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David Kooris walked into Muddy Waters Café on Bank Street in New London like a regular – a measure perhaps of the time he has spent as Deputy Commissioner of the Department of Economic and Community Development (DECD) acting as an ambassador, a fixer of sorts, for the Lamont administration on a joint wind energy deal based out of New London which for the last months has threatened to unravel.
The deal pairs a wind developer Ørsted, an energy supplier Eversource, a port operator Gateway New London LLC, and the quasi-public Connecticut Port Authority, in a near-term investment of about 93 million dollars renovating State Pier in the port of New London to serve as the central hub for the uncertain business of assembling and constructing wind turbines off the east coast as far south as Maryland. It’s a chance perhaps to place New London at the ground floor for a slice of what over the next decade or so has been projected to be a $70-billion-dollar 20-gigawatt business of wind power.
“A lot of what I do for the last decade is stakeholder engagement, right? That’s my bread and butter… complicated, multifaceted, multidisciplinary multi-stakeholder projects in existing communities and having to kind of negotiate that,” Kooris said.
He is late, appears exhausted, after a multiday effort in the lead up to Tuesday’s informational in New London.
“It’s very different when you come in like when a project is well underway, and none of that has happened, then when you’re in the position I am usually in which is kind of like crafting that from the outset and implementing it,” he explained.
It’s an effort that in this late state compares, he says, unfavorably to his experience working in Bridgeport.
“It’s a lot easier when you do that from the beginning, than you do what we’re trying to do now, which is you know – okay — I understand you weren’t talked to do through this process, let us get you up to speed, and hear you out, and hopefully it’s not too late,” said Kooris.
A little bit of room, not a lot of time
Almost five months after a well-publicized celebration of the still-unfinished deal, and with a meeting on Monday with Mayor Mike Passero and a meeting on Tuesday with Cross Sound Ferry, it’s ironic, I suppose, that Kooris felt the need to reassure us that the deal remains unfinished.
But in talking to Kooris there is a definite timeline to the project driven by existing Ørsted and Eversource commitments to wind projects. As he explained it, “there is a little [wiggle] room, not a lot of time.”
“In order to meet their timelines for the projects that they committed to us and other states they basically need to know by the end of this year whether they are doing this work,” Kooris told us. “It’s happening here or somewhere else and we are nearing that decision point for them.”
Two months from now is too late to meet stakeholders like Cross Sound, said Kooris, putting a rough timetable on his recent outreach.
Regarding the “terms sheet” – another way of saying a memorandum of understanding — signed on May 2 and the spark of the premature celebration, Kooris said that “some of those terms are being tweaked … not a lot of the big ones, I mean the cost share, all that, is pretty well baked.”
We’re Plan A
Driving the timeline as well is a belief, expressed by Kooris, that the while the current math favors New London as the nearest best solution for the first series of projects that are located between Martha’s Vineyard and Block Island, there is a “tipping point” when another more distant port with less need for immediate investment could prove preferable. “You know, so these guys have… alternatives, right?” said Kooris. “We’re plan A, but there’s a plan B.”
Kooris said he was not exactly sure of the alternate location but said that it was likely to the south in the so-called Mid-Atlantic region. Such areas might prove closer to later projects that will follow the initial wind leases off Massachusetts and Rhode Island.
“You know, so everyone kind of comes to me, and everyone thinks they’re the master negotiator, right?… is like, they need this port… this is the best port… You can get way more out of them than you are. Yeah, maybe we can get more out of them than we are, but New London is very well-positioned geographically, right? Is closest to that cluster of lease areas and that’s a big cluster of lease areas, it’s got some of the best wind, right? It’s kind of the early opportunities… it’s geographically advantageous because of the dredge with the subs, so you know it’s going to be maintained, no head restrictions, very little horizontal restrictions… so that’s all great. But what people forget thought is there may be another port that isn’t quite as close… there are other ports around the country without restrictions, right? We’re not the only port…”
An antiqued State Pier
Weighing against New London, according to Kooris, are antiquated port facilities that require tens of millions of dollars of upgrades – upgrades that have been recommended for decades, but which until now have lacked a private partner and or a likely use.
“This two-pier model is old, right?” explained Kooris. “Picture the west shore of Manhattan in the 18th century, all those ships, that’s how it used to work… it doesn’t work that way anymore… look at any pier… look at Quonset, look at the port of Newark, New Jersey… it’s the linear wharfage, it’s the laydown area, it’s the upland storage… it’s the heavy lift capacity — that’s what we need, and we are not that. We have decades of studies that say that if you’re going to be more than what you are today, you need to make these kinds of upgrades.”
On the downside Kooris admitted, the joint venture might not get a lot of contracts, and they might not make use of the pier, but on the upside for Connecticut is a motivated partner, committed to paying rent, and at the end of ten years (or another seven years if the agreement is extended), the State Pier will be state-of-the-art.
“So, for the first time ever we have a user who is giving us a high likelihood of utilization and is paying for at least better than half of the cost of reconstruction and at the end of the ten years we get that facility forever,” said Kooris.
A Niche Market
Kooris counted off various figures and benefits – acknowledging that the new deal with Gateway was premised on the possibility of more cargo entering into New London – finding the upside in $3 million as baseline revenues for the port authority and $1 million for Gateway, compared to a quarter-million previously. Kooris said that revenues for the port authority would take pressure off the state government to appropriate or bond for future port authority projects.
But the real benefits and possibilities of the project were in the possibility of serving as an assembly hub if the market for wind energy takes off – a “big if,” Kooris acknowledged.
Kooris said that prior to joining the port authority, in his role at the DECD had reached to the towns of New London, Waterford, Groton, Montville, Ledyard, and Norwich to assemble a portfolio of sites that were accessible to State Pier by rail or barge and that he had already met with interested Dutch and UK-based companies.
“We’ve already met with 2 companies now one from the UK and one from the Netherlands and we’ve now been able to say, ‘here’s the site you are on the rail directly connected to State Pier or you are on the waterfront with a direct barge connection to state pier,’” said Kooris. “That’s the hope, that’s the hope by doing more than one component out of New London that the folks who want to co-locate… it’s about positioning greater New London at the foundational level of a growing industry to potentially make as much of it as it can.”
Exclusivity, as Kooris explains it, more than outweighs the opportunity costs of lost cargo at State Pier by creating a niche market which best suits a port like New London.
“Some ports go all in on cars, and when wind started coming up in ‘18, way before I had any interaction with them, they were starting to tell the Connecticut Port Authority, the state, this might be your niche. Yes, we give up exclusively, but it’s also our way to get to the level of activity that it amounts to something.”
“What we’ve heard consistently from [Gateway] and from our consultants is that for a port your size and location a niche is really the way you’ll ramp up activity, right? Some ports go all in on cars, and when wind started coming up in ‘18, way before I had any interaction with them, they were starting to tell the Connecticut Port Authority, the state, this might be your niche. Yes, we give up exclusively, but it’s also our way to get to the level of activity that it amounts to something.”
Rather than reinventing the wheel it’s a project Kooris said, that reemphasizes existing strengths.
“It’s not like it’s creating this brand-new supply chain from scratch is kind of reinforcing spinning off this one we’ve already built.”
The experts in the room
Catherine Smith’s involvement in the wind energy deal is no doubt a Rorschach test for proponents and critics of the Malloy administration’s approach to economic development. As DECD Commissioner, Smith led the Malloy administration’s economic development efforts for nearly eight years, and counts agreements to keep, attract and grow businesses including UTC, Sikorsky, Electric Boat, Cigna, Bridgewater, AQR, Synchrony, as well as Charter, Infosys, and Navigators, among her key accomplishments.
Asked about a negotiating committee which appears significantly lacking in the kinds of skills suited to negotiating a large and arcane deal for a slice of a $70-billion-dollar business opportunity, Kooris emphasized the driving, “hands on” role of Smith.
“She was really driving it. She played a very participatory role” prior to her departure in January, Kooris explained. Kooris also said that the port authority had hired Seabury to help shape the proposal and that the consults were “in the room” during negotiations.
Kooris only joined the port authority in February as part of his role as deputy commissioner of DECD, he has since served as vice chair and acting chair with the departures and resignations of chairs Scott Bates and Bonnie Reemsnyder, as well as the paid leave and impending departure of Executive Director Evan Matthews.
“There are more eyes on it now than have ever been and it’s a broad range of folks with a broad range of expertise that are you know making it better,” said Kooris.
Kooris said that he had never actually attended a meeting of the port authority finance committee, which has been at the center of questions regarding port authority spending and oversight.
Since then, the Lamont administration has begun “reviewing all aspects of the deal.”
“There are more eyes on it now than have ever been and it’s a broad range of folks with a broad range of expertise that are you know making it better,” said Kooris.
Replacing the previous negotiating team of Parker Wise, Evan Matthews, Bonnie Reemsnyder and Catherine Smith is a new team that includes Parker Wise, David Kooris, Paul Whitescarver, counsel, OPM, and Seabury in a limited capacity.
Chief Operating Officer and Deputy Chief of Staff Paul Mounds, and Chief of Staff Ryan Drajewicz are providing added expertise and clout in the negotiations, said Kooris.
“The Chief of staff is heavily involved in kind of a lot of moving pieces, he is very much in the loop with the ongoing discussions with the city,” said Kooris.
Getting on the right page
Asked about the negotiations with the City of New London – compensation for the city remains a significant point of contention — Kooris said that the Governor’s office and Mayor Passero were “close” to being on the same page.
Kooris said that after eight months, and a hands-off approach by the Connecticut Port Authority without a deal yet between New London and the Ørsted-Eversource partnership, the Lamont administration was now taking an active part in those negotiations as well. Kooris said that the two sides were also near to being on the same page.
In addition, Kooris said that the administration were making progress helping two fishermen and the salt business currently using State Pier to relocate, emphasizing the governor’s commitment to the existing users, and that while the deal would hand over exclusive use of State Pier, that should not be confused with exclusive use of the rest of the harbor.
Or a little bit to a lot of people…
Asked to judge whether he thought this was a good deal or a great deal, Kooris thought for a moment and responded that “I think it’s a good deal that has a potential for great indirect impact.”
For a city which has promised repeatedly to avoid betting it all on the next big thing, will that be enough?
“Our port partners, i.e. Gateway, and external consultants concur that this seizing of a niche opportunity is the best path for the port to achieve greater potential rather than trying to be a little bit to a lot of people,” answered Kooris.
Judging by the generally favorable response on Tuesday night perhaps he has made the case.