Rehab center plan draws opposition

With over 200 acres of land, two dozen buildings, water frontage and mountain views, the Lakes Region Facility is a prime piece of Laconia real estate. Legislation was introduced last week which would turn the property into a rehab center. (Photo courtesy William Hemmel/LakesRegionAerials.com)

Laconia City Council to discuss proposal to sell State School land to private interests

By MICHAEL KITCH, LACONIA DAILY SUN

LACONIA — With the New Hampshire Senate preparing to vote next week on legislation that would foreclose efforts by the city to purchase the former Laconia State School property on North Main Street and instead authorize leasing it for a substance abuse and recovery center, the mayor and City Council, surprised by the proposal, are scrambling to frame an appropriate response.

Earlier this week, the Senate Finance Committee endorsed the proposal introduced by state Sen. Jeanie Forrester (R-Meredith), who chairs the panel, as an an amendment to House Bill 1695 by a vote of four-to-two, with senators Andrew Hosmer (D-Laconia) and John Reagan (R-Deerfield) dissenting. The Senate is expected to vote on the amended bill when it meets next week.

Mayor Ed Engler said the City Council will discuss the issue when it meets on Monday, May 9. He said he will prepare a resolution expressing the council's opposition to the legislation for the councilors to consider. At the same time, he said that he is encouraging Hosmer in his opposition to the proposal as well as contacting members of the House of Representatives who represent the city.

The property consists of about 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, an appraisal commissioned by the state found less than a handful salvageable.

Rehab center proposed

Forrester's proposal would direct Commissioners of the Department of Health and Human Services and Department Administrative Services "to develop and solicit a request for proposals for the private use of the Lakes Region Facility property in Laconia property to provide comprehensive substance abuse treatment and recovery programs." The amendment provides that the request for proposals could include but not be limited to "long term lease purchase agreements, ground lease arrangements, or any other arrangements" considered viable

At the same time, her legislation would deny the city the opportunity to acquire the property, which it has pursued since 2011. Her legislation would repeal the authorization to sell the property included in the 2016-2017 state budget budget. The companion bill to the budget, directed the Department of Administrative Services to sell the property and the budget booked $2 million in revenue from the proceeds of the transaction.

City officials only learned of Forrester's initiative on Friday, April 29, when by chance City Councilor Henry Lipman (Ward 3) was told of her amendment. Forrester herself informed City Manager Scot Myers on Monday, May 2, the day before the Senate Finance Committee held a hearing on the proposal.

Idea dismissed months ago

Although introduced suddenly, the proposal originated months ago when Alex Ray, the owner and founder of the Common Man Family of Restaurants, who developed the Webster Place Recovery Center in Franklin, began eying the Laconia State School property as the site of a similar facility. Ray said he visited the site with Michael Connor, deputy commissioner of the Department of Administrative Services. Connor said that after touring the property, Ray seemed particularly interested in the Peterson and Speare buildings, which, among the 26 on the site, are in relatively good condition. Connor advised Myers of Ray's interest in the property and Engler arranged to meet with him.

On Dec. 14, Ray, accompanied by so-called drug czar Jack Wozmak, who resigned in January, outlined his vision of developing a treatment center on the property. Engler recalled that Ray appeared to assume that the city would own the property.

"Scott and I were politely discouraging," Engler said. He added that they explained a substance abuse treatment center would not be the highest and best use of the property and would encounter stiff opposition from the community, particularly from residents of nearby neighborhoods on Old North Main Street and Shore Drive.

Three days later, Engler and Myers met with Connor, who explained that the department would hire a broker and put the property on the open market for six months beginning in April. 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.

"We have been waiting patiently for the process to play itself out," Engler said.

Connor said yesterday, "We're not actively listing the property."

The next day, Dec. 18, Engler emailed Ray to suggest he consider the Dube Building, last occupied by Lakes Region Community Services, which together with the Laconia 911 Center and Lakes Region Mutual Fire Aid Communications Center sits on 17 acres owned by the state tract adjacent to the Laconia State School property. Engler said that Ray replied the same day to say that, after their meeting, he had no further interest in developing a substance abuse treatment and recovery center on the property.

Facing opposition

Ray said yesterday that after meeting with Engler and Myers, "My interest was diminished. I don't want to go to a town and fight for something it doesn't want." Nevertheless, nearly five months later the project was revived by Forrester's proposal, which took city officials by surprise. Ray said that "the powers that be in the Senate said 'Let's get this thing off the table.'" He attended the hearing and spoke in support of Forrester's amendment.

Ray said "I'm open minded." Acknowledging the importance of the property to Laconia, he said that its development should only be undertaken with the cooperation and support of the city.

"I would sit with your powers that be — the mayor, City Council, Planning Board and so on — at a charette." Likewise, he said that the property is suitable for multiple uses and a treatment and recovery center need not require the entire property.

At the same time, Ray stressed the urgency of addressing substance abuse and making use of a dormant property. "Nobody has a solution," he said. "This may be one."

He noted that a treatment and recovery center on the site would neither affect any residential neighborhoods nor generate excessive traffic.

"It's what's best for everybody, including the city," he said. "I want to continue the conversation with the city of Laconia."

Status of sale

Forrester, who followed the city's interest in the property for some time, said that she was not aware that it was still contemplating acquiring the tract until Engler spoke to the Senate Finance Committee this week.

"From our perspective," she said, "nothing was happening with the property."

Engler, referring to the failure of the state to proceed with the sale of the property, said "We're not the ones slowing the process down. We're not driving the bus. They are." Dismissing suggestions that the property has lain fallow for the failure of the city to take the initiative, he said "It has been premature because the opportunity to acquire it has not been offered to us. No price has been set."

Meanwhile, Charles Bradley, a former city councilor, will present a draft resolution to the City Council alleging that Ray and Forrester "conspired to draft a midnight amendment ... to allow a drug and rehabilitation center at the Laconia State School" and directing the city manager to inform of the governor, president of the Senate and Speaker of the House of the circumstances and the city's opposition to to a substance abuse treatment center on the Laconia State School property.

Furthermore, referring to the investment of Forrester's husband, Keith, in the Hooksett Welcome Center, developed by Ray and Rusty McLear, Bradley charges that because of "her husband's business relationship with Mr. Ray," Forrester has a "definite conflict of interest." The resolution would direct the city manager to file a complaint with the Legislative Ethics Commitee.

Finally, Bradley would have the mayor, city manager and Belknap Economic Development Council propose a marketing plan for the Laconia State School property to state officials, which would offer the site as a tourist resort to all four- and five-star hotels in the country.

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 and an abutting 10.2-acre parcel for $2.16 million. The state did not respond to the offer, which was withdrawn following an environmental assessment of the property.The property has been on the open market ever since without fetching a single offer.