By Chris Frost
EAGLE TIMES NEWS EDITOR
NEWPORT, NH — A developer building 42 units of workforce housing on Spring Street has filed a lawsuit against the town of Newport, accusing it of changing the terms of development.
Avanru Development Group Ltd., with offices in Walpole and Keene, is asking Sullivan County Superior Court for “declaratory judgment over the Town of Newport’s attempt to impose a previously undisclosed and arbitrary assessments which violates applicable law.”
The lawsuit, filed on June 14, alleges Newport changed its connection fees to user fees, usually centered around the installation of water meters, after the deal was finalized. The developer wanted 42 meters, one for each apartment unit. The change significantly increased the cost of the project.
When contacted about the lawsuit by the Eagle Times on July 6, then Town Manager Hunter Rieseberg said he had not seen the lawsuit.
“We have not been served yet. I have not seen the complaint, so I can’t comment on it,” Rieseberg said.
Rieseberg said his office is typically served by the sheriff, after which it’s given to the town’s attorney.
“It’s unusual, but that has not happened,” he said.
Avanru owner Jack Franks said there is a general rule amongst attorneys and his firm, Sheehan Phinney Bass & Green, P.A. of Manchester, has reached out to Newport’s attorney and “asked if he would accept the service.” Franks said the town’s attorney had not returned any calls.
“The only assumption I can make is that the town manager has instructed the attorney not to accept service,” he said. “We now have to go through the process of going through the sheriff’s department to have them served by the sheriff’s department. It’s a stonewalling tactic.”
Rieseberg said that “service” is a routine process and he has no tactic or practice regarding legal matters.
“I cannot think of a case that was not delivered or served via the Sheriff’s Office, whose offices physically abut our property/offices,” he said. “It’s typically accomplished a number of ways, e.g., by sending the filing to the recipient’s legal representative who has been authorized to receive notice for the town. I believe our attorney is authorized to receive service on the town’s behalf.”
Franks said Rieseberg has been “nothing but difficult since day one in working to build housing and commercial development in Newport. He’s been obstructive in all aspects. It doesn’t surprise me that he’s playing the role of ‘Gee, we didn’t hear about it.’ It’s complete skullduggery.”
Franks called it a complete bait and switch.
“Who in their right mind would want to come to a town and invest millions of dollars where there are absurd usage or connection fees for a project?” Franks asked. “We’re doing a great service to the community already in investing $17 million and Jon Livadas is spending $21 million. We’re investing $35 million into a community that desperately needs housing and there is a lot of risk associated with that.”
Livadas is the lead partner in a proposed development that would convert the landmark Ruger Mill into 70 units of workforce housing. While he refrained from criticizing Rieseberg, saying he, and everybody else he’s worked with in town had been very helpful throughout the process, he was also unhappy with the unexpected assessment of usage fees, saying they will cost him $161,000.
“The $161,000 is going towards fees and not going into the improvement of the building,” he said. “In addition to that, we have the ability to bring $10,000 per unit to the town via the Invest NH Program. Our project will bring $700,000 to Newport. This is a partnership, and we want to work with the town to bring this money. What we’re asking for is for them to take a broader look at this fee structure and understand that part of what we’re dealing with is rising interest rates and costs.”
Livadas said workforce housing projects are different from market rate projects in that they are not allowed, as a condition of their funding, to exceed their development budget. This is why money paid toward fees is money taken away from the actual development. While he’s still in talks with the town over the fees, he said a lawsuit was in the works.
“We’re not asking for any assistance,” Livadas said. “Other Municipalities in New Hampshire that get this Invest NH money are donating it back to the project. We’re not asking for that. All we’re asking for is for our fees to be reasonable so we can build workforce housing for the town.”
Both Franks and Livadas said the usage fees weren’t disclosed on the town’s website or disclosed to them until well after their projects’ budgets were set. They now are.
“If a local owner has a four-unit building they want to renovate or turn into four units, they are going to spend $10,000 to do that,” Livadas said. “That’s cost prohibitive for a local owner to do something like that. Ours is on a much larger scale. Something that’s being overlooked is that this is an issue for everyone moving forward. Towns often say they don’t want to set a new precedent. We’re not setting a new precedent. We’re updating an outdated fee structure and not taking into account the housing crisis and the reality that we now have multi-family projects. When the fees were introduced, there were single-family homes and farm lots and it was about protecting the value of single-family home lots. Today’s world of density and connection to downtown is vital to town’s surviving.”
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