Preston — The Board of Selectmen on Thursday approved the new agreement with state agencies that will allow the cleanup to resume at the former Norwich Hospital property to prepare to turn the property over to Mohegan Gaming & Entertainment for proposed major development.

The agreement among the town, Mohegan Tribe and state Department of Economic and Community Development was approved Tuesday by the Preston Redevelopment Agency and has been signed by DECD Commissioner David Lehman.

The agreement resolves several issues that have delayed the cleanup since the spring of 2019, when the town discovered extensive previously undocumented coal ash contamination beneath parking lots, roadways and sidewalks.

Last summer, the state provided a $7 million grant to be added to a $2 million loan the town had secured previously to finish the cleanup. The state legislature affirmed that the town could use the state grant before tapping into the loan.

The new agreement allows the town to expand previously designated consolidation areas to place the ash and allows the town to use $5 million of the state grant to clean the property to the point where it can be conveyed to the tribe. The remaining $4 million will be placed in escrow to be used for further cleanup based on specific development plans.

PRA Chairman Sean Nugent outlined the history of the two-year impasse, along with the new agreement for selectmen Thursday. “I think it’s important that all three parties have the same end in mind, that we convey the property,” he said. Previously, he said, the three parties had different end goals in mind.

c.bessette@theday.com