Forum Journal & Forum Focus

The Vermont Downtown Program: Promoting Town and Village Centers, Protecting Landscapes 

12-09-2015 17:35

Vermont is a state of small villages, modest towns, and vibrant cities. It is a state of communities, village centers, and healthy downtowns. Vermont remains a state largely (although not entirely) free of paved-over cornfields and big-box stores; it remains a state where neighbors still meet over coffee and a newspaper at the local general store.

Despite constant pressure to pave, we in Vermont have fought to preserve this strong sense of community. No state can ignore the growth issue. Smart growth must be a priority shared by state and local governments, community boards, and volunteers. In Vermont, we have enjoyed a significant partnership with the Preservation Trust of Vermont and the Vermont Forum on Sprawl, for example.

The Vermont Housing and Conservation Board has the preservation of farmland and other open landscapes as its main priority. The Vermont Design Standards and Vermont Bridge Program are in place to preserve historic transportation resources. A major statewide effort to protect Vermont’s interstate exchanges from over-development is underway, and the Division for Historic Preservation operates two grant programs to rehabilitate historic community landmark buildings and working barns.

Supporting Traditional Downtowns

An ideal method for controlling development where it is not desired is to encourage and support it where it is wanted -- in the historic urban centers that are otherwise economically and socially devastated by sprawl development.

Vermont made downtowns a priority in 1994 when we created the Vermont Downtown Program. Responding to communities’ concerns about vacancies and other negative changes to their downtowns, the Downtown Program provided revitalization training and technical assistance based on the “Main Street Approach” developed by the National Main Street Center of the National Trust for Historic Preservation.

Located within the Agency of Commerce and Community Development and the Division for Historic Preservation, our downtown program has also been able to harness the expertise of the other departments of the Agency (Housing and Community Affairs, Economic Development, and Tourism and Marketing) to improve downtown housing and business. Lawmakers, pleased with the initial success, expanded the program in 1998. That Downtown Development Act created a Downtown Development Board to “designate” and provide certain benefits to downtowns in communities that have a comprehensive revitalization strategy with broad-based community support. There are currently 14 Designated Downtowns throughout the state, representing 25 percent of the state’s population.

The most important benefits available to property owners within a Designated Downtown are in the form of tax credits. For eligible projects, Vermont offers a 10 percent state income tax credit to add onto the 20 percent federal Rehabilitation Investment Tax Credit (RITC), and for projects that don’t meet the financial requirements of the RITC, Vermont has a 25 per-cent state income tax credit for Older and Historic Buildings in Designated Downtowns. A 50 percent credit for elevator and sprinkler installation alleviates one of the major barriers to upper- floor redevelopment -- the cost of code compliance. The Downtown Act also requires state agencies to give priority consideration to Designated Downtowns when awarding state or federal funds. Significant awards have been made to housing, infrastructure, and other community development projects from the state’s CDBG, Transportation Enhancements, Low-Income Housing Tax Credits, and Scenic Byways programs.

Grants from the Downtown Reinvestment Fund have enabled building owners to undertake projects that would otherwise have been impossible. From rehabilitating upper stories that had sat vacant for more than 50 years, to installing sprinkler systems in buildings that were formerly fire hazards, to rehabilitating and reconstructing historic storefronts, the success of these small projects has inspired other downtown property owners to perform similar projects in their buildings.

While the struggle against sprawl continues, Vermont’s commitment to supporting and increasing downtown revitalization efforts has been extremely successful. There were only three community organizations in the state dedicated to downtown revitalization in 1994; there are now 15 groups, and the Downtown Program’s Downtown Network reaches participants in more than 30 communities.

The downtown tax credits have awarded $1.4 million to downtown developers, and the $2.5 million in grant funds the Downtown Program has awarded since 1999 has leveraged almost $35 million in public and private investment in downtowns. Beyond the financial benefits, the Downtown Program has helped to create broad-based public interest in downtown issues. From business owners and municipal officials to senior citizens and “soccer moms,” everyone is working shoulder to shoulder to ensure a vibrant future for their downtown and their community.

Aiding Village Centers and New Town Centers

Based on these successes, the Vermont Legislature passed a second Downtown Development Act in 2002 to increase existing tax credits and, more importantly, recognize the importance of Village Centers and New Town Centers to Vermont’s development.

For the more rural parts of the state, small village centers serve a similar purpose to the larger downtowns -- a center of commerce, government, and business, and a place for people to simply gather. Sometimes they are as simple as a general store, a town office, or a church. Yet today’s increasingly auto-oriented lifestyle and spreading sprawl threaten to wipe out these centers. The Vermont Downtown Program now has the ability to recognize Designated Village Centers, and these villages will be able to take advantage of a tax credit for code-compliance projects, a 5 percent state income tax credit to add on to the RITC, and increased priority for other state grants. The New Town Center designation process provides a way for growing communities that lack a historic urban center to create a new one through careful and thoughtful planning.

Our Commitment to Controlled Growth

It may seem surprising that Vermont - one of the nation’s most rural states - is so strongly committed to preserving its most urban settings. In fact, nearly one-fifth of Vermont’s economic activity and jobs take place in our downtowns, and, in many cases, a downtown is a community’s second or third largest employer. We also realize that it is only with strong, vibrant, compact centers of downtown activity that the working landscape of Vermont can remain intact.

By providing incentives to encourage business activity within traditional urban settings, Vermont is limiting the uncontrolled sprawl that damages the economy, the environment, and the quality of life that makes Vermont so special. Our downtown efforts prevent the loss of the state’s farmland and forests to bland, monotonous strip development along our highways. At the same time, however, the state’s economy can continue to grow, new businesses can start, develop, and prosper, and our population can increase, creating a stronger Vermont for the future.

Publication Date: Fall 2002


Author(s):Howard Dean