PROVIDENCE, R.I. (WPRI) – The Providence City Council took the first step Monday towards approving a new 30-year tax treaty and lease with the private nonprofit that manages the city’s port, despite hours of testimony from opponents, many of whom called on the council to hold off until newly elected members take office in January.

The deal was approved by a vote of 4 to 1 in the Finance Committee, and is on Thursday’s agenda for a full City Council vote.

ProvPort, a 501(c)3 nonprofit, took control of its section of the Port of Providence from the city for $16.4 million in 1994 as part of Providence’s effort to close a projected budget deficit. The nonprofit outsources management of the port to Waterson Terminal Services.

The new agreement would extend ProvPort’s lease until 2052. Aides to Mayor Jorge Elorza argue the new agreement is a better deal for the city than the existing agreement, because it will increase the percentage of revenue that ProvPort pays into city coffers in exchange for controlling the port.

But during a lengthy public hearing Monday night, advocates fiercely opposed approving the deal without incorporating the city’s climate justice plan or creating a new “master plan” for the port, as called for in the new agreement. Multiple city councilors and councilors-elect also argued the public process is being rushed, and approval shouldn’t happen during a lame-duck session.

A floor amendment approved before passage added a requirement that ProvPort cannot expand its existing fossil fuel infrastructure.

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A map of the Port of Providence, with ProvPort’s area highlighted (Courtesy: ProvPort)

ProvPort controls only a portion of the entire Port of Providence, which sits on the Providence River in South Providence and feeds into Narragansett Bay. ProvPort’s tenants include companies like Orsted, Sea-3, Morton Salt and New England Petroleum. (Other businesses, such as the scrap metal yard on Allens Avenue, are not part of ProvPort.)

ProvPort’s existing lease doesn’t expire until 2036, but if approved by the full council the new agreement would start immediately, replacing the existing deal. (The tax treaty would first require General Assembly approval because it’s longer than 20 years.)

Under its existing long-term lease of the land, ProvPort has a tax-exemption agreement that requires it to pay roughly 5% of its revenue to the city instead of paying property taxes, according to spokesperson Theresa Agonia.

The new agreement would require ProvPort to pay 9% of its revenue to the city, with 2% going into special funds for sustainability and community benefits.

ProvPort paid the city $520,000 this year under the existing agreement, Agonia said, while full taxation would have been $768,803. The nonprofit estimates its payment to the city would rise to about $1 million in the first year of the new agreement, if approved. The city would also receive a one-time upfront payment of $7 million.

In total, ProvPort estimates it would pay $52.7 million to the city over the 30-year span of the deal, assuming revenue grows by 2% each year. The city did not provide an estimate of what the company would have paid in property taxes over that same period.

The deal also involves the city floating a bond that will be paid back by ProvPort.

Bill Fischer, a spokesperson for ProvPort, says the organization estimates it would actually pay more to the city under its proposed 9% revenue-sharing agreement than it would by paying standard property taxes in full.

The benefit for ProvPort: the company would retain long-term control of the land, allowing it to negotiate 30- to 50-year leases with its own tenants, according to a fact sheet.

The potential future uses for the port include a “long-term hub to support offshore wind development.”

“Our primary focus for expansion is supporting offshore wind development, not only off of Rhode Island’s waters, but up and down the East Coast,” Fischer said. He said Orsted, which owns the Block Island wind farm, has agreed to use 25 acres of ProvPort. He said there is “market demand” for additional offshore wind activity, but did not share any specific other companies planning to open locations at the port.

City Solicitor Jeff Dana said during Monday’s hearing that ProvPort reached out to Elorza’s administration several years ago to negotiate a longer lease deal.

But many who testified questioned the speed with which the agreement is moving through the council.

“A policy decision such as this importance requires much more extensive community engagement,” said Monica Huertas, a climate activist who lives in Washington Park. “To simply rush this is honestly just a disservice and a disrespect to all the work that we’ve done as a community.”

Miguel Sanchez, who will be sworn in in January to represent Ward 6 on the council, accused the council of rushing the agreement through because the new council members are unlikely to approve it.

Asked about the timing, Council President John Igliozzi said the Elorza administration negotiated the deal and asked the council to take it up.

“The City Council operates year round,” Igliozzi told 12 News. “We’re just doing what we’re elected to do, to do our job. We’re listening to it, vetting it, discussing it.”

Elorza defended the agreement in a statement, pointing to a need to keep the port competitive.

“The thirty year agreement is the result of over two years of negotiation and includes provisions that provide greater financial transparency, require a long-term master planning process, increased community investment dollars and increased revenues to the city,” Elorza said. “Coupled with the recently announced long-term lease with Johnson and Wales to secure an additional 13.5 acres of land, this agreement is a critical piece of ensuring ProvPort can secure long term investments from tenants and to ensure the Port is competitive at a regional and national level, specifically in the offshore wind industry.”

Mayor-elect Brett Smiley is in favor of the agreement.

Council Majority Leader James Taylor said during Monday night’s meeting he did not believe the process was rushed.

“I know this has been in talks for at least three years that I’ve been hearing about it,” Taylor said. “I do think we could’ve done a better job reaching out to the public.”

The proposed new agreement with ProvPort was not made public until it was introduced at a special meeting on Nov. 9, after which it was scheduled for the public hearing that took place Monday. Specifics about the plan were detailed during the same hearing in which the public was invited to testify, followed by the immediate vote by the Finance Committee.

Taylor said some of the public’s complaints about pollution and asthma issues stemming from the port come from businesses that aren’t part of ProvPort’s footprint.

He proposed a floor amendment prohibiting the further expansion of fossil fuels at ProvPort, along with another amendment detailing how the new sustainability and community funds will be spent. Both were approved.

“If the wind doesn’t work or anything, they cannot do anything with fossil fuel,” Taylor said.

Taylor voted in favor of the lease and tax deal along with Councilors Jo-Ann Ryan, Nicholas Narducci and Carmen Castillo. Councilwoman Helen Anthony, who unsuccessfully moved for the matter to be postponed, voted no.

Councilman Pedro Espinal, who represents the part of the city where the port is located, also objected to the speed of the council approval.

“We have time to get this right,” Espinal said. “If Councilman Taylor was informed about this, I congratulate him about that. I was not fully informed.”

“This is not the way we’re supposed to do things,” Espinal added. “This is not right.”

Steph Machado (smachado@wpri.com) is a Target 12 investigative reporter covering Providence, politics and more for 12 News. Connect with her on Twitter and on Facebook.