CLAREMONT – An 83-unit apartment complex under construction in the envelope of a historic mill overlooking the Sugar River is in the home stretch after a complicated financial package is put in place for the construction project of $ 11 million.
Chinburg Properties, based in Newmarket, NH, which acquired the 62,000-square-foot Peterson Building for $ 1.2 million last year, secured financing through a combination of federal tax credits, bank loans and regional development funds that will allow the developer to complete the conversion of the five-story building into ready-to-move-in apartments next spring.
The red-brick Peterson Building, which was part of the Monadnock Mills Textile Operation, is one of the most imposing structures in downtown Claremont and the latest in a trio of historic properties – the other two now occupied by Red River Technology and Common Man Inn & Restaurant – reusable for modern use. Over a decade ago, the city spent millions to modernize the Water Street district to stimulate private investment in factory redevelopment, including the construction of a parking lot and a pedestrian bridge over the Sugar River. .
“It’s exciting to watch it unfold,” said Nancy Merrill, director of planning and development for Claremont, of the building’s conversion work that began last fall more than a decade after the plan. from a previous developer to convert the 19th century factory structure. Condominiums collapsed during the recession.
“There is no vacant accommodation here for apartments and these will meet the critical housing needs of employers,” she said.
Last year, in an effort to help Chinburg redevelop the Peterson Building, city council approved a tax relief measure that freezes the assessed value of the building at $ 753,700 for 11 years.
In economic difficulty since the closing of manufacturing plants more than a generation ago, the economic recovery in Claremont has been slow and hesitant. But the city is currently in the middle of a $ 4.5 million project to redevelop Pleasant Street to make it more pedestrian-friendly.
The Peterson building project represents an important piece in the hopes of revitalizing the city.
The residential units in the building will consist of a mix of studio, one-bedroom and two-bedroom apartments at “market price” with rents ranging from an average of $ 1,150 per month for studios to an average. of $ 1,860 per month for both rooms, according to Matt Asia, director of asset management at Chinburg.
Other features of the apartment complex will include wi-fi, private outdoor patio grill for residents, rooftop terrace, on-site laundry facilities, downstairs “club room” for hosting parties and a “dog wash” room with tub and dryer, Asia says. Parking will be provided in the city-owned Claremont parking garage across the street.
Asia said Chinburg, which also builds and manages the property, will begin renting apartments towards the end of the year in anticipation of occupancy starting in March or April.
âWe just know that there are few vacant apartments in New Hampshire and the Upper Valley in particular, so we anticipate high demand,â Asia said.
Chinburg develops and builds residential properties in New Hampshire, Massachusetts, and Maine, including single-family homes and apartment and condominium complexes. Among the company’s projects is the Newmarket Factories, which converted a former factory into a $ 17 million mixed-use residential and office complex with 116 apartments.
Although Chinburg started work on the Claremont building earlier this summer, final funding for the project was finalized only a few weeks ago, according to Asia, as putting together the package involved a myriad of parts.
The Lebanon-based Mascoma Bank led the fundraising effort, one of the few independent banks in New England to have a dedicated group for using the tax credit programs of the government to finance projects that are too costly for conventional lenders.
This program, called the Federal Historic Tax Credit, allows investors participating in projects aimed at the redevelopment of historic buildings for new commercial and residential uses to benefit from a 20% tax credit. Projects must be reviewed and certified by the Home Department’s National Park Service to become eligible for the tax credit.
Federal credit is designed to advance hard-to-finance projects when they involve too much risk or too little return for conventional lenders.
âThese buildings would remain fallow, a plague on the community, without this program,â said Dick Jennings, director of the community development loan group at Mascoma Bank.
Mascoma, Jennings said, was brought in to lead the funding through Claremont Savings Bank, which is also helping fund the project but had no experience navigating the federal program. Other funding participants include the Capital Regional Development Council in Concord and the Regional Economic Development Center in Raymond, NH
Federal tax credits were purchased by Monarch Private Capital in Atlanta, according to Asia (the $ 11 million in construction costs does not include the cost of acquiring the Peterson Building, design work and architecture, permits, legalities and financing, all of which will push the total cost of the project – and the amount to be financed – upwards.
Given the current housing shortage in the Upper Valley, which has only been exacerbated by the pandemic, local real estate professionals don’t expect Chinburg to have trouble finding tenants to rent. the apartments.
Don Chabot, of Town & Country Realty Associates in Claremont, said that while the rent Chinburg will charge for the apartments is higher than the one typically seen in Sullivan County, “they should be fine.”
âLocally, our market would be more from $ 900 for a studio to $ 1,400 for a two bedroom,â said Chabot. “But I think the $ 1,100 to $ 1,600 deal in Lebanon is going to come here.”
Contact John Lippman at [email protected]
Chinburg Properties converts the Peterson building in downtown Claremont into 83 market-priced apartments. An earlier title and photo caption with this story incorrectly described the ownership structure of the units.