Four years after it was sold to a Florida hotel developer, the former home of the Greater Burlington YMCA is vacant, attracting graffiti and in foreclosure.
Burlington city officials have now stepped in to press the owner, who stopped making payments on the mortgage last fall, to take action.
The developer, a Palm Beach investment firm called Hospitality Funding, bought 266 College Street for $3 million in 2018 with the goal of turning it into a 142-room hotel. But the company stopped communicating with the city during the pandemic, according to Brian Pine, a former city councilor who is director of the city's Community and Economic Development Office.
With housing in very short supply, prospective buyers have been contacting the city about the building, said Pine, who sees the long-running vacancy as a lost opportunity.
“The city’s goal is to see that site be renovated and put back into productive use,” he said, adding that the city often works with private property owners who have run into financial problems to get their properties back on the market. He thinks the building, located on a public transportation route and close to the City Market grocery store, would be an ideal location for senior housing.
“There is certainly a strong enough housing market here that if it were put on the market, there would be some real interest in that,” Pine said.
City officials are also concerned that the building will become a fire hazard, and they are taking steps to ensure its condition doesn’t deteriorate further as the ownership questions are resolved.
Community National Bank sued Hospitality Funding and its CEO, Scott Silver, in January after the developer missed a deadline last fall to repay the loan. The suit also names James Albertelli, who — like Silver — personally guaranteed the loan.
The bank seeks repayment of $2.25 million it loaned the company in 2018 to buy the downtown property. The repayment was initially due March 2021 before it was extended to October 1, according to court documents.
City Attorney Dan Richardson said that on Wednesday, he talked to lawyers for both sides to see if there was a plan for the property. The city ordinances that govern the handling of vacant or abandoned buildings cannot mandate how the building is used, Pine said. Officials can only promote compliance with maintenance standards to ensure it doesn't create a safety hazard.
"We're trying to make sure there is someone on the ground providing maintenance," Richardson said.
Courtesy of Smith Buckley Architects
The proposed hotel
Pine would like to see the owner remove the graffiti that has appeared over the last few years.
“It’s an eyesore right now,” Pine said.
In an interview on Tuesday, Silver said that he is working on refinancing so he can continue with the project, which calls for renovating the building and adding 77 underground parking spaces. “We’re hopefully on the 5-yard line here, just trying to deal with getting the correct figures, dotting the i's and crossing the t’s,” he said.
The project stalled as a result of the pandemic, both Silver and Pine said. Before COVID-19 struck, the developer had collaborated closely with the city to plan a hotel that would fit in with local needs, according to Pine.
The 1934 building, which is listed on the National Register of Historic Places, was built to house the YMCA and once included a hostel for young men, a gym, a bowling alley, squash courts, a ballroom, and other public spaces. After World War II, the building was temporarily used as a dormitory for soldiers before the Y resumed operations there. In 2020, the Greater Burlington YMCA moved to the site of the former Ethan Allen Club at 298 College Street.
The lawsuit says the developers owe nearly $2.4 million for the mortgage, insurance and taxes. At an interest rate of 11.25 percent that went into effect after the default, additional costs are piling up at a rate of about $699 per day, according to court documents.