Lamont administration releases May 2019 agreement outlining State Pier redevelopment terms
A 25-page document, obtained by The Day this week, outlines the terms of an agreement to redevelop State Pier as a hub for the offshore wind industry.
Some of the details of the memorandum of understanding signed in May 2019 by offshore wind partners Ørsted and Eversource, the Connecticut Port Authority and Gateway, which operates State Pier, and touted by Gov. Ned Lamont, have been discussed publicly, but the document had been kept private.
It outlines the major components of the State Pier deal, such as key deadlines envisioned by the parties, and the details of the proposed work to be done, including how it would be paid for. Many of the deadlines outlined in the memorandum have passed. For example, the first phase of construction at the pier was supposed to begin Dec. 1, 2019.
The deadlines have various incentives attached to them. If the redevelopment is complete and State Pier is ready for use by March 2022, Ørsted-Eversource would pay the port authority $10 million, the memorandum says.
The Day sought the memorandum via a Freedom of Information request several months ago, but the port authority declined to release it, saying it was part of ongoing negotiations.
On Monday, Editorial Page Editor Paul Choiniere contacted the governor's communications director, Max Reiss, to express The Day's concerns that the newspaper and public were being denied access to the memorandum. Initially Reiss declined to release the document but later said the administration had reconsidered.
David Kooris, chairman of the port authority's board, said by phone Wednesday that the memorandum is the product of negotiations that occurred in late 2018 and early 2019 following the selection of Gateway as the operator of State Pier.
While some aspects of the memorandum are expected to stay intact in the finalized plan for State Pier, known as the harbor development agreement, many aspects have been subject to continued negotiations, Kooris said.
The Lamont administration has taken an active role in the negotiations as part of its greater oversight of the port authority due to the resignation of several key personnel and scrutiny over financial mismanagement and operations that came to a head over the summer.
"Frankly, some of this is the state coming in and the governor's team having a harder line on some of the issues that maybe were not properly negotiated by those who came prior," Kooris said.
He said the parties continue to meet and have "robust conversation" regularly and that he "strongly hopes" to present the finalized redevelopment plan to the port authority's board at its Jan. 21 meeting. He said he does not expect the board to vote on the agreement, as he wants to give members ample time to review it. The final agreement is contingent upon all federal and state permits required to support pier redevelopment.
"We are quickly approaching the decision point where frankly Ørsted and Eversource will have to secure their port alternative in order to guarantee they can meet their commitments," Kooris said, as part of their Revolution Wind Farm set to deliver electricity from federal waters south of Martha's Vineyard by 2023.
Kooris said the companies will need to make that decision within the next few months, which is why he's emphasized the need to finalize the details of the redevelopment.
The port authority, under the memorandum, would be responsible for securing all permits and overseeing design, engineering and construction in connection with the redevelopment. The agency would retain "100 percent of cost savings," but also would be responsible for any cost overruns, per the memorandum.
Gateway would provide access to State Pier for redevelopment and would not be required to pay rent or "meet minimum variable revenue thresholds" during construction, given no activity will take place during that time. One of Gateway's responsibilities, as outlined in the memorandum, is to make "best efforts" to relocate existing customers and operations at State Pier to its facility in New Haven once redevelopment starts.
The memorandum says that the Ørsted-Eversource would provide $2.5 million to compensate the port authority for lost revenue during construction.
The port authority has an agreement with New London to provide revenue to the city as part of its long-term contract with Gateway to run State Pier, and Kooris said the agency intends to continue making payments to New London during the redevelopment.
A major aspect of the redevelopment plan, which was presented during a public meeting in September 2019, is to fill in the area between the two existing piers at State Pier to accommodate heavier cargo. Yet the memorandum also envisions a scaled-down version of the project that would rely on barges to shuttle groups of wind-turbine components to the lease area as opposed to a so-called installation vessel transporting the turbine components all together. Under that scenario, the space between the piers would not be filled in.
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