Putnam Block Redevelopment

The Putnam Hotel and the surrounding

block represent the most prominent
location in downtown Bennington. The
architecturally significant properties
have fallen into disrepair and have been
underutilized for years. Like many small
historic downtowns the redevelopment of
these properties is not economically viable
by conventional methods. Their blighted
condition perpetuates a state of decline in
the downtown.
There is a model of community enabled
development combined with a mix of
federal tax credits and state support that
Photo by Dave Blake
has been successful in revitalizing other
Vermont downtowns. The Brooks House in
Brattleboro is very similar and was successfully redeveloped after a devastating fire. The cities of St. Albans
and Barre, Vermont have successfully used tax credits and state assistance to revitalize their cities.
The vision for the redevelopment of the Putnam Hotel and the surrounding block will include in-town living,
attractive retail and office space. It intends to provide important amenities like a neighborhood grocery,
restaurants and parking. The redevelopment of the Putnam Hotel and the surrounding block will create a
vibrant, mixed use, downtown neighborhood. The property is a gateway into downtown Bennington and
is large enough to reach a critical mass of economic infusion into the downtown. Revitalization of these
prominent, historic buildings will be catalytic for and help improve the economics for additional investment
in the downtown.
This redevelopment is being initiated by leaders in the community. It includes the following:

The Bank of Bennington

Southwestern Vermont Health Care
Bennington College
Southern Vermont College

Global-Z International
Brian McKenna
Anthony and Jacqueline Marro
A group of local professionals

These civic leaders are joined by M&S Development of Brattleboro, Vermont, a development company that
focuses on redevelopment in economically distressed downtowns. These investors will lead the effort with
raising the sources of funds, securing tenants and renovating the property.
The funding is a complex, blended combination of debt, grants and equity. Debt will be from private sources,
banks, Vermont Economic Development Authority (VEDA) and Town Program Income. Grants from the
Community Development Block Grant and the VT Downtown Program will be sought. This project qualifies
for New Market Tax Credits and Federal Historic Tax Credits.

Community Enabled Development

Community participation is essential to the revitalization of this downtown block. The investors will need
to be civically motivated as the risk and return will not be commensurate for a typical development project
solely measured by return on investment. It also may take many years before the project is able to pay back
the investment and real estate development is very risky. However, this project will not happen unless the
community steps up to make it happen. The community will need to have faith that this redevelopment will
be transformative and be the catalyst for adding life and vitality to Downtown Bennington. Community
participation is vital in the following areas:

Leadership Equity
Leadership Equity investors will be the ultimate owners of the project.
Requires a commitment to invest before ownership, in the pre-development phase when funds are spent
on permitting, design, marketing, funding applications and grant applications.
Subject to pre-development risk.
Requires loan obligations in the form of either pledged collateral or guarantees.
Is a member of the management group.

Preferred Equity

Provides an equity contribution for guaranteed 3% rate of return.

Principal is paid back in ten years or is converted to Leadership Equity.
Investment occurs at project closing.
No pre-development risk.
Investment can be a dedicated IRA contribution.

Private Loan or Guarantee

Loans at a rate similar to preferred equity but
with a variable term or balloon.
Subordinate to other debt

Charitable Contribution
Some of the project leaders are 501(c)(3)
charitable organizations that may invest in
capital improvements for the project buildings,
including fit-up expenses for student and faculty
housing.
Contributions from individuals to the 501(c)(3) charitable organizations for these purposes may qualify as
charitable contributions.
Committed Tenant
Pre-lease commercial commitments from anchor tenants will be essential for securing project financing.
Pre-lease residential commitments will be essential but will not require underwriting or long term
commitments.

Project Status
Negotiations for site control are in process, and an option agreement to purchase the property has been
secured. The next steps in the predevelopment of the project are to begin surveying and base data collection,
and hazardous materials inspections. Simultaneously, we will be submitting grant applications, working
with other funding sources and doing design and permitting. Once the financing and design components are
completed the project closing process will be initiated.