There are signs of life at the former United Hospital site.

The approximately 14-acre parcel in south Port Chester has sat abandoned for over two decades, with promised redevelopment projects fading away. But work preparing the site ahead of construction of a multifacility residential and commercial complex is underway, and the village expects the developers to obtain a building permit for the first structure by next year.

“The property’s been dilapidated since 2004,” said Stuart Rabin, Port Chester’s village manager. “Something was going to happen.”

But forward momentum is a less-welcome development in Rye.

The outgoing Rye City Council filed a lawsuit to stop the development, alleging that the state review process was flawed. A new administration, which takes over on Jan. 1, hopes to have Rye’s concerns addressed by Port Chester.

Mayor-elect Josh Nathan said that issues with increased traffic and the project’s timing — with Rye Country Day School also unveiling plans to develop fields near the school’s campus — are not ideal.

“We need to make sure we’re protecting our neighborhood over there,” Nathan said, adding that the city is hopeful that Rye and Port Chester will reach a resolution. “ It’s not good to have concerns, but it’s good that when you have the concerns to realize we actually have the ability to work on this and figure it out.”

Meanwhile fears of increased traffic are playing out in real time. According to a release from the Rye City Police Department, nearby neighbors are already filing complaints about increased traffic going to and from the site.

“Concerns included oversized commercial vehicles traveling through residential streets, vehicles speeding along Hillside Road, and vehicles failing to stop at the stop sign located at the intersection of Hillside Road and Grandview Avenue,” the statement said. Police added that there are not enough signs indicating that vehicles over 5,000 pounds are restricted in the area. The department will prioritize the neighborhood, the statement said, and add more patrols to address the concerns.

As the site preparation continues, both Rye and Port Chester are open to settlement talks, depending on the results of further traffic studies, and they are awaiting direction from the courts. In a letter filed on Oct. 28 by the City of Rye, officials asked that the date the two parties are scheduled to appear back in court be postponed until December.

“We continue to have a very good working relationship with the City of Rye,” Rabin said in an emailed statement to The Rye Record.

The complex is being built by Boston Post Road Owner, LLC, a partnership between Rose Associates Capital Group LLC and BedRock Real Estate Partners LLC. It’s expected to feature roughly 1,000 residential units, additional low-income and assisted-living housing, an amenity center, green space, a parking lot with more than 1,000 spots, and a hotel with approximately 120 rooms. The first major piece built is to be one of the residential buildings.

The Capitol Theatre “sees visitors from all 50 states,” Rabin said. “If they don’t feel comfortable taking an Airbnb or feel that the Courtyard by Marriott [in Rye] is too expensive, we find that many of those people either go to Stamford or White Plains. We think that it will be a prominent fixture to have in this village.”

Boston Post Road Owner, LLC bought the rights to the land in 2019 after a previous attempt to revitalize the property fizzled out. After the initial plans were approved, Rye filed its lawsuit in 2021, alleging that the State Environment Quality Review Act analysis that permitted the zoning of the project was flawed, particularly when it came to traffic mitigation.

The project’s specifications have evolved since 2021, including the addition of a bypass road from Boston Post Road to High Street in later construction phases.

“Right now, you get stuck at the High Street light,” said Chuck Berman, co-founder of BedRock Real Estate Partners LLC. “It’ll now flow much smoother during peak hours with people coming off the highway.”

Nathan is not convinced that will solve the traffic problem.

“Does that bypass road reduce congestion? Or does it move congestion from one place to another and create a different set of problems?” he said. “That’s something we have to look at.”

Concerns are also being raised about potential adverse effects on Rye’s downtown area. In some regards, it may be a boon to local businesses, with more people on the edge of Port Chester. But with that comes an increase in foot traffic and congestion at the Rye train station, as well as a decrease in available parking spaces.

“It’s like a drop of water,” Nathan said. “You see the splash here, but it has effects elsewhere too.”

Rabin is optimistic about the project, which he said promises many benefits to Port Chester. He said the developers, along with refurbishing the property, will be replacing the sanitation system from the former hospital down to Olivia Street — a project that the village hopes to extend with its own money.

Rabin added that the developers will pay fees to Port Chester in lieu of park land, which is allowed by a New York law that lets a village take money from residential developers if a project does not provide enough park space.

“We will be focusing on reinvesting those fees into the adjacent Abendroth Park to look towards improving the quality of recreation programming there,” Rabin said. “Field revitalization, maybe the building of some pickleball or tennis courts, refurbishing our dog park, and we also have a pavilion there that probably needs to be reimagined.”

It’s unclear if the pending lawsuit will slow the developer’s ability to obtain a building permit or provide additional roadblocks, but Nathan is hopeful it will lead to more dialogue between the two sides.

“We’re talking about litigation that’s been pending for more than four years,” Nathan said. “We need to see what the issues really add up to.”