State School property commission plan raises hopes in Laconia

Redevelopment agency seen as having the potential to be an ‘economic driver’

Laconia officials have welcomed legislation filed earlier this month to convene a commission to begin the process of redeveloping the former Laconia State School site “for self-sustaining economic development and job creation for the benefit of the city of Laconia, Belknap County and the state of New Hampshire.”

The initiative was taken by Senate President Chuck Morse, R-Salem, who for the past seven years has grown increasingly frustrated at the failure to sell the property and strip the nearly $400,000 spent annually to police and maintain it from the state budget.

Morse said that he anticipates the Lakeshore Redevelopment Planning Commission will become the precursor to an agency akin to the Pease Development Authority, which would oversee development of the property.

Chaired by an appointee of the governor, the commission would consist of eight members: four, including one from Belknap County, appointed by the governor and executive council; two appointed by the city of Laconia; and one appointed by the House speaker and another by the Senate president. The commission will have an initial budget of $365,000 with the expectation that it will request funding to invest in infrastructure on the site in the 2020-2021 capital budget.

“I commend Senator Morse for taking an economic development centered approach to the future of the former Laconia State School property,” said

Laconia Mayor Ed Engler praised Morse for the initiative saying “he understands that who actually owns the property is not as important as what the owners plans to do with it. He added that Morse “clearly sees its potential as an economic driver for the city, county and state.”

Not a blank slate

Opened in 1903 as the New Hampshire School for Feeble-Minded Children, what became known as the Laconia State School operated on land donated to the state until 1991, when it closed following years of controversy and litigation arising from the conditions at the institution and the treatment of its residents. Almost at once, the center of the campus was converted for use as a medium security prison, the Lakes Region Facility, which closed in 2009. The buildings were mothballed and the state has sought to divest itself of the property ever since.

The commission will not begin with a blank slate. In 2010, the state established a commission to evaluate long-term uses for the property, which reported in June 2011. The report recommended no specific use for the property, but identified a number of issues that diminished its value and hindered its sale, in particular the presence of contaminants in the buildings and on the grounds. At the same time, the city, with funding from the Environmental Protection Agency, engaged a team of consultants, which also reported on the existing condition and potential use the property.

The state appraised the property for $2.16 million, and in 2012 the city offered to purchase it for that price, but the offer was rejected. The state then listed the property on the open market, but has yet to receive an offer.

Altogether, the state owns some 245 acres divided among five abutting parcels, one of 17 acres housing the 911 call center, three leased to the city in 2000 for 99 years, and the main campus of 200 acres, which is the focus of the redevelopment effort. The property itself stretches across 200 acres in the northwest quarter of Laconia overlooking two lakes — Opechee to the east and Winnisquam to the west.

Although the property has no access to either lake, it abuts Ahern State Park, nearly 130 acres of woodland with 3,500 linear feet of shorefront on Lake Winnisquam.

Issues to be addressed

Engler said he was especially pleased that Morse has directed to commission to “identify potential opportunities for integrating future reuse and redevelopment of the property with the park. ”I believe the natural beauty of the park can be preserved while serving as an amenity to the property,” he said.

There are 31 buildings on the campus, including dormitories, classrooms, offices, garages and sheds for pigs and poultry, built between 1905 and 1975, half described as in good condition and half in need of repair. Two of these buildings are on the parcel retained by the state. Another two, in the northern quarter of the main campus, house the so-called Designated Receiving Facility (DRF) where the Department of Health and Human Services holds offenders with developmental disabilities deemed incompetent to stand trial.

Several issues must be overcome before the property can be redeveloped. There is the presence of the DRF, which the department is willing to move, but has yet to find a suitable location or muster the resources. A preliminary environmental assessment found there are a number of environmental hazards on the property, which the Department of Environmental Services estimates will cost more than $600,000 to thoroughly assess and between $2 million and $3 million to remediate.

The city is the sole entity eligible for federal funding, distributed by the EPA, to assist with the cost of environmental remediation. The water, sewer and electrical systems serves the four other parcels as well as the main campus and are not uniformly metered. Snowmobile trails, granted by easements, crisscross the property.

Development potential

Meanwhile, the prospect of putting the former Laconia State School property to productive use promises to help address a number of challenges that have increasingly weighed on the city in recent years.

Laconia’s population has been stagnant for more than half a century, creeping from 15,288 in 1960 to an estimated 16,193 in 2015. Like most cities and towns in the state, the population is aging. Between 2007 and 2016 the median age rose from 38.1 years to 46.7 years, an increase of 22 percent, while the school population slipped 13 percent, from 2,288 to 1,984.

While population growth has stalled, the housing stock has grown with the construction of seasonal homes. Between 2000 and 2010, when the number of units increased 15 percent, two-thirds of the units built were seasonal, which represent nearly a quarter of the housing inventory in the city.

While seasonal homes add to the tax base without significantly increasing demand for municipal services, occasional residents play in a minor role in the economy

The value of commercial property represents 14.7 percent of the property tax base, save for Berlin at 9.9 percent and Franklin at 13.9 percent the smallest share among the 13 cities. The aggregate value of commercial property in the city has fallen in nine of the past ten years, shrinking from $348,509,000 in 2007 to $282,976,000 in 2016, a decrease of 19 percent.

Potential for commercial development is limited. With 20.1 square miles of land mass, Laconia is among the smallest of the state’s 13 cities. Only Portsmouth and Somersworth are smaller. There are five state forests and a state park within the city limits, covering 596 acres. On the other hand, an inventory of vacant or underdeveloped land suited to commercial development counted 32 lots with a total area of 465 acres, of which 28 lots with 446 acres lie along the U.S. Route 3 corridor at The Weirs.

In other words, with 200 acres the former Laconia State School property amounts to almost a third of all the land readily open to commercial development in the city. Mayor Ed Engler and others believe the property presents a unique opportunity to redress the imbalance in both the city’s tax base and its demographic profile.