Preston — The state Bond Commission on Tuesday approved $7 million for the final cleanup of the 393-acre former Norwich Hospital property needed before it can be turned over to Mohegan Gaming & Entertainment for a planned major development.

The commission approved the funding without discussion, said state Sen. Cathy Osten, D-Sprague, who led the effort to secure the grant.

“Thank goodness,” Osten said Tuesday. “I am so excited about this.”

The $7 million will be held in escrow by the state Department of Economic and Community Development pending an agreement with the town on a cleanup plan and disbursement schedule. Town officials will discuss next steps during a conference call Thursday with DECD officials.

The bond money, combined with a low-interest state loan the town previously had secured, is expected to complete the cleanup of extensive coal ash contamination throughout the 393-acre property. The state had used ash, from a coal-burning plant, beneath roads, parking lots and building foundations.

The contamination was discovered last fall, as new First Selectwoman Sandra Allyn-Gauthier took office following the retirement of 24-year First Selectman Robert Congdon.

Allyn-Gauthier said she was “very excited” at Tuesday's funding approval. “This is the step we’ve been waiting for,” she said. “Hopefully, we’re going to be able to start back up in late summer, early fall.”

Congdon called Tuesday’s vote a “huge step” toward getting the property ready for development. The town took ownership of the property in 2009.

“This provides us with the funds that we needed,” Congdon said. “The Mohegans are committed to taking the property. Hopefully, we can get most of the work done while we have good weather.”

Most of the development parcels will be cleaned to a high standard for residential development and at least one parcel to commercial development standards, said Sean Nugent chairman of the Preston Redevelopment Agency overseeing the cleanup.

Nugent said if agreements with DECD can be reached smoothly on use of the grant and loan, work could resume in August. He said it could take 12 to 18 months from the start of work to complete the cleanup and obtain certification from the state Department of Energy and Environmental Protection to allow the town to convey the property to MG&E.

“I know people say, ‘you should be able to do it faster,’” Nugent said, “but Mother Nature does things to us, and the virus does things to us.”

DECD Deputy Commissioner Alexandra Daum said the agency and town officials need to iron out the scope and cost of the remediation in an assistance agreement governing how the funding will be dispersed incrementally. Thursday’s virtual meeting will start that process.

“We’ve always maintained a constant dialogue with the tribe,” Nugent said. “We don’t know their specifics, but we know they are as eager as we are to complete the cleanup and convey the property.”

"The tribal council is pleased by the leadership and foresight shown by Governor Lamont and can't wait for the cleanup to start again, and even more for it to be finished," Mohegan tribal Chief of Staff Chuck Bunnell said in an email statement Tuesday. "This was a big step forward for the region and state."

The General Assembly approved the $7 million as part of a $400 million bond bill on March 11, just before the legislative session and many government functions, including Bond Commission meetings, shut down or scaled back due to the COVID-19 pandemic.

“On behalf of the town and the PRA, I want to thank Gov. (Ned) Lamont,” Nugent said Tuesday. “It’s very much appreciated that he got this done during COVID. And special thanks to Sen. Osten and the other legislators in this region who supported this effort. And a special thanks to the tribe for sticking with us all this time.”

Preston’s delegation, state Sen. Heather Somers, R-Groton, and state Rep. Mike France, R-Ledyard, co-signed a letter Feb. 28 to Lamont supporting the Norwich Hospital funding. But while Somers voted in favor of the March 11 bond package bill, France was one of four representatives to vote against the package, citing objections to other funding in the package.

“The town of Preston should be congratulated for their persistence, and we appreciate that the governor recognizes the value of this wise investment,” Somers said in a statement following Tuesday's Bond Commission vote.

c.bessette@theday.com