Despite suspicious fire, State School sale closing still on track for end of August

LACONIA — After a suspicious fire broke out at the Spaulding Building on the grounds of the former Laconia State School the morning of June 14, closing on the sale of the property from the state to Pillsbury Realty Development was delayed.

Originally slated for July 28, the close date is now set for later this month. Pillsbury was awarded the contract to purchase the property in July 2024, for $10.5 million.

“It changed the nature of the property, in that our purchase-and-sales agreement talked about it being sold as-is, but with the fire happening, it changed that,” said Kevin Smith, project manager for Pillsbury. “So, through our attorney, we reached out to the state and asked that they conduct an environmental assessment on the property, prior to us closing on it.”

The state agreed to the assessment, which is currently underway. Developers don't know when they will receive the environmental report.

Smith said Pillsbury Realty Development has three extensions they can use, of 30 days each. They have exercised their first extension, and are currently scheduled to close on the property in late August.

The master plan for the Laconia Village development was approved this spring, outlining the multi-phased, multi-year vision.

“It's not all going to be built overnight. But it does call for a significant amount of housing, commercial space, civic space, and some retail,” Smith said.

The redevelopment is expected to include 375,000 square feet of commercial space, 2,142 units of various housing, and 75,000 square feet of civic space.

Pillsbury has also submitted required traffic studies, which have been approved by the state. The studies will guide intersection improvements and planned roads to handle future increased traffic.

“We've done a fiscal analysis, which shows that the project is very much tax beneficial to the city. It's tax positive. And so from that standpoint, I think it'll have a positive effect on the city,” Smith said.

Smith said feedback from residents, so far, has been positive.

“The school has been run down for some time, and so I think there's a number of people who are excited to see it become redeveloped, and turn into another vibrant part of Laconia.”

Smith said the project is a big undertaking. Also currently underway are infrastructure and energy planning.

“You have to upgrade the sewer pipe and water pipe. Obviously, access to natural gas in the short term could be a bit of a problem. Although we've been working very closely with Liberty Gas to come up with a temporary solution in the meantime, and we're exploring other alternatives, as well,” Smith said. “With any large development site there's always hurdles, but with the right team, most things can always be overcome.”

Smith said he is eager to see this property be redeveloped, as most of the former Laconia State School’s buildings on the 217-acre property are dilapidated and vandalized.

“We’re not using every square inch of the land, either, to develop on. In fact, I think there's at least something like 40 acres, if not more, of open space and undeveloped land,” Smith said. “So, I think when it's all said and done, it'll be a really nice asset and amenity for the city.”

In the Pillsbury master plan presentation to city council on March 9, the vision for Laconia Village was outlined, to bring together outdoor recreational activities, a “lush” natural environment, and vibrant civic spaces with homes, retail, walking trails, and community spaces.

“We're very bullish on the direction Laconia is going in,” Smith said. “We're happy to be working in the city. We think Laconia's got a lot going for it, and this will only enhance, and add to its vitality.”

Pillsbury is scheduled to close on the property in late August, pending the environmental report they will receive from the state. After they close, Phase I will start, beginning with a “mixed-use gateway” along Parade Road.