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Marketplace Futures: How Burlington Aims to Reorganize 'Downtown'

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"Here's the problem," consultant Brad Segal said of the challenges facing Burlington's Church Street Marketplace. "You're at a B- and slipping. If that experience slips more, it's going to be exponentially more expensive to fix."

The only thing more "tired" than the four-block pedestrian mall, according to Segal, is the commercial area around it. "The energy fades off of Church Street, and there is an inconsistent vibe throughout the rest of downtown," he wrote in his August report commissioned by the Burlington Business Association and the city's Department of Public Works.

That harsh assessment validates the mission of an advisory committee tasked by the city council in 2017 with identifying ways to revitalize downtown Burlington. It has also fast-tracked the group's final recommendation: that Burlington should change the way it defines — and governs — the city's retail core. 

Numerous factors — new competitors on Pine Street and in South Burlington, the downtown CityPlace Burlington redevelopment and the high cost of doing business on Church Street — have expedited the committee's proposal.

In a series of public meetings over the next month, city officials and shopkeepers will make a case to convert the city department known as the Church Street Marketplace into a private nonprofit.

The plan also includes expanding the shopping district and devising a new fee structure for the businesses that want to be a part of the downtown events, marketing and security as well as snow and trash removal that Church Street shops already receive. The details of the project, such as board composition, have yet to be ironed out.

Currently, the 40 street-level businesses on Church between Pearl and Main pay a mandatory surcharge to the Marketplace department — not unlike a condo fee — in exchange for those services.

The new, enlarged downtown shopping area would capture all of the commercial properties bounded by South Winooski Avenue and Pearl, Main and Lake streets, including the second-floor shops on Church Street. Since 1999, this section of Burlington has been known as the Downtown Improvement District. The businesses within it already pay a small tax to help fund the city's two-hour free parking initiative.

The city center needs a "complete overhaul," said Dara Harbour, owner of Stella Mae and Warner Supply, two Church Street clothing stores. That should include "some freshening and love" for the streetscape and a new, comprehensive marketing strategy for local businesses.

"We don't manage our downtown well at all, and change needs to come," said city councilor Adam Roof (I-Ward 8), chair of the advisory committee that has spent a year and a half exploring how a reconfigured 38-block improvement district could be managed, rebranded and renamed.

Dissolving the Marketplace would require city council approval and a charter change. The measure is expected to appear on Burlington's Town Meeting Day ballot. If the state legislature approves it, the new business improvement district could be in place by July 1, 2019.

The car-free Marketplace was created in 1981, the same year Bernie Sanders was elected mayor of Burlington. Two businesspeople — McAuliffe Office Products owner Pat Robins and architect Bill Truex — came up with the idea while on a ride overlooking the pedestrian-friendly streets at Disneyland, Robins said in a recent interview.

Early in the process, Robins proposed defining the market district to encompass all of downtown between South Winooski Avenue and the waterfront. But Robins said the owners of the One Burlington Square building, at the corner of College and Pine streets, objected, on grounds that they wouldn't benefit from the fees they'd be required to pay.

In response, "Gordy panicked," Robins said of then-mayor Gordon Paquette. He worried the owners of that property would move out of town. By then the 2-year-old University Mall in South Burlington was drawing shoppers from all over Vermont, and Burlington business owners perceived it as an existential threat to downtown. 

So the city limited the shopping area to the four northern blocks of Church Street, formally creating the Marketplace, which now draws three million visitors annually, according to executive director Ron Redmond.

Robins, who was chair of the Marketplace Commission at the time, said he tried again to expand it in the early 1990s, but business owners on the side streets objected to the extra expense.

Under the current arrangement, only Church Street businesses pay fees that cover most of the Marketplace's $1 million budget. That finances a staff of five, headed by Redmond, to manage Church Street's day-to-day operations, marketing it as a shopping destination, organizing events, conducting surveys, putting up decorations, working with the police department to address crime and increase safety, and keeping the street clear of snow and trash.

But at $2.87 a square foot, the fees for street-level businesses are among the highest in the country, according to Segal. The Outdoor Gear Exchange store pays $68,000 a year to the Marketplace. The owners of Homeport, Mark and Frank Bouchett, pay about $17,000 annually. The landlords at 97 Church Street, home of Garcia's Tobacco Shop, are on the hook for $2,800.

Business owners complain that they don't have enough control over decisions affecting the street, despite the fact that they can serve on the nine-member commission that sets Marketplace policy. As a city employee, Redmond is ultimately accountable to Burlington Mayor Miro Weinberger — not the fee-payers.

That allegiance can lead to conflicting priorities when organizing public events such as the annual Festival of Fools, which are popular among residents and politicians but detract from the "positive shopping experience" Church Street retailers seek, according to Jeff Nick, owner of JL Davis Realty and the chair of the commission. In those cases, the city, but not the merchants, wins out, he said.

Another complication: The Marketplace can't use tax dollars to replace the bricks along the street, and it doesn't have enough money to pay for the capital improvements Roof and others said should be scheduled soon.

The organization of the Marketplace as a public entity is an outlier among similar districts nationally, according to Segal. He estimated that fewer than 1 percent are run as municipal departments. The rest are nonprofits.

"There's fatigue among property owners who are tired of subsidizing a city agency," he said. "The property owners are seeking more accountability in the money they're paying for services."

The new district would increase the number of businesses paying for those services, slightly decreasing the costs for Church Street merchants. The business district would likely have a tiered funding structure, with Church Street businesses paying the highest rate. Vendors on nearby side streets would pay slightly less, and those further afield would pay the least.

Weinberger supports the change.

"Cleanliness in downtown could be better; infrastructure is challenged in some areas and aging; we don't do a lot in terms of promotion or marketing of opportunities," he said. The marketing budget of the Marketplace is a scant $69,000 a year. The new shopping district would spend "much, much more," according to Redmond.

"The Downtown Improvement District has the potential to expand, improve and elevate services in all those areas," said the mayor. And, he added, taxpayers won't bear the cost. If it's structured as a nonprofit, the organization could apply for grants and solicit donations.

With additional funds available, uniformed "ambassadors" could be hired to hand out maps and information. Redmond suggested they could also communicate with police and Howard Center workers to manage the homeless and those in need of mental health services.

There's minimal tourist outreach now, noted Kelly Devine, executive director of the private Burlington Business Association and a proponent of the plan. When she sees people who look lost, "I walk up to them and say, 'Hey, welcome to Burlington. There's a lot of cool stuff here,'" she said.

Most visitors would never venture far enough from the center of town to find out that "there's a deli with a speakeasy down the street," she said. "There's Hen of the Wood. Do people know there's $1 oysters every day before 5?"

Redmond agreed. "We've got to give the rest of the downtown a little more love and unify it," he said, also acknowledging that the new arrangement could put him out of a job.

"Anybody that's off the Marketplace by half a block like we are really knows how much the traffic is affected," said Tod Gross of Phoenix Books, who has spent six years trying to lure shoppers from Burlington's Church Street to his store at the intersection of Bank and Center streets.

He wants to be part of a larger downtown shopping district that enjoys all of the benefits of Church Street. And he's willing to pay for it.

Harbour, the owner of two Church Street businesses, is also on board, although she's worried that it might result in only "minimally" lower fees and "seeing my resources spread too thin."

But she said she recognized that "It's time that we look at downtown as an all-inclusive downtown," adding that such a change could renew "the support for downtown for culture, community, art, all those things."

Burlington businesses have to compete with more attractions and restaurants in the city's South End, a new Target department store in South Burlington's University Mall, and burgeoning retail districts in outlying communities.

"We started a lot of things here, but now it's everywhere," Redmond said of the idea of creating "an experience" for shoppers. "To some degree, we have to reimagine ourselves."

Robins pointed to the success of the Marketplace as evidence that the new project will pay off as well. "There are no vacancies. Given the current retail climate, that's impressive," he said.

Members of the Burlington City Council and Downtown Improvement District Advisory Committee will share proposals to revitalize the city's commercial center at a town-hall-style public hearing on Thursday, November 29, at Burlington City Arts. The free event is from 5:30 to 7:30 p.m.

Correction, November 21, 2018: A previous version of this story inaccurately described the location and organizers of the November 29 public meeting.

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