NASHUA – A downtown parking lot is being eyed by a Florida-based developer to be the future site of a seven-story apartment building.

On Tuesday, members of the Nashua Board of Aldermen took up the matter and assigned it to the Budget Review Committee. Resolution 20-028would authorize the city to enter into a master development agreement with Lansing Melbourne Group LLC. for the purchase and development of the “School Street Lot” for a housing project. If approved, the parking lot will be sold for $900,000 to the developer.

Tim Cummings, Nashua’s director of economic development, said the developer has had a couple successful projects in Manchester, including the new garage in the Mill Yard.

“I think advancing priority projects like this during this time is very important, especially in light of the potential additional revenue it will bring into the city coffers,” Cummings wrote via email.

In January 2017, the city released a request for proposals seeking input from real estate developers for a housing project on the approximately 0.682-acre parcel of property, which is currently utilized as a public parking lot.

According to the Master Development Agreement, the project is aimed at accommodating the growing housing needs of the city. The need for more housing in the city remains, especially with low vacancy rates. Cummings said the residential vacancy rate for multi-family apartments is very low, something around 1 percent throughout the city, and that on average, it hovers around 0 to 3 percent city-wide at any given time.

“The rents in Nashua have gone up double digits and sometimes more depending on where you are in the city,” Cummings said. “These apartments will be market rate and, of course, this additional supply will only help rents from increasing as quickly as they have been.”

The developer intends to build a 160,000-square-foot building, consisting of approximately 150 apartments. According to the Master Development Agreement, “during the Diligence Period, the city will provide $100,000 in funding during predevelpment for the design of public facilities and infrastructure surrounding the project site in the form of reimbursement for pre-approved design fees.”

In addition, the city and developer will seek to obtain funding through the U.S. Housing and Urban Development Community Development Block Grants or similar programs in an effort to offset costs.

As far as parking goes, the city and developer will enter into a 50-year minimum, long-term lease for parking in the nearby High Street Garage, which will provide at least one space per unit for residents of the building.

Conceptual designs of the seven-story School Street Flats include 42 one-bath studios; 76 one-bath, one-bedroom units; and 32 two-bath, two-bedroom units. Plans also feature an amenity courtyard.

“This would provide a boost, a big boost, for the city and the downtown and our economy as we emerge from the coronavirus crisis,” Nashua Mayor Jim Donchess said. “It would bring in $900,000 of cash initially, and with 150 units, would generate probably about $300,000 a year in tax revenue, in addition to providing hundreds of patrons for downtown businesses who are going to need help in the coming months and years.”

Donchess also said in addition to that revenue, the project will result in the leasing of evening parking spaces, which will bring in $150,000 to $200,000 of revenue on an annual basis.

Adam Urquhart may be contacted at 594-1206, or at aurquhart@nashuatelegraph.com.