After years of stagnation, Laconia faces the future

City revamps master plan as chart to economic growth

Although the largest municipality in the Lakes Region, Laconia, once a thriving hub of commerce and industry, has not shared in the growth and prosperity that has overtaken the state and region in recent decades. Now, as the city drafts its master plan — measures to encourage residential and commercial development with an eye to fostering a more dynamic demographic profile — balanced income distribution and a more robust tax base are the top priorities.

This stands in sharp contrast to the master plan adopted in 2007, when the land use section and vision statement emphasized protecting and preserving the rural character of the city and “infill” development in what were called its three “villages” — downtown, Lakeport and The Weirs.

This time around, at the initiative and direction of the Mayor and city council, the plan will focus on spurring growth and welcoming change. 

Councilor Henry Lipman, who chairs the city council’s finance committee, explained that the council and the planning board formed a joint master plan steering committee to develop the plan.

“We’re not looking for a plan that sits on a shelf and gathers dust, but for something that will have well-worn pages,” Lipman said. He stressed that the plan will be closely connected to the budget to ensure that its recommendations are implemented.

Misguided choices

Bob Selig, a longtime resident and former industrialist, traced the city’s misfortunes to the 1960s and 1970s, when both its manufacturing and retailing sectors were eroded. He explained that the textile, shoe, machining and woodworking industries, which represented a significant share of employment, were either overtaken by competitors from abroad or moved to southern states to spare labor costs.

“Laconia is not unusual,” he said, noting that its experience was common among small cities elsewhere in New Hampshire and throughout New England. 

About the same time, Selig recalled that a project to link Laconia to Interstate 93, which encountered resistance from some local interests, was abandoned, distancing the city from the major traffic corridor in the state. Ultimately, the retail center of the Lakes Region developed around Exit 20 in Tilton, while Laconia was eventually flanked by the Belknap Mall on Route 3 in Belmont and three strip malls along Route 11 in Gilford. 

Bob Selig, a longtime resident and former industrialist, said a 1975 major urban renewal project forced retailers to disappear from the Laconia’s downtown.

Completed in 1975 at a cost of $7 million, a major urban renewal project in the center of the city left it with what Selig called “not really a downtown.”

The southern stretch of Main Street was closed to through traffic and existing buildings were demolished and replaced with structures to frame a pedestrian mall. Vehicles were routed around the core of downtown on two loops — one northbound, one southbound.

As a result, “the retailers disappeared,” Selig said flatly.

The south end of Main Street was reopened to traffic in 1995, but despite some fresh investment, downtown has yet to recover its former commercial energy. “You can’t buy clothing for either men or women in the city of Laconia,” Selig said.

Since 1960, while the population of Belknap County has nearly doubled, the population of Laconia has risen by fewer than 800 people, creeping from 15,288 to an estimated 16,470 in 2016. Meanwhile, the numbers in Belmont, Gilford and Meredith, which border the city, increased 3.7, 3.5 and 2.5 times, respectively.

From 1990 to 2010, the populations of the 28 towns of the Lakes Region Planning Commission increased anywhere from 8.4 percent to 59.8 percent, while Laconia and Franklin, the two cities in the region, posted increases of 1.3 percent and 2.1 percent, respectively.

Seasonal homes

While the population has languished, the demographic profile of the city has changed.

Like most cities and towns in the state, the population is aging. Between 2000 and 2016 the median age rose from 38.8 years to 46.7 years, an increase of 20 percent. Those younger than 19 slipped from nearly a third of the population to a fifth, while those older than 55 grew from just over a quarter to more than a third. 

An aerial view of the Lakes Region. (Photo by Bill Hemmel)

The increase in housing units has outpaced the growth in population, driven in large part by the construction of seasonal and retirement homes. After adding just 353 units in the 1990s, between 2000 and 2010, when the population shrank 2.8 percent to 15,951, the housing stock increased 15 percent — from 8,554 to 9,879 units. Of the 1,325 additional units, 816, or nearly two of every three, were seasonal homes, which now represent about a quarter of the housing stock. 

At the same time, the proliferation of seasonal and retirement homes reflects itself in widening disparities of income marked by rising poverty and affluence and dwindling numbers of middle-income households.

From 1999 to 2015, the portion of Laconia households earning less than $35,000 dropped from 47 percent to 37 percent. But at the same time, the percentage of both families and individuals living in poverty doubled — in the case of families, from 7.5 percent to 15 percent, and of individuals, from 9 percent to 18 percent. During the 2016-17 school year, 57 percent of students in the Laconia School District qualified for free or reduced lunch.

Furthermore, between 1999 and 2015 the share of Laconia households with incomes between $35,000 and $100,000 shrunk from 47 percent to 42 percent. Meanwhile, those households earning more than $100,000, which represented 6 percent of the total in 1999, grew to more than a fifth by 2015. 

Diminishing commercial property

During the past two decades, the value of commercial property has shrunk from 20.9 percent to 14.7 percent of the total assessed valuation of the city. Two-thirds of the 24 lots in the Lakes Business Park, developed in partnership with the town of Gilford between the 1990s and 2003, remain on the market. Vacant and underused property downtown has depreciated in value. 

The diminished share of commercial property value reflects itself in a higher property tax rate. For instance, if the value of commercial property were 25 percent of the total assessed valuation, the tax base would expand by nearly $500 million of assessed value and the current local tax rate of $20.16 would fall to $16.11, reducing the taxes on a $300,000 home by $1,215, or 20 percent.

For several years the city council has placed addressing the demographic issues, particularly the aging of the population and incidence of poverty, at the top of its agenda.

Mayor Ed Engler has suggested that encouraging commercial development to lower the tax rate and generate opportunities for employment while encouraging residential development at competitive price points would position the city to attract a younger, professional demographic. 

Bordered and riven by four bodies of water — Lakes Winnipesaukee, Winnisquam Opechee, Paugus Bay and the upper reach of the Winnipesaukee River — Laconia is among the smallest cities in the state, with only 20.1 square miles of land area. (Among the 13 cities, only Portsmouth and Somersworth are smaller.) Moreover, six state forests — Hamel, Huston-Morgan, Opechee Bay, Paugus Bay, Prescott and Swain — and Ahern State Park, all in the northwest quadrant of the city, together cover 1.8 square miles.

Land adjoining major thoroughfares and served by municipal utilities suited for commercial development is relatively scarce. In 2015, the planning department identified 32 large lots with an aggregate area of 465 acres that were vacant or underdeveloped. Of these, 28 lots covering 446 acres lay along Route 3, running between The Weirs and Meredith. In addition, the state and city have begun to consider the redevelopment of the former Laconia State School site, a 200-acre tract on North Main Street.

The Weirs, which for many years was a popular summer tourist destination, has increasingly become a seasonal home community. Hundreds of homes and condominiums have been built in recent decades, and several hundred more are in the planning process. At the same time, many cottage colonies, once a hallmark of the resort, have converted to condominium ownership. 

The Weirs

To reserve a significant share of the remaining land along U.S. Route 3 for commercial development, Engler proposed delineating a corridor of 400 feet on either side of the highway within which residential units would only be permitted on the upper stories of buildings that house commercial space on the ground floor. Although the planning board flatly rejected the proposal, the mayor said that he expects the master plan to recommend designating land at The Weirs, lots fronting the highway, for commercial uses.

Councilor David Bownes, who serves as the council’s liaison to the planning board and as a member of the master plan steering committee, said, “I want to make The Weirs a year-round destination hopping with restaurants, entertainment and shops. With only second homes, it will be locked in place as a seasonal destination.”

The iconic Weirs Beach sign.

This year, the city invested $1.6 million in reconstructing Lakeside Avenue, which overlooks Weirs Beach, a project that included burying overhead power lines, erecting new street lighting and installing new sidewalks and crosswalks. Bownes stressed the significance of the recent purchase of the Weirs Beach Drive-In Theater, which sits on 12 acres at the center of The Weirs, by Al Mitchell, who seeks to put the property to a mix of commercial and residential uses, among them a hotel, shops and condominiums.

Meanwhile, the renovation and reopening of the Colonial Theatre is the centerpiece of efforts to restore commercial vitality and raise property values downtown. Although the project is behind schedule and over budget, the city council and the Belknap Economic Development Council, its partner in the enterprise, are expected to approve a revised financing package. In anticipation of completing the project, the steering committee will propose redrawing the zoning downtown, where there are currently a handful of different districts, each with its own set of restrictions, to ease the process of redeveloping and repurposing property.

The sparsely developed northwest quadrant of the city, the area on either side of Parade Road (Route 106), is considered best suited to more intensive residential development. “The aim is to make our housing stock more competitive,” Lipman said. “We must use our rural districts to attract people to foster a more balanced demographic.” 

Currently zoning effectively restricts development to single-family homes and cluster subdivisions. Only one road crosses the entire expanse between Parade Road and Route 3, although another — Hilliard Road — runs halfway across it from The Weirs. Nor is the area served by municipal water and sewer.

Engler said that the steering committee has discussed extending Hilliard Road to Parade Road as well as running water and sewer lines to the area. The panel has considered funding the projects by creating a tax increment financing district. A portion of the tax receipts generated by the incremental appreciation of property values within the district would be applied to funding the expanded infrastructure, either by servicing debt assumed by the city or reimbursing costs borne by developers. 

Providing the infrastructure, Engler suggested would serve as an incentive to developers and, by sparing costs, enable them to offer competitively priced housing.

The challenge, he explained, is to develop housing for year-round residents of the city without simply adding to the disproportionate share of seasonal homes.

“We want people who work in Laconia to live in the city,” he said.