hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires


News & Issues July 2019


A downtown makeover begins

Bennington sees landmark buildings as key to reviving its urban core



The former Putnam Hotel and two neighboring buildings in the center of downtown Bennington are the focus of a redevelopment effort that started construction in June. photo by Joan K. Lentini


Contributing writer


After two years of delays and setbacks, construction has begun on an ambitious, $54 million project to revitalize downtown Bennington.

The project, covering nearly an entire square block in the downtown core, cleared its final hurdle last month when a local redevelopment group formally took title to the property.

When the work is complete, backers say the project will restore and reopen three historic multi-story buildings along Main and South streets, create several new commercial and residential buildings on adjacent land, draw 100 to 150 new residents to downtown, and add hundreds of jobs to the area.

“It’s a great day for Bennington,” Town Manager Stuart Hurd said at a mid-June celebration of the project’s financial closing.

The proposal to revitalize the Putnam Block – named for the landmark former Putnam Hotel that dominates the town’s busiest corner – was unveiled more than two years ago. But in the many months since, there were few visible changes to the site. The project’s backers first had to work behind the scenes to resolve a series of legal and environmental issues before they could take possession of the property.

“Things have continued to happen,” Hurd explained. “The commitment of the investors hasn’t wavered.”

After the closing, the Putnam Block quickly transformed into a construction zone, its buildings surrounded by chain-link fencing by late June after the remaining ground-floor retail tenants closed or moved for the duration of the work.

Now the focus turns to renovating and restoring the old hotel and two neighboring buildings as the centerpiece of the redeveloped area. The upper floors of these buildings have been vacant for many years, but some of the historical details inside – tin ceilings, fireplaces, pocket doors, a spiral staircase – remain intact.

Supporters say the results of this work will set the stage for new construction to the west, transforming the area into a revitalized urban hub.


Bill Colvin, assistant director of the Bennington County Regional Commission, displays two posters of the downtown redevelopment project that’s under way in the buildings behind him on South Street. Joan K. Lentini photo


Community effort
Bennington has a scenic setting and a lively arts community, and it’s the home of Bennington College. But the town has struggled for years with low wages, population loss and a perception that its best days are long past. Its downtown core, though hardly deserted, has had more than its share of empty and underused storefronts in recent years.

In 2014, local leaders and concerned residents came together and agreed that if the town was to turn around, the private sector had to take the initiative. They organized the Bennington Redevelopment Group, a limited liability company that represents the Bank of Bennington, Southwestern Vermont Health Care (the parent company of the local hospital), Bennington College, the owners of several local businesses and other private investors.

The redevelopment group soon focused its attention on the Putnam Block. Over the years, nearly all of the buildings and land in the block – the southwestern quadrant of the intersection of Main and South streets (U.S. Route 7 and state Route 9) -- had come under the control of the Greenberg family, which had long operated a hardware store and lumberyard in the center of the block.

By 2014, the lumberyard had closed, and in 2016, the Greenberg family put the entire block on the market: four acres of land in the center of downtown, including the three landmark buildings, a fourth building rented by Oldcastle Theatre, and the former hardware store and lumberyard.
The redevelopment group saw the availability of this critical mass of downtown properties as an opportunity to address the area’s need for rental housing, create needed office space for the hospital and colleges, and bring in amenities they say the downtown needs if it is to thrive -- including a restaurant, a neighborhood hardware store and a grocery store.

One of the partners in the redevelopment group was M&S Development of Brattleboro, which had recently completed a similar but much smaller project there. Working with M&S, the Bennington County Regional Commission, and economic studies of downtown, the group drew up plans to renovate 74,000 square feet of existing space in the Putnam Block and build new structures with another 96,000 square feet.

Phase I of the project covers environmental cleanup and some demolition, restoration of the three historic building at the block’s east end, and some parking and site work.

In addition to the three-story Putnam Hotel, built by local industrialist Henry W. Putnam in 1873, the other historic structures that are part of the Phase I renovations are the next building west of the hotel, known as the Winslow building, and the next building to the south, a former county courthouse built in 1870 that most recently housed the offices and printing press of the Tri-State Pennysaver News, a weekly publication that shut down at the end of 2014.

Phase II will cover construction of two new buildings at the west end of the block and complete the site work, including parking and landscaping. Phase III, to be undertaken by a private developer, would create new housing or a hotel on the block’s southwestern corner.


Financial, legal hurdles
The project depends on financing from a mix of federal tax credits, federal, state and local funding, investment by members of the redevelopment group and other community members, private loans, donations and bank loans. M&S took the lead in assembling the dauntingly complex financial package.

The next step was to buy the property, but other hurdles soon emerged.
First, a previous owner had connected the southernmost building in the project, the Pennysaver building, to the next building south, the Drysdale Building, by a stairwell and elevator shaft. The two buildings had later gone to different owners. The owner who built the stairwell hadn’t deeded it correctly, so the Pennysaver building couldn’t be sold until an easement was in place.
Jon Hale, a partner in Hale Resources, had been managing the Putnam Block for the previous owners since 2015. During the negotiations over the stairwell, he learned the Drysdale Building was for sale. Hale Resources then bought that building “to prevent any outside investors from negatively impacting the $53 million project at the Putnam Block,” according to the company’s website.

One component of the project involves improving the surrounding streets to allow for more vehicle and pedestrian traffic. The project’s leaders decided the most reasonable way to do that was by creating a tax increment financing district, which would pay off the cost through rising tax revenues as business increases in the downtown district as result of the project. But the town needed state permission to create the special taxing district, and the state, which had bumped up against a statutory limit on the number of these districts, didn’t grant its approval until November 2017.

Hurd, the town manager, said he expects a public vote in 2020 to allow the special taxing district to finance the project’s Phase II infrastructure improvements through a bond.

When the Bennington Redevelopment Group took ownership of the Putnam Block last month, it actually acquired it from the Bennington County Industrial Corp., which had bought it from the Greenberg family in 2017. The nonprofit industrial corporation was eligible for certain grant funds, such as for environmental cleanup, that the private redevelopment group could not obtain.

Environmental assessments identified a number of hazards on the site, including lead paint and asbestos, soil contaminated by coal ash and various chemicals used there over the decades, as well as two underground fuel storage tanks. The project secured $580,000 in federal brownfields grants to remove the contamination and tanks and demolish the old hardware store and lumberyard buildings. That work was completed by the end of last year.


Changing rules and members
Investors on the project were depending on the federal New Market Tax Credit and Historic Tax Credit programs to make their contributions financially feasible. That was thrown into turmoil in 2017 when the Republican-backed federal tax overhaul proposed abolishing a number of tax credit programs. The final legislation replaced the New Market credits with a similar program – to the relief of those supporting the Bennington project and other downtown redevelopment efforts around the nation.

“We knew the project was going to be possible when we received that,” said Bill Colvin, the assistant director of the Bennington County Regional Commission and spokesman for the redevelopment group.

Still, although the legislation preserved the Historic Tax Credit program to benefit preservation of historic structures, the program was restructured, resulting in a “pretty significant reduction” in the yield of the credits, Colvin said.

Then earlier this year, Southern Vermont College, one of the original partners in the redevelopment group, announced that it would close at the end of the school year. The college had reserved space in Phase II of the project for its nursing and radiology programs, which were leasing space elsewhere in town.

Because the college already had a heavy debt load, it hadn’t committed any money to the project, so its loss had no immediate financial effect, Colvin said. Castleton University, a state school, took over the nursing and radiology program but has given no indication about whether it might want to take Southern Vermont College’s place in the Putnam project, he said.
The financing package, Colvin said, “was more complex than we envisioned.”

Ultimately, Phase I involved 21 funding sources, 23 third-party sign-offs, 463 stipulations, and approval by five teams of lawyers.

“Some of the national investors say it was the most complex project they’ve ever been involved in,” he said.

Vermont allocated more than $3.1 million to the project, including federal pass-through funds. In a contrast with other downtown revitalization projects around Vermont, the state won’t have any offices in the Putnam Block, Colvin said.

While the redevelopment group worked through the details over the past two years, construction prices went up, raising the estimated Phase I cost to just under $30 million, Colvin said. The group also must pay property taxes and a mortgage to the previous owners, he said.


Upgrading while preserving
Breadloaf Construction of Middlebury is construction manager of the project and is using local laborers and subcontractors. When construction is at its peak, Breadloaf expects 100 to 120 tradespeople at the site each day. Breadloaf received the go-ahead to start construction the day of the financial closing, and work was expected to start in late June.

The architectural work on Phase I is being handled by Stevens & Associates, a Brattleboro firm related to M&S. Alan Berry is the lead architect on the project.

Barry said the Pennysaver building and former Putnam Hotel date from 1870. The Winslow building is actually two structures, built in 1894 and 1907, with additions built in 1923. The buildings suffered from neglect, with rooms and entire floors essentially abandoned – a situation that’s not uncommon when landlords can’t find tenants, Berry said.

“We’ll save key architectural features on each building,” he said.
The renovations have to meet certain requirements to qualify for historic preservation tax credits. They also must conform to building codes, energy efficiency standards, and the requirements of the Americans with Disability Act.

“A lot of negotiations go on with these buildings,” Berry said.
In the former Putnam Hotel, the architects will keep two historic interior staircases and original tin ceilings, and restore the front windows and second-floor cast-iron balcony. A “beautiful fireplace and pocket doors” in what was a second-floor lounge for hotel guests “will become part of someone’s very nice apartment,” Berry said.

Creating a ramp to the street entrance would have been “incredibly expensive,” so handicapped entrance will be through the rear, next to handicapped parking spaces, he added.
The first floor is to become a 75- to 100-seat restaurant. The upper two floors will be a mix of market rate and affordable studio, one-, and two-bedroom apartments, some with handicapped accessibility.

Berry said he’s sometimes asked, “Why not make them all affordable?”
But staff at the hospital and Bennington College and well-to-do retirees are looking for higher-end apartments in the area and are willing to pay for the features they want, he said. And to succeed financially, revitalization projects need rents from some higher-income tenants.


History meets the future
At the Pennysaver building, a previous owner mounted metal grating over the Italianate front, Berry said. The grating will be removed, along with the old pressroom, paper storage area and loading dock at the back of the building. The former courthouse has “huge, oversized windows” that will be restored, Berry said. The restoration will retain a spiral staircase from the second-floor courtroom to a mezzanine, and the abandoned judge’s chambers will be reopened.

The first floor will provide new homes for the South Street Cafe, which is closed for the duration of the construction, and the Bennington Bookshop. Global-Z, a data management company and one of the project partners, will move from an industrial park to the former courtroom.
Linda Foulsham, co-owner of the Bennington Bookshop, said the new retail space will have an interior door connecting the bookstore to South Street Cafe, allowing browsers to circulate freely between the two businesses.

“The amount of space will be about the same” as at the bookstore’s current home, farther east on Main Street, Foulsham said. “But it’ll be brand new, which is pretty exciting.”

The 1907 section of the Winslow Building was designed in the Art Moderne style, which emphasized horizontal shapes and rounded corners.

“It was virtually the beginning of that style,” Berry said. For a town like Bennington, “it was extremely cutting-edge.”

The renovation of the Winslow Building will recreate the original bronze-framed storefronts and restore the bronze framing around the windows upstairs. Interior features include the original office of A.H. Winslow, whose hardware store occupied the building’s ground floor, tin ceilings, fine woodwork and “a beautiful fireplace,” Berry said. The freight elevator from Winslow’s store will be removed and is looking for a new home, he said.

Plans call for a new hardware store or grocery store on the first floor. Bennington College and VNA-Hospice of the Southwest Region have reserved offices on the second floor. The third floor will have apartments for Bennington College graduate students and a rooftop deck for residents and office staff.


Adding efficiency, updates
Part of the project’s funding required that the renovations be energy efficient. That means the project includes efficient appliances and mechanical systems, insulation and air sealing.
“We’re trying our best to get some solar panels on the roof,” Berry said.

The architectural team looked at Tesla batteries for back-up energy storage but concluded they would be too expensive. Electric vehicle charging stations will be installed “if not in this phase, then in Phase II,” Berry said.

From the street, “the courthouse and hotel will look very much the same, just restored and spruced up,” Berry said. The Winslow building will be closer to its original appearance.

The big changes will be in back, with inviting entrances, windows and landscaping replacing the current back-alley look. Exterior lighting fixtures will be historical reproductions, designed to keep light where it’s wanted without spilling onto other properties or into the sky.

Oldcastle Theatre, which sits between the Winslow Building and the former Greenberg’s Hardware site, was given the option of joining the project but decided to buy its building. The sale of its building closed June 14, and the theater company has renamed the building the “Bennington Performing Arts Center -- Home of Oldcastle Theatre.”

The redevelopment group hopes to have Phase I ready for occupancy by late 2020 or early 2021, Colvin said. About 70 percent of the space in Phase I is leased, with 90 percent of the 34 apartments spoken for. Because of schedules and existing leases among the new tenants, not everyone may be able to move in right away, he said.

When Phase I is done, the redevelopment group will have spent $30 million on buildings that will be worth about $8 million, Colvin said. But the investors’ goal is to boost the local economy rather than to make money directly for themselves, he said.

The project already has sparked other investment in downtown, Colvin said. He and Hurd pointed to the new office of Tri-State Area Federal Credit Union, built just across Washington Avenue from the project, as one example.

“We expect an even greater effect when people see activity,” Colvin said.
Matt Harrington, executive director of the Bennington Area Chamber of Commerce, said new housing will provide an immediate benefit to the downtown.

“The need for rental housing is huge,” he said. “Young people moving into the area to work at the hospital or factories are looking for rentals, and the availability is not really happening right now. The Putnam project, with rental and ownership options, is crucial.”

The restaurant, hardware store and grocery store will add competition for some existing businesses, “but they’re needed, according to the downtown studies,” Harrington said. “They’ll encourage more people to visit.”

One downside to the project is that it will employ practically every building tradesperson in the area, delaying work on other jobs, Harrington said.

“Contractors are running out of people with basic skills,” he said. “You have to wait two years for some contractors.”

Chamber members are looking at ways to encourage young people to consider careers in the building trades, he said.

Harrington called the project an example of “catalytic leadership.”

“It catalyzes other people to invest in an area,” he said. “They open a store or buy a house close to downtown. Bennington is sometimes hard on itself. This gives people permission to believe in the future of Bennington.”

The redevelopment group has transitioned to planning for Phase II, Colvin said.
“We’re maybe a year from a financial closing,” he said. “The 12- to 18-month range would be great.”

The Putnam Block buildings have been mostly dark and vacant, especially above the ground floor, for years. At the celebration, Hurd said he and some friends had tried to envision what Bennington’s central intersection will look like when the project is complete.
“Imagine it at night when the property is lit up and active,” he said.