New London – Developers of a planned housing complex at the site of the former Edgerton School have paid back a controversial $150,000 loan, with interest, to the New London Housing Authority.

The developers, FW Edgerton LLC, had borrowed the funds from the housing authority in April 2016 to help with the $600,000 purchase of the 120 Cedar Grove Ave. property that was supposed to be the replacement site for the 122-unit Thames River Apartments. That plan has since been scratched.

The $150,000 loan was not publicly known until after the departure of former housing authority executive director Sue Shontell in November 2016 and had caused a stir among the members of the current housing authority Board of Commissioners. Commissioners complained they were never aware of their investment and criticized the use of housing authority funds.

Board Chairwoman Betsy Gibson was the only one of the four commissioners at the time that is still a member. Gibson has said the vote came during her first meeting and no dollar amount was attached to the commission’s vote to use housing authority funds towards the purchase.

The project to build a 122-unit complex on Cedar Grove Avenue was fought by neighbors and the necessary approvals denied by the Planning and Zoning Commission. FW Edgerton, composed of Massachusett-based Peabody Properties and Affordable Housing and Services Collaborative Inc., has since secured approvals for a scaled back, 70-unit housing development at the same site.

The approvals allowed FW Edgerton to move on the purchase and sales agreements made with the owners of properties adjacent to the Edgerton site. FW Edgerton had included those properties as part of their overall plan.

Michael Mattos, the executive director of Affordable Housing and Services Collaborative Inc., said the money was paid back to the authority last month as FW Edgerton was securing a loan for the purchase of two of three properties adjacent to Edgerton property. A third was already purchased.

“Now that permitting and zoning is complete we now plan to acquire those sites,” Mattos said.

FW Edgerton secured an acquisition loan through the Local Initiatives Support Corporation and Mattos said it used a portion of that financing to pay back the housing authority loan.

Housing Authority records show the $150,000, plus $400 interest, was wired to the housing authority on Oct. 31.

FW Edgerton has also submitted an application to the Connecticut Housing and Finance Authority and Department of Housing for funding for the housing project. Mattos said an announcement on funding is not expected until March.

“Right now we’re sort of waiting to see what happens,” Mattos said.

g.smith@theday.com