Laconia State School Closing Delayed Again

[Riviera]

Originally Posted by John Mercier

The State officials were counting on the credibility of the funding source. That funding source is no longer interested in the project.

There was no funding source, there was no project, and there was no way that deal was ever going to materialize.

She was searching for investors. She was soliciting over the internet for people to join an “Opportunity Zone Fund”. The solicitation in and of itself was a borderline scam. An Opportunity Zone doesn’t creating funding …. it is simply a way of decreasing taxes for investors that hold an investment over a long period of time. It doesn’t begin to work for real estate developers that intend to develop property/lots for sale.

That land doesn’t begin to be worth $21M. Can anybody show a comparable land sale anywhere north of Concord, where an investor/developer paid over $21M for raw land? That’s nearly $100,000 per acre for RAW LAND, that doesn’t even have sufficient infrastructure for the proposed pie in the sky development program. There are a 100 other lots, with no worse development potential, that can be bought for a heck of a lot less than $100,000 per acre.

And how were they going to build “workforce housing” in Laconia NH, where the maximum sales price of a home (under workforce regulations) for family of four is $325,000. That couldn’t be done, with any semblance of a profit, if the State GAVE them the raw land!

It’s a shame that our state officials don’t have enough expertise to see the emptiness behind the curtain. The viability of the buyer could have been vetted within weeks, if they weren’t hoping for a buyer who needed to win lotto to be dumb enough to pay $21M for that piece of dirt.

Think about this comp …. land just up the street, where the South Down Shores barn is located, sits on 7.7 acres. It is all useable land, has a decent barn, comes with South Down amenities, and has infrastructure to support development. The cost of developing that parcel of land will be relatively small, in terms of typical development costs. That prominent land and barn/office sold for $500,000. That’s $65,000 per acre, for far more valuable land on a cost per acre basis. What makes the LSS property worth $21M? It’s not. It’s that simple. It can’t be financed, it can’t be developed on an economically viable basis at anywhere near that purchase price. Her issues had nothing to do with politics, snowmobile trails, or any other lame excuse.

Hopefully the State will stop trying to chase miracles, and let the property go for a reasonable price, to a developer with a proven track record, with a financial commitment to build something that will benefit the community.

[WinnisquamZ]

Originally Posted by Riviera

There was no funding source, there was no project, and there was no way that deal was ever going to materialize.

She was searching for investors. She was soliciting over the internet for people to join an “Opportunity Zone Fund”. That in and of itself was a borderline scam. An Opportunity Zone doesn’t creating funding …. it is simply a way of decreasing taxes for investors that hold an investment over a long period of time. It doesn’t begin to work for real estate developers that intend to develop property/lots for sale.

That land doesn’t begin to be worth $21M. Can anybody show a comparable land sale anywhere in the State of NH, north of Concord, where an investor/developer paid over $21M for raw land? That’s nearly $100,000 per acre for RAW LAND, that doesn’t even have sufficient infrastructure for the proposed pie in the sky development program. There are a 100 other lots, with no worse development potential, that can be bought for a heck of a lot less than $100,000 per acre.

And how were they going to build “workforce housing” in Laconia NH, where the maximum sales price of a home (under workforce regulations) for family of four is $325,000. That couldn’t be done, with any semblance of a profit, if the State GAVE them the raw land!

It’s a shame that our state officials don’t have enough expertise to see the emptiness behind the curtain. The viability of the buyer could have been vetted within weeks, if they weren’t hoping for a buyer who needed to win lotto to be dumb enough to pay $21M for that piece of dirt.

Think about this comp …. land just up the street, where the South Down Shores barn is located, sits on 7.7 acres. It is all useable land, has a decent barn, comes with South Down amenities, and has decent infrastructre to support development. The cost of developing that parcel of land will be relatively small, in terms of typical development costs. That prominent land and barn/office sold for $500,000. That’s $65,000 per acte, for far more valuable land, on a cost per acre basis. What makes the LSS property worth $21M? It’s not. It’s that simple. It can’t be financed, it can’t be developed on an economically viable basis at anywhere near that purchase price, and it has nothing to do with politics, snowmobile trails, or any other lame excuse.

Hopefully the State will stop trying to chase miracles, and let the property go for a reasonable price, to a developer with a proven track record, and a commitment to build something that will benefit the community.

Well written and said. It’s as simple as “following the money”. Now it makes me wonder if kickbacks were promised


Sent from my iPhone using Winnipesaukee Forum mobile app

[Riviera]

Originally Posted by WinnisquamZ

Now it makes me wonder if kickbacks were promised
Sent from my iPhone using Winnipesaukee Forum mobile app

In order to pay a kickback, you’d need money. She doesn’t have any money, and buying that land wan’t going to generate any money.

That said, it won’t surprise me if she found a few naive investors, and paid herself a “development fee” to manage what she isn’t capable of managing. If the cartoon development plans I saw in the press were any indication of her development skills, that should have been the first red flag.

[John Mercier]

The housing was condensed... multiple units per acre for the apartments.
Sort of like how they will attempt to build at the Weirs traffic circle.

No one wonders why less than 30,000 OHRV adding $2 per registration to a land purchase fund could afford to buy a $2 million dollar property in less than 5 years? You don't think the State knew how I did it?

And there is land going for over $100,000 an acre here in Belmont; but you can only build one unit per acre on that... no apartments.

From Dolan's perspective, paying $21 million for the land, and having to fork out another $21 million to meet the OZ requirements... regardless of how great a hotel/resort could be built... isn't really worth the effort. Especially since that group doesn't care about any residential housing. So they aren't going to back her play to close by the 22nd would be my guess.

Now, if they could acquire the property for half... and only be into the hotel/resort for $21... that may interest them. The OZ tax credits would just be icing on the cake.

The State will do what it must... the homeless are going to shift... and leaving that property open makes the risk greater that they will shift in that direction.

[Riviera]

Originally Posted by John Mercier

The housing was condensed... multiple units per acre for the apartments.
Sort of like how they will attempt to build at the Weirs traffic circle.

No one wonders why less than 30,000 OHRV adding $2 per registration to a land purchase fund could afford to buy a $2 million dollar property in less than 5 years? You don't think the State knew how I did it?

And there is land going for over $100,000 an acre here in Belmont; but you can only build one unit per acre on that... no apartments.

From Dolan's perspective, paying $21 million for the land, and having to fork out another $21 million to meet the OZ requirements... regardless of how great a hotel/resort could be built... isn't really worth the effort. Especially since that group doesn't care about any housing. So they aren't going to back her play to close by the 22nd would be my guess.

Now, if they could acquire the property for half... and only be into the hotel/resort for $21... that may interest them. The OZ tax credits would just be icing on the cake.

The State will do what it must... the homeless are going to shift... and leaving that property open makes the risk greater that they will shift in that direction.

Well, you seem to think you understand it pretty well, and the value is there, so I’ll bite:

1. Apartments: There is plenty of land in Laconia zoned for multifamily, that can be acquired for far less than $100,000 per acre. How about the 231 acres available on Endicott Street North, at an asking price of $5,000,000, which equates to just over $20,000 per acre. Multifamily is a permitted use, along with hotel and single family residential. It’s been on the MLS for nearly 4 years. Why isn’t that a better deal at about 1/4 the price per acre, and why hasn’t that property been gobbled up, given its apparent undervaluation?

2. Opportunity Zone: Explain to us how the “other $21M” works in an Opportunity Zone, or maybe the general benefit to buying OZ property. You mentioned tax credits from the OZ. What are those credits, and how can they be used? Assuming the developer were going to build and sell homes, what benefit will they receive from the OZ, and when will they receive that benefit? I can tell you that there is NO benefit to a land developer in an OZ unless that developer were to build out the assets, and hold those assets for at least 10 years before selling. Anything related to OZ by this developer is a smokescreen because most people don’t understand the OZ benefits, nor requirements.

3. Belmont: Please name any bulk (say 25+ acres) raw land sale in Belmont NH that has sold at a price anywhere close to $100,000 per acre. Heck, I’ll take any town north of Concord, as long as you exclude properties that are on a major retail thoroughfare.

4. Hotel: Please provide us with a hotel land sale comp anywhere in NH where the developer paid over $5,000,000 for raw land. And what makes this particular site attractive to a hotel developer, as compared to any site in closer proximity to restaurants, attractions, or other businesses? Can you provide us any comparable hotel development in which Mr. Dolan is a principal majority owner of the development? You seem to know his financial position, so you must have similar ownership comps at the tip of your tongue. They were proposing a hotel with a conference center. When was the last time one of those was built in NH without public subsidies?

5. Please explain how the $2 OHRV fee is in any way applicable to the land valuation for this property. Regardless of the applicability, whatever “you” did would probably be interesting to hear about, so go for it.

Thanks.

[John Mercier]

The ''party zone''. That is going to have to get a lot cheaper or go after a different set of residential owners.

For the OZ benefits...
If taxpayers keep the investment for at least five years, they may exclude 10 percent of the gain from their taxable income. Taxpayers who hold onto the investment for seven years may exclude 15 percent of the gain from their taxable income. These provisions sunset after 2026.
If taxpayers hold onto the investment for at least 10 years, they still must pay tax on the original capital gain but do not pay additional tax on the new gain from their investment.

The investors that would hold would be in the commercial part of the project... as the compact single homes were to be sold.

And this would be major retail throughfare... as that is part of the development proposal. But you are trying to compare a single unit site to a multi-unit site. 1200 housing units on 200 acres would equate to how many units on the SD piece? And no commercial on the SD piece.

For the hotel, I think the attractiveness was simply the opportunity.
Rusty was on the committee that looked over the property... he has had several hotel projects shutdown over the years, and was finally lucky enough that Meredith went along with Church Landing.
Personally, I think the Opechee operation is a better investment... but that isn't up for sale.

The OHRV was how the State realized that a funding source exists that is not part of the banking equation that they are used to. The money appeared without any expectation of return on investment.

A new buyer will pay less... but they aren't going to go along with all the demands of the State and City when they don't make financial sense or fit into traditional funding sources.

That means that the property would worth less than the $20,000 per acre... and only fetch the State about $4 million... but the other bids were more than double that price. So now you have to ask... why so high on the other bids?

[Riviera]

Originally Posted by John Mercier

That means that the property would worth less than the $20,000 per acre...

Finally something we can agree upon.

So, no tax credits, right?
No ownership history for Dolan?
No basis for hotel land value, just an “opportunity”?
No comps in Belmont, or anywhere else?
No up front cash benefit for an opportunity zone, right?
Can’t sell land as an opportunity zone investor, right?
Only a tax saving on long term profits on an opportunity zone, right?

The whole thing was a farce.

[John Mercier]

Originally Posted by Riviera

Finally something we can agree upon.

So, no tax credits, right?
No ownership history for Dolan?
No basis for hotel land value, just an “opportunity”?
No comps in Belmont, or anywhere else?
No up front cash benefit for an opportunity zone, right?
Can’t sell land as an opportunity zone investor, right?
Only a tax saving on long term profits on an opportunity zone, right?

The whole thing was a farce.

Answer my question first... why would the other bids be higher than the $20,000 per acre that you propose is the real market value?

As for Tom Dolan's background... it was good enough for Rusty.
Are you going to suggest that Rusty knows nothing about developing and managing a hotel business?