Laconia Officials Hope New Day for Former State School Property is Here; Other Bidders Named

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Paula Tracy photo

One of the abandoned buildings at the former Laconia State School.

Buildings on the grounds of the former Laconia State School Paula Tracy photo

By PAULA TRACY, InDepthNH.org

LACONIA – Its 30 dilapidated buildings, some with environmental hazard warnings signs and some surrounded in razor wire from its use as a medium security prison remain, but a new day may have dawned for the former Laconia State School property.

With its views to Lake Opechee, its open fields and forests, adjacent to a state park and snowmobile trails, the 217 acres of the former Laconia State School property are now under agreement for the second time, to be developed as a village with both residential and commercial uses envisioned, and city officials are expressing optimism.

On Wednesday, the state’s Executive Council voted 3-0 with two councilors recusing themselves from the vote to enter into a contract to sell the tract for $10.5 million to Pillsbury Reality Development LLC, whose principal, Michael L. Kettenbach is the developer of Londonderry’s Woodmont Commons, a residential retail complex located near Interstate 93 in the southern part of the state.

The other bidders included Hawthorne Development Corporation, Chinburg Development, LLC, AP & Affiliates and the Lakes Region Athletic Advancement Complex.

Both Mayor Andrew Hosmer and City Manager Kirk Beattie said they feel comfortable with the state decision to sell and as Hosmer said will “wait and see how this goes” and that the city is willing to work with the developer on its plan.

“I’m happy we are here,” said Beattie, who has done much of the city’s bidding in the process.

He said Executive Councilor Joe Kenney, R-Wakefield, has been a “big supporter” and was a key vote to approve the deal Wednesday.

Beattie said it has also been “great” working with Charlie Arlinghaus, the state commissioner of the Department of Administrative Services which is in charge of the sale.

Arlinghaus convened an advisory committee including Beattie and Kenney to choose among five potential buyers each having their own strategy. 

He named the other bidders Thursday, above, and said it would take a little more time to sort out the paperwork in the full bids to be released.

Some offered a cash deal which would lead to a quick sale while others, like Pillsbury offered a contingent sale after all permitting had been accomplished.

“We met with all the potential buyers and are very pleased with the decision. We feel confident they as a group will do well with the city,” Beattie said after the meeting.

He said they have been very responsive to the “needs and wants” of Laconia and are “good and constant communicators,” which will be key as he said the process of building out the parcel could be “decades long.”

Hosmer also said the city does not prioritize an expedited closing, as Kenney had stressed optimism for fewer than 18 months, but rather a good process that takes the needs of the city’s citizens into consideration.

For both Hosmer and Beattie the goal has been to get the property back on the tax rolls where it has not been since the early 1900s and Beattie said there is potential for significant taxable real estate which will help offset costs.

While he said he was unsure of the exact number of units, he said the buildout is for commercial, retail, residential in a village-like setting with a mixture in the types of housing.

Kenney said it was his understanding that the chosen developer wants to work on the retail aspect of the property first before constructing housing but Beattie said “we have a lot of confidence” the deal will go through and be a benefit of mixed use.

The state’s first effort to sell the property fell apart when Robynne Alexander, a Manchester developer, offered $21.5 million for the property in 2022 but could not come to the table with the cash after three delays in closing.

Alexander’s Legacy at Laconia LLC had an ambitious plan for housing and retail on the tract and had worked to get in place many of the necessary permits, making it easier for the next developer.

The broker for the sale, CBRE, is the same in both deals. If it closes, it will receive 5 percent of the sale price, about $525,000 and the remaining $9,975,000 will go to the state’s general fund, under the terms laid out.

There is a lease-back agreement which goes with the property allowing the Department of Safety’s 911 center to remain on the property along with the Lakes Region Mutual Fire Aid Association’s dispatch, until a new location for it can be built.

Pillsbury Realty Development LLC was registered in New Hampshire in November, 2007 with offices in Concord.

It has been primarily working on Woodmont Commons development which includes retail, apartments, restaurants and a brewery and is located on an old apple orchard. It is at least twice the size of the project envisioned for Laconia but in some ways, similar in a village concept.

The developer will need to address the “as is” aspect of the property which was a long time home for the state’s disabled which closed in 1991.

The 30 buildings and two water towers are in need of either extensive renovation or demolition, and there are needs on the property which include tying into the water and sewer systems.

While officials for Pillsbury have not made public comment, Hosmer said Wednesday he is confident in their experience and ability and is really a “top notch” group for the city to work with.

And while it was not the governor’s first choice among the proposals, according to Arlinghaus, Chris Sununu issued a statement on Laconia State School, Wednesday.

“I’m thrilled that the Laconia State School redevelopment project passed at today’s Executive Council meeting! This is an exciting opportunity for the City of Laconia, Lakes Region, and New Hampshire. Glad we got it done.”

There is no proposed closing date.

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