[Note: to learn how to purchase CDFA tax credits to benefit this project, click here.]
All systems are go for construction to begin on Cotton Mill Square after the 109-apartment project in the heart of north Main Street cleared its final hurdle on Thursday, developer John Stabile said.
“It’s a long time coming,” Stabile told The Telegraph upon getting word that the U.S. Department of Housing and Urban Development approved a roughly $11 million permanent end loan for Stabile’s rehabilitation of the historic cotton storage warehouse, located across the Nashua River from Clocktower Place.
“It’s going to be great for the city and great for downtown, and I think it’s going to serve the community very well,” Stabile said. “I’m really looking forward to getting started. All of our people are raring to go.”
The Stabile Co. has been hoping to get going on Cotton Mill Square for more than six years; its initial vision – to demolish the 8-story, 160,000-square-foot warehouse and surrounding buildings to construct 162 condominiums on site – fizzled out with the economy, after the Nashua City Planning Board first gave the project its blessing in September 2006.
Five years later, the planning board approved a new plan for the site, to refurbish the historic cotton building, built in 1905, into more than 100 units, more than half of which will be affordable to people making 50-70 percent of the median area income. Eleven of those apartments will be subsidized with housing choice vouchers administered through the Nashua Housing Authority and the rest of the units will be rented at market rate.
“This is terrific news,” city Economic Development Director Tom Galligani said Thursday. “We’ve been waiting for this for quite some time. It’s an important milestone.”
City officials hope Stabile’s rehabilitation in the city millyard will have a domino effect on other blighted properties in the area; the 108-year-old building, contaminated with asbestos, lead paint, fuel oil, carcinogenic polychlorinated biphenyls, or PCBs, is already undergoing preliminary abatement to clear up the remnants of its Nashua Manufacturing Co. and Nashua Corp. past.
“I had 33 abatement contractors in there yesterday,” Stabile said. “We also have masons in there putting the openings in there for the new windows and we’re continuing the interior demolition.”
HUD’s loan puts the finalizing in motion for all the various entities financing the project, Stabile said, from Northern New England Investments and TD Bank North that are buying tax credits for the project, to the city’s help with HOME and 108 funds.
Financing for the nearly $26 million project includes $10 million in historic and low-income housing tax credits, more than $1 million in Stabile Co. equity, $2.2 million in city and state HOME funds, more than $600,000 in EPA loan funds, and $1 million in Community Development Finance Authority state tax credits.
“The city and the Board of Aldermen have been very supportive of this project because I think everybody recognizes what it really means and it’s such a positive catalyst for Nashua and for the downtown region,” Galligani said. “When I really think about it, it’s taken all this effort and collaboration by us, the private developer team, the state and the federal government to get this project off the ground, it speaks to how difficult it is to redevelop some of these old properties, especially in this market. If it was an easy project, it would been done by now. So, it really has taken the attention and support of everybody to get this project to where it is and where it will be.”
The city has played a particularly crucial role in getting the engines going on construction; earlier this month, aldermen approved a five-year tax freeze on Cotton Mill Square, after the city adopted a state law that encourages investment in downtowns and village centers.
Through the city Community Revitalization Tax Relief Incentive Program, Cotton Mill Square can defer tax increases for five years despite its property value increasing from its substantial rehabilitation.
To qualify, projects must be within a sanctioned city district that includes French Hill, the Tree Streets, part of Canal Street and the Millyard, and have rehabilitation costs at least 15 percent of the building’s pre-rehab assessed value or $75,000, whichever is less. The freeze begins when rehabilitation is “substantially complete,” or the city issues a certificate of occupancy and the property is reassessed.
This summer, work also begins to add crest gates on the city-owned Jackson Falls Dam for $850,000, which will reduce the chance of flood for more than 70 properties downtown, including Cotton Mill Square, which needed to come out of the 100-year floodplain to be eligible for certain federal tax credits.
“I want to thank the people of Nashua, the aldermen, the mayor, the mayor’s staff, and all the various agencies that went over and above to help this project come online,” Stabile said. “I’m confident it’s going to be a good project for the city.”
Along with new apartments, Cotton Mill Square will produce 160 new parking spaces, bring major drainage improvements to the millyard and enable 1,200 feet to be added to the Nashua Riverwalk.
The dam upgrades should be complete by the fall, Stabile said, and Cotton Mill Square should have occupancy approximately 15 months from the time construction starts – so hopefully, by early 2014.
“It really starts the transformation for the Front and Franklin Street mill district,” Galligani said. “It’s the first major project to happen there since Nashua Corp. moved out of that location about 15 years ago, but there have been multiple attempts to get residential housing started in that area, including John’s past efforts, so it’s great to finally see some of the transformation of some of that mill district.”
The Credit Committee will meet Tuesday
The Community Development Advisory Committee will meet Thursday
The CDFA Board of Directors will meet Tuesday
The Finance Committee will meet Tuesday
The Credit Committee will meet Tuesday