Published September 27. 2012 4:00AM
Preston - On the final day of the Preston Redevelopment Agency's contract with Manafort Bros. Inc. for remediation and demolition at the former Norwich Hospital property, the agency voted unanimously to approve a two-year extension of the contract with several revisions.
Manafort was hired two years ago to secure the former hospital property and conduct environmental cleanup and demolition of buildings and underground tunnels as town funding allows. The contract allowed for a two-year extension but was set to expire today without the approval Wednesday by the PRA of the extension and amendments.
The lengthy contract contains complicated payment provisions in which the town receives breaks in demolition costs if Manafort is able to salvage materials from buildings being demolished. Thus far, two buildings have been torn down at no cost to the town because of salvage value, said PRA member Jim Bell, who oversees funding issues for the agency.
Manafort also has set up a sales outlet on the company's website to sell bricks, furniture and other artifacts from the hospital property to the public. Those sales also offset the town's payments to the company, Bell said.
Under the contract, Manafort controls access to the property by outside entities and conducts remediation and demolition. If the town hires a different contractor for any work on the property that Manafort could perform, Manafort would receive a fee agreed upon in advance by the PRA. But if the town hires someone to do work Manafort Bros. does not provide, no fee would be required.
Another amendment approved Wednesday would give each party a 90-day termination notice period if they wish to end the contract. First Selectman Robert Congdon, who participated in the negotiations, said if the town runs out of funds to continue the hospital property cleanup, the termination provision would allow Manafort to end the contract before the two-year period.
If Preston initiates the termination, the town would have to pay Manafort up to a $100,000 termination fee. Congdon said he is not worried because the town already has $1.5 million in grant-funded work in the pipeline and has applied for another $1 million in federal Economic Development Administration grants.
Preston also last week received approved terms from the state on a $4 million low-interest state loan awarded several months ago. The town is required to put up a $4 million match that must be approved at a referendum.
The town must decide whether to accept the loan agreement and conditions by Dec. 1, although town officials have asked for a deadline extension.
The PRA plans to hold at least two public information meetings and a tour of the hospital property to show progress to date on the demolition prior to a town meeting and referendum. The schedule for the meetings and tour has not yet been set.