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Preston won't get extension on federal grant

By Claire Bessette

Publication: theday.com

Published December 04. 2012 5:00PM   Updated December 05. 2012 12:13AM

Preston — The federal Economic Development Administration will not give the town an extension on the $964,000 demolition grant for the former Norwich Hospital property that expired Dec. 1 after residents rejected a required matching town bond Nov. 27, Preston officials learned Tuesday.

Voters rejected an $8 million loan package at a referendum Nov. 27. The package included accepting terms of a low-cost $4 million state loan, matching both that loan and the federal grant with a $4 million town bond.

Town officials had asked the EDA for an extension until Jan. 1 to keep the grant intact as they seek voter support for a smaller loan package of $4 million.

Without the extension, town officials still plan to go ahead with the Dec. 18 referendum and will apply for a new federal EDA grant at the end of March if residents approve the new loan package as the matching share.

Preston Redevelopment Agency Chairman Sean Nugent said Tuesday he is still awaiting word from the state Department of Economic and Community Development on whether that agency would agree to a $2 million loan under the same terms as the previous $4 million loan. Under those terms, the town would have paid 1.5 percent interest, with both interest and principal deferred for five years. For every 100 permanent future jobs, $1 million of the loan would have been forgiven.

Nugent said he hopes to have an answer from DECD officials in time for Thursday’s town meeting on the new $4 million loan package. The town meeting will be held at 7:30 p.m. at Preston Veterans’ Memorial School.

— Claire Bessette


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