Government Seeks New Owner for Montpelier's Federal Building

The federal building in downtown Montpelier Credit: File: Kevin Mccallum ©️ Seven Days

The U.S. government is seeking a new owner for Montpelier’s federal building, which was damaged by flooding and closed in July 2023.

In a press release, the U.S. General Services Administration said the building at 87 State Street is now in its “disposal process,” which allows the government to transfer, exchange or sell the property. The release, which named seven other buildings around the country that are now in disposal, said the GSA would seek public input as part of the process.

“The City would like to see the building or property repurposed for a use that is beneficial to the community,” city manager Bill Fraser said in an email to Seven Days on Thursday. “That could include hotel/retail, housing, or some other use. It is a prime downtown location.”
The announcement came as a surprise to the Montpelier Commission for Recovery and Resilience, which formed after the flooding. Commission chair Ben Doyle said he was sorry to learn that the feds aren’t going to rehabilitate and retain the 1964 building, which also housed the local passport office and a federal courtroom. It’s made with marble from the Vermont town of Rochester.

“It’s disappointing in the sense that a robust federal presence in the state capital is really important,” Doyle said. But it’s also an opportunity for the city and local nonprofits to turn the multistory structure into something that can strengthen Montpelier’s economy, such as housing, he said.

“It’s a central building in our downtown, and we’re hopeful that the GSA will work with the congressional delegation, state officials and city officials to find some kind of public benefit,” Doyle said.

The flood-damaged property includes 1.6 acres and was valued at $7.8 million on Montpelier’s 2023 grand list. That inventory, though, was published just a month after the North Branch inundated downtown, heavily damaging State Street buildings, and it might not reflect the building’s condition now.

In the wake of the flooding, many building owners had to replace utilities stored in inundated basements. The state and private landlords have spent millions repairing their downtown properties.

In a letter to the Commission for Recovery and Resilience, the GSA said floodwaters had filled the basement of 87 State Street and rose to 42 inches on the first floor. While the federal agency removed the water and disinfected the building, there are still high water levels in the elevators and sump pits.

“This condition, coupled with an ever-present flood risk due to the proximity of the Winooski River and the North Branch … led us to the decision to dispose,” the letter said.

The future of 87 State Street has been the subject of intense local interest because of its central location — and because it housed the Montpelier Post Office, which closed abruptly after the flood. In October, after 15 months closed, the U.S. Postal Service opened a new full-service counter in a nearby commercial building.

The prominent federal building also functioned for decades as a gathering place of sorts, hosting regular political demonstrations on the broad paved area and sidewalk out front. The U.S. Department of Agriculture was also located there, along with congressional offices, Doyle noted.

“It’s disappointing, but it’s the practical reality of where we are,” he said of GSA’s decision. “Let’s make some lemonade out of it with a housing solution or an economic development solution that can help signal what is next for our downtown.”