NASHUA — City officials are torn on whether to ask Pennichuck Corp. to fork over more than $2 million from the proceeds of a sale of property along Concord Street.

After a lengthy discussion Thursday night, the Board of Aldermen's Pennichuck Water Special Committee tabled a proposal to ask Pennichuck to contribute the money to the city's conservation fund.

The 33-acre parcel off Concord Street — the last piece of undeveloped Pennichuck property — was sold for $2.2 million to North Concord Street Properties in a controversial land deal that was finalized just days before the city acquired Pennichuck Corp.

At the time, many aldermen were unaware that the property, known as Parcel F, was not included in the city's acquisition of the water company, and unsuccessful attempts were made by the city to then purchase the land for nearly $5 million to derail an 85-unit housing project now being built on the site.

Trees have already been removed to make way for the elderly housing complex known as Hayden Green.

On Thursday, Pennichuck CEO John Patenaude told the aldermen's Pennichuck Water Special Committee that the request for $2.2 million would “make it difficult to continue business in our current form.”

The company's fiduciary obligations would prevent Pennichuck from transferring the money, according to Patenaude, who was present with members of the the Pennichuck Board of Directors, with the exception of Mayor Donnalee Lozeau, who was not present for last night's meeting.

Jay Leonard, chairman of the Pennichuck board, said his board has not taken any position on the proposed request, but is taking its responsibilities seriously.

His major concern is that if the request for $2.2 million were made by city officials, it could hinder the board's independence.

“I say that with all respect,” said Leonard. “ … We really do have the same goals.”

Alderman-at-Large James Donchess, prime sponsor of the proposed legislation to seek proceeds from the sale of Parcel F, said he does not agree with all of Patenaude's comments, and was surprised by some statements made by the CEO.

“It just doesn't seem right to me,” said Donchess, arguing a single contribution of $2.2 million should not threaten the financial stability of a corporation that saved nearly $4 million in interest rates at the time of the acquisition.

He urged his fellow aldermen to approve the resolution and make the monetary request to Pennichuck, stressing it is a reasonable request.

“I am the eternal optimist, and I think we should try to do both” said Alderman-at-Large Barbara Pressly, explaining the $2.2 million should be sought and used for conservation purposes, and other nearby watershed property should also be studied for future acquisition by Pennichuck.

If the Public Utilities Commission must approve the request, Pressly said, she believes the city can make a strong case for the funds.

Other aldermen, including Mike Tabascko and Brian McCarthy, the board's president, said they do not support the resolution to seek money from Pennichuck.

McCarthy argued that it would make more sense for Pennichuck to keep the proceeds from Parcel F and use it to acquire other important property in the area that would protect the watershed and the city's water supply. In addition, he claimed it would probably be cheaper for the city to bond money for conservation purposes instead of having Pennichuck hand over the $2.2 million, which could impact water rates for customers.
khoughton@newstote.com