An affordable housing developer is proposing to buy land at the former tannery site in Penacook to build an apartment complex with 54 units, mostly designated for low-income residents.
The offer comes after the city led a $4.86 million effort – using mostly state and federal funds – over the course of a decade to buy and clean up the brownfield site of the former Allied Leather Tannery, which closed in 1987.
The tannery – and the textile mill before it – was foundational to the village of Penacook. But in 2002, years after the site was abandoned, the city determined “the deteriorated condition of the property, coupled with significant environmental issues which accumulated over 160 years of industrial use, would make redevelopment of the property infeasible for the private sector,” according to a recent report.
Beginning in 2002, the city amassed 6.15 acres at the site and eventually sold off 2.1 acres of cleaned-up land for $338,200 in 2011, where the Penacook Family Physicians office is located.
The Caleb Group, a nonprofit Massachusetts-based housing developer, made the city an offer Nov. 29 to buy most of the remaining land for $540,000. It plans to use federal Low Income Housing Tax Credits to construct two buildings of 24 units and 30 units, with more than 100 parking spaces.
Forty units would be reserved for households earning 60 percent or less of the county’s median income, as defined by the U.S. Department of Housing and Urban Development. That’s about $40,000 for a couple or $35,000 for a single person.
Six units would be reserved for those earning 30 percent or less of the median, $20,000 for a couple or $17,500 for a single person.
Matt Walsh, the city’s director of redevelopment, downtown services and special projects, wrote in a March 22 report to the city council that it would be “a multigenerational family housing project, with a preference for senior citizen tenants.”
In 1957, the tannery employed 530 people, making it by far the biggest of its kind in the state, according to a history compiled by the state’s Division of Historical Resources. It produced upward of 3.5 percent of all the shoe upper leather made in the United States at the time.
As it stands now, the 35 Canal St. site on the banks of the Contoocook River is surrounded by a chain-link fence that warns against trespassing. The tannery’s main building collapsed in 2008, and after an extensive environmental cleanup, mounds of dirt sit in its place.
A vision plan for Penacook produced in 2015 pointed to the tannery site, which is only steps from the village center, as a prime location for development. It “should be permitted the highest intensity use of the village,” the planning document said, adding that buildings as tall as six stories could be permitted there by conditional use.
Popular recommendations at the time before the city put the property on the market in August 2015 included a grocery store or mixed-use development with commercial uses on the ground floor and residential above.
But “developer interest has been very low,” Walsh wrote in his report.
The relatively sparse population density and associated low traffic counts of about 7,000 vehicles a day have been two of the factors, he wrote. Councilor Brent Todd, who sought to attract a grocery store to the village, said even small supermarket developers would prefer a bigger site with 20,000 cars passing each day.
“Because of the size and configuration of the remaining lot portion of the tannery site, it’s not conducive to a grocery store,” Todd said, “along with that nemesis which keeps cropping up, which is the daily traffic count.”
Other factors troubling the site are that only 2.5 of its 4 acres are developable, due to the environmentally hazardous materials encapsulated at the site, and its sunken nature about 8 feet below the adjacent Canal Street. The undeveloped 1.5 acres could one day become a riverfront park.
Todd and Councilor Steve Shurtleff, both of whom live in Penacook, said they’re looking forward to an upcoming public hearing in the village to hear their neighbors’ thoughts on the proposal.
“I’ll be anxious to hear what our fellow residents think,” Shurtleff said. “People will be very blunt and very open and very honest with their thoughts, and that’s what we want to hear. Penacook has been very good – they’ve waited a long time to have that site developed.”
What remains to be seen is whether they’d prefer to wait longer – in hopes of some type of development that attracts more economic activity – or go ahead with the proposal.
The property would be worth an estimated $3 million after the two-phase construction is complete in 2021 or 2022, according to the report. That would result in roughly $115,000 in new property taxes each year.
A maximum of 14 units would be two-bedroom; the rest would be one-bedroom.
Taken alongside the taxes paid on the adjacent lot, which was sold in 2011, and the total sales value of both properties – more than $850,000 – the city could recoup its $2 million investment on the site in a number of years.
“That’s a huge investment,” Todd said, “so we do need to start to see – or we want to start to see – some kind of return on that.”
Todd said he’d bring a couple of “key questions” with him to the meeting on April 25 at 7 p.m. in the Penacook Elementary School cafeteria, which will feature representatives of the Caleb Group, as well as the city and its real estate broker.
“Are folks comfortable with waiting longer, until they find a project that really suits them? Then the question on the other side of it is, what happens if that project just doesn’t come along for Penacook?” Todd asked.
(Nick Reid can be reached at 369-3325, nreid@cmonitor.com or on Twitter at
@NickBReid.)