Waterford - The Board of Selectmen passed an act to withdraw developer Mark Steiner's special taxing district proposal for state-owned Seaside on Tuesday. Steiner had requested that his proposal be withdrawn from the town's consideration, according to the Board of Selectmen agenda.

"This was a phone call from their lawyer to our lawyer," said First Selectman Dan Steward. "It takes care of the issue that we have, and I think that this is a better situation temporarily. We still need to do something with the property."

Steiner proposed a special taxing district for the former Seaside Sanitarium property, which he has an agreement with the state to purchase, near the end of the 2013 legislative session. State legislators from Waterford would not support the legislation until the town gave them the green light.

In May, the Waterford Board of Selectmen tabled a vote on whether to support the legislative bill, and Steiner's proposal never became a bill to be voted on by state legislators.

After the meeting on Tuesday, Steward said he was not aware of any new plans to replace the special taxing district idea.

Steiner has proposed a 122-unit condominium complex at Seaside. Once built, it would be worth $125 million to $150 million and would yield about $1.6 million to $2 million in property tax revenues to the town, Steiner said in May.

The special taxing district proposal would have created a district with the authority to tax its residents for the costs of bonding for infrastructure. This could have lowered the development costs for Steiner.

Steward has said he was concerned about having a special taxing district because the town has never created one before and it would require an agreement between the town and the state since Steiner has not actually purchased the property yet. Steward said in May he was concerned there would be a special taxing district without any ownership.

Steiner's purchasing agreement with the state depends on whether he is given the local zoning, building and other approvals he asks for, Jeffrey Beckham, spokesman for the state's Department of Administration Services, said in May.

Steward has said he wants Steiner to buy the property before the permits are approved.

Steiner did not attend the meeting Tuesday and could not be reached to comment Tuesday evening.

j.somers@theday.com