Norwich — Republican Mayor Peter Nystrom announced his bid for re-election to a second four-year term as the city's top elected official Friday, outlining achievements of his first term and challenges ahead with the struggling economy and budget difficulties.

"My enthusiasm for serving as mayor of Norwich has never been higher," Nystrom said Friday.

He admitted that the economy continues to be difficult, especially with the state budget deficit resulting in declining aid for cities and towns. The city's grand list dropped in 2012, and state grants to the city could decline further.

"Of all the candidates running for mayor, I have the most experience in dealing with these difficulties," he said.

Nystrom becomes the first of three mayors to seek re-election since the 2001 charter change created the mayoral position. Republican Arthur Lathrop and Democrat Benjamin Lathrop each chose to serve only one term.

Nystrom joins formally announced mayoral candidates Democratic Aldermen Charles Jaskiewicz and Deberey Hinchey. Libertarian William Russell is petitioning for a spot on the ballot.

Nystrom listed as a second-term goal a joint venture with the chamber and the Society of the Founders of Norwich to create a tourism visitor's center connected with the Last Green Valley National Heritage Corridor at the Leffingwell House Museum.

The city's economy struggled during Nystrom's first term, although two city landmarks — the Marina at American Wharf and the former Norwichtown Mall, now Norwichtown Commons — found new life with new owners and multimillion-dollar renovations.

With his own initiatives, Nystrom saw mixed results, both with the public and the City Council.

Residents last November soundly defeated a $33 million plan to renovate the former Sears building and incorporate several surrounding vacant lots for a new police station and parking garage. A newly formed committee of residents is again studying a possible location for a new police station.

In November 2010, voters approved a $3.38 million downtown revitalization bond designed to entice new and existing businesses to relocate downtown and enhance the city's urban center through matching grants and loan programs. But interest has been weak, and few grants and loans have been awarded.

Nystrom said he continues to support the downtown programs with some revisions to be proposed soon, and said raising the downtown tax base is critical for the city. On Friday, he proposed creating a downtown development plan that would encompass both city-owned properties and vacant, privately owned properties.

"Completing a redevelopment plan in downtown will allow us to bring additional financial resources to the table to encourage further investment," Nystrom said. "This builds on what we have already started with the downtown bond programs."

The City Council refused to support one $5 million bond that Nystrom proposed to upgrade infrastructure along the Thames River and Norwich Harbor, which Nystrom said would have brought new investment to the Shipping Street former industrial district.

Shortly after that defeat, longtime Norwich Business Park firm, Collins & Jewell Co. Inc. — which considered moving to Shipping Street — announced it would move out of the city.

Nystrom said through his and Norwich Public Utilities efforts, another business park company, Gunther International, decided to stay in Norwich. City officials also have obtained a state grant to help the Nutmeg Companies look for a new location and move out of its flood-prone Yantic River property.

Nystrom, who has worked as a driver for United Parcel Service for almost 20 years, has a long political record in the city.

He served five years on the City Council, from 1979 through 1984, prior to his election as the 46th District state representative. In a heavily Democratic city, Nystrom won re-election easily in most subsequent elections and served in the House of Representatives from 1984 to 2002, when he unsuccessfully challenged popular Democratic state Sen. Edith Prague, D-Columbia.

Nystrom was elected again to the City Council in April 2009, filling a seat vacated by former Republican Alderman Christopher Coutu. He defeated three other candidates for mayor that November.

c.bessette@theday.com