East Lyme — Work to rebuild the Niantic Bay Boardwalk is being held up as Amtrak and the town negotiate a $400,000 project that First Selectman Paul Formica said Thursday he hopes will be paid for partially by the railroad company.

The revetment project, which involves a sloped area of rocks and concrete, will have the effect of protecting Amtrak's train track from another storm surge like the one that occurred two years ago when Superstorm Sandy barreled into the region, destroying the boardwalk.

"Amtrak should participate in some of these repairs," Formica said during the annual State of East Lyme breakfast meeting of the Chamber of Commerce of Eastern Connecticut, held at Town Hall.

Formica, a Republican who has announced plans to run for the 20th district state Senate seat being vacated by Andrea Stillman, a Democrat from Waterford, said the town believes Amtrak's railroad tracks would have been seriously undermined during Sandy had the town's boardwalk not protected it from the surge.

Last month, East Lyme residents approved at a town meeting spending more than $4.4 million for reconstruction of the boardwalk, an amount that will be largely funded by an insurance settlement and federal grants. Formica estimated the project will take about seven months to complete.

He said the town and Amtrak plan to meet Monday to try to work out a plan, including permission from the railroad so work can be done near its electrical lines.

In other updates, Formica said he expects the new Gateway Commons project to add about $1.5 million in revenues to the town's tax base. The project, undertaken by Simon Konover Development Corp. and KGI Properties on 200 acres between Exits 73 and 74 of Interstate 95, involves 280 apartment units and a 425,000-square-foot shopping area anchored by retailing giant Costco.

Formica said he wasn't sure about other shops to be included in the development, though he named Outback Steakhouse as a brand that often pairs with Costco. To give an idea of the extent of the retail area involved, Formica said Costco would likely fill up only 150,000 square feet or so — leaving nearly two-thirds of the space for other outlets.

Formica said regional cooperation that allows East Lyme to send extra water to other towns during the winter and then enables residents to tap into a supply controlled by New London in the summer helped make the Gateway Commons project possible, since it ensures a steady supply of water. He added that the town would likely be installing a new traffic light on Flanders Road near Five Guys restaurant to help accommodate traffic into the shopping area.

"Most people think the traffic is going to be beneficial," he said.

Moving to fiscal matters, Formica said that after five years of holding budgets to increases averaging 1.5 percent annually, the next spending plan is coming in at a 3 percent rise. He said the town is looking at a new approach in which it would provide in-house free medical services to municipal personnel, which would cover about half of the usual tests done at doctors' offices.

Brian Reas, assistant superintendent of schools, described the Board of Education's approach to dealing with elementary-school space issues. The system has fewer than 1,000 students occupying three elementary schools with a capacity for about 1,500 pupils, he said, and the board is looking for a cost-effective solution that will take into account the age of the town's schools.

Each of the schools is 50 years old or older, he said, and in many areas "needing some pretty significant work" within the next 10 to 15 years. So the question becomes, Reas said, whether renovations or building anew makes more sense, considering "repairs do not allow us to recoup any state funding."

Reas said he expected some sort of referendum on the elementary school issue to be brought to voters by June 2015.

l.howard@theday.com