A Man of Many Houses: Developer Mike Davidson Has Created a Real Estate Empire

By John Lippman

Valley News Business Writer

Published: 05-23-2018 3:58 PM

Lebanon — Mike Davidson’s career in real estate and development has had its ups and downs and twists and turns, but 2014 was the year that launched him in an entirely different direction.

After spending many years focusing mostly on multi-unit apartment buildings that catered largely to low-income renters — a period during which he developed a reputation as a responsive landlord but also one willing to evict tenants — Davidson in 2014 opened 43 loft-style apartments in the former Lebanon Junior High School. The school had been left vacant in 2012 when students were moved to the new middle school, and voters had rejected a proposal to raze the 1927 building. Davidson bought the Bank Street property for $841,000 and redeveloped it into apartments.

The project “was one of the first examples of nice, new studio housing in the Upper Valley and how in-town sites could be redeveloped for that purpose,” said Anne Duncan Cooley, chief executive of the Grafton Regional Development Corp. and former head of the Upper Valley Housing Coalition. “He put studios in the basement and even those rented out immediately.”

In 2017, he unveiled 36 studio apartments at the former College Cleaners plant on South Main Street in White River Junction.

In December, Lucky’s Coffee Garage opened in the former Roy’s Service Station building on the northeast corner of Colburn Park in Lebanon. In the coming months, Davidson plans to reopen the beloved Polka Dot diner in the heart of downtown White River Junction that he acquired last year.

And he’s not done yet.

On Davidson’s drafting board are projects to add seven apartment units and finish converting the former School Street School building into a residential complex; a proposal to build a 66-unit, six-story apartment building on land of the former Lebanon Junior High School; and a proposal he pitched before Lebanon city officials  to build between 100 to 200 housing units on the former public works site on Spencer Street, although that idea has been indefinitely mothballed while the city figures out how to upgrade its sewer system and whether to take other bids on the property.

Altogether, Davidson through his company, Execusuite, owns about 28 residential properties comprising a total of approximately 198 rental units in Lebanon, White River Junction, Enfield and Hartland, making him among the largest landlords in the region.

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Davidson, 55, also owns a cluster of commercial properties along South Main Street in downtown White River Junction whose tenants include C & S Pizza, Big Fatty’s BBQ, the restaurant Elixir, hydroponics store White River Growpro and River Roost Brewery, condiment maker Angry Goat Pepper Co., food and music venue The Engine Room and co-working offices.

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Davidson’s four-town real estate empire is today valued at about $13.1 million, according to assessing records.

Many of his holdings still include the smaller two- to eight-unit buildings of low- to mid-range priced apartments, but since 2014 his focus seems to be converting older structures into contemporary apartment complexes targeting young professionals and more upscale renters.

“Mike’s genius, his strength, is he can see what is coming before anyone else can,” said Jeff Acker, owner of HP Roofing in White River Junction and a former partner of Davidson in a property management company. “Like the junior high school in Lebanon — they were going to tear that thing down. Nobody else in Lebanon would have said, ‘I know there’s a market for 500- to 600-square foot apartments, and I can rent 43 of them for $1,000 a month.’ No one would take that risk.”

Others are less laudatory, saying that the upkeep of Davidson’s buildings has sometimes been lacking, and his living outside the U.S. with only intermittent trips back to the area effectively has turned him into an absentee landlord.

“It was definitely workforce (housing) in the beginning and not really putting a lot of money into upgrading the neighborhood,” said Erling Heistad, a lifetime Lebanon resident and veteran Lebanon City Councilor. Davidson, he said, “is always talking about being a resident and how it’s a hometown operation. I don’t think it’s really feeling that way now. Anytime owners move out of town, you have less connection to it. You don’t end up making the same decisions if you see the people on the street every day.”

“I wouldn’t want to say he provides workforce housing when you and I would not want to live there,” Heistad said.

College Painter

Davidson has been involved in Upper Valley real estate almost from the day he arrived from upstate New York as a student at Dartmouth College 35 years ago. He was 21 and a junior majoring in government when he bought his first house, an eight-unit apartment building, on Slayton Hill Road in Lebanon.

The son of a lawyer with the New York State transportation department, Davidson had showed an early interest in business as president of the Dartmouth Entrepreneur’s Club. At Dartmouth, he played rugby for four years and was a member of the rugby-centered Phi Delta Alpha fraternity.

After graduation, Davidson remained in the Upper Valley and ran a home painting business. He took the money he earned from painting jobs and bought apartment buildings, fixed them up and rented out the units.

By the time he was 25, Davidson had amassed a portfolio of 16 properties in Lebanon alone and owned 80 rental units in the Upper Valley. He hit a bump in 1993 when he became overextended and lost four properties in Lebanon and Enfield through foreclosure.

“He had some real difficulties in the beginning, but has learned from those mistakes and carried on,” said Pat Flanagan, a longtime Lebanon rental property owner. “Fortunately we’re in such a strong area (for real estate) that if you have the heart and soul for it, you can recover.”

With Acker, who was two years behind him at Dartmouth, and Deborah Gourley Violette, he formed property management and investment firm Davidson, Gourley & Acker, which owned and managed apartment buildings. Davidson also partnered with Acker in HP Partners, a home repair business that at one time operated in three states. Later, the roofing division was spun off to Acker, who today runs it as HP Roofing, and Davidson also sold Home Partners, which operates today under a different owner.

Until Davidson acquired the junior high and the circa-1874 former School Street School building for $400,000 in 2012, his residential properties in the city had largely consisted of small multi-unit buildings or divided-up houses, nearly all dating back to the 19th- and early-20th centuries.

Those apartment buildings still account for the bulk of his residential rental properties.

Many of the Lebanon apartment buildings are concentrated not far from Colburn Park and within a short walk of each other on Campbell, Parkhurst, School, Bank, Water and Elm streets.

Although he’s a major player in the Upper Valley, Davidson only makes periodic visits here. After living for a decade in Mexico, he moved to Guatemala in 2016. He declined to be interviewed for this story.

When he is in the Upper Valley, he resides at 31 Elm St., a mustard-painted Italianate-style house trimmed with blue canvas window awnings and burgundy shutters. Built in 1890 and once known as the Cutting-Dole House, it’s the city’s only building listed on the New Hampshire State Register of Historic Places.

Davidson’s own house is across the street from two other buildings he owns: A recent visit to one of them, 34 Elm St., revealed a trashed interior and garbage-strewn kitchen with the occupant’s belongings piled knee-deep.

Record of Evictions

Several of Davidson’s apartment buildings appear to be poorly maintained from the outside. Although tenants have on occasion filed angry complaints about the conditions of his apartments, neither Lebanon nor Hartford have records indicating major code violations.

These and other apartment buildings owned by Davidson frequently provide homes to people working low-wage jobs in retail or in hotel housekeeping. Some tenants have also worked on Davidson’s crews that maintain his apartments through his property management firm, Ledgeworks, according to former tenants and people who have worked for Davidson.

With a tenant base that includes people often living paycheck to paycheck, some receiving government housing assistance, it is not unusual for them to fall behind in rent. And Execusuite has a long history of serving eviction notices on both sides of the river.

In Vermont, Execusuite has filed 18 eviction actions against tenants in White River Junction since 2012, according to Windsor Civil Division docket records. Records at the New Hampshire Circuit Court in Lebanon show that Davidson has filed a total of 115 landlord-tenant writs since 1993. Landlord-tenant writs typically are eviction actions.

Erin Moses, of Canaan, lived in an Execusuite apartment at 60 Main St. in Enfield, moved in with her young son in 2010. Moses had a job, first as a sales clerk and then as a restaurant host. She made her $750 monthly rent payment regularly, she said.

Although the apartment was “cute and clean” and Execusuite was “quick to fix” things when there was a problem, she said, they once misplaced her money order for rent, and another time a new property manager had claimed she missed a payment a year earlier and demanded the money.

“We had some harsh words back and forth,” Moses said, calling it “the last straw to get out of there. I couldn’t come up with the 750 extra dollars.” She vacated the apartment, but her ex-boyfriend stayed behind. When he didn’t pay the rent, and because Moses’ name was on the lease, Execusuite took her to court.

“I take ownership for the last month (of rent),” said Moses, who added she was appreciative when an Execusuite employee came to her building one day to hand out vouchers at Christmas for heating assistance to tenants. “But in my mind, what they did was not right.”

Some of Execusuite’s White River Junction apartment buildings have had multiple evictions. For example, the two-unit Latham Works Lane has had five eviction actions, court records show, 112 South Main St. has had five, and 104 South Main St. has had four, all since 2012.

In some cases, the evictions were served to tenants occupying an apartment not long after the prior occupant had been evicted. At 112 South Main St., for example, Execusuite filed notice against a tenant occupying Apt. 3 in September 2015. The next October, notice was filed against a different tenant occupying that apartment, court records show.

Tenants rarely challenge the evictions, and they can also be saddled with Davidson’s attorney fees.

Lauren Nesto, a waitress at the Lebanon Diner who lives with her daughter, son and 120-pound Chesapeake Bay Retriever, Rocco, at Davidson’s 179 Bank St. Extension in Lebanon, acknowledged the building is not in the best condition but nonetheless praised Davidson as a landlord.

“It’s not perfect looking, but I’ve no complaints,” she said one recent afternoon on the front steps of her apartment. “If I complain, they come and fix it.”

And, she said, Davidson cares about his tenants, too.

“There was a time this winter I didn’t have the money for heating fuel, and he came and filled the tank,” paying the $400 bill out of his own pocket.

Her neighbor, Ryan, who declined to give his last name, is a forklift operator at a Lebanon equipment company and has lived in his apartment for eight years. Out walking his two dogs, Dozer and Brewski, Ryan said he has a reason for staying put.

“It’s hard to find a place that allows dogs,” he said.

Nesto, who has lived at the busy intersection for more than four years and pays $1,200 per month for a three-bedroom apartment, said evictions among tenants could be avoided “if people took more responsibility for themselves … there are ways to get help if you’re having problems paying your rent.”

Fraught Freight House

Davidson’s earliest landmark redevelopment projects was the building known as the Freight House, a former railroad warehouse owned by the New England Central Railroad. Davidson acquired the 1930s-era building in 2005 and three years later opened it with “lifestyle and destination” tenants as he described them at the time, including the restaurant Elixir, in which he was also a principal.

But Elixir opened just as the economy slumped into the Great Recession, cutting into diner spending. Saying he couldn’t juggle both the restaurant and his real estate businesses, Davidson closed Elixir in late 2008. Seven months later, the restaurant reopened under Upper Valley restaurant veterans Jane Carrier and Skip Symanski and has thrived since.

More problematic, however, has been the 4,000-square-foot event space at the other end of 10,000-square-foot former rail house that has morphed into three different incarnations all trying to capture an elusive downtown nightlife. The latest, The Engine Room, is now operated by Big Fatty’s BBQ and Maple Street Catering owner Brandon Fox. It opened in February as an event, music and food venue.

Initially, however, in 2010, Davidson leased the space to music promoter Scott Hayward, who wanted to open a White River Junction branch of his Tupelo Music Hall performance venue in Londonderry, N.H. Hayward installed $100,000 in sound equipment and booked such acts as Judy Collins, Crash Test Dummies, Jefferson Starship and David Bromberg to play the hall, bringing a little glamour to the old railroad depot.

Within a year, Tupelo was losing money, and Hayward warned Davidson he may have to close, according to a legal motion in Windsor Superior Court that Hayward later brought against Davidson. During negotiations in 2011 over how to move forward, Davidson sued Hayward, claiming “anticipatory breach” of the lease and asked the court to grant him control of the sound equipment, according to Hayward’s motion.

The judge denied the request and Davidson and Hayward eventually settled their dispute by forming a joint venture to operate the venue together.

But two years later, in 2014, the parties were back in court, this time with Davidson suing Hayward for nearly $92,000 in back rent and again seeking “attachment” of the sound equipment to cover the debt. The parties continued to war in court over the next 20 months. In early 2016, the two parties notified the court that the joint venture between Hayward and Tupelo had been dissolved and “wound up to the satisfaction of its members” and each party would “bear its own costs and legal fees.”

Hayward, via email, declined to comment, citing “settlement non-disclosure agreements.”

Renamed Freight House Hall, Davidson enlisted another promoter to book bands into the venue. But by 2015, citing the burden of managing the venue and running his real estate business at the same time — for a while Riverbank Church was using the space for worship services — Davidson was again shopping for new ideas.

Then in the fall of 2016, Davidson partnered with Tip Top Pottery owner Amy Robb and renamed the space The Engine Room. They converted it into a co-working space, targeting freelancers and professionals and for a while last year, it hosted a nightclub and music venue, Club Diesel Sports Bar and Lounge.

But the mash-up worked at cross purposes — the ice-making machine would kick in and annoy renters working on their laptops — and last fall, Davidson moved the co-working space across the alley into another building he owns.

Earlier this year, Davidson brought in Big Fatty’s owner Brandon Fox to manage The Engine Room, again trying to take advantage of the 4,000-square foot space with both food and live entertainment.

Fox, whose barbecue restaurant is a tenant in a Davidson building, earlier tried to team up with the him by operating a restaurant in the lower level of the former Lebanon Junior High School project before local concerns over traffic and noise scuttled the plan.

White River JunctionRevitalization

Just across the street is another major Davidson redevelopment project: a former dry cleaning plant that’s now an apartment complex.

“Elixir was a new focus on that part of the downtown,” said Lori Hirshfield, Hartford’s director of planning who credits him with revitalizing a stretch that had once been a grimy and dying industrial corridor. “The most interesting thing that Mike has done is the repurposing of old structures for modern day use, like what he did with the old railroad siding … that’s much more interesting than tearing buildings down and building something new in its place.”

Davidson’s operations in Hartford haven’t always gone over well with the town, however, most notably during the winter of 2011, when he purchased for $160,000 the downtown White River Junction parking lot that the town had previously leased from the Canadian National Railway for $2,500 per year.

When lease negotiations between Davidson and the town stalled — Davidson sought to increase the rent by more than 500 percent, to $1,100 per month — he stopped plowing the lot, leaving downtown businesses trying to figure out how to provide adequate parking for their customers.

Nine months later, the town reached a deal to buy the lot and its Gates Street extension from Davidson for $215,000. The impasse and amount paid still rankle some.

“We had been negotiating with the railroad for the parcel,” said former Hartford Selectboard member Ken Parker, who grew up in an apartment above C & S Pizza on South Main Street in a building now owned by Davidson. “He got wind of it and interjected himself into the process and swooped in and picked up the property and turned around and offered it to the town in my mind at a ridiculous price.”

Parker also is critical of Davidson for getting the town to indefinitely suspend impact fees on construction projects by threatening to cancel his $3 million conversion of the dry cleaning building if he was required to pay the $37,000 fee. The town used impact fees to help mitigate against increased demands on municipal services created by new development, but Davidson argued commercial projects have little financial margin to be viable and elimination of the fee would encourage more development.

The Selectboard eventually agreed with Davidson.

“The suggestion that businesses wouldn’t come to Hartford if (required to pay an) impact fee was nonsense,” Parker said, who likened Davidson’s approach to “a certain element of thuggery.”

But Parker’s view of Davidson is probably among the minority. Town planners tend to praise him for the impact he has had in their community.

“Where would we be if Mike didn’t do his projects? We’d be short many more housing units,” said David Brooks, Lebanon’s director of planning and zoning. He said that Davidson “has got a good feel of what people are looking for with the in-town, downtown living experience” as exemplified by the conversion of the former junior high school and other proposals he has out before town officials.

Davidson’s conceptual proposal to build a 66-unit apartment building on his 7.4 acre lot at 75 Bank St. riled some in the neighborhood who think the six-story structure would be obtrusive and out of character in the neighborhood. Others counter it’s just what is needed to attract younger professionals to reinvigorate a community whose demographics has been skewing to an aging population.

“We need the units, but what it’s going to take is the difficult question here,” Brooks said. “Mike acknowledged that and knows the proposal he submitted for conceptual (design) would need quite a bit of zoning relief.” Davidson has yet to submit formal site review plans to the city.

“To his credit, what (Davidson) has done is figure out creative ways to re-use older buildings in a way that has made them viable again,” said Andrew Winter, executive director of Twin Pines Housing, which develops housing for low-income people and families and whose organization was once a tenant of Execusuite in White River Junction. “He’s found a quiet way to tuck in more housing within our communities.”

Indeed, although the distinction may be lost on the general public, Davidson pointedly refers to himself as a “redeveloper” as opposed to a “developer.”

Yet that may be beginning to change. Two ideas Davidson has put before Lebanon officials, the six-story apartment building and a 100- to 200-unit apartment complex and mixed-used project at the site of the former public works lot on Spencer Street, would both be newly built structures.

In any case, if those projects move forward they might represent a coda to Davidson’s career in real  estate, in which he has often been partnered with his wife, Rachel Ballard.

“We have been living in Mexico most of the year the last decade or so, while still maintaining our presence in Lebanon, NH,” Davidson wrote in 2016 to the Dartmouth class of 1985 newsletter. Announcing that he and his family had just moved to Antigua, Guatemala, Davidson noted that he nonetheless was “still active in our Upper Valley real estate business.”

John Lippman can be reached at jlippman@vnews.com or 603-727-3219.