"City aldermen approve 79-E tax relief requests for two projects By Paul Feely Union Leader Staff Oct 17, 2023
Manchester aldermen approved two applications for the RSA 79-E tax credit program Tuesday. The projects involve properties at 25-27 Lowell St. and 215 Canal St. The tax credit program lets developers who improve blighted properties in downtown areas delay paying property taxes on the value of the improvements.
To qualify, the applicant must meet several requirements under the statute, including that the rehabilitation of the structure must cost at least 15% of the pre-rehabilitation assessed valuation, or at least $75,000. In April an applicant, Wellington Trade Center LLC — headed by city developer Ben Gamache, which owned the existing five-story, steel-frame office building at 25-27 Lowell St. — proposed converting the structure into a 55,000-square-foot apartment building, with 48 multifamily residential units and two first-floor commercial units.
Gamache applied for the 79-E tax credit but was rejected by aldermen on a 9-4 vote to receive and file the request. Edward Sapienza, Bill Barry, Pat Long and Joseph Kelly Levasseur voted against the motion to receive and file the application.
According to a report submitted to aldermen by city Economic Development Office Director Jodie Nazaka, the property is now under an agreement for purchase and sale with new owner(s) North Street Properties LLC — which has submitted a new RSA 79-E application — and the number of units has grown from 48 to 73, with a larger proportion of one-bedroom units.
Built in approximately 1940, the Wellington Trade Center has long been a primary office building within the Downtown and the former location of Mountain Trains and Hobbies.
According to Nazaka, the building was built in 1940 and is considered in ‘average’ condition.
The proposed project would convert the existing five-story, steel-frame office building into a 55,000- square-foot apartment building with 73 multifamily residential units and two first-floor commercial units. The composition of the units includes two commercial units situated at the front of the building along Lowell Street, seven studio apartments, 61 one-bedroom apartments, and five, two bedroom units.
The project carries a proposed budget (site acquisition costs excluded) of $13,968,991.
The 2021 assessed valuation of the property is $3,165,100, and the 15% threshold needed for approval under RSA 79-E is $474,765.
The adjusted total estimated project construction cost is $17,118,991, meaning the proposed project cost easily meets the substantial rehabilitation requirement.
The applicant agreed to provide four units as Section 8 housing.
Work on the project would get underway Dec. 1 and last about a year, with an estimated completion date of Nov. 30, 2024.
Aldermen approved the request “given the data shared by the applicant and the city’s pressing need for more housing units” for a six-year term of relief under 79-E.
City Assessor Bob Gagne estimates the property’s assessed value after renovation will be $11.8 million for a 73-unit residential conversion, increasing the annual property taxes by approximately $164,699 in year one.
The tax subsidy results in an estimated cost savings of $1,092,444 over six years for the applicant."
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