BRATTLEBORO — The ballroom of the Brooks House stands naked, its walls of joists and brick stripped of their grandeur by fire and time.
A pigeon flaps from one side of the room to the other. Underfoot, a 100-year-old sub-floor punctuated by rows of rusty nails is exposed to the dull grey November light struggling through tall, grungy windows.
Gov. Peter Shumlin hands Greg Miskovich, one of five investors in the Mesabi Group, LLC, a plaque. Applause erupts from the sizable group gathered to witness Mesabi officially receive its $750,000 Community Development Block Grant (CDBG) Nov. 1.
The space will be a new home for campuses of Community College of Vermont and Vermont Technical College.
Block grants are federal funds apportioned to the states. The states then award money to community projects that support needs such as economic development, housing, and early childhood education.
According to Sam Haskins from the Brattleboro office of Sen. Bernard Sanders, I-Vt., Congress has cut the CDBG program by 30 percent over the past two years.
“This building, this place, let it be a symbol for where we're heading,” said Shumlin.
According to Shumlin, Vermont has the sixth lowest unemployment rate in the country and was the only state to show income growth.
The growth may only have been 4 percent, but that's more than 49 other states, he said.
Still, many Vermonters work more than one job to make ends meet, he said.
“This is about jobs and economic development,” said Shumlin about the block grants.
During the award ceremony, Shumlin thanked multiple people who contributed time to helping the Brooks House project. He thanked Martha O'Connor, a Vermont State College trustee and former Selectboard member who helped vet the Brooks House as the new site of the colleges' downtown campus.
The colleges will rent about 18,000 square feet on the building's second floor and pay $250,000 in rent.
To the downtown merchants who have been “duking it out in tough times,” Shumlin said that the community would stand behind them by shopping locally this holiday season.
“Despite the flames, and despite the floods, we are going to ensure that Brattleboro remains the commercial center of Windham County,” said Shumlin.
The Brooks House, built in 1871, caught fire in April 2011. The five-alarm blaze displaced 60 people and 10 businesses. Since the fire, the 75,000-square-foot building at the corner of Main and High streets has been empty.
Mesabi invests
Mesabi consists of Bob Stevens, PE of Stevens & Associates; Miskovich, of Downs Rachlin Martin PLLC; and Ben Taggard, Drew Richards, and Peter Richards, who are all vice-presidents and principals at The Richards Group.
Funding for the renovation project comprises a “complex combination” of revenue sources, said Stevens.
In addition to the CDBG, the investment group has cobbled together state and federal historic and new market tax credits, a $100,000 loan from the town's revolving loan fund, and conventional loans from local banks such as Brattleboro Savings & Loan.
Mesabi is applying to the Vermont Economic Development Agency (VEDA) for a loan too, said Stevens.
He estimates the project has about 4 percent of the budget remaining to raise.
The block grant was awarded through the federal slums and blight program. To qualify for the program, the project team proved the prominent and vacant Brooks House posed a health and safety threat.
Stevens estimates the final project will cost $22 million. This total is higher than the $18 million estimate given just a few weeks ago.
About $13.5 million will encompass construction costs. The $22 million total also includes budgeting for contingencies, project fees, and purchasing the building from current owner Jonathan Chase.
The project team hopes to close on the building in early December. Construction is slated to start in early 2013. Some spaces, said Stevens, may open to the public in late 2013 with tenants moving in January 2014.
Stevens said that having the Community College of Vermont and Vermont Technical College chose the Brooks House as their downtown campus helped the project immensely by giving the building an anchor tenant.
According to Stevens, the building is worth half of what the team will pump into revitalizing the structure.
Stevens explained that rebuilding the Brooks House will not cost any more in Brattleboro than what that type of project would cost in Chittenden County or Boston. The rents developers in those cities can charge, however, are double what Brattleboro's economy will bear.
Old buildings in small New England towns are “living on borrowed time,” Stevens said, because those buildings are expensive to repair and the economy won't support higher rents.
By renovating the Brooks House, Mesabi hopes to help boost the economy and “raise the bar for everyone at the same time,” he said.
He estimates that, after construction, the building's footprint will increase to 90,000 square-feet.
Cash flow for Brattleboro
Earlier in the day, Shumlin had also visited Commonwealth Dairy, located on the Brattleboro/Guilford town line near Omega Optical's Delta Campus, to announce the company's expansion and that the yogurt maker would be receiving $14 million in new market tax credits.
With the influx of $32 million in capital investment for the two local projects, Brattleboro Community Development Corp. executive director Jeffery Lewis said the day represented a direction shift for Brattleboro.
“It's a significant change in the flow of capital [for the town],” said Lewis.
Lewis feels the investments will “change the nature of the economy.”
For years, said Lewis, Main Street has experienced a lack of development. The people working and running businesses in the downtown are strong, but not actively developing the area.
But Lewis said the Brooks House project has the potential to attract new investments, new businesses, and help the area leverage more capital for other projects.
This project, continued Lewis, has given Brattleboro a new story to tell potential investors both in and outside the area.
“[This investment] changes the conversations we can have,” he said.
A revitalized Brooks House will have a mix of housing, the two college campuses, and retail, said Lewis. This mix, especially the housing aspect, will bring a “different demographic to downtown.”
Lewis also joined Shumlin and other members of the audience in saying thanks to the members of Mesabi, whose actions showed a deep commitment to their local economy.
Peter Richards said that he, his brother Drew, and cousin Ben were feeling “optimistic” about the project's progress.
“[It's] hard not to feel good about it,” he said after listing the project's supporters, from local players up to the Governor's office.
Richards laughed when asked about being held up as an example of “third generation investors.” He said he was proud to be back in Brattleboro and carry on a “good tradition” of giving back to his community.
According to Richards, his grandfather Ed Richards founded the Richards' Group in 1947.