New London – The State Bond Commission on Friday approved $50 million to the Connecticut Port Authority toward the $235.5 million redevelopment of State Pier in New London.
It represents what is expected to be the state’s final contribution toward a modernization project that is underway in anticipation of State Pier next year becoming a staging area for the offshore wind industry.
Gov. Ned Lamont, at Friday’s meeting, said “it did take a little bit longer and was a little more expensive than we wanted,” but called the project transformative not just for New London but for the state.
“It’s one of the most extraordinary deepwater ports in the country,” he said. “I think it’s a worthwhile investment.”
The state has now contributed $160.5 million in total for a project that, when it was first conceived prior to Lamont taking office, was estimated to cost $93 million.
Rep. Holly Cheeseman, R-East Lyme, was the lone dissenting vote at Friday’s meeting. “I must admit, I’m very concerned with this project both in terms of costs that may be borne by the taxpayers and a lack of transparency on the part of the port authority,” she said.
She questioned ongoing legal issues that have delayed a state environmental permit and whether there are enough in contingency funds to cover unforeseen costs.
Under prior leadership, the CPA has come under scrutiny for mismanagement of funds and state lawmakers passed a bill earlier this year that provides for stricter financial reporting.
Cheeseman also asked about a recent amendment to the harbor development agreement with Ørsted/Eversource that provides for an Aug. 31 deadline for permits and funding.
The CPA awaits permits from the state Department of Energy and Environmental Protection and U.S. Army Corps of Engineers that would allow for dredging. A former State Pier tenant displaced by the project, road salt supplier DRVN Enterprises, has urged the state to deny a permit.
John Henshaw, executive director of the CPA, told The Day on Friday that the recently adopted amendment to the Harbor Development Agreement allowed Ørsted and Eversource to contribute their final tranche of funding, $52.5 million, in advance of receiving the state and federal permits as opposed to after receipt of the permits.
“This was done to allow us to continue making contract awards to keep the project on schedule,” Henshaw said. “With respect to the August 31 date, this date offers the partners the opportunity to reassess the project’s scope and/or schedule should the permits not be in hand by that time.”
Joint partners Ørsted and Eversource are contributing $75 million toward the project, $22.5 million of which fulfills a previous commitment by Deepwater Wind, a company bought by Ørsted.
The $235.5 million overall price tag represents $204 million for construction, including $11 million for contingencies, and additional $31 million for soft costs, Office of Policy and Management Deputy Secretary Kosta Diamantis said.
Ørsted and Eversource will lease State Pier for at least seven years for use as a staging area for assembly and transport of offshore wind turbines to offshore wind farms it has under development.
The city of New London is expected to receive $125,000 annually through the Harbor Development Agreement and, in a side host community agreement with Ørsted/Eversource, will receive at least an additional $750,000 per year with provisions for an increase of up to $1.5 million per year.
Ørsted and Eversource already have inked a deal with Dominion Energy for use of a first-of-its-kind $500 million, 472-foot wind turbine installation vessel, the Charybdis, for use in New London during construction of two planned offshore wind farms.
Ørsted and Eversource, in a joint statement, applauded Friday’s decision.
“The much-needed infrastructure improvements at the pier will transform it into a vital long-term asset for Connecticut, giving it heavy-lift capabilities and enhancing its overall footprint,” the statement reads. “These improvements will help launch Connecticut’s next great maritime industry at the pier, deliver hundreds of new jobs and millions of dollars in local community investment, and help the state achieve its ambitious clean energy and climate goals.”
Work at State Pier is expected to continue until 2022. Work happening now, overseen by construction manager Kiewit Corp., includes site clearing, demolition of some existing buildings and stockpiling and removal of material. Some of the excavated material is being stockpiled for placement within the Central Wharf, the area between the two existing piers at the site.