Lebanon, tight on commercial space, may lose business
Chris Fleisher
Valley News of Lebanon
LEBANON — When Red River Computer Co. announced plans this month to leave Lebanon for more office space in Claremont, developers said it highlighted an issue that has been simmering in the Upper Valley for several years.
Now, it seems to have reached full boil.
“It’s getting to the point where, between lack of the ability to expand and the cost of housing, you’re going to see one or two major companies withdraw from Lebanon,” said Bruce Waters, a commercial real estate broker at McLaughry Real Estate. “It’s going to have significant reverberations in the marketplace.”
Lebanon has approximately 2.5 million square feet of light industrial space, yet less than 1 percent of that total — about 15,000 square feet — is actually vacant, according to a recent survey by McLaughry. With no place else to go, many Upper Valley companies looking to expand are turning to places such as Claremont or Windsor and Springfield, Vt. That has put greater pressure on Lebanon planners as they shape the most significant changes to city zoning in nearly 30 years and try to find ways of keeping businesses here without paving over the city’s semi-rural character.
“I think there’s always a tug of war between the people who want to keep things the way they are and the people that want to change things,” said Ken Morley, Lebanon’s planning board chairman. “But the demand for space is amazing.”
The city’s proximity to Dartmouth has long made it a key location for new startups, especially those in high-technology fields that use Dartmouth’s research capabilities in developing their products.
Several years ago, rising rents began causing some to search for space outside of the city, and new companies like Seldon Laboratories, a maker of high-tech filtering devices, began to look farther out in the Upper Valley for a place they could afford but that would also allow for expansion.
Seldon CEO Alan Cummings said his company found enough space in Lebanon when officials were scouting locations in 2003, but rental prices were “way too expensive” for the kind of place they were looking for — a place empty enough to allow for major expansion.
“Having the ability to expand in the first place we located was a critical factor,” Cummings said.
Although Seldon needed only 2,500 square feet at the time, Cummings knew the company would grow rapidly in the next few years. Three years later, Seldon occupies 20,000 square feet in its Windsor location and eventually expects to take over 100,000 square feet.
That kind of space hasn’t existed in Lebanon for at least the past three years, Waters said, and even finding new land zoned for industrial or office development is a challenge, he said.
The Airport Business Park, already zoned for light industrial use, holds some potential in a planned 40-acre expansion, called “Phase 1B.” But Lebanon Airport Manager Steve Miller said developers shouldn’t expect to see movement there anytime soon.
“Phase 1B was supposed to follow shortly thereafter (Phase 1A), and 15 years later, nothing’s been done,” Miller said.
He’s hoping the city gets moving on that effort soon. A cargo company has expressed interest in building there, and Miller said he’d prefer not to keep them waiting.
“We certainly don’t want to lose this company because they may go elsewhere,” Miller said.
Miller said he is asking for $250,000 in the airport’s capital improvement budget to produce a design for the park expansion and, in a best-case scenario, could get work started in another year.
Lebanon’s planners have been reluctant to rezone new areas for industrial development, and instead have focused on the “revitalization of existing resources … of currently zoned lands,” as is called for in Lebanon’s master plan.
The city wants to restrict the kind of commercial activity seen along Route 12A in West Lebanon, said City Planner Ken Niemczyk, but others say it has also hindered space for the high-tech employers the city claims to want to attract.
It doesn’t have to be an either/or proposition, said Mark Scarano, executive director of the Grafton County Economic Development Council.
“You can maintain the emphasis on quality of life and still have growth,” Scarano said.
Concentrating development into pockets around the city, such as along Route 120 or in the Airport Business Park, while preserving the rural outlying areas of the city, is one way to do that, Scarano said.
That’s the idea behind some of the proposed zoning changes that Lebanon voters will vote on in March, according to Mark Goodwin, Lebanon’s senior planner.
Under the proposed changes, the total land designated for light industrial or office space would increase by about 240 acres, or 16 percent.
Most of the gain comes from an expansion of the industrial area around Centerra Business Park and using land in a residential zone south of Dartmouth-Hitchcock Medical Center.
The ordinance is being reviewed by the city council and will be presented to residents at a public hearing next month.
In the meantime, neighboring communities looking for an economic boost are more than willing to take whatever employers Lebanon can’t handle.
Bob Flint, executive director of the Springfield Regional Development Corp., said there is more than 300,000 square feet of vacant space between Windsor and Springfield just waiting for the right tenants, and plenty more being rehabilitated for use.
And Flint said he’s starting to see more interest.
“We’re seeing the tip of the iceberg in terms of commercial development emanating from the Upper Valley.”
Saturday, December 30, 2006