For counties with wind farm development, there’s no one way to slice the pie of tax-break agreements.
As town, school district and county officials in Jefferson County look around the state for guidance in dividing money for tax-break agreements with local wind farms, they won’t get much help. Across New York, there are at least four wind farms with some sort of tax-break agreement. Some relied on tax distribution to indicate how to divide the money, while others weighted towns heavily.
In Erie County, the city of Lackawanna got the whole pie.
The Steel Winds Wind Farm was built on the site of the old Bethlehem Steel site in Lackawanna. “It’s property that is probably never going to be used for another 25 to 50 years without this development,” said Mayor Norman L. Polanski Jr.
The city gets $100,000 for the eight turbines on the site. “There were no challenges from the county,” Mr. Polanski said. But, “the school district is infuriated.”
He said when the negotiations for the payment-in-lieu-of-taxes agreement were going on, the school district expected the city to negotiate for them.
“They had an opportunity to come in and do something and they didn’t,” he said.
Eight more turbines will be added this year, which will bring the city another $100,000. But this time, $100,000 also will be divided between Erie County and the Lackawanna City School District, based on taxes.
As part of that addition, five turbines will be placed in the town of Hamburg. The $125,000 for those turbines will be divided between the town and Frontier Central School District. Erie County will be consulted, but not included.
The town and school district will begin formal discussions on the division next week, Hamburg Supervisor Steven J. Walters said. While he would prefer an agreement weighted toward the town, herecognizes the school district “certainly has the most at stake.”
Mr. Walters said the town initiated discussions “so the project can go forward and so no one’s left out of the discussion and feels they’ve been taken advantage of.”
TWO COUNTIES, TWO PLANS
For the Munnsville Wind Farm, Madison and Oneida counties decided on different formulas. In Oneida County, the distribution basically mirrored standard tax distribution among the town, school district and county. But in Madison County, the Board of Supervisors opted out of taking any money at all.
Oneida County was not the lead on the project or negotiations, said Associate Planner Kristin E. Campbell.
“The number was from the developer, and it was given to us and we didn’t want to waive out of it,” she said.
She said the county’s Board of Legislators did not want to opt out, because it feared setting a precedent that the county would regret later.
But Madison County supervisors did not shy away from making that precedent. The county has a Board of Supervisors composed of the supervisors of each town. The board considered the development in the county’s small, rural towns as an opportunity for the towns to make more money.
“The decision was made to let them receive whatever resources were available through the project,” said Russell P. Lura, assistant to the chairman of the Board of Supervisors.
The board is part of a contract with the developer, but is not getting any money. Mr. Lura said there are other projects in development, and the county likely will make the same decision.
“I anticipate we’ll use the same agreement, but everything’s subject to change,” he said.
A HOST-BENEFITS PLAN
Residents in Wyoming County will see about 70 turbines at the Noble Bliss Wind Park begin to turn sometime in the next month. There, the town of Eagle has a separate host-community agreement that accounts for $6,400 per megawatt.
The other $1,600 is divided as a PILOT based on tax distribution. About 60 percent of that goes to the school districts, 24 percent to the county and 16 percent to the town.
“Nobody’s come in jumping up and down, but nobody’s said they’re dissatisfied with the way it’s worked, either,” said Michael E. Heftka, director of Wyoming County Industrial Development Agency.
Two other projects nearing construction will use a similar framework. “Obviously, everyone wants to get as much as possible,” Mr. Heftka said. With three more projects in the testing stage, he expects similar arrangements for them.
He said all counties bringing in wind development look for a fair and well-received agreement. “Unfortunately, there hasn’t been one of those,” he said. “Here in Wyoming County, we think we’ve got the first.”
MAPLE RIDGE LIFTS ALL BOATS
Closer to home, annual PILOT payments from the 195-turbine Maple Ridge Wind Farm in the Lewis County towns of Martinsburg, Harrisburg and Lowville are split among the county, towns and area school districts based on full-value tax rates in 2004 and 2005.
While that means the Lowville Academy and Central School District and the county get 71 percent of the revenues, a total payout of nearly $8.1 million this year means most pieces of this proverbial pie are quite large.
The wind farm’s two primary towns – Martinsburg and Harrisburg – received approximately $1.03 million and $880,000, respectively. Those amounts are two to three times larger than those towns’ pre-PILOT budgets.
“We really hit a home run with the Empire Zone,” town of Martinsburg Supervisor Terry J. Thisse said.
While wind developers initially proposed making smaller, voluntary payments each year, the Lewis County Planning Office – then led by John F. McHugh – helped draft new state legislation making it possible to enter wind PILOTs and linked the project to the EZ program.
“We just let him run with it,” Mr. Thisse said of Mr. McHugh, now Carthage’s community development coordinator.
With EZ benefits in place for much of the wind farm, a significant portion of the PILOT payments are reimbursed by the state. More recent state legislation ensures that such a lucrative wind farm deal may not be duplicated, Mr. Thisse said.
Times Staff Writer Steve Virkler contributed to this report.
By Nancy Madsen
Times Staff Writer
6 April 2008