NASHUA – Aldermen on Tuesday approved a deal that would allow CVS pharmacy to move forward with its proposal to renovate and expand its 242 Main St. pharmacy while protecting Southern New Hampshire Medical Center’s future interest in building a multi-story parking garage behind the store for up to a quarter-century.

The compromise agreement reached by the city, CVS and the hospital is one of multiple pieces that must fall into place for the complicated downtown development project proposed at the intersection of Hollis and Main streets to proceed.

Aldermen approved it on a 13-2 vote, with Alderman-at-Large James Donchess and Ward 6 Alderman Paul Chasse Jr. opposed.

The compromise would give CVS the guaranteed parking space it says it needs before it will invest in the project while allowing the hospital an additional 10 years to build a parking garage and multi-story office building.

“This is a huge development opportunity for the downtown,” Richard G. Lannan told Mayor Donnalee Lozeau and other members of the aldermen’s finance committee Jan. 7.

The CVS proposal would result in the redevelopment of a key intersection, create jobs and boost parking and tax revenues for the city, said Lannan, who is owner of The Lannan Co., a real estate and development firm. Lannan is the broker for the CVS renovation project, which goes before the Planning Board for approval next month.

Donchess on Tuesday said it is the city that would be “giving up a huge opportunity at that corner” by locking itself into an agreement that obliges it to dedicate most of the city lot to CVS for 25 years.

Donchess said CVS’s plan to put in a single-story pharmacy with a drive-thru does not comply with the multi-story style development the master plan intended for that intersection. He also has questioned whether the city is getting a “fair financial deal” from the proposal.

Donchess likened the corner to the intersection of Main and Pleasant streets in downtown Concord, which is flanked by two office buildings, one with a cinema and restaurants inside.

“Why can Concord do this and not Nashua?” Donchess asked.

“Why should we sell ourselves short and agree to allow for at least 25 years city land to be used for essentially a drive-thru pharmacy?” Donchess continued, asking aldermen to postpone acting on the proposal.

But other aldermen said no one has shown interest in developing that corner for multi-story office space other than the hospital, which indicated that it intends to build a parking garage and multi-story office space on the site in the future.

“There is no demand whatsoever for upper-floor office space in the downtown at the moment and probably won’t be for many years to come,” Alderman-at-Large Brian McCarthy said.

“The hospital is the most likely user of upper-floor office space, and that is exactly what this agreement anticipates,” McCarthy added, noting that he had “many discussions” with hospital officials about building a garage and office building on the site.

McCarthy said the agreement also would “facilitate the development of the overall downtown.”

Ward 9 Alderman Ken Siegel added, “If we say no to this, we are going to kill a development for no good reason. Nobody is racing to lease this space.”

CVS has proposed building a nearly 13,000-square-foot pharmacy on the site owned by Samuel Tamposi Jr. The building would have one story, a false second-story facade, and would be built up to the edge of the sidewalk at East Hollis and Main streets.

The buildings formerly occupied by Giant of Siam and Charron Medical would be torn down and converted to parking, Lannan said. A drive-thru pharmacy window would be part of the project, along with an additional westbound lane on East Hollis Street that would be dedicated to left-hand turns, Lannan said.

CVS chose to remain and rebuild on this site after exploring two other potential downtown locations, Lozeau said. The store is directly across the street from Southern New Hampshire Medical Center and is one of the highest-volume CVS locations in New Hampshire, city development officials have said.

CVS currently leases 37 parking spaces in the city-owned lot directly behind the store. The store says it cannot proceed with its expansion project unless it has a 25-year guarantee to rent those spaces, Lannan explained Monday.

The city currently leases the parking lot to the hospital, and the hospital, in turn, subleases the 37 spaces to CVS. The existing lease was signed last July 1 and runs 15 years. Under the terms of the lease, the hospital has an option to buy the lot for $720,000, provided it builds a parking garage there.

Under the amended sublease that the finance committee approved last week, if the 15-year lease runs out without the hospital buying and building a parking garage on the lot, CVS would then directly lease the lot from the city for the next 10 years.

If the hospital decides in that next 10 years that it would like to buy the lot from the city and build the parking garage, the agreement requires that they resume subleasing the 37 spaces to CVS through 2039.

Lozeau said the hospital already has done the engineering and other planning required to proceed with the parking garage, which is part of its master plan.

“I see this as a win-win-win for CVS, the hospital and the city. And I’m strongly in favor of it,” Ward 4 Alderwoman Pamela Brown said last week.

Kathryn Marchocki can be reached a 594-6589, kmarchocki@nashua
telegraph.com or @Telegraph_KMar.