PROVIDENCE — Bananas, pineapples and pears — thousands of them — stream across the docks on their way to supermarkets throughout the Northeast.

A crane unloads a shipping container of merchandise bound for CVS stores.

Used Toyotas hop a freighter for West Africa.

These are examples of the long-term vision, maybe decades away, that city and state officials have for a half-mile stretch of the Allens Avenue waterfront best known in recent years for strip clubs, zoning fights and failed redevelopment plans.

"A very small scrap operation and a series of dirt patches" is how Bill Fischer, spokesman for ProvPort Inc., describes the land his organization hopes to transform.

But first, Rhode Island voters would need to endorse the state's vision in November by approving the $20-million purchase of up to 25 acres of property of Allens Avenue waterfront to expand the city’s port.

"Baby steps" are what Chris Waterson, general manager of Waterson Terminal Services, calls the first phase of expanding the port his company operates.

Looked at another way, city and state leaders want ProvPort to do for Allens Avenue what the Quonset Development Corporation is doing for the abandoned former Quonset Point Navy base in North Kingstown: turn underutilized land into a trade and employment hub.

"ProvPort is not a household name in Rhode Island," Fischer said. "But this has been a very successful economic generator for the state, and we want to continue on that success. If we want to grow, it is not going to happen without additional land."

Some 1,700 people work at ProvPort, and the organization predicts the expansion would add another 300 jobs.

Not coincidentally, ProvPort has hitched its state-backed expansion plan to an even larger proposed state investment in Quonset, where officials are asking for a $50-million state bond to repair piers at the Port of Davisville. The two bonds will appear as a package and pass or fail together on the upcoming ballot.

Not everyone is convinced ProvPort should stretch down Allens Avenue.

"Moronic," Allens Avenue property owner Patrick Conley calls the idea of expanding ProvPort south of Thurbers Avenue. "To bring an industrial waterfront so close to the city and hospital district, where there might be questions of air pollution and toxins emanating from industrial activity, is foolish."

Conley's own plans to redevelop part of the area as a commercial and entertainment center were foiled years ago by the Providence City Council's insistence that Allens Avenue remain purely industrial.

But even previous supporters of a mixed-use waterfront, such as Council President Luis Aponte, are getting behind a ProvPort expansion.

"I think a reasonable person could say the [current] activity down there is not the highest and best use on the Providence waterfront," said Aponte, who along with Mayor Jorge Elorza worked on the expansion plan. "This proposal allows us to attract businesses that are not currently in the state ... and will provide jobs and an investment in this corridor."

What is ProvPort?

In 1994, facing a budget crisis, then-Mayor Vincent A. "Buddy" Cianci Jr. turned to the more than 100 acres of city-owned industrial land at Fields Point to raise cash.

With the City Council's approval, he sold the land, which included the sleepy Municipal Wharf, for $16.5 million to an entity controlled by California financier Ray Meador, who agreed to manage the port.

The deal utilized some financial sleight of hand. Meador formed a nonprofit holding company called ProvPort to possess the land, then lease the property to the city-controlled Providence Redevelopment Agency, which issued tax-free bonds to pay the city and subleased the land back to ProvPort.

The "sale" would last for only 30 years, and then ownership would revert to the city. Port revenues were pledged to pay off the bond.

The upshot of the deal, which has been extended through 2036, is substantial city control over the port through the nonprofit ProvPort, while risk and income flow through to the for-profit operator, which has been Waterson Terminal Services since the port's longtime stevedore company merged with Meador's Public Asset Management in 2007.

Two of the five voting members on the ProvPort board are appointed by the city. The PRA approves ProvPort’s budget and has an ex-officio spot on the board.

Meador, whose projects included arranging the financing for the ill-fated Wyatt Detention Center, in Central Falls, was not a marine trade expert, and the early years of ProvPort did not go well. By 2000, the city had chipped in $1.3 million to cover bond payments when port revenues came up short.

While he doesn't endorse the practice of mortgaging city land to plug budget shortfalls, Elorza's chief of staff, Brett Smiley, said the public-private partnership with Waterson is "advantageous" for the city, which doesn't want to run the port itself.

And now, headed for November's ballot, there's the $20-million bond proposal that would make the state a full partner in the operation. Here's how it would work:

An entity representing the state, probably the Rhode Island Commerce Corporation, would negotiate with Allens Avenue property owners to acquire at least 15 acres from some combination of seven parcels. The two parcels closest to ProvPort, one home to the embattled Rhode Island Recycled Metals scrap yard and the other owned by Cumberland Farms, are at the top of the list.

Then the state would enter into a long-term lease arrangement with ProvPort, so the nonprofit could store cargo on the land while marketing it to prospective tenants.

Finally, the state would enter into a revenue-sharing arrangement for the new land similar to the city's arrangement with ProvPort. And it would get a seat on the ProvPort board.

The city receives 6 percent of the port's gross revenue (before bond payments or any other expenses). It also receives property taxes on ProvPort parcels as if they were owned by a private company. The taxes are paid by ProvPort on parcels it has not leased and by leaseholders on land they occupy.

Initially, city officials had proposed to retain control of the newly acquired land, even though the state would be putting up the money to buy it. To compensate the state, ProvPort offered the state 8 percent of the revenue generated on the expansion parcels, with another 4 percent going to the city. The state would receive a projected $400,000 a year.

But state officials, especially House Speaker Nicholas Mattiello, balked at giving up ownership of the land, which brought negotiations to a standstill until the final week of the legislative session.

City leaders "re-thought their position and there were 10 days left in the [General Assembly] session ... that started an avalanche of vetting where they wanted [Commerce Secretary Stefan] Pryor involved and we worked over the weekend," Fischer said. "We weren’t trying to slip something into the budget in middle of night. Do I wish this happened in February? Yes."

In the end, the city's precarious fiscal position made self-financing the expansion untenable and ProvPort said adding major new debt would make it uncompetitive. So Elorza and Aponte agreed to state ownership of the port expansion.

With the ownership question settled, there were two main facets to the pitch that convinced Pryor and Mattiello that the state bond was a good idea.

One is that ProvPort's business has outgrown its home on Fields Point.

The state bond isn't intended to build any new wharves or docks, but provide more space for cargo storage in the short term and attract new tenants interested in building facilities in the longer term.

On a recent morning, Waterson pointed to Deepwater Wind turbine tower sections standing on one corner of the wharf and a pile of crushed limestone on another as an illustration of the tight quarters at the port. A new cement terminal is slated to open this summer, which will add more traffic to the area.

ProvPort leases land to nine tenants, whose businesses include cement, auto exports, chlorine manufacturing, salt, scrap metal and petroleum.

In 2015, the port handled 1.3 million tons of cargo. The top commodity passing through the port was salt, followed by scrap metal, cement, coal and caustic soda (an ingredient in chlorine).

Of the $7.42 million in gross revenue ProvPort generated in 2015, a little more than half of it, $3.46 million, came from lease payments, while $3.43 million came from fees for security, dockage and use of the wharf. Waterson paid $519,000 to ProvPort for use of the new federally funded harbor crane.







Then there is the long-term vision that, outlined in a report by consultants Vickerman & Associates, would encompass up to 60 acres and involve three new vessel berths along Allens Avenue.

That vision looks to take advantage of a long-theorized expansion in the East Coast shipping market driven by the June 26 opening of an expanded Panama Canal.

Port officials expect the arrival of a new group of larger ships at the biggest East Coast ports to force smaller ships out to smaller ports, such as Providence.

Of particular interest to ProvPort, and highlighted by the Vickerman study, is the opportunity to import perishable foods to Providence, such as fresh fruit, if the port develops cold-storage warehouses.

Rhode Island is only one of the states scrambling to get a piece of this potential market, which has also been part of the pitch for further investment at Quonset.

Asked whether the state's proposed expansions of both ports might lead to competition between them, Quonset spokesman David Preston said Davisville remains focused on auto imports and Providence is targeting other markets.

Could the joining of the ProvPort and Quonset bond issues on the final night of the General Assembly’s session jeopardize both proposals in November?

"I don’t think it changes anything," Preston said. "It is a great opportunity for Rhode Island to upgrade not one but two ports."

Massachusetts has committed $600 million to port improvement, including the $113 million spent to build New Bedford's Marine Commerce Terminal. Connecticut is investing $700 million over several years to improve ports at Bridgeport, New London and New Haven.

"We examined the claim ... that the port [in Providence] is running out of space and found it to be credible," Pryor said about why he vouched for the bond question.

"We also examined the claim that there is a great deal of variability and volatility in the port economy globally in part due to the expansion of Panama Canal ... [and] we found these arguments to be well grounded in facts and credible," Pryor said. "Other jurisdictions are making much larger investments."

Finally, there is Allens Avenue itself, an environmentally challenged and increasingly unproductive gateway to the city that has been a battleground in a generation of mayoral campaigns.

Having excluded all but industrial uses, and seeing little private investment in those uses, the city finds state intervention an attractive option.

Allens Avenue "was a legitimate point of disagreement during mayor's race," Smiley said, referring to Elorza's campaign against Cianci, who supported a mix of uses there. "It should be supporting the [marine] economy. There is only one 40-foot [deep] channel in Rhode Island and it is here."

— panderson@providencejournal.com

(401) 277-7384

On Twitter: @PatrickAnderso_