LEBANON — City officials will seek new proposals to redevelop the former public works building at 20 Spencer St., after plans to build 94 apartments and street-level retail and commercial spaces collapsed.

On Wednesday, the City Council recruited the Economic Development Commission and Downtown Lebanon TIF Advisory Board to evaluate new redevelopment proposals for the 1.7-acre parcel, which housed public works operations until 2012, when the department relocated to a modern facility on Route 4.

In 2020, the council approved a proposal by Ken Braverman, owner of The Braverman Co. of Stowe, Vt., who sought to purchase 20 Spencer St. for $1.5 million to build a four-story apartment building with 94 residential units, 4,500 square feet of retail and commercial space and 146 parking spots. The majority of these units would have been rented at market rate, though 10 of the units would be affordable to tenants making between 80-100% of the area median income, which is about $73,700 for a family of four in Grafton County.

In April, Braverman informed city staff that due to labor shortages and inflation, the project was no longer financially viable and he was withdrawing from the project.

“It is obviously a very different world (today) financially and logistically and in many other ways from what was the case in 2019,” Assistant City Manager David Brooks said at a recent joint meeting of the EDC and TIF Advisory boards. “Interest rates are more than double what they were at that time, plus increased difficulties finding materials and labor, supply-chain issues, and there was no indication that it was going to get better anytime soon.”

The sale of the property, which was put on hold pending mitigation of any environmental contaminants, was never finalized.

Between 2020 and 2022, the city spent $840,000 on environmental cleanup efforts, including the removal of polychlorinated biphenyls, or PCBs, a class of toxic chemicals found in electrical, heating and hydraulic equipment as well as some plastic and rubber products.

Brooks said the New Hampshire Department of Environmental Services, has allowed the city to lift restrictions on the property. The groundwater is still being monitored for arsenic contamination, though Brooks said the monitoring will not impair or prevent site development.

The two advisory committees, which hold monthly joint meetings, had evaluated and recommended Braverman’s proposal to the city council in 2020.

“The Spencer Street redevelopment was really our first foray into the potential for downtown economic redevelopment,” William Dunn, chairman of the Economic Development Commission told the council. “We thought we had a win (but) time went by, as there were certain land issues that had to be remediated.”

Dunn said he believes finding new proposals for 20 Spencer St., will be “an easier win” for the two committees, which have spent the last year exploring redevelopment ideas for a 2.9-acre piece of property between City Hall and the Mascoma River that currently serves as downtown parking.

“We had three developers who had expressed an interest in the (lot’s) potential and, given the close proximity of Spencer Street, if we can invite them into the process of something that was already conceptually approved, that might be an easier win for us,” Dunn said.

While the two committees typically consider projects that yield high economic benefits or increase a property’s taxable value, the City Council said they also intend to consider affordable or workforce housing proposals, including a public partnership with a nonprofit group.

“We as city councilors have a larger obligation to look at everything,” said Councilor George Sykes.

The city’s interest to sell 20 Spencer St. dates back several years. In 2017 Michael Davidson, owner of the Lebanon-based company Ledgeworks, offered the city $400,000 to buy the property, where he sought to create 100-200 housing units and 20,000 square feet of commercial and office space. But the council rejected the offer, largely because they believed the property was worth more money.

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

CORRECTIONS: The state Department of Environmental Services, or NHDES, authorized the City of Lebanon to lift restrictions on 20 Spencer St. A previous version of this story named an incorrect authorizing agency. 

The former developers of 20 Spencer St. agreed to make at least 10 of their apartment units affordable to tenants making between 80-100% of the area median income. A previous version of this story stated an incorrect percentage of units.