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Bond Commission to vote on $7 million to finish Preston Norwich Hospital cleanup

Preston — The state Bond Commission is expected to vote next week on the $7 million needed to finish cleaning up the former Norwich Hospital property, four months after the General Assembly approved the funding on the eve of the state shutdown due to the COVID-19 pandemic.

The funding was requested by Preston town officials after environmental crews discovered extensive coal ash contamination throughout the property. The state decades ago had used ash from a coal-burning power plant beneath roadbeds, parking lots and building foundations.

Once the property is cleaned, the town will transfer ownership to Mohegan Gaming & Entertainment, which plans a major development with commercial, recreational, residential and retail elements.

The General Assembly approved the grant on March 11 and Gov. Ned Lamont signed the bill two days later. Mohegan tribal leaders were preparing to receive proposed development plans for the 393-acre property when the coronavirus hit Connecticut and disrupted government and closed both Mohegan Sun and Foxwoods Resort casinos.

State Sen. Cathy Osten, D-Sprague, has led the push for the funding. Preston is not in Osten’s Senate district, but she said the former Norwich Hospital development is critical as an “economic development driver” for the entire southeastern Connecticut region.

“This bonding could not come at a better time,” Osten said Tuesday. “The region’s economy has been battered with unemployment, and tourism is at a standstill thanks to the coronavirus. This funding, which I have been seeking for more than a year, is the linchpin to private-sector development which is going to grow jobs and will be a regional engine for the economy once this pandemic has passed.”

If approved at the special Bond Commission teleconference meeting at 11 a.m. July 21, the $7 million would be provided through the state Department of Economic and Community Development and held in escrow to be used for pending remediation work “after a cost-efficient remediation plan is instituted,” the Bond Commission agenda states.

“Great news,” Preston Redevelopment Agency Chairman Sean Nugent said, “and we look forward to working with DECD to finalize the agreement documentation. Once that is done, we can begin the work again.”

The final remaining cleanup is expected to cost $9 million, including the $7 million state grant through the Bond Commission and the town’s preapproved, low-interest state loan for $2 million. Nugent said the final funding will allow environmental crews to clean up most of the development parcels on the property to residential development standards, and at least one parcel to commercial development standards.

Once the cleanup is done, the state Department of Energy and Environmental Protection would have to verify the cleanup was done to meet those standards, Nugent said, “at which time we can then convey the property to the tribe.”

"The Mohegan Tribal Council is excited to move forward on this regional development project once the site is ready for us," Chuck Bunnell, chief of staff for the Mohegan tribe, said in an email statement. "We appreciate the leadership by Governor Lamont that recognizes that we all stand to benefit by this moving forward."

In early March, Mohegan tribal officials said the tribe was expecting to receive a plan from a consultant to solidify the tribe’s conceptual plan for a $400 million to $600 million development on the property. The initial concept plan included sports complexes, a marina, recreation, hotels, upscale camping and senior housing. The tribe also is exploring a way to cross the river — such as a seasonal ferry, gondolas or a tram.

Osten thanked the Mohegan tribe for its “vision, commitment and patience,” and Gov. Lamont for recognizing the importance of the project and that it was the state’s responsibility to clean up the site.

“It’s always a win-win when we can clean up the environment and get a valuable, unused piece of land back on the local tax rolls, and back into private-sector development, with the ultimate benefit of more jobs for eastern Connecticut,” Osten said.

c.bessette@theday.com

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