A bumpy gravel road leads down a steep slope from Route 12 in Preston, across the Providence & Worcester Railroad tracks to a flat clearing at the Thames River bank.

Directly across the river, the Mohegan Sun Casino hotel tower dominates the skyline, the casino parking garages mark the foreground.

On this side of the river, the sprawling 390-acre historic former Norwich Hospital property is under transformation. Decaying buildings, rusted oil tanks and an obsolete powerhouse have been demolished. Overgrown brush has been removed from this roadway, giving new perspective on the beauty and economic and recreational potential of this much neglected former mental illness hospital campus.

A group of Preston volunteers is tackling the monumental task of turning that potential into reality, with a $20 million environmental cleanup bill and the worst economy in decades standing in the way.

The former Norwich Hospital property recently was named as the top environmental cleanup project in the entire southeastern Connecticut region in the new Comprehensive Economic Development Strategy plan. That placement could bring more attention and $1 million in federal cleanup grants to the property.

"We see it out our windows every day," Chuck Bunnell, chief of staff for the Mohegan Tribe across the river, said of the rapid progress Preston has made in the hospital cleanup effort.

The tribe was the first one interested in the property when the state of Connecticut closed it in 1996 and started seeking proposals. Time dragged on, and the Mohegan Tribe withdrew the plan. Since 1999, Bunnell said, tribal officials have met with everyone who had expressed interest in developing the campus - including the famously failed Utopia Studios plan.

"Since then, we looked at it with a desire to be a good neighbor with whomever could come in there and develop the parcel," Bunnell said. "We would hope to work closely with them to enhance the lives of people who call this region home."

Agency oversees cleanup

After watching the campus decay with more than a decade of neglect and failed proposals, Preston residents took a gamble on Feb. 24, 2009, with a 608-to-564 vote to take over ownership of the campus at the gateway to town from two major highways and the Thames River and get it onto the tax rolls. The town created the Preston Redevelopment Agency in May 2009 to oversee its cleanup and redevelopment.

The agency struggled at first, with membership and leadership turnover and frustration at rejections of cleanup grant applications and failed negotiations with major prospective developers.

But on Feb. 17, 2011, the agency celebrated its first successful federal Environmental Protection Agency cleanup grant and broke ground with the start of actual work on the property renamed Preston Riverwalk.

The bulldozers haven't stopped since. More grants came in and as salvage values soared, demolition contractor Manafort Brothers Inc. was able to tear down buildings at no cost to the town. Public Works crews cleared that old roadway to the river, and P&W Railroad has agreed to restore an old crossing over the tracks to give the town access to the water.

Meanwhile, the PRA put out requests for development proposals in the worst economy in decades. The agency remains in closed-door negotiations with Stamford development firm JHM Financial LLC on an undisclosed mixed-use project for the property. Separate negotiations are under way for a brokerage agreement with the PRA's hired real estate consultant firm Jones Lang LaSalle for future marketing of the property.

This spring, these volunteers will give a progress report to their "bosses" - Preston residents. The PRA anticipates making public presentations in April to residents to update progress on the development talks and seek approval for up to $4 million in town funds to match millions in state grants and loans for the cleanup.

Volunteer PRA members have dedicated what amounts to fulltime hours every week on the hospital property project.

Member Frank Ennis works daily with Manafort Bros. staff keeping track of demolition plans and any issues that arise.

Security a concern

PRA member John Harris, a Mohegan tribal member, is in charge of security, a monumental task on the campus that has been ransacked by vandals and metal thieves for a decade. The PRA has had to create a letter code system to discuss demolition plans in public, because they've learned if demolition of a specific building is announced, vandals appear instantly to strip it of whatever valuables remain.

Even with the Manafort security fence surrounding the heart of campus, Harris, town Public Works crews and the town's two resident state troopers frequently chase away trespassers.

PRA member Jim Bell is in charge of grant writing and funding, working closely with Town Planner Kathy Warzecha on complex federal and state grant applications that have brought the town $3 million to date - with $245,000 in town matching funds. The town also received approval of up to $4 million more in a low-interest state loan that would require an equal town match.

Four federal grant applications for a combined $800,000 are pending, and thanks to the recent top priority listing in the regional plan, the town is eligible to apply for another $1 million federal grant from the Economic Development Agency.

"The key in a bad economy is to clean it up," PRA Chairman Sean Nugent said, "and we knew we had to get funding to clean it up. It was a slow process. It was a learning curve for us in that too. There were a number of rejections that were difficult for the agency to swallow at first."

While the entire process is taking longer than the PRA's own initial ambitious two-year timeframe, the progress in the past year since the agency broke ground Feb. 17, 2011, on the first demolition project, has been a whirlwind.

To date, 16 named buildings have been torn down at Norwich Hospital, along with several smaller outbuildings that weren't even on the map. Manafort has agreed to tear down whatever buildings possible for salvage value alone - even shaking the crumbled concrete to extract metal support cables and beams.

The activity has cleared large chunks of the property, revealing picturesque river views on the rolling hillside. Across Route 12, two old cottages and a four-bay garage have been removed, giving a view to the former campus reservoir, where employees used to swim on weekends.

Admin building saved

In the future, this area could be reopened for fishing and passive recreation for town residents, but not for swimming, PRA officials said.

The PRA has determined the campus' first building, the former Administration Building, is the only one that can be saved for redevelopment. In here, the floors and walls are solid without so much as a creak.

Broken windows have been boarded and the roof shored up against the winter. The town even managed to obtain an ornate fireplace mantel and surrounding woodwork that the state had removed from the former superintendent's office. When the building is restored, so will be the fireplace mantel.

"I think it's incredible what they've done," said First Selectman Robert Congdon, an ex-officio member of the PRA. "You have to remember, these are volunteers working on this. They have done a tremendous service to the town."

Outside observers agreed.

Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, called Norwich Hospital a major economic development site for the region.

He expressed anger that the state allowed the site to crumble for 15 years with little regard for its importance to the region. He noted that Gov. Dannel P. Malloy seemed to apologize for that neglect and has responded to Preston's request for assistance.

"My hat's off to Preston for taking this on," Sheridan said. "It has enormous potential for the region."

c.bessette@theday.com

The people behind the Preston Redevelopment Agency

The Preston Redevelopment Agency has 10 volunteer regular members, including five who serve on the Operations Team that pays close attention to the daily progress of demolition, security, grant applications and other issues.

Here is a brief look at a few of the volunteers who spend many hours working on the project.

• John Harris, 58, has lived in Preston since 1989 and is chairman of the Preston Housing Authority and has served on the Preston Redevelopment Agency for the past two years and serves on the PRA Operations Team.

Harris oversees hospital campus security. He is a Mohegan tribal member and updates the tribe on progress at the former Norwich Hospital property.

Harris was manager of the separation science pilot plant at Pfizer Inc. in Groton before he was forced into retirement in mid-February after 35 years with the company. He ran a small construction company for 25 years while working at Pfizer, which helps him understand Norwich Hospital issues.

Both of his parents worked at Norwich Hospital for years and retired from there. "I knew and understood the place," Harris said. "It was like Conn College. It was well taken care of. The campus was beautiful. It's very strange to see it now. It hurts a little."

• Jim Bell, 69, has lived in Preston for 34 years. He has served on the PRA for two years, is currently vice chairman and serves on the PRA Operations Team. He also is co-chairman of the town Emergency Services Advisory Committee.

Bell's responsibility on the PRA is funding, finding grants and loans. The agency was nearly done spending the first four federal EPA grants when new state funding was approved, and the PRA has applied for four more federal grants while negotiating grant and loan agreements with the state.

Bell was vice president and treasurer of Franklin Press in Norwich, where he worked for 25 years. He then taught graphics communication at Norwich Regional Technical High School and retired from there three years ago.

• Sean Nugent, 59, has lived in Preston since 2004 and has been a member of the PRA since it was established in 2009. Nugent was asked to serve on the new panel by First Selectman Robert Congdon because of his professional background. Nugent has an advanced degree in organic chemistry and has worked for 28 years in the pharmaceutical industry. He was senior manager of science for 16 years and has spent the last 10 years in facilities operation and global strategic facilities planning at Pfizer Inc., and for five years was responsible for research and development worldwide for Pfizer.

Nugent retired in March 2011 and started a business with a friend, iLAB Technical Facilities Solutions, which focuses on laboratory design.

Nugent said progress on Norwich hospital has been more difficult than expected at times, but is progressing well. Nugent took over as chairman last summer. "The town has been so involved in this for so long, even before owning it, there's a perception that the agency has been on this for 10 years," Nugent said. "But the reality is, the agency had its inception in May 2009. … I'm pleased with the work that the agency has done. It is not an easy task."

c.bessette@theday.com