Brian Dunkiel

Vermont Supreme Court Affirms Dismissal of Challenges to Champlain Parkway Necessity Order

The Vermont Supreme Court has affirmed the dismissal of two separate legal challenges to a ‘Necessity Order’ related to the Champlain Parkway public transportation project in the City of Burlington. The Court issued the decisions (which can be found here and here) on June 19, 2020, finding that two potential challengers did not have standing to appeal the Burlington City Council’s order, which acquired several property easements needed for the Project’s right of way.

The Champlain Parkway project is a proposed transportation link connecting I-189 and U.S Route 7 with Burlington’s City Center District. In addition to improving traffic circulation, alleviating capacity overburdens, and improving safety on local streets, the Project will include new shared-use paths, recreational areas, and stormwater improvements in Burlington’s south end.

The Supreme Court’s decisions move the Parkway a step closer to completion, and were just the latest rejecting challenges to the Parkway. In 2015, the Court upheld the Project’s Act 250 land use permit, and in 2018, rejected a challenge to a wetlands Conditional Use Determination issued by the Agency of Natural Resources.

SRH Law attorneys Jon Rose and Brian Dunkiel represented the City in the case before both the Vermont Supreme Court and the Vermont Superior Court, Chittenden Unit.

NEW ROUND OF FEDERAL AGENCY SCRUTINY OF CBD PRODUCTS

Federal agencies continue to pay attention to the marketing claims by cannabinoid (CBD) product marketers, as evidenced by warning letters sent last week by the Federal Trade Commission (FTC) and the U.S. Food & Drug Administration (FDA) to three CBD companies making health-related claims about their products. The letters specifically target claims made on the companies’ websites and some social media pages that CBD products can treat or cure a range of human diseases and conditions, including cancer, Alzheimer’s, depression, and anxiety disorders, as well as a number of health conditions for dogs. The letters state that these claims may violate both the Federal Food, Drug, & Cosmetics and Federal Trade Commission Acts and order the companies to respond with the specific actions they will take to address the agencies’ concerns.

The agencies’ action sends an important signal to marketers after the recent declassification of Hemp as a Class 1 illegal drug in the 2018 Farm Bill. Companies marketing CBD should expect that the FDA and FTC along with state consumer protection divisions to assert their jurisdiction to protect consumers and review of product marketing claims – even claims only occurring on websites and social media platforms.

In the press release announcing the letters, the FTC notes that the letters are part of its “ongoing efforts to ensure that dietary supplements and other health-related products are advertised truthfully, and that efficacy claims made for such products are supported by competent and reliable scientific evidence.” The FTC’s standard for “competent and reliable scientific evidence” for CBD products making health related claims should be expected to be a relatively high bar. FTC’s definition calls for “tests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.” Anecdotal evidence from CBD users or newspaper and magazine articles fall short.

The FDA has also released a statement noting its continuing concern over the number of drug claims made about CBD products that have not been approved by the FDA or are being marketed as dietary supplements, and its intention to “advance new steps to better define our public health obligations in this area” and “to closely scrutinize products that could pose risks to consumers.” As evidenced by these most recent letters, CBD companies should note that regulators are looking beyond on-label product claims, and are focusing on company websites and social media sites like Facebook and Twitter. Companies should therefore carefully consider the various channels they use to reach consumers and pay close attention to the messages consumers are receiving about their products.

The regulatory landscape for CBD products is still catching up with the rapid market expansion, and there are ongoing opportunities for companies to participate in discussions with regulatory agencies about how to approach oversight of the sale and marketing of CBD products. The FDA is holding a public hearing on May 31, 2019 that will be webcast, and will open a docket for public comments to be filed online. Vermont CBD companies should also be aware the Vermont Agency of Agriculture Food & Markets is currently working on draft rules that will likely regulate many of the terms commonly associated with CBD and hemp products, which may affect how these terms can be used in product marketing. The draft rules have not yet been officially posted for public comment, but a copy of the current draft is available here.

While the regulatory waters may seem a bit murky at present, CBD marketers should not be completely discouraged. With carefully curated and substantiated marketing claims used on labels, websites, and social media platforms brands are establishing themselves today. Indeed CVS Pharmacy recently announced it would place CBD products on its shelves in selected states, including California, Colorado, Illinois, Indiana, Kentucky, Maryland and Tennessee. For more information about CBD product marketing regulation, contact Brian Dunkiel or Vic Westgate.

Hula Tech Campus to Open in Blodgett Oven Factory Buildings

The decommissioned Blodgett Oven factory on Lakeside Avenue in Burlington, Vermont is being redeveloped into a dynamic new tech campus, providing work spaces to new and existing employers in the field of technology. Developer Russ Scully is converting the old factory into a high-tech campus, called Hula, which will lease space to tech companies and startups.

It will boast vibrant amenities and an event space for live music overlooking Lake Champlain. The project aims to encourage growth in Vermont’s tech industry, and attract new employment for the state.

SRH Law partner Brian Dunkiel provided strategic counsel for the development and partner Drew Kervick facilitated the closing on the financing for the redevelopment of the property. Hula will recruit businesses to the space, focusing on the kind of innovators SRH Law’ IP team supports to advance a values-led economy.

Check out the Seven Days article about the Hula project here.

Vermont Supreme Court upholds 2011 Wetlands Conditional Use Determination for Burlington’s Champlain Parkway Project

The Vermont Supreme Court has affirmed the dismissal of a challenge to a wetlands Conditional Use Determination issued to the City of Burlington for the Champlain Parkway.

The Supreme Court’s decision moves the Parkway a step closer to construction. Dunkiel Saunders attorneys Jon Rose, Brian Dunkiel, and Karen Tyler represented the City in this case before the Vermont Superior Court (Environmental Division), and Vermont Supreme Court.

Read the decision here.

Your Opportunity Zone Project and Zoning and Act 250 Considerations

We recently wrote about the opportunity zones incentive and the benefits it could provide for Vermont communities, investors, and developers. While we await the IRS regulations governing the mechanics of opportunity zone investing, we thought it would be a good time to examine how state planning law might affect potential opportunity fund financed projects.

Vermont has unique land use and planning laws that can feel burdensome. However, a thoughtful strategy can lessen the burden, and understanding that Vermont’s state-wide land use laws have a clear goal—to concentrate and encourage development in compact traditional centers—can be used to a project’s advantage. In many cases, this goal overlaps neatly with the opportunity zone program, as the state-nominated zones generally coincide with traditional population centers where development is encouraged. Developers who understand and are able to design real estate projects that take advantage of the State’s land-use laws will be able to maximize the potential of opportunity zone financing, available public financial incentives, and the many social benefits that the program is intended to create.

This blog post provides a quick primer on the key Vermont land use laws and programs that may be utilized to enhance opportunity zone financed real estate development projects, and then summarizes the applicability of each planning program in the 25 designated opportunity zones.

Act 250

Passed in 1970, Act 250 is a state-wide land use control that overlays local zoning regulation. Developments and subdivisions that exceed various size thresholds trigger Act 250 jurisdiction and require a land use permit. To receive a land use permit, a developer needs to conform with the ten Act 250 criteria, which ensure projects meet environmental standards and encourage smart growth to protect public infrastructure and meet state, regional, and local planning goals.

How Act 250 might impact a project varies widely depending on the location and the project’s fit within the surrounding land uses. However, permits are granted for 98% of applications, so a well-planned project is likely to go through. Instead of focusing on the specifics of Act 250, this blog examines some of the exceptions and programs that streamline the process. For more information on Act 250, visit the Natural Resource Board website.

Vermont’s state land use goal is to continue the traditional pattern of compact population centers surrounded by working agricultural and forest land. Thus, exceptions and incentives to the Act 250 process promote that pattern and “funnel” development into existing centers. The two tools we consider are the state designation programs and priority housing.

State Designation Programs

The designation programs are a tool for municipalities to determine where to concentrate growth and then align various state taxing and permitting policies to promote growth in that area. Three “core” designations—downtowns, village centers, and new town centers—establish the highest density district in the municipality and receive the most benefits. Two “add-on” designations—neighborhood development areas and growth centers—are available once a municipality has a core district. The add-on designations support growth in the core district and encourage smart growth principles throughout the town. Designated areas may be layered to stack benefits.

Each designation receives a different suite of benefits. In existing centers—downtowns and village centers—the benefits center around substantial tax credits to offset renovation costs to modernize historic buildings. All the designations receive some form of Act 250 permit streamlining and reduced application costs. Downtowns receive the greatest combination of benefits, while new town centers receive the least benefits. Municipalities also receive priority access to state grants for smart growth infrastructure and planning (more information on state designation programs here, and a summary of benefits for each designation).

The table below lists all of designated areas within each opportunity zone. By developing an opportunity zone project in a designated area, a developer will be able to reap the many benefits associated with the designation. Note that the downtowns and village centers in the smaller cities and town usually occupy only a portion of the opportunity zone. Burlington, South Burlington, and St. Albans all have excellent overlap with a designated area covering most of the corresponding opportunity zone.

Priority Housing Projects

Often land use controls work against workforce and affordable housing. To combat this, the State has exempted priority housing projects from Act 250 jurisdiction. Typically, an Act 250 permit is needed when building a housing project with 10 or more units, on one tract of land or nearby tracts. Priority housing projects raise this threshold depending on the municipality’s population. The threshold ranges from 25 units for a town of 3,000 or less to an unlimited cap once the population exceeds 10,000.

The state designation areas are a prerequisite to the exemption. A priority housing project must be within a designated area. Furthermore, village centers do not qualify for priority housing unless they are also a designated neighborhood. The final prerequisite is the nature of the housing. The project must supply “mixed-income” housing—where 20% or more of the units constitute affordable housing (similar but different criteria exist when the housing is owner-occupied). Most priority housing projects can also be “mixed-use,” where up to 60% of the floor area is used for commercial or community space, so long as the housing is mixed-income. In designated neighborhoods, mixed-use is not allowed.

Including priority housing in an opportunity zone financed development project is accordingly an attractive way to streamline the development process and take advantage of downtown tax credits, while at the same time helping to alleviate the Vermont’s shortage of affordable housing.

Tax Increment Financing

Developers and investors are likely familiar with tax increment financing (TIF) districts that help cities and towns debt-fund infrastructure to support new development. Although the likelihood of new TIF districts in Vermont is uncertain, many opportunity zones have preexisting TIF districts. These preexisting districts may provide room for additional development without the need for developers to cover associated infrastructure costs.

Conclusion

To conclude, many opportunity zone real estate development projects should be able to take advantage of the State’s designation programs, the priority housing program and/or tax increment financing. The combined advantages of utilizing these State programs, plus the economic benefits of an opportunity zone financed project, promises to ease development burdens, especially for projects with affordable housing components, in Vermont’s population centers.

SRH Law Client, Devonwood Investors, Receives Zoning Approval for BTC Redevelopment

On Monday night, the City of Burlington Development Review Board approved Devonwood Investors’ redevelopment plans for the Burlington Town Center (BTC). The Development Review Board voted unanimously to approve the project, which will allow the project team to complete engineering drawings in preparation for a building permit, and proceed with redevelopment of the site.

The Board’s decision was covered by WPTZ, WCAX, and the Burlington Free Press.

Burlington Town Center Announces Collaboration with Local Firms on Redevelopment Project

Brian Dunkiel

A week ago, SRH Law client, Burlington Town Center, made a formal announcement identifying the Vermont-based firms and companies involved in the redevelopment of its property. Burlington’s Mayor Miro Weinberger was present at the announcement last week, and noted the immediate benefit to the local economy following last month’s vote in favor of redeveloping the downtown mall.

SRH Law was identified as one of the law firms involved in the project. The firm’s experience in permitting and City approval processes were noted, especially in affordable housing and renewable energy.

For a complete list of the local firms and businesses involved in the redevelopment, and to read more about Burlington Town Center’s announcement, read more at the Burlington Free Press and Vermont Biz.

GMO Labeling Update: Civil Suit Provision Delayed for One Year

Brian Dunkiel As we’ve discussed, Vermont’s first in the nation GMO labeling law (Act 120) is slated to go into effect on July 1 (a basic rundown of the law’s requirements can be found here.) The rules adopted by the Vermont Attorney General to implement the original law included a provision effectively delaying enforcement for certain packaged, processed foods until January 1, 2017 to allow retailers to clear inventories of foods manufactured and distributed before the law took effect. No similar protection was offered, however, from private civil lawsuits authorized by Act 120.

Responding to concerns from Vermont grocers and retailers about the possibility of consumer lawsuits over foods labeled before Act 120’s effective date, the Vermont legislature included a providing in this year’s budget bill delaying the civil suit provision in the law. Under the new law, consumers will not be able to bring Act 120 lawsuits until July 1, 2017.

This new provision is a welcome development for both food retailers, who may have faced the prospect of costly litigation over products ultimately not subject to Act 120’s requirements, and many of Act 120’s proponents, who believed that a rash of lawsuits against local grocers would erode local support for GMO labeling legislation in general.

Importantly, the revision to Act 120 does not delay the overall effective date of the law. Manufacturers and retailers still must comply with the labeling requirements by July 1.

Disclaimer: This article is provided for general informational purposes only and is not intended to constitute legal advice or to substitute for the advice of an appropriately licensed attorney. If the reader requires legal advice, s/he should contact a competent attorney licensed to practice in the reader’s jurisdiction. This article is general in nature and may not apply to particular factual or legal circumstances. The information presented is not an invitation to, and does not form, explicitly or implicitly, an attorney-client relationship.

Vermont’s GMO Labeling Law to Go into Effect July 1, 2016

On July 1, 2016, Vermont will become the first state in the nation to require food manufacturers and retailers to label certain foods that are produced with genetic engineering. The law, commonly known as Act 120, or the “GMO labeling law,” was signed by Governor Peter Shumlin on May 8, 2014.

The law generally requires that foods intended for human consumption and offered for retail sale in Vermont be labeled if they are “entirely or partially produced with genetic engineering,” as that term is defined in the statute. Importantly, the law applies not only to processed or packaged foods produced by food manufacturers, but also unpackaged, “raw agricultural commodities” advertised and sold by retailers. The law contains exemptions for foods consisting of or derived entirely from animals, alcoholic beverages, certain processed foods that contain essentially trace amounts of genetically-engineered materials, and certain prepared foods.

About a month after the law’s passage, the Grocery Manufacturer’s Association and several other groups representing food producers and retailers filed suit in federal court seeking to stop the law from taking effect. After denying requests to intervene in support of the law filed by the Vermont Public Interest Group and the Center for Food Safety, the court denied the challengers’ request for an injunction prohibiting implementation of the law. That decision is now on appeal at the federal appeals court based in New York. As of this writing, the law is still scheduled to take effect in July.

Assuming it is not invalidated by the courts, Act 120 is likely to raise a host of novel and potentially complex issues surrounding the definition of “genetic engineering,” the precise nature of the labeling requirement (especially for retailers), and application of the exemptions. Fortunately, regulations recently issued by the Vermont Attorney General—responsible for enforcing the law—contain a “safe harbor” provision for retailers who rely on sworn statements of suppliers. The provision creates a phased enforcement scheme where certain non-compliant processed foods will be presumed to have been manufactured prior to the law’s implementation for a year after the law goes into effect.

Nonetheless, the Attorney General has made it clear that “willful violations” of the law will be targeted immediately upon the law’s taking effect, and non-compliance could result in an enforcement action resulting in civil fines up to $1,000 per mislabeled product per day. Therefore, food retailers and manufacturers who have not already done so should consider carefully how Act 120 and the Attorney General’s regulations might affect their labeling obligations.

Attorneys in SRH Law’ food and green marketing practices have been tracking developments in the new law and in the legal challenge, and are available to assist producers and retailers looking for advice on how the law might affect them.

Brian Dunkiel on the challenge of handling contaminated soils

The proper disposal of contaminated “urban soil” unearthed during new development projects in Burlington has become a significant consideration for the city and its developers. Brian Dunkiel provides counsel to the city and others on contaminated soil management. Click here to read Seven Days’ in depth article examining the issue.

Vermont Supreme Court Affirms Dismissal of Challenges to Champlain Parkway Necessity Order

NEW ROUND OF FEDERAL AGENCY SCRUTINY OF CBD PRODUCTS

Hula Tech Campus to Open in Blodgett Oven Factory Buildings

Vermont Supreme Court upholds 2011 Wetlands Conditional Use Determination for Burlington’s Champlain Parkway Project

Your Opportunity Zone Project and Zoning and Act 250 Considerations

SRH Law Client, Devonwood Investors, Receives Zoning Approval for BTC Redevelopment

Burlington Town Center Announces Collaboration with Local Firms on Redevelopment Project

GMO Labeling Update: Civil Suit Provision Delayed for One Year

Vermont’s GMO Labeling Law to Go into Effect July 1, 2016

Brian Dunkiel on the challenge of handling contaminated soils

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