Million-dollar deal may be gone with the wind; First Wind pulls plug on TIF talks with Somerset County
SKOWHEGAN – Millions of dollars for economic development in unorganized territories may have disappeared with the clicking of the “send” button on a recent e-mail to Somerset County Commissioners.
Wind power developer First Wind has asked commissioners to delay deciding whether to form a tax-increment financing district – or TIF – in Mayfield Township, north of Harmony.
Commissioners will vote on the request at their next meeting at 4 p.m., Wednesday, Jan. 19, in their chambers in the county courthouse.
Millions of dollars for projects – such as establishing a regional bus system, developing multi-use trails, expanding broadband access or improving the Old Canada Road Scenic Byway – are at stake in the decision.
Over time, the TIF district would capture increases in property values in the area of a wind development around Mayfield planned by First Wind. The additional tax value the first year would be more than $1.35 million, but would decrease slightly in subsequent years, according to Jim Batey, executive director of the Somerset Economic Development Corporation.
A negotiated percentage of the money would go to First Wind. The rest, overseen by commissioners, would go to economic development projects in the county’s unorganized territories.
Bingham Wind Power LLC, a subsidiary of Boston-based First Wind, wants to place 52 wind turbines on ridges in the town of Bingham, in the Somerset County township of Mayfield and in the Piscataquis County township of Blanchard. The company intends to submit its permit applications in the spring.
The greatest number of turbines, 32, are planned for Mayfield, over which Somerset County Commissioners have authority. Any TIF arrangements in Bingham or Blanchard are not affected by First Wind’s recent request.
The request to table the TIF from First Wind came as a surprise letdown to commissioners who have been studying how a TIF would work. In their view, First Wind’s request pre-emptied their decision.
This is the first time commissioners have dealt with whether to form a TIF district from a wind development project, and they have been gathering information in order to make the best decision possible, they said.
“It seems very presumptuous,” Commissioner Robert Dunphy said.
First Wind, however, has indicated it does not want to force commissioners to make a decision and said the process could benefit from a break.
The “only way TIFs satisfactorily meet the objectives of developers and host communities is when there is a strong and committed partnership,” Joan Fortin, an attorney for First Wind, wrote in an e-mail to the county’s attorney and administrator Jan. 6.
“Reluctantly, therefore, I write to forward the company’s request that the commissioners table for now any further consideration of First Wind’s request to create a TIF district.”
A developer and community are not required to form a TIF under law; it’s an agreement that is negotiated by both sides. Commissioners, however, are not yet ready to negotiate, Fortin said in a phone interview this week.
“I would have liked it if the commissioners embraced this idea, but they didn’t seem to be,” she said. “We’re not in a position where it seems necessary to force this conversation.”
It’s unfortunate, she said, that from her view commissioners are not welcoming a TIF.
“In the case of a county it’s like free money. It really is. Those taxes are going to get paid either way,” she said.
Though the money must aid economic development in the unorganized territories, she said, it is flexible; it could go toward jobs training, matching grants, revolving loan funds or creating cross-country ski trails, for example.
The TIF district formed by the TransCanada Maine Wind Development, Inc. project in neighboring Franklin County will generate millions of dollars for scenic byway improvements on routes 17 and 27, nature-based tourism planning and a county match program for economic development grants, among other uses.
The developer is not responsible for how Somerset commissioners use the money, Fortin said, but county residents are. A public hearing is required before commissioners vote on the TIF proposal. It then goes to the Maine Department of Economic & Community Development for approval.
Batey, the economic development expert, said the elimination of the TIF would harm opportunities for Somerset County people.
“It is better to TIF,” he said. “There’s a lot of money at stake here.”
If no TIF is formed, that money would be spread throughout the unorganized territories in Maine, reducing landowners’ property tax rates, Batey said.
While Somerset County would receive a portion, it wouldn’t amount to what the county would otherwise receive from a TIF.
“Where else will we have an opportunity, absent these large projected wind power projects, to leverage money to raise the living standards and create job opportunities for the residents of Somerset County?” Batey said.
Commissioners, however, are being cautious for a reason: They want to gather all possible information before they make a decision that could set a precedent for other wind power developments to come.
Dunphy expressed bewilderment at First Wind’s request to table a decision. “How do I grade something if you don’t finish the test?” he said.
“My mind is an open book, and until I get the information, no one can say, and no one has ever heard me say, I will vote for a TIF or not vote for a TIF,” he said.
Commissioner Gerald York agreed. Commissioners must know how the TIF money would be spent, how it would be spread equally throughout the county’s unorganized territories, how tourism would be impacted and whether residents even want a TIF before they can make a decision, he said.
First Wind’s request “is a disappointment because I think we need to go forward. We need to get more information,” York said.
“It came as a surprise,” Commissioner Lynda Quinn said about First Wind’s request.
Though she said she knows a decision on a TIF doesn’t affect whether the wind development project receives ultimate regulatory approval, she has trouble aligning herself with a project she opposes for environmental, scenic and economic reasons.
“I just can’t get on this project,” she said. “It makes me not feel good on the inside.”
People say, “‘Take the money and run.’ I say, ‘I can’t do that,’” she said.
But she is torn about a TIF. “Would it help here? Probably,” she said. But she wants to make sure she knows the economic gains before she signs on.
If a TIF is formed, she said, “I would like the projects to be large enough to sustain a lot of jobs for a lot of people.”
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