For Sale: A Beautiful Property with Faults

Nearly a dozen people have expressed interest in redeveloping the 216-acre former Lakes Region prison site in Laconia – and it’s no wonder.

The brochure advertising the property plays up the sweeping lake views and the site’s proximity to ski trails, as well as the  golf course and six lakes that populate the land. And, while the brochure highlights an opportunity to assuage the state’s significant housing shortage, the marketing materials do not list a price though the property is zoned not only for housing but also for hotels, restaurants, retail, and entertainment.

“The Lakes Region has truly become a work-live-play opportunity for many,” it reads.

In spite of the property's assets, the state has tried and failed to sell the property for years. A single sentence in the brochure hints at why, “The property is being sold as-is in its current condition, with all faults.”

Those “faults” include water and sewer systems that need replacing and several of the site's 35 buildings, many of which have been abandoned since 2009 and have caved-in roofs and broken windows, need to be demolished.

Last year, the state hired CBRE, a real estate  firm with an office in Manchester, to overcome those challenges and find a buyer with money, experience, and interest in redeveloping the site.

The company has not returned messages but began quietly advertising the property last month via targeted outreach to undisclosed investors, as well posting the property's details online.

The site reveals more than how CBRE is pitching the property.

It shows the firm has pursued a working relationship with the Lakeshore Redevelopment Planning Commission, a legislatively appointed group the state had discouraged CBRE from relying on. It also makes clear the state will almost certainly remove the backup 911 call center and a mutual fire aid dispatch on the site, an endeavor expected to cost millions.

The commission’s work

In its request last year for proposals to market the property, the state Department of Administrative Services cautioned bidders against using the commission’s four years of research, studies, and proposed plans, saying the state’s goal in selling the land quickly differed from the commission’s goals. It did not say how, but Jared Nylund, a property asset manager with the department, said in an email Tuesday that marketing of the property is “not included among the commission’s statutory purposes, duties, or powers.”

Gov. Chris Sununu also sidelined the commission with an addition to the budget giving him and the Executive Council the sole authority to sell the site – bypassing the typical slow-moving state review process.

CBRE has not heeded the department’s advice.

The firm has included more than 15 studies the redevelopment group commissioned to better understand the site’s environmental concerns; sewer and water needs; historic buildings; wetland locations; and potential hazardous materials.

Commission Chairman George Bald has welcomed CBRE’s interest and believes the commission’s work will be valuable to bidders. “It provides really good solid information as to the situation there,” he said. “All the things that bidders would certainly need and not want to spend money doing.”

CBRE’s Roger Dieker, the lead broker on the project, told Bald in mid-March the firm had received 10 to 15 inquiries. Bald said he provided CBRE the names of people who had contacted the commission with interest.

“I told CBRE anyway I can help them, I will,” Bald said. “They seemed to understand that it will be important for them to work with us. While the (state’s request for proposals) said they don’t have to work with us, they have indicated to us that they will.”

Bald has urged CBRE to work with the city of Laconia, which wants to see the property redeveloped with a mix of housing and possibly medical services.

“I don’t want to sound like a broken record but I told CBRE probably 10 times, ‘Make sure you meet with the city manager, mayor, and planning director,’” Bald said. “These people have a good sense of the city. If you try to do this without their involvement, it’s not going to work out, whoever bids on it.”

City officials have said CBRE has done so.

The marketing materials from CBRE say the state intends to deliver the property vacant, without tenants; the site currently houses the 911 backup call center and the Lakes Region Mutual Fire Aid, which dispatches for 35 towns.

Chief Jon Goldman has estimated the cost of buying new land, building a facility, and relocating dispatch equipment to be as high as $7 million, a cost that would be shared among the fire aid member towns. The state has not said publicly how much it will cost to do the same for the 911 call center.

House Bill 1548 calls for using proceeds from the sale for the relocation, without specifying an amount. The bill will provide no assistance if the property sells for little to nothing, as predicted by the state in its request for marketing proposals. Citing that expectation, the state is paying CBRE $50,000 for its marketing work plus an additional $50,000 or 5 percent of the final sale, whichever is greater.

Goldman said Tuesday the state has proposed moving both operations to a state-owned land adjacent to the property.

“We don’t want to move,” Goldman said. “It shouldn’t cost us anything because it’s not our fault we have to move.”

Past projects

CBRE has helped several other states sell abandoned and problematic properties before.

A former college campus in California is back on the tax rolls after it sold for $15.5 million in November. A former prison in Florida is now an eco-hub incubator for growing hemp and algae.

The firm pointed to those successes and others in the proposal it submitted to the Department of Administrative Services last year.

In its proposal for the bid, the company also pointed to five successful “redevelopment sales” it completed in New Hampshire between 2010 and 2019. In 2020, it arranged the $3.2 million sale of an industrial property in Dover, according to its website.

Outside New Hampshire, CBRE has helped government clients redevelop correctional facilities, surplus land, a college campus, and state offices in North Carolina, Oregon, Ohio, South Carolina, Florida, and Virginia, according to its proposal.

The Laconia property is divided into two parcels, the larger encompassing nearly 200 acres bordering Route 106. Roofs on several buildings have caved in. Razor wire still surrounds the portion of the site used for a state prison from 1991 to 2009.

The state acquired the site in 1901 and for years it was home to the New Hampshire School for the Feeble-Minded, later renamed the Laconia State School, which closed in 1991.