Williams College proposed buying the lot at 59 Water St. to replace its existing Facilities Services building on Latham Street, which is the white building seen directly behind the lot.

WILLIAMSTOWN — After accepting a $2 million revised offer from Williams College for the “dirt lot” on Water Street, the town now must decide how to use that cash.

From housing to commercial use to paying for its riverbank stabilization project, Williamstown’s Finance Committee discussed Wednesday how to spend, which Chair Fred Puddester described as money that "fell out of the sky," while emphasizing that residents should have opportunities to weigh in before decisions are made.

The money is held in special revenue separate from the town budget, Puddester said, and any spending requires town meeting approval.

In April, Williams was the only respondent to the town's request for proposals to redevelop 59 Water St., a property that has sat vacant for decades. The college initially offered $500,000 for the parcel along with annual $50,000 payments to the Mount Greylock Regional School District for 10 years, beginning in 2028.

But after town officials said they hoped the property could generate more commercial activity or long-term revenue, the college returned to the Select Board in June with a revised offer: the original $500,000 purchase price plus an additional $1.5 million lump-sum payment at closing.

The Select Board approved the revised offer 4-1 on June 22, with Shana Dixon casting the lone dissenting vote. Dixon questioned whether the additional money outweighed the loss of future development opportunities on the site.

Williams plans to move its facilities building there to make room for its new Athletic and Wellbeing Complex at 60 Latham St. as part of its “broader campus plan.”

“I think it's great for the town,” Puddester said last week before passing the role to new chair, Suzanne Stinson. “The town needs $2 million and we give the college the ability to do something really great for the town — and take over the dirt lot.”

There is no timeline for when the money needs to be spent.

Stinson also asked whether the money should remain in a cash account or move to the town stabilization fund, where it could be professionally invested.

Moving the money into the stabilization fund — or withdrawing it later — would require a warrant article and a two-thirds Town Meeting vote, Puddester said.

Stinson said opportunities to receive a lump sum that large are rare and it should be invested in something with a "long-term outcome."

“If we had a way of gaining commercial or residential development, those things in particular would conceivably add to the tax revenue,” she said. “If there is an opportunity, I'd like to think those through.”

Puddester also brought up the town’s ongoing streambank stabilization project along the Hoosic River as a potential use for the cash.

The town is planning emergency and long-term stabilization work along the Hoosic River, particularly near a former landfill by Williams College's Cole Field. The project is expected to cost more than $3 million, but remains on hold while state agencies determine how it will proceed.

“That's an excellent example of a large sum, and members and the town were already worried that the cost of repairing is growing,” said Stinson.

During that June meeting, Select Board Chair Peter Beck listed several possible uses for the money, including the town's streambank project, repairs to Town Hall and the library, or property tax relief as the town faces mounting budget pressures and the possibility of a future Proposition 2 1/2 override.

“I suggest we take care,” said Stinson. “I’m really glad this goes to the voters.”