A parcel of land on Lafayette Road, once considered for the Smuttynose Brewery, will instead be home to a new Army Reserve Center.

The fate of a long-vacant six-acre plot of land off Lafayette Road in Portsmouth has been the subject of much debate over the last several years. The saga will come to an end on March 1, when crews break ground on a new Army Reserve Center.

The 21,000-square-foot building, slated to open in March 2013, will serve as an administrative center and training facility for 87 soldiers, complete with a library, learning center, weapons simulator and physical fitness areas. The $5.64 million design-build contract was awarded to GM2 Associates, based in Connecticut.

The property, located at the intersection of Lafayette and West roads, has been sitting vacant for more than 15 years. About five years ago, Smuttynose Brewing Company owner Peter Egelston began eyeing the parcel as a potential site for a new brewery and restaurant. That project would have required a zoning change, which the Portsmouth City Council nixed in 2007. Egelston has since acquired property in Hampton, where he will soon break ground on a new brewery.

Because it’s a federal building, the new Army Reserve Center is not subject to Portsmouth’s zoning regulations, nor will it pay any property taxes. Those factors have led some to wonder if the city missed an opportunity by blocking the brewery, which would have boosted local employment and tax revenue.

The Smuttynose Brewery is currently located on Heritage Avenue in Portsmouth, about a mile from the Army Reserve Center site. Egelston has long hoped to expand his brewing capacity and add a restaurant. He’ll do both by moving out of Portsmouth and relocating to Towle Farm Road in Hampton, where he will double his capacity and open a 95-seat restaurant by the summer of 2013. Construction will begin next spring.

It’s the end of a long search for Egelston, who began looking for a new brewery site in 2004. He first considered an old mill building in Newmarket, but, after months of wrangling with the Town Council, the plans fell apart in 2005.

His next serious bid was for the Portsmouth site on Lafayette Road. Since that parcel was zoned as office-research, he needed to sell the City Council on a zoning change to allow for a mixed-use development. That proved difficult, as neighbors who live across the street raised noise, traffic and safety concerns. Ultimately, the City Council refused to grant the change, and Egelston was again forced to look elsewhere.

City Councilor Ken Smith was among those who voted against the zoning change in 2007. Although the city will have no control over the Army Reserve Center, he thinks it will be a good fit for the residents across the street. The building entrance will be on West Road, which will reduce the traffic impact on Lafayette.

“I think it will be better for the neighborhood,” Smith said. “One of the things the neighborhood has always wanted out there is to have something that is not intense retail so it’s not disturbing the neighbors.”

The Army purchased the property from the Michael R. Iafolla Revocable Trust for $2.73 million earlier this year. According to city manager John Bohenko, the undeveloped land had an assessed value of a little over $1 million and had been contributing around $17,000 per year in property taxes. Had a private building gone up on the site, it probably would have generated between $80,000 and $90,000 per year in taxes—maybe even more if Smuttynose had wound up there, Bohenko said.

Smith agreed the brewery would have created better jobs and added more value to the city, but he said the council had to consider the neighbors.

“For the city, it’s kind of a mixed bag,” Smith said. “It’s a huge parcel of land that is now off the tax rolls, so in effect, everyone that pays taxes in the city of Portsmouth is going to have to pay a little bit more now.”

Although the Army Reserve Center will not create local jobs, Smith believes the soldiers stationed there will eat and shop at local businesses.

“It does help the local economy, as well,” he said.

But Councilor Chris Dwyer laments the city’s decision four years ago. She voted in favor of the zoning change that would have allowed the brewery. The change had been recommended by the Planning Board.

“Collectively, we missed an opportunity there to have it be attractive and useful and have it be something that generated revenue,” she said.

Instead, the city no longer has any influence over how the property is used or how it appears. “As a city, we have absolutely no say or control over design or whatever. The federal government really trumps all of that,” Dwyer said.

Army Reserve representatives gave a presentation about their plans during a City Council meeting on Dec. 5. Dwyer asked if they would consider installing a natural buffer of trees or bushes to the landscape by Lafayette Road.

“I would love it if they would do trees along (the front lawn),” she said. “I think it would be great for folks on the other side of the street and people who use that road to be able to have that be an attractive facility.”

She was told they would take the idea under consideration, but they’re under no obligation to follow through.

The Army Reserve will turn over its former facility on Cottage Street to the city at no cost. The Council must now decide whether to sell the property to a private developer or use it as a municipal building.

Dwyer would like to see the building converted into middle-income housing units, but that idea has drawn resistance from neighbors. She has been discouraged by the lack of support for such a project in the past.

“I so think we need more moderate-level housing for people in Portsmouth,” she said. “In the long run, that adds to our tax base, it adds to people being able to live in town, it really strengthens the community. So I am hopeful that we can take a look at that again.”

According to Smith, other ideas for the property have included establishing new headquarters for the Police Department or using it as a new recreation building to replace the Connie Bean Center.

But the Police Department idea has fallen off the table, and Dwyer said she opposes a recreational use of the property. She noted the city has added new athletic fields over the last few years.

“It’s a residential neighborhood. I see it being residential. I don’t see it being another field,” she said.