Newtown officials are struggling to “close the donut hole” related to historic credits that would allow the renovation of two buildings in the Fairfield Hills complex for mixed use after being told that all the campus’ current buildings must be preserved in order for a developer to qualify for the valuable and cost-offsetting state assistance.

The Connecticut State Historic Preservation Office recently notified the town that all buildings on the Fairfield Hills campus must be preserved in order for WinnCompanies of Boston, Mass. — a potential developer — to benefit from historic credits to offset the expense of renovating Kent Hall and Shelton Hall for mixed commercial/residential re-use. The office said the “relevance of the campus is the whole campus; they are not supportive of any abbreviated plan.”

First Selectman Dan Rosenthal told the Board of Selectmen at its March 21 meeting that his plan is to still apply for the historic credits with the National Parks Service.

“While we would have liked the state historic office behind us, we’re still going to go make our case,” said Rosenthal.

Rosenthal said the town still has a “strong case” for the historic credits, which could mean as much as $10 million each for renovation projects estimated at $50 to $60 million.

“We’ve owned the complex for 18 years, and have made many efforts to preserve the buildings and get them back to productive use,” said Rosenthal.

There are concerns over what may happen should the town not be able to demolish the buildings, and one of them suffers catastrophic damage. If the town receives the historic credits, it would be unable to demolish any building over the three years the developer was receiving the money, plus five years afterward.

“Not demolishing those buildings over the next eight or nine years is a challenge,” said Rosenthal.

Selectman Maureen Crick Owen said she was concerned if the town has to preserve all the buildings, and asked what recourse the town has if, say, a roof collapses. She wondered if it would be possible to demolish that building in that case.

Rosenthal said that it is currently unclear in his review of the regulations if the town has any recourse, and he’d want it in writing if they do.

“If a roof collapses, I don’t want someone to say we have to fix the roof,” said Rosenthal. “If we tear down a building against the wishes of the agreement, then those credits will be recaptured by the government. I’m sure the developer will have something to say about it.”

If the state’s Historic Preservation Office position is upheld, the town could be pressed to choose between getting the credits and keeping the proposed mixed use development project on track while also preserving all other campus buildings, or possibly leaving all the campus buildings vacant and eventually demolishing them.

Rosenthal said that in reviewing the buildings, a number of them are “unlikely to see use,” such as Cochrane, Norwalk, Stamford, and Plymouth. The town was looking at a phased demolition plan over a number of years, with the latest Capital Improvement Plan allocating $7.5 million for remediation and demolition of Fairfield Hills buildings in four of the next five years.

The first selectman noted that the remaining buildings are “solidly built” and most of the roofs have been holding up, but he couldn’t predict whether or not any of the buildings would hold up for eight more years virtually untouched.

Rosenthal said that the application to the National Parks Service was not “short form” and could take four to six months to hear the results.

Also noting that the entire Fairfield Hills campus was originally 650 acres, of which the town only purchased 180, he wondered if “the state would want the old powerhouse or horse guard building” in preservation.

“It’s strange the historic preservation office would want just these four streets preserved,” said Rosenthal.

Associate Editor Jim Taylor can be reached at jim@thebee.com.