Norwich - It will cost millions of dollars to clean the section of the former state hospital property in Norwich and the site, if developed in isolation, might be most conducive to housing.

Yet, if the City Council decided to purchase the 61 acres along the Thames River, the city would have control over the property and could reap the benefits of working with its municipal neighbor if the entire former hospital property is developed.

About 40 people attended a Norwich Site Development Committee meeting Tuesday that discussed purchasing the property that abuts 390 acres in Preston, already controlled by that town.

The meeting was one of the first public discussions about the potential uses for the property, remediation costs and grant funding, all elements that city officials must consider before telling state officials by Jan. 24 whether they want the land.

The deal seems sweet: 61 acres mainly overlooking the river for $1. But like its counterpart Preston, the cost of owning the property is much greater.

Preliminary environmental assessments on the site suggest it could cost from $5.5 million to $13 million to remediate the property - including either demolishing or renovating some of the existing structures and removing contaminated soil.

Analysis of the site suggests that only half the property is developable because of the steep terrain and its greatest potential for development is housing.

Lawrence A. Kenney, senior vice president of AMS Consulting LLC, said development opportunities expand if the property is joined with the 390-acre portion now owned by Preston.

Kenney said residential projects have a modest to good chance of being built, while industrial, large commercial and office space were less likely. The possibility of educational and medical facilities is unknown; Kenney said the market for the two later developments is difficult to predict.

Architect James Coleman did not recommend any specific development and said he evaluated the two properties as one site. He stressed the need for a mixed use and diversity of projects on the site and for it to be pedestrian friendly.

Coleman said the layout of the site should be community-driven, not developer-driven, and that there should be a system of roads, public and private spaces that provide opportunities for multiple developers and developments.

Committee Chairman Robert Mills, who is also the executive director of the Norwich Community Development Corp., said the community will have the annual costs of securing, insuring and maintaining the property - between $250,000 and $350,000. The city will also have to spend money to complete the environmental studies and possible draft a Remedial Action Plan that details how to clean the property, a potentially added cost of up to $100,000.

Following Preston's lead, the Norwich committee is closely watching and tracking grants available for the property.

In Preston, the redevelopment agency has obtained about $320,000 in state and federal grants. The agency will submit three more applications for $200,000 a piece for federal brownfields funding in mid-October.

m.bard@theday.com