LEBANON — City officials this week approved plans to redevelop the former NAPA Auto Parts store on Route 4, clearing the way for 18 new apartments in Lebanon’s downtown core.

The Planning Board voted unanimously Monday night to OK Lebanon developer Jeremy Katz’s proposal to renovate the circa 1900 structure at the corner of Mechanic, Mascoma and Foundry streets.

He hopes to install 17 studio apartments and one two-bedroom unit inside the roughly 14,000-square-foot building, according to plans submitted to the city.

The conversion also includes two new stair towers, improved landscaping and pedestrian-friendly lighting outside.

Katz said in an email Tuesday that he’s “very happy” the project can now move forward, and he hopes to start work in 2021.

He purchased the building last year for $264,000, according to Lebanon assessing records.

Construction will take place over two phases because of plans by the city and New Hampshire Department of Transportation to construct a roundabout at the intersection of Mechanic, Mascoma and High streets.

That long-awaited project, which is slated for the summer of 2022, would take parking from Katz’s roughly ⅓-acre property, build new curbs and regrade a portion of the street.

A first phase of construction for the apartment project would see changes to the building at 1 Mechanic St., while the second would focus on street-level infrastructure changes. Those include a reorientation of the parking lot, a new curb along Foundry Street and landscaping islands at a nearby lot that will house parking for the apartments.

Katz’s plans call for four on-site parking spots while an additional 12 will be available overnight at nearby 0 Foundry St. (Zoning for such projects in the downtown district don’t have have specific requirements for parking for each unit).

Katz said earlier this year that he turned to apartments after learning of the roundabout project, one of two planned for Mechanic Street.

The roughly $3 million road project could scare off retailers, while road work would make it impossible for delivery drivers to drop off goods, he told the Zoning Board in July.

The apartment project comes as the demand for housing in the Upper Valley remains high.

Lebanon real estate agent Patrick Flanagan, who owns rental properties in West Lebanon, said Tuesday that families and those in the service-sector are constantly looking for places to live.

“I think it’s important to get as much housing as we can,” he said, adding it’s difficult to turn away families and others in search of apartments.

However, Flanagan said, demand from Dartmouth College students has dropped slightly because fewer of them are attending classes in-person.

Meanwhile, members of the Planning Board lauded Katz for making good use of an existing building, saying the effort promotes development in an area of the city already served by water, sewer and public transportation.

“I think pretty much all of us thought it was a good idea,” board member Joan Monroe said Tuesday. “Whenever you can use a building that already exists, that’s great.”

Monroe said she was pleased that Katz didn’t request major structural changes, such as raising the building’s height and included “just enough” parking for residents.

Planning Board Chairman Bruce Garland agreed that the project is “a useful reuse of an existing building” that saw little opposition during its time before officials.

During an hour-long hearing Monday night, the biggest debate among officials was whether Katz should add a bench to the property.

Board member Kathie Romano said outdoor spaces are important, especially as people try to abide by social distancing.

“Just having a bench or two outside where people can safely gather so that they’re not in a confined space inside, it’s a tiny, tiny small suggestion but it does improve the quality of life,” she said.

While some other board members agreed, an attempt to include outdoor seating in the conditions for approving Katz’s project failed in a straw poll deadlock.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.

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