Development Heats Up

After sitting vacant for over five years, the former Coca-Cola plant on Eddy Road in Manchester will soon be transformed into a Planet Fitness center. In another part of the city, Second Street, lined with multi-family homes and small businesses, is being closely eyed by planners who say the area, with some zoning changes, could be ripe for redevelopment, allowing for even more businesses and apartments.

After years of economic stagnation, these are just a few of the signs of life among developers, who are again on the hunt for projects. Developers and market experts say they see a resurgence in multi-family housing and commercial and industrial projects. I have seen acute interest in building renewal as well as in development of residential rental units this year, and some of these proposed projects represent the first of their kind in as many as 15 years, says Russell Thibeault, president of Applied Economic Research in Laconia. It is an exciting time in development.
 
What the Market Wants

Michael Bergeron, business development manager for the NH Department of Resources and Economic Development in Concord, says there is high demand for single story, free standing industrial space between 15,000 and 20,000 square feet. New construction for industrial use is rebounding in southern New Hampshire in areas such as Concord south to the border, along the Seacoast up to Rochester, and in the Keene and Lebanon regions, he says. The North Country is seeing slower development.

Developers, though, are looking for amenities that will make their projects appealing. It has to be close to an interstate highway, have a pool of skilled labor in the area, have easy access to water, sewer, natural gas, the regional airport and high speed telecommunications, Bergeron says. And it certainly helps to be a business-friendly town or city [with] zoning that makes it easy for developers to come in without endlessly reworking plans.

There are several areas of the state poised for development, according to Thibeault, especially municipalities in the process of renewal but with plenty of untapped opportunities. This also means that regions that have been slower to recover or that have already experienced a boom in development in past years may not be target areas for developers.

Some communities are investing in economic development tools that will make them more attractive to developers. The Southern NH Planning Commission and the 13 communities it serves are developing a program that covers some of the expense to get a site shovel ready and extends the validity of any plan approvals to five years instead of one to two. This allows developers more time to find financial backing and get their approved plan completed before time runs out, says David Preece, executive director of the Southern NH Planning Commission.

This program works in conjunction with improved zoning that allows more options, such as multi-use and more dense development on a parcel; something that opens up development options and increases a parcel's appeal, Preece says. In a nutshell, it is a method for property owners and developers to reduce the risk and upfront costs related to site development. So where are the development hotspots? Here's a sampling:

Manchester

According to Thibeault, the Queen City has several structures that are vacant or have been less-than-successfully repurposed. Our research shows tremendous interest in building rehabilitation projects. Today, rental demands have increased while home values are down. People simply want to rent, he says. And Manchester is a hot spot because it has the vacant buildings, which are affordable and ripe for development to fit those new demands.

He cites a project in progress at the old Amoskeag Millyard, which has struggled as office rental space since the 1980s. The Amoskeag Mill on Bedford Street is being developed by Brady Sullivan Properties in Manchester into 110 residential, one- and two-bedroom rental units, Thibeault says.

Dick Anagnost, president of Anagnost Investments Inc. in Manchester, who has more than 30 years of experience in real estate and land development, agrees with Thibeault. There are many opportunities and they can be found in the very rundown structures or those vacated for years, he says. They can be a gem because of pricing and it becomes part of the revitalization of the city for a developer to come in and make it serve the community in some way.

It was those very qualities that led Anagnost to take on the redevelopment of the former Coca-Cola plant. The building was vacant a long time and Coca-Cola wanted to get rid of it, so Anagnost says he got a good deal on the building, which he will close on soon.

Preece says areas of Manchester, like Brown Avenue and Second Street, are prime for redevelopment. He says, however, it may take the city adopting an overlay zone option, which essentially gives developers more flexibility in what is allowed. For example, the new zoning may allow greater occupant density in a specific area or more options for multi-use development.
Bedford did this to make a zone more attractive for development, he says. They adopted an overlay zone for the Route 3 area and essentially they tailored it to allow more flexibility for potential developers to come in. Bedford adopted the overlay zone last year, so whether it will be effective remains to be seen. However, it does allow for more opportunities than the restrictive zoning.

Bedford

Bedford has experienced a spate of commercial construction in the past couple of years. It is a community willing to work with developers, as demonstrated by the aforementioned adjustments to zoning around Route 3.  Anagnost says large parcels of land hitting the market and easy access to Manchester and its airport make Bedford hot.

In 2005, Anagnost set his sights on 38 acres at the intersection of Route 114 and Route 101. Bedford Hills now includes The Copper Door (a restaurant) and a credit union. Popovers, a Portsmouth bakery and caf, is set to open a second location there this summer; and Benchmark, an assisted living facility, began construction in May.

With an improved market, Anagnost says developers are moving forward with plans. The plans for Bedford Hills also include office space, a daycare facility and 144 apartment rental units scheduled for construction in September.

Anagnost agrees that multi-family rental units are the hot movement in development now. With foreclosures up, he says nervous buyers and empty nesters are looking to rent rather than own. Since 2005, you could not find a unit to rent in some communities.  The demand is there and it is substantial, he says. 

Epping

Commercially, Epping was a quiet community until 2004, when Walmart opened a supercenter there. That was quickly followed by Lowe's off of Route 125, near Exit 7 of Route 101. That opened the floodgates for development, says Karen Falcone, chair of the board of selectmen.
With the help of a federal matching grant, the town has been expanding its water base to encourage more development along Route 125, as lack of access to water was the major challenge before 2004.

Massachusetts-based Waterstone Retail Development opened Brickyard Square just off Exit 7 in 2010 with a 76,000-square-foot Market Basket. Marshall's opened there in April and O'Neil Cinemas is opening a 12-screen theater there in September.

The qualities that attracted Waterstone to Epping are likely the same points it uses to attract retailers to Brickyard Square: Epping is the number one fastest growing trade area in NH with 125,000 people in a 12-mile  area. According to Waterstone's website, stores near the Route 125 and Route 101 interchange experience $200 million annually in sales and is visible to 105,000 cars per day. It's at the crossroads of the only east/west highway, Falcone says. There is a lot of undeveloped land along 125.

Core Physicians broke ground in February for a facility that will house doctors' offices and lab facilities, says Falcone, and Exeter Hospital plans to open a facility in town. That will bring in workers and attract more stores and restaurants. We want to work with developers. We welcome them, Falcone says.

Londonderry

A1,000-acre parcel under development off Pettingill Road is one example of Londonderry's potential. Thibeault says this area will require about $12 million to fully develop and will have a connector road to Manchester Boston Regional Airport. It would be considered a great success if this was developed into what Pease [International Tradeport] in Portsmouth has become, Thibeault says. It could offer the area up to 5,000 jobs with multi-use sites that include businesses, office space and hotel lodging. And in my opinion it is the prime piece of real estate out there because of its accessibility, the parcel is flat, and it has sewer and water easily connected. It is ready to develop.

Those are strong words given that Pease is considered the most successful redevelopment project in NH. The former Air Force base is an economic hub-home to more than 245 companies, employing more than 7,000 people, and occupying 4 million square feet of office and industrial space.

Giovanni Verani, vice president of Prudential Verani Realty in Londonderry, is the marketing agent representing another ready for prime-time parcel-46 acres of commercially-zoned land located directly off exit 5 on Interstate 93 on Rockingham Road in Londonderry.  Development at this exit was restricted before because of the way traffic would flow off of the old exit, but now it is prime undeveloped land and it is at the last undeveloped exit before the Massachusetts border, he says. That places it in high demand.

Verani says that there are plans under review by the town from undisclosed developers that could create approximately 350,000 square feet of retail and business space at the location.
 
Lebanon/West Lebanon

According to Thibeault, Lebanon and West Lebanon are also on the radar of developers due to low unemployment and the availability of land. David Brooks, senior planner for Lebanon, says there are a couple of projects in various stages of review including the River Park Project (on the former site of Bailey Brothers Automotive), a 38-acre mixed-use development that will include 550,000 square feet of industrial-research lab space, 80 apartment units and 11 single family homes. In the early planning stages, some projects may not be completed for another 10 to 20 years, Brooks says.
Off Route 120 straddling the Hanover/Lebanon town line, the 409-acre proposed Altaria project will include a 120-bed hotel and 400,000 square feet of retail, office and residential space, says Developer Peter Knights of Lebanon. It is located across from Dartmouth-Hitchcock Memorial Hospital and adjacant to Centerra Business Park.

Pittsfield & Allenstown

Some towns are making changes to their zoning regulations in order to make themselves more attractive to developers, says Matt Monahan, principal planner for Central NH Regional Planning Commission, including Pittsfield and Allenstown.

Pittsfield recently completed a charette for the downtown area (about 10 acres) that proposes changing land use rules and developing a master plan to attract medical or education campuses, and introducing more mixed uses such as energy efficient housing, recreation and small-scale retail, Monahan says.

Allenstown has recently made some upgrades to its zoning ordinance to, among other things, include more non-residential uses along Routes 3 and 28 along with an infill zone in Suncook that relaxes setbacks, increases density and encourages small-scale village commercial uses, he says. In addition to current residential uses, it opens zoning to include home businesses, residential units on the upper floors of commercial buildings, retail and convenience stores, banks, restaurants, and senior housing just to name a few.

Northern NH

If there's one thing the North Country has it's lots of land. And conveniently for businesses and developers, there are many parcels located near main roads and with all the needed utility hookups.
 The Littleton Industrial Park, located off Interstate 93, has at least five buildable lots available, the largest with 115 acres. Greg Eastman, president of Littleton Industrial Development Corporation, says the parcels have access to a Fed Ex facility at the park and access to secure, high-speed Internet.

While most of the news out of the North Country of late has been about business closures, Jon Freeman, president of Northern Community Investment Corporation, sees missed opportunities. The closed mills in Groveton and Stratford leave prime land -land Freeman says has the necessary water and sewer hookups and a natural gas line. That infrastructure can also be found at Colebrook Industrial Park, which has a few plots of about 10 acres open. In Groveton, there is more than 100 acres in the industrial park.

It's really the underground assets that are interesting and valuable because many companies want to have their own buildings anyway, Freeman says. The Natural gas pipe line is used at the Gorham Paper Mill and they are finding great benefit as a result. So manufacturers that use a fair amount of energy would find it to be a very attractive opportunity.