LEBANON — The owners of the former Element Hotel on Route 120 are asking the city to allow long-term residential leases at the property

AAM Lebanon Residences, a private equity firm based in Burlington, Mass., is seeking a zoning variance to allow Hanover Place Apartments to offer leases longer that 184 days. Because of its designation as a hotel, the property has been limited to the shorter-term rentals. Many of its residents are traveling medical workers employed temporarily at Dartmouth-Hitchcock Medical Center.

“We are essentially asking … that the (184-day) restriction be removed (so that) our tenants are able to stay with us longer,” Tony Librot, the firm’s chief executive and financial officer, said in a phone interview.

A variance is needed to change the building’s classification from a hotel to a residential dwelling because its 120 units — 88 studio apartments and 32 one-bedroom apartments — would exceed limits on residential density. The hotel, built in 2014, is located in Alteria Business Park, a 15-acre development approved for a mix of hotel, residential, office and retail uses. One of the park’s eight lots already has an apartment building with 33 residential units.

The city’s Zoning Board of Adjustment allowed the previous owner to rent out units as short-term housing without a variance after determining that providing months-long stays while people look for more permanent homes is fundamentally the same as operating a hotel.

AAM Lebanon Residences purchased the hotel in May 2022 for $17.6 million and has continued to provide short-term rentals. However, the city’s 184-day limit results is a quicker turnover than many residents would prefer, the firm stated in its zoning application. The firm says the policy contributes to a vacancy rate that hovers above 15% despite the lack of housing in the Upper Valley.

On Monday, the Zoning Board of Adjustment continued its discussion of the project until its Nov. 6 due to time constraints.

Some members of the board and city staff questioned whether AAM Lebanon Residences’s application should be considered complete, as it does not contain architectural plans or studies. In a memorandum to the board, city staff called the application “vague and non-descript” that lacks current and proposed site plans, a floor plan showing the layout and distribution of the apartments, and a parking plan.

“This lack of specificity leaves the Zoning Board in a position where it lacks sufficient evidence to conclude that the possible use is even (in) compliance with all Zoning and Planning regulations,” the memorandum stated.

Board members were split on Monday about whether to require the applicants to submit additional documents.

“I think the applicants decide when their application is complete enough and they have the burden of proof,” said board member Jeremy Katz. “So if they come forward and don’t have what they need to carry the day, then that’s on them. … I think it might be presumptuous to determine that it has shortcomings before hearing what they have to say.”

The zoning board did not vote on Monday whether or not to accept the application as complete.

Librot said in the interview that his firm does not believe the documentation recommended by city staff is necessary because the use is not changing from what the board previously allowed.

“The units are not changing, the parking is not changing, the traffic is basically remaining the same,” explained Librot. The lone change being sought is the length of time that the tenants are permitted to stay.

Librot said the tenants at Hanover Place are typically single individuals. While renters include couples and some infants and young children, the rooms are not well-suited for larger families, Librot said.

Librot declined to say how much renters could expect to pay for the longer leases. According to the Hanover Place website, short-term prices for studio units range between $1,800-$1,950 per month and one-bedroom apartments range between $2,500-$3,000 per month.

A recent study from public corporation New Hampshire Housing found that Grafton County’s median gross rent — $2,081 for a two-bedroom unit — is the highest in the state. Rent prices in Grafton County have increased by 82% since 2018, more than twice the statewide average of 36% during that time.

The next Zoning Board of Adjustment meeting will be on Monday, Nov. 6, at 7 p.m. in City Hall.

Patrick Adrian may be reached at padrian@vnews or 603-727-3216.