Preston — The Preston Redevelopment Agency on Friday unanimously approved the 150-page purchase-and-sales agreement with the Mohegan Tribal Gaming Authority that made some changes to the initial terms outlined last May and lists several specific “project components” envisioned in a master plan of development for the 393-acre former Norwich Hospital property.

The PRA resolution approving the Property Disposition and Development Agreement also set public informational meetings on the agreement for 7 p.m. March 22 and March 29 at Preston Veterans' Memorial School. On Monday, the Board of Selectmen will schedule dates for a public hearing, town meeting and referendum for residents to vote on the agreement.

Copies of the full document and a 20-page executive summary will be available for review at the first selectman’s office at Town Hall and at the Preston Public Library. Copies also will be posted on the town's website, www.preston-ct.org.

PRA members quietly congratulated one another following the vote, held during a special meeting Friday evening.

“Now the real work begins,” PRA Chairman Sean Nugent said on his way out of Town Hall.

“Friday's approval by the PRA takes us one step closer to the revitalization of the Preston Riverwalk site,” Mohegan Tribal Chairman Kevin Brown said in a written statement later Friday. “The project, with upwards of $600 million in possible development, is a win for the town of Preston, the region and state of Connecticut as it will stimulate growth, drive new business and help strengthen the local economy.”

The agreement includes several key changes from the initial memorandum of understanding approved in May by town and Mohegan tribal officials, including a rearrangement and simplification of property tax phase-in schedules and an agreement that the town will obtain a second $2 million low-interest loan from the state to cover environmental cleanup costs.

Nugent said the loan would be used only if needed to cover environmental cleanup costs, and town officials already are working with the state Department of Economic and Community Development on the terms. The interest rate would be 1 percent, lower than the 1.5 percent rate the town has on an earlier $2 million state loan.

Both loans have provisions for forgiveness based on the creation of permanent full-time jobs at the property in the future. The town wouldn't have to start paying back both loans for five years, allowing time for the development to be completed and jobs created, First Selectman Robert Congdon said.

But while the town still must complete the environmental abatement and remediation of any contamination of the remaining nine buildings, the gaming authority has agreed to do the actual demolition of the buildings.

The property would not be conveyed to the town until after the state Department of Energy and Environmental Protection certifies that the cleanup is complete.

As it did in the memorandum of understanding, the gaming authority has agreed to pay up to $500,000 of the town's so-called “soft costs,” including legal fees, consultants and advisers needed to review the documents.

Mohegan tribal officials unveiled a conceptual master plan in January that outlined numerous proposed developments. The property agreement gives more specifics on those proposals, including a 100,000-square-foot outdoor theme park with indoor attractions and a theater, a 90,000-square-foot indoor water park with an adjacent 300-room hotel. Two other hotels also are listed, a 100-room hotel associated with a 135,000-square-foot sports complex and a 100-room hotel with a 10,000-square-foot spa.

The proposed marina would have approximately 50 boat slips, and the proposed 220,000-square-foot senior housing complex would have 200 residential units.

The gaming authority will be required to create an $11 million line of credit as an assurance for the proposed development: $2 million for jobs creation and $9 million for project completion. For each 100 permanent jobs created, the gaming authority could remove $1 million from the jobs creation portion. If the developed project value fails to reach $200 million by an agreed project completion date, the town would receive the entire $9 million in the project line of credit. That amount would be reduced as the value of the project increases.

The new tax-fixing agreement in the property agreement divides tax assessment adjustments based on the value of specific project components phased in over 10 years rather than seven years. Nugent said part of the change was to accommodate state statutes allowing 10-year phase-in and to ease calculations for the town assessor.

For a specific development with a project cost of at least $45 million, property taxes would be based on 60 percent of its assessed value for the first five years after completion, climbing to 75 percent of assessed value in the final two years of the 10-year period.

Projects costing $10 million to $45 million would be taxed on 75 percent of assessed value for seven years following completion, and raw land or projects costing less than $10 million would be taxed at 100 percent.

“We very much look forward to working together with town and state officials to make the site an exciting part of the region and are grateful to Sean Nugent and the PRA, as well as Preston officials led by First Selectman Bob Congdon, for their commitment and tireless efforts,” Brown said.

c.bessette@theday.com