BennHi Redevelopment

Transforming An Iconic Building


PUBLIC INFORMATIONAL MEETINGS:
A public meeting was held on Wednesday, October 19, from 5:30 pm to 7:00 pm at the multi-purpose room on the third floor of the Firehouse located at 130 River Street in Bennington. A link to the video is available here. The slide deck for the presentation is available in the documents listed below.

The subject will be discussed again at the Select Board meeting on Monday, October 24. The select board meets at 6 pm and the agenda will be posted when available here. The meeting will be at the third floor multi-purpose room at the Fire House located at 130 River Street. The Select Board may choose to vote on the staff recommendations at this meeting; including whether to commit $2 million in ARPA funds to this project, contingent on grants and other funding being secured for the entirety of phase one of the community (town) portion of the project. Staff recommendations are detailed in the public presentation slide deck that are included in the document list below.

Questions and Answers raised during meetings are shared below.


Bennington High School BuildingThe historic Bennington High School located at 650 Main Street was first built in 1913, and was used as a high school from 1914 until 1967 when the new high school on Park Street was ready for occupancy. The building then served as the middle school from 1968 through 2004 when it was closed and the middle school moved to East Road. The building had been renovated three times over this period; in 1939, 1958, and in 1975. The building is listed on the National Registry of Historic Places. Since 2004 the building has remained vacant. The property has been called various names including; Benhi, BennHi, BenHi, Benn Hi, and other variations. We will refer to it as the “BennHi” for the purposes of this web page as we await a definitive decision on the preferred abbreviation.

Recent Investments In BennHi

Picture of room.The BennHi property was purchased in early 2020 by Christopher Gilbert of Dorset, VT and Red Hook, NY, for a purchase price of $146,000. The building was in rough shape with the accumulated years of vacancy having taken its toll. Gilbert has done a lot of work on the building to stabilize it and begin renovations; including a new insulated roof, cleanup, trash removal, broken glass replacement, new locks and hardware, six new gas heating systems with gas tanks and related hardware and ductwork, new plumbing, including new underground water line, repairs and updates to sprinkler systems, architectural work, engineering, elevator updates and repairs, electrical work, security, insulation, drywall, ceiling tile repair and replacement, flooring, and gym flooring. Owner Chris Gilbert estimates the value of the work done on the property to be over $900,000 to date.

 

ARPA Funding Creates Opportunity

Picture of Gym floor.In 2021 the Town of Bennington learned it would have 3.9 million in funding available for town projects and the Select Board commenced a public process to determine which projects to consider for ARPA funding. Two items that ranked high included a gymnasium for the Town and additional housing.

In March of 2022, the Bennington Select Board directed Staff to explore the idea of redeveloping the BennHi to provide a gymnasium, provide a new larger home for both the Senior Center and Meals on Wheels, and facilitate the creation of new housing. Town Staff has been working for the past six months on doing this due diligence and now are reporting back to the Select Board and the community with the findings.

Major redevelopment projects such as this are complicated, requiring multiple funding sources such as; TIF financing, Historic Tax Credits, CDBG funds, VHCB grants, and Tax Credits. A key piece of this is the availability of ARPA funding. The town would likely be spending between $1.9 million and $2.1 million of ARPA funds to make this happen. It is important to note that while some ARPA funds are being used now to perform the due diligence required for the pre-development work and planning for the project, the town will require all other funding sources to be in place before committing the full ARPA funds to the project as a whole.

Leadership from the Select Board and the community they represent will be essential to tackle a project of this scope. A public/private partnership is the only way to leverage the funding needed to make a project like this a success as the cost for redevelopment is very high, indeed higher than the ultimate value of the property when the work is completed.

Site Control
In order to be able to expend town funds, get state and federal funding not available to private developers, and to be able to do the necessary project management needed to fully plan for the redevelopment, the town needed control of the property. Working with the owner Christopher Gilbert, the town entered into a lease to own agreement that gives the town both the necessary control, as well as the ability to terminate the agreement if the town decides not to proceed with the project. Just as this agreement was needed to enable site control, modifications to the agreement as new partners emerge and the overall project comes into focus will be needed in the future.

 


floor plan

BennHi Redevelopment Project Status and Recommendations

View Project Documents

Project Scope

The redevelopment of BennHi by a public/private partnership made up of the Town and a private developer, Hale Resources, is planned. The schematic design prepared by Goldstone Architecture contemplates 30,000 sq. ft. of municipal/community space (Community Space) and 70,000 sq. ft. of residential space (Residential Space).

The community space is planned in two phases. Phase 1 consists of approximately 14,000 sq. ft. occupied by the Bennington Senior Center and Meals on Wheels. Phase 2 involves approximately 16,000 sq. ft. of gymnasium space, exercise/activity rooms, locker rooms/changing rooms operated by the YMCA and office/workshop space occupied by other community partners.

The residential space will include a mix of market rate and affordable housing. 40+ units are planned to include up to 17 affordable units. The development of the Residential Space is dependent on the Town developing the Community Space as much of the building is not suitable/feasible for residential units.


Pre-Development Work Completed to Date

After an extensive public process, the Select Board identified redevelopment of BennHi as a priority project for the expenditure of ARPA funds and directed Town staff to begin pre-development efforts to determine the feasibility of the project. The town obtained site control of the property through a long-term Lease with a lease to own provision and option to terminate if the project does not proceed. For the purposes of this report, pre-development work consists of work done prior to development of construction documents and entering into construction contract(s).

Community Space Pre-Development Work Completed

View Project Documents

  1. Retention by Town of Goldstone Architecture through a competitive bid process to provide architectural services and pre-development support services for Community Space development. With the assistance of Goldstone Architecture, a Construction Manager, Engelberth Construction, Inc. (ECI), was retained after a competitive bid process by the Town to develop a construction cost estimate and to identify materials/supply chain issues. Work completed to date by Goldstone architecture and subconsultants includes the following:
    • Development of existing conditions plans; evaluation of roofs and existing building systems.
    • Identification of specific space needs of users/tenants and development of detailed space program for the 30,000 square ft of Community Space after extensive meetings with users/tenants – Senior Center Staff/Seniors, Meals on Wheels staff, YMCA staff, etc.
    • Development of initial schematic design for Community Space, and multiple revisions of the schematic design after multiple conversations with users/tenants.
    • Development of building elevations.
    • Retention of Civil Engineer and development of site plan for property.
    • Retention of Structural engineer and evaluation of building structural issues. No significant structural issues were identified.
    • Retention of Mechanical engineer, identification of energy goals, development of proposed mechanical systems summary for Community Space (HVAC, electrical, plumbing. fire safety), and commencement of energy modeling services.
    • Work with ECI to prepare initial cost estimate.
  2. Paul Miller, Environmental Consultant, was retained by the Town to identify environmental concerns. Air testing for PCB’s was conducted. No PCB’s were detected.
  3. Catamount Environmental was retained by the Town to identify and test for asbestos in the building. Some asbestos containing materials were detected and costs for remediation were quoted. Given the age of the building remediation will be relatively minor as asbestos remediation was commenced by a previous owner.

Residential Space Pre-Development Work Completed

View Project Documents

  1. Commencement of partnership with private developer, Hale Resources, to develop Residential Space – Execution of Memorandum of Understanding with Hale Resources to serve as developer of the Residential Space.
  2. Ongoing conversations (Hale Resources and Town staff) with possible public funding sources, including the Vermont Housing and Conservation Board, Agency of Commerce and Community Development, and Low-Income Housing Tax Credits.
  3. Ongoing conversation by Hale Resources with private investors.
  4. Retention by Hale Resources of Goldstone Architecture to provide architectural services and pre-development support services for Residential Space development. Work completed to date by Goldstone architecture and subconsultants includes the following:a. Development of existing conditions plans.b. Development of initial schematic design for Residential Space – 40+ units to include up to 17 affordable housing units.
  5. Retention by Hale Resources of Historic Preservation Tax Credit consultant.
  6. Paul Miller, Environmental Consultant, was retained by the Hale Resources to identify environmental concerns.
  7. Commencement by Hale Resources of cost estimating.
  8. Hale Resources is in conversations with Doug Kennedy to conduct a housing/market feasibility study.
  9. Hale Resources is in conversations with M&S Development to serve as a Low-Income Housing Tax Credit consultant.
  10. Hale Resources is investigating rebates and incentives available from Green Mountain Power and Efficiency Vermont for energy efficient HVAC systems.

Remaining Pre-Development Work

Community Space

View Floor Plan in Project Documents

  1. Continue efforts to identify cost savings – value engineering. A significant reduction in the initial cost estimate is anticipated.
  2. Develop detailed list of soft costs (design services, engineering services, legal services, etc.), and other costs not included in the construction estimate.
  3. Evaluate most cost-efficient method to construct phase 1 – construction manager, general contractor, or other method.
  4. Evaluate cost impact of delaying commencement of construction of phase 1 – will supply chain issues improve? – will the bidding environment become competitive? The contract with the owner of BennHi has been extended; therefore, time constraints on the project have decreased significantly. American Rescue Plan Act (ARPA) funds do not need to be expended until the end of 2026.
  5. Identify, assemble, and secure all funding for phase 1. Phase 2 value engineering and funding to follow. See Discussion of funding for Community Space below.

Residential Space

View Floor Plan in Project Documents

  1. Completion of schematic design by Goldstone Architecture.
  2. Completion of cost estimate by Hale Resources.
  3. Identify, assemble, and secure all funding (grants, tax credits, private investment, bank financing) by Hale Resources. See discussion of funding for Residential Space below.

Funding

As is the case with virtually all real estate development projects, the greatest challenge for the BennHi project is identifying, assembling, and securing all of the necessary funding. One conclusion, however, has become very clear – the Town’s partnership with Hale Resources to cooperatively re-develop the entirety of BennHi makes it infinitely more likely that funding for both the development of the Community Space and Residential Space will ultimately be secured. Funders seek to leverage funds to accomplish multiple priorities. Most public funding sources currently identify housing and community services as high priorities. Funding applications that fail to leverage significant funds and/or fail to accomplish high priorities are not attractive to most funders. A public/private partnership between the Town and a private developer that leverages multiple funding sources to develop 40+ housing units and 30,000 sq ft. to host numerous community services perfectly aligns with current public funding sources’ priorities. In addition, several funding sources, such as tax credits, including Historic Preservation and Low-Income Housing, and State Designated Downtown tax credits, are more easily accessed by private entities (as opposed to municipalities).

Community Space Funding Sources

The following funding sources have been secured or are targeted (status of funds in parenthesis) by the Town for the Community Space.

Phase 1

  • $2 million in Municipal ARPA Funding (in hand – tentatively committed).
  • 18% of all development costs reimbursed by sale of Historic Preservation Tax Credits (eligible if partner with Hale Resources – application is being prepared).
  • 9% of all development costs reimbursed by the sale of State Designated Downtown tax credits up to $600,00 per year per municipality (eligible if partner with Hale Resources).
  • United State Department of Agriculture (USDA) funds ($1 million plus Community Facilities guaranteed low interest loans available to developer working with a local lender).
  • Rebates and incentives from Green Mountain Power and Efficiency Vermont for energy efficient HVAC systems. (program details being investigated).
  • $25,000 Building Communities Grants (grant application must be prepared).
  • $20,000 AARP Community Challenge Grants (grant application must be prepared).
  • Donations.

Phase 2

  • Up to $2 million in Tax Increment Financing (TIF) (requires development agreement with Hale Resources and bond vote).
  • 18% of all development costs reimbursed by the sale of Historic Preservation Tax Credits (eligible if partner with Hale Resources -application is being prepared).
  • United State Department of Agriculture (USDA) funds ($1 million plus Community Facilities guaranteed low interest loans available to developer working with a local lender).
  • 9% of all development costs reimbursed by the sale of State Designated Downtown tax credits up to $600,00 per year per municipality (eligible if partner with Hale Resources).
  • Vermont Community Foundation grants (being explored).
  • Rebates and incentives available from Green Mountain Power, Efficiency Vermont, and 3E Thermal for energy efficient HVAC systems (program details being investigated).
  • $25,000 Building Communities Grants (grant application must be prepared).
  • Donations.

Residential Space Funding Sources

The following funding sources have been secured or are targeted (status of funds in parenthesis) by Hale Resources for the Residential Space.

  • Up To $3.2 million grant from Vermont Housing and Conservation Board (VHCB) for affordable housing units (eligibility confirmed – application being prepared).
  • 18% of all development costs reimbursed by the sale of Historic Preservation Tax Credits (application is being prepared).
  • 28% of all development costs reimbursed by the sale of in Low-Income Housing Tax Credits (application is being prepared).
  • 9% of all development costs reimbursed by the sale of State Designated Downtown tax credits up to $600,00 per year per municipality (eligibility confirmed).
  • 28% of cost of HVAC system reimbursed by sale of Inflation Reduction Act tax credits (being explored with energy consultant).
  • Funding gap to be covered by private investment (discussions with investors underway).
  • 75% of the building value in bank financing (discussion with financial institutions underway).

 


 

Staff Recommendations

Town staff recommends continuing pre-development work with a focus on value engineering efforts and identifying, assembling, and securing funding for phase 1 of the Community Space project. Specific recommendations include:

  1. Formally commit up to $2 million in municipal ARPA funds for construction of phase 1 of the Community Space project, subject to securing funding to construct the entirety of phase 1. This commitment will significantly enhance the competitiveness of all grant applications by the Town and Hale Resources. Without this commitment it is unlikely that significant additional public funds may be secured. This commitment limits the Town’s exposure as it is subject to securing all necessary funding for phase 1. A definitive plan outlining funding sources awarded/raised will be presented to the Select Board prior to seeking the Board’s approval to proceed with construction of phase 1.
  2. Formalize partnership with Hale Resources to complete the re-development of the entirety of the BennHi property. As noted above, the partnership provides the best path forward to obtain and leverage the maximum amount of funds for both partners.
  3. Direct staff to identify cost savings in materials and labor – value engineering – and evaluate most cost-effective options for construction (general contractor, construction manager, landlord improvements, etc.)
  4. Authorize staff to actively pursue additional funding sources independently and in concert with Hale Resources.
  5. Direct staff to explore with Hale Resources ownership/lease models that most effectively facilitate the re-development of the entirety of the BennHi project. A specific example involves the up to 30% Historic Preservation tax credit which is viable only if Hale Resources ultimately owns the building for the compliance period.
  6. Direct staff to provide update to Select Board/public in 90 to 120 days.

Project Documents

Slide Deck from 10/19/22 Public Meeting
Updated Residential and Community Floor Plans (10/19/22)
BennHi Existing Conditions
Community Space Schematic Designs (prior version)
Residential Space Schematic Designs (prior version)
Site Plan
APEX Preliminary Cost Estimate (2/8/22)
ECI Initial Cost Estimate (10/7/22)
Audy Property Assessment
Gilbert Lease to Own Agreement
Hale Resources Memorandum of Understanding
Asbestos Abatement – Costs
Asbestos Abatement – Time and Materials
Feasibility Report – Roofing
Feasibility Report – Structure
Feasibility Report – Mechanical, Electrical, Plumbing, and Fire Protection
Air Quality – State Memorandum on PCBs
Air Quality – State Testing Requirements on PCBs
Air Quality – Testing Locations
Air Quality – Test Results

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Questions and Answers

Q: Will there be enough parking?

A: 67 parking spots are part of the proposed site plan. Additional parking may be available with a new parking lot on municipal land across the street next to the old Stewarts shop if needed. A parking study will be done as part of the project to assess needs.

Q: Will the town lease or own its portion of the building when the project is completed?

A: We are not sure at this point. The goal is to use an ownership structure that maximizes the amount of grants and funding available for the project; what that is will depend on that calculation. Whatever structure we end up finalizing, it will ensure long-term control of the property by the town for it’s portion of the building. For example, if a lease instead of ownership, it would include a very long term multi-generational lease.

Q: Will there be transportation from senior housing to a new Senior Center?

A: Yes. The Town has been in touch with GMCN the bus provider for the community about providing transportation from the senior housing on Pleasant Street to the BennHi location and they are willing to do so.

Q: Will the town of Bennington purchase the BennHi building prior to starting construction?

A: The Select Board authorized a lease and purchase agreement earlier this year that gave the Town control of the building that was needed in order to proceed with pre-development work. The agreement allows the town to back out of the agreement if the project ends up not being feasible, or if the Select Board chooses not to proceed. You can read the agreement and the amendment to the agreement here.

Q: Will Bennington ARPA money be used to support the Hale Resources housing portion of the project?

A: No. Town ARPA funds will only be paying for work done to part of the building that the town would occupy. The residential portions that will be controlled by Hale Resources will be entirely their responsibility.

Q: Will Community Development Block Grants go to the Hale Resources housing portion of the project? 

A: Possibly. Hale Resources may apply for Federal Community Block Grants that are Federal monies, and those do pass through the town but are specific to their application. This is the same as anyone in the community that applies for Federal block grants; they all are channeled THROUGH the Town, but are not the “Town’s” money. Examples of groups that have received Federal block grants “through” the town include UCS, Sunrise Family Resource Center, Shires Housing, and the Putnam Project.

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