Preston — The Preston Redevelopment Agency’s string of successes in obtaining federal and state grants to continue the cleanup of the former Norwich Hospital property hit a snag recently, when town officials learned they will not receive a $1.65 million state grant or three federal $200,000 grants sought for the work.

“As you might expect, we are disappointed, but will seek future opportunities,” Preston Redevelopment Agency Chairman Sean Nugent said Tuesday.

Nugent estimated completing the cleanup could take another $6 million to $8 million, and two grant applications are still pending.

Nugent said he received official word Monday that the town would not receive the three $200,000 building assessment grants from the EPA. Preston has received the assessment grants in the past and will apply for the next round, possibly this fall, First Selectman Robert Congdon said.

“The EPA has been very good to us, and we will apply again until we get it done,” Congdon said of the cleanup. “We are getting closer and closer, and as with most things, the closer you get to the finish line, the harder it gets.”

The town also learned it will not “make the cut” for a state $1.65 million state brownfields cleanup grant, but Nugent said the agency felt that application was a long shot because those grants were meant for awaiting development projects.

Preston has been marketing the property for development but learned early on that the incomplete cleanup was a deterent to potential developers. Nugent said "the phone is ringing" with expressions of interest, but said he could not comment on whether any proposals are pending.

Preston remains in the running in its application for a $1.25 million state Urban Act grant, and PRA officials recently were interviewed for a state Department of Economic and Community Development $165,000 environmental assessment grant.

“We’re very appreciative of the support we’ve received from the state and the U.S. EPA and the town and we will continue to work to raise funds to clean the property and improve its attractiveness,” Nugent said.

To date, Preston has received $15 million in federal, state and local grants and loans to clean up the 393-acre former mental illness hospital property to be marketed as Preston Riverwalk — or maybe Riverwalk @ Preston as recommended by real estate consultants. Nugent said $14.5 million has been spent to demolish 49 of the 57 total buildings on the property.

The agency decided to retain the historic first building, called the Administration Building. Another building that is 90 percent on the Preston side of the campus and 10 percent across the border in Norwich could not be torn down without an agreement with the future owner of the Norwich portion of the former hospital property, Nugent said.

Thames River Landing LLC has an agreement with the state to purchase the 49.65-acre Norwich portion for $300,000, but the deal has not yet been completed. State officials and Thames River Landing developer Mark Fields were not available Tuesday for comment on the status of the purchase.

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