Preston — A key breakthrough has been reached among town, state and Mohegan tribal leaders that could mean bulldozers can start rolling again by the end of November in the final cleanup of the former Norwich Hospital property.
The Preston Redevelopment Agency on Tuesday approved a term sheet that outlines the complex contractual agreement between the state Department of Economic and Community Development, the town of Preston and the Mohegan tribe, which will take over ownership of the property for a major redevelopment once the cleanup is completed.
The agreement must be approved by the Board of Selectmen, which will vote on it Thursday. That move would launch a final Financial Assistance Proposal, which all parties also must approve, along with a town meeting vote to accept a $7 million state grant for the cleanup. PRA Chairman Sean Nugent explained the agreements to the agency Tuesday.
The town previously had secured a $2 million loan toward the cleanup, bringing the final funding to $9 million.
The agreement clears up issues surrounding the cleanup, as well as how to pay for it, Nugent said.
Another problem had been that the cleanup deviates from state norms in that the tribe could not propose a final development plan until it owns the property, but the state normally requires a final development plan before approving a cleanup process. Instead, the parties agreed that the town would spend the first $5 million of cleanup funds, and the remaining $4 million, including the town loan if needed, will be placed in escrow to be used after the property is transferred to the tribe and specific development proposed.
With all the pieces nearly in place, Nugent said the PRA could secure town permits for the final cleanup and use the less than $1 million in previous state grant money to restart…
