Category Archives: Real Estate

Nothing to See Here, Just Your Garden Variety Ruling Class Mutual Back-Scratching

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So, the Scott administration finally did the long-rumored thing. It signed a five-year, $2.3 million lease for commercial office space in Waterbury. Office space that’s only necessary because of Scott’s back-to-commute order that would overload the state-owned buildings in town.

Now, that $2.3 million is only part of the price tag for this deal. It costs real money to prepare office space for full-time occupancy. Will we ever get a full accounting of the cost? I wouldn’t bet on it.

The immediate beneficiaries of this deal are some good friends and political supporters of, ahem, Gov. Phil Scott. VTDigger’s Shaun Robinson got a lot of this story, but not all of it.

As Robinson reported, the lease involves 22,000 square feet of office space in the Pilgrim Park complex, the former headquarters of Green Mountain Coffee. It’s now owned by Malone Superior, LLC, a real estate firm co-owned by Wayne Lamberton, Patrick Malone, and Randy Lague. As Robinson reported, Malone Superior is located at the same address as Malone Properties, also owned by Patrick Malone. And as Robinson reported, Malone Properties donated “about $12,000” to Phil Scott’s gubernatorial campaigns in 2016, 2018 and 2020.

But there’s more, quite a bit more, that Robinson missed.

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About That Amazing Art Installation…

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“Oh, great!” was my initial reaction to news of a massive art installation planned for the Essex Experience, a rather depressing retail sprawl just off Route 2A and Highway 289. The project, named Babaroosa, is inspired by the insanely successful Meow Wolf multisensory environments in Santa Fe, Denver, and Las Vegas.

Creators Teresa and Robert Davis promise “a labyrinth of over 60 rooms intricately woven through a 20,000 square foot complex.” It might sound like an artistic fever dream, but it’s got some serious money behind it. They’ve secured $7.25 million in loans from the Vermont Economic Development Authority and the Vermont State Employees Credit Union. Essex Experience owner Peter Edelmann will contribute $5 million in real estate, about which more below. The Davises are raising nearly $11 million in investor equity.

I’m looking forward to a visit if it comes to pass. However… the location is a terrible place to put a major tourist attraction.

The Davises foresee a half million visitors a year. Seems like a stretch, but Meow Wolf has become an entertainment phenomenon in a few short years. Let’s take their word for it.

The most popular tourist attraction in Vermont is the Ben & Jerry’s factory on Route 100 in Waterbury.with 350,000 visitors per year. It contributes substantially to the horrendous traffic on Route 100, but at least it’s only a short hop from the interstate.

The Essex Experience is six miles north of I-89 Exit 12. Doesn’t sound like much, but those six miles include the sprawling mallage just off the freeway, the busy US-2/2A intersection, a crawl into Essex, the Five Corners junction, and another crawl to 289. Virtually all of it is two-lane road. It takes 15-20 minutes to make the trip if traffic is unusually light.

I know because I made the trip in 16 minutes on Monday morning at about 10:00 a.m. Rush hour was over, and retail traffic had yet to pick up. Still, traffic moved consistently below the speed limit — which varied from 25 to 40 mph.

The Davises are talking about nearly doubling traffic along that route. Yikes.

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When “Opportunistic Investors” Grab a Chunk of Your Town

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Is it just me, or is something slightly… off… about the sale of South Burlington’s University Mall to a global investment firm?

On the surface it seems like good news. Taconic Capital Advisors and Eastern Real Estate will buy the Mall for a tidy $60 million, which happens to be $26.2 million north of its assessed value.

Let’s stop there. A big investment fund buying a declining property in a dying industry for nearly double its assessed value?

Things that make you go hmmmm…

Taconic describes its traders as “opportunistic investors” looking for market inefficiencies. That’s usually Wall Street-speak for “we buy low on assets and squeeze every last dollar out of them.” See: Every time an investment firm buys newspapers.

The above chart, courtesy of the investor-information website “WhaleWisdom,” shows a damn high churn rate for Taconic. The different colors represent different market sectors. As you can see, Taconic specializes on diving into market sectors where they see potential profit and getting out just as quickly.

Given that history, it’s a little hard to credit Taconic’s stated intention to “reenergize” the mall and “build on its success.” First of all, long-term stewardship of an asset doesn’t seem to be Taconic’s game. And second, success?

“That does not compute,” said Mr. Spock when asked for comment.

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