The state’s plan to redevelop Rye Harbor is dredging up angst among some longtime businesses, who claim they haven’t been able to provide input on the project.

And with a looming deadline at year’s end to spend federal grant money, the future look and feel of the harbor and its many stakeholders is poised to remain a flashpoint.

The Pease Development Authority is proposing to spend more than $1 million in COVID-19 relief money on a new raised structure that would house marine-related businesses. Those advocating for the project say it will address environmental concerns, particularly in an area prone to flooding, and could bring in needed revenue.

The new building would be constructed in the parking area of the harbor, with eight available units for lease, measuring between 210 and 250 square feet, according to a recently released drawing.

Opponents of the project say the design is reminiscent of a strip mall and a detriment to the character of the port, and that the new rental units wouldn’t meet their needs.

“None of us asked for that, none of us want that,” said Adam Baker, owner of Vintage Fish Company, which operates charter fishing trips and sells bait, tackle and ice.

Baker’s company and a handful of other businesses currently operate out of small shacks that sit on the edge of the harbor. The colorful shacks, some of which date to the 1980s, are privately owned by the individual businesses but sit on state land. In addition to paying town property taxes to Rye, each shack owner also pays an annual fee of $1,250 to the Pease Development Authority to occupy the space.

While quaint, the shacks abut sensitive marshland and are prone to flooding during high-tide events. Many of the small buildings sustained damage during a major storm in January. The Pease Development Authority’s board of directors contend the current layout of the harbor isn’t sustainable and is costing the state money.

“We have to make this harbor not only environmentally sustainable, but we have to make it financially viable,” said Steve Duprey, a prominent Concord developer who chairs the board.

It still isn’t clear if the current shacks would be removed if construction of the new building gets final approval. If so, the current shack owners would likely require some form of compensation.

Many of the tenants of Rye Harbor said the schematic drawing released in late July caught them off guard. At a Pease Development Authority board meeting earlier this month, several Rye Harbor tenants said they felt shut out of the process, leading to confusion and mistrust of the board’s ultimate goals for the harbor.

“There is definitely something in the works,” Baker said. “And I wish they’d be more transparent.”

Some also raised concerns about parking at Rye Harbor, which is already maxed out during summer weekends.

“Today, Rye Harbor is a fully engaged place and has no room for any additional development,” Alex Herlihy, Rye’s town historian, said during the hearing. The new structure, he warned, would consume more of the lot and could limit the public’s ability to use the residential boat launch.

Several existing businesses — Granite State Whale Watch, boat tours to the Isles of Shoals, and the Rye Harbor Lobster Pound, a takeaway seafood shack — already draw significant traffic to the harbor. The Pease Development Authority said it is aware of the parking crunch and is looking at all options to increase capacity.

Speaking to reporters after the meeting, Duprey said he repeatedly hears concerns that use of the harbor is unfairly limited to those who have long ties or other insider connections to the facility. He said he wants to see a more equitable approach for businesses who want to make use of a state-owned asset.

“So, anybody who wants to have a shack or use in the harbor could do so, or have an opportunity to apply and have a uniform or transparent fee structure for people who use it there,” he said.

It isn’t clear when the Pease Development Authority will hold a final vote on the project, but Duprey said he intends to schedule more public hearings on the issue so that people can provide input.

But he noted that Rye Harbor faces an annual budget shortfall, and recent storm damage cost the port nearly $400,000.

The proposed construction project has a tight timeline: The federal money the state’s hoping to use toward the project expires on Dec. 31, so the agency is hoping to sign a contract with a proposed builder before that deadline. The state has already spent roughly a quarter of a million dollars on engineering and design services for Rye Harbor.

“I just think it would be a loss for the State of New Hampshire not to avail ourselves of this money,” said Duprey.

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