HANOVER — The Hanover Consumer Cooperative Society is seeking town approval to convert the Lyme Road Co-op Food Store into a commercial kitchen to make prepared food for its other retail locations.

The small market just north of the roundabout at Reservoir Road first opened in the 1990s and has long been a money-loser for the cooperative.

“To date, we’ve incurred losses exceeding $2.6 million,” General Manager Amanda Charland said in a letter accompanying the co-op’s variance application.

The Zoning Board of Adjustment will hold a public hearing on July 11 regarding the cooperative’s request for a variance to allow a change in use for the .68-acre property at 43 Lyme Road, which sits in a retail business zoning district that prohibits commercial manufacturing.

“Our end goal is to transform the community market — which is currently an unsuccessful and unsustainable retail business — into a new home for our kitchen facility,” Charland wrote.

For more than two decades, the cooperative has leased a 9,000-square-foot production kitchen in Wilder where it produces sandwiches, salads and other prepared foods for its Hanover, Lebanon and White River Junction stores, as well as its catering department.

Overall, the co-op employs nearly 400 people. In addition to supermarkets in Lebanon, Hanover and White River Junction, it operates two automotive service stations, one in Hanover and another in Norwich.

In comments to the zoning board, residents have expressed dismay at the loss of the Lyme Road market and concern for the impact of commercial space in the neighborhood, Hanover Planner Bruce Simpson said Tuesday.

“Many of those who work in Hanover rely on the Co-op market as a place to get coffee, breakfast, and lunch — not least, our firefighters across the street,” Hanover resident Russell Muirhead said in a letter to the town last month. “Schoolchildren descend on the market after school hours for snacks and ice cream.”

Muirhead urged the board to oppose any variance.

“If the Co-op cannot run a retail operation profitably, it should sell or lease the facility” to another retail business, he said.

The staff at the Lyme Road market “are working extremely hard,” and the store has a loyal customer base, spokesman Allan Reetz said Monday. “But the sales are about $500,000 below where they need to be to break even.”

In December of 1995, the Co-op opened an automotive service center at 43 Lyme Road, a location that had previously been the site of a filling station and auto repair shop.

The service center operated until 1997, when, prompted by staffing shortages, the cooperative transformed the location into a “convenience-store model market,” Reetz said Monday.

The co-op replaced the original store with the current building in 2008.

“We totally get that this has been a community hub for people and we value that neighborhood,” Reetz said. “We don’t take any of this lightly.”

The cooperative does not plan to alter the size or appearance of the building’s exterior and states in its application material to the zoning board that a change to commercial use would not alter the character of the neighborhood.

“Deliveries would remain consistent and unchanged, and there will be no significant increase in noise, traffic, or other disruptions to the surrounding area,” Charland wrote. “If anything, traffic and the associated noise that comes with it would be significantly reduced,” she added.

The cooperative went a step further by stating that a denial would constitute an “unnecessary hardship” because the low traffic volume of the location “does not support a convenience store model,” Charland’s letter said.

Although the Hanover Consumer Cooperative Society owns the Lyme Road building, the land on which it sits is owned by Hanover resident Kathryn Manchester, who endorsed the variance application.

Manchester could not be reached for comment on Tuesday.

The hearing for the co-op’s variance is scheduled for Thursday, July 11, from 7 p.m. to 9 p.m. in person at the Town Hall boardroom and remotely via Zoom.

The Zoning Board of Adjustment will hold a deliberative session on July 18, from which a final decision on the request may be made.

Christina Dolan can be reached at cdolan@vnews.com or 603-727-3208.