Purchase deal for downtown apartment project falls through

LACONIA — Jason Ganong has backed out of a deal to buy the old Lakes Region Mental Health Center building, but said he will still seek city approval Tuesday for his plan to turn it into a 20-unit apartment building.

A different buyer has now entered into an agreement to purchase the property from the mental health agency. Their future plans for the 13,850-square-foot, two-story property at 111 Church St., are not clear.

Ganong, a real estate agent, confirmed Friday that he plans to appear before the Zoning Board of Adjustment on Tuesday evening to seek a variance and special exception for the project.

“I’m still planning to do it. I’m not under contract with the seller. I don’t have time to go over this with you,” he said before hanging up on a brief phone interview.

City Planning Director Dean Trefethen said it's unusual for someone to have a purchase agreement fall through on a property and then seek zoning board approval for a project to develop it, but that Ganong is free to do so as long as the building owner doesn’t mind.

Maggie Pritchard, chief executive officer of Lakes Region Mental Health Center, said she has no objection to Ganong going before the Zoning Board with his plan, but she also said, “My first priority is to the person with whom I have the purchase-and-sale agreement.”

She declined to provide that person’s name.

Ganong’s proposal does not state whether his proposal would include subsidized housing, an issue that has been a public point of contention in the community. His plan states “tenants will be highly qualified as all units will be newly finished with above average grade materials.”

Rick Hagan, the real estate agent for the Lakes Region Mental Health Center, said Ganong backed out of his purchase agreement after he found out how much it would cost to turn the commercial structure into a 20-unit apartment building. Extensive plumbing and electrical work would be needed.

Hagan said the property was listed for sale at $599,000. The assessed value of the building on Laconia tax rolls is $899,500, although the property is exempt from property taxes under its current ownership by the nonprofit Lakes Region Mental Health Center.  

A year ago, the organization moved to a renovated building on 40 Beacon St. East, creating the vacancy at the Church Street property.