Montville - Many in town fear that the Mohegan Tribe's assertion that a proposed housing development will ruin sacred land near Fort Hill Drive could derail future development projects and hamstring a town already faced with considerable financial hardship.

At issue is a proposed project called The Villages, a 120-unit affordable rental housing complex on a 12.2-acre parcel near Fort Hill Drive off Route 32. The area is a short distance from St. Bernard School and about one mile south of Mohegan Sun casino.

Because developers have sought a federally guaranteed loan for the $19 million project, federal agencies were required to commission an archaeological study of the site because of the National Historic Preservation Act.

The study considered several sources - including input from the tribe - and proposed that the property sits in what it referred to as a tribal cultural area. It argues this area should be eligible for listing on the National Register of Historic Places because of its historical significance and the belief that it holds powerful forces of spiritual energy.

The tribe has said that Sachem Uncas, for whom Uncasville was named, had a fort on the property and that the area has other historical significance. Ultimately, the study's findings will be considered by the U.S. Department of Housing and Urban Development.

The ruling looms large for The Villages project and potentially others, several people said Thursday night during a lengthy public hearing at Town Hall.

Town Planner Marcia Vlaun was one who argued against the study's findings. She called it "disingenuous" and said it would lead to other projects being hung up. "No small- or medium-sized developer could ever survive this process," she said. "You're freezing them out of doing this."

The land for which The Villages is proposed is in an area called Fort Hill. It is owned by brothers Vladimir "Vlad" and Drzislav "Dado" Coric, who said the property has been in their family for many years. The brothers first sought to develop condos on the property, but the downturn in the economy made that idea unrealistic, Dado Coric said.

The town established a Housing Opportunity Development zone for the property to allow the brothers to pursue the affordable-housing project.

The Villages would comprise one-, two- and three-bedroom apartments, and 54 of the 120 units would be designated for lower-income people, including retirees and employed professionals. The other 66 units would be rented at market rate.

Tenants in the affordable units would be required to hold a job or have some source of income and would pay a rent, including utilities, of no more than 30 percent of their monthly income. The state Department of Economic and Community Development and HUD would provide some financial assistance.

The Coric brothers have recently presented several arguments against the proposed tribal cultural area's inclusion on the National Register of Historic Places in hopes of seeing The Villages move forward. They said the property the tribe is seeking to protect as sacred is on a smaller parcel next to the 12.2-acre area they wish to develop. Vlad Coric also said there is significant evidence the area was quarried in the 1960s, which he considers to be an argument against its historical significance.

The brothers have also questioned why the tribe was able to build a power substation and an elderly-housing complex near the property in question if both are within the tribal cultural area now being argued for inclusion on the national register.

"In my opinion, this is about controlling development," Vlad Coric said.

Dado Coric acknowledged that in the past he and his brother have discussed selling the land to the Mohegan Tribe. He and Chuck Bunnell, chief of staff for external affairs for the tribe, said the two sides could never agree on a price. Both declined to say whether negotiations are ongoing, citing a confidentiality agreement entered into earlier this year.

Vlad Coric also said at Thursday's public hearing that the brothers would be willing to donate to the tribe the half-acre on which it is believed the Uncas fort was located and work on a mitigation plan or conservation easement.

Bunnell said Friday the tribe is not against development and that it has a history of working with the town and its elected officials. He declined to comment on the Coric proposal to donate the land to the tribe.

"The developer asked that we enter into a confidentiality agreement in March of this year, which would prevent us from commenting on the proposals that he mentioned (Thursday) evening," Bunnell said. "The fact that was mentioned has put us in an awkward position."

In a statement, Bruce "Two Dogs" Bozsum, chairman of the Mohegan Tribal Council, questioned the Coric brothers' motives. "Is the developer really interested in building affordable housing or in holding this Mohegan sacred site hostage for the biggest payoff possible?" he said.

A brief synopsis of the study done on The Villages was presented at Thursday's hearing. The study was prepared by Fuss & O'Neill, a consulting engineering firm, and was sponsored by the DECD and HUD.

The part of it that gave many in town pause was the proposed tribal cultural area. It encompasses the Mohegan Hill area and is proposed as several hundred acres and stretches more than 3 miles from its lower to top end.

Vlaun, the town planner, said it includes the Montville Commons, which has a Home Depot, Stop & Shop and other stores. She called the study's classification of the land in the proposed area as mostly undeveloped as "disingenuous" and "very inappropriate."

Town Councilor Rosetta Jones, who circulated a petition to force Thursday's hearing, has also questioned what this proposed tribal cultural area would mean for future development.

The study concluded that whenever federally funded projects are proposed within the area, a similar review seeking adverse effects on the area will be required.

Only publicly supported projects, not private development, would be affected, the study said, and Bunnell was quick to point out that it would not affect homeowners.

A majority of property owners in the proposed tribal cultural area would need to agree for the area to go on the national register.

"In no way would it impact anyone's home or any sort of development within that area in any way unless you were seeking to use public money," Bunnell said.

Public comment on The Villages project will continue until Friday. HUD will then consider comments and issue a decision.

While Jon Chase, the town historian, argued against the proposal at the public hearing and said it would adversely impact historical land, others in town said there is a clear need for affordable housing.

In a town of roughly 20,000 that will have an increase of roughly 8.5 percent in taxes this year, proponents said the boost to the local economy The Villages would bring - an estimated 100 construction jobs and new tax revenue - is sorely needed.

"I have to look at easing our tax burden," Michael Hillsberg, the town's former finance director, said at the hearing. Our taxes are going up 8.5 percent this year. I hope the state and government looks at the big picture."

jeff.johnson@theday.com