A building sits vacant on the former Laconia State School property in June 2022. (Jon Decker/The Laconia Daily Sun file photo)
WAKEFIELD — A potential buyer for the Laconia State School property was presented to Gov. Chris Sununu and the Executive Council on Friday before the matter was tabled to provide more time to evaluate the proposal.
The potential buyer, Pillsbury Realty Development LLC owned by Michael Kettenbach and based in Londonderry, has little online presence but is listed as one of the developers behind Woodmont Commons, an 80-acre project in Londonderry that features retail, apartments, restaurants and a brewery.
The information presented to the Executive Council on Friday did not include any details about how Pillsbury might develop the Laconia property, which covers some 217 acres. However, it did include one important detail: the purchase price of $10.5 million.
Even if the sale goes through, the state wouldn’t see the proceeds for as much as two years.
In an explanation of the proposal, written by Administrative Services Commissioner Charlie Arlinghaus, it was revealed there were five firms which proposed to purchase the property from the state, some of which came with lower offers without conditions. Pillsbury’s was one which offered a higher price but made the sale contingent on the developer securing the state and city approvals necessary to carry out its development plan.
The purchase-and-sale agreement, which has already been signed by both Arlinghaus and Kettenbach, requires Pillsbury to put down a $500,000 “earnest money” deposit, which is refundable until the close of a six-month period to allow for Pillsbury to conduct due diligence. After that six-month window closes, the deposit is non-refundable unless the state cancels the deal or breaches the contract. Following that window, Pillsbury will have 18 months to seek the permits and approvals it will need, and only after that point will the sale be finalized.
Arlinghaus said it will likely be more than two years, if the sale is approved, before the state would see any gains from the transaction. His explanation also notes that CBRE, the firm that marketed the property for the state, is entitled to a cut of 5%, or $525,000, leaving $9.975 million for the state’s general fund.
The deal was a late addition to the Executive Council meeting, and came so far down the agenda that many interested parties wouldn’t have had a chance evaluate the potential buyer, said District 1 Executive Director Joe Kenney after the meeting, explaining why he moved to table the question until the Council’s next meeting, currently scheduled for Wednesday, Sept. 25.
The state-owned property is often referred to as the State School, referring to a residential facility the state operated for intellectually disabled persons for many decades. After the school was closed in 1991, it was used as a state prison until 2009, and continues to house an emergency dispatch facility.
A term of the purchase-and-sale agreement requires the buyer to lease back to the state the Dwinell Building, which currently contains the 911 call center operated by the Department of Safety and the dispatch center for Lakes Region Mutual Fire Aid Association, until a new facility can be built to house those critical services.
The state’s effort to divest of this property dates to 2021, when an act of the legislature provided the governor and Executive Council sole authority to sell it. Pillsbury is the second prospective developer to sign a deal with the state. The first was Robynne Alexander, who offered $21.5 million, and the governor and Executive Council agreed to that deal as 2021 drew to a close.
Alexander’s ambitions for developing the property were as grand as her purchase price — but both proved to be well beyond her capabilities. In April of this year, after several delayed deadlines set by the state for her to come up with the money, Sununu’s patience was finally exhausted and the property was put back on the market.
When the deal fell through, local officials, including Mayor Andrew Hosmer, expressed concern that the state more carefully evaluate any future potential buyers to ensure they have the means to follow through with their plans. One thing they liked about Alexander’s proposal, though, was how she intended to include a mix of uses that included commercial space such as retail and restaurants, health care facilities, a resort hotel and hundreds of homes across a spectrum of affordability.
Any developer that takes on the property will first have to contend with its current state. There are 30 buildings on the site, most of which are dilapidated. There are water and sewer systems that are abandoned, and two water towers. The property also abuts Ahern State Park, and the purchase-and-sale contract states access to the public to Ahern must be protected “in perpetuity.”
Yet whoever is given the opportunity to develop the property will gain from Alexander’s failure. In order to prepare for that sale, lawyers on both sides of the transaction had to disentangle decades of state use there. Issues, now since resolved, included road closures, easements and agreements about snowmobile trails, among many other complications.
The property's possible redevelopment could be an economic engine for the region, as well as a potential relief to the housing crunch.
These articles are being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.
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