EDC spurs release of $10.5M grant to ProvPort

Concern over Providence’s financial condition has delayed release of a $10.5 million federal grant for long-anticipated improvements at the Port of Providence, though the funding is expected to be released soon under an arrangement with the R.I. Economic Development Corporation.
On Feb. 28, the EDC assumed control of the federal Transportation Investments Generating Economic Recovery grant awarded to Providence in October 2010.
Last week, William G. Brody, the general counsel for ProvPort, the nonprofit public-private partnership formed in 1994 that manages the port, met with the U.S. Department of Transportation Maritime Administration to clarify the final arrangements of the grant. He described the port’s ability to begin work under the grant as “imminent, or at least by the end of the month.”
Brody said the port is gearing up for improvements. “The $10.5 million was initially coming through the city to ProvPort. Now it will come through the state to ProvPort. The purpose of the grant is to assist us on our project of acquiring two 40-ton cranes and two barges upon which they will be placed and able to work both waterside and landside,” he said.
The new system will allow for the cranes to become mobile, a distinct operational advantage that allows the port some flexibility. They will also increase its ability to receive bulk materials and accommodate container operations. They are critical for the port, which has depended on 30-year-old cranes that have been prone to breakdowns and periodically out of commission for an extended period of time.
Providence’s precarious financial condition caused the federal government to not release the funds, according to Jim Bennett, Providence’s economic-development director.
In a Feb. 2 news conference called in response to the city’s fiscal crisis, Mayor Angel Taveras said the city would soon be bankrupt if it did not receive specific concessions and payments. That set off alarms with federal officials, who had already expressed concerns in January, according to Brody. After several discussions with state officials it was decided the most practical solution would be for EDC to hold the funds for their intended purpose. “The state is a better transferee than the city so that’s why it was transferred to EDC,” Bennett, Providence’s ex-officio member on ProvPort’s board, told Providence Business News. “The city leases the land to ProvPort,” which hired Waterson terminals to operate the port, he said. The lease with ProvPort expires in 2037.
The EDC’s board approved the arrangement for the loan transfer on Feb. 28, at a meeting chaired by Gov. Lincoln D. Chafee. A spokesman for the EDC declined to comment on the agency’s role in resolving the issue.
The TIGER program is part of the American Recovery and Reinvestment Act of 2009 and administered through the U.S. DOT. Funds from the program are for the improvement of transportation projects varying from highway construction to railway rehabilitation and port development. The grant is a “matching grant” where the federal government funds 54 percent of the total project and the recipient the remainder.
The total cost of the crane project is $19.4 million, thus ProvPort is still responsible for the remaining $8.9 million. Brody said arrangements for the funds have been made. “We have a relationship with Bank of America and we’re borrowing the bulk of that money, using the barges as collateral.”
ProvPort’s initial grant application involved a $39 million project that included the cranes, barges, and an energy component consisting of two wind turbines and solar panels. The concept was to become a “renewable port,” where they would not only be self-sufficient but also be able to sell power back to the electric company. With almost $19 billion in bids submitted nationwide for $600 million in available grants, chances of the project going through as proposed were slim. “To my knowledge, no one received all they requested,” Brody said.
After several meetings with the federal government the project was scaled back with the elimination of the energy portion from the proposal and the project was funded with $10.5 million. While the port would someday like to revisit the energy-saving additions there are currently no plans to do so.
The addition of the floating cranes will increase the port’s advantages over other nearby ports. It already boasts six berths, each with 40 feet of mean, low-water clearance. Along with Boston, it is the only other deep-water port in New England and is capable of accepting most world-scale cargo vessels.
ProvPort has other attractive qualities. It is a 105 acre facility with 25 acres of paved storage area near new rail lines. More than $50 million in new capital investments have been made over the last 15 years. In 2008, the port’s 3.1 million tons of cargo was second only to Boston in the region.
According to a report released Feb. 14 by the General Assembly’s joint port-study commission, the port employs more than 1,000 workers averaging wages of $25 per hour and indirectly employs another 1,500 workers. It generates over $200 million of total economic activity, more than $60 million of which is port related business revenue. In addition, the port generates $16 million of local and state tax revenue each year. •