It’s been almost 50 years since there has been a hotel in downtown Rutland. Because of the recent federal government shutdown, it's taking longer than expected to find out if the city will get a new one.
The historic Berwick Hotel burned down in 1973 and the sunken lot that remains, known locally as “the pit,” is still empty.
Last year, Williston-based DEW Construction purchased an option to buy that land and several nearby properties with hopes of building a new 110- to 120-room hotel, most likely a Marriott Courtyard.
But Pete Kelley, DEW’s Vice President of Business Development, said the $16 million to $18 million project can only happen if its awarded a federal New Markets Tax Credit. An announcement on those credits was expected this month. But because of the recent federal government shutdown, that decision has been delayed until later this spring.
The New Markets Tax Credit Program was created to encourage investment and job creation in low income communities. But developers can't access them alone; they need to work with community development agencies.
In this case, DEW pitched their hotel to several agencies, including Vermont Rural Ventures, a subsidiary of the nonprofit Housing Vermont. Beth Boutin, a senior investment officer with Vermont Rural Ventures, said for investors, the credits can mean big discounts on federal income taxes, so the program is highly competitive.
Pete Kelley admitted that hotels are not typically considered for the program because the jobs they create are often low paying. "The first time we submitted our proposal to Vermont Rural Ventures they were lukewarm on it," said Kelley.
So he said they reworked their plan to ensure the hotel's employment model would pay livable wages and target people re-entering the work force.
“So that would include people coming out of prison population, or people who have had substance abuse problems and have gone through recovery and are entering the workforce,” he added.
Kelley said the hotel would partner with organizations like Dismas House and Project Vision in Rutland to hire people facing barriers to employment. "This is something that's unique in our marketplace, and it's needed in Rutland County."
Teresa Miele is chair of the Rutland Region Workforce Investment Board, one of the organizations Kelley reached out to last summer. Miele said their board supports the project.
“One of the areas that more employers are looking at, especially with really low unemployment, is non-traditional sources of applicants and employees," she said. "So it wouldn’t be unheard of, in my opinion, for a hotel chain to zero in on that population of people.”
Terese Black, house director of Rutland Dismas House, which provides transitional housing for people just out of prison, says she too hopes the hotel is built. Some Dismas clients have been able to find higher paying jobs in Rutland doing construction, she said, but that type of work is not possible for everyone.
Boutin says even if the tax credits are awarded, the project still needs to get Act 250 approval and line up all the necessary funding.
Disclosure: DEW Construction is a VPR underwriter.
Correction 8:21 a.m. 3/22/2019 An earlier version of this story misstated Terese Black's title with Rutland Dismas House. She is house director, not executive director.
