Work continues on the Spring Street project in Newport, N.H. (Courtesy Avanru Development Group)
NEWPORT — The town has reached an agreement with two developers who had filed a court appeal of the water and sewer connection fees the town was charging for two workforce housing projects.
Interim Town Manager Paul Brown told the Selectboard Monday night that under an agreement reached with the developers, the connection fees will be reduced to 30% of the amount the town initially charged.
The connection fee for a Spring Street housing development with 42 units will drop from around $96,000 to $29,000. That project is expected to be completed in early 2024. Brown said developer Jack Franks paid the fee Monday, which Franks confirmed in a phone call.
The connection fee for the planned redevelopment of the former Ruger Mill on Sunapee Street will go from $164,000 to $49,000.
Franks, CEO of Walpole, N.H.-based Avanru Development, which is building the Spring Street apartments, said Tuesday he was pleased with the outcome.
“It was great to work with the Selectboard and Town Manager to find a resolution that was amicable,” Franks said. “We found common ground.”
Brown told the Selectboard the town is in line to receive more than $1 million from InvestNH for the two housing projects ($10,000 per unit with 110 units) and it will deposit part of that money into the water and sewer fund to pay the 70% balance of the initial connection fee costs, which would be about $180,000. The remainder of the money can be used by the town at its discretion, though the Selectboard has not discussed potential uses.
InvestNH is a $100 million state program funded by American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) money, to address the state’s acute housing shortage by incentivizing construction of affordable workforce housing.
The approval of the InvestNH money for Newport is in process, Brown said Tuesday.
In its court appeal of the connection fees, Spring Street Limited Partnership called the fee “arbitrary and unlawful” and argued that its constitutional rights were violated in the manner in which the fees were imposed by the town because the developers were never informed of the fees during the approval process.
In May, the town offered to reduce the fees by 33%, or $63,000, which Franks rejected.
He instead sought a fee of about $15,000, which he said was typical of the amount charged by other towns where he has done developments.
Franks said in July that the InvestNH funds for Newport were put on hold by the state because of the dispute over the water and sewer connection fees and the town could lose the money if the fee dispute is not resolved.
Together, the workforce housing projects will bring more than 100 new housing units to Newport. Eligible tenants can earn no more than 60% of the “area median income,” which is currently about $60,000.
The developers of the Ruger Mill, DRSWM Limited Partnership of New Hampshire, have taken ownership of the property, Brown told the Selectboard.
Jon Livadas, the agent for the developer, said on Tuesday they closed on the property Dec. 1 and are pleased to have finally begun work with interior demolition.
“We are super excited to finally close and commence construction,” Livadas said. “We thank Newport for supporting this and we are glad we could strike a deal (on the connection fees.)
“This project will be a major benefit to Newport and show everyone what workforce housing can be.”
When the estimated $17 million renovation is complete in about 14 months, there will be 19 studios; 31 one-bedroom, 16 two-bedroom and four three-bedroom units. The four-story brick building was originally a woolen mill built in 1905 and is on the National Historic Register. Livadas said the project has multiple funding sources, including the New Hampshire Housing Authority.
In 2022, the mill property was approved for the Community Revitalization Tax Relief Incentive Program, which will freeze the pre-construction assessment of $2.7 million for three years after it is occupied. The state program, which Newport voters adopted in 2018, lets developers build equity in the reuse of older buildings before having to pay a larger tax bill.
Patrick O’Grady can be reached at pogclmt@gmail.com.
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