Norwich - The Norwich Community Development Corp. recommended Monday night that POKO Partners LLC be the preferred developer for the city-owned Reid & Hughes building and asked the City Council to turn over ownership of the long-vacant building to NCDC, which would then attempt to reach a development agreement with the firm.

POKO was one of two finalists for the former Main Street department store. Its proposal, though, includes the adjacent building owned by the Lord Family Nominee Trust. POKO has been in negotiations with the Lord family, but no agreement has been reached, NCDC Vice President Jason Vincent told the council.

"POKO remains the number one-ranked respondent based on the ranking criteria," the report by NCDC to the council said. "But project feasibility requires adjacent property owner participation and that has not been achieved. Additional time will be needed to work on project feasibility."

POKO - the New York firm that had proposed a stalled major renovation of the decaying Capehart Mill in Greeneville - is now proposing an $8.4 million project for Reid & Hughes that would encompass surrounding properties with 113 apartment units and about 25,000 square feet of commercial space.

Norwich Heritage Trust in partnership with Carter Realty of Hartford proposed renovating the former retail store into 17 housing units and 1,600 square feet of retail space. The proposal cited Carter as the lead developer, and the project would have used D'Amato Builders & Advisors as the construction manager.

In the ranking, POKO scored 10 points higher than the Norwich Heritage Trust proposal.

Vincent briefly addressed POKO's failed attempt to develop the decaying Capehart mill and a former thread mill in Pawcatuck. Vincent said POKO pursued the project to develop apartments at Capehart for years, but it was not feasible in the depressed housing market.

In 2006, POKO obtained zoning approval to develop the Thread Mill on Mechanic Street in residential units and some commercial space but that project has never gone forward as POKO has been unable to obtain financing. Meanwhile, the mill has fallen into disrepair and in 2012 Pawcatuck Fire Marshal Kevin Burns and Fire Chief Tom Long told the town they are worried about the condition of the property and the risk it poses to neighbors.

Dale Plummer, president of the Norwich Heritage Trust and also Norwich city historian, said the trust's main interest is to see the Reid & Hughes preserved and redeveloped. He said Norwich Heritage Trust contacted the Lord family prior to submitting its development proposal, but the family was not ready to make a commitment to include the adjacent building.

"My only concern is that this could drag on and on," Plummer said of the pending negotiations between POKO and the Lords. "At some point, it should be opened up again rather than endless negotiations."

Turning over the building to NCDC would "end the active city role" and would leave to NCDC the responsibility of working out an agreement with the developer. The transfer of ownership would not end the need for city subsidies to make the project work, however.

Both developers envisioned using the downtown revitalization grant and loan programs approved by voters in 2010. The building is in the downtown enterprise zone, qualifying it for seven years of property tax breaks on the improvements.

In addition, the Norwich Heritage Trust plan called for a grant from the city totaling $800,000.

The city could face that much in costs - and potentially more - if it decided to tear down the building instead of seeking development proposals, Vincent said.

c.bessette@theday.com