Waterford - At least a month before Gov. M. Jodi Rell announced last December that she was pulling the plug on plans to sell the former Seaside Regional Center, members of her staff were pressing for the state to hang onto the property.

”... We have a parcel in our midst (on the shoreline I'm told) that we're selling on the cheap,” M. Lisa Moody, the governor's chief of staff, wrote in a Nov. 17 e-mail The Day obtained through a Freedom of Information request.“Here's a silly idea - let's keep it for future generations as a natural area - no paved parking lots, no buildings or facilities - just, God forbid, a pristine natural setting on the water. Want to talk about responsible growth (or responsible ungrowth, in this case). That's a legacy item.”

Originally, the state intended to sell 32 of the site's 36 acres to developer Mark Steiner of Farmington. Under the plan, the state would have collected millions of dollars in revenue for the developmentally disabled. The town, instead of a payment from the state to offset lost tax revenue, would have gained a taxable gem. The public would have gotten access to waterfront that, for the last 70-plus years, has been off limits. And Steiner would have reaped the profits of building luxury age-restricted condominiums.

Rell visited the Waterford site, formerly a residential center for the mentally handicapped and before that a tuberculosis sanitarium, in mid-December. Shortly thereafter, she announced that the state would keep the waterfront property, which includes buildings designed by famed architect Cass Gilbert.

The Dec. 19 announcement angered some local and state officials and rankled Steiner, who had been trying for more than seven years to strike a deal on the property just down the road from Harkness Memorial State Park.

The planned sale of the property had been derailed Nov. 15 when the state legislature's Government Administration and Elections Committee unanimously rejected a $7.1 million sales agreement between the state and Steiner. According to correspondence The Day obtained from the state Department of Public Works and the state Office of Policy and Management, the possibility of the state keeping Seaside was discussed immediately.

On Nov. 17, Adam Liegeot, a spokesman for the governor, sent an e-mail to Moody and her press secretary, Chris Cooper, saying the denial was a“chance for (Rell) to weigh in on what her vision is for this property.”

Liegeot's e-mail drew an immediate response from Moody, who asked what it would cost to raze all the Seaside buildings and remediate any environmental hazards“to the extent that the parcel is left as passive open space.”

Rell hasn't yet said what her vision is for the property, only that the state should keep it.

Following Moody's e-mail calling preservation of Seaside“a legacy item,” the head of the state Office of Policy and Management, Robert Genuario, sent an e-mail Nov. 29, seeking input on what recommendation to make to the governor.

Top policy staffers were torn following the legislative committee's rejection of the plan. Jeffrey Beckham, the OPM's undersecretary for legislative affairs, argued that the state should proceed with a plan that would end with Seaside being developed privately, calling it“the only reasonable option.”

”The biggest reason I say that is that, and folks don't seem to be retaining this particular fact, is that the state's retaining this property will actually result in a park that is practically usable only by the adjacent neighborhoods,” Beckham wrote.

OPM Deputy Secretary Michael Cicchetti responded that the state should“take another run at the sale.”

Beckham suggested that the state“ought to transfer (Seaside) to Waterford in the conveyance bill ... and let them flip it to Steiner or have it be a town park. If they flip to Steiner, we can even finish the EIE (environmental impact evaluation) if that makes people happy.”

In her proposed 2008-09 budget, Rell included $1.7 million to“mothball” the historic buildings at Seaside. The buildings, four of which are on the National Register of Historic Places, have significant water damage and contain hazardous materials, including lead paint and asbestos. As the 2008 legislative session drew to a close last week, the governor and lawmakers agreed to abandon plans to pass a new budget, reverting back to the two-year plan passed last year and thus eliminating any money earmarked for Seaside repairs.

The governor's office referred The Day's request for the updated budget for mothballing Seaside buildings to the state public works department, which has yet to respond.

The governor's $1.7 million figure was lower than a November estimate by the state public works department that the most basic level of repair and maintenance of the Seaside buildings would cost at least $2.5 million, with extensive options more than twice that.

Even those numbers are unrealistic, Steiner said.

”That's simply not going to be done by the state - the costs would just be staggering to do that,” he said in a recent interview.

In the aftermath of the legislative committee's rejection of the sale, Steiner accused the state of not doing its due diligence in handling the sale, claiming representatives from the public works department were unprepared to answer the committee's questions.

But Steiner also said the reasons the committee cited, namely that an environmental review hadn't been done and that only one reuse proposal had ever been circulated, were correctable.

¦ ¦ ¦

The disposal process for Seaside began in 1996, when the state declared it a surplus property. After circulating a reuse proposal among other state agencies - a requisite when the state is ridding itself of property - and finding no viable options, the OPM decided to sell 32 acres.

Before offering Seaside for sale, the state gave the town of Waterford first crack at owning it. Town residents widely rejected buying the property in a referendum, and the state moved forward with the sale.

The state, in conjunction with local legislators and elected officials, formed a committee to find a developer.

After a nationwide search, Steiner, a developer with experience in building assisted-living and age-restricted facilities, was named the project's preferred developer in September 2000.

Over the next four years, Steiner negotiated a sale price with the state and got the property rezoned to allow a master-planned condominium complex.

In 2004, then-Commissioner of Public Works James Fleming decided the original appraisals of the property were outdated and told Steiner that the original sale price of $2.5 million needed to be renegotiated. New appraisals put the value of the property between $6.4 million to $7.2 million. One of the reasons cited for the higher value was the rezoning.

Steiner threatened to sue the state, but the two parties finally came to a new purchase-and-sales agreement for $7.1 million.

”It was totally unfair,” Steiner said.“It was another thing where we swallowed hard.”

The sale received the OK last year from the legislature's Finance, Revenue and Bonding Committee, the state Properties Review Board and OPM, before being killed by the administration committee.

The $7.1 million in proceeds was to have been deposited into a special account to fund programming and capital improvements for the state Department of Developmental Services, according to a law that governs the sale of former mental health facilities.

The ARC of Connecticut, an advocacy group for the developmentally disabled, has repeatedly asked the governor to sell the property.

Steiner has hired Campaignswon.com, a political consulting group in Hartford, to lead a letter-writing campaign among Waterford residents to put additional pressure on the governor to sell.

And most recently in late April, Steiner, Rep. Betsy Ritter, D-Waterford, and Waterford First Selectman Dan Steward appeared at the Capitol, asking the governor to change her mind. A group of 10 eastern Connecticut legislators signed a letter asking that the sale proceed.

Steiner said he's invested“a very substantial amount of money” in trying to develop Seaside over the past decade, and is sticking with it as a“moral obligation.”

Article UID=62dd3603-20a1-4925-ad77-26a1c6e2d045