CT Port Authority Approves Plan To Turn New London State Pier Into Wind Hub
New London Day, February 14, 2020
By Julia Bergman
The board of the Connecticut Port Authority unanimously has approved a $157 million dollar redevelopment plan to transform State Pier into a staging area for the offshore wind industry.
The vote took place at a special meeting Tuesday. At a news conference later in the day, Gov. Ned Lamont and the principals involved in negotiating the public-private redevelopment said it sets up New London and the state of Connecticut as key players in the burgeoning offshore wind industry in the Northeast and would help the state achieve its renewable energy goals.
“Connecticut can be the Saudi Arabia of wind power,” Lamont said.
The governor and the others, touting that the deal was “finally” done, acknowledged that it took longer than expected, given the number of parties involved, including state, local and private entities, the scope of the project and, though not explicitly mentioned, the mismanagement and spending issues that have plagued the port authority.
The plan, which has been negotiated for 18 months by the port authority, port operator Gateway, offshore wind developers Orsted and Eversource and more recently the state, involves redeveloping State Pier to handle heavy-lift cargo, including docking a large vessel, used to transport offshore wind components to the lease areas, on the eastern side of the pier. The plan also calls for filling in the area between the two existing piers to create additional storage space and will result in three berths.
The parties involved in the State Pier deal are working with Genesee & Wyoming, which owns the rail line that connects to the pier, to acquire a piece of the company’s land that is currently northeast of the property for additional space for the wind turbine assembly.
Construction is expected to start in early 2021 and be completed by August 2022.
Tuesday’s vote cements a new host agreement with Ørsted/Eversource that will secure a minimum average of $1.3 million a year to the city of New London over the next 10 years, New London Mayor Michael Passero said.
Passero said an agreement finalized on Monday extends and broadens terms of an existing two-year, $750,000-a-year agreement and opens the door to an additional $250,000 to $750,000 a year in additional revenues based on construction completion bonuses and ability of Ørsted to secure future agreements with the state for offshore wind power.
The minimum of $750,000 per year is in addition to the $250,000 New London gets through a combination of funds from the state Payment in Lieu of Taxes program, the $75,000 yearly impact fee from Gateway and at least a $50,000-a-year share of the port authority’s revenue from pier operations.
Passero said the host agreement, which has yet to be signed, brings the city as close as ever to recouping what he considers to be taxes lost because of the state’s decision to not fairly compensate the city.
“This was my goal all along,” Passero said. “It’s a good win for the city. The taxpayers of New London have been cheated out of taxes from a commercial asset. The taxpayers should be compensated for that.”
Differing views back to top
At the start of Tuesday’s board meeting, port authority critic Kevin Blacker, who has expressed concern over the State Pier deal being negotiated in secret, said he would not leave until he was arrested and in handcuffs. Port Authority board Chairman David Kooris attempted to continue with the meeting, and started to conduct a roll call before asking that Blacker be removed from the meeting.
Kooris said much of the plan approved Tuesday remains consistent with what has been presented publicly at the agency’s board meetings — even though the board frequently went into executive session to discuss the details — and at an informational forum in September to solicit public feedback on the proposed redevelopment.
“We are confident that the facility with these adjustments in response to the comments that we’ve heard from the public and from key stakeholders is a better facility for us and for the taxpayers of the state of Connecticut now and in the long term,” Kooris said.
The most fundamental change from what was presented in September, Kooris said, is the relocation of the large offshore wind vessel from the southern side of the pier to the eastern side to avoid disruption to Cross Sound Ferry’s operations. That increases the cost of the project by $44 million. The project was initially estimated to cost $93 million.
Ørsted and Eversource will contribute $77.5 million to the project, while the state and the port authority will fund the remainder, with $25.5 million in already approved bond money and additional bond funding. The port authority and state will be on the hook for any cost overruns.
he plan will involve Ørsted and Eversource subleasing State Pier from Gateway for a minimum of 10 years to use the facility for the pre-assembly of wind turbine generators, with the option to extend the lease for seven years. The companies will pay the port authority $20 million in rent over that 10-year period. When not used by the companies, the facility can be subleased to other customers, including other offshore wind developers, per the agreement between the various negotiators.
Ørsted and Eversource will use State Pier as part of its 704 megawatt offshore wind farm, Revolution Wind, which is expected to be operational in 2023, as well as other projects in the Northeast. They also have two projects in the works to supply about 1,000 megawatts of power to New York.
The companies own three federal offshore lease areas south of Martha’s Vineyard, covering approximately 600 square miles, with the potential for at least 4,000 megawatts of offshore wind power. That includes the 704 megawatts from Revolution Wind, which will supply 300 megawatts of power to Connecticut with the remainder going to Rhode Island.
Thomas Brostrøm, CEO of Ørsted U.S. Offshore Wind, said the State Pier plan is “one of most visionary port redevelopments in the country.”
The redevelopment will result in an estimated 460 construction jobs. Once the pier is operational again, about 400 jobs are expected during construction campaigns. Those jobs fall into two broad categories: those who load and unload the vessels, and wind turbine technicians. Matt Satnick, CO/CEO of Enstructure, Gateway’s parent company, said Gateway will help to train and develop the workers at the pier to support the offshore wind industry.
The port authority’s board on Tuesday also approved a resolution allowing the quasi-public agency to take ownership of the facility from the state Department of Transportation. The port authority has control of the facility per an earlier memorandum of understanding with DOT. Kooris said ownership is necessary so that the port authority can be directly involved in the sublease with Ørsted and Eversource. The transfer of ownership also must be approved by the State Properties Review Board and the state treasurer.
Citing problems at the port authority and CT Lottery Corp., Senate Republicans unveiled a package of legislative proposals Tuesday to “increase transparency and oversight at Connecticut's quasi-public agencies.” Republicans also called on state leaders to stop creating and funding new quasi-public agencies until these protections are approved and enacted.
"Our proposals will overhaul the oversight of state quasi-publics and turn over a new leaf when it comes to transparency and accountability," Senate Republican Leader Len Fasano, R-North Haven, said in a statement.
"For years Republicans have proposed policies to stop quasi-publics from engaging in questionable behavior and mismanagement of taxpayers dollars. Unfortunately, past administrations have turned a blind eye to these problems, allowing new quasi-publics to be formed without proper oversight, controls or transparency. With the most recent scandals at the CT Port Authority and CT Lottery Corporation, these issues can no longer be ignored by those in charge.”