Norwich — Yet another effort will be made to renovate and revitalize the long-vacant Reid & Hughes Building on Main Street, with the Norwich Community Development Corp. standing by to take over the property if the effort fails.

Heritage Housing Inc., co-owner of the Wauregan Apartments building at the corner of Main Street and Broadway, has entered into a purchase and sale agreement with the current owner of the Reid & Hughes at 193-201 Main St. across the street and will investigate the feasibility of developing the historical building.

The plan would call for 17 market-rate apartments, with retail spaces at street level and no work in the basement that opens to the rear parking lot. In November 2020, Heritage purchased the income-restricted affordable housing Wauregan Apartments from former owner Becker + Becker Associates, which had saved that building from partial collapse and possible demolition.

“It is a special building,” David McCarthy, founder and president of Norwalk-based Heritage Housing Inc., said of the Reid & Hughes in an email response to questions from The Day.

McCarthy said he could not provide detailed plans yet. Heritage entered into the purchase and sale agreement under the name Heritage Reid & Hughes LLC in early March. He said there is demand for market-rate apartments in downtown Norwich.

“We receive many inquiries for apartments at the Wauregan from applicants who are above the income threshold to qualify for affordable housing,” McCarthy wrote in the email. “And we think it would be great to have a companion property in that location that could provide housing options for these renters.”

If the plan proceeds, work could begin later this year or in early 2023.

The NCDC board of directors agreed on Thursday to become the fallback owner if Heritage cannot make the project work. The board on Thursday approved a two-page resolution authorizing NCDC President Kevin Brown to negotiate a “Put Option Agreement” that would call for NCDC to take ownership of the Reid & Hughes but without taking on any financial liability from Heritage’s investment in the project or any of Heritage’s debt incurred on the building.

“Nothing is risk free, and I know there are folks who will roll their eyes and say, ‘oh here we go again with the Reid & Hughes,’” Brown said. “If this fails, then we along with the city will figure out what happens to the Reid & Hughes.

Heritage hopes to obtain federal historic preservation tax credits, obtain a brownfields grant for environmental cleanup and “a possible commitment from the City of Norwich for a loan,” along with other financing, the NCDC resolution stated.

Mayor Peter Nystrom said city officials have been discussing the idea with McCarthy for about the past year. He said the Wauregan owner has a vested interest in seeing the project succeed in that it would add value to the Wauregan with an improved view from its front windows across Main Street.

“This is a new player here in the city of Norwich,” Nystrom said. “He is a principal owner of the Wauregan. He understands real estate values and understands the benefit of that would be to his property. We need more market rate units in downtown.”

The 1880 Reid & Hughes, once a marquee department store, has been vacant for decades and the subject of several failed proposed renovations over the years. The city took ownership from NCDC in 1993 but neglected the worsening leaking roof that nearly signaled the end for the building.

Development proposals came and went, including one to place an architectural antiques business there. A complex deal in 2017 with the Women’s Institute for Housing and Economic Development seemed to save the building from the wrecking ball at the 11th hour. With a $150,000 contribution from the city in 2018, the Women’s institute completed a $500,000 stabilization, replacing the roof and sealing the building against the weather.

But nearly a year into the COVID-19 pandemic, in December 2020, the Women’s Institute announced it was backing out of the project. The nonprofit retained ownership under the name Women’s Institute Realty of Connecticut.

The NCDC resolution gives Heritage 12 months to decide whether to proceed or invoke the put option with NCDC, the agency’s resolution stated. Mayor Nystrom said he is optimistic Heritage will go forward with the project.

"We’ve been in discussion with him for some time,” Nystrom said of McCarthy. “We’re looking to finally close that chapter of development in downtown.”

c.bessette@theday.com