Mystic - Plans to rebuild the downtown Mystic retail shops destroyed by fire in 2000 are facing another potential obstacle.

The Groton Planning Commission gave a thumb's down to plans by the developer to lease town-owned land at the Gravel Street pump station for placement of an underground propane tank to heat the building.

Historic Mystic LLC has proposed a four-story building for the so-called Central Hall project with boardwalk, river access, 12 condos or apartments and six street-level retail spaces along West Main Street. The site for the propane tank sits in back of the building on Gravel Street.

The site plan for the building was approved by the planning commission in early October.

But the same commission at an Oct. 23 meeting voted 4-1 to deliver a "negative recommendation" on the proposed lease agreement that developers need with the town to place the tanks on town property.

The Groton Town Council, which has the final say, has previously voted in favor of leasing the same area to accommodate parking for tenants of the proposed building. Because of the recent vote by the planning commission, however, the council must approve the new lease agreement by a so-called supermajority, or two-thirds, vote.

Planning committee members, according to town records, gave an unfavorable review to the proposal because of worries about setting the precedent of providing town property for private use. They were also concerned about liability of the town in the event of a catastrophic failure of the tanks. The commission felt there were other acceptable heating sources that could be used in instead of the propane.

A public hearing on the issue is scheduled for Wednesday's town council meeting. A vote by the council is not yet scheduled.

Despite several past conditional site plan approvals, construction has never started at the site.

The latest movement came with Hurricane Sandy, when wind blew down a green wooden fence that had blocked the area from passersby. The wooden "green monster" was replaced with a chain link fence.

g.smith@theday.com

If you go

What: public hearing on proposal to lease town-owned land for placement of an underground propane tank

When: 7:30 p.m. Wednesday

Where: Groton Town Hall Annex