Tie broken: Downstreet apartment project gets review board approval

November 4, 2023 | By Lisa Scagliotti

With little fanfare and in closed session, Waterbury’s Development Review Board met this week and when it emerged, a deadlocked vote on a permit for affordable apartments on South Main Street had won approval, 4-3. 

51 S. Main Street is currently a parking lot. File photo

All indications point to the board Chair David Frothingham having voted to give the affirmative side a majority. But neither he nor town staff afterward would confirm that he cast the tie-breaking vote.

The board had a regularly scheduled meeting on Wednesday and the applicant for the only permit application on the agenda requested their hearing be postponed, according to Zoning Administrator Mike Bishop. 

The board then went into a deliberative session that is closed to the public, Bishop said. However, Waterbury Select Board member Mike Bard who was attending the meeting was allowed to stay.  

No minutes are taken nor are recordings made of deliberative sessions. 

Bishop said that following the session, the vote on a conditional use application for Downstreet Community Development and Housing’s proposed 26-unit apartment complex was revised.

“I was informed by the chair that all had voted and it was now 4-3 in the affirmative,” Bishop said on Thursday morning. 

The review board at its Oct. 18 meeting completed its permit review for the affordable housing development proposed for the former site of the Waterbury town offices at 51 South Main Street. A year ago, voters in the Edward Farrar Utility District which owns the property, approved selling the lot to the nonprofit housing development organization to build affordable rental units on the site. Downstreet has since presented plans for a three-story 26-unit apartment building. 

The project required a conditional use permit from the town’s Development Review Board. Over the course of three meetings in September and October, the board went over details for the project, asked questions, and made suggestions. Members of the public did the same and project designers made revisions to the site plan and building design.

Near the end of the Oct. 4 permit review session, board member Alex Tolstoi asked project officials if they could to make additional design revisions to alter the top floor so it would be set back from the front of the floors beneath it. Project designers initially balked at the suggestion, concerned that it would mean removing an apartment from the plans. They returned on Oct. 18 with a revised design that maintained 26 units and pushed some but not all of the top floor back from the street side of the building.

The board ended its review and then voted 3-3 on the permit request. Decisions need four “yes” votes – a majority of the seven-member board – for approval. The tie vote came as somewhat of a surprise and it left the matter potentially headed to state Environmental Court which hears appeals in such cases.   

The tie, however, came at a meeting when board Chair David Frothingham was not in attendance. In addition to its seven members, the Development Review Board has two alternates. One alternate, Joseph Wurtzbacher, already was included in the Downstreet permit review after regular member Patrick Farrell, who lives on Parker Court in close proximity to the project site, refrained from participating in reviewing the application. 

The Oct. 18 vote had Vice Chair Tom Kinley along with Bud Wilson and Wurtzbacher supporting the Downstreet permit; Co-Vice Chair Alex Tolstoi, David Rogers and Harry Shepard opposed it. 

According to the board’s rules of procedure regarding voting, “absent members may participate if they have reviewed the audiotape and minutes of the proceedings, and any evidence submitted.” 

When asked if Frothingham, who missed the Oct. 18 meeting and vote, added his vote to the tally to break the tie on Wednesday, Bishop said he couldn’t comment on action taken in deliberative session. 

Frothingham responded to an email from Waterbury Roundabout by directing any inquiries about the Downstreet permit vote to town staff.

Bishop said five of the board’s seven members attended Wednesday’s meeting and deliberative session. Of them, Frothingham was the only one who did not vote on the housing project’s permit application at the previous board meeting. 

Municipal Manager Tom Leitz also would not comment on the tie-breaking vote specifically. He instead pointed to the board’s rules that allow a member who was absent to essentially catch up with an application review in order to add their vote to a decision.

Under the board rules, it has 45 days from the time it ends an application review to issue its decision in writing. That time period for the Downstreet project began on Oct. 18. It is not clear whether the permit decision will incorporate the final building design with the reduced third-floor footprint as presented at the last October meeting.  

Regardless of how the tie vote was resolved out of public view, Downstreet Project Manager Nicola Anderson was pleased with the outcome. “We’re so happy to be moving forward,” she said on Friday. 

"We are immensely grateful for the positive DRB vote and extend our deepest thanks to the Town of Waterbury for their unwavering support and recognition of the community’s housing needs,” Anderson said. “The overwhelming support from local Waterbury residents and business owners has been invaluable, acknowledging the housing crisis and the vital importance of new housing in Waterbury.” 

Anderson reflected on the utility district’s vote a year ago signaling public support for the property becoming a site for affordable housing. That backing is key, she said, to addressing a critical need. 

The conditional use permit was the main local approval needed, she said. Other state-level permits are still on schedule and the project will not need review under Act 250, she noted. 

Funding first, then construction

Downstreet is currently looking at late summer 2024 to commence construction, Anderson said. The next vital phase is lining up funding for the project. The most recent cost estimate late this summer was $13.9 million. That will be revisited by designers as the project moves forward and applications are made in early 2024 to two of the top funding entities – the Vermont Housing & Conservation Board which provides loans and grants for sustainable, affordable housing, and the Vermont Housing Finance Agency, which assists in financing development of new rental housing. 

So far, the project has less than 25% of the funding needed to move forward, Anderson said. That includes an allocation of $100,000 of federal American Rescue Plan Act funds that Waterbury taxpayers approved in this year’s municipal budget. The town has received $1.54 million in the pandemic-relief funding. 

Tax reallocation to save development costs

One key part of the project financing recently fell into place when the state announced the latest round of development incentives through tax credits for projects in downtowns and village centers around Vermont. 

Gov. Phil Scott and the Agency of Commerce and Community Development last month announced over $4.4 million to support 31 rehabilitation and revitalization projects that together state officials expect to generate $150 million in building improvements and public infrastructure around Vermont.

“These projects support local communities with basic needs – like housing, sites for businesses to grow, and healthcare services – which improve the economic vitality of our community centers,” Gov. Scott said in announcing the awards. “In addition, these are the types of programs that align with our recovery and resiliency work from both the COVID-19 pandemic and the devastating summer floods. By strategically using federal and state funds to revitalize communities, we’ll recover faster and build back stronger than before.”

Most of the projects in the state announcement rely on state and federal tax credits that redirect taxes owed to help cover construction costs for improvements and redevelopment. The Downstreet project proposed for 51 South Main St., however, qualified for a different program that applies to new construction, explained Caitlin Corkins, Tax Credits and Grants Coordinator for the state Agency of Commerce and Community Development. 

In this case, the Waterbury project will receive a sales tax reallocation. Corkins explained that this involves the state Tax Department “reallocating” the sales taxes generated by the development of the project such as purchases of building materials and supplies. The developer needs to document its costs during construction and the state’s payments come as spending is completed, she said. 

This award was based on a project cost estimate of just under $13.7 million which would mean a sales tax reallocation of just over $127,000, according to the state announcement. 

The payment will go to the Town of Waterbury to cover the cost of infrastructure work on the project site due to the construction. That means Downstreet does not have to cover those costs with its project budget, Corkins said. The work includes some site preparations that involve moving a utility transformer and equipment, creating a curb cut, and prepping site hook-ups to water and sewer service. 

Like the larger state and federal tax credit programs, the sales tax reallocation focuses on projects within designated downtowns and village centers, Corkins said.