Passero makes a deal
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 operator 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