LEBANON — The New Hampshire Housing Appeals Board has ordered the city of Lebanon to reconsider a request for an extension for the Prospect Hills subdivision, breathing new life into the proposed 117-unit project near Lebanon Middle School.

The Lebanon Planning Board had denied the extension in March, noting that plans to build the subdivision, which would include 43 single-family homes and 74 townhouses on a 40-acre wooded parcel, had dragged along for 15 years.

But in its 10-page decision remanding the issue back to the Lebanon Planning Board, the Concord-based Housing Appeals Board said Lebanon officials had given short shrift to a state law that allows such extensions for “good cause.”

“This case rests on two words: ‘good cause,’ ” the Housing Appeals Board wrote last Thursday.

But it also noted that the phrase is not well-defined in the relevant state statute, and referred to a legal dictionary to help define it as “a reason for taking action or failing to take an action that is reasonable and justified when viewed in the context of surrounding circumstances.”

The developer, Manchester-based Brady Sullivan, had argued that it needed the extension because it spent more time than anticipated “cleaning up” Phase I of Prospect Hills, an earlier development just north of Prospect Street that was started by another developer. Brady Sullivan also had asserted that the COVID-19 pandemic had hampered its ability to meet earlier development deadlines.

City officials had argued that the Planning Board had given Brady Sullivan a couple of extensions already, the most recent being in 2018.

The Housing Appeals Board said the granting of previous extensions should not be a consideration in deciding the current request, and also instructed the Planning Board to factor into whether the COVID-19 pandemic could have had an impact in impeding work on the project.

Lebanon Planning and Development Director David Brooks said Tuesday that a rehearing, per the interim order, would likely be scheduled for Nov. 8.

“The Planning Department and Planning Board will coordinate with legal counsel for appropriate guidance before the rehearing, but we have no comment on the ruling itself at this time,” he said.

John Cronin, a Manchester-based attorney for Brady Sullivan, said, “We’re pleased with the result from the Housing Appeals Board, and I think they were correct in finding that the denial was not done correctly.”

He also noted that the project would help meet a demand in the Upper Valley.

“There is a statewide need for housing, and it’s a project that is essentially shovel-ready to get built out,” he said.

John Gregg can be reached at 603-727-3217 or jgregg@vnews.com.