The Cheshire County delegation voted Monday to authorize a nearly $7 million bond issue to finance the purchase of the courthouse on Winter Street in Keene.
While the county makes bond payments, it will also receive income in the form of rent from the New Hampshire court system. After six or seven years, depending on interest rates, the arrangement is expected to become profitable for the county on an annual basis, according to projections from county officials.
The courthouse building on Winter Street is home to Cheshire County Superior Court and the Keene branch of the 8th Circuit Court. It is distinct from the historic courthouse building on Court Street, which now houses county offices — including the hall where the delegation, comprising the county’s 23 state representatives, met Monday night.
Built in 2013, the newer courthouse is owned by a subsidiary of Keene-based Monadnock Economic Development Corp. and leased to the state.
The nonprofit development corporation financed construction in part through New Markets Tax Credits, a federal program that involves investors receiving tax credits over a period of seven years. With that period running out early next year, MEDC is preparing to sell the building, as was planned from the start.
The state has the right of first refusal, but says it’s not interested in buying the building. If the county hadn’t wanted it either, MEDC would have marketed it to private buyers.
The county donated the land for the building with the understanding that it would receive a $750,000 discount if it later bought the courthouse.
The delegation’s 17-0 vote Monday authorizes a bond issue of up to $6,950,000.
While he voted in favor, Rep. John Hunt, R-Rindge, said his constituents have been complaining about county taxes. The county taxes went up after a $36 million bond for the renovation and expansion of Maplewood Nursing Home in Westmoreland was approved in 2017. A decade earlier, the county borrowed a similar amount to build a new jail in Keene.
“We all knew this was gonna happen, that we were gonna buy this property,” Hunt said of the courthouse. But he cautioned against further bonds. “There is some big pain being felt,” he said. “This is not just a great slam dunk.”
Other delegation members said that with the income the county will receive, the tax impact should be negligible.
County Finance Director Sheryl Trombly presented two sets of estimates — one with a 20-year bond at 3 percent interest, another at 3.5 percent. In both scenarios, because of the timing of the bond payments, the county would turn a profit of more than $300,000 in 2020.
The next four or five years — depending on the interest rate — the county would pay more in bond payments than it would receive in rental income. It would turn a slight profit in 2025 and 2026, and the revenue would increase every year after that due to rent increases in the court system’s lease.
Rep. Lucy Weber, D-Walpole, pointed out that under the 3.5 percent scenario, the $342,000 net income in 2020 would offset all but about $26,000 of the losses over the next five years. With the county paying 3 percent interest, the $359,000 profit it would earn in 2020 would cover the losses in 2021 through 2024 with more than $100,000 to spare, according to the projections presented Monday.
The county’s total budget is about $50 million this year.