ProvPort wins 30-year tax deal, tweaked to address environmental concerns

PROVIDENCE, R.I. (WPRI) — The private entity that runs much of the city’s deepwater port in South Providence is set to retain control until 2052, and will likely continue to be exempt from taxes under a new deal approved by the Providence City Council Thursday.

The amended deal for the organization called ProvPort includes new environmental stipulations amid concerns about fossil-fuel activity at the port and a recent U.S. Environmental Protection Agency fine for one of its tenants.

The council unanimously approved the 30-year tax deal at its meeting Thursday night, sending it to Mayor Brett Smiley, who is expected to sign it into law. The deal still requires General Assembly authorization since it exceeds the usual 20-year maximum for a tax treaty.

The deal calls for ProvPort, which outsources management of the port to a company called Waterson Terminal Services, to pay 9% of its revenues to the city instead of paying property taxes. If revenues come in as projected by Waterson, the payments would be higher than the property tax bill.

The 30-year deal was initially negotiated by former Mayor Jorge Elorza’s administration and introduced to the City Council at the end of its four-year term last year. Amid outrage from environmental advocates about a lack of public input and skepticism from city councilors who were just learning about the deal, a planned vote was scrapped in early December.

The council ultimately passed the deal at its final meeting of the term, but with the understanding that it would be reconsidered by the new council members sworn-in in January (ordinances have to pass twice before they are final.)

A separate bond resolution approved by the previous council gives ProvPort control of the port for another 30 years. The resolution stipulated that it would only go into effect if the tax deal won second passage.

In between the first and second approval, the new tax deal for ProvPort was updated by the new council’s Finance Committee to include mandatory public input in a new “master plan” for the port. The updated proposal also sets aside money for sustainability projects including air quality testing and environmental mediation and prohibits new fossil-fuel tenants from coming to the port.

ProvPort officials have said they aim to expand offshore-wind development at the port.

“The process and decision to pause last year has produced a better outcome for all parties and we can now turn our focus to the additional economic development and job-creation opportunities associated with offshore-wind development,” said Chris Waterson, the general manager of Waterson Terminal Services.

The amended version of the legislation also requires ProvPort to provide the council with a full list of its tenants, and require in its leases that the tenants comply with environmental laws and report any violations to ProvPort and the City Council.

That requirement came in response to a recent EPA violation for Univar, a chemical distributor located at the port.

The EPA settlement with Univar released earlier this month said the violation came from the company’s “failure to comply with industry standards of care … for hazardous and/or regulated chemicals” like ammonia, chlorine and formaldehyde at multiple locations, including in Providence in 2019.

Univar agreed to pay a $600,000 fine to the federal government.

ProvPort’s lawyer sent a letter to Univar on Jan. 19 saying the company was “shocked” to hear about the EPA violation, claiming Univar never notified ProvPort of the issues — despite the fact that the EPA inspection took place years ago.

“ProvPort is disturbed that Univar made no effort whatsoever to notify ProvPort of the claims and allegations asserted by the EPA,” general counsel William Brody wrote, adding that the allegations “indicate a serious breach” of Univar’s lease.

ProvPort has not taken any legal action against Univar.

Councilwoman Helen Anthony, who chairs the Finance Committee, spoke in favor of the new deal on the council floor. Anthony said ProvPort is projected to pay between $800,000 and $1.1 million in its revenue-sharing deal in the first year compared to $764,000 it would pay if the property was taxed.

“While this final tax-exempt agreement is not perfect, it lays the groundwork for us to continue improving the negative environmental impacts of our port, while transitioning it to a major player in the clean-energy economy,” Anthony said.

Councilman Pedro Espinal, D-Ward 10, who represents the area where the port is located, called the agreement a “significant victory” for his constituents. He had previously opposed the original version of the deal.

“Late last year, the City Council heard from community groups concerned that the ProvPort negotiations were moving too quickly with minimal conversations happening with neighbors,” Council President Rachel Miller said in a statement. “The Council listened, paused, and re-engaged with the community and environmental advocates to come up with a better solution.”