The Day: Why Formica’s Seaside proposal makes sense

March 7, 2018

Editorial as it appeared in The Day

Sen. Paul Formica, R-East Lyme, is taking a controversial stand in pushing legislation to put the former Seaside Regional Center property in Waterford up for sale. Yet if the final legislation included wise safeguards, Formica’s proposal would also be the right one.

It is highly questionable whether the state Department of Energy and Environmental Protection’s current plan for the property is viable. The agency’s bet is that it can find a private partner to restore the former tuberculosis hospital, designed by renowned architect Cass Gilbert, as a lodge with 63 rooms, dining areas, conference space, a pool, a fitness center and parking.

The state would retain ownership, making the lodge operator a tenant. The state would operate the rest of the 32-acre property as a state park.

It is dubious whether a developer would be willing to invest the many millions of dollars it would take to get the badly dilapidated 1934 tuberculosis sanatorium into shape, without the reward of full control or ownership. If a developer is willing, one can only imagine the concessions and guarantees it will seek to extract from the state to make the project worthwhile.

Waterford would benefit little, as the state property would not produce property tax revenues.

This is why Formica’s gambit makes sense. Sell the property, but with provisions that require the purchaser to restore and utilize the historic structures, most critically the primary Tudor-style sanatorium with its distinctive steeple. Deed restrictions could assure that the public retains access to the shorefront for passive recreation.

This is a more viable option, because would-be developers in making their pitch to the state could come up with creative approaches for making the project profitable, rather than be straight-jacketed by the plan the state cooked up.

This approach would have the added advantage of making much of the property subject to local taxation, while still maintaining the desired public access. And revenue from the sale, or some portion of it, could help fund programs provided through the Department of Developmental Services. That was the legislature’s plan when it originally authorized the sale of the property, which had as its last use in the mid-1990s providing programming and housing for people with developmental disabilities.

It’s unfortunate that a developer was close to executing such a project when Gov. Dannel P. Malloy in 2014, with the seeming priority of trying to influence a local Senate race (a race Formica won, by the way) and perhaps his own re-election chances, made his surprise announcement that Seaside would be a state park.

At the time, preferred developer Mark Steiner — who had battled with neighbors, faced difficulty in working with the state, and who had revamped his plans numerous times — had settled on the seemingly most practical option. He planned to convert the existing buildings into high-end condominiums, but with construction of a new inn to generate the added revenue to make the project feasible. Adding to the plan’s credibility was the involvement of the management team from Ocean House in Watch Hill, who were interested in running the Seaside inn.

A 3-2 vote by the town’s Planning & Zoning Commission blocking a zone change stalled the plans, though the result appeared tainted because a commissioner with an obvious conflict voted. Before Steiner could appeal, however, Malloy made his announcement.

Formica faces a very difficult battle. State park and open space advocates are uniting in opposition to the idea of selling a shorefront state property. They want more than shoreline access. We get it. Offering the property for sale, even with safeguards, would be a tough vote for lawmakers.

If Formica’s initiative falls short, as it might, DEEP’s plan for the property will be tested. Our expectation is that it will not be able find a partner to develop its planned lodge, at least not without giving away far more than the state can afford. And besides that, where is this cash-strapped state getting the money to run another state park, as desirable as that may be?

If not passed in this session, perhaps Formica’s approach could be re-examined by the next legislature and the new governor, particularly if the plans now on the table stall.