CLAREMONT — The Claremont Development Authority is in a financial crisis due in large part to delinquent payments in taxes, rent and loan repayments by the Claremont Creative Center, city officials said at a meeting last week.
The Development Authority, whose mission is to develop city-owned property, may need a bailout from the city to meet its obligations, Mayor Dale Girard, who sits on the nine-member Development Authority board along with Councilor William Limoges, said at last week’s City Council meeting.
Girard said he sees no other way out of the current financial situation, which he and others attributed to delayed payments from the Creative Center, which makes its home at 56 Opera House Square.
“…If the tenant (Claremont Creative Center) doesn’t pay her bills it is going to put us in the red,” Girard said during a one-hour council discussion about the Development Authority’s operation and its finances. “I don’t think this is going to be a viable situation without city backing.”
The Development Authority has the power to acquire, sell or lease property in the city. It also can issue bonds, obtain loans and pay project costs. For 56 Opera House Square, it obtained grants for roof replacement, removal of hazardous material and interior renovations.
City officials are now concerned that the Creative Center’s financial situation may compromise the Development Authority’s financial position, which could have broader consequences for the city. In addition to 56 Opera House Square, the Development Authority owns the adjacent Farwell Block, Syd Clarke Industrial Park off Grissom Lane and Ashley’s Landing on River Road.
At last week’s City Council meeting City Manager Nancy Bates said in a memo to the council that she wants the Development Authority to succeed and had previously worked with Nancy Merrill, the former planning and development director, and with Development Authority President Andy Lafreniere to address the issues.
“It is my desire to see the CDA be successful in its mission to encourage development within the city,” Bates wrote in her memo. “However, the way it operates and its failure to effectively deal with a problematic tenant has seriously compromised the CDA.”
Bates recommended that bookkeeping for the Development Authority become a function of the city finance office, legal advice should be sought should the authority become unable to continue and finally suggested a joint meeting of the council and Development Authority’s nine-member board. That meeting has not been scheduled.
“I have to point out that the CDA is in peril and I think they are in financial hot water,” Bates told the council. “I don’t want to see it continue down that road.”
Melissa Richmond, the director of the Creative Center, said she was not aware of the Council’s discussion and disputed the dire assessment by Girard and Bates.
The Creative Center opened to great fanfare in May 2024 after extensive renovations to the vacant four-story building that had not been occupied since a restaurant there closed in the early 1990s. Richmond moved her West Claremont Center for Music and Arts from the Union Episcopal Church on Plains Road to the Opera House Square property when it opened.
She said she expects to soon receive a $2.3 million Housing and Urban Development grant awarded to the project a couple of years ago. When the grant was awarded, Richmond said it would cover additional construction costs for the building’s upper floors and operational expenses in the first few years of the Creative Center.
“If (the City Council) had talked to me they would know that we will have our money from the government,” Richmond said in a phone interview Monday.
She recently received the signed grant agreement from HUD, Richmond said. “So everything is about to be resolved,” she said. “Probably next week we should have the money paid in full.”
The Creative Center is three months behind in loan repayments and four months behind in rent and taxes owed, a total of more than $8,000, Bates and the Development Authority said. Though the Development Authority owns the property, the Creative Center is responsible for tax payments.
Richmond said they have waited close to two years for the grant money and it has been hard keeping things together in the meantime.
“This was all part of the business plan for opening the building; that we would have the money and then we had a couple of years to get the business plan set for the long term,” Richmond said about the HUD grant.
Lafreniere, the Development Authority’s president, said the authority is aware of the pending receipt of the grant money and hopes it arrives soon. However, he wants clarity on what the money can be used for.
“Can the grant be used for arrears? I hope it can,” Lafreniere said, referring to the more than $8,000. “There are questions on this. It is not black and white.”
Lafreniere said the application for the $2.3 million grant included lines to pay for things Richmond needs to pay the Development Authority for but reiterated that he is not sure they are eligible.
“When the award is made will determine if all those things are indeed covered,” he said. “At the moment, I can’t say with certainty that they are. Until that materializes it is wishful thinking and in the meantime, the CDA is running thin.
“…Right now we are in a holding pattern,” Lafreniere said. “I agree with the mayor, without an infusion of funds somewhere, like sale of a property or an arrangement we come to with the city, it is going to be difficult. We are committed to the building and the project, but without resolving these funding issues, there is no clear path forward.”
The Development Authority can obtain loans and grants that the city is unable to apply for, giving it a greater chance at improving city-owned parcels, Lafreniere said Wednesday. Should the Development Authority cease to exist, the chances to improve some parcels would become limited.
“It functions as an economic development tool,” he said.
Bates said the Development Authority has had to “use rents and other incomes” to cover delinquencies, including transferring $10,000 from its savings account to the operating account without approval by two-thirds of the board, which is required according to the bylaws.
Lafreniere has acknowledged the mistake and said the organization won’t do it again.
Bates said the Creative Center has been “consistently late with monthly obligations” and the Development Authority has failed to perform the duties of a landlord for the building. It only recently sent its first notice of delinquency to the tenant.
“Given the payment history and the tenant’s claims of no funds, it is unlikely the CDA will receive all the arrearages before the 60-day remedy period is over, thus further complicating the CDA’s position,” Bates wrote.
Bates also expressed concerns about the back taxes owed.
“A delinquent taxpayer is not the image we want for the city,” Bates wrote.
The council appoints Development Authority members and can dismiss them, but otherwise has no authority over the organization.
Girard and other councilors said the Development Authority’s members are committed volunteers, but they lost some professional guidance after Merrill left in 2024.
“They take this very seriously,” Girard said. “This was not a purposeful mistake. Every member agrees something needs to be done.”
Patrick O’Grady can be reached at pogclmt@gmail.com.