LEBANON — Fourteen years ago, Lebanon moved its public works department out of a garage on Spencer Street. Despite big plans and multiple attempts to turn the property into something new, it has sat as a vacant lot just down the street from Colburn Park for years.
After trials, tribulations and pitches that didn’t pan out, developers hope to start construction on an 80-unit affordable housing complex on the site in the next six months, Hollis, N.H.-based developer Jake Tamposi told the Planning Board last week.
“After an arduous and uncertain funding environment over the past few years, just given some of the changes at the federal and state levels, we were really excited in the past eight months now to see a lot of the pieces really come together for The Muse,” Tamposi said in a Friday interview.
The four-story 76,000 square foot development called The Muse will include a mix of one, two and three bedroom apartments available to people earning between 30% and 80% of the Grafton County Area Median Income per year, or about $24,000 to $84,000, according to materials submitted to the Planning Board.
As of this week, the development will include fewer studio and one-bedroom apartments and more two-bedroom apartments than originally approved to meet growing needs for larger housing in Lebanon.
Tamposi said in talking with the Lebanon Housing Authority, the city’s public housing agency, he was struck by the need for affordable housing for families in Lebanon.
“It really was dramatic,” Tamposi said.
The complex includes three studios, 37 one-bedroom, 32 two-bedroom and eight three-bedroom units. It is expected to cost just under $32 million, Tamposi said.
“The reality is we have families,” Nick Golon, president and engineer of TFMoran, an engineering firm for the project, said at the Planning Board meeting. “Families need more space.”
The City Council selected the project, pitched by Tamposi and his brother Joe, who own the company The Muse Lebanon LLC, as part of a 2023 competitive bidding process to redevelop the site into 100% affordable housing.
2023 was the city’s second attempt to find a developer for the project after rejecting a 2017 offer from major Upper Valley developer Mike Davidson.
Davidson, who owns Lebanon-based property company Ledgeworks, proposed buying the nearly 2-acre property for $400,000 and building 100 to 200 housing units and 20,000 square feet of commercial and office space.
At the time, the city council said the offer was too low. The land is currently valued at $853,000 according to city property records.
In 2020, the council accepted bids and approved a proposal by Ken Braverman, owner of The Braverman Co. of Stowe, Vt., to purchase the land for $1.5 million.
Braverman planned to build a four-story apartment building with 94 apartments, including eight affordable units, and 4,500 square feet of retail and commercial space.
The discovery of environmental contamination at the site caused further delays, and Braverman withdrew from the project in April 2023, saying that it was no longer financially viable due to hiring shortages and inflation.
In 2024, the council selected the Tamposi proposal over two others because of the developers’ experience and understanding of how to fund the project and the amenities included in the proposal, according to meeting minutes from the time. Also, other developers expected the city to help fund the project and offered little to no money for the land.
Per the agreement, the Tamposi brothers will buy the land for $400,000 once they have finalized funding agreements. The deal is less than half of the assessed value of the property, but aligns with the city’s original goals of revitalizing Spencer Street and offering a needed resource of affordable housing.
“The city is selling the property at a price that allows the project to make sense,” Tamposi said Friday. “Whereas a lot of other land and opportunities in the Lebanon and Hanover market are just so expensive now that it’s very much difficult to do these affordable housing communities on them.”
In 2024, the Muse secured approval for the current plan from Lebanon’s Planning Board.
Despite locking down key approvals from the city, the project was not yet free and clear because of funding issues.
Developers hoped to secure a bond from the New Hampshire Housing Finance Authority in 2024, but the project was not selected, according to a letter submitted to the planning board by TFMoran. The agency did not offer the program the next year, “leaving the project’s path forward uncertain.”
“Over the last several months, however, several critical funding pieces have come together,” the letter reads.
The funding comes from a mix of state and federal sources, including $750,000 from the state-led InvestNH 2.0 program that was designed to promote affordable housing development, $5.8 million in federal HOME and housing trust funds, bonds from the state housing finance authority and low-income housing tax credits.
All of the funding for the project is now “lined up,” Tamposi said, and the developers are in the process of finalizing agreements to secure the money.
With the project again moving forward, developers returned to the Planning Board last week to secure final approvals, including changing the types of units it will include and removing a previously required playground from the plans.
The playground would have been located partially on land owned by the state of New Hampshire.
Despite negotiations, project engineer Golon said at the meeting that the city, state and developer “weren’t able to find common ground” to build the playground in that location.
Tim Corwin, deputy planning and development director, told the board he had “no concern” about removing the playground because the complex is located near the Northern Rail Trail, Eldridge Park, other play structures and Colburn Park.
The board unanimously approved the changes.
“I think it’s an excellent location for this property and I hope you’re successful in building it,” said board member Kathie Romano at the meeting.
With the approval, Golon said the project is ready to move “full speed ahead.”
