RUTLAND, Vt. (WCAX) – Municipalities across Vermont are facing a housing crisis, yet many properties could be utilized but haven’t been. Now, some communities are working to turn problem properties into profit.
The city of Rutland is looking into forming a tax increment financing or TIF district, and officials say they already have a project in mind.
“I don’t foresee myself ever buying a property like this again. But you know, the stars have aligned for this to happen,” John Ruggiero said.
Ruggiero owns the old Lynda Lee Dress Factory, which has been a blighted property in Rutland for many years. Back in September 2023, there were reports of fires being started in the building, drug use and squatters.
Now, the building has been boarded up and the city is working with Ruggiero to take it off his hands and turn the space into what officials hope will be an economic driver.
“We don’t want to burden the city with a liability that we can’t resolve. What we are doing now is signed a letter of intent with the current owner. That puts us toward kind of a purchase agreement, where we would buy the property for a dollar, forgiving the tax debt on it,” Rutland Mayor Mike Doenges said.
The city is currently in a 60-day period to study the property and to see what it needs for redevelopment.
Officials say Rutland is at the beginning of the TIF process that municipalities use to finance improvements for public infrastructure through a public–private partnership.
Rutland city officials say they are following a model that St. Albans officials have created over the past 10 years, and this kind of deal can create some needed revenue for city development.
“We clean the land. We demolish the buildings. We go out and broker the deals that the community envisions. St. Albans has issued in round numbers about $23 million in tax increment finance bonds, and in round numbers, that’s produced about $60 million in new tax space. That’s about a three-to-one return on investment,” St. Albans City Manager Dominic Cloud said.
St. Albans has finished two projects. Eight other municipalities have also formed TIF districts.
Blighted property owner Ruggiero says deals like this are a win-win.
“The administration is more open to these kinds of things. I think they are more creative. I think they really have an eye on what the risks could be to the city. So I don’t think they are just jumping in without knowing what they are doing,” he said.
If all goes well, the Lynda Lee Dress Factory will be demolished, leaving the city to send out a letter of interest to developers.
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