Proposed Norwich Hospital agreement in the hands of Preston voters Tuesday

A map rendering of the proposed development by the Mohegan Sun of the former Norwich Hospital property. (Mohegan Tribal Gaming Authority)
A map rendering of the proposed development by the Mohegan Sun of the former Norwich Hospital property. (Mohegan Tribal Gaming Authority)

Preston — With a yes or no vote Tuesday, residents here will decide whether this small, traditionally farming town will become host to a major entertainment, sports, outdoor recreation and resort attraction on the east bank of the Thames River.

Polls will be open from 6 a.m. to 8 p.m. at Town Hall, 389 Route 2, for a referendum on whether to approve the proposed Property Disposition and Development Agreement between the town and the Mohegan Tribal Gaming Authority. The vote comes nearly one year after tribal and town officials first agreed last May to negotiate a possible sale of the former Norwich Hospital property to the tribe.

The 150-page agreement, negotiated by the Preston Redevelopment Agency and tribal officials — with several attorneys on both sides — governs the tribal authority's proposal to take ownership of 388 acres of the former Norwich Hospital property in Preston to turn it into a destination resort, recreation and entertainment complex. Included in the document is a list of specific proposals for the property and a conceptual map placing projects on certain parcels on both sides of Route 12:

  • A 100,000-square-foot outdoor theme park with indoor attractions and a 90,000-square-foot indoor water park with outdoor attractions and a 100-room luxury hotel on the east side of Route 12.
  • A 135,000-square-foot sports complex with a 100-room hotel and a 100,000-square-foot sports retail store, also on the east side of Route 12.
  • A marina with approximately 50 boat slips on the Thames River.
  • 100 time-share residential units on the west side of Route 12 overlooking the river.
  • A 220,000-square-foot senior housing complex on the west side of Route 12.
  • A 120,000-square-foot large retail complex on the west side of Route 12.
  • And up the hill on the east side of Route 12, the plan calls for a year-round synthetic ski facility, an RV park and “glamour camping” facility.

State restrictions and the proposed agreement both prohibit the tribe from building gambling facilities on the property and from attempting to take the land into trust as tax-free. The town added a provision that the tribe waive its sovereign immunity from legal challenges if issues arise on the property in the future.

The specific developments would have to be approved by town planning, zoning and other permitting agencies in the coming years, and the tribal gaming authority anticipates a five-year build-out of the entire property once the town completes the environmental cleanup. That, too, is outlined in the proposed agreement, giving the town a year to complete the cleanup and turn the property ownership over to the MTGA.

The town already has secured state approval of a $10 million grant to do the environmental abatement of the remaining 10 buildings and the cleanup of any environmental contamination in the ground on the property. The tribe has agreed to do the actual demolition of those buildings, planning to restore the historic Administration Building at the center of the property.

The proposed agreement includes a provision that the town secure an additional $2 million low-interest state loan for environmental cleanup, if necessary. The new loan, along with an existing $2 million loan the town secured previously, would be converted into grants if the development reaches certain goals for permanent full-time jobs created.

There is no straight purchase price. Instead, it calls for the MTGA 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 MTGA 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.

A tax-fixing agreement in the agreement sets property tax payments based on the value of specific project components. For a development costing 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 a 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 of assessed value.

c.bessette@theday.com

The former Norwich Hospital Preston Riverwalk property in Preston, with Mohegan Sun across the Thames River, is seen from the air on May 17, 2016.  (Sean D. Elliot/The Day)
The former Norwich Hospital Preston Riverwalk property in Preston, with Mohegan Sun across the Thames River, is seen from the air on May 17, 2016. (Sean D. Elliot/The Day)

If you go

Preston referendum on proposed Property Disposition and Development Agreement with Mohegan Tribal Gaming Authority for former Norwich Hospital property.

When: Tuesday, April 18; Polls open 6 a.m. to 8 p.m.

Where: Town Hall, 389 Route 2, Preston.

The proposed agreement available for viewing at www.preston-ct.org, at the selectmens' office at Town Hall and Preston Public Library.

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