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For sale: a fixer-upper on North Main Street

Early Friday afternoon, the Barley House lunch crowd lingers in the sun at outside tables.

While shopping in Runner’s Alley, a woman laces up a new pair of shoes.

A handful of customers wander through an open shop door to browse beads and jewelry.

But if those customers stroll north beyond the bright blue-and-green awning at Bead It!, they’ll find only the dim and desolate storefronts in the corner building known as the Vegas Block.

At the intersection of North Main Street and Loudon Road, the brick building is a prime piece of downtown real estate. It’s also set for public auction later this month. And attracting tenants, business or residential, to the building as it is will be a tall order for the next owner.

“This building has a bad reputation for years and years,” property manager Nina Mujakovic said. “It’s about time to take that label off by bringing it up to date and . . . (making) it a pleasant place to be.”

Mujakovic won’t be the one to do that, though. Her partner, Emin Halilovic, bought the building in June 2008, and if they can’t find a buyer in about the next two weeks, the bank is going to foreclose.

So who will?

The Vegas Block has more than 30 upper-story apartments and multiple now-vacant storefronts on the street level. And it’s a fixer-upper: Mujakovic guessed it could take more than $1 million just to renovate the building and make it competitive with other downtown properties. She has heard from two potential buyers, but she couldn’t disclose more about either one.

The next owner won’t be the city of Concord, said Matt Walsh, director of redevelopment, downtown services and special projects – though the council will vote tonight on buying the New Hampshire Employment Security building on South Main Street, another blighted property.

“We haven’t had any conversations along those lines at all (about the Vegas Block). . . . It would be the city’s strong preference to have a private-sector buyer acquire it and redevelop it,” Walsh said. “Obviously the city has certain tools at its disposal that we could use to help a developer do that.”

Carlos Baia, deputy city manager for development, said he would hope to see a new owner bring more market-rate housing to that building. Based on an April survey, Baia said at least 267 housing units in the core downtown area are subsidized in some way, while only 33 market-rate units have been added to the downtown area in the past 25 years.

Baia called those numbers “very disproportionate,” saying the city would encourage the building’s next owner to add more market-rate rentals to the mix.

Whoever the next owner is, the owners of nearby businesses would like to have neighbors on the ground floor again. Mujakovic’s Rooster Convenience Store closed shortly after opening in 2009, and Siam Orchid moved down the street last month. New spots such as Runner’s Alley and Wellington’s Marketplace have joined this end of Main Street in recent months, and Bead It! owner Donna Norlund said she wants to see retail openings around her shop continue.

“Really, most of the spots at this end now are filled right in,” she said.

Norlund suggested a women’s shoe store at one of the empty Vegas Block windows. One door down, Runner’s Alley manager Sean Gray suggested a restaurant with a healthy menu.

“Just to get some more foot traffic,” he said, handing a box of shoes to a shopper.

Since Halilovic bought the building in June 2008 for $2.45 million, Mujakovic said it has been “an agonizing process.”

The Monitor has reported Halilovic’s company, Denev Realty, paid almost no money down on a $1.9 million loan on the building. And he didn’t know the hot water had been shut off because the previous owner was more than $20,000 behind on his bills to Concord Steam. Tenants complained of inadequate hot water, elevator service and outdated windows.

A Merrimack County Superior Court judge fined the previous owner more than $15,000 for those failures in December 2008. A judge ruled in 2010 that Halilovic would not have to pay damages for the days he had also left his tenants without heat and hot water in the falls of 2008 and 2009 – but he would have to pay the heating bill one month early each year. Halilovic had told the court he was unaware of the city’s requirement that landlords provide heat by Sept. 15 each year.

“Here were countless problems that we didn’t expect to face,” Mujakovic said. “I know that we were so eager to help and grow and live the American dream, so we didn’t do our due diligence and I admit that.”

But their intentions were good, she said.

“I wanted to see flower baskets outside the building,” she said. “I wanted to make it very welcoming and a place that everybody can go home (to).”

Instead, Mujakovic said every penny went to property taxes and a massive loan, so Halilovic didn’t have the cash needed for major fixes to the building. The owner owes more than $62,000 to the city for unpaid taxes, according to city records. The building has been cited for several code violations over the years, but Mujakovic also said the city’s housing inspector degraded Halilovic in front of his tenants. On one occasion several years ago, Mujakovic said she filed a letter complaining about the way the inspector had treated Halilovic during a visit to the property.

“The city found every possible reason to make his life miserable as a landlord,” she said.

Code Administrator Michael Santa described the city’s interactions with the Vegas Block owner as “a working relationship.” If a resident files a complaint, the city sends an inspector to check it out. Concord also does an annual inspection at the Vegas Block because many of its tenants are subsidized by Section 8 housing vouchers.

“We’re working . . . on behalf of the tenant to make sure that the dwelling unit that they live in meets the minimum standard for the city, so sometimes we’re coming up with some safety violations that are going to cause the owner to spend money and that doesn’t go over too well,” Santa said. “But it is the ordinance. It is the ordinance and we work to provide the best level of safety for the interests of Concord. Sometimes people aren’t too happy, but I don’t remember what Nina is talking about.”

Halilovic has generally been prompt in fixing any problems in the apartments, Santa said, including complaints about the elevator system and windows in need of repair.

“We have been able to resolve all of the violations that have come up,” Santa said.

Halilovic is “a hardworking man,” Mujakovic said.

“We did everything possible in our power, in our reach, to improve the conditions of the building,” Mujakovic said. “And apparently it wasn’t enough. Whoever purchases the building, they’re going to (have to) take the tenants, ask them to leave and fix it up from top to bottom.”

The building is valued at $1.8 million, according to the city’s assessing records. Many of the apartments are empty, though Mujakovic would not say how many are still occupied. If Mujakovic does not find a buyer for the Vegas Block, the public auction is scheduled for June 23 at 11 a.m. at 148-158 N. Main St.

Downtown on the agenda

The Concord City Council will decide tonight on whether to buy the now-vacant New Hampshire Employment Security building at 32-34 S. Main St.

The councilors will discuss and vote on whether to acquire the state property for $1.9 million; whether to finance that move through the Sears Block Tax Increment Finance district; and whether to demolish the downtown building or leave it standing if purchased.

Weatherizing the building to leave it standing would cost $190,000. The cost to knock it down would be $325,000.

“One, do we want to acquire it, and if we do acquire it, what do we want to do with it?” City Manager Tom Aspell said.

The council will also vote tonight on whether to spend $115,000 on a study of the city’s parking. Concord’s parking fund is going to be in the red in less than two years, according to a report to the council by Matt Walsh, the city’s director of redevelopment, downtown services and special projects. That fund is supposed to sustain itself on meter fees and leased spaces, without taxpayer dollars.

The study’s goal would be to “develop a strategy to help restore the parking fund to financial solvency, as well as to address other parking-related concerns,” Walsh wrote in his report.

The meeting will begin at 7 p.m. in council chambers.

A burger, with charity on the side

During this year’s annual Burgerfest, the Barley House will again raise money for the Children’s Hospital at Dartmouth-Hitchcock.

“For every specialty burger sold, the Barley House donates a dollar,” manager Kevin Graham said.

Every burger also has a local donor to match the Barley House’s contribution, and New Hampshire Distributors will donate a dollar for every beer sold that they have supplied to the restaurant. The money goes to Fred’s Fund, which supports parents and families of children treated in the Pediatrics Intensive Care Unit at the children’s hospital.

Owner Brian Shea said this year’s specialty menu includes at least 11 burgers, made of everything from salmon to chorizo to venison, and at least 16 businesses and individuals have signed up as matching donors.

The theme for this year’s Burgerfest is “The Quest for 3,000.”

“Last (year), we sold just over 2,800 burgers,” Shea wrote in an email. “So this year we are going for the 3K mark.”

Burgerfest begins Friday and will continue through June 21.

Go ‘around the world’ with a Concord yo-yo

Forget the souvenir snowglobe.

YoYo Heaven is now selling signature Concord yo-yos in its store at 132½ N. Main St., owner Andy McBride said. On one side is a picture of the State House dome, and on the other is an inscription about Concord and the store’s name.

“Because of our location right across from the State House, we get a fair number of people that are here on vacation and visiting from out of town,” McBride said. “They do stop by the store, and they look for something to commemorate their visit to Concord.”

While the souvenir yo-yos aren’t professional grade, McBride said they’re well-made and perfect for more casual use.

“They’re a great looping yo-yo,” he said.

YoYo Heaven is selling the Concord yo-yos for $6.95.

(Megan Doyle can be reached at 369-3321 or mdoyle@cmonitor.com or on Twitter @megan_e_doyle.)

Legacy Comments3

I'm no real estate mogul, but how is it these ovic slumlords didn't know about the $20,000 owed to Concord Steam before buying the Vegas Block property? Where was their attorney on this matter? How is it they strapped themselves down with a $1.9mil loan without realizing some money would have to be put into the property, sooner than later? Where was the building inspector? How is it they got the loan at all?! Appears to me they bought the property via smoke and mirrors, which seems totally irresponsible on the part of everyone involved.

The sad reality of these turn of the century brick blocks is most all of them are in need of expensive rehabs. Maybe someone can make a go of it in this one...maybe...but in other small towns, no way. Their fate is the wrecking ball.

The Endicott Hotel recently got renovated, instead of demolished. It can be done.

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