New London Wins 10-Year Commitment For Northeast Offshore Deal on State Pier

Cate Hewitt  HARTFORD — State officials announced today the signing of a Host City Agreement between New London and a joint venture of Ørsted and Eversource that includes a 10-year commitment paying the city an average of at least $1 million each year during offshore wind operations at State Pier.

“Today’s agreement makes Connecticut’s role as a leader in the offshore wind industry official, with New London now poised to become the premier commercial east coast hub for this sector and our state set to become a leader in the transition to renewable energy and the fight against climate change,” Gov. Ned Lamont said. “This project represents exactly what I have wanted to see at the local level since I came into office – local investment, job growth, development, and a focus on providing for a better environment and future for our state.”

New London Mayor Michael Passero, whose dogged advocacy has at times called into question the possibility of a deal, praised the agreement.

“The city has worked tirelessly to reach an agreement that benefits the taxpayers of New London as the host city for the State Pier’s use for offshore wind development,” said Passero in a statement. “It is exciting for the city to partner with the stat on its commitment to increasing clean renewable energy for Connecticut residents, and we look forward to economic growth opportunities for New London and the region as the offshore wind industry continues to grow. I would like to thank Governor Lamont for his leadership on this important project, and for his commitment to New London and Southeast Connecticut.”

The long-awaited agreement includes the potential for $250,000 to $750,000 each year in additional funding for New London if the joint venture, called Northeast Offshore or NEO, meets specific energy thresholds with the state.

For each of the first seven years, from 2022 to 2028, Northeast Offshore has agreed to pay the city $750,000 — a number significantly greater than the two-year “voluntary” annual contribution of $750,000 offered by the venture during a public rollout of the plan in New London on Sept. 19, 2019.

Beginning in 2024, NEO will also pay the city for power purchase agreements awarded from the state. The fee structure includes an annual payment to the city of $250,000, $500,000 or $750,000 for power purchase agreement awards totaling 800 megawatts, 1,200 megawatts and 1,600 megawatts respectively. 

In addition, the Connecticut Port Authority will pay the city an annual minimum revenue sharing fee of $50,000 from 2019 to 2023, that will increase to $69,000 from 2024 to 2028. The port authority will also pay an annual incremental revenue sharing fee projected to total between $62,000 and $109,000 each year from 2022 to 2028. 

Gateway Terminal, the port operator as of May 2, 2019, will also pay the city an annual fee, beginning retroactively in 2019, of $75,000 each year, a fear that increases by 2 percent each year to $89,632 in 2028.

The agreement is in addition to a payment in lieu of taxes from the State of Connecticut reimbursing the city for the tax exempt property, said Kosta Diamantis, the deputy secretary of the state. Those funds were previously estimated at $125,000 each year, but Diamantis said the amount could vary over the 10-year deal.  

Passero makes a deal, and uses all his skills doing it

Paul Choiniere  As the late Kenny Rogers sang in "The Gambler" − "You've got to know when to hold 'em. Know when to fold 'em. Know when to walk away."

On Friday, New London Mayor Michael Passero walked away with a pretty good deal for his city.

But, I suspect, the mayor realized that if he pushed his luck much further, he could have walked away empty handed.

For the past year, Passero had sought assurances that New London would see a fair and reliable revenue stream to city coffers as a result of the massive development that is intended to turn State Pier from an underutilized port into a busy hub for the assembly of wind-power turbine parts and their transport to offshore wind farms.

The mayor's aspirations were complicated by the fact State Pier is state property, and so not subject to property taxation. And under the public-private partnership negotiated with the developers, the heavy-lift cranes and other infrastructure to be constructed will also be untaxable state property.

New London had anticipated $1.2 million to $1.4 million would annually flow to the city as a result of the project. This was calculated from a combination of state subsidies to partially offset the pier's tax-exempt status, payments from the Connecticut Port Authority and port operater Gateway, and revenues from developer North East Offshore in accordance with the Host Community Agreement.

But later calculations showed the city falling about $450,000 short of that expectation, primarily because the city had counted on state PILOT funds − payments in lieu of taxes − increasing as the State Pier assessment grew with new construction. Instead, the administration learned, PILOT aid could remain frozen at the current $125,000, a measly 12.5% of the property's assessed value, unless the legislature approved an increase.

Passero, a retired city firefighter who earned a law degree during his time in the department, turned to a legal term to explain how all the parties had miscalculated the expectant revenue that would flow to the city.

"It was mutual mistake of fact," said Passero.

North East Offshore, made up of the Ørsted/Eversource partnership, did not see it as its job to boost the funding available through the Host Community Agreement because Connecticut was shorting New London on PILOT funds. And the administration of Gov. Ned Lamont gave no signs it was ready to offer any guarantees. The stalemate dragged for months.

Passero saw as his bargaining chip the Master Development Plan for the property, developed in the 1990s by agreement of the city and state to govern development at State Pier and the surrounding 125 acres. Not surprisingly, it envisions nothing like the major overhaul of the port in support of wind development as now planned. Amending or repealing the MDP would require the city's agreement, Passero contended, and he wasn't prepared to give it unless the compensation issue was settled.

Which brings us to Friday, with the proceedings for the necessary Department of Energy and Environmental Protection permits set to begin and the city ready to press its case that the project was not in compliance with the MDP.

That appeared to provide a sense of urgency, leading to the deal. As a result of talks last week, North East Offshore agreed to amend the Host Community Agreement and boost its guaranteed minimum payments to the city to $750,000 a year for at least seven years and up to 10 years. These are significantly higher amounts than originally guaranteed, but do not entirely close the gap Passero had sought to fill. But if Ørsted/Eversource wins additional wind-power contracts, payments could reach $1.5 million annually.

In return for the increased payments, New London has withdrawn any objections involving the MDP and will cooperate in either amending it, dissolving it, or establishing its legal compliance with the planned project, whichever proves necessary.

"As of that signature, I am a cheerleader for the project," said Passero, referencing the revised host-community deal.

Passero could have pushed harder. He had reached out to the Lamont administration to, as part of a grand bargain, also dissolve the MDP for Fort Trumbull, which the mayor said only makes development there more difficult. The governor had no interest and Passero opted to fold on that one. Likewise, he decided not to hold out for assurances of greater aid to the city.

Had Passero overplayed his hand, and endangered the project, it could have proved to be a million-dollar mistake, annually, not counting the jobs and economic development that would have been lost.

But more aid may yet flow to New London for State Pier. In the state legislature, Sen. Paul Formica, a Republican whose 20th District includes New London, has introduced legislation that would direct $400,000 annually to New London as compensation for the pier facility that it cannot tax. The legislation mirrors existing law that directs $1 million annually to the city in lieu of the taxes that are lost because it hosts the U.S. Coast Guard Academy.

Sen. Cathy Osten, a Democrat representing the 19th District and co-chair of the Appropriations Committee, said a more likely source of added revenue could come from a movement, within the Democratic caucus, to boost PILOT funds across the board.

Passero seemed to need all his skills in this high-stakes poker game − the politician using the media to apply pressure, the lawyer utilizing the MDP for legal leverage, and the firefighter getting in and out of the burning building before the floor let go.

New Milford seeks affordable housing plan 

Currie Engel   NEW MILFORD — New Milford is looking for a new affordable housing plan, with the hopes of increasing the town’s affordable housing from its current share of roughly 4.7 percent.

The initiative couldn’t come at a better time, officials said

Recently, New Milford Affordable Housing has been getting calls about younger people who are struggling with mental health and having a hard time finding suitable housing, said Mary Jane Lundgren, a town council member and president of the nonprofit.

New Milford’s lack of homeless shelters means that those unable to secure housing end up at the Danbury shelter, she said.

“I just think it’s going to get a lot worse with COVID,” Lundgren said. “There’s just no question that a lot of people are really falling behind to the point where they’re going to be homeless.”

The purchasing department is accepting applications from professional planners and consulting firms ready to develop the plan. The proposal must outline a plan to evaluate demographics, resources, and future housing needs, and then determine a strategy and recommendations for the town.

A $15,000 state grant will help fund the selected proposal, but a price tag won’t be finalized until a winner is declared.

“We kind of wanted to take stock of where we are,” said Mayor Pete Bass, of the plan.

They’re focused on providing workforce housing and homes to those who can’t afford New Milford prices. About 400 condo units have already been pre-approved for construction, but haven’t yet been built. Bass said he hopes a new proposal will remedy this.

Over 75 percent of houses in New Milford are single-family homes, and more than half of renters are “cost-burdened,” said Michele Shackelford, coordinator for healthy, efficient and diverse housing for Sustainable CT in the town.

Current affordable housing options for residents include two complexes run by New Milford Affordable Housing and units at another developer’s property.

“There is a big need,” Lundgren said.

She said the nonprofit has a waiting list of people interested in their affordable and supportive units.

“We’ll never be empty,” she said

The state has encouraged municipalities to meet a 10 percent threshold for affordable housing stock, with the aim of getting towns to improve their margins. This type of plan would help put New Milford on the road toward alignment with this goal.

As a member of Sustainable CT, a voluntary state certification program, participating municipalities including New Milford must have an affordable housing plan in place by Aug. 1. While Bass has been spearheading the initiative with the state grant, Shackelford said the mayor’s plans align with their own Sustainable CT goals.

Several other towns in Litchfield County have also started creating their own affordable housing initiatives, including Warren, Washington, and the Salisbury area.

Shackelford said the initiative would also help attract younger people to the area and allow older couples to downsize.

“We are rapidly aging and we’re not replacing individuals with young families,” she said.

In the next 10 to 20 years, Shackelford said they expect a 17 percent decrease in school-age children in New Milford, and roughly the same increase in households with adults in their 50s.

While the purchasing department could not confirm the number of proposals they’ve received from bidders, purchasing specialist Valerie Douglass said they’re very happy with the interest they’ve seen so far.

The request for proposals will expire next Thursday, and by March 11, the town will award the contract to one of the bidders. A tentative project completion date has been set for June 30.

Bass is also focused on making sure future housing plans keep with the “charm and character” of the town.

“That’s why people come to move here,” he said. “It’s because of our beautiful downtown, our parks, our trails.”

Proposed bill takes aim at DOT’s tree-cutting practices along CT highways

Brianna Gurciullo   After local environmentalists and residents raised concerns about tree removal along the state’s highways, state lawmakers who represent Greenwich and Stamford proposed legislation to rein in “unnecessary tree pruning and removal” and restrict the use of “clear cutting.”

The recently proposed bill from state Sen. Alex Kasser, D-Greenwich, and state Rep. Stephen Meskers, D-Greenwich, suggests forming guidelines that would conserve urban forests and examine how the Connecticut Department of Transportation manages trees along highways and railroads.

“Any adjustments and improvements we do to clearing lines of sight, fixing drainage, repairing the roads have an impact on quality-of-life issues,” said Meskers, who represents Greenwich’s shoreline. “So I’m trying to get a comprehensive review of vegetation management.”

State Rep. Matt Blumenthal, D-Stamford and a co-sponsor of the bill, said he wants to ensure that DOT takes into account environmental and community concerns before taking down trees.

“We’d like to create, with this bill, a process by which the DOT, before it cuts down or prunes trees in any significant way, would have to engage with the community on it, so that we’re not seeing the clear-cutting that we have seen in some places,” Blumenthal said.

Another co-sponsor, state Rep. David Michel, D-Stamford, said that dead trees may need to be removed for safety reasons, but he said he supports the establishment of standards for vegetation management.

“It’s OK to clear dead trees, right? But to clear the other trees that hold the ground and forest together and help with stormwater and water absorption — there are several problems that could come from that, like flooding on the road,” Michel said.

Many residents and groups including the Greenwich Tree Conservancy have lamented the tree-cutting along the Metro-North Railroad tracks and I-95 in both Greenwich and Stamford. The Tree Conservancy has also complained about tree-trimming by Eversource in the past.

Mostly recently, the Tree Conservancy zeroed in on a construction project along I-95 that is expected to begin in fall 2022. During a public information meeting last month, a consulting engineer on the project said about 2 acres of trees would be removed from along over 6.6 miles of highway from Greenwich into Stamford.

“Our approach to this is to really minimize any tree-clearing along this corridor,” said Tony Margiotta of GM2 Associates. “But we unfortunately do require some selective tree clearing to improve the site distance, for example, around the corner of a curve.”

A number of trees would also be taken down to make way for work on drainage improvements along I-95, Margiotta said. In addition, crews would remove limbs that are hanging over the highway.

Those involved in the project are “looking to incorporate vegetative buffers” in the plans, said Neil Patel from DOT.

“Of course, they have to be in coordination with our maintenance operations and where feasible,” Patel said. “So we will be looking at that as we go forward with our design.”

JoAnn Messina, executive director of the Greenwich Tree Conservancy, said the combination of past events and the plans for I-95 has prompted the group to press for “legislation to control DOT.”

The Tree Conservancy has proposed language for the bill, which has been referred to the Joint Committee on Environment. In sum, the group wants a group of forestry experts to develop guidelines for vegetation management that DOT would be required to follow, Messina said.

“And then we generally would like to get into a situation where Connecticut DOT, for lack of a better way to say it, pays attention to many of the climate change suggestions that have come from” Gov. Ned Lamont’s Council on Climate Change, she said.

“Everything you read, trees are what is going to help with climate change, and here you have an arm of our state government just clear-cutting, cutting down all of our trees that can assist,” Messina said.

“We don’t think they’re mutually exclusive. We can have trees along roadways — which help with flooding, which help with carbon sequestration, which help with all of the things, all the benefits that trees give — as well as having safe railways and roadways,” she said.

The Riverside Association, a neighborhood group in Greenwich, has also complained that the plans for the I-95 project lack proposals for noise barriers — which Meskers said he is also monitoring.

Meskers said he believes the vegetation management bill would resonate with some of his colleagues. In the meantime, he has been part of conversations with Greenwich First Selectman Fred Camillo, the I-95 project managers and state Transportation Commissioner Joseph Giulietti about the issue.

“I think just the proposal of the bill, and the concern that we’ve expressed at the municipal level, and through our representatives — I’ve been impressed so far with the speed of a response that I’m comfortable that our concerns have been heard,” Meskers said. “And I’m awaiting further dialogue to address and solve the outstanding issues.”

The proposed bill’s other co-sponsors include Reps. Kimberly Fiorello, R-Greenwich; Harry Arora, R-Greenwich; Michael D’Agostino, D-Hamden; and Josh Elliott, D-Hamden.

‘Backbone of the digital age’: Lawmakers advance legislation to promote new data centers in Connecticut

Luther Turmelle The Connecticut House of Representatives has approved legislation that would give tax breaks to companies that develop new data centers in the state.

The House voted 133-13 to send the data center legislation to the state Senate, which is expected to take up the measure next week.

“We do think it’s a great industry and is something businesses look at when they consider whether they want to move to our state,” Department of Economic and Community Development David Lehman said Thursday.

Governor Ned Lamont said the data center legislation, if passed, will encourage increased economic development for the state. It’s hoped job growth will not only come from the additional data centers, but also from industry attracted to the state by a robust data infrastructure.

“Seeing the Connecticut House of Representatives approve this measure in a bipartisan way is exactly what our residents want to see when it comes to our commitment to economic growth and continuing our Connecticut comeback,” Lamont said in a statement. “Data centers are the backbone of the digital age, and with this growing need, we are witnessing a significant period of national growth to build these infrastructures and create the corresponding jobs that support their operations. Connecticut needs to get in the game and bring this industry to our state.”

Under the terms of the legislation, data centers will be required to be located in federally recognized opportunity zones, which will help boost the development of economically distressed areas.

“There is a significant amount of grand list growth for the communities that host these centers,” Lehman said.

At the same time, he said, companies that develop these data centers will avail themselves of savings on sales and use taxes for a period of 20 to 30 years. The length of the period during which data center developers will not have to pay these taxes depends upon the size of their investments, according to Lehman.

“Companies that invest $200 million or more won’t have to pay these taxes for 20 years,” he said. “Companies that invest $400 million or more won’t have to pay these taxes for 30 years.”

Connecticut already has between five and 10 data centers, Lehman said. But the existing centers are largely aging facilities, he added.

A new data center being developed in what was once part of the famed Stanley Works manufacturing center in New Britain is slowly moving closer to reality, according to the city’s economic development director William Carroll. The data center is the centerpiece of what is called an energy and innovation park that was first announced in 2019.

“It hit a snag with COVID-19, but it has gotten back on track,” Carroll said. “We expect demolition work to begin in the next 60 days.”

Full build-out of the Energy and Innovation Park is expected to generate more than 3,000 primary and secondary jobs over a 10-year period, according to officials with the company that is developing the facility.

Officials with EIP LLC were not available Thursday to comment on when construction work on the New Britain data center might start.

Biden team readies wider economic package after virus relief

KEVIN FREKING, HOPE YEN and JOSH BOAK  WASHINGTON - Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another top legislative priority - a long-sought boost to the nation's roads, bridges and other infrastructure that could run into Republican resistance to a hefty price tag.