Final Norwich Hospital cleanup now pegged at $9 million

Preston — The final cost to finish the environmental cleanup of the former Norwich Hospital property is now projected at $9 million, and while town and Mohegan tribal leaders hope for a quick response to their request for state funding, the issue is tied up in the stalled overall state budget bond package yet to be put before legislators for a vote.

Town and tribal officials, local state legislators and representatives from the governor’s office, the state Department of Energy and Environmental Protection and Department of Economic and Community Development participated in a 90-minute telephone conference call Monday to discuss the town’s funding request and the delayed schedule to finish the cleanup and turn the property over to Mohegan Gaming & Entertainment.

Chuck Bunnell, chief of staff for the Mohegan tribe, said the tribe is working on “some exciting” potential projects at the property, and the Tribal Council is receiving “some pressure” from potential developers seeking time estimates for the final cleanup.

“Everyone is a little anxious,” Bunnell, who participated in Monday’s call, said Tuesday. “Already, it’s longer than we anticipated, and more expensive.”

The cost estimate to finish the cleanup is now projected at $9 million, including a $2 million low-interest loan the town previously had received from the state and a $7 million grant request to the state. Town officials have said they will not tap into the loan until receiving a commitment from the state for enough grant funding to complete the cleanup.

The final projected cost soared beyond the $10 million state grant approved in 2017 after environmental cleanup crews discovered what Preston Redevelopment Agency Chairman Sean Nugent in the past has termed the worst-case scenario: much more extensive contamination beneath the surface than expected. In decades past, the state apparently used coal ash from its on-campus coal-burning power plant as sub-surface material beneath parking lots and roadways that snake throughout the campus.

And, if the town is required to remove all underground electrical wires, water and gas piping, that would add to the final cost as well, First Selectman Robert Congdon said Tuesday.

Although the development conceptual plan calls for mixed-use development, including senior housing, hotels, sports and recreation facilities and retail stores, the agreement between the town and tribe calls for the entire property be cleaned to the highest “residential standard,” officials said.

Congdon said participants in the phone conference call talked about the town’s dilemma of needing to finish the cleanup before turning over ownership of the property to Mohegan Gaming & Entertainment for its planned taxable major development.

But the DECD currently has no cleanup funding available for the Preston property or for three other state or former state properties on a priority list needing brownfields funding for cleanup.

In a follow-up to Monday’s meeting, DECD Deputy Commissioner David Kooris on Tuesday provided an update to state legislators in the conference call estimating the four properties need a combined rough estimate of $20 million in cleanup funds.

Kooris said Tuesday that Preston’s grant request must be part of the state bond package, because all other available cleanup funding has been exhausted. He also said the town’s environmental consultants will try to find ways to cut the cleanup costs.

State Sens. Cathy Osten and Paul Formica and state Reps. Mike France and Chris Soto participated in Monday’s call.

Formica, R-East Lyme, said funding for Preston is just one example of essential municipal funding held up in the stalled bond package he said should have been approved before July 1. He complained that minority-party Republican state legislators have not been provided information about the bond package, which also contains vital town road grant money and now money for municipalities to buy salt and winter supplies. The package has not been presented to legislators for a vote.

Osten, D-Sprague, said the legislature’s Finance, Revenue and Bonding Committee has not met to discuss the bonding package, so there would be no proposal to present it to other legislators.

While action by the governor’s office or state legislature is out of the town’s or tribe’s control, the two parties were asked to meet with their respective environmental consulting firms — Tighe & Bond for the town — to try to find ways to cut the projected cleanup costs and tie the cleanup to a specific development process.

Congdon said the tribe would be reluctant to alter its agreement with the town to take ownership before the cleanup is completed without first receiving a commitment from the state that if a development is ready to go forward, the state funding would be provided.

“It’s a double-edged sword,” Congdon said. “If you say: ‘Tribe, take the property as is now, and do the cleanup as part of development,’ there needs to be a mechanism to protect the tribe, some funding source in place for the cleanup.”

Congdon, Nugent and Bunnell all said they were encouraged by comments made during the phone conference that state agencies and legislators support the town’s request for state grants for the final cleanup.

“Everybody on the call was looking for a way to (say) ‘yes,’” Nugent said.

Formica and Osten echoed that position Tuesday.

“This is a state-created situation that needs a state-created solution,” Formica said Tuesday. “I’m sure that it would all be wrapped up in a bond package that is yet to be brought before the General Assembly for a vote and signed by a governor. There was consensus by those of us on the call to be supportive of our brownfields dollars to ensure that Preston needs to be made whole. The bond bill should have been done on July 1. The delay on the bond bill is causing all kinds of complications for cities and towns.”

“I think we should clean up the property to the standard we said we would,” Osten said. “We made a commitment to do that. They need to know, and they don’t want to borrow the $2 million without a commitment for the rest of it. We have to accept this.”

Congdon, who is set to retire Nov. 19 after 24 years as first selectman, said the parties hope to have answers to some questions, including whether cleanup costs can be reduced, within the next week.

“We’ve got all homework assignments to do this week, and we’ll get back together the end of this week or next week at the latest,” Congdon said.

c.bessette@theday.com

Editor's Note: The agreement between the town and tribe calls for the entire property be cleaned to the highest “residential standard,” officials said. Information was incorrect in an earlier version.

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