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If permit approvals or the final $50 million of bonding for State Pier development are delayed much longer, the partnership of Eversource and Ørsted could take back millions of dollars pledged for the project based on a recent change to the development agreement with the Connecticut Port Authority.
An amendment added to the harbor development agreement between Eversource-Ørsted and the Connecticut Port Authority on June 29 allows the partnership to take back whatever portion of $55 million that it contributed to the project, but has not yet been spent, if a series of conditions aren’t met by Aug. 31.
Those conditions include the project receiving two permits — one from the state’s Department of Energy and Environmental Protection and another from the U.S. Army Corps of Engineers — as well as the remaining $50 million in state funding for the $235 million project. That money needs the approval of the State Bond Commission, which is scheduled to meet on July 30 and Aug. 27.
Connecticut Port Authority Executive Director John Henshaw said he expects the permits and the funding in hand well before the Aug. 31 deadline. If not, the amendment calls for the authority and Northeast Offshore to meet before Sept. 15 to discuss how to move forward. According to Henshaw, that could simply mean extending the deadlines again, and would not necessarily mean the loss of the private funding.
“If we don’t in fact have permits in hand on Aug. 31, we sit down and we figure out what kind of project do we want to build given that situation,” Henshaw said.
The Eversource-Ørsted partnership has contributed $75 million to the project, and the amendment, but the amendment entitles the partnership to take back up to $55 million held in escrow – minus the amount of that money that has already been spent by Aug. 31, and the pro-rata cost to demobilize the project – if the deadlines aren’t met.
“It is the joint venture and the State’s expectation that all the pieces to commence construction at State Pier will be in place by the end of August,” a spokesman for the Eversource-Ørsted partnership said to CT Examiner in a statement. “That’s why that date was included in the HDA amendment. If all the pieces do not come together by August 31, we will come together with the State to assess schedule impact – if any.”
Henshaw said the purpose of the amendment was for Eversource-Ørsted to put its contributions into escrow earlier so the authority could start spending on the project. The agreement previously contained clauses that called for the parties to discuss altering the agreement and the scope of the project if deadlines weren’t met.
Henshaw said the authority has already approved 95 percent of the contracts for the project. The outstanding permit from DEEP is to allow dredging, and the department issued a proposed decision in May indicating its likely approval. But road salt distributor DRVN, which has been displaced by the project and is fighting to continue using the pier, has challenged that permit. Oral arguments in that case are scheduled for July 21.
This story has been edited to include a statement by Eversource-Ørsted