Unbottling the Nongfu Spring deal

New Hampshire’s attorney general says no improprieties by state officials preceded the sale of a large Nashua commercial building to China’s largest water bottler.

But Attorney General John Formella’s report to Gov. Kelly Ayotte dated Oct. 3 says the provisions of federal law should have taken place prior to the sale of the 337,391-square-foot building at 80 Northwest Blvd. in Nashua by a subsidiary of Nongfu Spring.

The report also notes that the state economic manager who worked on the transaction did not alert supervisors about it even after he learned the purchase involved a Chinese company.

A product shot of Nongfu Spring water available from alibaba.com

In response to the report, Ayotte signed executive orders preventing certain entities that she considers foreign adversaries from doing business with and in the state.

“China, Russia, Iran and other countries like them should not be doing business in the State of New Hampshire — it’s as simple as that,” Ayotte said in a statement released on the heels of the attorney general’s report.

“We must do everything we can to protect our state from foreign adversaries, and it starts with making sure they cannot access sensitive data, do business, or purchase property here,” the governor added. “Under my administration, New Hampshire will always do our part to keep America safe.”

Prior state involvement with Nongfu Spring officials came from Michael Bergeron, a business development manager at the New Hampshire Department of Business and Economic Affairs (BEA).

According to the attorney general’s report, in March 2024 a commercial real estate broker approached the BEA regarding a then-unknown business entity that was interested in settling in New Hampshire. The report said Bergeron “responded by undertaking the normal  business-facilitation services that BEA offers to enterprises seeking to expand or relocate to New Hampshire.”

The report noted a reference to Nongfu Spring as “the Coca-Cola of China.” It is China’s largest bottler of water and tea drinks.

(Note: The report did not specifically name Bergeron as the business development manager involved, but Bergeron’s direct involvement was cited by Nashua Mayor Jim Donchess at a Board of Aldermen’s meeting on Aug. 12.)

The report sets out a timeline that runs from March 2024 to now, detailing meetings that involved Bergeron, Nongfu Spring officials, Nashua development officials, and local utilities, including Pennichuck Water, from whom the beverage manufacturer would draw up to 2 million gallons a day from its distribution system.

Nongfu Spring’s founder and chairman – Zhong Shanshan, considered the richest man in China – toured the facility on June 17, 2024, several months before its actual purchase by a corporation registered with the Secretary of State’s office as NF North America. He returned to New Hampshire for another meeting Nov. 14, 2024, according to the report.

The timeline shows a developing cold shoulder toward the company as it failed to communicate with local and state officials and as the public and politicians became wary of the purchase of a New Hampshire building by a Chinese national.

“Since Nongfu Spring’s purchase of 80 Northwest Boulevard began generating public interest and complaints, there has been minimal contact between company representatives and state or local actors,” said the report of events that occurred between May and now.

Company representatives reached out to the BEA, but “neither the BEA business development manager nor anyone else at BEA has since replied,” according to the report. The representatives also reached out to city of Nashua development officials “expressing frustration over both the negative press their plans to launch the bottling company had encountered and the state’s apparent unwillingness to champion their investment.”

Nongfu Spring purchased the property for $67 million in early 2025, more than four times its assessed value.

The report put that into perspective, saying, “According to a number of individuals interviewed for this report, the selling price is not widely regarded as exceeding market-value. In fact, the property was reportedly one of the few structures of its size in New England available at the time that was capable of meeting the bottling company’s structural and technical requirements.”

The report questions the status of a so-called CFIUS review of the purchase.

CFIUS is the Committee on Foreign Investment in the United States, part of the U.S. Treasury Department. It is empowered by federal law to review transactions that may impact the national security of the United States, including real estate transactions, such as the Nongfu Spring purchase of the Nashua building.

According to the AG’s report, company officials insist “their side of the transaction had received CFIUS “approval” for the transaction.” The report casts some doubt on that.

“This Office has not been able to independently verify this assertion,” it said.

“CFIUS review of the Nongfu Spring transaction thus would have been advisable in the context of the Nashua property’s proximity to Joint Base Cape Cod, which is listed as 87 miles from the purchase site,” the report said. “Moreover, in today’s climate, and at the level of Nongfu Spring’s investment (including not only the price of the real property, but also a projected $200 million in improvements and employment of 200 people), a CFIUS analysis as a matter of course should have been conducted and documented prior to the completion of the transaction.”

State politicians have cited the property’s proximity to certain military installations in New Hampshire (such as New Boston Space Force Station and the Nashua-based FAA Air Route Traffic Control Center) as well as the water supply  as reasons of concern for national security.

The CFIUS review would have come as the presidency was transitioning from outgoing Joe Biden to incoming Donald Trump. CFIUS review was used during the Biden Administration to prohibit in May 2024 the establishment of a Chinese-owned cryptocurrency mining facility located within 1 mile of Francis E. Warren Air Force Base in Cheyenne, Wyoming.

U.S. Rep. Maggie Goodlander, D-2nd Congressional District, has asked the Treasury secretary for a CFIUS review of the transaction.

For its part, Pennichuck Water acted, as prescribed by Public Utility Commission regulation, to treat Nongfu Spring as it would any potential new business customer.

Pennichuck CEO John Boisvert has said the 2 million gallons per day that might be sought by Nongfu Spring is well within the utility’s capacity to provide it. He said the water company has an average of about 10 million gallons of excess capacity per day currently available.

“Pennichuck regarded Nongfu Spring as a potential customer and treated the company as it would all other customers,” the report said. “When he and his staff learned of the anticipated water requirements at 80 Northwest Boulevard, they informed the company that it would have to make and pay for upgrades to Nashua’s ‘snow station,’ which would allow increased amounts of water to flow through the watermain. Pennichuck is accustomed to managing water requests of commercial and industrial customers, who are typically required to pay ‘up front’ for the work that Pennichuck sends out to bid on their behalf.”

Contacted by NHBR on any recent communications from the company, Boisvert replied: “Radio silence.”

Likewise, the city of Nashua treated the company as it would any commercial investor, according to the report. Public hearings regarding the purchase were not necessarily required, said the report, “Unless NF North America seeks a substantial change to either its site or the traffic around the site.” There was a request of the Planning Board to widen the driveway from 45 feet to a width of 86 feet, which would have required a hearing. But that request was withdrawn.

The attorney general recommended changes to the way these types of transactions are communicated. There is no indication that BEA Commissioner Taylor Caswell or the governor at the time — Chris Sununu — knew of Nongfu Springs entreaties into the Granite State.

Bergeron did not report to higher ups anything about the purchase, according to the report, even after it was known that a Chinese entity was involved.

“The BEA business development manager did not violate any existing BEA or State policies or protocols through his actions in helping to facilitate the purchase of the subject property or in failing to notify his supervisors of the transaction,” the report said.

The report said the BEA has since altered its process to better flag these types of investments, noting, “Across both State and local government, certain employees require greater awareness of emerging avenues for malign influence by foreign actors.”

The AG said, normally, a report like this, since it involved private commercial dealings, would be confidential. The Governor waived those privileges in this case and authorized the report’s release “given the important public interest in this matter.”

Ayotte’s two executive orders that grew out of this report bans state agencies from buying or using certain technologies made by China, Russia, North Korea, and Iran. The second order directs state agencies and employees to ensure that no foreign principal from those countries is involved in any transactions involving state-owned real estate.

Ayotte signed a law from the 2025 legislative session that prohibits the purchase of any property by any person or entity from these countries. That law went into effect after the Nongfu Spring purchase.

Formella noted that his report encompasses questions asked of the BEA by Executive Council members Joe Kenney, Dave Wheeler, and John Stephen. The three council members – representing a majority of the council — opposed Caswell’s reappointment as BEA chief. Caswell has resigned his post, effective Oct. 15.

Mayor Donchess during statements made during the aldermanic session Aug. 12 addressed a crowded session about Nongfu Springs, saying, “”I don’t think people generally understand that this company came to Nashua as part of a state economic development initiative. Now let me repeat that — they were brought here by the state of New Hampshire Division of Economic Development. The project was led by a guy named Mike Bergeron, senior business development director. That’s how they got there, and he visited the site with them a number of times. The company was this Chinese company looking for a location in the United States.”

There is another property in Nashua owned by a Chinese company: the former Daniel Webster College campus. Donchess encouraged aldermen on Sept. 9 to pass a resolution giving him the authority to seek state and/or federal funds to purchase the property, currently owned by Xinhua Education Consulting Services Corporation.