New London - Mayor Daryl Justin Finizio said Friday he's willing to let a dispute over a proposed housing project in Fort Trumbull play out, but he plans to more aggressively pursue giving the city the lead in future development of the waterfront development area.

"The city doesn't intend to do anything more to appease the developers of Fort Trumbull,'' Finizio said. "The city has done everything to ensure the project is successful. ... Our part of the agreement has been met. It's now up to the developers to get adequate financing."

On Thursday, the Renaissance City Development Association found Riverbank Construction in default of its contract for failing to close on the first phase of the $24 million Village on Thames housing project by the May 17 deadline.

The RCDA and Robert and Irwin Stillman, owners of Riverbank, disagree over the details of a self-financing plan proposed by the Stillmans for about $6 million to build the first 34 of the proposed 103 units.

"In working with Robert Stillman, I believe this is a good project,'' Finizio said. "If the financing can be shown, I think it will be good for the city."

Because of possible liability, Finizio said he could not comment further on the project. But he added that he does want the city to be in charge of development at Fort Trumbull and said he's talking to the governor and the state Department of Economic and Community Development about city staff controlling the 90-acre Fort Trumbull Municipal Development area.

The New London Development Corp., which is now the RCDA, has overseen redevelopment of the area for the past 13 years. Under its watch, all the structures in Fort Trumbull, except for an office building and the Italian Dramatic Club, were torn down to make way for a conference center and hotel, an athletic club, new office space, housing and parking. But a prolonged legal battle over the city's use of eminent domain for economic development reasons, which the city won in U.S. Supreme Court but lost in the court of public opinion, stalled new construction on the site.

Village on Thames would be the first new construction since the development project began around 2000. Its groundbreaking was supposed to trigger a larger transition that would put more responsibility for the property with city staff and away from the RCDA, Finizio said.

RCDA President Michael Joplin, of Chester, agreed to step down after the groundbreaking and allow Linda Mariani, a New London attorney and resident, to take over the agency, Finizio said. He said he wants to move the city's development office into City Hall, provide the RCDA with a desk, and create a more cooperative working relationship.

"The time has come," he said. "We don't want to force a transition. I hope it can be accomplished in a cooperative way."

But Finizio admitted that untangling the legalities of the site is daunting, and he will be looking for legal opinions on what the city accomplish. "It's time to put all the properties in the city's name,'' he said. "Any development agency should be working for the city, not the other way around."

Meanwhile, Riverbank has 10 days to respond to the RCDA's letter of default. If Riverbank addresses the RCDA's concerns, the project can move forward. If not, according to the agreement, both sides must sit down face-to-face to discuss the dispute. An arbitrator also can be brought in to mediate.

Riverbank was set to take ownership of two parcels of land from the RCDA on May 17, and a groundbreaking was supposed to go forward on May 20 for 34 two- and three-bedroom homes that would be rented if they could not be sold as condominiums.

The proposed housing would be located on land formerly occupied by the Naval Undersea Warfare Center and not on any property that was taken by eminent domain.

k.edgecomb@theday.com