State School back on the market – Legacy fails to make April 22 deadline

LACONIA — The deal in place to transfer the former Laconia State School property into a private developer’s hands is now off, with the would-be buyer missing the state’s final deadline to close on the deal.

April 22 was the date to “put up or shut up,” as Charlie Arlinghaus, director of the state’s Administrative Services, described the deadline to a meeting of the Governor and Executive Council last month.

The state has been working with developer Robynne Alexander, under the project name “Legacy at Laconia,” for more than a year, after she submitted the winning bid to purchase the 220-acre parcel, which has a history of state use that includes a residential facility for developmentally-disabled persons and, later, a state prison.

Alexander’s bid, $21.5 million, was nearly double the next highest bid, but she wasn’t ever able to write the check for it.

On Monday evening, Arlinghaus said in a text message, "The state is in the process of ending the purchase and sales agreement it entered into 16 months ago and will begin aggressively marketing the property Tuesday morning."

The first closing date for the property was in September, but that date and a few subsequent dates were pushed off — the stated reason being there were several technical problems associated with the property that needed to be addressed.

But when the property was supposed to close in March, Legacy at Laconia, communicating through a spokesperson, said that it needed more time, that a lender they were working with had placed an expiration of Feb. 28 on the loan offer, and they’d need more time to line up a new financing package.

Legacy’s plan was welcome news to local officials. Their development proposal called for the creation of a four-story resort hotel, commercial and retail space, health care facilities, and, most significantly, 1,260 housing units. However, as the delays dragged on, concerning details about Alexander’s financial dealings came to light. Her portfolio included foreclosures and tax liens, a lawsuit from a former investor and — as reported in the NH Bulletin — an ongoing investigation by the state’s Bureau of Securities Regulation.

Ultimately, Legacy wasn’t able to find $21.5 million by the April 22 deadline, and the state will re-market the property in hope that another developer will be able to convert it into a positive use.

Joe Kenney, executive councilor for District 1, said on Monday afternoon that Alexander technically had until midnight, but that it appeared that the property would be put back on the market very soon.

Kenney said that the real estate firm CBRE still held the contract to market the property.

“If the individual cannot come up with the money, then we’ll put it right back out to bid, simple as that. We will find a new developer,” Kenney said.

He said that he expected an “abbreviated” bid process, that there was “a lot of interest in this property,” and that the work that Legacy and the state did in preparing for the property’s transfer would translate to enhanced value for the next prospective developer.

“All the things that make this project so complicated have been ironed out, we don’t have to go down this road again,” Kenney said. “I’m pretty confident that good things are going to happen at that property.”

He said that he expected it unlikely that another bid would come in as high as Legacy’s. He also said the state’s process would be repeated, that there was no reason to think that anything differently should be done a second time around.

“The state wouldn’t have been responsible if it hadn’t taken the highest bidder,” Kenney said. “That is the process, it is a transparent process, it goes to the highest bidder.”