Proposed Manchester student housing plan raises finance questions
MANCHESTER — An aldermanic committee on Monday had a mostly positive reaction to the latest proposal to build a residential tower for college students on the site of a city parking lot, but members raised questions about its financing and other issues.
The plan was outlined before the Land and Buildings Committee by a familiar face: Patrick Arnold, the former alderman and 2013 mayoral candidate. Arnold and his colleague Jason Fellman were representing the developer VMD Companies through their new venture, MHT Strategies, which was registered with the state three weeks ago as a government affairs and consulting company.
VMD had proposed buying the Pearl Street lot last year to build the student housing building, but the plan was shot down largely because the company wanted the city to finance the $60 million cost of construction.
VMD is now offering the city $1 million for the Pearl Street lot, a block north of Bridge Street, and to arrange financing for the $40 to $60 million project on its own. The building would contain 240 units, housing 756 beds arranged in two towers, with the first three floors serving as a parking garage.
Arnold said the building would make downtown more vibrant, create local construction jobs, and generate annual property tax revenue of around $300,000. He also stressed that the development team was willing to include legal restrictions in its agreement with the city that would limit the use of the building to student housing and prevent its sale to a tax-exempt entity.
"Our development team is confident there is demand for student housing in Manchester," Arnold said. “That said, we recognize ... that you don’t want to undertake a project like this and at end of it, discover the market has changed.”
He said the sources of outside financing for the deal would be disclosed between the time the city entered a purchase agreement and the closing of the deal.
This component of the proposal drew criticism from Ward 12 Keith Hirschmann, as well as City Solicitor Tom Clark.
"I think this board would want all information before entering a purchase-and-sale agreement," Clark said.
Concerns were also raised about the loss of the $150,000 in annual revenue from the Pearl Street lot and the impact on business that rely on the spaces.
Arnold said the development team would be working with area businesses and property owners to address the displaced spaces.
Alderman-At-Large Dan O'Neil said parking was the most important issue that needed to be addressed. “I’m less concerned with how it’s getting financed. I think it’s a great project,” he said.
Alderman-At-Large Joe Kelly Levasseur said the proposal was a great improvement over the previous plan, which he also thought was promising.
"As a business owner at the very southern of end of Elm (Street), I'm very envious what this will do for the northern part of Elm," he said.
The committee tabled the proposal, while directing city staff to work with the development team over the next 60 days to incorporate the concerns raised by some of the aldermen.
McIntyre Ski loan
In other action Monday, the committee supported a $250,000 city loan to the McIntyre Ski Center to make improvements, including overhauling the ski lifts and snow-making capacity.
Committee chairman Pat Long, Ward 3, said the improvements would lead to the "enhanced performance" of the ski area, which is operated under a public-private agreement with the ski center.