City asks state for 'due diligence' about reliability of proposed State School buyer

LACONIA — A letter from the City of Laconia to the Executive Council raised concerns about the experience and reliability of the proposed buyer and asked the state to preserve licenses held by the city to use the property.

At the Executive Council’s Wednesday meeting, the Department of Administrative Services is expected to ask the Council to approve a $21.5 million sale agreement for the property with Robynne Alexander of Manchester via her company Legacy Laconia, LLC. 

The letter, submitted around 2 p.m. Tuesday, asks the Council to ensure that the property deed preserves two licenses currently held by the city. The first allows the city to use a portion of the land attached to the State School property as overflow parking at Robbie Mills Field and the second allows an irrigation system that feeds Robbie Mills constructed by the city access to a water tower on the state property. The letter also asks that the deed honor the usage of the Dube building as a cold weather shelter for those experiencing homelessness through the beginning of April, an effort undertaken by Lakes Region Mental Health Center through a grant from the state. 

Executive Councilor Joe Kenney said that it was possible the licenses were included in the language of the agreement. He also said the questions about licenses, as well as concerns about the potential buyer, would likely come up at the council's Wednesday morning breakfast meeting. 

“There’s no intent to do any harm there,” Kenney said. “We’ll review them.” 

These licenses, said Mayor Andrew Hosmer, “have in clear terms been raised with the Department of Administrative Services and with Councilor Kenney before.”

An article originally published in the New Hampshire Bulletin Tuesday outlines the past developments of the proposed buyer. The article, referenced by the city in its letter, highlights that none of the developments are of comparable size to what Alexander has proposed for the State School property and that her largest development project to date, in Manchester, is three years behind schedule and has sparked litigation.

“There is some concern about the buyer's experience and ability to take on a project of this size,” the letter reads. 

“The City has been assured by the Department of Administrative Services that the buyer was the winning bidder based not only on their bid of $21 million, but also on their ability to complete the proposed project... Our residents need assurance that due diligence has been exercised by the State, and that the redevelopment of the property will come to fruition.”

Hosmer explained this concern.

“I don’t want to see a project partially completed then the balance of the work be largely neglected,” Hosmer said.  

“If the state were to close the deal and then walk away, and then the developer were not to fulfill the obligations laid out in the proposal,” Laconia could be left to pick up the pieces, he continued.

Kenney said Tuesday that he had not yet read the article or the letter. After being contacted by the Bulletin reporter about specific questions of the potential buyer’s track record — to which he responded that he had “no information” — Kenney said he asked Administrative Services Commissioner Charlie Arlinghaus “late, late last night to look into it.”

Kenney also noted that the primary appeal of the proposal lay in its ability to check many of the boxes expressed by both the city and the state for the property’s future, and that “the DAS committee [tasked with reviewing proposals] probably felt there was enough of a track record there” to recommend it. 

“Although the initial sale price represents a potential windfall for the State,” the letter asks the council to “please consider the long-term issues faced by the City of Laconia if the project is not completed in a timely manner.”

Hosmer said he wants the state to undertake a “two-pronged stress test” of the buyer to ensure “that they have the expertise” to pull it off and “the financial wherewithal and access to financing” required.

If such efforts were not undertaken and the state were to approve the deal as is, Hosmer suggested that a bond be put in place to ensure that, should the developer fail to complete the project, the city has access to funds for the demolition of the standing buildings and the “remediation of the land.” Such remediation, he added, is of the foremost importance to the Laconia City Council.

“The last thing I want to see is the citizens and city of Laconia left holding the bag,” Hosmer concluded.