Published December 17. 2012 4:00AM Updated December 17. 2012 7:31AM
Preston - One week before Christmas is an odd time for a referendum vote, but Preston voters will be asked to come to the polls one more time that day to consider a proposed $4 million loan package for the cleanup of the former Norwich Hospital property.
Polls will be open Tuesday from noon to 8 p.m. at Town Hall.
Voters on Nov. 27 rejected a proposed $8 million loan package for the hospital property by a vote of 319-261. That package called for a $4 million low-cost state loan matched with a $4 million town bond.
By rejecting the initial plan, the town lost out on another $964,000 federal grant that would have accompanied the loan package. That grant expired Dec. 1.
Town officials quickly rebounded from the defeat, and two days later proposed cutting the loan package in half, with a $2 million state loan from the Department of Economic and Community Development and a matching $2 million town bond. The state loan terms include a 1.5 percent interest rate, with interest and principal payments deferred for five years.
There would no federal grant, but the Preston Redevelopment Agency plans to apply again to the federal Economic Development Administration at the end of March if the referendum approves the loan package.
At a town meeting last week, residents expressed mixed opinions on the new loan package. But supporters say it represents the best opportunity to continue progress in cleaning up the former hospital property, while the total would not be enough to tackle the largest buildings that remain standing on the Route 12 campus.
Along with the lower amount, another major difference the second time around is the position of the Board of Finance. The board only reluctantly voted to send the $8 million to voters in November, and four members campaigned publicly and strongly to defeat the package. Their efforts were criticized by First Selectman Robert Congdon and PRA members, who accused the four of meeting illegally in violation of state Freedom of Information laws.
The Board of Finance initially endorsed the new plan unanimously, with the hopes that the federal EDA would approve an extension of the grant offer and the state would extend the same loan terms to the smaller amount. The state agreed, but the federal agency did not, and finance board member Andrew Bilodeau renewed his opposition last week when the board voted on the state loan package.
Bilodeau said he still is concerned about the financial impact the loan would have on the town, and said he voted against it in part because there now is no federal matching grant.
But the four who campaigned against the first referendum said they would not do so this time. Members Jerry Grabarek and Bilodeau said they would remain quiet. Norman Gauthier, who created and distributed fliers prior to the first vote, said at the town meeting that he would support the new package as more palatable.
Board Chairman Kenneth Zachem said the smaller loan package is better financially for the town. But Zachem expressed concern about a potentially low voter turnout. The timing of the vote was dictated by the state loan, which expires Jan. 1 if the town does not accept the terms.
"It's going to be a tough time of year to get the vote out," Zachem said. "The best thing to do to get future town support (for the hospital property cleanup) is to get some development out there."
PRA officials agreed that they would like to bring development to the property soon, but they argued that a clean site is the best way to attract developers. The state loan includes a provision that for every 100 permanent jobs created by future development, $1 million of the loan would be forgiven.
Congdon said he hopes residents realize the cost to the town to continue the cleanup is little more than the cost of closing down all cleanup operations. As the owner of the property, the town would still be liable for security and insurance, including paying for a new security fence estimated to cost $460,000. Annual costs to maintain and secure the property are estimated at $165,000, or 0.42 mills in property taxes per year, Congdon said.
"One way you're putting at least $4 million worth of equity into the property, and with any future grants you get, it's probably more like $6 million. … The other thing is if we vote 'no' again we send a clear message to both the state and federal agencies that we're not willing to put any equity into the project while they put in $4 million already. That money will dry up," he said.
If the referendum fails, the PRA plans to use up the remaining amounts in grants already received to clean and demolish buildings at the hospital property, which likely will take until about March. The agency would continue to seek future grants, but those likely would be small amounts, restricting and slowing progress on the cleanup.