The redevelopment of the former Hudson River State Hospital site is underway 15 years after the hospital closed its doors.

Wednesday, state, county and local officials joined executives from EFG/DRA Heritage LLC., a joint venture between the EnviroFinance Group and Diversified Realty Advisors, to kick off the redevelopment with the first demolition of buildings.

Hudson Heritage is a $250 million redevelopment project that should transform the abandoned hospital into a mixed-use community, consisting of 750 residential units including multifamily apartments, townhomes, and detached single-family homes.

"We are excited to begin the redevelopment,” stated Nicholas Minoia, Managing Partner of Diversified Realty Advisors. "Our vision is for Hudson Heritage to become the cornerstone of the community – providing luxury accommodations, world class shopping and adaptive reuse of historical structures that are connected to the rest of the Hudson Valley."

The 156-acre property in the Town of Poughkeepsie will also feature retail shops, dining and hotels. As well as over 2.6 miles of a multi-use trail system, linking to the Walkway Over the Hudson, Quiet Cove Park and the Marist College Campus.

"Transforming abandoned state properties into workable businesses has significant potential to breathe new life into our area and reinvigorate our local economy which is why I was proud to fight for language in our state budget that will move this project forward," said State Senator Sue Serino.

Key structures from the Hudson River State Hospital will be preserved and reused in the new development. The former Administration building, which is listed on the National Register of Historic Places, will be rehabilitated to its original architectural beauty and repurposed into a hotel/spa/restaurant/catering facility. Additional buildings that will be preserved include the original library, theater, chapel and Director's residence.

"I am especially pleased that key elements of the old site will be adapted, reused or otherwise embraced, maintaining a link with the site's important past, even as it creates a brand new future," said Assemblymember Didi Barrett.

In 1871, The Hudson River State Hospital became New York State’s second insane asylum. In the 1950s it housed over 6,000 patients and employed hundreds of doctors and nurses.