Rejected loan proposal halved, will return to voters

By Janice Steinhagen - Staff Writer
Preston - posted Mon., Dec. 3, 2012
This map outlines the areas of the former Norwich Hospital site to be remediated next with funds from a projected grant. Photo by Janice Steinhagen.
This map outlines the areas of the former Norwich Hospital site to be remediated next with funds from a projected grant. Photo by Janice Steinhagen.

Efforts to breathe new life into the former Norwich Hospital site hit another snag last week, when Preston voters turned down an $8 million loan proposal to rehabilitate the site. It was a major setback for the project, said town officials. “We would have ended up with 80 percent of the footprint demolished and abated,” said Preston Redevelopment Agency Chairman Sean Nugent.

Voters rejected the measure by a 261-319 vote, a low voter turnout despite the agency’s efforts to post information on the loan on its website and to hold four informational meetings on the loans, Nugent said. “We had about 20 people show up to each of them,” he said of the meetings. The rejected proposal would have required the town to match a $4 million state Department of Economic and Community Development loan through the sale of bonds, but would have qualified the town for an additional $964,000 grant from the U.S. Economic Development Administration.

Rejection of the state loan meant that the town also missed a Dec. 1 deadline for the federal grant. It’s unlikely that grant money in that amount will be available again anytime soon, said Preston First Selectman Robert Congdon. The EDA grant “was what I call a home run ball,” he said. “We were moving along nicely, but when someone offers you something on a silver platter [and it’s rejected], it doesn’t have a good effect on the relationship. With the state budget constraints we’re looking at now, it could be a good long while” before such substantial grants are available again.

Now agency officials are looking at a more piecemeal approach. A Dec. 18 referendum has been scheduled to seek voter input on a plan that would essentially cut the rejected plan in half. Under the new proposal, the town would allocate $4 million toward the brownfields remediation project at the site, accepting $2 million in state funds and funding the remaining half through town bonds.

The town is also seeking more federal grant funds to continue chipping away at demolition in a piecemeal manner. The agency conducted a public hearing the day after the vote, taking comments on its application for grants to remediate three separate parcels on the property, totaling 8.22 acres.

Congdon said that the town currently has $825,000 in grant money available for assessment and cleanup of the site, which covers a total of 393 acres in several detached parcels. Preston has received $500,000 for the project from the Small Town Economic Assistance Program (STEAP), as well as $1 million from the state Office of Policy and Management Urban Act funds.

At present, 22 of the site’s 58 structures have been demolished, which amounts to 17 percent of the total enclosed square footage on the hospital campus, Nugent said. The grant application currently on the table would bring that total up to 25 percent, he said.

Norwich State Hospital housed patients with mental illnesses from 1904 through 1996, when it closed its doors permanently. Since the town acquired the site from the state for $1, its fate has proved to be problematic. Efforts to attract developers to the site, now known as Preston Riverwalk, have been hampered by the presence of the deteriorating structures and environmental pollutants.

“Developers were interested in the property, but once they saw the clean-up work, it was too much,” said Nugent. “They’re looking for shovel-ready [sites].”

Despite the hurdles, “it’s still our intention… to look at being able to sell multiple parcels to different developers,” Nugent said. “We will continue to market and socialize the property as best we can.”

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