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East Hartford developer takes ownership of Norwich portion of former Norwich Hospital

Norwich — The mortgage foreclosure on the nearly 50-acre portion of the former Norwich Hospital property in the city was completed last week, and the four properties are now owned by Castanho Development LLC of East Hartford.

Castanho had filed mortgage foreclosure against Thames River Landing LLC, headed by Mark Fields, in New London Superior Court. Fields had until June 20 to pay off the debt, which totaled nearly $700,000, and failed to do so. Castanho had provided an initial mortgage of $450,000 to Thames River Landing for the purchase and initial development plans for the property.

Thames River Landing LLC had purchased the 49.65 acres of former Norwich Hospital property from the state in 2015 for $300,000 but failed to submit cleanup or development plans for the property, although Fields renovated one house at 626 Laurel Hill Road and used it as his residence.

The four parcels comprising the land on the east and west sides of Route 12 now are listed on the city’s tax rolls under the ownership of Castanho Development LLC, two with addresses of 626 and 705 Laurel Hill Road and two with no numerical addresses.

Principal Carl Castanho declined to comment on the foreclosure this week, saying he is not yet ready to discuss possible development plans. He said he has paid the back taxes and legal fees owed to the city on the property.

City Tax Collector Karlene Deal said Friday she has not yet received the payment, which will come through the city’s attorney who worked on the foreclosure. Taxes owed on the property, not including legal fees, totaled $119,805 through June 29, Deal said Friday.

Robert Mills, president of the Norwich Community Development Corp., said he will reach out to Castanho to discuss possible plans for the property.

“I’ll share the contact information with the mayor and offer our support and see what we can do to partner up and make it a good venture for everyone concerned,” Mills said.

The Norwich land is zoned as a Planned Development District, which would allow numerous types of commercial uses, but does not allow residential uses.

The property abuts the 393-acre former Norwich Hospital property in Preston. In 2017, Preston town leaders reached a purchase and sale agreement with Mohegan Gaming & Entertainment for the entire Preston portion, now called Preston Riverwalk, for a planned $200 million to $600 million commercial, recreational, sports, retail and residential complex. The transfer is pending the town’s final environmental cleanup of the property on the Preston side.

An appraisal of the 49.65-acre Norwich property, done by Valbridge Property Advisors of Hartford for the foreclosure, calculated the fair market value of the property at $620,000. The property has 26 buildings, mostly in poor condition and abandoned, except for the house renovated by Fields.

The appraisal report stated the value assumed that the property “is not impacted by any environmental hazards.” A 2005 environmental study commissioned by the city of Norwich estimated environmental cleanup costs at $1.1 million.

“The highest and best use of the site is for development of the two subject parcels with a single, mixed-use project to include office, warehouse and/or solar farm uses,” the appraisal report stated.


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