LACONIA — Conversation between city and state officials about the sale of the former Laconia State School property on North Main Street opened Thursday when Mayor Ed Engler and City Manager Scott Myers met with Michael Connor, deputy commissioner of the Department of Administrative Services at City Hall.
Engler said that the meeting "provided us with a very solid basis from which to proceed" and that he expected to brief the City Council and general public "very soon, if not this month, in January."
The sale of the property was included in the 2016-2017 state budget, and the terms of the transaction in companion legislation. RSA 4:40, the statute governing the sale or lease of state property, provides that once the state determines it has no need for a property, "the governor and council shall first offer it to the town, city or county where it is located."
However, Engler said Connor explained that this offer does not represent a right of first refusal, but instead is contingent on an appropriate price. He said that the Department of Administrative Services will hire a broker and put the property on the open market for six months to determine its market value.
While the property is on the market, the city would be entitled to present an offer and Engler anticipated that the department would disclose any offers from other parties to city officials. The highest and best offer for the property would be taken as its market value and it would be offered to the city at that price. The city would have at least 30 days to match the offer.
But, contrary to the statute, the transaction would be exempt from the review and approval of both the Council on Resources and Development, a panel representing executive departments and agencies, and the Long Range Capital Planning and Utilization Committee, consisting of four members of the Senate and four members of the House of Representatives. Instead, the sale would require the approval of only the Governor and Executive Council.
The state budget includes $2 million in revenue from the transaction. In 2012 an appraisal prepared for the state by the Bureau of Right-of-Way of the New Hampshire Department of Transportation placed the value of the site at $2.16 million.
Engler, who has favored purchasing the site, reaffirmed he would advocate acquiring it if it were offered to the city for its appraised value or less. At the same time, he expected any private parties interested in purchasing the property would seek assurances from city officials that their plans for its redevelopment were compatible with the interests of the community. Nor did the mayor exclude the possibility that the city might acquire the property, but subsequently transfer all or some of it to private interests to further its development.
The property consists of slightly less than 200 acres bounded by North Main Street to the east, Meredith Center Road and Eastman Road to the north and Ahern State Park to the west and south and divided roughly in half by Right Way Path. Among the 26 buildings on the site, the appraiser found less than a handful salvageable and estimated the cost of demolishing the rest at more than $2 million.
An initial assessment of the site by Credere, LLC of Westbrook, Maine in 2010 indicated that there were typical but significant environmental concerns, most of them confined to the 75 acres housing the buildings. As the party responsible for the environmental contamination the state cannot qualify for federal funding to address it. But, the city qualifies for funding to assess the extent of the contamination and if were to acquire the site, would be eligible for funding from the United States Environmental Protection Agency to address contamination.
The state first sought to sell the property in 2011, offering it to the city for $10-million. However, soon afterward, two appraisals, one by the state and another by the city, found it was worth about a fifth that much. In April 2012, the Laconia City Council offered to purchase the property, together with the Robbie Mills Sports Complex, an abutting 10.2-acre parcel owned by the state and leased to the city for 99 years, for $2.16 million. The state did not respond to the offer. The property has been on the open market ever since, but the state has received no offers for it.
Connor said the state spends approximately $330,000 annually to maintain and police the property, apart from the cost of any urgent repairs like the replacement of a failing roof.
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