Progress outlined at Preston's former hospital site, but still no buyer

Preston - Residents learned many details Thursday about three years of progress on the cleanup and demolition of buildings at the former Norwich Hospital property, the continuing headaches in securing the property and the as-yet-unsuccessful effort to find a taxpaying developer.

About 30 residents attended the informational session led by the Preston Redevelopment Agency and responded with several questions about the town's financial commitment to the property, development prospects and whether the town would have a say in what any future proposed development would look like.

During his introductory overview, PRA Chairman Sean Nugent showed a slide with four top priorities the agency has had over the past three years. The first three had green check marks, but he placed a red X at the bullet item for "developer selection."

Nugent said thus far the agency hasn't had success in finding a developer for the 393-acre property.

The PRA two weeks ago ended negotiations with JHM Financial LLC, which had proposed building numerous renewable energy facilities there. Nugent said it was an "interesting and new idea" for the property. But Nugent called the project "a fluffy cloud," and town officials could not get details, including how much the company would pay for the land and when and where the development would take place.

Since then, the town has been in contact with four potential developers, including one who represents a buyer from Florida looking for 150 to 200 acres of land in southern New England who has been calling weekly. Another is interested in military housing. Nugent said any development proposal would have to go through normal town planning and zoning permit processes, allowing residents to see and comment on their plans.

PRA member Jim Bell, who oversees funding for the project, went over the grants and loans the agency has received for the cleanup and demolition of 20 buildings on the hospital campus. The PRA has received $1.8 million in federal grants and has applied for another $1 million through the federal Economic Development Administration. Those grants required a total of $1.2 million in local matching shares, but Bell said the town used a different $1 million grant as part of its matching requirement.

To date, the town has spent about $400,000 of its money on the project.

The town has been approved for $6.1 million in state grants and loans, but must provide a $4 million matching share to receive an approved $4 million low-interest loan from the state Department of Economic and Community Development.

Bell said with these grants and loans, the demolition would be 80 percent complete, but one large building on the campus will present a major cleanup cost. Because of contaminated roofing materials, that one building will cost about $1 million to clean and demolish.

PRA member Frank Ennis added that demolition contractor Manafort Bros. has demolished several buildings for salvage value alone at no cost to the town.

Since February, the agency has been in negotiations with the DECD on the terms of the $4 million loan, and has reached an agreement for no interest for the first five years. Town officials hope the state will agree to forgive the loan repayment entirely in a job creation deal, but that hasn't been ironed out.

Until that provision is approved, the town must prepare to meet the $4 million match requirement. Information on the loan and matching share will be presented at a future town meeting when details are better known, Bell said.

Bell told residents Thursday the town has several options for providing the match. The town could bond the total and use the money to add to the cleanup. Or the developer could pay for that cleanup and the town would forgive future taxes to that amount. The town also could reach an agreement with a developer to share the $4 million match. A final option would be to use another grant obtained as the town's match.

Prior to the informational session on the Norwich Hospital property, about 25 residents approved appointing two new members to the PRA, Frank Matovic and William Legler to fill two vacancies and reappointing Merrill Gerber and extend the terms of Nugent, Bell and Ennis.

Residents also voted to accept the $1 million state grant from the DECD for the cleanup. That grant has no required local match.


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