Vermont Legislature SmartTranscripts:

[Speaker 0]: RBI Live. What's going on? Great. Welcome everybody to set of economic development and housing and general affairs. It is Vermont Housing and Conservation Day at the State House, which is always an exciting day. And so we are kicking off by we're kicking off our housing day with appropriately talking to our housing and conservation partners. And to kick that off, we're going to pass it to Molly to introduce yourself and to introduce what we're going

[Molly Dugan]: to hear about. Thank you very much. For the record, my name is Molly Dugan. I work at Cathedral Square, a nonprofit housing and services organization that serves statewide. I'm also one of the co chairs of the Vermont Housing and Conservation Diplomation. And as the chair just mentioned, this is our annual legislative day, and we are filling the Safe House with staff and residents and farmers and all kinds of folks that have seen the impact of Vermont County Conservation Board funding for next year is the fortieth anniversary of the Vermont County and Conservation Coalition. That's pretty exciting. Forty years that housing and conservation insurances come together to support these community driven projects that you're going

[Speaker 0]: to hear about from our three witnesses.

[Molly Dugan]: And I think our key point today is that these community driven projects have been going on for forty years where we're coupling housing and conservation. As you can see here, housing loves conservation and vice versa. We're going the Valentine's Day. What you're going to hear is this common thread around connections because that is what at its base the Fund Maker BHCB does. It brings people connecting at the very local level through housing, historic preservation efforts, conservation efforts, farm legacy efforts. So, we are gonna be around the State House all day. We're gonna be testifying in 10 different committees. Thank you very much for having us. And we want to underscore that our main ask, if you will, is that we support the governor's recommend for Vermont House and Conservation Board of the $37,600,000 which is the full of the property transfer tax. We ask that you support what the governor has put in the budget. With that, I'm going it over to our wonderful witnesses that are going

[Speaker 0]: to talk about the incredible community impact that's happening. Thanks to you guys. Well, and it's a mutual admiration. It's exciting. So I think we're gonna start with Ben. No. David. No. It's David. Start with David. David on the screen.

[David Newell]: Yes. Hi, folks. I had a brief Internet blip, but I'm back.

[Speaker 0]: And Oh, great. And if we could go full screen with David, great. David, I'm not sure, do you know all of us here in the room? Do you know

[David Newell]: I probably don't. I looked at the roster and we've Okay.

[Speaker 0]: We're gonna introduce ourselves. David

[Sen. Randy Brock (Vice Chair)]: Weeks. That's

[David Newell]: fine. Yep.

[Speaker 0]: We're gonna start with another David.

[Sen. David Weeks (Clerk)]: Good morning. David Weeks representing Rutland County.

[Sen. Randy Brock (Vice Chair)]: Great. I'm in Frankfort County in North Grand Isle.

[Speaker 0]: And Alison Clarkson, Windsor District.

[Sen. Thomas Chittenden]: So I'm Tom Chittenden. I represent Chittenden Southeast, and Senator Ram Hinsdale is also on the committee. She should be joining on Zoom shortly, and she's from the same district as well.

[Speaker 0]: Great. And David, we welcome you via Zoom, and you look like you're outdoors at a tour, a trailhead of some sort.

[David Newell]: That that's to some extent, that's true. Yes. It's a lovely morning down here. It's about zero we started with. The sun's out, and there's no wind. Everybody's all pumped up to the Williams College Carnival, which is going on right now.

[Speaker 0]: Great. So, David, introduce yourself and, fill us in on your and and testify away.

[David Newell]: Thanks for the invitation, to testify this morning. My name is David Newell. I'm president of the Prospect Mountain Association Board. We're a five zero one c three, and we own and operate the Prospect Mountain Nordic Trail Center in Woodford, Vermont, which is seven miles east of Bennington on Route 9. I'm sorry I can't be there in person. I've done that before on behalf of the VHCb, but we do have a big event going on right now, the Williams College Winter Carnival, the Nordic portion of it, which is about a dozen division one teams competing here today. And, unfortunately, I can't stay on to hear the other testimony from the other folks that I do have some things to attend to here. But this event and many others would not have been possible for us without the outstanding support that we got from the VHCb. Going back to 2018 when they generously gave us a grant for 265,000, which enabled us to purchase Prospect Mountain from the private owners at that time. The I consider the grant from the VHCB an investment in the community, and it certainly has been that for us now that we're embarking on our ninth year of operation here. Today is a good example. We have 200 folks here at Prospect, athletes and spectators. They stayed overnight last night. They stay overnight tonight. They patronize our shops and other hostelries, and this is a great economic boost for Southern Vermont in the wintertime, which is a traditionally fairly slow time. And that would not have been possible without the great initial grant we got from the VHCb. When we received the grant in 2018, it gave us legitimacy where folks said, gee, these folks are the real thing. They're they're both the VHCB believes in their mission and what they're doing, and I think we'll donate also. And it enabled us to complete our capital campaign, and we did raise the 900,000, in a matter of a few months to purchase Prospect. But, again, the starter on that was the VHCb grant. We were, assisted by the Vermont Land Trust, and they did an excellent job in helping us get organized and also assisted us in the grant application to the VHCb. And they we found that the staff of the VHCb were tremendously helpful to us and very professional, starting with Gus Selig and his, excellent crew that worked for them. And I'm sure other organizations, and you'll hear from two others today, have the same story with how easy it is to work with them, and what a bonus it is to have them support your organization. We, now, Prospect is used by a wide range of folks, not just competition like we have today, but we have youth program, the Bill Cothe Youth Ski League. We have the we have an elementary school program where we donate ski rentals and instruction for them. High school racing goes on down here in Southern Vermont, and, of course, we have the college competition today. But maybe what's even more important is we offer a recreational outlet for many folks in Southern Vermont to come up here and ski. We have three eighty season pass holders from six different states here. So it brings people up to the Southwest Vermont area to ski here and also stay overnight. And we, last year, had 27,000 skier days up here. So we're used quite a bit by recreational skiers primarily in that number.

[Speaker 0]: We

[David Newell]: are, I think, a pretty important recruiting tool for the hospital when they're trying to attract doctors to come here and other industries and businesses here when they're attracting executive talent because we do offer a very well appointed Nordic trail center with groomed trails and a lodge for folks to enjoy. Events are important to us. We have this one today. We had the New England U16 championships last year, a five state competition and involved about 300 kids. And we are the we're gonna host the Bill Coke Youth Ski Festival next year. Wish us luck on this, but this was 600 kids coming here.

[Speaker 0]: It's a great event. Oh, man.

[David Newell]: Right. Great event, and we're delighted to be part of that. And it'll be a a massive effort, but we think we can pull it off. So I would certainly encourage the legislature to support the VHCb budget request of the 37,000,000. And our story is, I think, a very good one, and you'll hear many others for the importance of the grant support they receive from the organization. So I'm glad to accept questions and from any of you. I know you have a limited time slot this morning, so feel free to ask some.

[Speaker 0]: Committee, any questions? Dave?

[Sen. David Weeks (Clerk)]: So thank you for the testimony. I see behind you snowshoes, cross country, some alpine deer. What what sports are you are you addition to those, possibly, are you supporting at the center?

[David Newell]: Well, in addition to Nordic skiing, we do have snowshoe trails here available. We have a a lively group of folks who do snowshoeing up here. And we also have since Prospect back in the day was a downhill ski area, it actually was founded in 1938, went all the way to 1992 with a t bar lift and a rope tow up here. So the alpine trails are still here, and we have a growing number of folks who skin up and ski down.

[Speaker 0]: Ah, yes. Those skinners.

[David Newell]: Yeah. And skinners, and these folks are great. And, we're a little bit of an epicenter on that because we have the unusual resource of having downhill trails in a Nordic area. Right. So we're happy to encourage that. So that's what we offer. Yeah.

[Speaker 0]: Do mountain biking?

[David Newell]: We don't, do mountain biking here. One reason is that 40% of our trails we lease from the National Forest, US Forest Service. And they're really nice folks, and they work well with us. But we would need a different permit than we have now to mountain bike on the trails.

[Speaker 0]: Got it.

[David Newell]: And we are moderately concerned about damage to our Nordic trails and repairing that for the for the upcoming season. And, there are many other opportunities for mountain biking down here, so we leave that to other folks, who are better equipped to offer that service.

[Speaker 0]: So question for you, the next major investment I assume that you're considering is snowmaking.

[David Newell]: That's true, and we actually have a small system now. I didn't mention that in my remarks to you, but after the initial purchase, we launched another capital campaign for that. And we were able to raise, believe it or not, about another 900,000 for the system, which cost us at least that plus a little bit. We now have about two k of snowmaking here.

[Speaker 0]: Oh, that's great.

[David Newell]: Which is on a loop and enables us to open earlier and to supplement the snow that we have. Right. We'd like to maybe eventually expand that. We're sort of learning by going on this, and we we all learned that making snow is a somewhat complicated procedure. Very weather dependent and wind. And Right. And having the right personnel. We our staff, it works really hard as it is, but it's hard for us to keep them up all night doing that.

[Ben Doyle]: Right.

[David Newell]: But we do have it, and we have used it. Yes.

[Speaker 0]: Right. David, thank you very much. That was terrific. And if you have written out your testimony, if you'd be kind enough to email it to our committee assistant, KRME, that would be terrific.

[David Newell]: Yes. I did write it out, and I will

[Speaker 0]: Oh, Oh, okay. I apologize. Oh. Molly Molly

[Molly Dugan]: helped with

[Speaker 0]: that. Right. Will look before I speak. Thank you. Thank you. I see it right here. In fact, everybody.

[David Newell]: That's great, and we appreciate the opportunity.

[Speaker 0]: Thank you. Thank you. Thank you. A great event, and have fun with all those Williams Williams College people.

[David Newell]: That's right. We're rooting for Williams today. Yes. We are.

[Speaker 0]: Yeah. They're here.

[David Newell]: They're almost in Vermont. They're almost in Vermont. They should be.

[Speaker 0]: Almost. Not quite. Yeah. Thank you. Okay. I think we're next gonna welcome Ben. Unless Andrew wants to I mean

[Andrew Winter]: I know what.

[Speaker 0]: Ben. Ben. Ready.

[Ben Doyle]: Ready to see you all again.

[Speaker 0]: Ben, it's good to see you. I'm just gonna I'm

[Ben Doyle]: gonna share my screen. Is and I need Yep.

[Speaker 0]: Oh, I thought I smoked earlier. Wonder. It should it just tastes like it. Yeah. Oh god. It's been very long. I think it's sadly thing that's happened ten years ago. It's come through. My slow spine again. So I'm saying it's just what they say happens. Sorry. Bye.

[Ben Doyle]: Oh, you.

[Peter Trombley]: Check

[Ben Doyle]: with Well, I mean, really, feel again, might have used this joke before, but I the ethics of the world's English teacher, and I still have PowerPoint anxiety of ninth graders, now. But they're you folks are far more generous.

[Speaker 0]: Great. And and the screen is Thomas. Oh, there you go. You got it. You got it. Perfect.

[Ben Doyle]: Great. It's wonderful to see you all again. My name's Ben Doyle. I'm president of the Preservation Trust of Vermont. I've been here already this year, so I'm not gonna spend a lot of time talking about the Preservation Trust other than to say our mission is to build community through the preservation of historic buildings, villages, downtowns. Last year, we worked on 355 projects in a 152 communities. That's what this map represents. And I wanna say that so much of this work is made possible because of our partnership with VHCb.

[Sen. Randy Brock (Vice Chair)]: Sure.

[Ben Doyle]: We have a long standing relationship with VHCb. And, probably most significantly, when VHCb donates, or makes a grant for a historic preservation project, that is accompanied by a preservation easement, meaning that the grant recipient agrees to maintain the historic character of that building, and that easement is monitored by the preservation trust. We receive a small portion of funding that goes into a special fund that allows us to, every year, visit those projects and those investments to ensure that they're, being maintained correctly. What I really wanna speak about today, though, is the dual goal of the agency.

[Speaker 0]: Before you leave that Sure. Slide Ben, this is such a great map for those of us who wanna ensure that projects happen all over Earth. But all your important data is in this tiny unreadable box. And I'm just gonna say, those of us who are psych challenged, I would love that information in a in a in an independent email or something because I can even read it.

[Ben Doyle]: Okay. I thank you for that feedback. I will absolutely

[Speaker 0]: If you're online, that's true. You can zoom in. So Thomas, of course, has figured out how to zoom in. I, with my pathetic eyesight, you know, like, ugh. No problem.

[Ben Doyle]: I'd be happy to send that information.

[Speaker 0]: Thank you. Or or Thomas will figure out how to

[Ben Doyle]: get it. Okay.

[Speaker 0]: But because that's all the great data that I mean, that's You know,

[Ben Doyle]: I have to say we struggle every year on how are

[Sen. Thomas Chittenden]: we gonna put this map together and what but

[Speaker 0]: It's great. The map is great.

[Sen. Randy Brock (Vice Chair)]: Yeah.

[Speaker 0]: But just the info is even more important.

[Sen. Randy Brock (Vice Chair)]: Great.

[Speaker 0]: Okay.

[Sen. Randy Brock (Vice Chair)]: You can send us a magnifying glass.

[Speaker 0]: Yeah. I actually have one here. I have one here.

[Ben Doyle]: I'm gonna move on to the

[Peter Trombley]: dual goals of the ACV.

[Ben Doyle]: Yeah. Yeah. Yeah. Which and this is really what I wanna tell as a little bit of a story about. And I think I've told you about the East Callis General Store before, but this is and I'm gonna go very briefly on it. But this is the East Callis General Store, which was built in 1850. One of the challenges of my jobs when we talk about general store, everybody in Vermont thinks they have the oldest general store, including these folks. But, anyway, 1850, and it was really, if you know East Scalis, the heart of that community. Right? The village anchored this anchored anchored the village in the community. After, you know, a hundred, you know, a hundred and fifty years of of, of use, finally, the store was in a pretty challenged and dilapidated state by 2018, had closed. And a group of people got together and said, we have to save this store if our village is gonna remain viable. And that, of course, the East Catalyst Community Trust representative Mahali was a huge part of this project Right. Organizing this. But I think if you were to ask representative Muhammad, he would tell you that this project would not have been possible without VHCV. VHCV was the largest funder of this project. The preservation trust, we provided a ton of technical assistance. We provided actually a lot of funding through a congressionally directed spending award, through the Paul Bruin Historic Revitalization Grant Program. '27 different funding sources went into this project. Woah. But it would not have happened without BHCD. And just to give you a sense of how they influenced this project, it's not only the general store that anchors the village and provide the center of commerce. There's three perpetually affordable housing units in this building, which, by the way, is, carbon neutral. They did an amazing job. So it has three perpetual units, at least one of which is fully handicapped accessible. And this is what I wanted to talk about is VHCb's dual mission, and I think of it as the three legged stool of land conservation, historic preservation, and housing. It's not one of those three. It's all of those three put together that makes Vermont what it is. And VHCb, I think, is a real leader nationally in bringing that approach. And here, they leverage different resources. So for example, they provided $370,000 in housing funding to make those three perpetual units. They had 2,000 $210,000 in preservation funding. They had $60,000 in lead remediation funding and then $2,000 in feasibility funding right at the beginning to see if this was in fact the viable project. And this is the story today, and I hope that you all get a chance to it.

[Speaker 0]: And may I just point out because I represent one of exactly the same thing all over Vermont. We have as all of the four of us know, we have these anchor Yes. Anchors to our communities that are generally often just one general story. Yes. And they often are the general story. Barnard is one of them. You did one up in Albany. I have

[Andrew Winter]: a whole

[Speaker 0]: I'm gonna The whole group.

[Ben Doyle]: I'm gonna breathe right through them.

[Speaker 0]: What is astonishing is how many of our communities are held together by one Yes. Thing.

[Ben Doyle]: And that, you know, that I absolutely agree. And what I really wanna leave you with is this idea that communities, rural communities in Vermont are only truly viable for the future if they have a gathering place like this. If we want more people to come to Vermont to participate in our economy, I really believe we have to look at our strategy for rural communities and make them viable. And I think when someone's choosing whether or not they're gonna live in Burlington or Belvedere, they're gonna choose a place where they can find affordable housing, but also find a place of community, a place where they can gather with their neighbors and feel like they belong.

[Speaker 0]: And get their income.

[Ben Doyle]: And get their income.

[Andrew Winter]: I mean,

[Ben Doyle]: yes. So just real quickly, this is, of course, the ribbon cutting for that ceremony, which was as a real team sport. But I just wanna, like, breeze through really quickly to say these guys example is not unique at all. This is the Guilford Country store that ten years ago, VHCb more than ten years ago. Excuse me. Almost twenty years ago, VHCb put, $70,000 into this project, and Wyndham and Windsor Housing across the street helped develop affordable units of housing. So you've got this combination of commerce, community support enterprise, and housing. Similarly, the Putney General Store, which burned in 2008, was renovated and then actually burned to the ground in 2009. Preservation Trust worked with a number of partners, but including the HCD, who made a significant investment for the Putney General Store to rebuild and is thriving today. The Albany General Store Yeah. This is a a project that I really wanna talk we know a lot about the housing funding that VHCb does, the conservation funding. One of the most significant, I think, in kind of under the radar rock star programs at VHDD is the REDI program, the Rural Economic Development Initiative program, which provides small grants to leverage federal funding. And so the Albany General Store is another example of a store that burned, sat vacant for five years. Fundraising Trust, we helped them organize a community trust that raised money and purchased the building, renovated the building, and it's now owned by a nonprofit trust and operated by a private operator. But what I want you to think about is that because of the Beretti program, which provides grants of less than $5,000, they were able to hire a grant writer that allowed them to pull down a USDA rural rural develop rural business development grant of $90,000. Similarly, at the East Havas store, the REDI program helped them secure Northern Border's Regional Commission grant of a $185,000.

[Speaker 0]: So that is an amazing return on a very modest investment.

[Ben Doyle]: Honestly, it is one of the most successful economic development programs I know on the state of Vermont. They they they really help people on the beginning of that project, and they bring in the technical expertise. These small communities, they ask them to fill out a Northern Borders Regional Commission grant application. And I I'd say this is someone who used to work at USDA, administer those grants. It's very challenging. And that's why you see larger communities often pull down that kind of federal funding. It's programs like the R. D. E. That allows these small towns to really pull it down. The Rupert, Rupert Cafe was able to pull down a USDA community facilities grant because of the R. D.

[Speaker 0]: E. Program. Where is this for my desk?

[Ben Doyle]: This is the Sheldon Cafe in Rupert, Vermont. This is. And this is an old general store that's had vacant for a number of years. It was actually turned into a housing unit, which often happens when general stores close. We need the housing, but we also need the stores. And so this is a they now have coffee hour on every weekend, and, the community kind of gathers there. Again, that was, also helped made possible by, the Ready program. The Strapper General Store that we just worked with for the past two years finished? Yeah. It's it's it hadn't. They they really pulled it off. They raised, you know, I think $1,600,000 of philanthropic funds to make this project happen. And now, Reddy was a big part of that, of helping them do feasibility studies. They're currently working with them on potential renovations that they need to do. And then Bucks Deeks. This is a we were I was actually there yesterday, and, you know, this was a real loss for the community of Orwell. And we're working with them through our Builders Trust initiative, but Ready and BHCB, we anticipate they're gonna be a huge partner on this project. Elmore General Store, Barnard General Store.

[Speaker 0]: Oh, right. The Buxton's is in Orwell. Right?

[Ben Doyle]: That's right. Yep. And then this is Pierce's General Store in Shrewsbury. Do you know Pierce's? Oh, yeah. Yeah. It's very well. That's and his just We actually, Preservation Trust of Vermont owns Pierce's and then Lisa sit out. Wow. This is so very close. We know. They have a great new operators there and excellent food. Great sandwiches.

[Speaker 0]: And do they have an apartment?

[Ben Doyle]: They actually do have an apartment. The the store is attached to Marjorie Pierce, the Pierce family lived here for generations. And then when she passed away, she actually thrown into the store to the preservation fest of Vermont.

[Speaker 0]: Oh, great.

[Ben Doyle]: Yeah. It's a wonderful place, an institution. But what I mean to just end with, and I'm really cognizant of the time, is that I cannot tell you how important BHCb is in thinking holistically about what it means for rural communities to thrive. Do we need access to land because this is Vermont? We need a four places where people can live, and we need to preserve the important parts that make Vermont Vermont and allow communities to come together. And I think through general stores and through so much of what VHP does that may pop forward. Thank you for your partnership and your support of VHPV. Means less.

[Peter Trombley]: Happy to take any

[Speaker 0]: questions. Gentlemen. Well done. We're never done. It's not nicest thing with Ben is we're never done. And as you may know, because I think you touched on it briefly when you were here before, you are engaged in Montpelier and trying to take all these empty less than well used spaces in Downtown Montpelier Well, I mean turning them in productive spaces, and you have three minutes to

[Ben Doyle]: Well, as you know how much

[Sen. Thomas Chittenden]: I love the last time I was

[Ben Doyle]: here, went off a little bit on the Federal Building, but that's actually a really good example that AHCb recently recapitalized their land bank fund in order to provide access to capital, not necessarily to that project, but to projects where there's a unique opportunity that's required to secure site control for potential affordable housing projects. And so that, you know, every town or not every every downtown in Vermont that has these kind of underutilized, you know, a lot of times we call them pits, but I think of them as development opportunities. Yeah. I think and it's often so difficult to secure site controls And something like, you know, VHGB being flexible, being creative, having access to capital that can quickly be deployed to secure site control so something wonderful can happen is is really important.

[Speaker 0]: And what we're looking at in in all the designs I've seen or at least all the maps on this possibility, on this opportunity, are the as you gentlemen know, the three parking lots that are behind, all owned by different people, I believe, or many of them.

[Ben Doyle]: The best the best part of yeah.

[Speaker 0]: And then the Federal Building.

[Ben Doyle]: Well, it's really great because you've got the for years, people have talked about redevelopment along Court Street, and it's been very challenging because the federal government doesn't wanna really talk about it. But the fact that they're now putting that property up for auction means that you would have access to those three lots owned by the federal government, Vermont Mutual and BGS, all from that one property. Three different owners. But all of whom are ready to work together to make something great happen.

[Speaker 0]: Which is great and not always the case. Yes. But that's terrific. Thank you.

[Ben Doyle]: Thank you so much.

[Speaker 0]: And thank you for being such a productive partner. I mean, we have great partners here today. And from my neck of the woods, we have Andrew Winter, and we welcome you, sir.

[Andrew Winter]: Great. Introduce yourself. Andrew Winter from Twin Pines House of Trust, senior senator. We had an occasion to to visit together at Barker Town Hall a couple years ago. Nice to meet you, senators. I'm I'm the executive director at Twin Pines Housing Press. And, Sierra, thank you so much for playing a videographer here as we kind of cycle through this. The first slide is a slide of a project that we developed a few years ago, five years ago, called Wentworth II in Hartford, a great example of the kind of housing that we're developing in conjunction with BHCB. So a little bit about Twin Pines. We are a nonprofit like like our other partners here today and have been around for thirty five years. Each have today, 665 rental units, 71 homeownership units, mobile nine mobile homes, and and a single, mobile home park in South Royalton. And we're doing a little bit of everything. Anything that involves housing is what we're doing, and that is true for our peers in, in the network of nonprofits that are developing, across Vermont. So we're doing stuff for seniors. We're doing a lot of housing right now for veterans. And we also have done projects for the homeless. So the project that you see on the top of the screen, the 747 Hartford Ave, is one that we did in conjunction with the Upper Valley Haven, which is our regional homeless shelter, and that is providing housing for 18 chronically homeless folks, similar to a project that we've built across the river in Lebanon, New Hampshire. We worked on both sides of the river. And and then more recently, we undertook the Riverwalk project, and that's sort of an interesting project because we did it on a turnkey basis in an effort to try to keep costs down. We're always trying mindful of how expensive building anything is in Vermont these days. This is a project where we worked with a a property owner that happened to be a general contractor, had developed several properties in Hartford, and we, signed an agreement with them to buy a completed building. We worked with them to make sure that it was designed to meet our needs.

[Speaker 0]: So that's what you mean by turnkey.

[Andrew Winter]: You bought finished. So we bought it finished when it was 99% finished. I'm happy to explain the the the whys as to why it was 99 complete and not a 100% complete, but it had to do with our tax credit goals and and making sure the investor was admitted into the project or the project was placed in certain

[Speaker 0]: And how much would you estimate that saved? Because we're all very and we all have a pretty clear understanding of what of of the COGS challenge. Yeah. And so we I think we'd love to know, a, how much you saved by doing it that way, and b, how much did sort of on average these units cost?

[Andrew Winter]: Yeah. So this this was a project that was 394,000 a unit, so less than 400,000. Less than 10. The $7.47. $7.07 47 was in the fours, and that was driven in part because we were working with St. Paul's Episcopal Church. We were rebuilding certain facilities that they share with us, as well as with the Upper Valley Haven, which is right next door. So it was you know, one of the challenges that we deal with when developing housing is working with municipalities. The municipality here really wanted us to upgrade everything, in that site. And so

[Speaker 0]: As did the neighbors.

[Andrew Winter]: As did the neighbors.

[Speaker 0]: The neighbors were very challenging.

[Andrew Winter]: The the the neighbors were very challenging. Yes.

[Speaker 0]: I I I said that with affection. But Yes. They were they didn't delay it ten years, but they did delay it.

[Andrew Winter]: Yes. This was this was there are, I believe, forty or fifty hours of my life that I will never get back in terms of public hearings. Yeah. And it but that was a that was a a lengthy process, but one that I think ended up with a a better product and one that, you know, we're committed to working with them. May

[Speaker 0]: I just add you on that? That is designed to bring people from homelessness into housing.

[Andrew Winter]: Correct.

[Speaker 0]: 18 of those units are for that purpose. Yes. What's our success rate so far? And we've only been open a year.

[Alex Farrell]: Yeah.

[Speaker 0]: Mean, Well it would just be curious to know how this is a model we all have kind of bought into and we But all how's how's that working?

[Andrew Winter]: Yeah. So I will be candid. My job is to be candid and to acknowledge, the challenges that we face. So this is based on a project in Lebanon, New Hampshire, right across the river. 18 units, been open eight years, we've had one eviction. I would say that is a win. Right? You're taking people who are chronically homeless, who may have bounced from place to place, may have been living in a car before they lived in housing, most recent, you know, most recently into housing, and and we were very successful there. This has been a little bit more challenging. I will acknowledge that we had one placement early in the project, and this individual who was maybe not as far along in their recovery has been a a problem. And we've been kind of working with the residents, working with the town of Hartford to address some criminal activity at the property. So and that and that had been frustrating. It's it's frustrating because it is detrimental to the well-being of the residents who are there, and I will share that one of the things that I would very much like to see is, and we will be talking about when it comes to the Senate side, is landlord tenant changes.

[Speaker 0]: Have you weighed in with Mark upstairs on our bill, on landlord tenant?

[Andrew Winter]: We are in the process of waiting, and I have a draft letter ready to go out.

[Speaker 0]: Okay, so soon, because crossover is happening. Mean, we're happy to address it once it gets here, but it would be great to

[Andrew Winter]: Yeah, and again, you know, I will share. I know our peers at CHP have been weighing in, Chris Kelly and Michael Fonny have

[Speaker 0]: Chris have been weighing in from all fall, which has been terrific.

[Andrew Winter]: So that's something that we can get behind, in part because we understand the difference. The senator and I were talking earlier about the differences in New Hampshire and Vermont. It is much quicker and easier for a landlord to get an eviction in New Hampshire than it is in in Vermont. It's one to two months in New Hampshire. We can decide whether that's the right metric. It's six months or more. We'd have a household that we've been working on for fourteen months.

[Speaker 0]: In Vermont. So this just to finish on, 747 Hartford, the of those 18 units, only one has been a real problem. And are you in the process of evicting that person?

[Andrew Winter]: Unfortunately, we're in the process of evicting six. We've evicted three, and we have three others that we're working through. Now, just because somebody files for an eviction doesn't necessarily mean it's going to be granted, must mean that somebody's going to engage treatment or other actions that prevent us from having to move forward with eviction. But it's an acknowledgement that this is an issue, and it's something that we're working with to make sure the legislature understands.

[Sen. Randy Brock (Vice Chair)]: Randy, can you give us the thirty second review of the obstacles you face and why it's taking you so long based on what you see?

[Sen. David Weeks (Clerk)]: Too big.

[Andrew Winter]: Yeah. So I'll just That's why I said the thirty second. Yeah. I'll I'll give a quick synopsis. You know, with this one particular individual, as a landlord, having, you know, absent sort of a police report or fire report that says this person is engaging in drugs, we can show activity at the site or be not. That's a little bit of the challenge, and And you're representatives. And we're represented, maybe folks are either represented by Vermaatly Blade, they may have gone in pro se, and whether they represent themselves, it can be a challenge getting the judge to buy in on why we're evicting this person for cause.

[Speaker 0]: Yeah. And one of the things this bill does is make much clearer reasons for it to

[Peter Trombley]: be Yes. Just cause.

[Andrew Winter]: And that's and that's that's helpful. And that that that was another question. Is is what you've seen the bill sufficient, or are there other things that you think should be done? I think that the bill is a good first step, and there may be other things that people get over time, but I think it's gonna be a really good first step.

[Speaker 0]: Yeah. Okay. We've we've delayed.

[Andrew Winter]: So I'm gonna I'm gonna point out one one other thing about Riverwalk. So Riverwalk is general occupancy. In addition to doing it as a turnkey, one of the things that we benefited from, is philanthropic dollars raised from major employers in the region, Dartmouth College, Dartmouth Medical Center, Dartmouth Health, and Mascoma Bank were all partners in creating an Upper Valley Housing Fund, and that is in fact-

[Speaker 0]: $10,000,000.

[Andrew Winter]: 10,000,000 and this project was recipient of $2,000,000 providing first mortgage financing for helping to finance this project. So just great way that partner with BHCV. They're a great partner, not only providing capital dollars, yes, thank you, not only providing capital dollars, but obviously providing organizational capacity, capital dollars, and through foundation support, they've been helping us with resident support services, which helps keep people helping in towns. I'm gonna give a couple examples on projects with. Sandra, did you have a question?

[Speaker 0]: No. Okay. Okay. I'm always happy to have someone as an example.

[Andrew Winter]: So here's here's an example. This is a project, Melishwood. It's a great example. It's 26 units of housing that was developed by a for prop for profit developer in the nineteen seventies. He passed away a few years ago, and we purchased the property. It consisted of the historic structure that you see in the top photo, the not so historic 1970s era, additional buildings in the bottom. And so with BHCV support, we are going ahead. We're gonna renovate the two historic structures in the front, that are really integral to the historic, facade as you kinda come into to the town of Woodstock. And then we're gonna have build this new building, this is an act of place in the 1970 era, structure structures with this new building, and we're really excited about it. Of the really critical elements here is thanks to act 47, thanks to the efforts of the town government, we were able to increase density by 50% in an in town location for our seniors. Walkable services, walkable to the downtown, and and that really is credit to the town, but it was also made possible that act on morning seven.

[Sen. David Weeks (Clerk)]: Right. You're moving from the downtown towards the highway. Is it on the left side? So this this is side.

[Andrew Winter]: Yeah. So this is It's

[Speaker 0]: right next to Shire Motel.

[Andrew Winter]: The Shire Motel and what you see Max Market.

[Speaker 0]: To the Masonic Hall. It's right on Route 4. As you traffic park is here, and Meliswitz here. Our grow our grocery store Oh, right. Kind of kiddie corner from the grocery.

[Andrew Winter]: Yeah. So it's it's it's a it really is a superior location.

[Speaker 0]: Oh, it's right in the center.

[Andrew Winter]: Right in the center too.

[Speaker 0]: Right next to the health center, is even more important.

[Andrew Winter]: So we have the It's in people. It's next to the Atacuchi Health Center, so, BHCD put in $5,500,000, that included some one time money that was so a significant investment for the HCV. I wanna talk about leveraging. This is one where 75% of the cost is coming from either private sources or federal sources and private investment dollars to help make this happen. So there's a real leveraging effect here of what BHCb is putting into the project. So I need to move on to the next one. Another example in in the town of Woodstock is the Bondale Reservoir. This is a project that is in process. The Montland Trust is currently has an application pending before BHEV. I don't wanna prejudge whether BHEV is going to say yes, but it's an example of the kind of conservation work that BHEV supports. 2023, obviously, terrible flooding across the state of Vermont and Woodstock. It it wiped out the Woodstock Aqueduct company, private fourth generation water company in Downtown Woodstock, and the town was without water for two weeks.

[Speaker 0]: Oh, it was nothing like compared to Irene.

[Andrew Winter]: It was nothing compared to Irene, but it did it did He's okay. It did it did reveal some of the deficiencies of the water system.

[Speaker 0]: Actually, Irene Well Irene did that, and we didn't make anyway, they were but we're thrilled we've got it now.

[Sen. David Weeks (Clerk)]: So thrilled.

[Andrew Winter]: So I like to give Woodstock kudos because, you know, we work across the region, New Hampshire and Vermont, trying to encourage communities to step up when it comes to water and sewer. This is a great example of where the town wired the water system from the private operator, and this is kind of finishing the piece off. This is the old backup reservoir for the water system and will be conserved, 300 plus acres, wonderful walking trails up there, and

[Speaker 0]: Mountain biking.

[Andrew Winter]: Mountain biking and all of that, and this is a real community asset, again, made possible thanks to the support of the agency.

[Speaker 0]: And because we all care about quality of life, brings people and residents to our state, this is a huge piece of our quality of life, an additional piece to Woodstock area.

[Andrew Winter]: Yes. And again, a great example, you know, representative Charlie Campbell was a he was a key person, and I had a chance to talk with him this morning. And so he came in, and I was like, I'm the Michigan Union. Yeah. He really stepped up sometimes to mean a supply of something. It it takes with with limited resources at the unit municipal level, sometimes it takes community volunteers to help things like this happen, and that's the Vermont way. And he did a great job kind of helping explain to everyone why this was important.

[Speaker 0]: Well, while he was not here at the state house, he actually spent those two years selling, purchasing the water company from the buildings and getting this project Yeah. Through. So we big thanks to Charlie for both of those efforts. Yeah. Yeah. So his time was well employed when he wasn't here at the state house.

[Andrew Winter]: So I I noticed I'm coming up on my on a lot of time. So I thank you very much. I encourage you to endorse the governors, approve the governors.

[Speaker 0]: Quickly, if you would weigh in on our housing bill, and I would love to have you guys review that, our page two three twenty eight. We do have a piece that affects developers, which is the union the the suggestion that we use union labor for what I would hope would be multi residential unit construction. I think we're looking at prevailing wage, not just union labor, because we don't have enough union labor to do that in Vermont. How, as a developer I mean, because you are a developer.

[Andrew Winter]: We are a developer.

[Speaker 0]: Any thoughts on that?

[Andrew Winter]: Yeah. So, prevailing wage, we're already paying prevailing wage for our projects. You know, I think one of the challenges with union labor in our region is, that we're probably gonna be pulling that from Massachusetts. We're probably gonna be pulling that from Southern New Hampshire. It's it's not the the the homegrown businesses that construction businesses in our region.

[Speaker 0]: And you do you use primarily Vermont based developers, or do you use because you're on the river, you you both?

[Andrew Winter]: Yeah. So we we we because we're on the river, we'll pull from, you know, we'll pull from Central Vermont, we'll pull from New Hampshire, so we have kind of a combination. Again, you know, for anybody who lives, you know, along the border of State of Vermont, you know, you may shop, you may you may have family, you may have an employee who lives in one state or worse than the other, and that is certainly true in the Upper Valley. We have although we're based in White River Junction, we have, employees and vendors on both sides of curve.

[Speaker 0]: Same. Thank you.

[Ben Doyle]: Yeah.

[Speaker 0]: And, Molly or Ben, any thoughts on that? Oops.

[Ben Doyle]: I would defer in my

[Speaker 0]: Yeah. How come right? Great. Any other thoughts that you would have on 03/28? We'd appreciate hearing Yeah. In patrimony or and or given our time frame in writing to all of us

[Sen. Randy Brock (Vice Chair)]: Yeah.

[Speaker 0]: Because we're gonna be

[Andrew Winter]: Yeah. I mean, again, you know, one of the other issues sitting there that I know, I think probably needs to thought is, around, restrictions on, for granting of, you know, pro pro prohibiting HOAs, prohibiting prohibiting rentals in cuddle units, and that's something that obviously people I look at and with a little bit of concern, just making sure that that does impact covenants that exist for the benefit of

[Speaker 0]: So you and Chris Donnelly, actually. Chris is working with our legislative council, Cam Wood. Okay. And we're working on crafting language that satisfies that because the Chittenden Housing Trust has the same issue.

[Andrew Winter]: They do.

[Speaker 0]: So that would be great. You'll see Chris today. You kind of have to weigh in with him and find out where that is. I know it's being drafted, so I mean, I know they're working on it. And we're gonna have language to look at next week.

[Andrew Winter]: Okay, I will do that. Again, it's an issue that affects all the housing trusts in all parts of Vermont because often we're doing home ownership projects in smaller HOAs. And so we want to make sure that the rules Right.

[Speaker 0]: We want to protect public dollars for somebody who really has a need and not for them to be making market rate money off That's public right. Okay.

[Andrew Winter]: Thank

[Speaker 0]: you. Thank you all. Thank you so much. This is great. Thank you. This is terrific. And we're actually pivoting to HOAs, Andrew, because we're gonna be looking at oh, no. We're doing off-site. So we're welcoming in Alex and Peter. Thank you, Ben.

[Ben Doyle]: Thank you.

[Speaker 0]: Have a great day.

[Andrew Winter]: Thank you. Thanks very much.

[Speaker 0]: Are either Alex or hi, Kesha. There's Alex. There's Peter. Oops.

[Alex Farrell]: Sorry. I didn't

[Sen. Kesha Ram Hinsdale]: hear you. Hi.

[Molly Dugan]: Hi. I love your Valentine this morning.

[Sen. Kesha Ram Hinsdale]: Aw. Thank you.

[Speaker 0]: It was delicious. Okay. Alex and Peter.

[Sen. Kesha Ram Hinsdale]: Just so people know that was a picture of my one and a half year old. Was a It

[Speaker 0]: was a sparkling.

[Sen. Kesha Ram Hinsdale]: Thanks for the cheer. It

[Speaker 0]: was delicious. So, Alex, would you like to launch? Because I think if you launch don't worry. There's runway. Yes. Tom can do the lights. Alex, welcome back. It's good to have you. Thank you. If you would be kind enough to walk us through section three, because we haven't really addressed it yet. Sorry. We should be kind of a buzzer going. Thanks. Which Which one? We're we're on housing. And so we're at 328. Our three twenty eight draft 1.1, I think. No. Graph. No. We don't have the Yeah. Yeah. Just as you Just as introduced. And, Alex, I think this was this I I I think it's honest to say that this section of the bill was introduced before the governor's budget was clarified. And so there were some staffing implications here, which were clear on that with the local test, and we know you can't weigh in on that. But if you could weigh in on this project and its importance and why you spearheaded it or in large measure, you spearheaded it, and what you and in conjunction with the treasurer's proposal that we're gonna hear about this either, how this might be possible. So because I last time you were here, you were a little disparaging publicly about it actually being able to move forward. That's what I thought I heard.

[Alex Farrell]: I'd only disparaged Peter, really.

[Speaker 0]: Yeah. Yeah. I don't think. Me too. Yeah. Anyway, we are however, now looking at it with new eyes, I think. Is that fair to say? Is that fair to say? Yeah. I'm sure. Maybe looking at it with new eyes. And so if you walk us through what your goals are with this project and why it's important, and then we'll turn to Peter to hear about the proposal from the treasurer's office that may make it possible. Thank you. And that language is being worked on by Ken as well. He has it.

[Alex Farrell]: All right. It's a good answer. Thank you, Madam Chair. For the record, Alex Farrell, Commissioner of the Department of Housing and Community Development. So I appreciate the context, Madam Chair, maybe to paint that more fully because Senator Clarkson and I have had more in-depth conversations with the rest of the committee. Prior to budget development, what we wanted to do was put in a placeholder that essentially listed a number of actions that could be taken to incentivize off-site constructions, modular panelists here in Vermont. And so, the reason this reads as sort of a list, a menu of options, is because after it was, so flexible depending on what became available in the budget, and Senator Clarkson's point, seems as though maybe there's some opportunities for proposals around LIAC, and so Peter's gonna talk to you more about that. But what I'll do right now is walk you through this menu in section three and talk about what's already underway, what we see as true opportunity to give off-site more flexibility. So, the context on off-site, what we're trying

[Peter Trombley]: to curb is the sort of

[Alex Farrell]: boom and bust that's happened nationally, not just in Vermont, nationally in off-site construction in Vermont. We're trying to get a little capability. I'm gonna walk through, I'm just gonna start right at section G where it just says, may consider the following elements. This is where the menu starts.

[Speaker 0]: Bulk purchasing,

[Alex Farrell]: and in this case, it lists a single development or an aggregation. This is where potentially opening up more YAX funds to enable either a congregation of municipalities or a developer to bulk purchase could be facilitated with a fund. So, I'm gonna keep moving on from that because I think Peter maybe will be better to address that. Number two, streamlining regulatory process, pre approved modular designs. This is what I really want to focus on today, is what we can do for modular producers in Vermont and outside of Vermont who could produce units here in the state and have some capabilities, give them a catalog of designs that they know can be approved anywhere in the state. We heard from Silver Maple, who I would encourage you to hear from. You've likely heard from Jason Webster already at Huntington's Home,

[Speaker 0]: but Silver Maple is another great Yeah, we just heard from Jason last year.

[Alex Farrell]: Yeah, Jason's good, but the folks at Silver Maple, you know, they indicate that if an off-site producer works so hard on the pond is you have over 200 fiefdoms where it is essentially difficult So to if you're trying to produce at scale, what you need is statewide predictability. So that's gonna come into play in another, on one of these menu items lower down here, but I just wanna emphasize that our eight zero two Homes initiative that's already underway envisions this. What we need from the legislature, and I'm gonna acknowledge that this is the administration,

[Speaker 0]: but you're gonna be in a

[Alex Farrell]: joint hearing with that committee soon, what that needs to give off-site producers predictability is that those can be statewide, established as pre approved statewide, respective of whatever the need. Do

[Speaker 0]: we have some of those issues to give that? We do, we're going to be discussing it on Tuesday with the proposal that will be in front of us, is the Flyright design, Flyright House.

[Alex Farrell]: If you're interested, there's planning on achieving the administration's House Bill S-two 67 to achieve that. Moving through, again, number three, I'm gonna pass off to Peter because an aspect of their, what they're proposing could establish a loan loss reserve to enable, again, this would be largely to support both purchasing. Loan loss.

[Speaker 0]: Peter's gonna explain that. Sure. Yeah, we'll let him

[Alex Farrell]: number four, I think, in measurements, essentially, a particular project. I don't think that's where we need to focus our energy because what we want to establish is a system so that any project could happen statewide. So, number five, again, a statewide for

[Speaker 0]: So, just before we leave for, are you wanting us to, is that a suggestion that we would be striking I'd strike for because it's largely being less, again, Okay, sort of got it. A list of Yeah, need, know, time's tight, so suggestions right now about what we can Okay, get rid of is

[Alex Farrell]: appreciate that. So, going down to number five, establishing a statewide procurement consortium. This, again, is contemplated in a bill in the House. DH seven seventy five contemplates this.

[Ben Doyle]: There are a

[Alex Farrell]: couple of ways that this could be achieved. Don't, this isn't where I would prioritize, but again, the funds that could be made available through LIAC, if there is increased LIAC approved, a statewide consortium procurement could be established. What I may envision, and the RVCs aren't gonna be happy with me for suggesting this, but I think procurement perhaps could be managed by the RVCs, municipalities working through the RVCs

[Speaker 0]: in order to operate as a consortium.

[Alex Farrell]: That's something I may suggest.

[Andrew Winter]: Yeah.

[Alex Farrell]: Six, again, reminding the committee that this is sort of a menu of items, not necessarily specific. Six, I think, aligning state and local permitting, this is a general statement that we still have a long way to go.

[Speaker 0]: That's an aspirational statement. Aspirational. Like some of our other bills, they're aspirational.

[Alex Farrell]: And if you want to achieve it in this context, what I'd say is I'd come back to my comments about number two, that eight zero two Homes would establish that through a set of pre approved designs.

[Speaker 0]: And again, that's what we'll be looking at Tuesday.

[Alex Farrell]: Number seven is establishing a statewide off -site building code. So, I talked to some of my colleagues in other states. This is something that a couple have taken a stab at. I know Colorado has, and there's a couple others that are coming to mind right now. What I would suggest that you all consider is directing us, maybe Division of Fire Safety, to establish a statewide off-site building code, which municipalities would not have the authority to alter. So this would give the off-site producers the predictability to know that, okay, we're gonna produce a home for Vermont, whether it's producer based in Vermont or Maine or Pennsylvania, they know that they can produce 30 something units, and they're not gonna have to make modifications to each unit. The way the industry has gone, and Jason Webster from Huntington Homes was the first to tell you, they've gone towards individual custom homes. They can't produce it both because they don't have the predictability that a design is gonna work everywhere. This would give that predictability.

[Speaker 0]: I think this is great, and I sort of am sorry that we we had talked about further charging the energy code work with doing this work and that sadly didn't happen. I have long talks with Scott Campbell about that. But I also hear that the real need, if we're going to build out this bold creation and and and manufacturing, which, of course, is a huge opportunity for Vermont too, building these units and these pieces, that really we have to have regional building codes because we're wanting to create these unit all over New England in New York State so that we would want to be able to build the scale, I. The whole region. And to do that, then this is even more long term, but maybe an additional necessity is regional I think that's well said. We all have the housing crisis. It's not like it's just us.

[Alex Farrell]: That's well said. We certainly, you may remember a report that we had just on on this, and and one of the ideas that exploded is sort of standardized code. So our convenience could be to establish that so that there could be predictability across The States. That's certainly something you have an interest at this point.

[Speaker 0]: So it it it would be the objective of this would be to develop draft building codes that we would then approve next session?

[Alex Farrell]: I would think so. Yes.

[Speaker 0]: I can't remember. Yes. You have so you're giving yourselves a two year runway on that? I hadn't appreciated that. I thought you were coming back to us sooner than that. Or maybe wrong, maybe next I don't

[Alex Farrell]: see a timeline on number seven, but oh, I see. The report

[Speaker 0]: at the end. Is that how quickly do you think you might be worse with working with fire safety and the treasure to because it's slightly different from what seems

[Alex Farrell]: Well, it's the date is intended to capture sort of all of the work. And so

[Speaker 0]: Anyway, let's think about that. But if you're wanting to come back to us with draft building codes from statewide building codes

[Alex Farrell]: How much time would

[Speaker 0]: Think about the date that you would want that to be accomplished by. I could come back. I mean, so that it would come to the because I think we have to we have to still sprinkle legislative holy water on that, right?

[Alex Farrell]: Right, right. So,

[Speaker 0]: I'm trying to see what our, if we could move that up a bit from Yeah,

[Alex Farrell]: I could suggest a date.

[Speaker 0]: And then the rest of this Tomorrow. Tomorrow, okay. We need to call

[Alex Farrell]: Mike Derocher about that.

[Speaker 0]: Right, Mike's good at That's right.

[Alex Farrell]: The rest of this, I'd say, so we're now moving out of this sort of menu of things that could be considered as a part of the pilot. Now it's just moving to more general statements. And so, you know, see at the very bottom of page six, if that's already happening, and through the course of the summer and fall, myself, Peter, members of both of our teams have been meeting with financing institutions producers. So this collaboration provocation is already happening, that's what's actually producing some of the posts here. And so I'm not sure that C is necessary because that's more of a statement of something that's already happened. D, I'd say also

[Speaker 0]: I have to say that's just such a pleasure for all of us who are doing bills to know that something's actually already been accomplished. It's drafted. Then two months later, it's accomplished.

[Alex Farrell]: It's because we work very well with the treasurer's office. D, I'd say is unnecessary. Because we don't need to identify a pilot project. We can enable this across the state and as part of eight zero two homes which is already happening. We have three pilot communities already signed on where we could consider if we wanted to do a demonstration project where we could already consider, so T is unnecessary.

[Speaker 0]: Got it, yeah.

[Alex Farrell]: E, I'd likewise say is unnecessary. Could you just

[Speaker 0]: remind us what the three counts are for the eight zero two months? I know you said You should remember one.

[Alex Farrell]: Hartford. Hartford. That's right. Essex Junction and Manchester. That's right. Thank you. Three. Development ready communities. Yeah. And I'd say E is also unnecessary because at any point municipality can come to us for a municipal planning grant. Right.

[Speaker 0]: And then if we could just hone F, maybe? Timeline? Yeah. That would be great. Yeah. I don't know. Fabulous. Anything else? I mean, for us who deal with housing and economic development, This to me is also a huge economic development opportunity. It can be. When I think of the Fairhaven, but, David, the Fairhaven site, I mean, we are we have space in this state hungry to be filled with this kind of construction project. We have CPE kits working for the summer. We have $15,000,000 to help work have them work on a summer project. This is this is this is both an economic development opportunity and, of course, serving capacity.

[Alex Farrell]: It is. It is. All I'd stress is that statewide preapproved designs and statewide building code, I think, the two

[Speaker 0]: best ways. Lynched fence. That that's right. They're Lynched. Okay. Given that, is it a good moment to segue to Peter?

[Alex Farrell]: I think it is.

[Speaker 0]: Peter, why

[Sen. Randy Brock (Vice Chair)]: don't you

[Speaker 0]: come join us? Thank you, Peter. Then we'll Peter, this may be your first time testifying by your on your own in this committee.

[Peter Trombley]: It is my first time testifying in this committee. First time testifying someone scheduled to testify. That's I was 17 years old, actually.

[Speaker 0]: And what did you testify when you were on when you were 17?

[Peter Trombley]: A proposal to free school spending. So times have not changed. So for the record, Peter Trombley, office of the Montserrit treasurer, as commissioner Farrell mentioned, we have been discussing with his team for, I think, almost a year now ways to align the work that they're doing with off-site housing and the work that the treasurer's office is already doing with LIAC loans, the 10% of the month credit facility. So I was hoping to give just a brief refresher on what those loans look like, what that credit facility is, and then talk about some of the proposed changes to that credit facility, of which there are three, two of which support the offset accelerator. I believe the committee has the language that we had sent I don't madam chair has it, and that's our my slideshow.

[Speaker 0]: That's a slideshow. And I think we have your language also. Great. I don't have it immediately in front of me. I don't think, but maybe I

[Peter Trombley]: So just a brief refresher on what the

[Speaker 0]: 10% But we have you, which is better.

[Peter Trombley]: Exactly. A brief pressure on

[Alex Farrell]: what the 10% of

[Peter Trombley]: Vermont program is, often referred to as LIAC. You know, the state collects its revenues. The treasurer manages short term cash investments before those revenues are appropriated and spent. And since 2014, I want to say the treasurer's office just had the authority to invest 10% of those cash on hand holdings in more long term investments. And since 2023, this program has changed significantly since Dr. P. Chek took office. The biggest change that happened is that pre pandemic we had typically about $250,000,000 cash on hand in any given month, And post pandemic, we had I think we peaked at about 2,500,000,000.0 and are now around 1,500,000,000.0 in cash on hand. And so 10% of that has obviously grown substantially. We've been able to make significantly more loans than treasurer Pichai's predecessor was able to make under this program. And when treasurer Pichai took office, he wanted us to prioritize housing for this credit facility, and so we've been able to invest now about a $120,000,000 in housing loans across the state, all at below market interest rates.

[Speaker 0]: And what are those interests? Ah, they're right there.

[Peter Trombley]: They're right there. So we base our interest off the amortization period. So zero to five years being 1%, and then twenty plus years going up to point 5%. So significantly better than what a developer might be

[Sen. David Weeks (Clerk)]: able to get a refresher on they have to do. Who's the who's the target?

[Peter Trombley]: Well, we Sorry. What's your question again? Who is the target for these loans? We don't have any narrowing criteria. We will lend to any housing developer through intermediary usually, and I can get into how that works in more detail if you'd But

[Speaker 0]: you do lend to many of the affordable housing project that we've already seen discussed. When we talk about I think it was Ben who said there were 27 funding partners in one of those projects. Black has been an incredibly important partner on on many of these projects. Yeah. So So any do affordable and and for and market rate investments because you also invested in Stone Ridge Zeke's. That Is right? Stone Ridge.

[Alex Farrell]: Stone Stone Crow.

[Peter Trombley]: Stone Crow.

[Speaker 0]: Stone Crow. Sorry. Stone Ridge. The the The majority Actually, you also invested then. So it's is a big range.

[Peter Trombley]: Yes. The majority of our housing investments have had some affordable housing component, but typically not all of the project, and not all of our projects, have had affordable housing. So anything from market rate developers to someone like Evernorth is receiving our capital through an intermediary, usually. The largest intermediary being DHFA holds about 52,000,000, I want to say, of our 120. So the impact of our investments to date, we've been able to support over 1,700 units of housing. Some of these have already built, some of these will be coming in the future. Largely new housing, but some refurbishing of housing that was at risk of going offline. And a lot of our projects have been or some of our projects, I should say, have been mixed housing economic development, and so our investments have also created a 140

[Speaker 0]: new permanent jobs across the state. And just can you share with us how that that has happened?

[Peter Trombley]: Yeah. So some of our investments have been one I'll talk about in a minute. Senior assisted living facilities.

[Speaker 0]: So those facilities have, of course, hired.

[Peter Trombley]: Others, like the Ben High project, have been mix of housing units, but also redevelopment for commercial space. I think there's a child care center in there, if I'm recalling correctly.

[Speaker 0]: Randolph, did you were you one of the partners in the Randolph Child Care facility? That's my recollection, but I can double check that. That does totally, yeah.

[Peter Trombley]: I have a point This of time in the treasurer's is just a selection of our investments. This does not include the most recent investments that we announced just a few weeks ago, which we approved in December. So as you can see, there's a range of the award sizes and a significant range in sort of the communities we're investing in and invested in. Now, with our most recent round, 12 out of 14 counties and are always looking for investments in Des Moines and Essex County. So if there are developers in those counties listening, apply for live funds in the future. Just two investments I wanted to briefly highlight. This is one of our senior and assisted living facilities that I mentioned before for Jen's Grant. Over 65 new units of housing right in the heart of downtown for Jen's and boarding new jobs established. Senior housing has been a focus of ours in trying to find opportunities because of the demographic trends in the state, but also the way building senior housing can open up units all around the area as folks move into these facilities. And another partnership we were able to establish, which I think showcases the flexibility of these funds, is Roots of a Rutland, where we partnered with the city of Rutland and Heritage Family Credit Union to provide $8,000,000 that they then distributed in smaller loans for smaller projects all around the community, and I believe it created north of 80 units of of housing throughout the community. Three proposed changes to the LIAC program. One is to move the 10% in Vermont credit facility up to 12.5% of the state's cash balances, and that would create about 30,000,000 in new lending capacity, which we could put towards new projects. The second proposal is to redirect portfolio interest, which is currently going to the general fund, into a new housing special fund, and I'll get into detail in a minute about what we would want to use that funding for. And the third is to create a 1% credit facility, which would allow us to, you know, backstop all quarters of off-site housing. So this is the piece that would really allow us to fund the pilot that commissioner Farrell was speaking about. 1% would be part of the whole credit facility, part of the 12.5, not in addition to it, and it would be, you know, an optimal authority. So if for whatever reason, this pilot were unable to move forward, we could dedicate that funding towards our traditional housing loans that we've been doing so far. So raising the 10% capacity to 12.5, I I, you know, put up this pie chart to sort of show what our state cap really looks like. We assume a cash holding of 1,200,000,000.0 for the purposes of this program. Right now, it's about 1.5. It's a little larger. We make this more conservative assumption based on really two criteria. One, where do we think cash is going to trend in the long term? Because as you saw before, you know, the loans we're making are five, ten, twenty year loans, and we wanted to know where over that horizon we're gonna land the cash holdings. And the other is we take a look at, you know, restricted cash reserves, and then we when we remove those from our cash balances, what are we left with? And both of those figures point us towards 1,200,000,000.0 as a more conservative place that we should be when we are thinking about the sales cash. So right now, a proposal of 2.5% under that assumption will be 30,000,000 in new lending. And I just wanted to highlight, in addition to the 10% that we can put towards economic development, a few years ago, the legislature created another 2.5% credit facility, which is for climate resilience lending. Right. The vast majority of that portfolio is currently with the bond bank being used to support municipalities that have been the victim of flooding in recent years by bridge financing as they await reimbursement. So that's been a great partnership with the bond bank. Nothing we're proposing really changes how that credit facility operates, but if you add them all up, we'd be moving from 12.5 across both credit facilities down to 15% of the state's cash equivalent by the Right. Was gonna

[Speaker 0]: say that you're adding that on to and not making part of amount available. You're adding another two. 5%. Tell us.

[Peter Trombley]: Wanna know what LIAC stands for. I don't

[Sen. Thomas Chittenden]: see your slides but the other question I have is so you are in your modeling. You pre pandemic two 50,000,000 cash on hand, pandemic peak 2,500,000,000.0, now we're at 1,500,000,000.0, now you're at 1,200,000,000.0. What is your modeling? Are we planning to get back to that pre pandemic two fifty billion over a timeframe or do you expect us to level off that $1,000,000,000 cash on hand or some other? What does

[Peter Trombley]: your modeling look like for that? Barring another event like a pandemic, I think we would expect a leveling around 1.2 or so. We don't see us ever going back to pre pandemic levels. Mean, just inflation alone has fundamentally changed that dynamic. But the state now holds so much more cash than it's spending on any given year. And so barring a recession or some other event mean, you know, if you're At your discretion, of course, we're spending a lot less than we hold in any given year, and so we don't anticipate going back to pre pandemic levels. LIAC, I don't see the acronym spelled out. LIAC, apology, stands for Local Investment Advisory Committee.

[Speaker 0]: I had to, yeah.

[Peter Trombley]: So the treasurer ultimately holds discretion over this lending, but we make all of these loans in consultation with a committee that includes Avita, BHFA, Efficiency Vermont, VSAC, and the bond bank. We work with that credit facility to draft an investment policy that our loans fit into, so those are the guidelines and parameters we use. When I talk about how we want to use the interest on LIAC loans, we would develop policy for that in a consultation to the city as well. It's a great resource for us.

[Speaker 0]: I just want to remind everybody that this is an economic development fund. That's how that started it. It is how we have continued it. We have just made a priority of that economic development fund housing. So it it's a lot possibly for how you know, for housing, but I would remind that it serves two of our our purposes in this committee, which is also good. And, Alex, as Lyle Jepsen, I'm gonna ask you to carry this message. I know you have a duly interest here, but this as we look at access to capital, this isn't capital get granting. This is loans. And I put the second thing is I'd remind everybody, this is not grant funding. This is loan funding. So it's great, but it has to be repaid.

[Peter Trombley]: Indeed. It's not free money, but it is cheap money.

[Speaker 0]: It is cheap money, which is which is great. It does.

[Sen. Thomas Chittenden]: So they they love housing. They definitely wanna do housing. But have you also considered the scope of school construction aid? Because that's got a carryover at lower risk too. That something you'd

[Peter Trombley]: be willing to broaden the scope on and to evaluate the potential application for those types of projects? It's something we could certainly look at. Typically, we want to loan for something that will generate returns that could be used to pay the loan, and that would be an important consideration of risk. In all these loans, lend through an intermediary that guarantees us repayment, So we would wanna look at how we could potentially structure that program if if we were to move in that direction. And, you know, we have chosen to Treasurer, P Check has chosen to prioritize housing because we saw it as the most critical issue facing our economy. You know, if in many years, thanks to your hard work and the hard work of the folks at DHCD, are pulling out of this housing crisis, it would be up to a future lag committee and treasurer to think about what are the most common uses of the So

[Sen. David Weeks (Clerk)]: I can say as a member of the LILAG LIAC. LIAC. The bond bank. The bond bank in recent briefings is showing an interest in participating in school construction Yeah.

[Speaker 0]: Madam Kesha, I I see you came off mute, Kesha.

[Sen. Kesha Ram Hinsdale]: I feel like feel like this is my opening unless we were there was, like, more to the presentation that you wanted to get through. And I see the Peter, how much more do have?

[Speaker 0]: I have

[Peter Trombley]: a few more slides, but, of course, happy to

[Speaker 0]: Kesha, if you if this is you wanna wait and let them finish and then and and then jump in, or you are you you could jump in now. I mean, we've Sure. Already

[Andrew Winter]: So,

[Sen. Kesha Ram Hinsdale]: you know, I just I think everyone in the room has heard me say this, and I don't see the commissioner anymore, texted him just because I had wanted his thoughts on His listening.

[Speaker 0]: He was

[Sen. Kesha Ram Hinsdale]: just on an off-site accelerator.

[Speaker 0]: Oh, he's right you can't see him. He's right behind Peter.

[Alex Farrell]: Okay. Seven, senator.

[Sen. Kesha Ram Hinsdale]: Apologies. Apologies. I did think you had left the room. So am I echoing? Is there No.

[Speaker 0]: You're fine. Oh, okay.

[Sen. Kesha Ram Hinsdale]: So everyone, I think, in the room then, including the commissioner, has heard me say that we tend to set aside funds for a specific type of housing or investment only when we feel like otherwise it it is getting lost and needs to be brought to the absolute top of the list. If I were to think of something that that needs extra attention and support, it would probably be building housing on former school sites if if and when we move forward with education reform. That's an accelerator that's been discussed that, you know, has an appeal to communities. So I just see no I I don't see any compelling reason to spell out off-site construction acceleration because it ties up funds that I think would otherwise be flexible to be used for that or other types of housing. And the commissioner's there, and he knows, you know, how strongly I feel about devastating situations where we've had to give back FEMA trailers and where off-site housing has not necessarily brought down the cost for the end consumer if communities then reject it because they want a larger lot size for that housing. So I don't honestly know where this came from as the most strategic or compelling way to use our housing money.

[Speaker 0]: So who would like to take a stab at it?

[Alex Farrell]: Yeah. I I can start. I mean, I I think, senator, you're you're articulating better a point that I was trying to make, which is that I think the proposals that we're putting forward to enable off-site construction allow that to move forward and also at the same time create a pathway for any type of construction of housing, which is why I'm really pressing on giving eight zero two Homes and sort of this catalog of preapproved designs, I'm putting pressure on that to be established statewide because those designs will be available for both traditional construction or off-site. And, you know, I'll defer to Peter. I don't know that we necessarily envision or I don't know if the treasurer's office actually envisions this increase being solely dedicated to off-site, but an eligible use. I think we're seeking flexibility to or bulk purchasing to be an eligible use.

[Speaker 0]: Right. And I don't think we've had a number put to the bulk purchasing yet in terms of how much that would use of this.

[Peter Trombley]: Yeah.

[Speaker 0]: But it does create down. Yeah. Do you wanna finish? That's helpful. Kesha, do

[Sen. Kesha Ram Hinsdale]: wanna Okay. But I did I did think the proposal set aside something like 6,000,000 just for this purpose.

[Speaker 0]: It did originally when that was, I hope hoping that it was gonna be in the governor's budget. Is that correct?

[Alex Farrell]: Well, yes and no. That was part of the policy bill, not so

[Speaker 0]: Yeah.

[Molly Dugan]: It's not

[Alex Farrell]: that Blanket reminder, when there's an administration policy bill, the appropriation section is basically meaningless that the the governor's budget is what matters. So there is not actually a proposal to set aside any money for

[Ben Doyle]: Okay. Off-site.

[Speaker 0]: I think the 6,000,000,000 is off the table at the moment, although, obviously Okay.

[Sen. Kesha Ram Hinsdale]: It's it's enabling it's enabling something that otherwise wouldn't be considered housing lending. I I still don't exactly see the value, but if it doesn't set aside money, I'm I'm okay with it. I just don't see why it has to be spelled out. It's if it's flexible otherwise.

[Speaker 0]: Okay. Why don't we let Peter finish his slideshow, and maybe it will be addressed in the parts of the rest of the slides.

[Peter Trombley]: Yeah. Happy to address that question, Senator. Thank you. I'm gonna skip ahead to this third change that we are proposing, which is a 1% credit facility out of the existing what would be 12.5, if you were to increase it for off-site construction, this would be up to $12,000,000.

[Speaker 0]: And by credit facility, you mean a loan? A loan portfolio. A loan portfolio.

[Peter Trombley]: Right. The reason and to your point, Cedric, it would not require us to use that funding for off-site acceleration. It's part of the larger LIAC program, and if for whatever reason we did not need the full 12,000,000, you know, it sounds like 6 was the figure we had originally been anticipating. Or if the accelerator, the pilot, were to not be able to move forward, we could absolutely dedicate that funding towards our more traditional IAC loans. The reason we felt that we needed some specific legislative authority here is that these loans carry more risk than our traditional loans. Typically, we we have no ability to or we're sort of curtailed by statute from making loans that we think have a substantial risk of loss, and that's the reason we loan through an intermediary that guarantees us repayment. We do think there's a slightly greater risk of loss if we were to make these revolving loans, and we have a few suggestions for how to mitigate against that. But that is why we were seeking the specific authority to create a credit facility for off-site because we wanted civic legislative approval to take what we view as first year loans.

[Sen. Kesha Ram Hinsdale]: Sorry, if I'm understanding that correctly, it makes me support it even less. Because if we're asking for additional risk, is that the best use of the risk? Is this the top priority of where we would make riskier loans out of state funds?

[Speaker 0]: So I think I would say this is, as we all talk about, this is one tool for us to be able to create cheaper houses, there's like a monkey warden houses that you could buy and get. To me, this is bringing down the cost of housing. I mean, this has potential to bring down the cost of housing. How? It how? Because you create all these units off-site, you bring them to the site and construct them. I think that we will hear from people who can talk. I mean, we've heard already from Jason Weber about how that reduces cost. I think this is one tool for how we can begin to bend the curve on the cost of the ever increasing cost of building. I mean that's my understanding of this. Is that incorrect Peter and Alex?

[Alex Farrell]: Oh, sorry Alex. I'd offer that down the line if true bulk purchasing were enabled, that's the potential, but I think maybe cost savings is less the benefit and more it's the rapid deployment of units that is a benefit here. Now, you could potentially attribute some savings to time saving because site prep and unit development happen at the same time rather than sequentially, but Senator, I think the point's well taken that maybe you don't see a ton of savings on a per unit basis right Now, if you're bulk purchasing, several municipalities could bulk purchase 50 units or a 100 units for multiple developments, there'd likely be savings on those units, but I think we're several steps away from that right now.

[Sen. Randy Brock (Vice Chair)]: Well, wouldn't that mean, though, a savings just in the value of time? Yes, exactly. And that's where savings would be. Right.

[Sen. Kesha Ram Hinsdale]: But where so did I miss a slide on the demand side for this? Like how they will be deployed and what the end cost would be to the consumer?

[Speaker 0]: We have yet to see that. But is that company Peter, why don't you finish?

[Andrew Winter]: And then

[Speaker 0]: we could open this up because we have to go in five minutes to Room 10 where we're doing our joint hearing.

[Peter Trombley]: Well, I'll move back very briefly. The second proposal, and this is relevant, was to retain LAG interest and be able to deploy it in an integrated fashion for our existing LAG program. So when developers would apply for LAG funds, in addition to our traditional loans, we'd have a few more tools we could offer them using the interest that we've retained. That could be grants. It could be buying down commercial loan rates to make them more affordable. It could be equity investments in housing projects, which is increasingly something we're hearing from developers. They a hard time finding the equity partners they need, and they can't take on more debt. It could be very minor administrative costs to the whole portfolio that currently we just absorb into our office's budget. We're talking in the maybe few tens of thousands of dollars for actuarial and underwriting services, repayment of losses to the 1% credit facility to make the state's cash balances whole if there were to turn out to be a

[Speaker 0]: loss. Oh,

[Peter Trombley]: that comes in as piecemeal. I was asked by the committee to try to visualize how this funding might support an off-site accelerator pilot. I want to caveat everything I'm about to say with these are details we would need to work out with the HCD in the implementation of the pilot, but here's two scenarios that we could envision how this money could be used. If we're placing a bulk order and a developer would like to take part in that bulk order, reserve, let's say, 20 units out of the 100 we're buying, they would borrow from our 1% credit facility in order to purchase those units, them, cite them and sell them to the consumer, and then repay the treasurer's office back into that revolving credit facility to be used by another developer. The factory produces the housing, the developer who buys it using our money, sells it to the consumer, pays us back.

[Speaker 0]: Then your last slide, and then the top.

[Peter Trombley]: I'll say final slide is a very similar model, but what we've heard from Huntington Homes is they want to be able to produce on their timeline and fit a bulk order into any production gaps in order to scale production for up a whole year by having that guaranteed work they can always fall back on. So in that scenario, if there's a slightly longer gap between when the factory produces the home and a developer has already decided, we could foresee an intermediary purchasing those tomes, taking title, sitting on them for a short period of time, using our money, and then finding a developer who wants them to buy them off the intermediary.

[Speaker 0]: Okay. We are gonna come back to this issue because we need to end, but I wanna Thomas has a question, so I'm gonna

[Sen. Thomas Chittenden]: I'm not against this, but I would share some of Senator Ram Hinsdale's concern that it just seems this is carries with it what I would anticipate a lot more risk if we're going to own or have any type of expectation that the developer is going to be able to deploy these units in Vermont regulatory environment. I'm worried that there's going to be more defaults or carrying a higher risk that we're heavily subsidizing cash on hand. That doesn't mean I'm against this. I just, think we need to address that risk concern. And I do think this would be a great thing to also open up some small funding. Housing and install construction needs are very fallen and not right now. Appreciate that, John. Great.

[Speaker 0]: More to follow. Peter and and Alex, thank you very much. This was a great roll out of it. Thank you. We are due in Room 10, and remember, we're going in on opt in, opt out. And Kesha, how do we get Kesha over to that? I'll I'll surely Okay. Kesha, Pierre, we'll make sure you get zoomed in.