NEWPORT — A tax relief program aimed at spurring redevelopment of qualifying structures has been approved for the developers who plan to convert the former Ruger Mill on Sunapee Street into 70 housing units.

The Selectboard’s unanimous vote Monday means that the current assessment of $2.7 million on 169 Sunapee Street will not change for three years once the building is occupied. After that, the new assessment will be determined and applied, unless an extension is granted under the Community Revitalization Tax Relief Incentive Program.

The board said it is the right decision for Newport because it will add to the grand list in the long term.

“The responsibility we have for the greater community is to grow that grand list,” Selectboard member Jim Burroughs said.

Burroughs said freezing the assessment for three years makes sense if the town gets a $20 million assessment in “perpetuity.”

“It is the right thing for Newport,” he said.

Board member Barry Connell said the building needs to be utilized or it will deteriorate and the developers have worked to bring their proposal to fruition.

“We need to grow this town the best we can,” Connell said. “Two to three years to give them a chance to make this work is the thing to do.”

Jon Livadas, who spoke for the developers via Zoom, said they have all of their funding lined up and are ready to move forward with the construction, which could begin in June 2023 and would take between 12 and 18 months. Asked at one point whether the tax relief incentive was necessary in order for the project to happen, Livadas was noncommittal. 

“I can’t definitively say yes or no to that,” Livadas said. “The reason we are applying for this is because we need it to pay our debt service on the building.”

Before the vote, several residents spoke at a public hearing and most thought the board should take more time and look closer at the proposed development before approving the tax relief. One resident questioned whether the developers were “overextending” themselves if the tax relief was needed to make the renovation financially viable.

“I appeal to you to look at this project and in five years, are you going to be happy with your decision,” asked resident Gerrie Black.

Livadas told those at the meeting they have done a full financial analysis and weighed all the risks and now are ready to begin. He reiterated that the town is not losing the roughly $50,000 in taxes now paid on the building, only delaying payment of a larger tax bill when the new assessment is determined.

One of the issues that arose from an earlier hearing was a question on the number of children who may live at the complex and enter the school system. On Monday, Livadas referred to a market analysis done when they redeveloped a mill building in Lebanon. The analysis studied several mill buildings across the state and the ratio of “school area children” per 1,000 square feet. He said he used that to calculate the number that may live at the Ruger Mill and reached a figure of between 0 and 10.

“Most likely it will be on the lower end,” Livadas said.

Resident Bert Spaulding Sr. criticized the board for accepting Livadas’ word and not requesting the documents before making a decision on the tax relief.

“I think you are putting us in peril by not doing a total review,” Spaulding said. “The depths of what you are considering must be supported by the facts.”

Another resident, Kurt Minich, also urged the board to reject the tax relief application.

“If the business really wants this, let them do it on their own, not with our tax dollars,” Minich said.

The property is currently owned by 169 Sunapee Street LLC based in Manchester, not by Occom Properties in Hanover, which is proposing the development. In 2017, the Planning Board approved a site plan for 66 apartments but the owner decided not to pursue the redevelopment when he could not secure new market tax credits.

Newport’s Planning and Zoning Administrator Christina Donovan said on Wednesday she is reviewing the 2017 Planning Board approval and has not determined whether the current proposal for 70 apartments will require Occom, which plans to purchase the property, to come before the board again.

In 2019, the Selectboard approved a $500,000 Community Development Block Grant for Occom Properties to build a combination of market rate and affordable housing units. Livadas said Monday night that New Hampshire Housing Authority is also part of the funding sources.

There would be two three-bedroom apartments, 29 two-bedroom units and the rest single-bedroom apartments and studios in the 70,000-square-foot, four-story brick building that was the original Dexter, Richards and Sons Woolen Mill built in 1905. Occom Properties estimated a $20 million project cost.

Newport adopted the Community Revitalization Tax Incentive in 2018. It is designed to encourage reuse of older buildings in an established geographic area by the town. The tax relief can be granted for up to 13 years.

Patrick O’Grady can be reached at pogclmt@gmail.com.

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