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Downtown projects in multiple towns win Vermont tax credits

  • William Chapman built the original post office at 501 Main in Fairlee, Vt. He also owned Chapman’s General Store, which has been passed down through the generations. (Courtesy photograph) Courtesy photograph

Valley News Staff Writer
Published: 10/3/2021 8:54:34 PM
Modified: 10/3/2021 8:54:36 PM

FAIRLEE — Old buildings live multiple lives, and sometimes they need a bit of a push to move on to the next one.

For instance, Fairlee’s former post office building dates to 1934, and was expanded in 1968. In recent years, the building on Main Street has had a series of uses and is now in need of updates.

Jonah Richard, whose great-grandfather, William Chapman, built the post office, purchased the building from his grandmother last year and is planning its next life.

The project is getting a jump start in the form of an $86,000 tax credit from the state of Vermont.

“I wouldn’t be able to do the project without it,” Richard said Friday.

Vermont offers a tax credit program for projects in downtowns and village centers, and last week the state announced that projects in Chelsea, Norwich, Springfield and Strafford were awarded tax credits, in addition to the Fairlee project. The grants were part of $3.6 million awarded to 28 revitalization projects around the state.

The program, administered by the state Department of Housing and Community Development, has grown tenfold since its founding in 2000, when it gave out $300,000 in tax credits, Josh Hanford, the department’s commissioner, said Friday.

Tax credits enable the backers of a project that would otherwise struggle to get funding to raise money and attract other funding. The developer or owner can take the state tax credit to a bank, insurance company or investor, often a community-minded institution, and exchange it for cash to sink into a project, Hanford said. The financier then gets a break on its state taxes. The Legislature authorizes the credits as part of the revenue side of the state budget, where the credits are accounted for as “foregone revenue,” Hanford said.

The program functions like a grant, Hanford said. But “it’s not like the state is putting out more money,” he said. Rather, it is receiving less.

Around the state the projects range from a huge office building in Burlington in need of updates to the celebrated Elmore Store, which is transitioning to nonprofit ownership. The tax credits will aid such institutions as St. Johnsbury’s Fairbanks Museum (one of four projects in the capital of the Northeast Kingdom) and the Old Bennington High School, which is being turned into a community center.

Among the Upper Valley projects is a plan to bring Dan & Whit’s up to fire code, including fire alarms, sprinklers and a new fire escape.

The Norwich general store, a fixture since 1955, had to empty out its upstairs during the pandemic after an inspection found fire code issues, Dan Fraser, the store’s co-owner said Friday.

The $80,000 tax credit, which covers half of the project cost “makes it a lot more affordable,” Fraser said.

The second floor used to house the town hall prior to the construction of Tracy Hall in 1938, Fraser said. There was a hallway between the hall and the Norwich Inn, so inn guests could attend a show in the hall without getting snow on their boots.

That passageway is long gone, but if the store can collaborate with the inn to build a new one, and a fire escape accessible to both structures, it will be able to reopen its second floor at full capacity, Fraser said.

A handsome former bank at 302 Route 110 in Chelsea most recently was home to a diner that closed in 2018. Owners Robert and Petra McCarron plan to renovate it in the hope of finding someone to open a restaurant.

“Our motivation is to reopen a restaurant in a town that doesn’t have a restaurant,” Robert McCarron said Friday.

The $54,000 tax credit is essential to the estimated $288,000 project, he said. “The cost of renovation is going to far exceed anything a business could support,” he said.

The Strafford Historical Society acquired the former Masonic Hall in South Strafford last December for a dollar. It’s going to take around $360,000 more to renovate the building, Laura Ogden, the society’s vice president said.

A state tax credit of $56,000 forms a key part of a $124,000 project to stabilize and update the structure.

Springfield, once the industrial capital of the state, is undergoing a long revitalization. Its 1868 Woolson Block has been rehabbed, a co-op grocery store moved into downtown and a restaurant and a coffee shop have opened.

“Those were all projects that were taking leaps of faith,” Matt Dunne, founder and executive director of Rural Innovation Strategies, said Friday.

Two buildings on Main Street, a former department store and a neighboring mixed-use commercial property, were awarded tax credits, for $185,000 and $117,000, respectively.

As with the other projects that received tax credits, the money will help pay for some unlovely work — asbestos removal, upgrades to meet building codes and work on the buildings’ facades.

“It makes all the difference in making these projects viable,” said Dunne, a Hartland resident and former state senator. Once buildings have reached a certain level of depreciation, they can’t attract conventional financing.

There isn’t yet a grand plan for the two Springfield buildings, Dunne said, but “there is an ongoing need in Springfield to keep the momentum going in its downtown.”

Without the tax credit program to start that momentum, a grand but decaying building “would sit there and continue to rot,” Dunne said.

“It’s super important to have these kinds of programs.”

Alex Hanson can be reached at ahanson@vnews.com or 603-727-3207.




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