State seeks private developer to transform waterfront site

HARTFORD, Conn. - The state of Connecticut hopes a private developer can help transform a former 1930s-era tuberculosis sanatorium for children overlooking Long Island Sound into a high-end lodge and spa, similar to those found inside national parks like Grand Canyon and Yosemite.

The outreach to developers marks the latest plan for the state-owned, 32-acre parcel in the coastal community of Waterford. The site, which was converted from a heliotropic treatment centre to a geriatric care facility and later to the Seaside Regional Center, a state institution for people with developmental disabilities, has been vacant since 1996.

The site came close to becoming an upscale condominium complex until Democratic Gov. Dannel P. Malloy stepped in and suddenly halted the sale in 2014. He argued the "beautiful piece of land should be used for the direct benefit and enjoyment" of residents.

To make that happen, state officials contend it makes sense to have a private developer cover the hefty expense of renovating the aging historic buildings, which are listed on the State and National Historic Registers of Historic Places. In return, they'd receive at least a 50-year lease. Some of the buildings were designed by architect Cass Gilbert, who was responsible for the U.S. Supreme Court Building in Washington.

"We feel really confident that this is the right course to save these historic buildings," said Susan Whalen, deputy commissioner of the state's Department of Energy and Environmental Protection. At the same time, the state would continue to own the rocky beachfront property and make it available for public recreation, including fishing and kayaking.

Whalen said the state expects there will be a demand for new lodging. The site is close to tourist attractions in Mystic, as well as Mohegan Sun and Foxwoods Resort Casino. There's a nearby mansion where about weddings are held each weekend.

"The fact is, there just aren't that many shorefront properties like this," she said. "When you're in those buildings, the view out on the water is just spectacular."

Developers have until July 27 to submit proposals.

Republican Waterford First Selectman Daniel Steward, who favoured selling the property to help generate local tax revenue, is skeptical of the state's idea, saying he's watched the various plans for Seaside "go up and down" during his nearly 13 years as the town's leader.

"They're going to have to invest a lot of money into building some kind of facility to service their customers and then make a profit," Steward said of potential developers. "My expectation is they're going to have a hard time doing that."

While the state has spent about $2 million to abate asbestos in the buildings, Whalen said potential developers should not expect "a big check" to fix up the buildings. A hospitality industry consultant hired has estimated it could cost $25 million to $35 million to retrofit four structures and possibly build some new construction on the site — a figure Steward questions.

"Good luck,' he said, adding how a sea wall on the property could cost at least $10 million to repair. "I look at these buildings and I know the condition they're in."

Steward said the town of Waterford likely would have received about $2 million to $3 million in annual local property tax revenue from condo project proposed by Mark Steiner, of Farmington, who is currently seeking permission to sue the state for $20 million for terminating his contract. Steward said it's unclear how much, if any, revenue Waterford would receive from a tax-exempt state park with a private lodge operating on state property.

"We are in a position where we can't do a whole lot," he said.


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