Office of Mayor Miro Weinberger

TO:
FROM:
DATE:
RE:

City Council
Mayor Miro Weinberger
August 24, 2018
Side Letter to Clarify Development Agreement for CityPlace Burlington

On October 26, 2017, the City of Burlington (City) and BTC Mall Associates LLC (BTC) signed a
Development Agreement (DA) to guide the parties’ efforts to construct and complete the
redevelopment of the former site of the Burlington Town Center and surrounding buildings. The new
project is known as CityPlace Burlington.
Since the DA was signed nine months ago, we have seen progress on the project. BTC has completed
site demolition despite delays caused by the remediation of asbestos that was discovered and the
unexpected volume of material on site. Further, the City delivered to BTC 30% designs of the
surrounding streets as part of the project’s focus to redevelop the streetscapes and utility
infrastructure on Bank and Cherry Streets and to construct the new sections of Pine and St. Paul
Streets.
CityPlace Burlington is a big project with multiple tracks. On the eve of the issuing the building permit
to allow the foundation work to commence, there are several elements in the DA that do not align with
the current status of the project. A clarification of these items would be helpful to both the project and
the City, and would allow the project to proceed without delay.
The side letter is intended to clarify the Development Agreement between the parties and is focused
on two elements of the DA. First, it authorizes BTC to perform the project foundation work before it
has a contract in place to construct the rest of the project. Second, it re-allocates the design for Bank
and Cherry Streets to the City so that the City is able to better manage the design and cost of improving
those streets, an adjustment the City has requested. The material terms of these elements of the side
letter are summarized as follows:
Foundation Work.
The DA currently does not allow BTC to commence foundation work until it has a guaranteed
maximum price contract in place to construct the new segments of Pine and St. Paul Streets and those
portions of Bank and Cherry Streets that are immediately adjacent to the project (which are
collectively defined as the public improvements), and until it has a bonded, guaranteed maximum
price contract in place to construct all of the private improvements (which are defined as the entire
project except for the public improvements).
Due to the nature of the design and budgetary processes for the public improvements that were not
fully projected by either party at the time that the DA was executed, BTC will not be in a position to
sign a guaranteed maximum price contract to construct the new segments of Pine and St. Paul Streets
and those portions of Bank and Cherry Streets that are immediately adjacent to the project until spring
of 2019. As written in the DA, this condition would delay the construction of the Private Improvement
for many months with no benefit to either party. This was not the intent of the DA and we see no
problems with amending the DA to correct this oversight in the original document and to allow the
project to proceed.

 As a separate matter, BTC has also sought relief from the requirement to have a bonded, guaranteed
maximum price contract in place to construct all of the private improvements before starting
foundation work because it has not yet obtained full construction financing beyond the $56 million of
equity financing that the project secured last fall. BTC has evidenced to us that the remaining equity
capital is more than sufficient to complete work of this foundation scope. Further, as added conditions
in this side letter, BTC has agreed to provide the City with evidence that it has a bonded, guaranteed
maximum price contract in place to construct the foundation work so that the City can be assured that
the work will be completed once begun, and has agreed that it will meet the original DA conditions
before proceeding with construction beyond the completion of the foundation. By allowing BTC to
perform foundation work at the developer’s expense, the project will continue to progress without
potentially damaging delay and the site will be improved considerably, both of which forward the
City’s interests. I welcome further discussion on this topic with the City Council in Monday.
Design Work
The DA currently grants BTC the right to design the new segments of Pine and St. Paul Streets, to
design those portions of Bank and Cherry Streets that are immediately adjacent to the project, and to
design the other blocks of Bank and Cherry Streets after the City generates 30% concept drawings of
those blocks.
The City has determined that it would be preferable for it to control the designs of all blocks of Bank
and Cherry Streets so that the design work is uniformly completed by a single design team, and so that
the City can better manage the cost of construction. The City has further determined, based on its
experience working with BTC on this project, that it is necessary to establish clear design guidelines,
deliverables and milestone dates to facilitate the parties’ development of agreed-upon plans,
specifications and budgets related to these public improvements.
Accordingly, the side letter continues to grant BTC the right to design the new segments of Pine and St.
Paul Streets but excludes the intersections from BTC’s design responsibilities, and grants to the City
the right to design all blocks of Bank and Cherry Streets. As was explicit in the voter-approved
language of the TIF bond, because those portions of Bank and Cherry Streets that are immediately
adjacent to the project are critical to the project, they are granted priority over the remainder of Bank
and Cherry Streets to ensure that there are funds available to construct the agreed-upon
improvements.
The side letter also clarifies the elements that need to be addressed in BTC’s design drawings, requires
BTC to provide the City with progress drawings for the City’s review, and in order to facilitate the
budgeting process, it requires BTC to provide the City with a schedule of actual and estimated hard and
soft costs when it provides progress drawings.
Similarly, the side letter requires the City to provide BTC with progress drawings for its review, and in
order to facilitate the budgeting process, it requires the City to provide BTC with a schedule of actual
and estimated hard and soft costs when it provides progress drawings.
Motion
We respectfully request the City Council to authorize the execution of the side letter modifying and
clarifying the Development Agreement for CityPlace Burlington.
Motion: The City Council authorizes Mayor Miro Weinberger to execute the attached side letter modifying
and clarifying the Development Agreement for CityPlace Burlington with BTC Mall Associates LLC.

City Hall   149 Church Street   Burlington, VT 05401
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