The offshore wind developers Ørsted US Offshore Wind and Eversource are now offering East Hampton Town nearly $29 million over 25 years in exchange for being allowed to land the power cable from the South Fork Wind Farm in Wainscott.
Town officials on Tuesday revealed that the town, East Hampton Town Trustees and representatives from Ørsted-Eversource have reached an agreement in principle that would see the company pay the town more than $1 million in two payments at the start of the project and then an annual payment for the 25-year-life of the project that would start at $850,000 and increase by 2 percent each year — a total of just under $29 million.
The funding would essentially be rent for the use of the ground beneath the beach at the end of Beach Lane in Wainscott, and about 2.5 miles of town roads snaking northward from the beach to the Long Island Rail Road tracks, where the cable will run east to the Long Island Power Authority substation near Buell Lane.
The agreement, which was still being finalized by attorneys for the two sides and is expected to be made public on the town website later this week, also imposes a long list of demands on the construction of the project, the attorneys who worked on the agreement for the town said at Tuesday’s Town Board work session.
Attorney John Wagner, the town’s outside counsel for the negotiations, said that the agreement contract, known as a Host Community Agreement, or HCA, would give the town independent authority over nearly every aspect of the construction work, including environmental protective measures, the restoration of roadways and surrounding lands after the installation of the cable and the removal of all components if the easement is ever terminated. The easement agreement would not take effect until all the permits for the project are received.
Neither the Town Board nor the Town Trustees have voted to ratify the agreement yet, and the New York State Public Service Commission and federal Bureau of Ocean Energy Management are still reviewing the project as a whole.
But the majority of Town Board members appeared in favor of the proposal on Tuesday — save for Councilman Jeff Bragman, who maintained his steadfast position that the town should not enter into any agreements until the Public Service Commission has issued an approval — and Trustees Clerk Francis Bock said that he believes the majority of the Trustees are satisfied with the results of the lease agreement negotiations.
“We went from $3 million to almost $29 million and almost every concern for the environment that we had has been addressed,” Mr. Bock said on Tuesday. “Fisheries, access to the beach during construction, right down to the type of sand they are going to use when they do their cofferdam. We got an awful lot. Everything we asked them for, we got.”
Mr. Bock credited fellow Trustee James Grimes with insisting on the gradually increasing annual payments after Ørsted had rejected a town proposal that had suggested a one-time $25 million lump sum payment in favor of annual payments.
The amounts, he said, were arrived at by attorneys for the Trustees and town who have worked on similar negotiated payments to communities upstate based on megawatt delivery. The town officials handicapped their own demands based on the different impacts of a wind farm over the horizon and “Ørsted didn’t disagree,” Mr. Bock said.
“Ørsted has actually been fantastic to work with,” he added. “Once Deepwater sold to them, it was a completely different ballgame.”
Jennifer Garvey, the New York market affairs manager for Ørsted, said that the company is pleased with the agreement.
“We worked closely with the town and the Trustees for a long time on this and I think everyone is pleased with where we landed,” she said. “It’s an exciting process.
The total sum more than triples what Deepwater Wind, the company that originally introduced the project, had initially offered the town, and comes as flat payments to be spent however the town and Trustees choose.
Supervisor Peter Van Scoyoc said that the two boards are still working out how the funds would be split. He said that if the agreement is inked, the Trustees plan to direct their portion to environmental improvement projects and he said he’d like to see the town’s portion put into a dedicated fund for projects to expand the use of renewable energy around the town.
“I don’t want to see a future Town Board deciding to use HCA funds to balance a budget or cover a budget shortfall,” he said.
Residents of Wainscott have mounted an effort to incorporate the hamlet as a village, in hopes of being able to halt the cable running through their neighborhoods.
The developers have also identified a potential landing site on state land in Hither Hills, but the company, some town officials and residents groups from the eastern hamlets have said the Wainscott site would be the least disruptive.
Mr. Bragman said that he sees the town’s proposal to sign onto the agreement before the state review process in concluded as sending a message to the state regulators that the Wainscott site is the preferred site of the local municipality. He worried that the gargantuan financial windfall would diminish environmental considerations as the main concern.
“What we’re doing by agreeing to this HCA, is we are settling the question of whether Beach Lane is the best place to land the cable or not,” he said. “My reaction to this is that nearly $29 million is a lot of persuasive power, and I don’t like to see it brought in when we’re considering environmental impacts and alternatives.”
Mr. Bragman said that he believes the Town Board should hold a public hearing on the proposed agreement after residents have had a chance to read the details of the contract.
“The most important local impact is clearly the choice of the route,” he said. “All of our negotiations have been in private executive session, completely outside the hearing of the public. I don’t think it’s enough to say we’ve been working on this for five years. This is new. The public has never seen this.”
Carolyn Logan Gluck, the chairwoman of the Wainscot Citizens Advisory Committee, echoed Mr. Bragman’s sentiments.
Mr. Van Scoyoc said that while the legal requirements for such an agreement don’t require an officially noticed public hearing, the board would give the public ample opportunity to comment on the proposal before it votes. The supervisor did say he would like to see the agreement signed soon, however.
“The question is at what point do you actually proceed with the next step,” Mr. Van Scoyoc said. “We want to proceed because we’ve finally negotiated after two years an agreement that we have consensus support for on the board.”
The supervisor said he believes there is no advantage to the town to wait until the application process is completed before entering into the agreement and that allowing concurrent planning to proceed will help advance the work on the project.
The application to the state has spent the last 10 months in what is known as the settlement process, through which dozens of interested parties — from municipal governments to individual residents — have been discussing various concerns about the project and how they might be alleviated. The process largely wrapped up in May after more than 20 meetings and a joint settlement proposal detailing the negotiations is expected to be released this week as well.
The application for the South Fork Wind Farm to the federal Bureau of Ocean Energy Management, after being officially “paused” for nearly a year while the developers conducted additional work on their siting and arrangement of the 15 turbines in the ocean southeast of Block Island, is now proceeding again.
The BOEM website anticipates the project receiving its permits in January 2022. The company has said in the past it expects construction to take two years. The company had originally expected to bring the wind farm online in 2022.
Ms. Garvey said the company’s other Long Island project, the 100-turbine Sunrise Wind project with New York State, which could land its power cable in Hampton Bays, is still in the very preliminary stages of preparing its applications.
Ørsted also announced on Tuesday that it will begin conducting archaeological surveys along the proposed cable route as well, which has twice been delayed. The surveys involve contractors digging a series of holes, each about 4 feet deep, on the road shoulders. The digging will be done by hand and will take place on weekdays from 7 a.m. to 7 p.m., starting September 14.