Local development corporation wins bid for former Montpelier post office

Updated at 2:15 p.m.

A local development corporation spearheaded by the Foundation for a Resilient Montpelier has tentatively won the auction for 87 State Street, the former Montpelier Post Office building and longtime downtown staple, the foundation’s Executive Director Jon Copans said Thursday. 

“This is a transformational piece of property and opportunity for our community, and now we’re on a path — a pretty clear path — to having site control,” Copans said. “And so that feels like a positive development for Montpelier, that ultimately, the 87 State Street Local Development Corporation will be carrying this project forward.”

The winning bid of $540,000 was well under the federal government’s original asking price of $2.4 million. The foundation originally walked away from a potential sale at that price after uncovering evidence of environmental contamination throughout the building. 

“The gamble that we took when we stepped away” was that they would be able to get the property at a lower price, Copans said. 

The federal government still has to officially accept the bid, Copans said via email. 

“At the same time, our impression is that they are motivated to transfer ownership of this property,” he added.

The property suffered damage in the July 2023 flood, forcing the U.S. Postal Service to relocate to another location on Main Street. From the time the federal government announced the sale, the foundation, once called the Montpelier Commission for Recovery and Resilience, has had an interest in developing the property into a flood-resilient site for both housing and commercial use. 

The foundation approached the U.S. General Services Administration during the “negotiated sale” process, a time when local and state entities can get an early opportunity to purchase federal property. But they found a 2023 report from Clay Point Associates, Inc. that revealed widespread contamination from PCBs, Copans told VTDigger in June.

The foundation walked away from that negotiation. Instead, it put together a coalition of ten local entities that form the newly created local development corporation.

According to a press release, the corporation’s board of directors are from the Foundation for a Resilient Montpelier, the Preservation Trust of Vermont, the city of Montpelier, National Life Group, Union Mutual Insurance, Vermont Mutual Insurance Group, Central Vermont Medical Center, Downstreet Housing and Community Development, the Central Vermont Economic Development Corporation and the Central Vermont Regional Planning Commission.

The local development group also secured an award through the Rural Industry Development Program to defray the cost of the building, a Vermont Agency of Commerce and Community Development program, Copans said. 

“Everyone has said yes when asked about their participation, and that participation has a lot of different — flavors, let’s say,” he said. “But people have been really generous in stepping forward to help us with this project.”

Copans said in June that the foundation was interested in turning the parking lot behind the building into housing, helping to alleviate the city’s housing struggles, while continuing to use the building itself as office space. 

But the first order of business, he told VTDigger Thursday, will be getting into the site to perform a more thorough environmental assessment. According to the press release, rough estimates of the cost of remediation range from $1.8 million to $3 million.

“Before we make any other decisions about the building and how to proceed, we’ve really got to understand what the scope of that contamination is, and what kind of a plan and what kind of a cost is entailed in cleaning it up,” he said. 

Read the story on VTDigger here: Local development corporation wins bid for former Montpelier post office.