Search

Finance Committee - 9/5/2018 Page 7

need a facility such as this to have a long-term command post and something available, and that can be easily
be broken down and reused again, am | correct in assuming all of that?

Mr., Kates

Yes absolutely.
MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Contract for Hotel Market Study (Value: $15,000)

MOTION BY ALDERWOMAN KELLY TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
PINNACLE ADVISORY GROUP IN THE AMOUNT OF $15,000. FUNDS ARE AVAILABLE IN
DEPARTMENT 183, ECONOMIC DEVELOPMENT; ESCROW FUNDS

ON THE QUESTION

Mayor Donchess

And why doesn’t Mr. Cummings come on up. This is of course Tim Cummings the Economic Development
Director. Would you please explain the objective here?

Tim Cummings, Economic Development Director

Yes Mr. Mayor and through you to the Committee, | am here this evening requesting $15,000.00 which is
money out of an escrowed account for real estate consulting services. The reason why is we have been
interested in developing, in the downtown area, some differing uses. We traditionally see mixed use housing
development in the downtown. We have been recently speaking to a few developers about the concept of a
hotel in the downtown. We received feedback that if we had some due diligence on our end to help provide
some data, we could have a more sophisticated and hopefully positive conversation. This is a consultant that
specializes in doing market studies for hotels, very well respected and is going to look at the downtown area
and help us understand what we can do to better position ourselves for that type of development in the
downtown area.

Mayor Donchess

| would add only that we approved an RFP some years ago to possibly develop the School Street Parking lot
and a hotel is a possibility for that. Right now we have had one hotel developer a little bit interested, but the
feedback we have gotten from people in the business is that if we had a marketing study that showed that this
is a feasible project for this market, particularly with this consultant who is the number one consultant in the
hotel industry, that we would greatly enhance our chances of persuading someone that this would make sense
in Nashua’s downtown. There hasn’t been a hotel built in downtown since at least that is still standing since
the Layton House.

Alderman O’Brien
Don’t forget the Old Tavern.

Mayor Donchess

The Old Tavern but sometime in the mid-18"/19" century so it has been a couple hundred years and maybe it
is time to get another hotel after all that time. That's the thought process. But are there any questions or
comments?

Board of Aldermen Page 11
September 14, 2016

Alderman Schoneman

This did go before the Budget Review Committee, and | am on that committee and | was the only vote
against it. | do want to express here at the full Board what my main concerns are. | like the things that
we are doing on the top part of that sheet, as part of the legislation, the $243,000; the various initiatives,
the fall music festival and holiday lighting. | think those are a good use of left over funds and good for
the city. We are also transferring some funds to the city building expendable trust fund and to the Capital
Equipment Reserve Fund. Both of those are funds that may potentially have been neglected over the
years for various reasons but | think they are legitimate expendable trust funds and that we want to
maintain buildings and amortize the cost of our vehicles. $900,000 — 40% of the total amount is going to
the pension expendable trust fund and my only objection there is that it’s not really a cost that is
amortized the same way that vehicles would be. It’s an operating cost that is due in the next operating
year. | understand the logic behind moving funds and making it available for spending but what came
out in the Budget Review Committee is that the main reason for doing this is not the only way to
accomplish it and certainly doing this is not necessary for meeting our pension obligations, we have to
meet them no matter what. The main reason for doing this is to avoid the vote on a spending cap
override that would otherwise result if this had to be appropriated in next years’ budget. This means that
although we call it a savings we are not actually spending less money, we are spending more money. All
we are doing is avoiding the spotlight that the spending cap override legislation would involve and | just
don’t think that we should do that so | didn’t vote for it at the Budget Review Committee and | don’t plan
on voting for it here.

Alderman Siegel

I'd like to address some of my colleagues’ comments. One is that it absolutely is an amortized expense
because it represents the shortfall that the State of New Hampshire has dropped down on our heads like
an anvil to pay down over a period of time; initially | believe it was 25 or 30 years and we are several
years into that. It’s adjusted biannually and this is something that we don’t control. | am absolutely
sympathetic to the spending cap arguments. The spending cap argument is stuff that is in our control but
this anvil was dropped on our heads. Obviously this has gotten quite a lot of scrutiny and nobody is
hiding anything because there were several attempts at legislation to try and use what we had already
set aside for that and it didn’t pass. At this point we do have these obligations and they are not going
away. This money would not have been my preferred solution; | had other legislative action that | would
have preferred, however, the bullet is out of the gun barrel and it is on its’ way and we cannot pretend
that we don’t have to pay this down so | strongly urge my colleagues to support this and also | would
point out that one of the big problems that | had in the budget hearings was CERF being effectively
gutted. This backfilling the CERF fund | think is critical for the health of the city because we can’t pretend
that the vehicles and the rest of the major equipment that CERF funds don’t need maintenance.

Alderman Schoneman

There is no pretending, | think | understand the CERF. | was one of the advocates for doing more for
CERF and I’m glad to see that. | think there is no pretending about the city buildings needing some
funding or better maintenance. The objection is simply to the pension fund. It’s a current obligation and
there’s no pretending that we don’t owe it. The only thing is that it ought to be part of a budget and not
transfers to avoid any spending cap. This represents more spending and by doing this we are allowing a
little more room, $900,000 more room in next years’ budget for things that we’ve already probably
committed to that may | think, in my mind, have been excessive. | don’t like the idea of relieving that
pressure on us. | think that we owe it to the taxpayers not to find ways to avoid bullets even if they have
left the gun. We owe it to them to live within the limits and | think the limit is defined by the spending cap.

General Obligation Bonds (Public Offerings)

Business-Type Principal Interest Total
2022 $ 2,804.500 § 1,030,352 § 3,834,852
2023 2,790,000 884,942 3,674,942
2024 2,790.000 753.466 3,543,466
2025 1,990.000 636.611 2,626,611
2026 1,795,000 551,362 2,346,362
2027 - 2031 7,980,000 1,633,631 9.613.631
2032 - 2036 3,955.000 479,972 4,434,972
2037 - 2040 1,673,000 85,981 1,758,981
Total $ 25,777,500 $ 6,056,317 $ —31,833.817

State Revolving Loans (Direct Borrowing)

Business-Type Principal Interest Total
2022 $ 3,293.610 §$ 816.443 $ 4,110,053
2023 3,269.407 738.486 4,007,893
2024 3,156,079 660.852 3,816,931
2025 3,156.712 584.949 3,741,661
2026 2,653,728 509,034 3,162,762
2027 - 2031 11,799,506 1,547,247 13,346,753
2032 + 2036 5,504,901 464,797 5,969,698
2037 - 2040 699,266 35,604 734,870
Total § 33,533,209 $ §,357,412 $ —_38,890.621

70

Finance Committee - 9/5/2018 Page 8
Alderman Laws

Well | just wanted to go on record as saying that this is one of those things that really excites me. I’ve said it
before the fact that Nashua downtown is so successful in spite of the fact that it has no hotel is baffling to me
and | think this is a sound investment for the City even if it turns out that it is not a financially viable option, just
to know and then we can move on with further project So thanks for that.

Alderman Harriott-Gathright

Is Park Street Parking lot, that’s the only place that you’ve looked at?

Mr. Cummings

So that is one of the sites. The contract actually scopes out the idea of three differing sites all within the
downtown area. The one site that is articulated is the School Street Parking lot.

Mayor Donchess

But if someone were interested in another site, we would try to make that possible as well. But that is one that
we have identified as a possibility that is City owned as opposed to privately owned.

Alderman O’Brien

Thank you, | just want to say | totally support this particularly where it is a feasibility study and everything
because | look at it, in order to get a great downtown if we are going to look at Nashua, it is going to be the
postcard of Main Street basically and that is our selling point. And as we look at different things that are going
to enhance our downtown, you just don’t do it all at once, it is all an integral puzzle that you piece together all
the different pieces. And this is one of the pieces that will be pieced together that in the future | really do see
that if we are custodians of our duty here as Aldermen to enhance the City to make it thrive, this is one of the
pieces of the puzzle that needs to go in that will enhance the City and make the downtown a very much strong
focal point for all our citizens and our guests as well. Thank you.

Alderwoman Kelly

Thank you. | also want to say that | support this. | think it would be a great move for downtown. | do have a
question about what he will be looking at from a feasibility standpoint. Is he looking at specifically is that site
feasible or is it overall, can the City of Nashua support a hotel downtown.

Mr. Cummings

So she is going to study specifically the market itself and whether the market is feasible and then in particular
look at, based on her experience and expertise in relationships with and in particular it is a certain type of hotel
to be exact. It is what is called a limited select flagged hotel, what is that? That is brands like a Hilton, I’m
sorry, a Marriot Courtyard, a Hilton product of like the Hilton Garden Inn or Embassy Suites. There are specific
types of brands within either the Hilton, the Marriott, the Hyatt chain. So that is a specific category or product
and then knowing that, what type of sites would actually be of interest to those types of brands. For instance,
frontage on Main Street or can it be off of Main Street and how big does it need to be to accommodate the
certain type of room count that is necessary. So those will all be part of the market study that occurs.

Alderwoman Kelly

Thank you.

Finance Committee - 9/5/2018 Page 9
Alderman Laws

Just had to ask, is parking going to be included in this?

Mr. Cummings

Well yes in regards to we know that parking has to be a component but we would like to leverage the current
parking structures if possible for the opportunity to maybe not necessarily need as much land directly for
parking because we can utilize our existing infrastructure.

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Contract for Residential Real Estate Brokerage & Marketing Services (Value: $0)

MOTION BY ALDERWOMAN KELLY TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
BROCKU REALTY GROUP

ON THE QUESTION

Mayor Donchess

Mr. Cummings, do you want to tell them what this is all about?

Mr. Cummings

Yes Mr. Mayor, thank you. So the contract that is before you, | just want to make sure it is clear, it is Brocku
Realty Group which is part of KW Realty Metropolitan which is the broker that the contract actually would be
signed with. Then there is the Realtors that work under the brokerage umbrella of KW Realty Metropolitan.
Why we are doing this is because we have a few surplus residential properties that have needed to be put
back on to the tax rolls. They mainly came about from two different ways; first being the Broad Street Parkway
and as that project is now closing out, there was some takings that occurred later one that have created now
this opportunity for some of those residential properties to actually go back out onto the private market. And
then if this Board recalls, we, about a year ago, took back some property that were delinquent in their taxes so
we are going to try to get these tax taking properties back on the tax rolls. We are looking to get a residential
broker to market and put these opportunities back out on to the market to hopefully get them back paying
taxes. So that is what this contract does and | would appreciate your favorable endorsement of it.

Mayor Donchess

One of these is West Hollis Street.

Mr. Cummings

Correct.

Mayor Donchess

Which we took for taxes, it needs a lot work so we are hoping to be able to sell it to a responsible party and get
the property upgraded. It’s like 44 or 42, | forget the number; 38 %. Anyway, any discussion or questions.

Finance Committee - 9/5/2018 Page 10
Alderman Caron

Thank you Mayor. | just have a question as to why we are doing this when we have over the past 8 years that
I’ve been on the Board we’ve always had Auctioneer do this? | know we’ve sold property from the Broad
Street Parkway that we had left over through that.

And my second part of the question is why are we going outside of the City when we have such great real
estate agents to utilize? Two questions in one, is that ok Mayor?

Mayor Donchess

Yes.
Alderman Caron

Alright, thank you.

Mr. Cummings

So Mr. Mayor and through you to the Committee, first | will answer the latter which is we put this out for an
RFP, we wanted anyone interested in the Marketplace. | specifically reached out to five local realtors in
Nashua, made them aware of this opportunity. | thought we would at least get one, unfortunately we only got
one response and that response happens to be someone out of, works very much in the Nashua area, but has
hung their shingle with a shop out of Bedford, NH. So that stands to that very specific question.

And then relative to why going the direction of a brokerage as opposed to an auctioneer, we could go the
auctioneer route, | think the sentiment was with some of the staff here in the City and in particularly with the
Broad Street Parkway, we have to make sure we obtain and achieve certain values to make sure we are
meeting State and Federal criteria. Because sometimes certain monies were used and we have to make sure
we achieve fair market value. We thought we would have a better opportunity if we had someone out there
actively marketing these properties to try to achieve the highest price possible.

Mayor Donchess

| think, correct me if I’m wrong, Federal DOT has a lot of money in this project, doesn’t like the auction
approach and if we sell these properties for less than the appraised value, they have to be convinced that we
got as much as we could. They are less likely to be convinced at an auction than they are through this
approach. So part of this is to satisfy Federal DOT so they don’t penalize us and say that we didn’t get enough
for a property if it has to be sold for less than the appraisal.

Alderman Caron

Thank you. So are you saying that they weren’t happy with the previous selling of some of that property on
Broad Street?

Mayor Donchess
We've done most of the Federal DOT stuff by broker, haven’t we? No?
Alderman Caron

| don’t know.

Finance Committee - 9/5/2018 Page 11

Mayor Donchess

But they like this approach better, correct?
Alderman Caron

Ok and the other thing is would this be continued constantly or would you do an auction for 38 % West Hollis
Street which is small, how much money are you going to get for the market value for that, because it is in such
tough shape. It’s just a question because we haven't had this before, so | think it is important to understand
why we are shifting from one thing to another. | appreciate that if you went to local real estate agents and
nobody wanted to participate, well that is on them. My concern is that we tried to deal with our local
businesses and | appreciate your comments.

Mayor Donchess

With respect to 38, because the property is in such bad shape, what we really want at least | would say what
we really want is someone who will come in and do a good job rehabbing it, right? And there are certain non-
profits in the area that might be much more responsible owners and rehabbers of a property such as that
rather than someone who is just going to bid the most and then they'll milk it for whatever they can get out of it.
So in that instance, that property, there are others involved, but that one, we want to make sure we Sell to a
buyer of our choice as opposed to necessarily the highest bidder in order to reduce blight and slums in
downtown.

Alderman Caron

| agree, thank you.

Mr. Cummings

So just to echo what the Mayor was saying, the way you can do that and achieve that goal is through a P&S
process, a purchase & sales agreement where you can negotiate some of these terms and have them actually
in a binding contract as opposed to selling as is, whereas, absolute auction type sale where you are then once
we dispose of it, we are then left to whatever actually occurs there. So this gives the municipality more of an
opportunity and the direction of the potential future use of the site.

Mayor Donchess

Now this only authorizes the broker, this does not authorize the sale. So were we to arrive at a purchase price
or whatever with any potential buyer, that would have to come back to the Board of Aldermen for approval. So
all you are approving here is the idea of entering a contract with the broker. We would still have to approve the
sale. Why do you say no?

Mr. Cummings

Mr. Mayor if | may just add that it is my understanding that the Board of Aldermen already acted on a few of the
Broad Street Parkway properties in giving the ability for the City to sell them. So there was already a resolution.

Mayor Donchess

| am more focused on 38 West Hollis Street, at least with respect to 38 West Hollis Street, we would have to
come back and propose how we were going to go forward.

MOTION CARRIED

Finance Committee - 9/5/2018 Page 12

From: Dan Kooken, Purchasing Manager
Re: Contract for Phase 2 of Consulting Regarding Implementation of Fundraising for the
Performing Arts Center (Value: $48,000)

MOTION BY ALDERWOMAN KELLY TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
FULL CIRCLE CONSULTING IN THE AMOUNT OF $48,000. SOURCE OF FUNDING IS DEPARTMENT
183, ECONOMIC DEVELOPMENT; PAC PROJECT COST

ON THE QUESTION

Mayor Donchess

Yes Mr. Cummings.

Mr. Cummings

Thank you Mr. Mayor. What is before you is the second phase of a two-phased proposal and if this Committee
recalls, | was here earlier in the summer where we introduced Phase | which we are well underway. The
Planning & Economic Development Committee will be getting an update on this project at their end of
September meeting. | will just say very quickly that the feasibility study, that Phase |, should be wrapping up
by mid-September. So this would be so we don’t lose any time, the continuation and making sure that we have
the consultant retained to then execute upon that feasibility study.

It was always understood to be approximately a $75,000.00 type contract and this is just the Phase II at
$48,000.00. | assume | will be getting a question as to where this money is coming from. | want to make sure
everyone understands, this money is coming from the Downtown Improvement Committee funding. They set
this money aside and that is the source of this funding. This project is obviously very near and dear to me and
will be critical for us to be able to move forward with the Performing Arts Center. Thank you.

Mayor Donchess

Discussion or questions?
Alderman Laws

So do you have a progress report? As you know, | sit on the Downtown Improvements Committee so this is
particularly important to me.

Mr. Cummings

So Mr. Mayor if | may, there will be a progress report at the PEDC September 18 meeting. | can tell you that
the feasibility study is well underway, it has been very warmly received; that there have been many meetings
with various stakeholders within the community throughout the summer. The initial feedback that I’ve gotten is
very positive. So we are well on our way, we are on track. | want to leave my comments there for right now. |
don’t want to bias anything here and we are still waiting on actually getting the official report back which is due
mid-September, September 15".

Alderman Laws

| want to reiterate, | think you and | have the same vision when it comes to the Performing Arts Center, | am
excited about that as well. The feedback that | am getting from the community though isn’t as positive as the
feedback that you are getting. People are very concerned, they are not hearing much about it, they don’t know
about the fundraising. So if there is any way | can light a fire under you, get us some information that | can
pass on to constituents, | would really appreciate that.

Finance Committee - 9/5/2018 Page 13

Mayor Donchess

Well you will get a report on the 18"", but | would say this in general, the fundraiser we have knows the Nashua
community very well. | did go the Soup Kitchen Fund Drive as well as others as well as the YMCA, and the
general approach taken by these professionals is that it is much more important to secure large gifts at the
beginning as opposed to going out, you know as much as we would like to have 100 people give $10.00 that
the way to manage a successful campaign is to secure large givers at the beginning and then move out from
there. So | think by taking a methodical, professional, proven approach, even though it takes more time, at
least in the beginning, the interviews are with people and organizations who can potentially give significant,
more than say you or | would probably be capable of. They can most successfully reach the goal.

| think part of the goal of course in addition to private sources who would contribute their own money is the new
market tax credit. We do have a consultant there; that is not a sure thing but it looks very favorable and we
have a separate consultant, this person also has some knowledge of that. We are pursuing that at the same
time. We just don’t want to tell you the results before the fundraiser is here and can kind of go through the
details with more knowledge than what we have. We don’t want to upstage her really, and let her provide you
directly the results of her work. But we think at that time there will be some recommendations as to how to
achieve some major gifts and how to most maximize our chances on the Performing Arts Center and how to
ultimately raise the amount of money we are looking for.

Anybody who wanted to give money right now can just send it to the Nashua Arts Commission and they will
hold small contributions at the present time. But the proven approach towards community fundraising, over
and over and over again, is you secure large gifts at the beginning. And those don’t come like you know, hey
could you give us you know, oh yeah sure, I'll write a check, those don’t come quickly or easy.

Alderman Laws

That makes perfect sense and again | support what is going on. The people | am hearing from are not people
looking to make donations though. They are the people who believe that this is a self-fulfilling prophesy of
electing a new Board of Aldermen, spending $15 million dollars of tax payer money and then nothing coming
out of it. That’s generally where my concern is, | understand September 18", seems like Christmas to me, |
am excited about it.

Mayor Donchess

Well Christmas in September? We will have it.
Alderman Caron

Yes thank you. | have to agree with Alderman Laws. | sat on the Board when we brought that legislation in and
that part of it was that $4 million dollars had to be in place before we would put any money down from that
bond to that facility. And believe me, | have been part of Performing Arts Centers for 30 some odd years and
so that is their concern, because the clock is ticking. Granted, you don’t want to give us all that information
until September 18", but that is the question that keeps coming up is are we going to pursue this even though
we don’t have that money. Because if we don’t have first $ 4 million dollars, are you ever going to have that
money that is going to sustain it or are we going to end up like we did before and have an issue that the City
has to carry the burden forever. And | don’t think that is what the City should be doing; they need to work in
partnership. | understand you are bringing consultants in and that’s a good thing if they are raising that money
but that is the question that | keep hearing, where is that $4 million dollars before you approve that final bond
issue. So | think it is important for you to understand that and for the public to know that people who sit in this
horseshoe are concerned as well. Thank you.

Finance Committee - 9/5/2018 Page 14

Alderwoman Kelly

Thank you Mr. Mayor. | will echo both what Alderman Caron and Alderman Laws said, I’ve been getting
similar sort of what is going on type of questions. | would like to rescind my motion to approve and just table it
until the 19" which is the day after we will get all the information from you.

MOTION BY ALDERWOMAN KELLY TO TABLE THE CONTRACT

ON THE QUESTION

Mayor Donchess

Alright there is a motion to table. Any discussion on that?
Alderman Klee

| have a question if we table this and we don’t go forward with doing that, how far does that put us behind?

Mr. Cummings

Mr. Mayor if | may, if you table this a month to two months potentially, | mean so the whole point of this was to
try to keep the consultant retained so we could easily transition into the execution phase of the fundraising
effort. Right now we are just in the feasibility study, which is the report and the strategy and the
recommendations that will be coming. Then it will be the execution phase and ironically enough if you delay
this then you will actually be a self-fulfilling prophecy because it will just be that much longer before we actually
then start to raise the money.

Alderman Laws
Respectfully | appreciate Alderwoman Kelly’s proposition but as Alderman Caron pointed out the clock is
ticking and at this point | feel like in the interest in time we really need to approve this to get this ball rolling,

because | am more concerned about dragging this out any longer. And let’s be honest, if this doesn’t work out,
we are all going to be run out of town ayways. Let’s get this moving. Thank you.

Alderman Caron

Thank you. | understand Alderman Kelly’s concern and | agree this is part, it’s almost like the second half of
her job. So if you stop if for another month or so it really doesn’t help the situation so | agree with Alderman
Laws, we just need to just push it forward. But knowing that we are going to have a report in September and if
we are not seeing anything that we really think we are doing, then there always other avenues. But think you
don’t want to stop this. You are like driving the car to 500 miles and you stop at 250 and say let’s wait a month
or two. So | would ask you to approve this.

Alderman Klee

Thank you. | agree. | think we need to approve and not go with the tabling.

Mayor Donchess

Alright well the motion on the floor is to table. Any further discussion?

MOTION FAILED