The city of Keene will move forward with the tax-deeding process on a vacant industrial property with more than $900,000 owed in back taxes and interest, after a 12-2 vote by councilors Thursday night.
Councilors George S. Hansel and Robert S. Sutherland opposed the measure, while Councilor Stephen L. Hooper was absent.
The issue wasn’t on Thursday’s agenda because it’s been tabled during negotiations with the property owner. But City Manager Elizabeth A. Dragon recapped the issue during her regular comments with the latest updates, and then Mayor Kendall W. Lane brought the motion back on the table for a vote.
Since February, when Councilors Mitchell H. Greenwald, Janis O. Manwaring and David C. Richards proposed starting the process, the question of whether to take the 20-plus acres on Laurel Street by tax deed has been debated several times.
Councilors have weighed the potential financial gain from taking the property against the potential liability, since the city would own the site as is, including the environmental hazards and contaminants that have been discovered through groundwater testing, along with any unknown risks.
Manchester-based property owner Brian J. Thibeault bought the property in 2013 at a foreclosure auction for $50,000, after longtime owner and toy-turned-tool manufacturer Kingsbury Corp. filed for bankruptcy. Thibeault inherited about $670,000 in tax debt, which has continued to accumulate interest.
The city received a check on May 9 for $100,067.70, which covered the 2016 property taxes that were due.
Thibeault now owes a total of $903,775.77, Dragon told the council Thursday.
The tax-deeding proposal was tabled as discussions continued with Thibeault, and then the council authorized Dragon in June to negotiate two land easements with him: One would allow the city to extend Victoria Street, and the other would expand an existing easement along Beaver Brook for work to alleviate flooding.
The value of the easements could be credited against Thibeault’s tax debt.
Thibeault’s lawyer, Margaret H. Nelson, submitted a letter to Dragon June 20 outlining a payment plan that stipulated her client would pay a reduced amount in four installments, essentially asking for the interest and penalties for the inherited 2009 and 2010 taxes to be waived.
Dragon responded a week later with a counter offer. The city would agree if Thibeault would grant the requested easements, proceed with brownfield land assessments on the east side of Beaver Brook, give a timeline for the demolition of the building on the property, and agree to not subdivide the land until the environmental concerns are addressed.
In late August, Dragon was notified that a brownfield grant from the Environmental Protection Agency, through the Southwest Region Planning Commission, was in jeopardy because of the lack of activity at the property. A brownfield is land that may be environmentally contaminated, and grants assist nonprofit organizations and municipalities with cleanup.
After more back and forth, Dragon said, Thibeault called her Thursday afternoon and then sent a new counter offer, which agreed to the easements in exchange for $650,000 credit on the taxes and interest due. He would not agree to the request to restrict subdividing the property, she said, and he would not offer a timeline for building demolition.
Thibeault told a council committee in June that he had plans to redevelop the property with mixed-use retail, housing and eateries. He said then that the taxes would get paid after the land is developed and money is coming in.
Sutherland argued Thursday that Thibeault has paid some money, which is better than none.
“I also think that my concern is opening the taxpayers of Keene to a lot of risk to a property that has a lot of brownfield problems or potential brownfield problems,” he said. “… I don’t think that acting in one direction only, which has little outward benefit, visible outward benefit, is in our best interest or in the best interest of the taxpayers.”
But several councilors said Thibeault hasn’t been negotiating in good faith, noting as they have in the past that this discussion is now on its third city manager.
“I mean, it’s a tough situation, but I think this council has to just come to the understanding that we’re being played,” Councilor Randy L. Filiault said. “You know, we’re like 15 fiddles, and he has the string — he’s been playing us for a while.”