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The Westerly Town Council will consider using American Rescue Plan funds to demolish the Potter Hill Mill. Grace White, Sun file photo

WESTERLY — The Town Council will consider, during a meeting scheduled for Monday, committing $400,000 in anticipated federal COVID-19 relief funds toward demolishing the Potter Hill Mill. Actual commitment of the funds would be contingent upon a Superior Court judge approving an administrative lien that would give the town top priority to recover the funds.

Under the plan, the $400,000 would come from the $6.6 million officials expect the town to receive from the federal American Rescue Plan Act of 2021. The funds are expected to come to the town during the next two years. The proposed demolition project is expected to meet criteria for funding under the federal act because it would create open space that could be used by the public and would "mitigate a flood event," Town Manager J. Mark Rooney told the council during its Sept. 13 meeting.

"We did get indications from the grant writer and project lead, Lisa Pellegrini, that it would be eligible in the U.S. Treasury Department's oversight of expenditures," Rooney told the council. Pellegrini, who formerly served as director of the town's development services department, is now working for the town as a grant writer and administrator.

The federal government will reimburse municipalities and other qualified entities for qualified projects using funds made available through the rescue plan act, said Town Attorney William J. Conley Jr.

The town has been trying to get the mill property cleaned up for decades. A demolition order was issued by the town in 1980 but never acted upon. A more recent effort by the town to enforce a demolition order was caught up in a court battle for years before being upheld by a Superior Court judge. Still, the mill buildings have continued to stand in their dilapidated condition.

In late 2019, the Town Council authorized John Dorsey, a lawyer, to petition a Superior Court judge to place the mill property in receivership, a process akin to bankruptcy. The judge granted the town's petition and Dorsey has been working to find a solution to address the health and safety hazards posed by the mill, which is positioned along the Pawcatuck River near the Hopkinton town line. Efforts by Edward Carapezza's Renewable Resources Inc., which owns the property, to redevelop the mill have failed, over the years, to gain traction.

Dorsey, during the council's meeting, said he would ask a judge to grant an administrative lien in conjunction with the proposed demolition of the mill buildings. Town Councilor Philip Overton asked if the town would stand a chance to recover the funds. Dorsey said he believed the town would be protected.

"From a financial perspective, my understanding is that any consideration of approval of an allocation of funding by the town would be contingent upon the Superior Court also granting the town an administrative priority lien, subject only to the expenses of the process, that essentially works as a first lien on the property," Dorsey said.

Demolition of the mill buildings would likely not occur until next year following completion of a report on the historic significance of the mill, the buildings, and their component parts, Dorsey said.

Efforts are also underway to remove the dam that provided power to the mill, which ceased operations in the 1950s. The dam is seen as a potential flood hazard and an impediment to fish passage and recreational use of the river by kayakers and canoeists. The resolution under consideration by the council does not refer to the dam project, which is currently in a study phase.

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