Norwich — The renovation of the massive Ponemah Mill complex into more than 450 apartments was cited by state and local officials Tuesday as the perfect example of how state brownfields cleanup grants should be used.

Lt. Gov. Susan Bysiewicz highlighted the project during a news conference Tuesday while standing in front of the second mill to be renovated. She said the $797,000 brownfields grant was one of $19 million in grants awarded to 31 projects in 23 Connecticut cities and towns.

“It’s a win for the environment. It’s a win for our communities. It’s a win for economic development and job creation, and it’s a win for communities like Norwich, who now get more productive properties on their tax rolls,” she said.

OneKey Inc. has completed renovations of the giant first mill in the complex into 237 market and affordable apartments, with 77 new units from the mill’s rear wing to come online in September, OneKey Director of Operations Finbar O’Neill said Tuesday.

The second building, which formerly housed Central Sports and Amazing Furniture, will be renovated into 141 units, with the front former furniture store planned for a restaurant, food market or other commercial space, O’Neill said.

Alexandra Daum, deputy commissioner of the state Department of Economic and Community Development, said the Ponemah application scored high on the main goals for the highly competitive state brownfields funds, garnering extra points as a historic mill renovation, for providing needed housing and for leveraging private investment dollars.

The state’s nearly $800,000 will contribute to a $40 million planned renovation, Daum said.

“Clearly, we’re looking at a beautiful mill,” Daum said of the property dubbed by Bysiewicz on Tuesday as the DECD brownfields czarina. “And the first phases have been done so well, so we’re looking forward to the next phase going in the same vein.”

The completed Ponemah units are 99% occupied. Daum, who has a background in real estate, said a 99% occupancy rate “just doesn’t happen,” calling it an “extreme demand.” O’Neill said there is a waiting list for new units.

State Sen. Cathy Osten, D-Sprague, recounted a bit of the history of the 1860s mill, with Irish immigrants making up the first workforce before a labor strike forced them out and brought thousands of French Canadian families to Taftville. Many of their descendants still live in the area, she said.

“Many mills get taken down, and we don’t see the value of them," Osten said. "But the sites here, the apartments here are beautiful, and they are perfect places for that next generation of workers that we have here that come from Electric Boat, that come from Pfizer, that come from the Sub Base. We are building up the workforce here in eastern Connecticut.”

Osten, chairwoman of the General Assembly Appropriations Committee, thanked OneKey developers Finbar and Paula O’Neill for “having a vision that takes a site from dilapidation to beautiful.”

O’Neill said the residents range from empty nesters to young professionals working in the region. He said he did not have statistics on where the residents work but said “quite a number” work at EB. Rents start at $1,005 monthly for a one-bedroom unit, according to the Lofts at Ponemah Mills website. Two-bedroom units start at $1,195 monthly and three-bedroom units start at $1,875 per month.

The brownfields money will be used to clean the building of asbestos and lead paint and to clean out coal ash from the rear of the property near the Shetucket River. The second mill has two stories in front facing Route 97 and three stories in the rear facing the river.

Work is expected to begin by the end of summer, and the renovations are expected to be completed and ready for occupancy by the end of 2022.

OneKey also purchased a commercial building across the street that had been the mill complex store and social hall. Nutmeg Pharmacy and Hair Do’s salon occupy spaces in the building, and O’Neill said he hopes to bring sandwich shops and other food service businesses to the site.

c.bessette@theday.com