Montpelier Beverage Store Threatened With Eminent Domain

Jul 24, 2015

The city of Montpelier is threatening the owners of Montpelier Discount Beverage with eminent domain, the apparent result of failure to reach an agreement.

“Me and Mayor (John) Hollar don’t see eye to eye on the situation,” said Jay White, a trustee for Thomas J. Mowatt Revocable Trust, which owns Montpelier Discount Beverage, commonly known as M&M Beverage, on Main Street.

Eminent domain is the right of a government or its agent to take possession of private property for public use, while providing compensation. The city decided to go this route at the latest City Council meeting on July 10.

“We never wanted to sell the building at any price,” said White. He said that years ago when he was approached by the city about the possibility of taking down the building, he suggested it be rebuilt in the lot between Montpelier Discount Beverage and the Drawing Board, which the city owns.

The city’s reason for wanting to getting rid of Montpelier Discount Beverage is to link up bike path segments — part of the One Taylor Street Redevelopment Project across the North Branch River.

“That way we keep the one-story building, but just push it over. They have their bike path, it’s a win-win situation,” said White. The other option White suggested to Hollar was to leave the building alone, while building the bike path in the lot next to Montpelier Discount Beverage. White brought a picture of an aerial depiction of how he says that is possible to the last City Council meeting.

Hollar said that’s just not an option.

“What Jay is proposing really doesn’t work. It creates a very unsafe intersection,” said Hollar. “The bike path would come out along Main Street, and would create a new intersection on Main Street and exacerbate an already dangerous intersection.” Under the One Taylor Street project, the bike path would be connected from where it stops at the back of Sarducci’s to where another segment takes up again at Taylor Street.

White believes this may be the first time Montpelier has ever taken a building through eminent domain, though it’s not the first time the city started the process.

Hollar said they started that process for the Carr Lot. “We began the process with Alan Carr for his property but ended up purchasing it to avoid the legal proceeding of eminent domain,” he said.

According to City Manager William Fraser, the city paid $1.4 million to Carr. For this figure, $200,000 came from the city’s bond proceeds and $800,000 was paid with federal money. That amount — $1 million — was paid to Carr in a lump sum.

The remaining $400,000, according to Fraser, is a mortgage note using the property as security and, if the city defaults, Carr can foreclose and reclaim the property. “It is debt in the sense that the city must pay it off (we make monthly payments),” said Fraser  “It is not debt against the city’s borrowing limits because it was not secured by the taxing authority of the city.”

Last week, Fraser wrote in his weekly report that the city is about $1.4 million short of what is needed to complete the entire One Taylor Street project, and he is confident the gap can be closed. He said Tuesday that mortgage payments are being made out of the lease revenue for the lot (the state leases the lot for parking). 

“Once the project is completed, though, the payments will be part of the annual city budget,” he said. “We anticipate that the new  tax revenue from the new housing units will essentially balance out the loan payment.”

Right now, the city is interested in constructing a three- to four-story building in the lot next to the current Montpelier Discount Beverage. Hollar said it would create more economic activity downtown and higher value on the grand list. “A larger building would also be consistent with the architecture of our historic downtown buildings,” he said.

White likes the idea but said it’s financially impossible. “We all have the desire to do this three- or four-story building but unfortunately it’s not really doable,” he said.

White said instead he signed an agreement in February 2014 to explore the option of building a new one-story building in the same lot. The city and White compromised and agreed on a two-story building and it has been permitted by the Development Review Board.

But, White said Hollar revealed a month ago that the city doesn’t have the funds to do so. He said now the city won’t go back to discussing a one- or two-story building with him.

“We have been talking with him for three years now and we haven’t been able to figure out an agreement,” said Hollar. “We’re still going to meet with him some more to try to come up with a resolution, but (eminent domain) is the process we’re pursuing at the same time.”

Hollar said he is trying to schedule another private meeting with White soon to see if they can come to an agreement. The next council meeting at which this issue will be discussed is Aug. 26.

Gina Conn is a reporter for the Barre-Montpelier Times Argus, where this story first appeared. It was re-printed here through a partnership with the paper.