District Environmental Commissions #4, 6 & 9 111 West Street

Essex Jct., Vermont 05402 ________________________________________________________________________

January 11, 2016

Brian Dunkiel, Esq. Dunkiel, Saunders, Elliot Raubvogel Hand 91 College Street P.O. Box 545 Burlington, VT 05402-0545

RE: Jurisdictional Opinion #4-248 Burlington Town Center

Dear Mr. Dunkiel:

This jurisdictional opinion was initiated pursuant to your written request of December 4, 2015 regarding the applicability of Act 250 jurisdiction over the proposed redevelopment of the Burlington Town Center (“Mall”) in the City of Burlington, Vermont. I have based my analysis on your submittals and the files for permit series #4C0116. For the reasons set forth below, I have determined that that the proposed hotel rooms do not count as “housing units” for the purposes of determining whether the proposed redevelopment qualifies as a Priority Housing Project. Although you requested that I assume that all aspects of the proposed redevelopment satisfy all requirements of a Mixed Use Priority Housing Project, I do not find that the hotel rooms would satisfy the requirements as a commercial part of the “Mixed Use” component of a Mixed Use Priority Housing Project. As a result the redevelopment proposal would be subject to review under 10 V.S.A § 6086b.

Facts

1. On June 29, 1973 the Burlington Square Associates was issued LUP #4C0116 for construction of a department store, a mall area, and a bank building. This was Phase I of the Burlington Urban Renewal Development, a multi-phased project located off of Church Street in the City of Burlington. The original tract of land was 13.8 acres.

2. A total of 48 permit amendments have been issued for this mall. The major enhancements include:

a. On January 22, 1980, LUP #4C0116-4 was issued for a 30,000 sf addition to the Mall consisting of 20,000 sf for 24 retail shops and 10,000 sf of pedestrian area.

b. On April 21, 1982, LUP #4C0116-11 was issued for construction of an 8-story 77,000 sf office building located on the corner of Bank Street and Pine Street.

c. On September 14, 1984 LUP #4C0116-13 was issued for a 68,000 sf two-story department store located on Bank Street and 48,000 sf of retail on top of the existing Mall.

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Telephone: (802) 879-5614 www.nrb.state.vt.us

Burlington Town Center Jurisdictional Opinion JO #4-248 Page 2 of 6

d. On September 25, 1984 LUP #4C0116-14 was issued for site and foundation work for Phase IV of the Mall (then called Burlington Square Project) to include a 64 room hotel addition and a 505 parking space garage.

e. On February 6, 1998 LUP #4C0116-21 was issued for construction of a two-story 150,000 sf Filenes with a three-story parking garage.

f. On November 24, 2004 LUP #4C0116-21B was issued to expand the parking garage by two levels.

g. On November 24, 2004, LUP #4C0116-21C was issued for construction of a 127-unit hotel, a 30-unit residential building and a mixed use structure with 13-residential units.

h. On August 7, 2009 LUP #4C0116-21F was issued for a 34-room addition spanning the approved courtyard.

i. On January 27, 2011, LUP #4C0116-21G was issued for construction of a 126-unit 6-story 75,910 sf hotel and 3,500sf restaurant.

3. Church Street’s two middle blocks (between College & Cherry Streets) were officially closed to traffic on July 7, 1980. The Church Street Marketplace opened on September 15, 1981. In 1994, the Church Street’s top block (between Cherry and Pearl Streets) was closed to vehicular traffic and resurfaced with brick. In 2005, City Hall Block (between Main and College Streets) was the final block to be closed to vehicles and resurfaced with brick. The Church Street Marketplace is listed on the National Register of Historic Places.

4. On January 6, 1999 the City of Burlington was awarded a State Designated Downtown District for the area centered on the Church Street Marketplace. The area was expanded on March 26, 2001, further expanded on March 22, 2004 and then again in March 2007. The designation was renewed on February 29, 2012.

5. The population of Burlington was estimated at 42,211 in 2014.

6. The proposed redevelopment of the Mall involves new retail, office and parking. In addition, it proposes to add housing, which for the purpose of this Jurisdictional Opinion is assumed to qualify as Mixed Income Housing1. The proposal also includes a new hotel with approximately 100-150+ new rooms. Hereinafter the full redevelopment is referred to as the “Proposal.”

1 10 V.S.A. § 6001 (27) defines Mixed income housing as “a housing project in which the following apply:

(A) Owner occupied housing. At the option of the applicant, owner-occupied housing may be characterized by either of the following:

(i) at least 15 percent of the total housing units are affordable housing units have a purchase price which at the time of first sale does not exceed 85 percent of the new construction, targeted area purchase price limits established and published annually by the Vermont housing finance agency; or

(ii) at least 20 percent of the housing units have a purchase price which at the time of first sale does not exceed 90 percent of the new construction, targeted area purchase price limits established and published annually by the Vermont housing finance agency;

(B) Rental Housing. At least 20 percent of the housing units that are rented constitute affordable housing and have a duration of affordability of no less than 20 years. (28) "Mixed use" means construction of both mixed income housing and construction of space for any combination of retail, office, services, artisan, and recreational and community facilities, provided at least 40 percent of the gross floor area of the buildings involved is mixed income housing. "Mixed use" does not include industrial use.

Burlington Town Center Jurisdictional Opinion JO #4-248 Page 3 of 6 7. At all relevant times, the City of Burlington has had a duly adopted subdivision and zoning

ordinance and is thus a “10-acre town”.

Issues

Do the proposed enhancements (the Proposal) of the Burlington Town Center (Mall) qualify for the exemption to the need for an Act 250 permit amendment pursuant to 10 V.S.A. § 6001(3)(A)(iv)(I)(aa)?

Analysis

The need for an Act 250 permit is triggered by either “development” or “subdivision.” 10 V.S.A. § 6001(3)(A) defines Development as:

(i) “The construction of improvements on a tract or tracts of land, owned or controlled by a person, involving more than 10 acres of land within a radius of five miles of any point on any involved land, for commercial or industrial purposes in a municipality that has adopted permanent zoning and subdivision bylaws.

…

(iv) The construction of housing projects such as cooperatives, condominiums, or dwellings, or construction or maintenance of mobile homes or mobile home parks, with 10 or more units, constructed or maintained on a tract or tracts of land, owned or controlled by a person, within a radius of five miles of any point on any involved land, and within any continuous period of five years. However:

(I) A priority housing project (“PHP”)2 shall constitute a development under this subdivision (iv) only if the number of housing units in the project is:

(aa) 275 or more, in a municipality with a population of 15,000 or more;

…

(ff) notwithstanding subdivisions (aa) through (ee) of this subdivision (iv)(I), 10 or more if the construction involves the demolition of one or more buildings that are listed on or eligible to be listed on the State or National Register of Historic Places. However, demolition shall not be considered to create jurisdiction under this subdivision if the Division for Historic Preservation has determined that the proposed demolition will have no adverse effect, will have no adverse effect if specified conditions are met, or will have an adverse effect that will be adequately mitigated. Any imposed conditions shall be enforceable through a grant condition, deed covenant, or other legally binding document.

(II) The determination of jurisdiction over a priority housing project shall count only the housing units included in that discrete project.”

2 10 V.S.A. § 6001 (35) defines a Priority housing project as “a discrete project located on a single tract or multiple contiguous tracts of land that consists exclusively of:

(A) mixed income housing or mixed use, or any combination thereof, and is located entirely within a designated downtown development district, designated new town center; designated growth center, or designated village center that is also a designated neighborhood development area under 24 V.S.A. chapter 76A.”

Burlington Town Center Jurisdictional Opinion JO #4-248 Page 4 of 6

The proposed scope of work is considered a physical change. The owners of the Burlington Town Center can be considered a person pursuant to 10 V.S.A. § 6001(14). The Mall is for a commercial purpose and is located on a parcel that is greater than 10 acres. Thus the normal triggers for the need for an Act 250 permit are met for the Proposal.

However since the Mall is wholly located within a state Designated Downtown District, the threshold unit count increases to 275 units for a PHP located in the City of Burlington. The Mall is a discrete project.

There are two residential-like components of the Proposal, the assumed mixed-income unit and the hotel. Act 250's definition of “development” of a PHP uses the term “housing units.” 10 V.S.A. § 6001(3)(A)(iv)(I)(aa). Neither the Act 250 statute nor the Act 250 Rules define “housing” or “housing unit.”

Act 250 does appear to distinguish between “units” and “housing units.” Title 10 V.S.A. § 6001 (3)(A)(iv) defines “development” to include the “construction of housing projects such as cooperatives, condominiums, or dwellings, or construction or maintenance of mobile homes or mobile home parks, with 10 or more units.” The Act 250 Rules defines both “dwelling3” and “unit4” to include hotel rooms. However, Act 250 states that "determination of jurisdiction over a priority housing project shall count only the housing units.” Therefore, it does appear that the use of the word “housing” should be read to narrow the definition of “unit,” as otherwise it would be mere surplusage. See State v. Carroll, 2003 VT 57 ¶ 7, 175 Vt. 571 (In statutory construction, it is presumed that “statutory language is inserted advisedly and not intended to create surplusage.”). I agree with your analysis and conclude that the term “housing” narrows the definition of “unit” to private, residential units, such as apartments or condominiums. The number of hotel rooms do not count when one determines if an adequate number of affordable units exist to qualify as a PHP.

Since there are commercial elements of the project, the Proposal must qualify as “Mixed Use” in order qualify for the PHP exemption. “Mixed Use,” is defined as a project with both “mixed income housing” and “any combination of retail, office, services, artisan, and recreational and community facilities, provided that at least 40 percent of the gross floor area of the buildings involved is mixed income housing. “Mixed Use” does not include industrial use.” 10 V.S.A. § 6001(28). “Mixed Use” does distinguish between a housing component and a commercial component. However, the definition specifically lists the types of commercial uses that are allowed to qualify. The same surplusage argument also applies here. If all commercial elements were permitted in “Mixed Use,” then the term commercial would have been used. Instead the Legislature chose to list only those commercial units that qualify as “Mixed Use.”

Hotel units are not retail, office, artisan, recreational or community facilities. Act 250 statute nor the Act 250 Rules define services. However, Act 250 Rule 3(C)(4) does define commercial purpose as

3 Act 250 Rule 2(C)(10) defines Dwelling as “a place which is intended for human habitation including: (a) any building, structure, or part thereof, which is used as a conventional residence, including but not limited to, single family homes, duplex or multiplex homes, and apartment buildings; (b) any commercial residential building, including but not limited to, a hotel, motel, rooming house, nursing home group home, residential care facility, or dormitory which is usually occupied in exchange for the periodic payment of a fee, contribution, donation or other object or service having value.

4 Act 250 Rule 2(C)(23) defines Unit as “an individual and discrete residence within a dwelling, condominium or cooperative project, including but not limited to an apartment within an apartment building, each separate residence of a duplex or multiplex home, or a room or suite of rooms within a hotel, motel, rooming house, nursing home, group home, residential care facility or dormitory. With respect to single family homes within housing projects, each home shall be counted as a unit.

Burlington Town Center Jurisdictional Opinion JO #4-248 Page 5 of 6 “the provision of facilities, goods or services by a person other than for a municipal or state purpose to others in exchange for payment of a purchase price, fee, contribution, donation or other object or service having value.” One could argue that a hotel reservation is a provision of services thus it qualifies as a commercial purpose. In re Spring Brook Farm Foundation, Inc., 164 Vt. 282 (1995), affirming Spring Brook Farm Foundation, Inc., Declaratory Ruling #290, Findings of Fact, Conclusions of Law and Order (Vt. Envtl. Bd. May 20, 1994); and see Re: S-S Corporation / Rooney Housing Developments, Declaratory Ruling #421, Findings of Fact, Conclusion of Law and Order at 7 (Vt. Envtl. Bd. November 25, 2003), aff’d 2006 VT 8 (V.S.Ct) [Payment of rent creates a "commercial purpose."]. However, the definition of commercial purpose uses the phrase “provision of services” while the Mixed Use definition uses just the term “services.” Although it is not dispositive, I note that the City of Burlington in their draft form based zoning distinguishes Short Term Accommodation (bed and breakfast, historic inn, hotel, shelter) from Office and Service (Downtown Form Based Code November 15, 2015). Again I conclude that the same surplusage argument also applies here. I conclude that services as used in the definition of “Mixed Use” and exchange of services as used in the definition of commercial purpose are different terms.

Therefore, I would conclude that the Proposal does not qualify as a Mixed Use PHP since the hotel component is considered commercial but is not one of the allowed commercial components.

Further, since the Town Center already is governed by an Act 250 permit, we also need to analyze if the Proposal constitutes a Material Change (Act 250 Rule 2(C)(6)) to the existing Mall. Act 250 Rule 3(C)(6) defines a material change as any change to a permitted development or subdivision which has a significant impact on any finding, conclusion, term or condition of the project's permit or which may result in an impact with respect to any of the criteria specified in 10 V.S.A. § 6086(a)(1) through (a)(10).

The Environmental Board adopted a two-prong test when applying Act 250 Rule 34(A) (material change to a permitted development): (a) whether alteration (physical change or change in use) has or will take place; and (b) whether alteration has a significant impact on any finding, conclusion, term or condition of the project's permit, and the alteration may affect one or more of the values Act 250 protects. McDonald’s Corporation, #1R0477-5-EB, Memorandum of Decision at 9-10 (Vt. Envtl. Bd. May 3, 2000); Hiddenwood Subdivision, Declaratory Ruling #378, Findings of Fact, Conclusions of Law and Order at 9-10 (Vt. Envtl. Bd. Jan. 12, 2000).

The construction of the hotel is a physical change to the permitted project. The operation and construction of the hotel has the potential to have a significant impact under several Act 250 criteria. Thus the construction of the hotel passes the test as a Material Change to the permitted project.

As concluded above, the proposed hotel rooms are not considered “housing units” for the purpose of determining whether the Proposal qualifies as a PHP. However, the hotel rooms do not qualify as part of the mixed use component of a PHP. The construction of the hotel rooms would also constitute a Material Change to the existing Mall, pursuant to Act 250 Rule 2(C)(6).

Conclusions

The proposed hotel rooms do not count toward the number of proposed “housing units” for the purpose of determining whether the Proposal qualifies as a Priority Housing Project.

In making the above conclusion, you had asked for me to assume that the housing components of the Proposal satisfy all the requirements of a Mixed Use Priority Housing Project. The hotel units are considered commercial and thus must qualify as one of the listed commercial components of a mixed use priority housing project. Since hotel rooms are not listed in the statute as a commercial component

Burlington Town Center Jurisdictional Opinion JO #4-248 Page 6 of 6 qualifying for the exemption as a mixed use priority housing component, the Proposal does not qualify for the exemption and is required to apply for Act 250 review.

This is a jurisdictional opinion issued pursuant to 10 V.S.A. § 6007(c) and Act 250 Rule 3(A). A request for reconsideration by the district coordinator, pursuant to Act 250 Rule 3(B), must be sent to the district coordinator at the above address within 30 days of the mailing of this opinion.

Effective July 1, 2013, no appeal may be taken from a jurisdictional opinion or coordinator’s decision on reconsideration without reconsideration by the Natural Resources Board. Requests for reconsideration by the Board must be submitted to the Board within 30 days of the mailing of this decision or a coordinator’s decision on reconsideration. The mailing address is: Natural Resources Board, Dewey Building, National Life Drive, Montpelier, VT 05620-3201. . For additional information, see the Act 250 Rule 3 -- Jurisdictional Opinions [http://www.nrb.state.vt.us/lup/publications/rules/2015rules.pdf].

If you have any questions regarding this jurisdictional determination, please call me at (802) 879-5658.

Sincerely, /s/Peter E. Keibel Peter E. Keibel District #4 Coordinator Cc: Donald Sinex, BTC Investors

Louis Borie, Executive Director, NRB Greg Boulbol, Esq., General Counsel, NRB

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CERTIFICATE OF SERVICE I hereby certify on this 11th day of January 2016, a copy of the foregoing JURISDICTIONAL OPINION #4-248 to Brian Dunkiel, Esq., Dunkiel, Saunders, Elliot, Raubvogel & Hand re Burlington Town Center, Burlington, VT, was sent by U.S. mail, postage prepaid to the following individuals without email addresses and by email to the individuals with email addresses listed. Note: any recipient may change its preferred method of receiving notices and other documents by contacting the District Office staff at the mailing address or email below. If you have elected to receive notices and other documents by email, it is your responsibility to notify our office of any email address changes. All email replies should be sent to nrb-act250essex@state.vt.us. You can now fill out and submit the Act 250 survey online at: http://permits.vermont.gov/act250-survey. Brian Dunkiel, Esq. Donald Sinex, BTC Investors Dunkiel Saunders Elliott Raubvogel & Hand 91 College Street, PO Box 545 Burlington, VT 05402-0545 bdunkiel@dunkielsaunders.com Chair, City Council/Chair, City Planning Commission City of Burlington 149 Church Street Burlington, VT 05401 Chittenden County Regional Planning Commission 110 West Canal Street, Suite 202 Winooski, VT 05404 rmahony@ccrpcvt.org Elizabeth Lord, Land Use Attorney Agency of Natural Resources 1 National Life Drive, Davis 2 Montpelier, VT 05602-3901 anr.act250@vermont.gov FOR YOUR INFORMATION District #4 Environmental Commission 111 West Street Essex Junction, VT 05452 Barry Murphy/Vt. Dept. of Public Service 112 State Street, Drawer 20 Montpelier, VT 05620-2601 barry.murphy@vermont.gov Craig Keller/John Gruchacz/Jeff Ramsey VTrans Policy, Planning & Research Bureau One National Life Drive, Drawer 33 Montpelier, VT 05633 craig.keller@vermont.gov john.gruchacz@vermont.gov jeff.ramsey@vermont.gov Vt. Agency of Agriculture, Food & Markets 116 State Street, Drawer 20 Montpelier, VT 05620-2901 AGR.Act250@vermont.gov Division for Historic Preservation National Life Building, Drawer 20 Montpelier, VT 05620 scott.dillon@vermont.gov james.duggan@vermont.gov

Jon Groveman, Chair Lou Borie, Executive Director Greg Boulbol, Esq., General Counsel Kimberley Lashua, Administration Manager Natural Resources Board Dewey Building Montpelier, VT 05620-3201 Dated at Essex Junction, Vermont, this 11th day of January, 2016.

Natural Resources Board Technician 879-5614 christine.commo@vermont.gov

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