As Retirement Nears, Claremont’s Santagate Reflects

  • John Seaver, CFO of manufacturer New Hampshire Industries, right, stops to talk with Claremont City Manager Guy Santagate, middle, and Director of Planning and Development Nancy Merrill, left, during their lunch at the Farro Deli in Claremont, N.H., Tuesday, November 29, 2016. New Hampshire Industries is in the process of relocating from Lebanon to Claremont. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Claremont City Manager Guy Santagate listens to Assistant Director of Public Works Vic St. Pierre during a meeting at City Hall in Claremont, N.H. Tuesday, November 29, 2016. Santagate is retiring after 15 years with the city. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Claremont City Manager Guy Santagate meets with city officials, from left, Director of Planning and Development, Nancy Merrill, Assistant Director of Public Works Vic St. Pierre, Finance Director Mary Walter and Assessor Marlene Jordan, in his city hall office in Claremont, N.H., Tuesday, November 29, 2016. Santagate will retire at the end of December. "Nothing's ever done in this building," said Santagate. "Administration goes from century to century." (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Claremont City Manager Guy Santagate walks to lunch with Director of Planning and Development Nancy Merrill, left, in Claremont, N.H. Tuesday, November 29, 2016. Santagate is retiring after 15 years at his post. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • "I told them I'd do three to five years, and 15 years later I'm still here," said Claremont City Manager Guy Santagate. Santagate brought Chelsea, Mass. out of bankruptcy as its city manager before coming to Claremont in 2001 passing up positions in finance with the Big Dig in Boston and with development with Trinity College in Hartford, Conn. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Runnings' Andrea Duvall, left, interviews Geoffrey Robbins, of Claremont, N.H., during a hiring fair for the store on November 10, 2014 at the Common Man Restaurant. The store opened in the former Claremont Lowes building in April 2015 with about 80 employees. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Claremont teenagers Sarah Bedell, 16, left, Cody Dellabough, 13, and Amber Marcotte, 16, check out the view of the Sugar River mill complex from the Sawtooth parking garage on June 19, 2009. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Lorin Day, right, encourages her daughter Sophia, 5, to test her swimming abilities in the pool at the Claremont Community Center on July 3, 2013. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Correspondent
Saturday, December 03, 2016

Claremont — When Guy Santagate hands over the keys to City Hall at the end of this month after a 15-year run as Claremont city manager, he can be sure that the city he is leaving is significantly different than the one he inherited when he arrived in 2001 from Chelsea, Mass.

Some of those changes are obvious: The mill buildings on Water Street — which were just shells when Santagate arrived and were once targeted for demolition — now house an upscale restaurant, an inn, and a computer company that employs just over 100 people locally. A new community center sits at the end of Broad Street. A 66,000-square-foot food processing plant is being constructed by North Country Smokehouse in a city industrial park near the Connecticut River, just down the road from where Canam’s Structal Steel is manufacturing girders for the New Tappan Zee Bridge outside New York City.

Other differences are less obvious, like the city’s $3.1 million fund balance and the stability Santagate brought to a city that had seen five managers — counting permanent and interim — in five years.

But Santagate is also leaving some challenges behind for the next manager, including gaping stretches of vacant storefronts along the north end of Pleasant Street near Opera House Square, and finding ways to grow the city’s middle class and industrial base.

The 78-year-old Santagate said he has a few regrets, but makes no apologies for the way he ran the city.

“I think the thing I’m disappointed in mostly is the downtown,” he said in a recent interview at his City Hall office. “It’s better than it was, but I was hoping to make much more progress.”

Santagate didn’t even like the place all that much when he first visited. “There were no bus stops and too many trees,” he remembered. For a guy who grew up in an apartment above his parents’ Italian grocery store in Chelsea and was used to the action of the big city, “I felt like a fish out of water.”

He wasn’t planning to come, but when the committee of leading residents who were part of the search for a new manager kept calling, the man who was widely credited with cleaning up the corruption in his hometown became convinced that Claremont was serious about making changes.

He signed on for $90,000 and a car allowance of $5,000 and figured he’d stay maybe five years, health permitting. He never dreamed he’d still be here 15 years later, making a salary of $100,250 and a $6,000 car allowance.

“But I felt like we were making progress,” he said in explaining why he stuck around.

It wasn’t what he was used to, but Santagate got used to it. He lived within walking distance of City Hall and most days either walked home for lunch or grabbed a bite at one of the downtown restaurants.

Santagate readily admits that a lot of the things people say about his tenure at the helm of Sullivan County’s only city are true — including some of the criticism.

“The job of a city manager is to set the tone, direction and vision of the city and to propose policy,” Santagate said. “It’s a major job, and if you think you’re going to do that without criticism, boy, you’re disillusioned.”

Layoffs Necessary

It started almost as soon as Santagate arrived in August 2001, when he laid off 21 city employees, the majority from the police, fire and public works departments.

The layoffs were necessary because the city had only $4,304 in its fund balance — a relative pittance by municipal government standards. (This year, Claremont reported a $3.1 million fund balance, though is devoting $1.7 million of it for operating expenses and to reduce the tax rate.)

“I couldn’t take you to dinner with what was in the fund balance,” Santagate quipped. “I knew if you stayed on this road, you’d go bankrupt. Period. It wasn’t even opinion. It was the numbers. You could see it.”

The fact that the layoffs were necessary didn’t make them any easier. “I agonized over it,” he recalled.

The criticism never really let up.

“You go into a restaurant, the first thing you hear is, ‘Get rid of Santagate,’ ” said Don Chabot, a longtime Claremont real estate broker with Town & Country Realty. “Because the average guy’s just looking at his tax rate and, unfortunately, the city only controls a very small portion of that tax rate.”

Santagate is sensitive to criticism about the city’s property tax rate, which was the second-highest in the state on an equalized basis, according to a 2015 listing on the state Department of Revenue Administration website.

But, to Chabot’s point, the municipal portion accounted for only 36 percent of that rate, according to the DRA. The majority — 57 percent — went to pay for Claremont schools, and the rest funded county government operations like the jail and nursing home. Ten years ago, the municipal side accounted for 40 percent of the tax burden.

The trend continued last week with a new Claremont property tax rate of $42.62 per $1,000 of valuation set by the DRA, with the city’s municipal rate falling 11 cents to $14.86. On the school side, the local education rate rose $1.45 to $22.48.

During Santagate’s tenure, the grand list has grown some 36 percent, from $510 million in 2001 to $694 million now, though the population has dipped slightly to just under 13,000, according to 2015 Census estimates.

Still, former Mayor Allen Whipple, who was on the City Council that hired Santagate, said last month that failure to stabilize the tax rate has been a shortcoming, but Whipple credits the manager for some things, too.

“We had four goals when I was there: image enhancement, tax-rate stabilization, infrastructure enhancement and economic development,” said Whipple, rattling off the goals of the former Sullivan County Citizens for Tax Relief. “I think the economic development is just bumping along. I think the image enhancement has improved, because I think people that aren’t here think it’s doing great. Infrastructure improvement, he’s done good, but a lot of it is in the ground and you can’t see it. And tax rate stabilization is a failure.”

It hasn’t helped that the state has downshifted some significant costs onto local government in recent years, according to City Councilor Scott Pope. “We’ve lost a lot of money in state aid over the last few years. That’s several dollars on our tax rate that ended up being lost.”

Santagate’s relationship with the City Council comes up often when people talk about the manager. He has enjoyed the council’s support, but there are also those who believe the council has abdicated its oversight role.

“He’s made the council irrelevant,” said John O’Connor, a retired New York City police officer who recently won election to the New Hampshire House. O’Connor said the motions made at council meetings are usually written out ahead of time, an indication that outcomes are largely decided beforehand.

“He wanted like-minded people on the council — that’s smart on his end,” said O’Connor, adding that Santagate tried to recruit him to run for the council several years ago. “I feel as if he’s been able to — I won’t say bamboozle — but he steered this council and previous councils in the direction he wanted to go.”

‘Back Me or Fire Me’

Santagate acknowledges that the nature of the council-manager relationship changed when he took over. When he got here, councilors were involved in day-to-day city operations, sometimes calling department heads directly if they had a question or complaint. The new manager put a stop to that practice.

“That’s where you get the, ‘He’s on his own, he doesn’t listen to anybody,’ or ‘He’s neutered the council’ ” Santagate said. “They had a lot more say before I got here. But that’s why it was dysfunctional. You can’t have 10 people running the place.”

Now, by design, councilors who have a question about city operations call the manager’s office.

Santagate said he has told councilors that they have three duties. “You back me when I’m right. You back me when I’m wrong. And if I’m wrong too often, you fire me. But you don’t poke into the day-to-day.”

Pope, who was on the council for six years early in Santagate’s tenure and mayor during four of those, said the city is better off for the changes, and that Santagate got the structure of the city manager’s job back in order.

“We have, as a City Council, one employee — that is the city manager. He follows our directives, he follows our decisions and makes them work.”

Councilors probably had to be more hands-on when there was a leadership vacuum, but change was necessary once Santagate arrived, Pope said. “In the end that’s the way it had to be, that’s the way it should be and that’s the way it is in every single city and town that has a manager.”

Keeping councilors out of the city’s day-to-day operations was also a major factor in what Santagate cites as one of his major accomplishments — stabilizing the city’s roster of department heads.

“We were tired of the revolving door,” said Chris Shaban, who was mayor when Santagate was hired. “We had department heads coming and going. There was no continuity. The council said, ‘We want quality people.’ ”

Most department-head positions were vacant when Santagate arrived, but the turnover since has been infrequent and the majority of department heads have been on the job for 10 years or more, Santagate said. “Retaining the staff that was once a revolving door is a major accomplishment, I think.”

Along with the initial layoffs, there were two other rounds, and some positions were frozen. The city had almost 210 full-time equivalent employees in 2001, and now has 145, including 15 full-time equivalent positions created by the new community center.

Mill Development

Support from the council was also crucial to what many view as Santagate’s signature accomplishment: efforts to revitalize three long-abandoned buildings from the Monadnock Mills complex on Water Street along the Sugar River that the city acquired by tax deed.

Two of the three buildings are now occupied. One houses the Red River Computer Co. and the Common Man Inn and the other the Common Man Restaurant. Developer John Illick’s plans to build condominiums in the third building ran headlong into the reality of the Great Recession, when the bottom fell out of the real estate market in Claremont and elsewhere.

That may be changing. Illick said in an interview last week that he has had discussions with potential partners about the building and, “I will be surprised if that building isn’t fully redeveloped inside of two years.”

Just how much credit Santagate deserves for the Water Street development depends on who you ask.

“I think the current administration can be very proud of running one of the more successful laps of the relay race, but they didn’t run all of them,” said Stuart Arnett, a former Claremont economic development director who had moved on to work for the state by the time Santagate arrived.

A lot of pieces were in place before Santagate arrived in Claremont, Arnett and others said, including an update of the infrastructure on Water Street and plans to build a pedestrian bridge over the Sugar River to link North and Main streets.

“There had been some groundwork, but no one had put together a $10 million bond to get the work done,” said former Mayor Jim Nielsen. “Managerial skill is to get divided sides together,” and Santagate provided that.

“There were a lot of steps along the way and a lot of opportunity for everything to fall apart,” remembered Nancy Merrill, the city’s planning and development director, who pointed to a series of votes the City Council took to fund things like a new parking garage and the pedestrian bridge.

“It was his leadership,” said Merrill, a former mayor in Lebanon. “He was the conduit to the public. He was the conduit to the elected officials.”

One of those elected officials was then-state Sen. Bob Odell, who said Santagate was skilled at keeping a lot of balls in the air on the mill district project.

“Guy was kind of like core central,” said Odell, a Republican whose district included Claremont and Newport. “He was the guy in the center of the circle who made things happen. Whether it was tax credits, whether it was supporting those who were trying to come in and invest, whether it was putting up the parking garage, it was a multifaceted series of responsibilities he took on.”

That included introducing Illick, the Vermont developer, to Common Man Restaurant owners Alex Ray and Rusty McLear, and Red River Computer CEO Rick Bolduc, which formed the foundation of the Water Street partnership.

Dan McGee, president of operations at Red River Computer Co., said Santagate and Merrill were instrumental in Red River making the move from Lebanon to Claremont.

“They put us together and then they put the package together,” McGee recalled. “They told a great story about what it could do for the city, and what it could do for our individual businesses being down here.”

Illick, who later sued the city over the assessment of his Water Street properties, credited Santagate for courage that was critical to the project’s success. “Without his nerve and vision, nothing would have happened,” he said. “Nothing of this magnitude happens because of one person. Clearly there were a lot of people — a lot of city councilors who showed great courage, too — but Guy was very instrumental.”

“There were a lot of naysayers, a lot of naysayers,” Illick added.

One of the things some residents objected to was the creation of a second tax increment finance — or TIF — district as a means of funding infrastructure improvements to the mill complex. TIFs allow municipalities to issue bonds under the premise that enhanced infrastructure fosters development, which increases property values and results in higher tax revenue within the district; the increase in revenue is then used to pay off the bond and other expenses over a certain period of time.

The city already had one TIF district near River Road, and the City Council had to decide in 2007 whether to support Santagate’s vision for the mill district and issue bonds for its TIF, which was created in the late 1990s. Councilors backed the manager and his economic development team.

But because of the downturn in the real estate market, the Petersen Building bought by Illick was never built out, and tax revenue from the mill district TIF has failed to cover expenses.

The result has been annual deficits of about $300,000 that the city covered by borrowing from the River Road TIF. That deficit now exceeds $1 million, city officials said earlier this year.

‘Close to the Vest’

One of the things Santagate gets criticized for is shrinking the circle of people who were participating in city government — something he readily admits. He said reducing the size of the Claremont Industrial Development Authority, for instance, from more than 20 members to nine was necessary for the city to get the traction it needed to move forward on projects that had sat dormant for years.

But that also left more people on the outside looking in when it came to city business, and Santagate and others agree that shrinking the number of seats at the table of city government may have fueled the perception that Santagate’s administration was less than fully transparent.

Several people — including Santagate himself — used the term “close to the vest” to describe his management style.

“He’s a take-charge control guy,” said Chabot, the real estate broker who believes that, on balance, Claremont is better off because of Santagate.

A lot of the criticism about transparency directed at Santagate has come, ironically, from a former city councilor who voted to hire Santagate in the first place. Jim Sullivan, who runs a website dedicated to keeping an eye on Claremont government, has been Santagate’s most relentless critic after being one of his staunchest early supporters.

“It’s not personal,” Sullivan insists. “It’s based on job performance.”

Santagate estimates that the city has provided “thousands” of pages of documents to Sullivan over the years, but Sullivan insists that, “I still can’t get a straight answer half the time. I laugh when he says they’re transparent.”

Sullivan, who Santagate once threw out of his office, faults the council for, among other things, not keeping a tighter leash on the manager, the city’s bidding process, or asking harder questions about the city’s tax increment finance districts.

“I thought the council did him a disservice, though not intentionally,” said Ray Gagnon, a former mayor and current state representative. “They bought into his concepts, but they didn’t ask tough questions. And by not asking tough questions, that fed into the conspiracy theorists.”

While Sullivan believes Santagate has set the city up for financial disaster, others take a different view.

“I think in the long run and in the big picture, he’s been good for the city. He brought continuity and a certain gravitas,” said Gagnon, echoing a sentiment expressed even by many who were critical of some facet of Santagate’s management. “The millyard project was in the works long before he came here, but he’s the one who took advantage of the opportunity and put together a public-private package that made the millyard possible. He only did two of the three buildings, but that’s not his fault, that’s the recession.

“The last I knew,” Gagnon said, “he did not cause the Great Recession.”

Though, he added, that might not stop some of Santagate’s detractors from trying to pin it on him.

Roger Carroll can be reached at roger.carroll.nh@gmail.com.