A Massachusetts developer has pulled out of a project that was set to bring 98 housing units to East Concord on Old Loudon Road.

The project, which had been in the works for over a year, received conditional Planning Board approval. With high construction costs and a lack of funding, Dakota Partners decided to step away from the site plans, said Jeremy Vieira, the development director for Dakota Partners.

“We were getting figures back that made the project difficult from a financial perspective,” he said.

With the rise in construction costs, current site owner Mark Bogacz was not surprised that the financing did not work.

“The city gave them everything they wanted but financing,” he said. “I don’t really care that they backed out because it’s a beautiful piece of property.”

Dakota Partners approached Bogacz about building on his property in February of 2023. A few months later, they signed an option to purchase.

The plans included three buildings – two with 30 units and one with 38 units – on the 13-acre site. Bogacz’s house and barn, which he previously used as a photography studio, would remain.

Dakota Partners would have paid Bogacz $1.25 million for the site, he said.

The site is listed on the National Register of Historic Places as it used to be the home of Leavitt Farm, which dates back to the 1800s. Little has changed from the original buildings, according to a report from the U.S. Department of the Interior.

The project summary, submitted in the summer of 2023 to the Concord Planning Board, named the site the Leavitt Farm Apartments.

To Bogacz, the obvious challenge with developing remains the cost.

The initial project summary noted that separate water and sewer services would be required for the condominium units. City staff recommended that the developer “provide a financial guarantee for the cost of installing the separate services.”

Across the road, developers at the Steeplegate Mall have the green light from the Concord Planning Board to begin a partial demolition. This site is expected to soon be home to more than 600 housing units.

With the cost of excavation work, building a road through the property and sewer expenses, the cost per unit would be much higher than Steeplegate.

Sewer capacity for any new project is an ongoing issue in East Concord, according to Planning Board Chair Richard Woodfin.

Only so many developments could connect to the existing sewer line without major investments, he said.

“There’s definitely some sewer concerns on capacity, and then certainly with Costco potentially going in and all that development at the mall there is going to be some added load,” he said.

Dakota Partners received conditional approval from the Concord Planning Board in August of 2023, with a one-year requirement to satisfy conditions. After the city sent a reminder to Dakota Partners of this deadline, they responded saying they would not be pursuing the project further.

Over the last year, the city has tried to help the developer find different financing options, said Vieira, including applying for a Community Development Block Grant. The plans, however, did not qualify for the grant and other applications for financing assistance were also denied.

Without these pieces, it was hard to justify continuing with the development, said Vieira.

“We didn’t see a clear path to getting it funding in a way that we liked going forward that we thought would allow us to do a successful project there,” he said. “So we decided to move on.”

Throughout the pandemic, American Rescue Plan Act funding and subsequent programs it created, like New Hampshire’s InvestNH helped developers finance affordable housing, said Vieira. To continue to incentivize viable affordable housing projects, like this one would have been, he hopes the state and federal government will continue to subsidize construction aside from available tax credits.

The Low Income Housing Tax Credit is one financing tool Dakota Partners has used to finance affordable housing projects, including the Railyards on Langdon Ave in the South End which is nearing completion.

Working with various communities throughout New Hampshire, including Concord, Vieira said that there is an acute awareness of the state’s housing crisis. Estimates show that 60,000 units are needed by 2030 to meet demand.

“Everyone is very cognizant statewide about the housing crisis and the escalation and housing costs for residents and is doing everything in their power to move projects forwarded that will help alleviate that,” he said.

If the funding piece could work, Vieira would expect to see another developer pursue plans on the Old Loudon Road site.

“It would have been a great project,” he said. “It very well might be that somebody in a few years steps back in to take  it.”