The Quoddy Tides

Eastport, Maine

2006 January 13

Downeast LNG offers town
$3.6 million annual package

by Marie Jones Holmes

A proposal to the Town of Robbinston from Downeast LNG concerning the construction and operation of a liquefied natural gas (LNG) terminal and storage facility at Mill Cove was the topic of discussion at a public hearing and informational meeting held December 28 at the Robbinston Grade School. The hearing was held almost two weeks before the town voted January 10 on the question: "Shall the town approve the proposed Downeast LNG terminal and storage facility at Mill Cove?"

Downeast LNG principals Dean Girdis and Rob Wyatt presented a $3.6 million annual package that would accompany the construction and operation of the proposed terminal and storage facility.

More than 100 Robbinston residents and interested Quoddy area residents filled the Robbinston school auditorium. Girdis, president of Downeast LNG, told the audience that the support of the Robbinston community is important to the project, but a strong "no" vote would not stop the project. "It would just tell us that we have more educational work to do." Girdis said the Federal Energy Regulatory Commission (FERC) likes to know how a community feels about a proposed project.

Highlights of the proposal

A draft of a legal agreement outlining Downeast's $3.6 million package is now in preparation and will be reviewed by the town's attorney. Some of the highlights of the proposal follow.

A real estate property tax payment that would be 92% of the total town budget, a three-year financial guarantee of taxes and an estimated 60% reduction in residents' property taxes would be offered. Downeast LNG will pay its property tax obligation to Robbinston based upon the assessed value of the LNG plant. Plant depreciation would not be deducted.

Downeast LNG proposes to guarantee, through a financial bond or equivalent mechanism, the equivalent of an estimated three years of the town budget, ensuring the payment of its future tax obligations. The financial instrument would be maintained at a three-year capability throughout the life of the project. Estimated taxes would be paid by October 31 of the prior year in which the taxes are due.

The company proposes to establish for the town a Community Development Fund. At the commencement of construction, Downeast LNG would contribute $100,000 yearly until the plant becomes operational. Once operational, they will make a yearly contribution of $1,200,000. This amount would be reduced $1 for every $1 that their yearly tax bill from the Town of Robbinston exceeds $1,500,000.

Under the proposal, Downeast LNG agrees to pay for all expenses associated with maintaining and upgrading fire equipment and the fire house for the Robbinston Fire Department.

Under economic development, the company reiterated its commitment that building contractors will employ as many local Washington County workers as possible, if they are available and qualified. Basic construction job training would be made available to qualified hires, if needed, up to a maximum of five months, through the Washington County Community College. Existing Washington County contractors would be reserved a 5% set-aside of in-state construction expenditures, assuming there are local firms that can fulfill bid terms and that bids are competitive.

If Downeast LNG begins construction of the LNG terminal, it agrees to fund the construction of a new school to replace the existing school, at a size that meets the reasonable projected growth of the school population. Two college scholarships of $5,000 each will be provided for attendance at accredited Maine colleges.

The company will study the feasibility of retrofitting the existing school to an assisted-living home for the elderly of Robbinston. Downeast LNG would finance the renovation, if viable, or build a new facility.

If the LNG project is built, Downeast LNG offers to abutting property owners — those owning property immediately across Route 1 from the facility and those owning property on the shoreline of Mill Cove facing the project — one of the following three compensation options: a one-time impact fee payment of $25,000 to each homeowner; the difference of any increased cost necessary to purchase or build a reasonably similar home and property in the Robbinston area, including payment for reasonable moving expenses; or protection of property market value prior to LNG announcement, based upon independent appraisal with property value escalation based upon average price appreciation in Washington County. For other property owners not covered above, but within a half mile, impacts would be individually assessed by Downeast LNG to determine if some form of compensation would be appropriate.

Public comment

Following the presentation period, a one-hour public comment period was held. Mike Footer, one of eight community residents who participated in a three-day trip to the Cove Point, Maryland, LNG terminal, sponsored by Downeast LNG, answered questions concerning that facility. In response to questions concerning lighting at the terminal, Footer said they were at Cove Point during the day only. Also, there was no ships at the terminal during their visit. The group did talk to Cove Point area residents, and many residents said they were not conscious of the facility being a neighbor. Real estate values have gone up, but are most likely a result of population expansion from the Washington, D.C., area. After viewing the Cove Point operation and talking to area residents, members of the Robbinston group who traveled to the Maryland facility said they felt comfortable with the Downeast LNG proposal.

One resident asked, if the students were being moved from the school for safety reasons, why would the building be used for assisted living purposes for the elderly. Girdis said they will study the feasibility of retrofitting the existing school for an assisted-living home for the elderly of Robbinston. Downeast would finance this renovation, if viable, or build a new facility.

Robbinston resident Troy Hatton stated that the "fear mongering that went on in Perry is creeping in here. We have a long tradition of crying about jobs. It is time to let something come in."

Girdis said Downeast LNG plans to file its pre-application with FERC in January. The permitting process is expected to take two years. While working on the FERC application, Downeast LNG will also be pursuing local and state permits.


© 2006 The Quoddy Tides
Eastport, Maine
Article republished on Save Passamaquoddy Bay website with permission.