The Burlington City Council met in special session Wednesday night to approve the purchase agreement for Burlington Telecom, the city’s cable and broadband utility. The deal now heads to the state.
The city of Burlington is selling Burlington Telecom to Schurz Communications and ZRF Partners. The partnership will buy Burlington Telecom for $30.8 million and Schurz will be the controlling partner.
Councilors spent the first hour of the special session quizzing city attorneys about the details of the purchase agreement. City Attorney Eileen Blackwood: “The idea is that we’re trying to sign this document by December 31st and under the agreement with Bluewater if this agreement is signed by the 31st then the city is entitled to 50 percent of the proceeds which then get shared with CitiBank. From here there’s a whole lot of work yet to do so the sale isn’t completed until sometime down the road. And the next big step is the Public Utility Commission approval. And then once that happens there will be a final closing of the sale.”
City Council President Progressive Jane Knodell then opened the floor for public comments. Five individuals stepped up and most wanted the panel to postpone the vote and reconsider the local coop bid. Burlington resident David Lansky led off the comments. “We have something in Burlington that’s really quite unique and very wonderful and the choice this council and administration has made serves Bluewater Holdings, serves CitiBank, but I don’t think it serves our community well.”
Knodell: “Our second speaker is Dean Corren.”
Corren: “I’m here one last time out of all these many times to once again ask you not to do this, as far as selling or really giving away a $60 million asset, selling at fire sale prices when there’s no need for a fire sale.”
Knodell: “Paco DeFrancis.”
DeFrancis: “I think this is a great sales agreement. There’s a lot of really good aspects about the Schurz and combined with some of the elements from ZRF this is a great framework that’ll preserve BT and be a game changer for the whole Chittenden County economy.”
During debate over the resolution Ward 5 Councilor Democrat Chip Mason outlined the benefits he says approving the agreement will bring to the city including retaining all BT employees and financial commitments to the community by the buyer. “I was on the council along with a number of my colleagues when we were literally months away from trial in federal District Court you know facing a $30 million claim for breach of contract, fraud and a legitimate very legitimate claim for taking the assets back. I think you have to look at all the benefits that flow to the city out of this agreement. It’s a $30.8 million deal with a potential earn out taking that higher. The city will have the right if Schurz ever sells this to buy it back. That’s not a bad result from a body and an institution that was about to lose that asset to City Capital.”
Ward 2 Progressive Max Tracy, who attended the meeting by phone, was one of two councilors who voted against the agreement. “We had an opportunity on the 27th to go with an entity, Keep Burlington Telecom Local, that would have resulted in significant local controls for a member owned cooperative. Instead of doing that we decided to go with a bid that was not on the table at the beginning of the night and that the public did not have an opportunity to weigh in on. And I do not feel that the public has been well enough incorporated in this final element of the sale process.”
Burlington city councilors approved the asset sales agreement on a 10-2 vote. The sale of Burlington Telecom must now be approved by the Vermont Public Utility Commission.
Audio of the city council meeting is courtesy of Channel 17 Town Meeting Television.