Oct. 18—The Board of Mayor and Aldermen will hold a public hearing this week on an application for the RSA 79-E tax credit program to retrofit a building at 73 Hanover St. into 43 units.

The planning board approved the project at the Independent Order of Odd Fellows building across from the Palace Theatre in July.

The tax credit program lets developers who improve blighted properties in downtown areas delay paying property taxes on the value of the improvements.

To qualify, the applicant must meet several requirements under the statute, including that the rehabilitation of the structure must cost at least 15% of the pre-rehabilitation assessed valuation, or at least $75,000.

Online appraisal records show that the 2021 assessed valuation for the project parcel is $1,859,200. The proposed renovations total $7,664,000.

Red Oak Apartment Homes bought the building for $1.5 million at the end of last 2020 with the intention to convert the upper four floors into market-rate apartments. The company also owns the Hanover Street parking garages and the 10-story Citizens Bank building, which houses 91 apartments.

The proposed project consists of a five story commercial building on full basement having a 7,372-square-foot footprint along the south side of Hanover Street in the block between Elm and Chestnut streets.

The building has most recently housed retail on the first floor and commercial office and studio space on the upper floors.

The proposed floor plans submitted at City Hall show the first floor will be commercial retail space, including a proposed one-story addition on the west side of the building.

The upper floors will be converted into residential apartment use with 10 apartment units on the second floor — 6 studio and 4 one bedroom — and 11 apartment units on floors three through five (six studio and five one-bedroom units on each floor).

The project will contain a total of 43 residential apartment units, 24 studio units and 19 one-bedroom units.

A new elevator will be installed, along with new plumbing, heating, electrical and mechanical systems. Currently the fifth floor is partially open to a fourth-floor auditorium below. There will be structural decking work to the fifth floor, converting it to a full story.

"The plan depicts retention of the current brick exterior walls, in keeping with the historic downtown character of Hanover Street," writes assessor Bob Gagne in his review of the project application.

The application for the tax credit program requests a five-year term. City Ordinance 36.40 (C) pursuant to RSA 79-E:5 states the Board of Mayor and Aldermen can grant a tax relief period of up to, but not exceeding, five years.

The public hearing on the RSA 79-E tax credit program application for the project is 5:30 p.m. Tuesday at City Hall.