East Lyme ― More than 100 acres of land in the Oswegatchie Hills currently owned by the East Lyme Land Trust have been put up as collateral in the conservation group’s bid to hold onto another property it considers the number one preservation piece in town.

The East Lyme Land Trust in September took ownership of 120 pristine, aquifer-heavy acres near Lake Pattagansett known as the Hathaway property for $2.3 million dollars. The seller, Hathaway Farm LLC, holds the mortgage for the land trust.

Now the land trust is hoping to pay off the loan on the Hathaway parcel by selling the organization’s stake in the 400-acre Oswegatchie Hills Nature Preserve to the town, which already owns the remaining 300 acres.

The primary stated goal among parties involved – which include the land trust, the town and a self-described “conservation intermediary” – is to keep the Hathaway property out of the hands of housing developers. Less apparent at this time are the unstated goals of these like-minded but conflicting entities.

The land trust began in earnest in September of last year to try to get the town to buy the 120 acres of the Hathaway property, then being pitched for $1.65 million. Numerous executive sessions were held by the Board of Selectmen with no outward progress.

First Selectman Kevin Seery on Friday said the Board of Selectman in executive session this week authorized Seery and selectman Dan Cunningham to meet with members of the land trust to discuss their proposal. He said he is coordinating a meeting to include attorneys representing the town and land trust.

Affordable Housing

The Hathaway parcel, which sits on an aquifer feeding one of the town’s wells, includes roughly 3,000 feet of waterfront on Pattagansett Lake and the Pattagansett River. It has figured prominently in the town’s overarching conservation plan since 2009.

Hathaway Farm LLC paid $1.05 million over a year ago before carving off almost 20 acres and selling the remainder to the land trust. Former finance board chairman and land trust member Steve Harney is the spokesman for the LLC.

“We’re going to go into a position of a lender or mortgage holder,” Harney said back in September. “I think what we’re going to do is give them the opportunity to really get a conclusive answer from the town on if they want to participate.”

Harney, the “conservation intermediary,” said if the land trust can’t make a deal, the mortgage holder can take the property back – but he added “that’s not the goal by any means.”

“If it doesn’t work, we’ll go in with affordable housing,” he said.

The state affordable housing statute makes it easier for developers to secure zoning permits for larger developments than they might otherwise get approval for, as long as at least 30% of the units are set aside at reduced rent for those with low and moderate incomes.

“At least the land trust has a chance to protect it,” he said. “If they don’t protect it and I take it back because of the structure of the bridge financing, then we’re just going to get an affordable housing project approved, because I think it brings the most value to the land if you’re going to develop it.”

He has said one interested developer so far produced a concept for a mix of 175 affordable and market-rate units that could include single-family homes, townhouses and a component for the 55-plus community.

According to Harney, the value of land is determined by what can be done with it.

“There’s no such thing as an obscene profit – because the markets define that,” he said. He suggested the town should have bought the parcel before he did if they didn't want to see him make money on it.

Harney said he doesn’t see the idea of affordable housing as a threat or negotiation tactic.

“There’s a screaming demand for that,” he said of housing options people can afford. “So is that a horrible thing? I don’t think it is.”

He said he is willing to work collaboratively with the land trust to give them time to secure funding to pay off the loan, but emphasized there is real urgency.

“They’re feet are to the fire,” he said of town officials. “Are we going to be heartless about it? No.”

The Hills

East Lyme Land Trust president Ronald Luich, when asked what would happen to the land trust’s share of the nature preserve if the town doesn’t purchase it, responded “we’ll go to Plan C, which we have not developed yet.”

Luich and East Lyme Land Trust vice-president Art Carlson said it’s logical for them to sell the Oswegatchie Hills property because it doesn’t fulfill the group’s focus on preserving the water supply like the Hathaway property does.

Carlson noted there are no conservation easements on most of the land trust’s portion of the Oswegatchie Hills Nature Preserve.

“That means, in principle, the land trust or whoever has the deed can sell it to anyone he wants,” he said. “It seems like a good time to talk about the town purchasing this to make Oswegatchie Hills whole.”

He said ownership by the town provides stability and continuity that the land trust won’t necessarily provide going forward.

“There’s no protection on that land. We don’t know who’s going to run the land trust ten years from today” or whether it will have merged with another entity, he said.

The preserve is bordered to the north by more than 230 acres owned by Landmark Development. The Middletown-based company, under developer Glenn Russo, has for decades been trying to get an affordable housing development with more than 800 units through the local approval process. Issues of sewer access and public opposition based on environmental impacts have dominated the long, litigious and unfinished battle.

Proponents of the Oswegatchie Hills Preserve have held from the beginning that their goal is to acquire Russo’s property. This year, state Sen. Paul Formica unsuccessfully appealed to the state bond commission for $10 million “to purchase two hundred forty-three acres to expand the Oswegatchie Hills Nature Preserve.”

Kris Lambert, president of the Friends of the Oswegatchie Hills Nature Preserve, said the land trust never reached out to her organization about using the property as collateral.

“The hills are being put at risk,” she said.

e.regan@theday.com