A Corner on the Market
Should Canadian developer Billy Mauer be telling Burlington where to go?
It's lunchtime at N.E.C.I. Commons, and the upstairs dining room is the picture of bustling Burlington. That may explain why Billy Mauer picked this spot to discuss his plans for the Church Street Marketplace. One of the biggest downtown property owners has also arranged for a friendly audience. The Canadian developer and real estate attorney agreed to an interview only if two staunch city supporters could chaperone the proceedings.
Burlington City Arts Director Doreen Kraft and Church Street Marketplace Director Ron Redmond take their seats for lunch, but stay pretty quiet during the course of the conversation, which Mauer dominates from the head of the table. The 61-year-old Mauer certainly knows the importance of choosing the right location. He's a commanding presence with strong feelings about Burlington, the waterfront and the future of downtown.
I'm interested in asking him about one property in particular: 116 Church Street, a building on the northeast corner of Church and College streets that Mauer purchased in October from Irv Abrams. As commercial real estate transactions go, this was like scoring season tickets on the 50-yard line -- it's one of the most desirable locations in Chittenden County. Here a landlord can command some of the highest rents in the city, between $25 and $35 per square foot for first-floor retail space. But Mauer -- charismatic, energetic and unapologetically blunt -- prefers to discuss bigger-picture issues.
"If Burlington is going to continue to exist, we have to save the downtown corridor," he says, glancing occasionally at a typed list of "points to get across" on the table. "How you save it is by attracting good little boutiques, not by having Home Depot come in."
Big-box stores are one of Mauer's favorite targets. So are suburban sprawl, gaudy signage, hastily constructed strip malls and ill-conceived architecture, all of which fall under his general rubric of "cheap crap." As a developer and investor, Mauer prefers "quality, not quantity:" three- and four-story historic buildings, usually on a corner and in need of renovation, into which he pours considerable time and money. But unlike some developers, Mauer holds on to virtually all the properties he buys.
"It's a very different approach," says Michael Monte, director of Burlington's Community and Economic Development Office. "You don't get the sense that Mauer is coming in just to make some money and walk away. He likes this town and enjoys the process. He brings value that way."
Unless you deal in commercial real estate or own a business on the Church Street Marketplace, Billy Mauer's name probably isn't familiar, even though his buildings are. Kitty-corner from the property he just bought at 116 Church, Mauer owns the corner building that houses the men's clothing store Michael Kehoe. He also owns the buildings that host the Church Street Tavern, Bangkok Bistro and Uncommon Grounds. The Charter One Bank building on the corner of College and St. Paul also belongs to Mauer.
In all, the Montreal native and part-time Stowe resident owns more than a dozen properties in downtown Burlington alone, including five on Church Street, five on College, two on St. Paul and one on Main. Soon he will break ground on a 128-acre industrial park on Hinesburg Road, which he says took him nine years to get re-zoned. He also owns the Chelsea Grill in Stowe and numerous properties in Montreal, Toronto and Ottawa. These days, however, Mauer's sights are firmly set on Burlington.
Like many a successful businessman, Mauer has ruffled a few feathers in town, especially with some of the occupants of 116 Church Street. Most have either vacated the premises already or been told they must be out soon to make way for renovations scheduled for the spring. Among them are Irene Callisto, owner of the lingerie shop Isadora, and Laurie Brooks, owner of Le Petit Magasin, a children's clothing store. Both contend Mauer is trying to muscle them out of their leases in order to drive up the rent.
As expected, people's views of Mauer tend to reflect where their own interests lie. Praising parties may do business with him: commercial real estate agents, bankers, officials with the city of Burlington and the Church Street Marketplace. Those with harsher views tend to be competitors or disgruntled tenants. Few of his critics, however, are willing to go on the record, which may speak to Mauer's growing influence in Burlington. As one soon-to-be ex-tenant put it, "He's a scary person, but I wouldn't want to be quoted saying anything bad about him in the paper. There's a very good possibility he'll be my landlord again very soon."
Redmond is one of Mauer's more vocal supporters. "Billy Mauer is definitely cut from a different cloth," he says. "He comes at things with this incredible amount of energy. Whenever I see him he's got 14 ideas of what we ought to be doing. As trite as it sounds, he really gets it. Everything I've seen him do is better than it was before."
Redmond's enthusiasm for Mauer is understandable. As director of the quasi- governmental body that oversees what is arguably the most important retail district in Vermont, Redmond know how vital Church Street is to Burlington's economy -- and how vital Mauer is to Church Street. Each year the Marketplace generates close to $1 million in property taxes alone and draws an estimated three million visitors to town, including many city planners from around the country looking to duplicate its success. It almost goes without saying that the Church Street Marketplace is both the city's economic and social nexus, what Senator Patrick Leahy once called "Burlington's front porch."
"Look, who wants to live downtown? The singles, the divorced, young married and older people," Mauer explains. "Those with three children don't want to live there. We have to make the downtown a complete 24-hour center like we did in Montreal. If not, what you'll have is L.A. They leave L.A. at five o'clock and don't come back until nine o'clock the next morning. If that's what you want, fine."
Redmond adds that most successful downtowns -- such as in Austin, Boston, Boulder and Philadelphia -- are those that maintain a healthy mix of pedestrian traffic around the clock. But to do so requires investors with the financial wherewithal to create mixed-use development -- that is, both commercial and residential space in the same building. Inevitably, that's more expensive in an urban core than in the suburbs.
"To build a parking space in downtown can be $10,000 to $15,000 per space, whereas if you plow a field it's only two grand a space," says Redmond. There are other unforeseen expenses with the older building stock of historic districts like Church Street, such as the need to update plumbing and wiring or remove asbestos and lead paint. Few would argue that after 22 years the Church Street Marketplace is beginning to show its age. Redmond asserts that Mauer is just the kind of developer to get the job done.
Mauer cites 116 Church as an example. He claims the building's fire insurance was canceled several months ago not only because events at the Rhombus Gallery upstairs were exceeding its occupancy limit, but also because the building's previous owner had neglected to install proper fire doors and other mandated safety equipment.
"If, God forbid, a fire had started in the building, 20 to 25 people would have died," Mauer says. "If you had a son or daughter, a 17-year-old college student from UVM in there one night for a poetry reading who got hurt, you wouldn't be so happy with me.
"Bottom line, without all the B.S., it takes money," Mauer adds. "I don't want a Tiffany's store and a Saks Fifth Avenue. But I do want to see more Mercedes Benz in the streets than tow trucks hauling away the local junk."
Mauer doesn't deny that once he renovates a building the rents go up. The upscale apartments he created above Michael Kehoe go for $1450; those above Bangkok Bistro rent for $1650. But he says that's all part of creating a more prosperous downtown.
"You know, we pay a hefty fee to be a part of Church Street. It's expensive," he says, referring to the special assessment district fees that cover maintenance and special events on the pedestrian mall. "Wal-Mart goes in and pays $4 [per square foot], where our tenants pay $34. How the hell can we compete?"
But what about affordable housing in the downtown core? "Look, give me an affordable plumber and I'll give you affordable housing," Mauer says.
Some business owners on Church Street don't like Mauer's style. They resent this "outsider" with his "big-city ideas," aggressive business style and "wheelbarrows of cash."
But they don't necessarily disagree with the principles he espouses, which, in the vernacular of city planners, is sometimes called "New Urbanism" -- creating diverse, vibrant, mixed-use neighborhoods that emphasize pedestrian traffic and de-emphasize cars. And no one claims he hasn't done an impressive job of restoring Burlington's historic buildings. Rather, they take issue with what one business owner says is Mauer's apparent willingness to get his way regardless of the consequences.
On Nov. 27, the start of the make-or-break Christmas season for downtown retailers, Isadora owner Irene Callisto received a certified letter from Mauer's attorney notifying her that she had to "immediately vacate the premises" of 116 Church Street by Dec. 15, or else her front door would be padlocked. The letter claimed she was in arrears for more than $9000 in back rent. From all accounts, the building's previous owner, Irv Abrams, maintained a very casual relationship with his tenants and was flexible about when rents were due. Callisto claims Abrams never even charged her for heat or other utilities.
Callisto doesn't deny she fell behind in her rent payments, but says she paid Mauer the money he was owed as soon as she received his notice. She also says Mauer began telling city officials and others that her retail space would soon become available, despite the two years left on her lease.
"If you locked up every store on Church Street that owes money, the whole street would be empty," Callisto argues. "This isn't a hobby for me. I have debt service I need to pay. Plus, I have a lease. That's the important thing."
Next door at Le Petit Magasin, Laurie Brooks says she received a similar letter. Like Callisto, she was never informed that the building had been sold, and only found out when architects came into her store one day and began measuring the walls for future renovations.
"Church Street is supposed to be this quaint shopping area whose owners all live in the area," says Brooks, who points out that she also has more than two years left on her lease. Of Mauer, she says, "I don't know what his intentions are, but it's clear he doesn't want us here and wants us to fail."
"The point is, Billy Mauer wants us out of here because he wants more rent," concludes Callisto. "It's like a big Monopoly board and he thinks he's landed on Park Place. But we're not going away that easily."
Mauer won't speak on the record about either of the women's claims, saying both cases are now in litigation. He does note, however, that "A lot of people are in business who shouldn't be," and says he only gets complaints from tenants who don't pay their rent.
"You know what really gets me upset?" Mauer asks. "Right away everyone looks at me like I'm a greedy capitalist. But everybody knows there are rules to be followed."
Another business owner on Church Street -- who also chooses to remain anonymous -- says Mauer's "hardball" style reflects the increasing gentrification of the Church Street Marketplace and a leaner, meaner business climate that is increasingly reliant on national chain stores.
Another unidentified source -- a tenant who's been there for more than a decade --says what makes Church Street unique is its funky mix of local cottage industries on the strip's upper floors. And those, he says, will quickly disappear once rents go through the roof.
While Redmond agrees that you didn't see many national stores on Church Street 20 years ago, he rejects the notion that national chains have been bad for local businesses.
"Some Vermonters say, 'Oh, my God! There are nationals on Church Street!'" says Redmond. "But if you talk to the merchants who have locally owned businesses, they will tell you what it's done is bring people downtown to discover the locals. It's maintained our vitality." And as he points out, national chains still make up only 40 percent of the retail businesses on the Marketplace. In fact, locals recently have replaced national stores in some locations.
"Today, any healthy shopping area is filled with national tenants," adds real estate agent Bill Kiendl of V/T Commercial, which handles the leasing for the Burlington Town Center. "I don't necessarily love it, but it is what it is. If you talk to a landlord and say, 'Do you want a Banana Republic or some fella who wants to start a new restaurant concept?' they're gonna take Banana Republic."
Mauer bucked that trend at least once. When Wendy's wanted to buy into the building now occupied by the Church Street Tavern, he chose local owners over the fast-food franchise. "I haven't seen or heard from them in five years," he says of his tenants. "They're happy and I'm happy."
He's still in a good mood on a subsequent tour of Montreal, where he and his wife live in a luxurious downtown high-rise built in 1962. As we zigzag the streets of the old city, Mauer eagerly shows off what the Queen City could learn from La Belle Ville. "The Burlington waterfront could be like this," he says, indicating the new parks, shopping areas and mixed-use housing sprouting along the St. Lawrence River. "But we're losing out to other cities."
Like his Volvo wagon, Mauer's mind races from one idea to the next, each more ambitious than the last. "We need to put in cobblestones, nice lighting and take it down to the waterfront so that people want to park their cars and walk down there at night. And we've got to expand Church Street to Cherry and all the other side streets, make it all nice and fun."
Mauer definitely has a business stake in that scenario. But his use of "we" suggests a different kind of belonging. "I would rather be a Vermonter than anything else," he suggests. "I came here because I think this is the greatest city and state in the world. People don't know how good they have it."