New London — The owners of the former Edgerton School property are prepared to pitch a scaled-back version of an affordable-housing complex initially designed as a replacement for the Crystal Avenue high-rises.

The plans call for approximately 72 units on the same 120 Cedar Grove Ave. site where the developers originally had proposed 124 units, according to people familiar with the plan.

It is an apparent reaction to an outcry from nearby residents and the rejection of a zone change application by the Planning and Zoning Commission that would allow a residential complex at the site off Colman Street.

The site is owned by the Massachusetts-based companies Peabody Properties and Affordable Housing and Services Collaborative doing business as F.W. Edgerton LLC.

Housing Authority Chairwoman Betsy Gibson said that a meeting between herself, a Housing Authority attorney and the property owners tentatively is planned for Monday.

While she expects the new development plans to be part of the conversation, she said the first priority for the Housing Authority must be the status of the authority’s $150,000 investment in the Edgerton School property and a clear understanding of its partnership with F.W. Edgerton.

“The air has to be cleared,” Gibson said. “There has to be a clear understanding of where we stand and I need accounting of that $150,000 with a guarantee we’re going to get that back one way or another.”

It came as news to the new members of the Housing Authority’s board of commissioners that former authority Executive Director Sue Shontell had signed a cashier’s check for $150,000 to aid in the $600,000 purchase of the property in April.

The board had voted on April 1, 2016, to allow Shontell “to move forward with the Thames River Development Team and gain site control by utilizing funds from the New London Housing Authority’s business activities account.”

Shontell in a March 29, 2016, email to the board members, however, had estimated the Housing Authority’s cost at $154,000. The email was obtained through a Freedom of Information request by The Day.

Gibson, the only current member who was on the board at the time, said the vote came on her first meeting and while she may have seen Shontell’s email, the dollar amount was never mentioned during the vote, never recorded in any documents and no attorney had ever signed off on a contract that shows exactly what the Housing Authority would get for its money.

In addition, Gibson said it appears the board did not have legal representation to look over details of the investment. Shontell’s email explains that the money was to be reimbursed “when the financing and closing take place on the redevelopment. (About a year to a year and a half.)”

And while there was a memorandum of understanding with F.W. Edgerton, there is no final development agreement in place, Gibson said. The Housing Authority is not listed on the deed.

It was the Housing Authority that had enlisted Peabody and Affordable Housing in 2015 to find and build a replacement site for the federally subsidized Thames River Apartments on Crystal Avenue — three high-rises whose residents filed a class-action lawsuit against the Housing Authority regarding the unsanitary and unsafe conditions there. A stipulated agreement now mandates the Housing Authority find the residents new homes.

Attorney Mathew Greene, who represents the owners, said from his standpoint next week’s meeting is a first step in helping to clarify the partnership between Peabody and the Housing Authority and the use of the funds.

“Not only was the money used as intended, it was never hidden from anybody,” Greene said.

He said he could not speculate on why the $150,000 was not known by the current board members, but Peabody remains committed to the project and to a partnership that started with its response to a request for proposals and later was solidified in the memorandum of understanding.

The agreement, Greene said, is that the $150,000 is reimbursable when the project is funded and completed. The Housing Authority also is due 25 percent of developer fees and 25 percent of cash flow from the eventual development.

When Peabody’s plans for the development on the Edgerton property were delayed, the city and Housing Authority took an alternate route to vacate the aging high-rises. They now are in the process of applying for a demolition disposition from the federal Department of Housing and Urban Development. If the city can prove the conditions at the high-rises are beyond repair, HUD would allow the 124 families to move elsewhere with housing vouchers.

Gibson said the $150,000 handed over to F.W. Edgerton is even more crucial now that the authority is seeking money to help relocate the residents. The relocation plan must be in place as part of the application.

“We have to have money up front to relocate 124 families and right now we don’t have the money to do that,” Gibson said.

Gibson said the relocation cost are estimated to be about $2,000 per family, or $248,000, along with other associated costs.

“My main concern is not Peabody right now, it’s the residents living at Thames River,” she said. “The $150,000 would go a long way to relocate tenants.”

Greene, who has filed an appeal of a Planning and Zoning Commission decision, declined to discuss details of the new development.

g.smith@theday.com