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Mayer Brown advised the Connecticut Port Authority (CPA) on its agreement with an affiliate of Gateway Terminal (Gateway) for the long-term operation of the State Pier in New London, Connecticut.
Under the terms of the 20-year agreement, Gateway is expected to assume operation of the State Pier on May 1, 2019. At the end of the initial term, the CPA has the right to extend the term for two additional 10-year periods. The new contract requires that an annual fixed fee of $500,000 be paid to the CPA, increasing by $250,000 every five years. The CPA will also receive a variable fee of 7% of Gateway’s gross revenues at State Pier, with a minimum annual guarantee of $500,000 that has the potential to increase every five years based on Gateway’s percentage increase in gross revenues. Gateway also will share 50% of all wharfage and dockage user fees at State Pier. All together, these terms will provide CPA with a substantial increase in revenue over the current operations.
This agreement presents an opportunity to expand the role of CPA, a quasi-public agency whose mission is to enhance Connecticut’s economy and create jobs by strategically investing in the state’s three deepwater ports and small harbors. The agreement serves as an economic driver by increasing the overall traffic flowing through this key point of entry.
Mayer Brown served as co-counsel with Robinson & Cole as advisors to the CPA on the transaction. The Mayer Brown team included partner Joe Seliga and counsel Jeromy Cannon (both Chicago) and senior advisor Toby Moffett (Washington DC).
Under the terms of the 20-year agreement, Gateway is expected to assume operation of the State Pier on May 1, 2019. At the end of the initial term, the CPA has the right to extend the term for two additional 10-year periods. The new contract requires that an annual fixed fee of $500,000 be paid to the CPA, increasing by $250,000 every five years. The CPA will also receive a variable fee of 7% of Gateway’s gross revenues at State Pier, with a minimum annual guarantee of $500,000 that has the potential to increase every five years based on Gateway’s percentage increase in gross revenues. Gateway also will share 50% of all wharfage and dockage user fees at State Pier. All together, these terms will provide CPA with a substantial increase in revenue over the current operations.
This agreement presents an opportunity to expand the role of CPA, a quasi-public agency whose mission is to enhance Connecticut’s economy and create jobs by strategically investing in the state’s three deepwater ports and small harbors. The agreement serves as an economic driver by increasing the overall traffic flowing through this key point of entry.
Mayer Brown served as co-counsel with Robinson & Cole as advisors to the CPA on the transaction. The Mayer Brown team included partner Joe Seliga and counsel Jeromy Cannon (both Chicago) and senior advisor Toby Moffett (Washington DC).
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