Developer Seeks $371K Subsidy For New Concord Apartments

CONCORD, NH — A developer that has been on a buying spree in the capital city of late is requesting a tax abatement from the Concord City Council that will cover nearly 15 percent of the company’s redevelopment costs for new apartments downtown. On Dec. 11, 2017, the council will consider a six-year tax abatement for State Pleasant Street LLC of Manchester, a company that purchased four properties in the Pleasant and South State Street areas of the city in September. The parent company of State Pleasant Street LLC is Elm Grove Properties, a real estate firm that owns and manages more than 1,000 residential units in both New Hampshire and Massachusetts.

In September, the company purchased 5-7 S. State St., 15-17 Pleasant St., and 19 Pleasant St. for more than $1.8 million. It also purchased an adjacent property – 26-32 Pleasant St. for $495,000.

The company has petitioned the city for a tax abatement of $370,962 during the next six years via the state’s 79-E Community Revitalization Tax Relief Incentive – a provision that allows developers to forgo property taxes if they improve properties, based on “unique attributes” – in order to renovate two of the properties.

The company purchased the South State Street property – known as the Kearsarge building – for $740,000. It is proposing to spend about $2.2 million to renovate the building into 18 new market rate apartments. The apartments will be studio, one-bedroom, and two-bedroom units. The LLC recently received zoning board approval to convert commercial space on the ground floor into residential, according to staff reports. The LLC is proposing to spend $1,879,336 to complete the project. The building, according to the city, will more than double in assessed value after the project is completed. It is requesting a $283,199 tax break across six years.

With the 15-17 Pleasant St. property, the Star Building, which was first constructed as a theatre in the 1900s, the company purchased it – as well as 19 Pleasant St., the building and parking lot between next door – for $1.16 million. The company is proposing to spend $925,000 to convert office space to 13 “micro flats” – essentially, studio apartments – and market them to young professionals. According to staff reports, the building will increase in value by about 40 percent when the apartments are constructed. The company is spending $733,595 to renovate the property and is requesting $87,763 in tax relief for that building.

Two weeks before purchasing the Star Theatre, the Kearsarge, and the parking lot, the LLC bought 26-32 Pleasant St., the building across the street. The building was the former home of WEVO – the flagship station of New Hampshire Public Radio – and WNHN, which recently moved out of its space there due to increased rent.

State Pleasant Street LLC pointed to the historic significance of both buildings while city staff highlighted the “public benefits” to be that new apartments units will “create additional vitality as these new households will ‘shop, dine, and play’ downtown thereby contributing to the economic vitality of the area.” Staff greenlighted the request in its reports.

This is the second time in recent years that a developer with numerous, multi-million holdings has requested a tax abatement after already making the investment to purchase the buildings.

Jonathan Chorlian, the developer of the Sacred Heart Church condos on Pleasant Street, requested a $350,000 tax break from the city via the 79-E provision earlier this year although that break was withdrawn by the developer after public outrage over the request.

Remi Hinxhia, who purchased the Vegas Block building on North Main Street at auction, also requested the city for an abatement and received it, due to a commitment to ensure that the apartments would be market rate – in order to keep it from becoming the drug den it was before he purchased it.

The Endicott Hotel redevelopment project – another market rate building – also received an abatement five years ago after a fire while Steve Duprey and Chorlian’s Sanel Block project, the Penacook Village Laudromat, and the Washington Street condominiums in Penacook have also received abatements since the city approved 79-E.

The Concord City Council meets at 39 Green St. at 7 p.m. on Dec. 11, 2017.

Images via Tony Schinella, Patch staff.

Editor's Note: Chorlian withdrew his request for a 79-E tax abatement before city councilors had the opportunity to vote on it. That section of the story has been corrected.