East Lyme ― The Water and Sewer Commission in the course of its regular duties is being asked to answer a question crucial to the town development.

Will the town remain open for business or will it close its doors?

The introspection is being forced by the prospect of one of the largest developments in the town’s history. Plans for the 454-unit Niantic Village senior housing complex come at a time when town utilities engineer Ben North said there’s little, if any, capacity remaining in the system designed to send 1.5 million gallons per day of sewage to New London’s Piacenti Water Treatment Facility.

Officials said the choice is either halt all large development or figure out how to add capacity to the system.

North at a Water and Sewer Commission public hearing Thursday said the project, if approved, would likely be “one of the last major developments” in town until the capacity issue is addressed.

Pelletier-Niantic LLC earlier this year filed a request to secure enough access to the sewer system to accommodate 160 condominiums, 144 apartments, and a 150-bed assisted living section, as well as urgent care and radiology facilities open to the public.

The proposed site is made up of several parcels along Pennsylvania Avenue, about a half mile north of Town Hall. The cost of running a sewer line from the existing one on Main Street up to the proposed site would be paid by the developer.

New London attorney Bill Sweeney represented the New York-based senior housing developer at the hearing. He framed the capacity issue as one much larger than the development itself.

“The town cannot just simply close its doors. You need increased sewer capacity one way or another to fuel future growth and the success of the community in the years to come,” he said.

He suggested the commission can approve the request now and use the next two years to create a strategic, long-term plan for ensuring enough capacity going forward.

“A project of this nature and size does not get built nor does it go online overnight,” he said. “This is a multi-year, phased development that still needs local zoning and state traffic approvals before construction can even start, let alone be completed.”

He estimated construction would start two years from now, with peak demand realized in three or four years.

“Obviously, though, we need an allocation now to move forward with final design and permitting of the project,” he said. “This is a multi-million dollar effort and we need some assurance from the town that there is an allocation that’s been provided.”

North said there are 255,000 gallons per day of capacity not being used. But there are 312,249 gallons per day being saved for projects in various stages of completion that are either under construction, haven’t been built or haven’t yet opted to tie into the system.

That means the system has no capacity – or 57,249 gallons per day less than none – to offer to Pelletier-Niantic or a future applicant.

Oswegatchie Hills has much of the remaining capacity

Charles Ambulos, a longtime resident, asked how much flow was being reserved for a proposed development in the Oswegatchie Hills that has been fought at the local commission level and in state court for more than two decades.

The commission in 2018 granted Landmark Development its request for 118,400 gallons per day of flow after a protected legal battle. That’s how much developer Glenn Russo said he needed at the time for a proposed 840-unit affordable housing development, where 252 of the units would be offered at reduced rents for households with lower income levels.

At Ambulos' request, officials repeated the 118,400-gallon-per-day figure several times.

“Thank you,” Ambulos said. “I was a little hard of hearing. I just wanted to hear it again.”

Town officials and Sweeney had avoided mentioning the Landmark Development project to that point.

Landmark in 2020 filed a lawsuit against the commission to overturn a regulation giving developers four years to obtain necessary land use permits and tie in to the town’s sewer system before a sewer capacity allocation expires. The developer argued the regulation could prevent the company from accessing greater sewer capacity in the future. But the court last year threw out the case because Landmark hadn’t been harmed by the regulation and had no right to sue.

Landmark’s court-ordered allocation, which was requested before the regulation was changed, will remain available indefinitely.

The developer as of last year was preparing a final site plan application for submission to the Zoning Commission, according to court documents. A Superior Court judge in 2021 ordered the commission to take another at its denial of the project after Russo appealed.

First Selectman Kevin Seery on Friday said no plans for the project are being reviewed by the land use department at this time.

“How communities die“

Officials at the public hearing said options for increasing capacity could include renegotiating agreements with New London and Waterford or working with the state to access unused capacity at sites like York Correctional Institution, Camp Nett and Rocky Neck State Park.

Based on a 2021 tri-town agreement through which East Lyme and Waterford’s wastewater flows into New London’s treatment facility, the towns have to wait until 2026 to open negotiations for more capacity.

The two smaller towns last year agreed Waterford gets 30% of the 10-million-gallon treatment capacity of New London’s treatment facility while East Lyme gets 15%, or 1.5 million.

The issue of capacity came up shortly after the Water and Sewer Commission was forced to reserve a large amount of capacity for Landmark Development in 2018. At the same time, several large-scale developments were nearing completion: Costco, hundreds of nearby luxury apartments and 40 townhouses known as Rocky Neck Village.

Former utilities engineer Brad Kargl told The Day at the time that there would be “very little ability to allocate additional capacity.”

"But I just see that really running out in a fairly short time and then what do you do? Do you have to hold off on development until we figure this out? There is no real easy answer,” Kargl said.

While then-First Selectman Mark Nickerson suggested renegotiating capacity as part of the tri-town agreement set to expire in 2020, that’s not what ended up happening.

North on Friday said it’s his understanding negotiations did not result in additional flow for East Lyme because buying capacity without a plan to pay for it would have placed an undue burden on ratepayers. He also said there were no large developments looking to tie into the system at the time.

Seery, who serves as chairman of the Water and Sewer Commission in his role as first selectman, acknowledged there are going to be more developments that want to come to town.

“We’ve really tried to deal with this capacity question for quite a while and we realize there’s going to be a need to expand and request more,” he said.

Commission members are scheduled to deliberate on the Pelletier-Niantic LLC request March 28. According to Town Attorney Mark Zamarka, state statute requires the commission to make a decision by the end of the month unless the applicant agrees to an extension.

North after the public hearing said it appears clear to him the town does not have enough capacity to accommodate the development at the volume being requested.

“It’s really a discussion on what’s the path forward now,” he said. “Do we stop all large development and just hold onto what we have, or do we go to New London or Waterford and try to get more? Do we go to the state and see what they would want to do?”

Sweeney after the hearing put it this way: “What it’s really about is, communities that are successful and continue to grow have to have sewer capacity to allow for reasonable growth. You can’t just say ‘well, we’re out.’ It doesn't work. That’s how communities die.”

e.regan@theday.com