It appears that the Orsted-Eversource joint venture project and New London Mayor Michael Passero are tantalizingly close to reaching a host community agreement that would, for the first time, make the state-owned State Pier property a significant revenue generator for its host city.

But there is also a chance the deal could slip away.

The mayor, in successfully seeking re-election to a second term in 2019, promised that if a major project transformed the State Pier into a hub for offshore wind power development, as planned, he would make sure it included an agreement bringing fair revenue to his city.

And rightly so. For too long New London has struggled fiscally because so much of the city — roughly half the real estate — is made up of nonprofit or government properties not subject to property taxation, including State Pier.

So if the Orsted-Eversource partnership is going to partner with the state on a $157 million transformation of the port area, New London deserves some just compensation.

Unfortunately, Gov. Ned Lamont let New London down in not making sure that issue was resolved before the Connecticut Port Authority finalized and signed the deal with the Danish wind-power giant and the New England energy company.

Yet Passero has pressed on, with considerable success. And while the energy companies have no legal obligation to commit to additional payments, they appear to recognize the advantages of working with a mayor and a host community that is a happy partner, rather than an angry suitor who feels shortchanged.

A month ago, when the agreement to transform the State Pier to support offshore wind power development was announced, Passero described the outlines of the host community agreement he was negotiating.

The city would get $750,000 per year in direct payments over the next two years under a prior agreement reached with Orsted, and $500,000 per year in future years from the Ørsted-Eversource, joint venture.

Written into the agreement would be provisions to cover previous commitments by the state totaling $250,000, including $125,000 in state PILOT funds — payments in lieu of taxes — and another $125,000 from revenues and impact fees from port operator Gateway.

Under the current formula used by the state, those PILOT funds should grow, perhaps tripling, as the pier property is further developed. There would also be provisions for the energy partnership to pay the city more if it wins future wind-energy production bids from the state and/or of the project is completed on schedule.

According to Passero, it would mean payments to the city averaging $1.3 million per year − smaller at first, then growing − with the potential to reach to $2.2 million or more.

What’s the hang up?

While neither side is talking publicly about the negotiations, those familiar with the talks say the impasse involves the PILOT money, and its potential to grow. If the state legislature fails to increase PILOT money as the project expands, or cuts those payments, Passero expects the Orsted-Eversource joint venture to cover the shortfall.

In a carefully worded public statement last week, the energy partners said they “support the mayor’s effort to seek certainty around New London’s future state PILOT funding.”

But they apparently don’t want to be stuck paying the money if the Connecticut legislature reneges on its PILOT obligation. That makes sense. Requiring Orsted-Eversource to make up the gap could be an invitation to the legislature, if it is looking to save a few bucks, to cut off the PILOT money for the State Pier.

Could Orsted-Eversource afford it? Of course. But we suspect it is a matter of principle.

The mayor has engineered a pretty good deal for his city, and without any real leverage. He risks losing that future revenue if he digs in on the PILOT issue. New London is a Democratic city in a Democratic-dominated state, and that is unlikely to change anytime soon. New London should have the muscle to keep those PILOT funds coming and be increased as the project ramps up.

The two sides are too close to a win-win to let things fall apart. The mayor’s tenacity is admirable. But sometimes it is wise to walk away from the table with your winnings, rather than risk overplaying your hand.

The Day editorial board meets with political, business and community leaders to formulate editorial viewpoints. It is composed of President and Publisher Timothy Dwyer, Executive Editor Izaskun E. Larraneta, Owen Poole, copy editor, and Lisa McGinley, retired deputy managing editor. The board operates independently from The Day newsroom.