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Peabody City Council votes down turning a coffee shop into studio apartments

William Skouras' plan to transform the shuttered Peabody Coffee House at 59 Walnut St. into eight studios failed to win enough votes for a special permit. (Spenser R. Hasak)

PEABODY — A landlord’s proposal to turn a former coffee shop into a lodging house was defeated by a single vote of the City Council.

William Skouras’ plan to transform the shuttered Peabody Coffee House into eight studio apartments failed to win enough votes for a special permit.

The outcome was unexpected given Ward 3 Councilor James Moutsoulas, whose district includes the Walnut Street property, was supportive.

“I was disappointed,” he said. “I’ve never seen anything like this in Peabody. I’ve served on the council for many years where ward councilors respected and supported each other because we know our wards.  This council is acting like Congress, who can’t seem to agree on anything.”

Under the proposal, the tiny apartments would feature hardwood floors, Italian tile in the kitchens and baths, real wood cabinets, and a bathroom for each unit. They are priced at $950, including utilities and WiFi.

The two-story, wood frame building has nine units on the second floor. Most of them are leased through a deal with North Shore Community Action Program (MassCap), a nonprofit whose mission is to assist the needy, achieve social and economic stability through services and education.

Skouras bought the 5,460-square-foot property with his father, John J. Skouras, under the name of Trustees of William Skouras in 1997 for $85,000. The restaurant closed two years ago and the space has been vacant ever since.

Originally, Skouras was hoping to lease the cafe to a commercial or retail user, but couldn’t find a tenant.

“For the last two years I tried to rent it without success,” said Skouras prior to the council vote. “I even offered one year of free rent for the right tenant. We got five or six nibbles, but no one was serious enough to commit.”

While a few new restaurants have opened in downtown Peabody in the last few years, he said, that market is weak.

“I tried to get Brodie’s Pub to come because they are an established business,” he said. “But that went nowhere.”

At the Council hearing, Heidi Williams, MassCap’s program director, testified in favor of the project.

“It’s a win-win because the fair market value of a studio apartment in Peabody is nearly $1,400 and Bill is charging $950,” she said. “He is the rare landlord because he’s willing to strike a deal with us to help our clients.”

Laura MacNeil, MassCap’s executive director, said her agency helps place homeless persons into safe housing, and in some cases provides temporary subsidies as clients get back on their feet.

“The lodging house it’s a good project that deserves approval because it’s getting homeless people off the streets,” she said.

But City Council President Jon Turco asked whether the project met a city zoning requirement that 15 percent of the units be set aside as affordable, Ward 2 Councilor Peter McGinn expressed concerns about flooding in the area, and Ward 6 Councilor Mark O’Neil inquired about previous code violations at the building. In the end, the three councils and City Councilor-at-Large Thomas Rossignoll opposed the project. The 7-4 vote failed to meet the required eight votes for a special permit.

City Councilor-at-Large Anne Manning Martin said she was troubled by the vote.

“This was an opportunity to help homeless people become self-sufficient and Mr. Skouras was willing to offer eight additional rooms at an affordable rate,” she said. “It was a very unfortunate vote and I hope my colleagues reconsider their stance.”

Skouras and his attorney did not return calls seeking comment following the vote. Before the decision, Skouras said he was hopeful to win approval.

“I want to be optimistic and hope they will say yes,” he said. “It’s a good thing for the city of Peabody, a good thing for Walnut Street, and there’s obviously a need for housing.”

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