ST. ALBANS CITY — The ribbon has been officially cut on the new state office building on Federal Street.

Gov. Peter Shumlin, was on hand Monday along with representatives from the city and all of the various private companies involved in the project.

The new building, which is owned by the ReArch Company, will add $8 million to the city’s tax rolls.

The former state office building on Houghton Street has been sold to Mylan Technologies, Inc., which is expected to add to its growing workforce as a result of the purchase.

“Welcome state employees,” said Mayor Liz Gamache. “We’re delighted to have you move into your new digs.”

The relocation of the state office building brought 170 state workers into the heart of downtown in a four-story building constructed adjacent to a new parking garage.

Shumlin spoke of the “extraordinary transformation of a downtown.”

“Store front after store front that were completely empty not long ago are now extraordinary places to shop and eat and get together with other people,” said Shumlin.

He thanked state employees “who have gone along with this vision,” and Mylan, “which had to make some significant money challenges work to make this happen.”

“This is about every piece coming together to make St. Albans and Franklin County a good place to work and live and raise a family,” said Shumlin.

St. Albans City Manager Dominic Cloud spoke of the challenges involved, including the discontinuance of two-thirds of Houghton Street for Mylan, 25 easements needed for the parking garage construction, the demolition of the three buildings, and a combined $20 million in public and private investment. It also needed two votes by the Vermont Legislature.

Stating, “behind every good manager is a good consultant,” Cloud thanked David White of the real estate firm White + Burke and Peter Cross of Cross Consulting Engineers for their services.

John Illich, founder of ReArch, said he was very proud of the work his staff did on this project. He also recognized the firm that designed the building, Vermont Integrated Architecture. Designing a modern building and weaving it into the historic fabric of an existing city is not easy to do, he said. “I think they did it with great success,” Illich added.

Not everyone present was cheering on the project. City resident Joyce Audette questioned the need for a new building for the Agency of Human Services when the community lacks a treatment center for addiction and a teen center.

“Addicts, they need help,” said Audette.

Gamache said the state office building relocation is an economic development project, and that development is essential to dealing with the drug problem.

“This is about our community… about creating hope for the future,” said Gamache.

Mylan’s expansion will increase the city’s tax base and bring more good paying jobs into the city, according to Gamache. That will increase the resources available to address other problems.

Economic impact

In 2013, economist Jeff Carr did an economic analysis of an interconnected series of events including the construction of the new state office building and city garage, the sale of the old state office building to Mylan, and the use of tax revenues generated by those changes for tax increment financing projects, primarily the Federal Street Multi-Modal Connector.

Over 20 years, those projects are expected to increase economic activity in Vermont by $735 million, and increase disposable income by $61 million, with 191 new jobs created, most of them at Mylan, a manufacturer of transdermal medicine delivery systems.

While the state will be paying rent to ReArch at its new location, the increased tax revenue from the economic expansion will outweigh the cost of the rent, according to Carr’s analysis, which took into account all of the costs borne by the state.

“In the long run, the project is expected to materially alter the regional economy through a significant amount of new investment and related business investment activities,” concluded Carr. “Therefore, it is expected that the regional economy of Vermont will have a correspondingly higher level of investment, employment, output and disposable income than would be the case in the absence of the proposed development, construction and operation of the new state office building in St. Albans.”

Carr compared the new building to a stone thrown into a pond, creating a “ripple effect” through the economy of Franklin County.