CLAREMONT — The historic and once blighted Oscar Brown Block at the corner of Pleasant Street and Opera House Square was sold at auction Monday to the New Hampshire Business Finance Authority for $210,000.
The Civil War vintage 11,000-square-foot building was rehabilitated after the Main Street Claremont group purchased it about seven years ago. The restoration of the building to historical standards cost about $2.5 million.
The project was too big for the Main Street group, so Brown Block Development LLC was formed with the Keene-based Monadnock Economic Development Corporation, the Claremont Development Authority and Sovereign Bank as members.
Each member played a part in financing the project, said John G. Dugan, president of Monadnock Economic Development Corporation.
"It's a complicated structure, but the bottom line is Monadnock Economic Development Corporation needed to be a member of the LLC to make it work," Dugan said.
MEDC raised about $1 million through tax credits and grants, and Sovereign Bank invested in the project in return for tax credits.
The Claremont Development Authority stepped in with a $450,000 loan to complete the $2.5 million financing needed for the project when the project stalled. Claremont Development Authority had borrowed the money from the N.H. Business Finance Authority.
The building was first placed on the National Historic Register and then renovated to historical standards, Dugan said.
Unfortunately, once completed, cash flow became a problem, Dugan said. Brown Block Development LLC couldn't charge rents high enough to keep up its loan payments, Dugan said, and ended up defaulting on the loan to N.H. Business Finance Authority, which ended in foreclosure.
"At the end of the day, the entity with the only real loan to the project ended up getting the building," Dugan said.
The building is assessed at $546,000, Dugan said.
"I don't think anybody thought that it would realize that kind of money," Dugan said.
Financially, it was a messy, complicated project, but it successfully brought a building in the heart of downtown back to life, City Manager Guy Santagate said Tuesday.
"I think people forget now after seven years, it was basically an abandoned shell in downtown Claremont across the street from City Hall," Dugan said.
A successful restaurant sits on the first floor and there is also a barber shop and lawyer's office. Upstairs, six apartments have been rented out.
The project was good for downtown, it created jobs and brings in taxes to the city, Santagate said."Without government money in there to jump start it, it wouldn't have happened," Santagate said. "Eventually what will happen is the Business Finance Authority will sell it to a private owner who will not be saddled with the debt of rehabilitating it."