Manchester landmark faces uncertain future

Many longtime Manchester residents and historic preservation enthusiasts have a sentimental attachment to the Pandora building at 88 Commercial St., once a part of Amoskeag Industries and later the home of Pandora Industries, a company that manufactured and sold sweaters and other knitted goods worldwide from 1940 to 1990. But will anyone sink into the mid-19th century building the millions needed to renovate it for residential use?

“It’s all up in the air,” said Manchester developer Dick Anagnost, who made a preliminary inquiry about the building after College Street Management of New Haven, Conn., abandoned plans to spend $8.7 million to renovate the five-story building and turn 144,000 of its 155,000 square feet into luxury apartments. Anagnost said he has asked the owner, 1850 Associates, for any structural studies that have been conducted on the building and is waiting to hear back from them.

“I know College Street did a bunch of studies,” Anagnost said. His own review of the building has thus far consisted of a walk-through with his project manager on June 19.

“The building is in a fairly decrepit state,” he said. “There are holes in the roof. Portions of the upper two stories are collapsed.” Continued deterioration would at some point leave the building beyond repair, he said.

Bob Tuttle, vice president of DEKA Corp. and a partner with DEKA’s president, Dean Kamen, in 1850 Associates, said he has been in contact with several developers interested in the project. He also said the real estate partnership may keep the building and do its own renovations.

“We’ve done extensive renovations of like Millyard buildings,” Tuttle said, though the previous retrofittings have been for industrial and commercial, rather than residential, use.

“The difference between residential and office is minimal from a construction point of view,” Tuttle said.

Kamen and Tuttle also are partners in 1848 Associates, owners of three “Gateway” buildings on Philippe Cote Drive and Commercial Street. Tenants include Autodesk, Texas Instruments and Jillian’s restaurant.

The company entered into an agreement with the city earlier this year to purchase the parking lot at the former Seal Tanning building and the Granite Street lot at Granite and Commercial streets, along with Phllippe Cote Street, a short loop off of Commercial Street that runs behind the Pandora building, for $1.52 million. The agreement calls for the purchasers to expand the number of parking spaces by adding a deck at the Seal Tanning site.

The request for proposals had stipulated that the purchasers also provide for the refurbishing of a significant historic property within a quarter-mile of the lots.

Economic factors?

The proposal presented in January by 1848 Associates and 1850 Associates included a commitment by College Street Management to purchase the Pandora building and renovate it to accommodate 91 to 104 residential units.

According to the documents presented to the city’s board of mayor and aldermen, the Connecticut developer was prepared to spend — in addition to the undisclosed purchase price — $8.7 million in renovation and fix-up costs. The project was to be financed by Lubert-Adler, a private equity real estate firm specializing in redevelopment.

But in June, the developer pulled out of the project, leaving the future of the building uncertain.

“We’ve had private discussions, and we’ve avoided making that public,” Tuttle said when asked why the developer had changed his mind. (Calls to David Nyberg, College Street’s president went unreturned.)

Jay Minkarah, Manchester’s director of economic development, said it’s unlikely that the condition of the property is what changed the developer’s mind.

“When we met with College Street, we discussed the property with them, and that was one of our primary concerns,” said Minkarah. “They were very clear to us that they had been inside the building, had brought in their experts and were aware of the condition of the building. I would be surprised if the reason why they decided not to pursue the project was the condition of the building. I think everyone knew the building is in a state of deteriorating.”

College Street Management has acquired and developed over 3 million square feet of commercial and residential properties, according to the proposal submitted by the Pandora owners in January.

But worsening economic conditions and the tight credit market are dampening a lot of plans for development projects these days, said Tom Farrelly, executive director of the Cushman-Wakefield commercial real estate firm in New Hampshire.

“There’s a credit availability crisis,” said Farrelly. “The availability of financing has almost completely dried up. Any project trying to advance today requires much more equity. Developers don’t like to tie up their own cash,” he said.

There are also discouraging and puzzling economic trends to contend with, he said.

“There are the most unstable factors in this current cycle than in any one I’ve seen,” said Farrelly. “People are still trying to figure out what the risks are. The risks in renovating a building you’re going to rent out as apartments is that people will not pay the rent you need to get because they can’t afford to.”

Tuttle said he sees the current economic conditions as a formidable, but not insurmountable, obstacle to redevelopment efforts.

“This isn’t the easiest time to contemplate and undertake a significant project,” he said. “It’s just an additional challenge, I would say.”

The sale of the parking lots and Philippe Cote Street is contingent on the restoration of the Pandora building. The agreement with the city requires 1848 Associates or the purchaser of the building to supply the city with a $750,000 letter of credit as a guarantee of the completion of the project. The parties have until the end of the year to meet the conditions for the sale of the lots.

1848 Associates had originally offered $468,000 for the two parking lots, but later increased its offer to match a competing bid by Brady Sullivan Properties. Brady Sullivan had proposed building a 570-space parking garage on the Seal Tanning lot. The company also had planned to renovate the neighboring Waumbec Mills building, one of its Millyard properties.

Historic importance

Home of Pandora Industries from 1940 to 1990, the Pandora building housed a textile operation that at one time employed as many as 1,000 people and turned out 60,000 knitted sweaters a week. Pandora founder May Gruber donated the building to the Mental Health Center of Greater Manchester in 1991. Three years later, Kamen bought the building for a reported $75,000 and free rent for the Mental Health Center at another Kamen-owned building.

Fred Walker, then the vice president of the center’s board of directors, told the Union Leader at the time that the property had been advertised for the better part of a year and that Kamen’s was the only offer.

Later that year, Kamen’s request for a permit to demolish the Pandora building was granted by the Historic District Commission, but blocked by the board of mayor and aldermen. He did, however, raze a 50,000-square-foot section of another of his Millyard properties, the Seal Tanning building, to create parking for tenants of the Gateway buildings.

James Maher, his property manager at the time, described the section as permeated with chemicals and falling apart.

The Pandora site remains vacant and maintenance of the structure has amounted to “little more than trying to maintain security,” Tuttle said.

Masonry work was recently done at the top of the building, where falling bricks had struck cars parked below earlier this year.

Its restoration would help preserve an “atmosphere of history” at the center of the city, said Aurore Eaton, interim director of the Manchester Historic Association, whose Millyard Museum is a short distance from the Pandora site.

“People are enthralled by it,” she said. “This is a city that has taken care of its history. There’s a certain atmosphere of history being alive here. People respect that.”