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PARSIPPANY - The giant orange crane stood behind flimsy yellow tape, its color reflected off the pristine snow by Tuesday morning's blinding sun. At acting Governor Codey's command of "Go!" the crane lifted its claw.

The operator carefully aimed for an open fourth-floor window, clasped the sill and yanked a hole in the worn gray-stoned dormitory atop a hill at Greystone, once one of the world's most famous and infamous psychiatric hospitals.

Surrounding the red-haired governor was a knot of dignitaries and aides dressed in black topcoats, as if for a funeral; but they cheered as the facade stones began thudding into the ground. Indeed it was something of a funeral, as just minutes before Codey had indicated. Yet it also was the beginning, as he'd also said, of a new age of care for the mentally ill in North Jersey.

It was a ceremony marking the demolition of the 103-year-old dormitory, at 208,000 square feet the second largest building on the Greystone Park Psychiatric Hospital grounds. Closed in 1992, the dorm now is being reduced to land fill and will be replaced by what Codey declared "a smaller, better and safer" treatment building "that reflects a new focus on improving mental health care across our state."

"Too long we've looked the other way," Codey said from the temporary lectern on the wind-swept hillside as photographers snapped and reporters scribbled. "Too long we've swept mental health under a rug. ... Not everyone who is mentally ill can go back into society."

The subject is not new for the unpretentious Codey. In 1987, as a state senator, he went undercover as an employee to expose poor conditions at the now-closed Marlboro Psychiatric Hospital, and his wife, Mary Jo, suffered postpartum depression after the birth of the couple's first son.

Last year, Codey replaced the disgraced Jim McGreevey as governor. Codey's first "public" meeting was a breakfast with Greystone staff and patients, and his announced first priority was to upgrade care for the mentally ill - the only group, in fact, to get a raise in Codey's 2005 austerity budget. Thus Tuesday marked what might be his signature moment as governor.

The entire project - demolition, design and construction - is pegged at $190 million. The state Economic Development Authority, the Human Services and Treasury departments, and the Health Care Financing Authority are partners in the project. The timetable is for the new center to be ready in about two years, long after Codey has left the governor's office (he is not running for re-election).

Just before Codey ordered the crane operator to "Go!," he announced a change in the plan for the new building. Instead of the 460 beds as originally envisioned, it will contain 510 beds. This change, said the governor, was made upon the recommendation of the Task Force on Mental Health, which cited still-crowded conditions across the state. Greystone houses about 550 patients, their treatment centered at the huge main building in the middle of the Greystone grounds, which will remain open.

Groundbreaking for the new building is to be this summer. The building will concentrate programs and services and will have small dining rooms on each of the 25-bed units.

Greystone was a showplace when it opened in 1876 as the State Lunatic Asylum. It became its own village - featuring its own train station. It was situated on 671 acres in what was then Hanover (later, Parsippany came to include most of the grounds). Though it was built to house 600 North Jersey patients, Greystone became horrendously crowded in the 1950s with almost 8,000 patients.

However in the 1970s the advent of psychiatric drugs persuaded politicians that most of the inmates could be deinstitutionalized. A large hunk of Greystone then became a ghost town, with many buildings gradually abandoned. Two years ago the state sold 300 acres to Morris County for $1; the county has demolished some of the buildings and dedicated its space as parkland.

County authorities have not finalized their plans, but say they foresee passive and active recreation on their land, which will be adjacent to the new state hospital.

Janet Monroe, chief executive officer at Greystone, spoke along with Codey on Tuesday morning. She said the massive gray dorm "symbolized the old way of treating the mentally ill." Another speaker, Terri Wilson, deputy commissioner of the Human Services Department, hailed the plan for the new building but ended with this wish: "If only we could knock down the stigma against mental illness, this would be a better day."