LACONIA — Rachel Selsky explained to a packed City Council chamber Wednesday night why it isn’t likely the old State School property will become home to major industrial companies.

Selsky, the senior project manager for a consultant hired by a state panel to study the 245-acre property, said there’s already plenty of excess space for industry amid a lack of growth in this sector. Also, the property’s distance from the interstate makes it a tough sell for industrial use.

Demand for office and retail space is also relatively weak, according to a report from the consultant, Camoin Associates of Saratoga Springs, New York.

The consultant is assisting the Lakeshore Redevelopment Planning Commission in its task of creating a jobs generator on the property, located at Meredith Center Road and North Main Street. This land was once home to a prison and, before that, a facility for the developmentally disabled.

There is strong regional demand for middle-income housing, and that is likely the most feasible use for the site, which offers commanding views of mountains and water, Selsky said.

And, she said, there is a way this housing could stimulate economic development and jobs: businesses might be more willing to locate or expand in the region if there were more places for their employees to live.

“We found high demand for residential, nearly all types,” Selsky said. “We heard this from everyone. We saw it in the data. There are not enough houses. The inventory and diversity is not there to retain people, to attract people to the area.

“We heard from businesses and people in the community that businesses are not able to find, recruit, retain a workforce and they have attributed that to a limited amount of housing.

“You are constrained in terms of your economic development potential because of your lack of housing.”

The consultant came up with three potential redevelopment concepts, all of which include residential housing. One is primarily focused on housing, but includes other potential uses such as a hotel with a restaurant and banquet facilities. Another concept includes a resort and a third includes a sports complex. All would leave open land to allow for other future uses and green space.

On Thursday, a spokesman for Gov. Chris Sununu said the governor is open to the idea of a mixed-use development.

“He believes that the ultimate decision that comes out of the old State School property should play an important part of the economic development of the Lakes Region, and hopes it will serve as an example for successful public-private partnerships in the many years ahead,” said the spokesman, Benjamin Vihstadt.

During a public comment period at the Wednesday night meeting, Mayor Ed Engler encouraged the commission to look at the city’s new Master Plan, which emphasizes residential development as something the city needs as population growth has stagnated. Some of this development is envisioned to occur near the old State School property.

“One of the things we are going to be looking at is actually having the city provide the infrastructure for raw land, using performance zoning bonuses to prospective developers,” he said.

Engler said the emphasis should be on attracting young people.

“We have no problem now attracting people 55, 65, 75, 85, to live in Laconia, especially second homeowners,” he said. “What we’re lacking is families.

“We need to revitalize our community. We’re getting older and poorer by the minute as most communities in this part of New Hampshire are, and we’d like to do something in the coming years to reverse that trend.”

He also said the old State School property could be particularly attractive for a residential and mixed-use area, since it borders Ahern State Park, which offers numerous recreational opportunities and includes shore areas of Lake Winnisquam.

Laconia resident and business adviser Sally Holder said the commission needs to keep young people in mind.

“Many of these people work from home,” she said. “They really want to collaborate with people their age. Many are sole proprietors or work on the internet, fly in to Boston, New York, San Francisco, Paris and meet with their co-workers from around the world, but on a day-to-day basis they are fairly isolated.”

These people need a place where they can explore and incubate business ideas while being close to recreational opportunities, like biking, hiking, skiing and boating.

Karen Barker, of Laconia, said attention must be paid to maintain the natural beauty of the site to be enjoyed by all.

“That property does belong to all the citizens of New Hampshire, all of us,” she said. “It’s our land.

“I would really hope that whatever does get developed there is something that is of value and benefit and can be utilized by all different kinds of people. I don’t want to see that land go to only the people with all the money. I don’t want it to become a place on the hill for all the rich people.”

The commission plans to give further study to the consultant’s work before seeking a second report that would narrow in on a particular use. It is also studying ways to clean up pollution at the site and contamination in buildings.

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