Westborough Town Manager Jim Malloy said Thursday that a verbal agreement has been reached with the state on the sale of the shuttered Westborough State Hospital in which the town would buy the hospital property, resell all or part of the land for commercial development, and give the state a portion of the net proceeds.
Malloy said he could not disclose details of the agreement — including the negotiated price — until a written version is produced.
The town manager said he is optimistic that residents will approve purchasing the hospital property, with the proposal anticipated for a vote at Special Town Meeting in October. He recalled a 2011 meeting where “the vast majority said the town should buy this and direct the redevelopment of it.”
According to information posted on the town’s website, the hospital closed in 2010, at which time the state created the Westborough State Hospital Re-Use Commission.
In a 2011 report, the commission cited a study by Sasaki Associates that determined that it could make the most money by selling the land to a developer that would build 500 housing units.
“Something like that would push us to build a new school,” Malloy said on Thursday. A new school, he estimated, would cost Westborough more than $6 million a year for debt service and operating costs alone.
Additionally, if the property is sold to a developer, the town would lose out on six soccer fields that it had built on the land, under a lease from the state at a cost of $1 a year.
Replacement soccer fields would run the town $4.4 million for construction costs and land acquisitions.
However, Malloy estimated that Westborough could make $1.2 million in annual property taxes if the site off Lyman Street was developed commercially.
“People will see it’s a very positive thing for the town,” he said.
Additional public forums on the purchase of the state hospital will be held in September and October.
In an interview last month, town planner Jim Robbins said the site is 125 acres, with 92 acres of usable land. The rest consists of steep slopes and wetlands.
There are more than 40 structures on the property, the largest of which is the administration building. Many buildings are in such bad condition that they’re unusable.
What makes the situation unusual, according to Robbins, is that the state is willing to sell the property to the host community with few conditions.
“No other town was able to secure . . . their hospitals with no strings attached,” said Robbins. “For example, Belmont, Foxborough, Northhampton — all of them have retrofitted existing structures for use. All those projects had issues with existing buildings. The cost to rehabilitate them is so great,’’ with the removal of hazardous materials like asbestos particularly expensive, he said.
The area is zoned for mixed use, Robbins said, which would allow a wide range of developments, including offices, retail, residential, hotels, and recreation.
“There is water there, so it’s very attractive,” he said.
While a residential development would be allowed, the town is not considering that as a likely option. “We want a positive cash flow,” Robbins said. “At some point, we’ve got to balance the budget.”
According to Malloy, there is the potential for 1 million square feet of taxable commercial development on the site.
Ideally, Robbins said, he would like to see mixed commercial use, such as a medical campus, or a combination of restaurants, retail shops and a hotel, as well as promoting the use of Lake Chauncy.
“This was the first mental health facility in the Commonwealth,” Robbins said of the former state hospital. “The administrative building is still in very good condition. We’d try to save that. It’d make a great conference center. Other structures are so compromised that they’re not salvageable. Most buildings would be removed.”John Swinconeck can be reached at johnswinc@ gmail.com.