return on investment. That's what chip is about and that's what TIF is about. What's working is the underlying infrastructure, TIF part and the chip part. Where we're having trouble is some of the transactional details, the more process oriented items of getting the money out the door. Here's our next project, which has been on hold until we got Fonda under construction. When the Fonda project leases up and I can go to the development community and say, well those 45 units that were built in year one leased up in four months, everybody gets more comfortable. Some of you live in Northwestern Vermont. I don't think there's a huge difference in what people are able and willing to pay for rents in Northwestern Vermont. It's a quick shot down the interstate to jobs outside of the county. There's a lot of great jobs in the county. For all intents and purposes, all of us along the interstate are one marketplace. But the banks don't always see it that way. There's still more risk developing in Franklin County. The further you get from Exit 14, the harder you need to lean into a project. So this is our next project, but I can't bring this one to the market until I get the bird in the hand taken care of, which is fond of. So if you've been to St. Albans lately, you'll see this building, Hawking Over Main Street with my name on it. This is the former Bellevue building which has been deteriorating for fifteen years.

[John Groveman (Vermont Natural Resources Council)]: What's the building?

[Dominic Cloud (City Manager, St. Albans)]: It's known locally as the Bellevue. Now originally it housed the Bellevue Theatre and so it's another symbol of decline. What's the cost of that hawking over Main Street? What's the impact on all the surrounding businesses? But the city bought this. We've issued the debt through the bond bank for redeveloping it into a housing project. We intend to demolish the building, build the structured parking underneath this building, and complete all of the environmental remediation and build new parking to serve not just this building but the other buildings around it. And that's what we envision that the new building is going to look like. And so we anticipate a very similar conversation to Fonda with this. Fonda, remember, is viable because of the infusion of LIAC funds. There's no LIAC on this one.

[Marc Mihaly (Chair)]: LIAC just for the committee. Sure. LIAC is referring to remember the treasurer has can invest 10% of his total assets while he's investing in real estate at very low percentages, and LIAC is just the name of the committee, the treasurer's committee, Morris sits on

[Katie Gallagher (Vermont Natural Resources Council)]: and Right. Is this not eligible?

[Marc Mihaly (Chair)]: And it and it and it and they you LIAC is the name of the committee that awards the funds. So when he says LIAC funds, he's referring to the treasurer's money.

[Dominic Cloud (City Manager, St. Albans)]: It would be a great candidate if there was more money. But that program is obligated. And if I were to deliver one message I would say I think we spend a lot of time talking about permits and infrastructure and all of that's really important. But what is still killing deals is the cost of capital. And that's what we're experiencing in all of our projects now is these projects are viable when money's at 3%, when money's twice that, they're not viable. And so that's a forecast on the future that I think we might be having conversations with policymakers like yourself as the chip program gets underway that I think we may have conversations about it's still not enough because the cost of capital is killing deals. And so that ability to access capital, that's something that the city, when you go back to our initial example with the St. Albans house, putting money into deals and then having it at our cost, is about half the cost of a private developer, and then having that money come back to us at a later date. That's a time tested tool that uses our ability to access capital, which is very different than direct grants or any of the other solutions. So this is a current project that we're working on. We're going to demolish the building and go to the marketplace in this year's construction season. And just wrapping up here, this is what St. Albans looked like in 2012. If you read our planning documents at the time, it would describe us as the center of business and commerce for Franklin County. But nobody would want to do any business or any commerce here if they could help. And four years later, this

[Marc Mihaly (Chair)]: is what it looked like.

[Dominic Cloud (City Manager, St. Albans)]: There's a brand new office building, which is fully leased to the state of Vermont. The legislature and the Sherman administration was a key player in that deal. It's a brand new hotel. Hampton Inn right there on Lake Street. There's a three fifty space parking garage and the whole area has been streetscaped. That was about 12,000,000 in public investment and you're looking at about $20,000,000 in private increment right there that helps patients learn. And so that's how we can do dramatic change quickly by the tools that you provide. And I come from a clear place ideologically that I think when communities lead it, you get there faster with greater certainty and you get better projects because the community is taking the lead. It's not the only way to do it. A lot of chip programs are going to be small deals, developer led, where the community is only saying yes, we will sign off on the agreement and allow your tax increment to pay for the infrastructure. But our experience is is you get more bang from the buck when the community puts more skin in the game. And so I welcome any questions.

[Marc Mihaly (Chair)]: Yeah. Thank you so much. This has been a wonderful short course in redevelopment for the committee. I think it's, I really appreciate the concrete nature of your testimony. Very helpful. Do members of the committee have questions, Dominic?

[Dominic Cloud (City Manager, St. Albans)]: Tom?

[Thomas "Tom" Charlton (Member)]: If you have any specific insights as to what could be done to shorten, and I know the difference from every project in all account, to shorten the time period between starting the tax increment financing and actually breaking ground. Because it sounds like that is something that could potentially limit the usefulness of the CHIP program.

[Dominic Cloud (City Manager, St. Albans)]: Yeah.

[Thomas "Tom" Charlton (Member)]: That gap concerns me. If there are specific ideas, if there are clear things you can isolate that would close that gap in general.

[Dominic Cloud (City Manager, St. Albans)]: Sure. You know there's a tendency in all that to focus on permit reform and know let's build homes. It's going to have I'm sure some proposals in that realm. Not taking anything away from those policy efforts. My experience is the best and I'm going to repeat my theme here is to encourage the community to put more skin in the game. Not every community is going to want to do that. And a thing we often hear when we give this talk around the state is well we don't have a dominant cloud. Well there's not I didn't know anything about commercial real estate development when I became the city manager. And I still know about as much of it as I know about wastewater treatment design or defending the city in court, which is I know who to call. So you don't need to be an expert. But when the community steps up and creates the vision, sells the vision, and offers the voters a chance to weigh in on the vision, you get fewer appeals. We've never everything I showed you, none of those projects have ever been appealed. It's one thing to stand out in front of a project with a private developer mission driven or otherwise. Something else to stand out in front of a project that the elected leaders of the community say is important and that the voters have supported three to one. And that's been our experience. The last thing in terms of shortening that gap is many of our affordable housing path housing development pathways are really focused around affordable housing. And they're tremendously successful. They've got a great track record. Where we struggle is when we start trying to expand beyond affordable housing into workforce housing and market rate housing. And we don't yet have the pathways yet for that process to be as smooth as it can. And they're really different animals. An affordable housing project and the return on investment and the level of equity that's contributed from the investors is really different than a market rate project. And CHIP has market rate component to it and it's the market rate projects that pay for everything else. Remember they're worth twice as much. And so we need to figure out how to have that process be as smooth as possible.

[Marc Mihaly (Chair)]: Thank you. Are there other questions? I'll just add my own experience. What Dominic described to you was my life for two decades in California. And what I learned is very much the same as what he is saying, which is that public private partnerships really work well because there are things that government can do that the public private sector just can't. But there are really important things that the private sector can do that the public sector can't. And the trick is to design projects which play to the strengths of each party. And very often, one of the problems is the private sector return has to for them, their return has to relate to the risk. The higher the risk, the higher the return. Otherwise, they'll never get anybody to invest. No one would invest. Believe me, you have to be a little nuts to be a developer, and none of us, if someone said to you, would you invest your own personal money in this? How much would you have to make? You'd say 20% or, you know, some outlandish number. So, the problem in Vermont and it's not unique here is that rents that people can afford are not high enough to create that level of return given the risk. And so, government has to step in and inject certainty, inject capital, inject land, whatever the government can do to reduce the risk so that a lower return is acceptable and the project, as we say, pencils out. And that's, you heard three or four different versions of that and how that works here.

[Dominic Cloud (City Manager, St. Albans)]: Well put, Mr. Chairman.

[Marc Mihaly (Chair)]: Any other questions or Dominic?

[Katie Gallagher (Vermont Natural Resources Council)]: Yes. Not a question, just a thank you from somebody in your county. I remember a few years ago, was very pregnant, and I told my mom we were like trick or treating with my oldest in St. Albans, and I had to move the phone away from my ear because she was so mad and frightened because of her idea of what St. Albans used to be.

[Ashley Bartley (Vice Chair)]: And it's just, it's truly changed to such a beautiful, lovely community. It is the best place to go trick or treating. Please don't tell Fairfax that. But just really, commend you for the work that you've done and your entire team.

[Dominic Cloud (City Manager, St. Albans)]: Thank you. I remember that fear.

[Marc Mihaly (Chair)]: Okay. Dominic, thank you very much. You're welcome. For being with us, and we may want you back for something. Thank you.

[Dominic Cloud (City Manager, St. Albans)]: Anytime. Have a good one. Okay.

[Marc Mihaly (Chair)]: Alright. We have the security briefing nominally at eleven. Given that it might be a good idea for them to come five minutes earlier, do you think that's possible or not? Probably not?

[Katie Gallagher (Vermont Natural Resources Council)]: Probably not.

[Emilie Krasnow (Ranking Member)]: That's what I'd ask.

[Marc Mihaly (Chair)]: Why don't we go offline? We'll be what's going to happen is we're going to have before we go offline to the public, we're having a security briefing here, and for fairly opposite obvious reasons, that briefing has to be confidential. It's going to discuss issues which are best not public, so we're not going to livestream the period when that briefing is given to us. This is between eleven and twelve. We will reconvene at 01:00 with a number of bills that are being introduced, and their sponsors will be talking to us, and that will start at one. So now we're adjourned until not adjourned. We are