Putnam Block Innovation
Revitalizing the Past for the Future
By Lesley A. Dyson

In the corner of southwestern Vermont, Bennington, the largest town in the region with a population of 16,000, is a bustling community. Surrounded by scenic rural areas, Bennington enjoys proximity to metropolitan areas such as New York City, Albany, and Boston.

The town provides its residents and visitors a flourishing art scene, museums, galleries, and theater—ranked in the top ten of small communities in America. It offers New England icons such as the famed Bennington Monument that towers from a hill over the town, covered bridges and farms; seasonal celebrations and festivals; and high-quality local colleges. The service and commercial core of the county and beyond, Bennington draws people from bordering Massachusetts and New York.

Bennington’s downtown is a National Historic District, and the former Hotel Putnam, built in 1894, dominates the Four Corners intersection of the town center. The Putnam Block includes the hotel, the Old Courthouse building, used for that purpose from 1870 to the early 1930s, and the A.H. Winslow building, the site of Winslow Hardware for over 60 years. These three historic buildings, along with four acres of buildings and parking buildings in the downtown area, comprise the most ambitious development undertaking in Bennington’s history.

The Bennington Redevelopment Group, LLC (BRG) is working to transform this parcel into a vibrant, mixed-use downtown space offering service, commercial, retail, and market-rate residential spaces.

The Putnam Block Project
The revitalization of current structures and the planned new construction will include anchor tenants, project partners Bennington College and Southwestern Vermont Health Care; a grocery store; restaurant; a hardware store; and housing. Plans encompass a theater, an outdoor plaza, and artists' studios and galleries. Sustainable and resilient design features stormwater bio-treatment, green products, and energy-efficient high-performance mechanical systems. All totaled, the project will encompass about 66,000 square feet of renovations with an additional 94,000 square feet of new construction. Cost estimates are now about $54 million.

Currently, underutilized spaces and buildings in the planned renovation area house the Chamber Visitor Center, a variety of small shops and offices, empty storefronts, and rundown parking areas behind the Four Corners’ buildings.

Jim Sullivan, Executive Director of the Bennington County Regional Commission (BRCR), deems the expansive project “incredibly important—it will contribute greatly to the local economy and the vitality of the region.”

Bennington has seen a deterioration over the last few decades. It’s lost high-end factory and manufacturing jobs, lost a higher percentage of its population than any other area in Vermont, has lower per-capita income and a higher unemployment rates than the state average, far lower median property values than the state average, an aging population, and has seen a decline in tourist revenues. Empty storefronts dot Main Street and the only new construction downtown in the last seven years has been a Dollar General store, which has not contributed any charm to Bennington’s status as a Designated Downtown.

Bennington is acutely aware of its challenges in strengthening and reinvesting in the downtown core. In 2006, the town completed a Downtown Market Analysis for Downtown Bennington, a Land Use and Circulation Analysis and a Downtown Master Plan. In 2013, they shaped a Strategic Economic Development Plan, and in 2015, the Bennington Town Plan. These studies formed the basis for the identification of key development needs and by 2016, the Putnam Block renovation was the focus of the Bennington Downtown Area-Wide Plan, completed by Jim Sullivan and BCRC assistant director Bill Colvin, which provided a guide and vision for economic revitalization of the vacant and underutilized Putnam Block.

Talk is cheap, and plans on paper look good, but Bennington also has civic groups and businesses that fervently believe in and work toward the future of the still-quaint town. These groups have invested an estimated $1.5 million or more of their own equity in the Putnam Block project, funds that may not be making a quick return, according to Colvin, BRG’s point-person.

According to the BRG Facebook page, “BRG investors do not expect to make money. The gain in the long run will be benefits from having a more attractive, vibrant downtown… Specifically, the Putnam Block project will cost over three times as much to build as it will be worth and market rents fall far short of covering the debt needed to build. …The returns won’t be measured in profits or dividends, but rather in positive outcomes for the community.”

However, numbers generated by analysis of the project paint a rosier picture of the financial returns. According to a Putnam Block Redevelopment Employment and Economic Assessment, the project will produce a substantial economic impact on the area’s economy. The Assessment projects that “the construction of Phases 1 and 2 alone will generate a cumulative total of 534 jobs (FTEs), $21.2 million in labor income and a cumulative $66.81 million in output.” In addition, the project’s long-term employment and economic impact will translate to $1.9 million in labor income the first year of the completed project and more than $18 million per year after the third year. With the influx of money spent by people utilizing the health care services and retail stores, working and living in the finished offices and housing, the town will see an increase in its bottom line—profits and dividends that extend to the whole community.

The state agrees that this redevelopment will have a positive impact on the town and the region. In its 2016 approval for the Tax Increment Financing (TIF) of the Bennington District Plan, the Vermont Agency of Commerce and Community Development states, “The Town will benefit from job creation, increased tax revenue, the redevelopment and occupancy of vacant properties, the enhancement of Bennington as a destination, and as a place to live, work and raise a family. The region will see a strengthening of its core community, and the State will accrue all these same benefits through tax revenue increases in each of its important economic sectors. A thriving Bennington is good for Vermont.”

The Development Team
The Putnam Block redevelopment is a community-led project. At the helm is BRG, a diverse collaboration of investors and partners, including Southwestern Vermont Health Care, Bennington College, Bank of Bennington, Global-Z International, Brian and Jennifer McKenna, and Anthony and Jacqueline Marro. These institutions, businesses, civic boards, private investors, and regional groups provide BRG with far-reaching contacts and interactions in the town and the state. The BRG group’s alliances with the town of Bennington, Bennington County Regional Commission (BCRC), Bennington County Industrial Corporation (BCIC), and other groups have taken this project from early vision to funded and finally ready to break ground in May 2019, a short three-year span for such a massive project.

In 2015, concerned about the decline of the town they loved and with a shared understanding something needed to be done to reverse that, the BRG group envisioned the redevelopment of the Putnam Block as the transformative project Bennington needed “to change and create positive momentum,” as Bank of Bennington president Jim Brown said.

BRG then partnered with M&S Development of Brattleboro, which develops projects with social and economic benefits and which oversaw the model redevelopment of Brooks House in downtown Brattleboro, to help develop financing and manage the project. Project investor Stevens & Associates, an award-winning firm in Brattleboro specializing in historic building preservation, has been contracted as the project’s architectural firm, with Breadloaf Corporation in Middlebury undertaking the construction management.

Seeing the immense value of a revitalized downtown, Bennington College and Southern Vermont College have been closely involved in the redevelopment initiative, with SVC president David Evans saying, “We both know that an attractive, vital community is key to the success of our institutions and to attracting and retaining students, staff and faculty.” Bennington College president Mariko Silver concurred, “The strength of Bennington College depends on the vitality of the community in which we live and work—and vice versa.” The recent closing of Southern Vermont College is a harsh blow to the partnership and funding of the project, but Bennington College’s commitment remains firm. The college will have office suites and graduate student housing units in the complex.

The Putnam Project
The stars aligned for Bennington in 2015, when, after the Bennington town plan identified the Putnam Block area as key to revitalizing the downtown and advancing economic vitality, the prime property came on the market.

In July 2016, BRG reached an option agreement with the sellers, the Greenberg family, whose former H. Greenberg and Son Hardware is one of the buildings in the sale, to acquire the downtown parcel comprising the six buildings and four acres.

By December 2016, BRG had developed conceptual plans and completed a feasibility analysis for the proposed three-phase redevelopment of the historic buildings and construction of two new buildings, which inspired enthusiastic community involvement and investment.

In September 2017, the properties were purchased for $2 million by BCIC, a nonprofit organization eligible for state and federal funding programs. BCIC initially took possession as it could receive grant funding unavailable to the BRG developers for necessary environmental remediation and other work. BRG later assumed ownership of the property to accomplish the complex project.

Overall, the main buildings are sound. Redevelopment includes renovation, remediation and salvage/conservation of the three historic buildings, demolition of non-historic buildings, and new construction of harmonious buildings for residential and commercial use. Asbestos removal from the Greenberg site is nearly done, and the building will be demolished in the first phase of the project.

As a result of financing complexities, the Putnam Block parcels will be financed and built in two phases, with a possible third phase.

The first phase of this major initiative entailed acquisition and environmental remediation and soon will see the demolition of the hardware building. Renovation and infrastructure improvements will begin, with a new restaurant, offices for Global-Z, a data management company, and Bennington College’s spaces. Phase One also included the recent sale of the Oldcastle Theater on Main Street to the theatre company to reinforce that organization’s presence as an anchor of the arts and culture community in downtown Bennington.  

The second phase includes new building construction and municipal infrastructure, including sites for a much-needed downtown grocery store, which Colvin says is being negotiated among three contenders, and a medical building housing Southwestern Vermont Health Carewith additional offices for the Southwest Region Visiting Nurses and Hospice Program.

The Putnam Project will address the need for more affordable housing and the shortage of quality rental housing downtown. Between 2008 and 2014, the town issued just eight building permits for multi-family housing. Robert Stevens of M&S Development anticipates 105 new housing units in the project, augmenting the 160 downtown units currently available.

Phase One will offer both market rate and affordable residential units on the upper floors of the renovated Hotel Putnam and Winslow buildings. Considerably more newly-constructed housing will be offered in Phase Two, and, in Phase Three, Lisa Patlis, of Housing Vermont, a nonprofit development company, says that her organization has an option to build 30 permanently-affordable housing units.        

Stevens projects that the planned units would result in about 150 new residents in the downtown, boosting the property grand list by $6.8 million and infusing more than $4 million annually into the local economy.  

Colvin says that Phase One construction will take 15-18 months, with Phase Two starting in 12-15 months. The second phase includes the new construction and about 60 percent of the site work, including most of the parking and all of the municipal infrastructure, with environmental remediation ongoing throughout the project.

The Funding
Groundbreaking for the Putnam Block project has been pushed back a number of times since the initial target date of October 2017. BRG cited the complex and non-traditional nature of the financing package. The parcel’s town-appraised value of less than $2 million is far short of the amount required for its renewal, resulting in tight constraints for traditional borrowing capabilities and a significant gap in the financing structure. The complex, multi-layered financing package put together by BRG and partners, comprising federal and state tax credits, more than 60 private investors, grants, state and local funds, and traditional debt, is a substantial achievement.

The package includes 17 unique funding sources that have been secured from the major consortium partners, bank loans, Bennington’s town revolving loan funding, Vermont Community Development and Housing and Conservation Board funding, federal funding like historic preservation, and other sources. Colvin says that funding now is “all identified and in the final stage of underwriting and will be secured just before the final closing in May.” Then the demolition starts.

After the 2016 approval of the Tax Increment Financing (TIF), a tool for municipalities to finance public infrastructure spending and spur downtown property redevelopment, project leaders pulled together an impressive array of funding and support. The catalyst for the projects, the TIF will mainly fund Phase Two of the project, with Phase One funding, now reaching its final stages, contingent on the TIF.

Early in the project, Colvin reached out to the community for their contributions in leadership, preferred equity, private loans or guarantees, charitable contributions, or as a critical, committed tenant. The project generated major commitments that has driven support from state and federal officials. There now are now 60 local individual investors and multiple institutional and business investors.

Debt financing was sought from private sources, banks, and the Vermont Economic Development Authority (VEDA). Grants were pursued from the Vermont Community Development Program and State of Vermont and Environmental Protection Agency (EPA) Brownfields programs. The project sought Federal Historic Tax Credits and New Market Tax Credits (NMTC), which are tax credits eligible in certain census tracts—like Bennington—to encourage economic development where it's not otherwise possible through traditional models.

Roughly 40 percent of the total cost will come from the New Market credits and Historic Rehabilitation Tax Credits. NMTC come with some requirements, including a requirement that the renovated space be at least 60 percent leased for commercial occupancy. At this point, Colvin says Phase One is 70 percent pre-leased.

A substantial portion of Phase One financing materialized when Vermont Rural Ventures, which uses NMTC resources to support investment in the economic, environmental, and social well-being of Vermont communities as in Brattleboro’s Brooks House, doubled their initial allocation of funds to the Putnam project to $15.6 million.

Colvin says the town is supportive of the project, providing revolving loans and a CD block grant of $1.25 million, and cooperative with various permitting. In January of this year, Governor Phil Scott confirmed more than $3.1 million in approved funding commitments for the Putnam Block redevelopment project, which includes the State of Vermont and EPA programs, a Community Development Block Grant program ($1.25M), and a Downtown and Village Center Tax Credit award ($1.3M). Project funding also includes the Vermont Community Foundation ($500,000) and Windham Regional Commission’s Brownfields Revolving Loan Fund ($430,000).

With the $29 million financing package for the project’s first phase nearly complete, the expansive range of backing reflects the wide support the project has received from both the public and private sectors in Vermont.

The Future
The civic leaders of Bennington, together with the town, state, and critical tenants, provided the investments and commitments to ensure this project’s success. Revitalizing the historic downtown Putnam Block creates an historically beautiful, vibrant downtown and is an inspiration for a downtown renaissance in other Vermont communities.

The immediate impact of the first phase will be a surge in local employment in the construction trades and related jobs, with an expected 100 to 120 workers a day during aspects of the redevelopment work. The completed project will solve the town’s housing shortage and boost existing businesses with larger business customer base. It will offer health, food, and other services, spur other businesses to launch or expand, and increase after-work options and activities for residents and visitors.

As Governor Phil Scott said, “This project is a great example of how public and private funds can come together…to transform our downtowns. This historic block in Bennington will once again be a hub of commerce, employment, and housing in one of the state’s most vibrant downtowns.”

Putnam Block Redevelopment (BRG)
William Colvin
bcolvin@bcrcvt.org;
802-442-0713, ext. 1
http://putnamblock.com/

Bennington County Regional Commission (BCRC)
Jim Sullivan, Executive Director 
jsullivan@bcrcvt.org
111 South Street, Suite 203
Bennington, VT 05201
802-442-0713 x5
http://www.bcrcvt.org/

Bennington County Industrial Corporation (BCIC)
William Colvin, Acting Director
bcolvin@bcrcvt.org
802-442-0713 x1
http://www.bcic.org/ 

M&S Development
95 Main Street
Brattleboro, VT 05301
802-246-2100
https://www.msdevelopmentllc.com/

Stevens & Associates
95 Main Street
Brattleboro, VT 05301
802-257-9329
https://www.stevens-assoc.com/

Global-Z International
Dimitri Garder
395 Shields Drive
Bennington, VT 05201 
802-445-1011
https://globalz.com/

Bennington Downtown Alliance
215 South Street
Bennington, Vermont 05201
802-442-5758
admin@betterbennington.com
https://www.betterbennington.org/

Housing Vermont
Lisa Patlis
lpatlis@hvp.org
802-861-3814
100 Bank Street, Suite 400
Burlington, VT 05401
802-863-8424
https://www.hvt.org/index.php

Vermont Community Foundation
802-388-3355
https://www.vermontcf.org/

Vermont Community Development Program
802-828-5219
https://accd.vermont.gov/community-development/funding-incentives/vcdp