Some City Councilors See Positives With Employment Security Plan

CONCORD, NH — The Concord City Council will consider whether or not to approve a new purchase and sale agreement for the former Employment Security building project with an out-of-state developer Monday and at least three of the city's at-large councilors are speaking positively about the project. Dol-Soul Properties, a consortium of real estate developers led by the Dolben Company of Woburn, Massachusetts, is asking for the city to pay an additional $3.5 million to develop the South Main Street parcel – above and beyond the millions the city has already spent to acquire and mothball the building.

Dolben – which has two developments in Concord – is proposing to construct 125 new market rate apartments but says the current agreement doesn't make the project viable.

Three of the city's at-large city councilors – Byron Champlin and Mark Coen, who are both up for re-election in November, and Fred Keach – are leaning toward supporting the project.

Coen said he didn't see the $3.5 million of additional incentives – which will be derived by borrowing against the future tax revenue of downtown parcels via the Sears Block tax increment finance (TIF) district – as a subsidy but an investment because the financials show that the city will recoup its money.

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"I look at the TIF districts set up, the success we've had in Concord with it, and it's paid off 10-fold," he said. "(TIFs) created better areas so that's worth something. As a citizen of Concord, when I drive into Concord, I don't want to see an area with weeds or an abandoned Sears building."

Coen, however, does understand that the Dol-Soul Properties request is "right on the edge of what I can call acceptable; it does meet the criteria but that's the maximum." He would like to "get back to what TIF districts are supposed to do," and not just be a financial substitute for other sources of capital.

"It's an important piece of property," Coen added, "it goes back five to seven years, and we wanted to make sure we had some say in it instead of the state selling it to a developer."

Keach agreed.

"I definitely have some concerns," Keach said. "Should the taxpayers be in the business of picking winners and losers? But, we purchased the building and that was the goal."

Keach said the economics of the proposal "make total sense" if one looks at the $3.5 million as an added investment returning close to $600,000 more annually in property taxes into the future.

"I'm a firm believer that TIFs work and they are effective," he said, adding, "you wouldn't have seen any of the great things in the last 20 years; all this development … would not have occurred without TIF districts."

Champlin said the project was "a big risk" – one of the biggest ever considered by the city – but it could have big rewards, too, as with anything. Since the project is in the heart of downtown and will bring in more people who will walk Main Street, shop and eat, along with the future revenue, "it's a huge plus," he said.

"What I find, with the conversations I have been having, is it's such a complex project, in terms of all the pieces to hold together, that it takes time for people to get their heads around it, to see how it works," Champlin said, "In terms of the city, I think the city staff has worked hard, and the city council has provided scrutiny and viability of the project, and tried to build in safeguards."

There Are Concerns

Champlin, Coen, and Keach all raised concerns though not so much about the project but housing in the city, in general. Limited vacancy rates due to lack of new construction, zoning, the state's tax system, and other issues are on the minds of councilors.

The new market rate units – studios to two-bedrooms, in the $2,000 a month range – are expected to be pitched to younger adults without families and empty-nesters; which should free up other apartments around the city as well as single-family homes offered for sale. At the same time, there is a shortage of accessible housing, especially for employees of restaurants and stores downtown who aren't making the median income of the city, about $61,000 annually.

"It's increasingly expensive to rent" in the city, Keach said, especially for workers downtown, many of whom commute into the city from Franklin and Pittsfield, where rents and properties are less expensive.

"My focus has to be a little more broad than the developer's," he said. "I think that is the solution – not shutting down and throwing cold water on these great projects – but much more needs to be done to the other end of it."

Keach suggested that the city might want to consider what Boston has which is a 10 percent set aside of accessible units with each large project or a fee put on developer's that would go toward a housing fund for future use.

Champlin said the desirable vacancy rate for a city the size of Concord is around 4 percent; it's currently around 2 percent, which means access to the real estate market is exceedingly low for a lot of people. Many of the businesses downtown – as well as future businesses, as the city continues to grow – need a workforce to fill the jobs and those workers need places to live.

"We also need new people coming in," he added. "If we don't have nurses coming in, who is going to take care of (the aging population)? We need new people coming in, to fill those jobs, as you and I retire; it's a huge problem and one I've been trying to quietly work on."

Coen stated that getting the Sears Block TIF district properties back on the tax rolls will also need to be a priority. Under the current financials, it is expected to be paid off and running a positive cash flow – assuming future councilors and city administrators don't borrow against the assets some more – by 2032. It may not lower property taxes but "it certainly will help keep taxes from increasing at a higher rate," Coen said.

At-Large City Councilor Amanda Grady Sexton declined to comment saying she was still eyeing all of the specifics of the project.

Linda Kenison, who represents Ward 6, where the parcel is located, didn't return an interview request.

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