Port authority pays $523,000 to settle disagreement with firm that helped select operator for State Pier
The Connecticut Port Authority recently paid $523,000 to Seabury Maritime, the firm that helped the quasi-public agency find a new operator for State Pier several years ago, following a disagreement between the two parties over how a success fee would be calculated.
The port authority hired Seabury in 2018 to handle the request for proposal process for a pier operator, including writing the proposal, helping to get out the word and soliciting responses. The firm also helped the port authority negotiate the agreement with Gateway, announced in early 2019, to manage the pier, and with early aspects of the harbor development agreement that governs the $157 million plan to redevelop the pier for use by the offshore wind industry.
Per its contract with Seabury, the port authority paid the firm a monthly retainer of more than $20,000, reimbursed the firm’s expenses and agreed to pay a success fee, or compensation for successfully entering a contract, that was based upon Gateway’s commitment to make $30 million in capital improvements at State Pier.
The port authority paid the success fee, the amount of which has not been publicly disclosed, in early 2019, said David Kooris, interim chair of the port authority’s board. Seabury then was entitled to a second success fee based upon the capital contributions promised by offshore wind partners Ørsted and Eversource, and that’s where the disagreement lay, Kooris said.
“Because of the variety of different ways in which Ørsted and Eversource are contributing funds to the State Pier project and because of the relationship with Ørsted, Eversource and Gateway through the (request for) proposal response, there was a difference of opinion between us and Seabury on exactly how to calculate that,” Kooris said during a phone interview Tuesday. “Ultimately, the $523,000 is significantly less than their calculation and avoids the legal cost and the uncertainty if we couldn’t reach a settlement.”
Ørsted and Eversource, which will utilize State Pier for the pre-assembly of wind turbine generators for their 704 megawatt offshore wind farm, Revolution Wind, expected to be operational in 2023, and other offshore wind projects in the Northeast, are contributing $77.5 million toward the redevelopment of the pier. Under the harbor development agreement, the two companies will pay the port authority $20 million in rent to sublease the pier from Gateway for a minimum of 10 years.
The port authority’s board voted 10-3 at its July 21 board meeting to approve the settlement agreement with Seabury, and the money was paid in full following the board's approval, Kooris said. Vice Chairman Don Frost and board members David Pohorylo and Judi Sheiffele voted not to approve the agreement.
Frost and Pohorylo both said in separate emailed statements Wednesday that they were uncomfortable with the settlement agreement, but did not provide further details. Sheiffele did not respond to a request for comment.