Long before he became entangled in a messy land dispute with an East Montpelier neighbor, Gov. Peter Shumlin spent three decades building a real estate empire from his hometown of Putney.

In the years since he and his brother took over a student travel business from their parents in 1983, Shumlin has amassed a nearly $5 million stake in 19 properties. Included in his real estate catalog are office buildings and apartments in Brattleboro and Putney, a Westminster dairy farm and a vacation home on 38 acres in Cape Breton, Nova Scotia.

“I used to tease them we’d get a special town phone directory — one for Putney and one for the Shumlins,” says former town moderator John Caldwell, repeating a joke he told for years at town meeting.

So sprawling is Shumlin’s empire that when he first disclosed his holdings during the 2010 gubernatorial campaign, he apparently forgot to include a property he’d bought several years before on the Caribbean island of Dominica. The undeveloped, three-quarter-acre parcel, for which Shumlin says he paid $18,000 or $20,000, is farmed by a banana grower who goes by the name of Big Ben.

“I forgot. Honest mistake,” Shumlin said last Friday, noting that Dominica doesn’t levy property taxes. “When I was listing all my properties in the original campaign disclosure, I just went through all my property tax bills, and I didn’t get one for Dominica … So I simply forgot to list it.”

Shumlin’s real estate prowess and financial success — he reported $10.6 million in assets in 2010 — have figured prominently in the narrative of a controversy that’s bedeviled the governor for the past month.

When East Montpelier neighbor Jeremy Dodge accused Shumlin in May of fleecing him out of a 16-acre property adjacent to his 2200-square foot “governor’s cabin,” Shumlin’s detractors characterized the situation as that of a real estate pro taking advantage of a vulnerable man. The governor has since offered to sell the land back at the price he paid for it.

“Mr. Dodge has been dealing with a sophisticated and shrewd businessman, a businessman who is also the most powerful person in Vermont,” Dodge’s new lawyer, Brady Toensing, said last week.

But those who’ve worked with Shumlin over the years in Windham County say that caricature misses the mark. They contend that while he’s made gobs of money, he’s done so scrupulously. And they say he’s as driven by the desire to preserve the character of his hometown as he is by the desire to increase his wealth.

“He gets a bad rap because he’s always in a position of power. People pick on him or assume things,” says Larry Cassidy, Shumlin’s longtime business partner. “But the truth is, we’ve been in business for 30 years and we’ve never seen the inside of a courtroom. That has to tell you something in this business.”

Cassidy first teamed up with Peter and Jeff Shumlin in the mid-1980s, when the three bought a 600-acre tract of land on Putney’s Bare Mountain. Decades before, a wealthy New York City lawyer had cobbled the property together from the back lots of abutting neighbors. After Cassidy and the Shumlins bought the land for $300,000, they gradually sold those lots back to the families that once owned them — for a profit.

“It was a way for us to try to make some money, but more importantly to try to keep it from being developed,” Cassidy says.

“Thirty years later there is one house on that 600 acres,” Peter Shumlin says with pride.

The Putney Tavern building, 133 Main Street, Putney

14 Park Place, Brattleboro

Putney Student Travel building, 345 Hickory Ridge Road

220 Western Ave., Brattleboro

Above photos by Kayala Rice

As they sold off Bare Mountain parcels, the men reinvested the profits in commercial and residential real estate in nearby Brattleboro. Their company, Bare Mountain LLC, now owns six properties worth $1.9 million. Peter Shumlin and Cassidy both hold 40 percent stakes in the company, while Jeff Shumlin owns the remaining 20 percent.

Around the same time, the Shumlin brothers started buying up and rehabilitating residential properties once owned by the Putney Paper Company.

“It was something we did just because we found ourselves living back in our hometown, taking over Putney Student Travel from our parents, which is not something we expected to do,” Jeff Shumlin recalls. “We saw this as a way to make a long-term investment.”

Today, the brothers jointly own four properties worth $1.1 million under the aegis of Kimball Hill LLC. That doesn’t count their shares in the family business, which grossed between $8 and $9 million in 2010, Jeff Shumlin told VTDigger at the time.

Peter Shumlin’s most visible property is the 18th century Putney Tavern, which he and his then-wife Deborah bought at bank sale in 1995 for $209,000. The stately white colonial now serves as an anchor for Putney’s historic downtown — but when they bought it, the place was a dump.

“Anyone in their right mind would have bulldozed it,” says Green Mountain Orchards president Evan Darrow, who helped the Shumlins fix the place up. “I was thrilled they undertook it.”

According to Peter Shumlin, Deborah took the lead in restoring the building’s original wraparound porch, fireplaces and vaulted ceilings. Next door, they expanded an existing structure into a three-story, mixed-use commercial and residential building. Earlier this year, a farm-to-table restaurant called the Gleanery opened on the tavern’s first floor.

The entire property — owned by a Shumlin LLC called P&D Commercial Holdings — is now worth more than $1 million.

“They put a tremendous amount of blood, sweat and tears into that property,” Jeff Shumlin says. “It’s a huge contribution to the façade of downtown Putney.”

Indeed, the town is dotted with evidence of the Shumlin family’s contributions to it.

The governor famously launched his political career by helping to lure Landmark College — a school that caters to those, like Shumlin, with dyslexia and other learning disabilities — to a Putney property that was slated to become a federal prison. Both Shumlin brothers and Cassidy played a role in saving a Route 5 property that now houses the Putney Co-op from becoming a strip mall. And Jeff Shumlin was a leading fundraiser in the successful effort to rebuild the Putney General Store after two fires.

“Over time, when something’s come up that’s been a real derelict or long neglected, he’s been there and seen it as an opportunity,” Darrow says of the governor.

The investments have paid off handsomely. In his 2009 tax return, Peter Shumlin reported $988,000 in income, though the governor says much of that came from his 50 percent stake in Putney Student Travel. By 2011, when he became governor and relinquished a portion of the company’s profits, his income dropped to $502,000.

Shumlin’s wealth — and his real estate holdings — are about to take another hit, thanks to his March divorce from Deborah, whom he married nearly 24 years ago. As part of their settlement, the governor agreed to surrender the couple’s $444,000 Putney home to his ex. The two will split their interests in the tavern building and will share the Cape Breton property. Shumlin agreed to pay $10,000 a month in “spousal maintenance” to Deborah until one of them dies, plus another $3 million that comes due in 2020.

Shumlin says he has yet to complete the real estate transfers related to the divorce, though he intends to soon.

If there’s one property of Shumlin’s that stands out from the rest, it’s a 167-acre dairy farm he bought from a sixth-generation farmer in 2004. Unlike most of his real estate acquisitions, which he says were conducted with profit in mind, Shumlin says he bought the Westminster farm for sentimental reasons: He grew up hunting and fishing nearby and has since come to own hundreds of adjoining acres.

“It was more of an emotional connection to that farm than a business decision,” he says.

At least on the surface, the deal bears some resemblance to the East Montpelier transaction that’s landed Shumlin in a heap of trouble.

As he told Seven Days for a 2010 profile, the episode began when Shumlin stopped in to visit lifelong dairy farmer Harold Ranney and learned that Ranney was drowning in debt and considering selling off his herd of Jersey cows.

“I said, ‘You know, I’m a business person, but I really care about this farm. Would you be willing to show me the books and just let me look at ’em?’” Shumlin recounted to Seven Days in 2010.

Ever a proud Vermonter, Ranney demurred at first, but several days later he turned them over. Not long after, Shumlin made his neighbor an offer.

According to town records, the governor bought the Ranney Farm for $300,000 through yet another LLC he created for that purpose. At the time, it was assessed at $421,000. One year later, it was reassessed at $436,000.

But those numbers only tell half the story.

According to the purchase and sale agreement, Shumlin agreed to lease back the farm to Ranney and his heirs “as long as Harold and [his wife] Joyce, or any descendant of theirs actively farms the property as a dairy farm.” In return, they’d be responsible for property taxes and insurance as long as they used the land.

Shumlin further promised in the agreement to install a new $50,000 milking parlor and subdivide five acres of the property for Ranney’s son, Philip, at no cost. Within a year of the closing, he says, he had invested another $200,000 in renovating the farmhouse, repairing the barn and replacing its roof.

In Shumlin’s view, the deal was more than fair.

“Obviously we were providing a benefit to Harold and Joyce that isn’t reflected in a traditional real estate deal, in the respect that they had continued use of the house — no rent — and the farm for the rest of their lives and for future generations,” he says.

But the arrangement wasn’t enough to keep the Ranneys farming the land.

Within a few years of the sale, Philip Ranney took over the herd. And as price volatility in the wholesale milk market pushed more dairy farmers out of business, the younger Ranney told the Brattleboro Reformer in July 2009 that he was putting his 50 Jerseys up for sale.

“It’s the hardest decision I have ever made in my life,” Philip Ranney told the paper at the time. “There’s no money in this. I am in as much debt as I can handle. I don’t see how anyone can make it.”

According to Cassidy, who was not involved in the situation, Shumlin “tried to help” the younger Ranney stay afloat, “but he had to draw the line somewhere.”

Harold Ranney died late last month. Philip and Joyce Ranney both declined to comment for this story.

The way Jeff Shumlin sees it, the only connection between the Westminster and East Montpelier situations is that both are examples of his brother “engaging people directly and very personally.”

“He gets involved in their lives in a way other people wouldn’t. It’s true in business and in politics,” the governor’s brother says. “I’m always amazed to see the way he connects with people he meets. So it doesn’t surprise me to see him involved in the life of his neighbor.”

As for the notion that his brother did anything wrong in East Montpelier, Jeff Shumlin says, “Sometimes the press is looking for Peter at his worst — not at his best.”

At least one other Windham County local is eager to jump to Peter Shumlin’s defense: Brandon Bucossi, a 23-year-old Vernon native who moved his herd of 70 Jerseys to the vacant Ranney Farm last spring.

“I couldn’t ask for a better landlord,” says Bucossi, who signed a five-year lease with the governor at a favorable price. “I couldn’t ask for a better guy to get along with — very reasonable, very understanding of my situation.”

Shumlin drops by to say hello every month or so, and the two email back and forth frequently. When Bucossi needs to borrow money, the governor is always happy to help out.

“I was a little skeptical of this whole thing in East Montpelier,” Bucossi says ,“because around here I’ve seen just the opposite.”