Norwich - With one recent major failure, few successes and many more downtown revitalization efforts that never get off the ground, officials at the Norwich Community Development Corp. believe it's time to take a more active role to renovate long-vacant, stagnant downtown buildings.

NCDC President Robert Mills told the board of directors Thursday that he had hoped to make a major announcement soon that a private college with a nursing degree program would purchase the mostly vacant Thames Plaza office complex at the corner of Water and Market streets.

But after the school - Stone Academy - studied the building and found it suitable, federal regulations changed that led the school to scale back expansion plans, Mills said.

The deal fell apart Wednesday night, so instead of a big announcement, "we have a big, loud, thumping dud," Mills told the board.

NCDC officials have become frustrated at efforts to bring new businesses and even residents to the downtown's historic but obsolete buildings that need much renovation work. Residents passed a $3.38 million, three-pronged downtown revitalization bond in 2010, but few grants and loans have been awarded in the two years since that trust was placed in the city.

NCDC now is considering taking on some of those renovations itself in the hopes of improving the downtown market.

Jason Vincent, senior economic development associate, presented a plan to the board of directors called "Vanilla Boxes," in which NCDC would lease vacant spaces in downtown buildings from participating building owners for $1 for five years. NCDC would do enough renovations to make the space ready for a potential tenant - floors, ceilings and walls, creating a white box of space.

At the same time, officials at the city's economic development agency would market the space to potential tenants who already have expressed interest in downtown. Preliminary looks at specific spaces showed one that would require about $1,500 to create a "vanilla box," while another could cost $30,000, due to the amount of work needed.

NCDC ideally would recover its up-front costs by receiving the rent money from new businesses either for the full five years or until the costs are paid off. Payback times would vary per building.

Mills said the problem the agency has faced thus far is a "Catch-22" in which building owners do not want to invest in renovating long-vacant spaces without having a rent-paying tenant lined up. Eager tenants, however, don't want to wait months for renovations to be completed in buildings that might be plagued with mold, peeling lead paint, ripped-up carpets or raw concrete floors.

"We've got to do a little more than we thought we would," Mills said of improving the downtown business climate.

New board member Robert Buckley of Dime Bank asked several questions about the proposal and agreed to help staff members work on a more detailed plan.

"My reservation is that we're investing public money for a property owner who isn't willing to do it themselves," Buckley said.

Board member Carl Reiser said NCDC officials would have to study the building before making any improvements to a specific space to ensure that it is structurally sound and doesn't have a leaking roof or other problems.

Mills said many details remain to be worked out for the plan, including how NCDC would pay for the renovations. The agency does have money in its budget for economic development projects and also might ask local banks to front loan money for projects.

NCDC also would need to work with city building inspectors on what work would be needed in specific spaces, and with Norwich Public Utilities on utility work. Mills said he hopes to enlist the Greater Norwich Area Chamber of Commerce to help work with new tenants who come to downtown.

Mills said two building owners have expressed interest in NCDC's proposal for a pilot project.

"We really think that as a pilot, it may be part of the key to unlocking the door to why these properties (are) not moving," Mills said.

c.bessette@theday.com