City council approves $1M sale of former Employment Security building

  • The Concord city council voted Tuesday, Oct. 10, 2017, to sell the former Department of Employment Security building on South Main Street, which has been empty for three years. Monitor file

Monitor staff
Wednesday, October 11, 2017

The Concord city council has decided to drastically alter the landscape of South Main Street by selling the former New Hampshire Department of Employment Security building to an out-of-state real estate company.

The city voted to sell the property, along with the Fayette Street parking lot, to Dol-Soul Properties, a developer out of Woburn, Mass., for $1.08 million at Tuesday night’s meeting. The council also voted to change the zoning around the building and to cap the project’s impact fees at $150,000, which is a $25,000 discount from the normal impact fee schedule.

The motion gives Dol-Soul the chance to “fix the one hole in the smile” that is Concord’s downtown renovation, said Drew Dolbin, executive vice president of the Dolben Companies, referring to the building’s somewhat ugly appearance.

“We think this particular spot is an exciting place,” he said, later adding, “The location on Main Street is a unique opportunity to do something special.”

However, sale of the building could take up to a year, city officials said.

That’s because the city wants to make sure the project is locked in before giving up the building, according to Matt Walsh, Concord’s director of redevelopment, downtown services and special projects. The sale agreement comes with a series of conditions, including that Dol-Soul get all of its permits, financing and building contracts in place before the city lets go of the property.

Similarly, Walsh said the demolition of the building, which will be done with tax increment finance funds from the Sears Block TIF District, will not take place until Dol-Soul progresses to a certain point in the project.

The development plan is for a seven-story building with 5,000 square feet of commercial space and 109 market-rate apartments, ranging from studios to two-bedrooms. Between 50 and 100 parking spaces would be included, possibly including some underground parking.

That’s less than what the city requires for residential spaces of that size, so the proposal calls for the city to create a permit system via a new ordinance and provide up to 82 permits to tenants to use in a number of city parking lots and spaces. That ordinance will have to be created in the coming months.

The plan also called for rezoning the entire 1¼-acre block between South Main and South State streets, bordered by Thompson and Fayette streets, to what is known as Central Business Performance. This would allow 80-foot-tall buildings instead of the current 45-foot building limit, and would remove requirements for building setback and for on-site parking.

The rezoning covers Eagle Hall, the Equality Health Center and a private home that is divided into rental units. The rezoning will give the owners the option to expand into current parking areas, and it would likely affect their future sale value, Walsh said.

The city bought the building and lot for $1.58 million in 2014 and has spent several hundred thousand dollars to weatherproof it. The city also paid about $2 million to bury the power lines in front of the site during the Main Street project. Overall, the city has spent $3.27 million to redevelop the current building.

But Walsh said the city stands to gain not just from having more apartments close to the downtown; there is also a financial impact. The building would have an assessed value of $12.5 million, and is estimated to bring in $5.6 million in revenues over the course of 10 years, the bulk of which would be made up of property taxes and the sale of the property. Overall, he said, the development would bring in a net return on investment of around $2 million.

Aside from Dolben, only two people spoke about the project during the proposal’s public hearing. Tim Sink, president of the Greater Concord Chamber of Commerce, said the Dol-Soul development would be a boon for bringing more young professionals to the city and would further energize the city’s downtown.

“The lack of rental housing in the city is a factor in businesses being able to recruit talent,” he said.

“This would be an economic shot in the arm,” he added.

Roy Schweiker, who is running for mayor, said he felt differently.

“The city needs to quit giving downtown all the money if it wants to fix itself up and pay for the police, fire and schools,” Schweiker said. He later added: “Every development has been a negative, because all the money goes to the TIF district, and everyone else has to pay for it.”

Dol-Soul Properties is a group consisting of three entities: a real estate firm called Dolben Co. Inc. based in Woburn, Mass.; Vermont developer Ari Souliotis, who owns a number of Dunkin’ Donuts locations in that state; and Tim Vanech, founding partner of a Norwood, Mass., investment firm called Shorepoint Capital Partners.

Dol-Soul Properties owns Pembroke Place on Manchester Street and Penacook Place on Fisherville Road in Concord.

Concord will have to pay about $300,000 to demolish the building; action to appropriate those funds was pushed to next month, as law requires approval of TIF funds be done at least 15 days after a public hearing.

Walsh said construction on the project could begin as soon as next summer or fall, with completion possible in late 2019 or early 2020.

(Caitlin Andrews can be reached at 369-3309, candrews@cmonitor.com or on Twitter at @ActualCAndrews.)