Workforce Housing Project to Get Third-Party Review

The Zoning Board of Adjustment continued to its March 18 meeting a re-hearing of variance requests for a proposed workforce housing development on Stonehenge Road.

The Board asked the applicant to come back with a cost analysis detailing how each individual variance would financially impact the feasibility of the project.

According to Laconia-based Applied Economic Research’s Russ Thibeault, it would cost Windham developer Raja Khanna $4.5 million more to build the project without variances to the ordinance: to allow construction of 24-unit buildings where 16-unit buildings are permitted; to allow the percentage of workforce housing units in the development to be limited to 50 percent where 75 percent is required; and to allow phasing of the development over three years, exempting the development from future implementation of growth control regulations.

Thibeault said even if the Board does grant all three variances, the project’s profit margin is “razor thin” at a 5.5 percent return, based on renting the regularly priced units at $1,440 per month.

Member Neil Dunn said he would like to see Khanna provide specifications for the units he plans to build to Thibeault, and for Thibeault to share his analysis with a third-party consultant for review.

“I think you’re looking for a comfort level for the costs and that the figures I’m giving you are realistic,” Thibeault said.

“I look at rental rates for the Fairways (in Derry), and they’re renting two-bedroom apartments for $900, where you’re saying they’ll cost $1,400,” Dunn said. “I would like to have a third party evaluate. How do we know it’s not just inflated? I would like to see that resolution. I’m also looking for assurance what you’re proposing to put in is what will end up going there. How do we guarantee that is what will get done?”

The Board directed Thibeault with sharing with the third-party consultant his analysis of each of the variances independently from the others, and how the project would be impacted by each of those variances.

“It’s not a massive undertaking,” Thibeault said. “I think I could have that ready for your next meeting on March 18.”

Concerns from members of the Board and members of the public during the re-hearing focused on whether or not the Town has a responsibility to make the workforce housing development economically viable.

“What if he overpaid on the price of the land?” David Nease of 11 Faye Lane asked the Board. “What if they did pay 20 percent over for the property? It’s obvious that type of project won’t work without several variances. Why is it our responsibility to make it financially feasible?”

“State statute requires the Town to make efforts to provide workforce housing,” argued Bill Tucker, a Manchester-based attorney who represented Khana at the meeting. “Londonderry and state statute are important to the overall discussion to make this an affordable and realistic project. The Town must provide reasonable and realistic opportunities to develop economically viable workforce housing within the framework of the municipality’s ordinances. This is a unique situation where the state requirements act as canopy which the Town must operate within and remain in compliance with. What may seem acceptable for a market rate project may require modification for a workforce housing project.”

Dunn pointed out the courts have ruled the character of a neighborhood should be considered, and that if the developer is granted a variance to build 24-unit buildings, they will be a story taller than the 16-unit buildings would be.

“For me, a taller building does change the character of the neighborhood more than a lower building,” he said. “The character thing is big for me. I travel all over and when I get off the highway these big apartment complexes are intrusive. I’m big on character in Londonderry.”

“I think these buildings do a dis-justice to the people in this neighborhood,” said Deb Paul of 118 Hardy Road, publisher of the Londonderry Times. “There are nice, single-family homes coming in. Yes, the assessment of the home may not go down with this development, but it goes down when you go to sell it. When the buyer goes to look at the neighborhood and says, ‘oh, that’s what’s there?’ It may not affect the assessed value, but it affects the resell value.”

Khanna told the Board the development will be barely visible from Stonehenge Road and won’t be visible from Mammoth Road due to the downward slope of the property and natural buffers.

“I keep hearing it doesn’t affect the neighborhood. Well, I live in the neighborhood and I’m here telling you that I don’t like it,” Paul said. “I sat on the (workforce housing) board and we worked for over a year-and-a-half talking about the workforce housing ordinance.”

Paul noted the town planner said that according to the town assessor, Londonderry fulfills 70 percent of its workforce housing obligation.

“That’s why they’re rezoning everything,” she said. “There was a lot of back and forth, and we compromised at 16 units per building because people didn’t want to damage the character of this town and make it a Manchester, or a Derry, or a Salem.”

But Tucker argued it’s rare for a developer to build under 24 units in a building.

“At the end of the day, the ordinance was written and approved by the town attorney. Back then, things cost a lot more and they said it was feasible,” said Paul.

“The same exact project was brought up in 2008. When they purchased this property and started thinking about it, they knew about the challenges they had and the variances they would need,” Nease said. “For them to expect it to be feasible today doesn’t make sense to me. They should have done their due diligence and negotiated less on their property. It’s not our responsibility as residents or you as a board to make this an economically feasible project if they overpaid on the land.”

Paul argued the reports Thibeault has presented are one-sided, as he is paid by Khanna.

“Their issue is to make sure they get what they want, not what’s right for this Town,” Paul said.

The Board agreed that bringing in a third-party consultant would generate confidence about those numbers.

The case will be re-heard at the Board’s March 18 meeting, taking into consideration Thibeault’s analysis of the financial implications of each variance, as well as the third-party consultant’s analysis.

In other business at last week’s meeting:

• The Board voted 5-0 to grant a variance to allow a subdivision to create a lot with less than 30,000 square feet of contiguous non-wetland area as required by the ordinance.

The variance will allow Jack Szemplinski of 62 Rear Adams Road and Harold Kicza of 86 and 88 Adams Road to move forward with a lot line adjustment that will clean up the lot lines related to their properties.