Zoning Board Denies Variances for Stonehenge Workforce Housing

After hearing the concerns of several residents who spoke against a proposed workforce housing development on Stonehenge Road, the Zoning Board voted unanimously to deny all three variance requests related to the project.

Developer Raja Khanna of Windham requested variances to allow construction of 24 units per building where 16-unit buildings are allowed, completion of the project over three years rather than six, and a reduction of the minimum workforce housing occupancy requirement from 75 percent to 50 percent.

Bill Tucker, a Manchester attorney who represented Khana at the Dec. 18 meeting, argued the town needs the project to meet its fair share of workforce housing offered, and that the project wouldn’t be financially viable without variances to the Town’s Zoning Ordinance.

Londonderry’s requirement that workforce housing developments maintain 75 percent workforce housing units is onerous, according to Tucker.

“I don’t believe there is another town in the state that has a 75 percent requirement. Most other towns require 25 to 33 percent, and one other town requires 50 percent,” he said.

Pointing to a report of the Southern New Hampshire Planning Commission from 2010 that concludes Londonderry needs to construct 374 more workforce housing units by the end of 2015, Tucker said the project will help the Town meet its obligation.

But residents called for the town to take inventory of workforce housing units currently available and under construction before granting variances for another project.

“We have over 200 workforce housing units in the pipeline,” Jim Butler of 57 Mammoth Road told the board, noting there’s a more updated draft of the SNHPC’s 2010 report. “A draft titled ‘Moving Southern New Hampshire Forward,’ which covers 2010-2020, indicates Londonderry only needs 187 units to meet the fair share of workforce housing. In the pipeline now, we have over 200 units. If that’s the case, I think, personally, we need to take a stand.

“I’m all in favor of helping out and having workforce housing, but I don’t want to be abused as a taxpayer,” Butler said.

The Workforce Housing law was designed for regional use – and Derry, Manchester, Litchfield and other areas surrounding Londonderry already offer a high percentage of workforce housing rental units. Londonderry also offers homes for purchase that are under the median, according to State Rep. Al Baldasaro, R-Londonderry who served on the Affordable Workforce Housing Board and voted against the legislation in 2008.

“I have been trying to appeal this law for two years,” he told the Board. “I’m asking you to not tie up the Town because in another year we don’t know where we’ll be under growth control. I’m hoping we do not set the town up for the future to have an overabundance of apartments.

“Don’t let the lawyers push you around with these laws,” Baldasaro said. “We have a lot of workforce housing here.”

Residents at the meeting argued that the developer’s request for an accelerated construction schedule would put a burden on town resources and exacerbate traffic issues in the already congested area.

“I don’t know how Hardy Road could support this project unless we’re planning on turning it into a four-lane highway,” Greg Stanley of 112 Hardy Road said. “I think you need to go by the strict letter of the ordinance. The phasing requirement is in place to give the Town time to adjust the schools, police and roads when a project like this comes in.”

But according to Russ Thibeault of Applied Economic Research in Laconia, it would cost Khanna $4.5 million more to build the project without the variances requested. And even with the variances, the project’s profit margin is low based on renting the regularly priced units at $1,440 per month.

“He’s looking at a 5.5 percent return; that’s razor-thin,” Thibeault said.

“I look at the numbers – we would never get involved in a project that has such a low profit margin,” said Richard Flier, a local real estate developer and taxpayer. “The land isn’t worth anywhere near what they’re paying. Maybe the person who owns the land should reduce the price.”

Flier additionally noted there’s not much room if something goes wrong during construction and expressed concern the Town will be burdened by the project if it goes bankrupt.

“That would be pretty irresponsible for all of us if the town gets stuck with it,” he said.

“I have seen the taxes go up and up,” Stanley said. “I just don’t see how they could buy this project. The town can’t subsidize their subsidized housing. This doesn’t benefit the town. This isn’t the right thing for the town and the taxpayers.”

In response to their concerns, Khanna said his company owns and manages 1,000 units, all quality properties throughout the region.

“We have developed five projects and have significant development experience,” he said. “I have confidence we can take on this project, complete it and manage it well.”

The largest project Khanna has developed is a 204-unit complex, where the proposed workforce housing development for Londonderry would be a 280-unit complex.

“When you allow a project with such a margin of success or failure at stake, you bring down the values of everything in town,” Flier said. “Blight is not just on the project, but neighboring properties as well. It makes developers who come in look twice at properties and think twice about investing. If you go in knowing it may fail, you’re putting the town in jeopardy in terms of future investment and value in the Town.”

The Board concluded each of the three variance requests failed to satisfy all five points of law, which is required for variance approval.

In regard to Khanna’s request for a variance for 24 units per building where 16-unit buildings are allowed, the Board determined the request is not in the public interest due to a lack of analysis data to support the type of housing proposed.

Khanna’s additional variance requests, for a variance to allow completion of the project over three years rather than six and to allow a reduction of the minimum workforce housing occupancy requirement from 75 percent to 50 percent, were determined to be contrary to the public interest as well.

The Board noted that granting the variance for a rapid pace of development would restrict the Town’s ability to monitor and control growth, thereby making it contrary to the public interest.

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