Report: Portsmouth Developer Sues City Over Parking Agreement

Portsmouth’s new City Council has found itself in the crosshairs of a second lawsuit from a developer alleging breach of contract.

Deer Street Assoc. is asking a judge to award $4.25 million in damages as compensation for the council’s Nov. 23 6-3 vote to reject an agreement the developer, also known as DSA, signed with the previous council to provide parking spaces for several of its proposed buildings near the new city-owned parking garage on Foundry Place. The Portsmouth Herald first reported the suit.

The garage was built on land DSA sold the city with the agreement that DSA would later have access to spaces in the garage for tenants of buildings it planned to build on surrounding lots. The lots are small enough that the addition of significant structured or surface parking would likely force any proposed building to shrink substantially.

In general, the city requires one off-street parking space per housing unit for units between 500 square feet and 750 square feet, and 1.3 spaces per unit for any unit larger than that. Non-medical offices require one space per 350 square feet of gross floor area, all retail shops require one space per 300 square feet and all restaurants and bars require one space per 100 square feet.

DSA has permitted two of the four buildings it plans around the Foundry Place garage. The two unpermitted buildings still need Planning Board review and one needs approval from the city’s Historic District Commission.

“The city was then, and remains, well aware that these promised parking spaces are vitally important to [DSA’s] intended development of surrounding property,” the developer’s lawsuit states.

Most of the current city councilors were elected last fall by voters eager to replace the previous slate, which was viewed as too friendly to the developers behind a separate project, Redgate/Kane’s McIntyre Federal Building redevelopment. Redgate/Kane filed suit against the city, also accusing it of breaking a development agreement inked by the previous City Council, but have since suspended the suit pending the outcome of negotiations.