East Lyme — The Elms Hotel remains unoccupied this week, after residents were evacuated from the more than century-old building in Crescent Beach following a power shut-off on Friday.

The town has deemed the building unsafe due to the lack of electricity. Meanwhile, the property owner, Kasey Inc., owes back taxes and the town plans to move forward with new liens to recover the costs associated with last week's power shut-off.

But a potential buyer said he plans to acquire, within the next two months, the property at 25-27 Ocean Ave. to build a three-lot subdivision.

The president of Kasey Inc., which is doing business as The Elms Hotel, is listed on the secretary of the state's website as Jude Cleary.

Connecticut Light & Power on Friday shut off electricity to The Elms Hotel for non-payment of bills.

"We're in the business of delivering electricity to local homes and businesses, so the last thing we ever want to do is disconnect anyone's service," said CL&P spokesman Mitch Gross in a written statement. "Out of respect for customer privacy, we are unable to discuss specific concerns regarding the Elms Hotel, however, we can say that we have repeatedly attempted to work with the owners for more than a year to help with programs and services, to no avail. Each customer's situation is looked at individually and unfortunately, in this case, disconnecting service was unavoidable."

Under state law, after the power goes off in a building or there are code violations, the property owner has four hours to repair the situation, said First Selectman Paul Formica. The fire marshal and building inspector found code violations, including a lack of egress from the rooms and the hallways.

He said the town enforced the fire marshal's order and moved the residents to the Niantic Motel on Flanders Road out of concern for public safety. He said having 30 to 40 residents in a building without power and without a working fire alarm would be unsafe, especially when the building is situated in a neighborhood close to other homes.

"It contributes to a very unsafe environment," Formica said.

The building is closed to the tenants, but the fire marshal gave the property owner the opportunity to enter the building at specified times to begin to assess the property, said Formica.

Building Official Joseph Smith said the owner would need to make repairs to the electrical meter socket, which is damaged and has heavy corrosion, and have CL&P restore power, before the town can lift the unsafe order.

Formica said the former tenants are safe. As of Tuesday, some residents were still in the Niantic Motel, while others were able to find lodging on their own. He said he will hold a meeting at a later point to update the former tenants on the situation moving forward.

In addition to the taxes and payments the property owner owes, the town is planning to place liens on the property to cover the costs of housing the tenants and providing police presence over the weekend to prevent people from entering, said Formica.

The Elms Hotel has been for the past year and a half in arrears on its real estate taxes to the town, representing an amount of $47,475.29. Its other debts include water bills and personal property taxes, according to the town's tax records.

Formica said the town has worked with the owner in the past, but it had become "apparent that the owner of the property was not able to work with us in good faith."

"When it became apparent, we just decided to go after the money that was due us," he said. "We were beginning the process and the negotiations are ongoing."

At the same time, a developer is also aiming to turn the property into a subdivision.

The Crescent Beach Zoning Board of Appeals partially approved subdivision plans this spring by granting the three-lot configuration but placed stipulations on the rear setback for one lot, according to a notice filed at Town Hall.

Robert Barbaro of Barbaro Property Management said Tuesday he is working with the owner and has spoken to the town. He is trying to work on the "legal logistics" to acquire the property, which could take about six to eight weeks.

"We're trying to work together so something will transpire," he said.

Cleary could not be reached to comment Monday or Tuesday.

Barbaro Property Management will need to come back to the board with its final plans, said Crescent Beach Zoning Enforcement Officer Stephen Rebelowski.

k.drelich@theday.com

Twitter: @KimberlyDrelich