HAMPTON - The town is proposing building a new fire substation at Hampton Beach while upgrading the current substation on Winnacunnet Road as its new headquarters.

Town Manager James Barrington said several locations have been discussed for the new beach substation but one possible location is causing a stir with the Beach Precinct Commission.

The top two are where the old police station sits and a parcel of land on Church Street.

"The Beach Precinct Commissioners will oppose the Church Street site," said precinct Commissioner Mike O'Neil. "They want a fire station somewhere in the middle of the beach because of insurance and access."

O'Neil said the closer the substation is to the beach the less insurance businesses in the area will have to pay. If the substation is built on Church Street, insurance premiums for businesses in the area will skyrocket, he said.

"Insurance rates are a big concern right now," said O'Neil. "I have had several people come to me saying, 'Why are we building a fire station next on Church Street?' I told them I heard the rumor but I haven't heard it explained. Personally, it doesn't make sense to build it there because it's a congested area."

Barrington said he favors the Church Street site.

The town wants to tear down the old police station to reclaim parking spaces at the Ashworth parking lot that were lost with the construction of the new police station.

That lot is one of several where the town charges to park during the summer months.

"If I take down the building and pave it, we can make money," Barrington said. "If we put the building there, then the town won't have that revenue."

The plan, estimated at close to $6 million, will go before Town Meeting voters in March.

While the rumored location has been causing a stir with some people, others are questioning the cost.

Barrington said the figure was cut from what was originally proposed.

"That is about as low as we can go and still satisfy today's needs," Barrington said.

The manager said the town needs to build a new beach fire station because it doesn't own the current beach fire station, which serves as its headquarters, on Ashworth Avenue.

The beach fire station, which was built in 1923 and does not meet building and fire codes, is owned by the Hampton Beach Village District.

If the article fails, Barrington said under its agreement with the Beach Precinct Commissioners the town can renew its lease with them for one additional year.

In 2002, selectmen and the Hampton Beach Village District reached an agreement in which the town would take over the responsibility of fire protection at the beach.

As part of the agreement, the precinct leases the beach fire station to the town for $1 a year with the lease expiring in 2005.

Beach Precinct commissioners have already announced plans that they want to tear down that building to construct a five-story parking garage.