Developers argue Newport water and sewer fees excessive, threaten ‘workforce’ housing projects


Valley News Correspondent

Published: 05-25-2023 5:26 PM

NEWPORT — Two developers planning to build a combined total of 112 units of workforce housing in town are asking the Selectboard to reconsider its denial of a request to reduce water and sewer connection fees.

If the board won’t reconsider, the developers plan to proceed with an appeal or court action, claiming the fees the board is requiring — totaling more than $250,000 — threaten the projects’ economic viability, the attorney representing the developers told the Selectboard in a letter last week.

“Unless the Town re-engages these developers in a discussion toward further abatement, our clients intend to invoke the appeal process and/or litigation so that the Superior Court or Housing Appeals Board can apply the law to the user fees,” wrote James Harris, with Manchester-based Sheehan Phinney.

Harris represents Walpole, N.H.-based Avanru Development, which already has started construction on a 42-unit complex on Spring Street, and Occom Properties, the developer of a planned 70-unit housing project at the former Ruger Mill at 169 Sunapee St. Workforce housing is defined in state law and units are subject income limits.

The town had planned to charge $96,000 to Avanru and $164,000 to Occom.

At the May 15 Selectboard meeting, after a discussion that included a presentation by Chad Branon with Fieldstone Land Consultants, representing Avanru, the board voted 4-0 to take the request to reduce the fees to $15,000 for each project under advisement.

However, later in the meeting, after the developers’ representatives had left, the board voted to deny any further reduction in the fees.

“We are pretty discouraged on how it was handled,” Jack Franks, CEO of Avanru, said by phone on Monday.

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At the meeting, board member Jeff Kessler pointed out that the board already agreed to a 33% reduction.

However, that is contingent upon developers applying for and receiving InvestNH funds, which are designated to address the state’s housing shortage. Newport could receive the maximum amount of $1 million for both projects.

If the application is denied or not filed on time, the 33% reduction would not apply, the Selectboard said.

“While our clients appreciate the offer to reduce the assessment of previously undisclosed fees by 33%, that reduction is insufficient to avoid threatening the economic viability of the projects,” Harris wrote in his May 19 letter to Selectboard Chairman Barry Connell.

Harris cited state law as it pertains to workforce housing and the authority municipalities have to reduce water and sewer assessments as an incentive for these projects.

“RSA 674:59 requires all municipalities to provide ‘reasonable and realistic opportunities for the development of workforce housing’ and empowers the town to satisfy its obligations with inclusionary zoning, incentivizing developers to produce workforce housing units,” Harris wrote. “Reducing the assessment our clients proposed is consistent with the authority granted in the workforce housing statute.

“The statute also prohibits against the imposition of conditions that render workforce housing projects ‘economically unviable,’ ” Harris continued, adding that state law also allows developers the right to contest such conditions.

At the May 15 meeting, Branon said neighboring communities have connection fees in the $15,000 range, and the nearly $100,000 fee for Avanru, before the 33% abatement, is “a big burden on a workforce housing project.”

“We are coming before you, knowing that the state statute and RSAs allow this board to assess reduced fees for projects like workforce housing,” Branon said. “There are a number of RSAs that pertain to workforce housing and to excessive and detrimental fees that compromise the viability of workforce housing projects.”

Harris also alleged in his letter that neither developer was made aware of the fees and his online research did not yield any description of the town’s fees or how they would be assessed. He further stated that the fees are not on the application developers submit to the town nor do they appear on the “rates” link on the water and sewer department website

“In short, neither developer had sufficient notice of such user fees to be able to budget for them,” Harris wrote.

Harris also contended that the projects will bring in “tens of thousands of dollars in usage fees” so the $15,000 request combined with actual usage fees is equitable.

“An initial assessment of approximately $260,000 for these projects plus the actual usage fees causes these developers to shoulder a disproportionate burden that violates applicable law,” Harris wrote.

If the case goes to court, Harris said they would at that time be unable to work with the town to secure up to $1 million in InvestNH funds and argued the town would be better served financially to approve the $15,000 requests and apply for the InvestNH money.

Of the initial $100 million of InvestNH funds, Franks said there is about $20 million remaining.

“Our clients respectfully assert that the town would be better served by further abating the initial water and sewer assessment so that the approximately $1,000,000 in grant funds can be pursued with all due haste,” Harris wrote.

Harris concluded his letter by asking the Selectboard to reconsider its “hasty decision” and use its discretion under state law to further abate the fees because they are “excessive,” threaten the economic viability of the projects, were not previously disclosed and do not provide a reasonable opportunity for workforce housing development.

Patrick O’Grady can be reached at