East Lyme ― The Inland Wetlands Agency has gotten behind a push by the East Lyme Land Trust to preserve a 5.1-acre piece of land fronting Pattagansett Lake.

The proposal first emerged last month when land trust President Arthur Carlson said the town could buy the property or let a private developer put homes there. He was acting as middleman for investors represented by former resident Steve Harney, who earlier this year was instrumental in the town’s purchase of three different parcels for $2.3 million.

Carlson described further development of the lakefront area as a threat to the underlying aquifer that feeds one of the town’s largest public wells.

The wetlands agency in a Nov. 19 letter wrote in support of a grant application being submitted by the land trust to the state Department of Energy and Environmental Protection (DEEP) Open Space and Watershed Land Acquisition grant program.

In the letter drafted by Wetlands Enforcement Officer Gary Goeschel and signed by agency Chairwoman Kristen Chantrell, they said leaving the land undeveloped will help ensure water quality in the lake and will prevent the kind of surface water runoff inherent in residential development that could compromise the health of the sensitive hydrological system.

“This is true in all towns, but especially in East Lyme due to the location of municipal drinking water supply wells downstream, the town’s proximity to Long Island Sound, and intense water consumption during the summer months,” the letter said.

The ax-shaped property borders 120 acres the land trust sold to the town earlier this year as part of the multi-million dollar open space purchase. The land trust acquired the so-called Hathaway Property in 2022 from a limited liability company associated with Harney, with the company flipping from owner to lender.

Harney carved out the 5-acre parcel from the Hathaway Property before selling the rest to the land trust. In a Wednesday phone interview, he said he’s ready to unload it and reap the tax benefits.

Harney put a roughly $450,000 price tag on the land, which he said he offered to the town for $600,000 during negotiations on the original purchase.

“Everybody accused us of taking the best piece,” he said. “Now I’m offering it back to them for probably 30% less than I did two years ago.”

Asked why, the North Carolina transplant said it’s the right time for him and his fellow investors.

“Just because I want to get on with my life, and it really makes sense for me to do it tax-wise,” he said. “It’s just timing, because we’re not going back there.”

Harney said he is waiting for assurances from town officials that they’re interested in preserving the land as open space.

“If I have some confidence they’re going to do it, what I’ll do is sign a contract with the land trust,” he said, echoing the process that played out earlier this year.

The town would then buy the property from the land trust and turn over its grant award.

The land trust has until Dec. 2 to submit an application and until Jan. 6 to get an appraisal done, according to the DEEP. Grants can be awarded for up to 65% of the fair market value.

Possible audit problems

Among the requirements are proof of audits going back three years for any organizations that received state grants amounting to more than $300,000.

The land trust in 2020 was awarded $560,000 for what was then called the Nehantic Nature Preserve, spanning 320 acres on the Montville border.

The DEEP as of June was not aware of any audits having been submitted, according to a spokesman. The online state reporting system does not show any filings since then.

The agency on Wednesday could not provide updated information about the land trust’s compliance with the audit requirements.

Carlson in a Wednesday phone call said he doesn’t know if an audit is being prepared.

“We can’t skip it,” he said. “I just don’t know the status, and who are the people working on it.”

He said the land trust is in the process of reorganizing after the death of president Ronald Luich last year.

“It’s very difficult with small organizations when only one or two people take the lead,” he said. “When one of them passes, it gets very confusing.”

First Selectman Dan Cunningham on Wednesday said he hopes to visit the site soon.

It’ll be up to the Board of Selectmen to see if there’s an appetite among taxpayers for buying more open space.

“I think we’re still kind of thinking about whether this is something the town wants or needs, or not,” he said.

e.regan@theday.com