— As the struggling East Lyme Land Trust looks to pay off a multimillion-dollar mortgage by selling 255 undeveloped acres to the town for $2.25 million, residents on Wednesday weighed in.

A public hearing attended by roughly 75 people was held to gauge opinions on the possible sale, which includes the 122-acre Hathaway property on Lake Pattagansett and 120 landlocked acres at the center of the existing Oswegatchie Hills Nature Preserve. Another 22 acres of trails in the Giants Neck Beach area rounds out the proposal.

Of the half dozen people who spoke, only one was opposed. The rest supported the purchase to varying degrees and for different reasons.

Bill Kowenhoven, who identified himself as an adjacent property owner to the Hathaway property, said the town should move now to maintain open space amid what he described as rampant development.

“The (land) trust bought this property for a reason,” he said. “And what was that reason? To maintain it for the town.”

The aquifer-heavy Hathaway swath, sitting on land held by Hathaway descendants since it was allegedly deeded to them by the King of England, has been targeted for preservation in municipal planning documents going back decades.

The property was initially purchased by Hathaway Farm LLC, a private venture associated with former land trust member and current real estate investor Steve Harney. Hathaway Farm picked up the property in 2021 for $1.05 million before carving out lucrative parcels and pitching the rest to the town for $1.65 million.

But the town didn't take them up on the offer, and the investors instead sold the property to the land trust for $2.3 million in September of last year. Hathaway Farm LLC then became the mortgage holder for the land trust, using the nonprofit organization's properties in the Oswegatchie Hills and Giants Neck Beach area as collateral.

“We have to keep open space,” Kowenhoven said. “We can't develop everything.”

The current deal, based on numbers laid out in a June 1 appraisal from Howard B. Russ, totals $2.3 million plus fees: $1.6 million for the Hathaway property, $575,000 for the Oswegatchie Hills properties and $125,000 for the Giants Neck property known as Ravenswood.

Carve-outs

Mike Blyskal, who operates Island Campground & Cottages on Lake Pattagansett, questioned the motives behind the sale and the numbers associated with it.

He noted the property now is smaller — by about 16 acres, according to town documents — than it was when first purchased by Hathaway Farm LLC.

Harney has described open space transactions, which can benefit developers as well as conservationists, as a niche area of real estate with

Finance Department documents show the cost to taxpayers, minus an expected $400,000 grant from the state and $200,000 already in the town’s open space fund, would be $1.75 million.

which he has more experience than most people. The process involves selling off large chunks of land to environmental groups for the tax benefits, while “carving out” parcels to be developed for financial gain.

Blyskal said the remaining acreage up for purchase by the town has been stripped of the best lake frontage and most of the road frontage: “And now they want you to believe, two years later after buying it, it’s now worth 2.3 million?”

He said the town should look at getting another appraisal “that doesn’t coincidentally total up to the exact number that the East Lyme Land Trust paid Hathaway Farm for the property.”

Finance Department documents show the cost to taxpayers, minus an expected $400,000 grant from the state and $200,000 already in the town’s open space fund, would be $1.75 million. If bonded over 15 years, that shakes out to an additional $17 per year in taxes for a home appraised at $400,000.

Harney has maintained he will put affordable housing on the Hathaway property, if the town isn’t interested in buying it.

The state affordable housing statute makes it easier for developers to secure zoning permits for larger developments than they might otherwise get approval for, as long as at least 30% of the units are set aside at reduced rent for those with low and moderate incomes. It works by making it easier for developers to sue zoning commissions — and win — if their proposals are denied.

A proposed affordable single-family homes and townhouses development along Holmes Road near the Montville border, on which Harney said he served as a consultant, was denied by the Zoning Commission in July. Applicant Duval Partners has appealed the rejection to the state Superior Court.

Putting The Hills ‘at risk’

Support from some who spoke was muted by distrust about the way the deal had evolved.

Friends of Oswegatchie Hills Nature Preserve President Kris Lambert said the group remains alarmed that land trust’s share of the preserve, which comprises a large interior portion of the expansive 457-acre trail system, was used as collateral for the Hathaway property.

“The Friends are not happy with how the nature preserve was brought into this situation, and we are dismayed that a significant part of the preserve has been put at risk,” she said.

Acknowledging “the reality of the situation” and the need to keep the land free of development, she said The Friends endorse the plan for the town to acquire the land trust properties.

Deb Moshier-Dunn, of the nonprofit environmental organization Save The River -- Save The Hills, emphasized the need for a conservation easement to keep the land preserved in perpetuity “so nothing like this can happen again.”

For land trust member Art Carlson, it all comes down to the pristine nature of the Hathaway property and the importance of keeping it that way.

Aquifers on the property feed one of several wells that make up the public water system in town. He said keeping the area free of development will help ensure the quality and quantity of drinking water in the area.

“The point on that property is, it’s incredibly important for watershed protection,” he said. “Period.”