State frees Preston from confines of original Norwich Hospital agreement

Preston — The town may now sell portions of the 390-acre former Norwich Hospital property without proving to the state that the entire campus has been cleaned or posting a bond to cover the entire cleanup cost.

State officials have given final approval of a long-awaited amendment to the town's original purchase and sales agreement with the state for the hospital property. The original agreement called for the town to clean the entire property before parceling out sections for sale. But from the start, state officials told town leaders they would consider changes to the provision.

State Rep. Tom Reynolds, D-Ledyard, and state Sen. Andrew Maynard, D-Stonington, both of whom represent Preston, announced Wednesday that all state approvals for the amendment had been secured.

"This amendment will empower the Preston Redevelopment Agency to pursue cleanup and development with much greater flexibility and in multiple phases over a multiyear period, which is the only viable path to progress in today's economic climate," Reynolds said.

Local legislators were required to secure approval of the amendment by the state Department of Administrative Services, State Properties Review Board, the legislature's Finance, Revenue & Bonding Committee and Government Administration & Elections Committee, Office of Policy & Management, and the Attorney General. The Attorney General, the final approving authority, signed the amendment this week, Reynolds and Maynard said.

First Selectman Robert Congdon said the efforts by Reynolds and Maynard were key to securing the amendment town officials have sought since the initial agreement was approved in 2009.

"It's great news that we're finally getting to that point that we can now talk to developers in concrete terms about parceling the property," Congdon said. "It takes away the huge hurdle if, for example, a hotel developer came in for 10 acres. The town wouldn't have to bond for the entire cleanup. It's great news for the town, and it gives the redevelopment agency some real valuable tools to work with."

The final piece of paperwork now is in the hands of the state treasurer, PRA Chairman Sean Nugent said. That includes a map with the various development parcels defined.

The PRA is in negotiations with JHM Financial LLC of Stamford for an undisclosed development agreement for the former hospital property. Nugent said he discussed the amendment with the firm Wednesday after learning of the state approvals.

The PRA hopes to complete negotiations with JHM by the end of April and present results to the town.

c.bessette@theday.com