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Wednesday, September 28, 2011

City tried to buy controversial Pennichuck land in 2003

NASHUA – The city has spent nearly a decade trying to buy Pennichuck Corp. with the intent of stopping the company from selling land around the watershed.

Not long after that process started, a 30-acre parcel off Concord Street next to Supply Pond caught the eye of a few city officials. It seemed like the ideal parcel to protect from commercial development. The city even could have applied for a federal grant to make the deal happen.

But the transaction fell through. Now, nearly eight years later, that land has become a source of controversy as Pennichuck is about to sell it to a developer who wants to build a housing complex there.

The Telegraph has obtained e-mails and letters between city officials on the possible purchase in 2003.

The communications reveal how Pennichuck initially showed interest, but then its new CEO pulled the plug because of a concern that the city would try to take over the company through eminent domain.

In a paradoxical way, the larger pursuit to protect all developable Pennichuck properties apparently put the brakes on a purchase of a smaller chunk of land.

Today, despite the objections of many residents, it appears city officials can’t do much to stop Pennichuck from selling the land to North Concord Street Properties LLC. The city Planning Board this summer approved North Concord building an 85-unit elderly housing complex on 32 acres in that spot.

It is considered one of the last – if not the last – pieces of undeveloped, unprotected land in Nashua that Pennichuck can sell.

The messages exchanged between city officials in 2003 show they were aware of the land’s importance.

Then-Conservation Commission Chairman Kathryn Nelson wrote in an October 2003 e-mail that she had found a list of properties that Pennichuck owned, and a 30-acre parcel behind Clovelly apartments, near Pennichuck Junior High School, was one.

The Conservation Commission identified the parcel as a priority for protection, while Nelson sent a letter to new Pennichuck CEO Don Correll, expressing the city’s interest in saving the land. A grant was also being written to a federal program to help with the purchase.

In one e-mail, Nelson wrote, “I sensed that (Pennichuck executive) Don Ware thought a bargain sale may be an option.”

Nelson also wrote that Ware said years earlier, the land was about to be sold for condo development before the city objected to Pennichuck Corp. working out an acquisition deal in which Philadelphia Suburban Corp. would take over the company for about $106 million in a stock-for-stock transaction.

Brian McCarthy, then and now an alderman, and Kathy Hersh, now the city community development director, walked the property and “said there is a lot of high and dry developable land,” according to an e-mail from Nelson.

McCarthy eventually wrote Hersh that buying this land would “come off the package price” of the larger Pennichuck transaction and would be a separate deal with different funding. “I don’t see a problem if we want to proceed,” he wrote.

But as the deadline for the grant neared, Nelson relayed news that deal appeared dead.

In an Oct. 24 message, Nelson wrote: Correll “had concerns with entering into specific discussions with us about selling the land due to the nature of the potential eminent domain action by the city.”

Correll’s priority had thus become “focusing on the water company and the dealings with the city rather than selling land,” she wrote.

The next month, city officials offered Pennichuck $121 million, which they said was equal to the Philadelphia Suburban deal because it included $15 million to cover the company’s tax liabilities. Pennichuck rejected the offer a month later.

In 2004, city officials submitted a petition to the Public Utilities Commission to take over Pennichuck’s regulated water systems.

Now, in 2011, the city is close to acquiring Pennichuck for $200 million, needing only PUC approval. But by the time the deal is finalized, the Concord Street property could be on its way into becoming an elderly housing complex.

Albert McKeon can be reached at 594-5832 or amckeon@nashuatelegraph.com; also check out McKeon (@Telegraph_AMcK) on Twitter.