Talk of shorter PILOT ignites flap
A minor firestorm has flared after the attorney representing Upstate NY Power Corp., developer of the proposed Galloo Island Wind Farm, claimed Thursday the developer never offered an 18-year PILOT to ease legislators' concerns about a proposed 20-year agreement.
And the ensuing to-do has almost, but not quite, obscured the news that the Jefferson County Industrial Development Agency has spent more than $200,000 on consultant and legal fees in developing the payment-in-lieu-of-taxes agreement for the proposed wind farm.
JCIDA Chief Executive Officer Donald C. Alexander divulged the charges in explaining the time and effort the agency has put into the PILOT. The Times submitted a Freedom of Information request on Friday to parse the fees.
The acrimony surrounding the county Legislature's reluctance to endorse the PILOT went up a notch Friday when Robert W. Burgdorf, of Nixon Peabody, Rochester, sent a letter to Legislator Scott A. Gray, R-Watertown, asking for him to publicly correct statements about the PILOT. Mr. Gray has frequently cited the offer of an 18-year PILOT as a reason for pushing for more money for local taxing jurisdictions.
The letter was copied to the members of the Board of Legislators, Mr. Alexander and John B. Johnson Jr., Times co-publisher and editor.
The discussion of an 18-year PILOT began with Mr. Burgdorf and Legislator Barry M. Ormsby, R-Belleville, on Jan. 4, the day before the Legislature planned to vote on a PILOT agreement. The JCIDA asked that the referendum on the proposed PILOT be pulled from the agenda about 30 minutes before the board met.
"During an informal discussion with Legislator Ormsby, the reasons necessitating a 20 year PILOT were discussed," Mr. Burgdorf wrote. "During that conversation, I told Mr. Ormsby that I would nevertheless check with my client and its finance people to determine if there was any way to reduce the PILOT without jeopardizing financing, even by a few years, if that would help. In the end it proved unworkable, and my client would not authorize me to pursue an 18-year PILOT."
An 18-year PILOT would have resulted in full taxation two years earlier. That would generate about $5.3 million more in property taxes for the county, town of Hounsfield and Sackets Harbor Central School District.
"Obviously they put that out there for an intended result of enticing a few more votes, and that didn't happen," Mr. Gray said. "So obviously at this point, they would retract that. I still question why he would put that out there at the 11th hour to entice votes without being able to deliver."
Mr. Ormsby sent the e-mail offering the 18-year PILOT to legislators Jan. 4 to see if there were any interest.
"The attorney told me, 'I don't necessarily have the green light on this thing, but I will take it back if this is the wishes of the board,'" Mr. Ormsby said. "I don't necessarily view this as any different than typical negotiations where someone goes back to get approval after throwing out an idea."
On Wednesday, Mr. Alexander tossed a little gas on the fire when he sent a letter to Jefferson County legislators and other officials asking for the PILOT to be placed on the agenda as soon as possible.
"IDA staff, working with Project Developers and other affected taxing jurisdictions has provided additional information as requested in order to assist the Board in its deliberations," he wrote. "We believe we have addressed all of the substantive concerns expressed during recent public discussions regarding the project."
The PILOT proposal that JCIDA wants the Legislature to endorse was not changed — it remains at 20 years, with base payments beginning at $2.14 million and increasing by 2.5 percent each year. It also includes supplemental payments based on higher wholesale electricity prices.
Mr. Alexander stressed the need to vote quickly on the PILOT because of circumstances related to finances for the development.
"In spite of unsubstantiated claims from a vocal minority, the terms of the PILOT agreement, negotiated over many months, are favorable to Jefferson County taxpayers," he wrote. "The notion being perpetuated by the vocal minority that somehow we are 'giving up something' is, at the very least, disingenuous and a ruse to disguise more personal interests at the expense of the greater number of county taxpayers."
Mr. Ormsby said the past few weeks have been productive, in firming up commitments to local labor, getting the county involved in the decision-making process for the transmission line with the state Public Service Commission and working on a decommissioning agreement.
"We should base our vote on agreements for similar and like projects," he said. "Had this agreement been substandard, the negotiations in neighboring counties wouldn't be using this as a model for theirs."
The PILOT deal for the Galloo Island Wind Farm is on the agenda for the next Finance and Rules Committee meeting, at 7 p.m. Tuesday at the board chambers, 195 Arsenal St.
