Ayotte Cut the Money. Laconia Village Has 158 Days.

Twenty-nine decaying buildings sit on 217 acres at the corner of North Main Street and Meredith Center Road. They are all that stands between New Hampshire and 2,000 new homes — and the governor just eliminated the state programs that could have helped build them.

On September 25, 2026 — 158 days from today — the largest housing development in modern New Hampshire history either survives or dies in committee. That is the deadline the Laconia Planning Board set for Pillsbury Realty Development to finalize plans for Laconia Village: 2,000 housing units, 375,000 square feet of commercial space, and enough new infrastructure to add 20 percent to Laconia’s population. Miss the deadline, lose the conditional approval. The 217 acres where the old state school decays go back on the market for the fourth time since 2009. Nothing built. Nothing begun. Another decade lost to a housing crisis that is currently pricing teachers, nurses, and firefighters out of the communities where they work.

And here is the part no other New Hampshire outlet has connected: this deadline is arriving in the same calendar year that Gov. Kelly Ayotte zeroed out $35 million in state housing production programs. The two facts are not in separate news cycles. They are the same story. The largest housing development in state history is racing a five-month clock to survive in a state whose governor just cut the programs designed to help projects like it get built.

Local media covered the Executive Council’s 2024 purchase approval. The Laconia Daily Sun followed the technical review meetings in 2025. Then coverage dried up. The project that could house 4,500 people in a region where a starting teacher cannot afford the median home has received less sustained 2026 coverage than debates over casino opt-out laws. That silence is not an accident. It is how transformative projects die in New Hampshire — quietly, in committee, while the press looks elsewhere.

The Site That Time Forgot

The former Laconia State School has been accumulating problems for longer than most Granite Staters have been alive. Opened in 1903 as “The New Hampshire School for the Feeble-Minded,” it housed thousands of people with developmental disabilities until 1991. It became the Lakes Region Facility prison until 2009. Since then, 217 acres of prime developable land — with lake views, forest buffers, and frontage on Route 106 — have sat unused while the state tried repeatedly to find a buyer willing to deal with the contamination.

The contamination is extensive but not catastrophic. Environmental assessments found asbestos in virtually every building, along with lead paint, petroleum contamination from leaking storage tanks, and traces of PCBs, pesticides, and coal ash in soil and groundwater. A 2020 assessment by RPF Environmental estimated cleanup costs between $50,000 and $350,000 per building. Soil remediation for lead, arsenic, and PCB hotspots was estimated at $20,000 to $25,000 total — cheap against total development costs, expensive enough to scare off speculative buyers for over a decade.

The infrastructure deficit is harder. The site has 29 buildings in various states of decay and water and sewer systems that predate modern standards. Connecting 2,000 new housing units to Laconia’s municipal systems would require major capacity upgrades the city has not budgeted for.

The Developer’s Dilemma

Pillsbury Realty Development is not a speculative startup. Michael Kettenbach, the company’s principal, spent decades developing real estate for Market Basket and is currently building Woodmont Commons, a 600-acre mixed-use development in Londonderry. The Laconia project follows a similar model: mixed-income housing, walkable neighborhoods, commercial amenities, density that makes transit viable if anyone ever builds it.

Woodmont Commons started with empty land and functional services. Laconia Village starts with contaminated buildings and aging infrastructure. Pillsbury has deposited $500,000 in earnest money; the final $10.5 million purchase depends on receiving all necessary permits by September 25. Third-party traffic studies, third-party stormwater reviews, voluntary lot mergers, condominium documents where applicable, 9-1-1 addresses and floor plans for every unit — those are the planning board’s July 2025 conditions. That is what dies if the deadline is missed.

The Programs That Aren’t There

When Pillsbury submitted their development proposal in 2024, New Hampshire had $35 million in active housing programs designed to support exactly this kind of project. The Invest New Hampshire fund provided $10 million for multifamily housing development. The Affordable Housing Fund offered $25 million in loans for projects serving low- and moderate-income residents. Both programs were created to bridge the gap between what developers could afford to build and what communities needed.

In the 2026-27 state budget, Gov. Kelly Ayotte zeroed out both programs.

The NH Fiscal Policy Institute noted drily that this “could constrain future projects and development.” Policy-speak for what it actually means: the largest housing development in state history is moving forward without the state funding mechanisms designed to make such projects viable. Ayotte’s budget did continue $10 million for homelessness and housing shelter programs — crisis intervention rather than housing production. The state will pay to manage the consequences of housing scarcity but not to address the scarcity itself.

The Five-Month Impossibility

The deadline Pillsbury faces was not designed for a project of this scale. Traffic studies of this magnitude typically take 6 to 12 months. Environmental permitting takes longer. Third-party engineering reviews — independent firms certifying the traffic and stormwater plans, at the developer’s expense — are thorough processes, not rubber stamps. Pillsbury is attempting to compress a multi-year approval process into less than five months, on contaminated land, with uncertain municipal capacity.

Municipal capacity is its own constraint. Adding 4,500 residents over a decade requires proportional increases in police, fire, emergency services, and school capacity. City Manager Kirk Beattie has said Laconia can absorb the growth — “as that property grows, so would our services needed to respond to it.” Superintendent Steve Champlin has said the schools have capacity. Both statements assume current enrollment levels and current state aid formulas. When Concord’s 12.2 percent property tax hike this month forced layoffs of nearly 40 school staff, it demonstrated what “capacity” actually means in a funding formula that punishes growth. The word bends.

This is where Ayotte’s budget cut bites hardest. Without state funding for infrastructure, Pillsbury must finance every improvement through the project — water upgrades, sewer capacity, traffic reconstruction, remediation. Those costs roll into housing prices. Higher prices crowd out the workforce units the region actually needs. The project meant to add affordable housing ends up building market-rate condos. And all of it has to happen by September 25.

The cycle is familiar. Robynne Alexander failed to close her $21.5 million purchase in April 2024 after three deadline extensions. The site has been “about to be developed” continuously since 2009. Pillsbury has the financial capacity and development experience Alexander lacked. Neither overcomes regulatory timelines designed for small developments on clean land.

Ayotte’s Test Case

Kelly Ayotte ran on housing. Her inaugural address promised that housing would be her top priority. Her first biennial budget zeroed out the state’s two largest housing production programs. Her administration’s current housing policy is increased funding for homelessness services — paying to manage the symptom while defunding the treatment.

Laconia Village is the test case for whether that approach survives contact with reality. If Pillsbury makes the September 25 deadline and breaks ground on 2,000 homes, it will happen despite the state, not because of it. A private developer will have absorbed risks and costs that a functional housing policy would have shared. If Pillsbury misses the deadline and the 217 acres go back on the market for the fourth time, Ayotte will have presided over the largest housing development in modern New Hampshire history collapsing in the middle of a housing crisis — in the same budget cycle her administration eliminated the programs built to prevent exactly that outcome.

Either way, the generation priced out of the communities where they work is keeping the receipt. In 158 days they find out which story they’re living in.

Dexter Dow is the editor of Granite State Report and the author of Generational Malpractice, which examines how policy failures create compounding disadvantages for younger Americans.