Year-long Colonial refurb could begin in October

LACONIA — Renovation of the Colonial Theatre could begin as soon as October under a funding plan endorsed unanimously by the City Council late Monday after years of financing setbacks.

The breakthrough came when councilors agreed to add $230,000 to the city’s next budget to pay the first installment for $6.7 million in debt needed to finance restoration of the 105-year-old building.

Early on, the city loaned $1.4 million to the Belknap Economic Development Council to buy the vacant theater, so the overall municipal commitment will be $8.1 million.

The year-long construction project will yield a 750-seat modern theater capable of hosting live stage performances and musical acts. Experts will restore the intricate and ornate features of the building, which once housed vaudeville acts and was later used for a multi-screen cinema.

Local businessman Rusty McLear, who has developed successful projects across the state, plans to build eight to 10 spacious apartments or condominiums associated with the theater.

There will also be four storefront commercial units.

A public hearing and more City Council votes will be required over the next month, but Monday’s unanimous agreement appears to ensure the year-long project will finally get off the ground after four years of delays.

Before that agreement, Mayor Ed Engler, who is on a committee planning the effort, told councilors what was at stake.

“The committee that I have been serving on has decided that after four years of working on this project, now is the time for closure,” he said.

“Very quickly, a decision needs to be made as to whether or not this project is going forward or it’s dead forever.”

City Manager Scott Myers said a conservative estimate of $465,000 in yearly costs to service $6.7 million in debt over 20 years can be managed in a financially responsible way and without breaking the municipal tax cap or harming city priorities.

“We have a significant amount of debt space available to us by the state formula which deals with assessments and backing out of revenue and school bonds,” he said.

Myers said that in 2009 the city’s debt service was at 8 percent of the general fund budget and by 2018 dropped to 6.9 percent. Local per capita debt has also been relatively flat.

“We are not debt heavy, so taking on this additional $6.7 million is not going to jeopardize our financial position by any stretch,” he said.

“We’ve got balance sheets that a lot of towns would be envious of in terms of debt or lack thereof on the books.”

The plan also uses about $4.5 million in state, federal and private money.

A revised cost estimate for the project is $13.5 million, but that value will increase after McLear builds the residential portion.

This money will buy a theater intended to bring new vitality to the downtown area.

An outline provided by Justin Slattery, executive director of the economic council, said it will be “one of the most advanced civic auditoriums in New Hampshire.” 

The outline also said this will be “one of the largest historic preservation projects in state history.”

“I think there is a multiplier effect,” Slattery said. “This will provide an anchor to downtown that will help the community grow.

“There will be an opportunity for people to have a place to go to see a show and they might get some dinner, or have a drink, or dessert. They might bring kids downtown, go for a walk, maybe go to a retail shop.”