24 V.S.A.

SECTION 2742 AGREEMENT

AGREEMENT made this ____ day of August, 2016 by and between the City of
South Burlington, a Vermont municipal corporation situated in Chittenden County (South
Burlington), and the City of Burlington, a Vermont municipal corporation situated in
Chittenden County (Burlington), collectively the Parties.
WHEREAS, Burlington owns certain property located within the corporate
boundaries of the City of South Burlington, which is principally used for the operation of
a public airport commonly known as Burlington International Airport (BTV); and

WHEREAS, Burlington disagrees that the assessed values determined by South

Burlington for Tax Years 2012 through 2015 are fair and reasonable valuations of its
property at BTV, and appealed such valuations to the Vermont Superior Court,
Chittenden Unit, Civil Division; and
WHEREAS, South Burlington recognizes the contribution of BTV to the
economy of Chittenden County and the State of Vermont, and its convenience to the
citizens thereof; and
WHEREAS, Burlington recognizes that the airport utilizes a significant land area
within South Burlington and for this reason has a significant impact on tax revenues in
South Burlington; and
WHEREAS, the Parties, informed by and in reliance on the rulings made by the
Vermont Superior Court, Chittenden Unit, Civil Division entitled Decision on Motions
for Summary Judgment dated March 3, 2016, have settled Burlingtons appeals of the
assessed values of BTV for Tax Years 2012 through 2015, and as part of that settlement
have agreed to a methodology for establishing the Grand List property values which will
1

determine the amount of taxes payable with respect to BTV property so that both Parties
may from year to year, during the term of this Agreement, avoid uncertainty as to the
taxes to be paid with respect to BTV;
NOW, THEREFORE, it is hereby agreed as follows:
1.

Description of Taxable Property: This Agreement shall apply to all land

and improvements owned by Burlington located in South Burlington and used by

Burlington, the State of Vermont, or the United States Government for purposes of
providing air transportation services at BTV as set forth in the inventory attached hereto
as Exhibit A, which consists of one page (hereinafter referred to as Public Use
Property). Property owned by Burlington which is set forth on the inventory attached
hereto as Exhibit B shall be taxed at its fair market value in accordance with Vermont law
(hereinafter referred to as Private Use Property). The parties shall at least annually
confer in good faith to review the inventories on Exhibits A and B and update them as
appropriate to account for changes of use, acquisitions and conveyances by Burlington.
2.

Taxation. During the term of this Agreement, the following shall be the

method for determining taxes due and payable on the land and buildings described in
Exhibit A:
(a) Land subject to 5 V.S.A. 754, provided such land is primarily devoted to a
public use, shall be subject to a payment in lieu of taxes (PILOT) payable to South
Burlington, based on the then current municipal tax rate; improvements on such land
shall not be taxed. The per-acre value of such lands shall be (i) $280,000 per acre for
land that was residential at the time of acquisition by Burlington and (ii) $25,750 per acre
for land that was non-residential at the time of acquisition by Burlington.

(b) Land subject to 32 V.S.A. 3659, provided such land is primarily devoted to a
public use, shall be subject to property taxes based on the then current municipal tax rate
and non-residential statewide education property tax rate; improvements on such land
shall not be taxed. Taxes due and payable shall be computed based on an assessed value
equal to 1.75 times the value of such land at $25,750 per acre.
3.

Alteration in Property Ownership and Use:

A.

Any property listed in Exhibits A or B of this Agreement which, as of

April 1 of any year during the term of this Agreement, shall not be owned by Burlington,
shall be taxable to the owner therefor for such year in accordance with applicable
provisions of Vermont law.
B.

If any property listed in Exhibit A or B which, as of April 1 of any year

during the term of this Agreement, changes use from being predominantly public to
private or from private to predominately public, such property will be taxed
according to its use and the applicable provisions of Vermont law or this Agreement.
Burlington shall establish the nature of the use and provide South Burlington with
reasonable access to the land and improvements, as well as other reasonable information,
to allow such assessing determinations to be made.
4.

After Acquired Property: Property acquired by Burlington for use in

connection with BTV after the date this Agreement becomes effective shall be taxed
according to the following methodology.
a) Any property purchased the use of which is not predominantly public shall
be taxed according to Vermont law.

b) For any property purchased pursuant to 5 V.S.A. 754, provided such land is
primarily devoted to a public use, there shall be a PILOT based on the methodology set
forth in section 2(a), above.
c) For any property not purchased pursuant to 5 V.S.A. 754, provided such land
is primarily devoted to a public use, taxes shall be assessed based on the methodology set
forth in section 2(b), above.
d) Any dispute regarding the taxability of such land or improvements shall be
subject to arbitration in accordance with the provisions of Section 7 below.
e) If 5 V.S.A. 754 or 32 V.S.A. 3659 are amended during the term of this
Agreement, the Parties agree to work cooperatively and in good faith to achieve an
outcome that is reasonably equivalent to the intent of this Agreement.
5.

Term of Agreement: This Agreement shall remain in effect for a term of

ten years commencing with the South Burlington grand list for April 1, 2018 and ending
on March 31, 2028, unless terminated earlier pursuant to Section 6 below.
6.

Termination: Subject to the arbitration provisions in Section 7 below,

this Agreement may be terminated by South Burlington upon thirty (30) days written
notice to Burlington upon the occurrence of any of the following:
A.

BTV or a substantial portion of the land and improvements comprising

BTV is sold to any individual or entity except the State of Vermont or a regional airport
authority created by the General Assembly of Vermont.
B.

BTV or a substantial portion of the land and improvements comprising

BTV is leased to any individual or entity for a term exceeding ten years except that this
condition shall not apply to fixed-base operations and concessionaire agreements entered

into to support routine operations of BTV for the primary benefit of the traveling public.
Provided termination under this subsection shall not be authorized if Burlington shall
advise South Burlington in advance of a proposed lease which would otherwise entitle
South Burlington to terminate this Agreement and if Burlington shall further agree to
have such property thereafter taxed according to its full fair market value.
7.

Arbitration: Prior to termination of this Agreement as provided in

Section 6 above, South Burlington shall provide Burlington written notice of intent to
terminate which is to be filed with the Burlington City Clerk, with the reason for such
termination. Burlington shall have fifteen (15) days from the date such notice is filed
with the Burlington City Clerk to request that such termination be submitted to arbitration
by filing a written request for arbitration with the South Burlington City Clerk. If
Burlington requests that the matter be submitted to arbitration, the parties shall diligently
pursue arbitration in accordance with the provisions of 12 V.S.A. Chapter 192. If South
Burlington shall be found to have just cause to terminate the Agreement, Burlington shall
be granted seven (7) days in which to cure or remedy the circumstances justifying
termination. If Burlington shall fail to cure within seven (7) days, South Burlington may
terminate the Agreement in accordance with the provisions of Section 6 above.
8.

Representation on Burlington Airport Commission: During the term

of this Agreement, Burlington shall take no action to amend Section 276 of its Charter
which provides for South Burlington to have one (1) voting member on the Board of
Airport Commissioners of the City of Burlington.

ACKNOWLEDGEMENT OF ARBITRATION

THE PARTIES UNDERSTAND THAT THIS AGREEMENT CONTAINS AN

AGREEMENT TO ARBITRATE. THE PARTIES UNDERSTAND THAT, AFTER
SIGNING THIS DOCUMENT, THEY WILL NOT BE ABLE TO BRING A LAWSUIT
CONCERNING ANY DISPUTE THAT MAY ARISE WHICH IS COVERED BY THIS
AGREEMENT, UNLESS IT INVOLVES A QUESTION OF CONSTITUTIONAL OR
CIVIL RIGHTS. INSTEAD, THE PARTIES AGREE TO SUBMIT ANY SUCH
DISPUTE TO AN IMPARTIAL ARBITRATOR.

Dated at South Burlington, Vermont, this ___ day of _______________, 2016.

CITY OF SOUTH BURLINGTON

_________________________

________________________________

_________________________

________________________________
________________________________
________________________________
________________________________

On this _____ day of _____________, 2016, personally appeared

____________________________________________________________________,
signers and sealers of the foregoing instrument and acknowledged the same to be their
free act and deed and the free act and deed of the City of South Burlington.

________________________________
Notary Public

Dated at Burlington, Vermont, this ___ day of _______________, 2016.

CITY OF BURLINGTON

_________________________

________________________________

_________________________

________________________________
________________________________
________________________________
________________________________

On this _____ day of _____________, 2016, personally appeared

____________________________________________________________________,
signers and sealers of the foregoing instrument and acknowledged the same to be their
free act and deed and the free act and deed of the City of Burlington.

________________________________
Notary Public

EXHIBIT A
1.

44.564 acres of residential land purchased pursuant to Burlingtons Noise

Compatibility Program (acquired pursuant to 5 V.S.A. 754).

2.

370.108 acres of land (acquired pursuant to 5 V.S.A. 754).

3.

457.11 acres of land subject to provisions of 32 V.S.A. 3659.

4.

BTV Main Terminal 1200 Airport Drive

5.

BTV Parking Garage 1200 Airport Drive

6.

BTV Maintenance Center 55 Customs Drive

7.

Vermont Air National Guard Buildings located within BTV Zone 5. *

8.

Two Vermont Air National Guard mechanical sheds located adjacent to runway
15 and 33.

9.

Vermont Air National Guard Tactical Air Navigation (TACAN) facility located
opposite taxiway Hotel.

10.

Radar Tower and air navigation buildings Building Nos. 08, 09, 31, 32, 33 and
34.

11.

Vermont Army National Guard Facility Buildings within BTV Zone 6.

12.

228 Aviation Avenue

13.

265 Aviation Avenue.- ASH building.

14.

481 White Street.

15.

1150 Airport Drive North Hanger.

16.

1252 Airport Drive FAA Facility and accessory electrical networking shed.

The zone and building numbers referenced in this exhibit are as classified in the August 10, 2012 Stantec
survey of the BTV property.

EXHIBIT B
1.

21. 64 acres of commercial properties not included within the main airport parcel.

2.

Commercial Properties as of April 1, 2015, with values of:

3.

a.

3060 Williston Road -

$892,300

b.

3062 Williston Road -

$69,500

c.

3064 Williston Road -

$593,900

d.

3090 Williston Road -

$379,000

e.

1399 Airport Drive -

$397,500

f.

Airport Car Rental

$145,900

g.

1223 Airport Drive -

$163,700

h.

4016 EX Williston Rd. -

$200,000

i.

700 Airport Parkway -

$453,500

Private Use Properties within the main airport parcel as of April 1, 2015, with
values of:
a.

1130 Airport Drive -

$197,700

b.

1120 Airport Drive -

$1,136,300

c.

25 Customs Drive -

$638,000

d.

73 Customs Drive -

$900,000

e.

15 Eagle Drive -

$2,853,400

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MLS\SON16-002 2742 agreement 8.1.16c.docx