On Tuesday the citizens of Preston are being asked to vote on whether to accept or reject a $4 million Department of Economic and Community Development (DECD) loan proposal. We believe the Preston Redevelopment Agency's (PRA) recommendation to accept the DECD loan as well as bonding the required $4 million matching town money will best position Preston for future success.
Attempts to attract and secure a developer or developers for the former Norwich Hospital property have not been successful. Feedback from the developer community indicates that the failure to clean up the site and get it ready for development is the key impediment. Therefore, cleaning up the property has become the top priority of the PRA and this requires money.
The PRA worked closely with DECD to develop the loan proposal. The state is offering a $4 million loan over 20 years with both principal and interest deferred for the first five years at an interest rate of 1.5 percent. The state has also offered loan forgiveness by reducing the amount owed by $1 million dollars for every 100 permanent jobs created. In addition, the PRA has been awarded a $964,000 demolition grant from the U.S. Economic Development Administration (EDA) contingent upon the town accepting the DECD proposal. The town match will be generated through the use of either tax-exempt or taxable bonds. This means that the town will receive $9 million toward the cleanup and demolition of a significant portion of the site.
Some in Preston feel that the town should not accept this proposal. As part of the overall recommendation process, the PRA also evaluated the options of (a) continuing the path traveled to date and (b) stopping all activities and wait for a developer to come forward. It is clear that the path traveled to date has been successful, but limited. Working in partnership with Manafort, monies received from the federal government (primarily EPA), the state (STEAP and Urban Act grants) and the town (required grant matches) have allowed smaller buildings to be abated and demolished. Similar grants, however, will not allow abatement and demolition of the larger buildings. Eventually the path traveled to date will no longer work for Preston Riverwalk and the town will be in a "stop-all-activities" situation. This step is not cost free to the town as the PRA has estimated that Preston will have a minimal cost of $165,000 per year to keep the site secured and insured. A 'no' vote does not continue to progress the cleanup even though the town retains the liability to clean up the property.
In May of 2009, the selectmen and citizens approved the creation of the PRA and charged it with the stewardship, cleanup, and marketing of the site. Over the past few years the PRA has successfully obtained $3.7 million in state and federal funding and $300,000 in town-match monies. These dollars have been used to abate and demolish 22 of the smaller buildings. However, the largest buildings remaining require significantly more money. The DECD loan proposal provides money that will be targeted to abate and demolish the remaining largest buildings, plus some of the smaller buildings.
In 2009 Preston voters took a bold step by purchasing the former Norwich Hospital from the state for $1; with the understanding that time and money would be required to clean up and revitalize the site for future development. On Tuesday the people will once again decide whether to support the PRA's recommendation to continue on the path to revitalize the site.