JCIDA gives nod to Galloo wind PILOT
The final approval for a payment-in-lieu-of-taxes agreement for the proposed Galloo Island Wind Farm came Thursday morning in a 4-2 vote by the Jefferson County Industrial Development Agency board of directors.
The resolution was supported by board Vice Chairman David J. Converse, Treasurer Michelle D. Pfaff, Secretary Kent D. Burto and W. Edward Walldroff. Chairman Urban C. Hirschey and John Doldo Jr. voted against it. William H. Fulkerson was absent.
"I believe there are better ways to get electric generation from non-fossil fuels," Mr. Hirschey said.
"While I agree with Urban on the big picture, when I look at what this project brings to the county in terms of quality of life, the benefits outweigh the drawbacks," Mr. Walldroff said. "If there is one wind project we should have in Jefferson County, it should be this one."
Mr. Walldroff said he did not support any other proposed wind farms in the county.
The PILOT, which allows the developer to make reduced payments to taxing jurisdictions instead of paying property taxes, was approved along with a sales tax exemption and sale-leaseback agreement, which eliminates mortgage recording taxes.
"This has been a very involved, committed, thoughtful process," JCIDA Chief Executive Officer Donald C. Alexander said. "It is one that has always had the best interests of the community at heart."
The PILOT for the 252-megawatt project will run 20 years and have base and supplemental payments. The base payments would begin at $2.14 million and be divided among the town of Hounsfield, Sackets Harbor Central School District and Jefferson County. They will escalate by 2.5 percent annually and be joined by supplemental payments when electricity prices reach certain thresholds.
A resolution allowing the
PILOT, which deviates from a standard 15-year plan, was approved unanimously in November by the town and school district. It also was approved Tuesday by a narrow 8-7 vote by the county Board of Legislators.
During a lengthy discussion on the resolution, Mr. Doldo triggered a debate by asking about the total cost of the project and the expected revenue for the developer.
"Why can't we get a look at that?" he asked.
"The economic benefits and earning potential are the company's business," said attorney Justin S. Miller, Harris Beach PLLC, Albany, which has consulted on wind farm PILOTs with the agency.
Mr. Doldo said, "But a PILOT, sales tax and mortgage tax are our business."
JCIDA attorney W. James Heary said the supplemental payments put in the PILOT give taxing jurisdictions extra revenue when electricity prices give the developer high earnings.
"We don't necessarily need to go into the nitty-gritty of their plan," he said.
Other board members chimed in and said they don't know the bottom line with several projects. Mr. Burto cited the 50-year PILOT with the Residential Communities Initiative on Fort Drum.
"Did we ask what their returns were then? No," he said.
Mr. Walldroff asked what the amount of the sales tax exemption would be.
The sales tax abatement will not have the $19 million in value originally estimated. The state Division of Taxation and Finance said in December that all turbine parts are exempt from sales tax. The value of the abatement is now about $6 million, Mr. Miller said.
The sales tax exemption begins when Upstate NY Power is permitted to begin construction.
PILOT and mortgage recording tax exemptions occur when Upstate NY Power buys Galloo Island and closes on project financing with lenders.
JCIDA will sign a project-development agreement with the developer that authorizes the project and the tax abatements. The PILOT and sale-leaseback agreements will include guarantees for a community fund, a scholarship fund and for local jobs added at the last minute to satisfy the county Board of Legislators.
Donations to the $3 million community fund will escalate over the 20-year term of the PILOT, beginning at $100,000 for the first four years. The county will designate one or several nonprofits to oversee the fund, which will disburse grants to youth and civic groups, nonprofits, educational organizations and other charitable organizations.
The developer will contribute $25,000 per year to a scholarship fund for high school seniors to study sciences and renewable energy in college.
When the project is complete, the developer will total all the work hours and calculate how much was done by Jefferson County residents. For every percentage point where the local labor share falls below 25 percent, the developer will put $25,000 into an educational program at the Jefferson-Lewis Board of Cooperative Educational Services.
After the PILOT and sale-leaseback agreements were approved, the board unanimously agreed to a moratorium on accepting tax abatement applications from wind power projects until a uniform tax-exempt policy is approved. The board will hold a special meeting this month to discuss the policy.
