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Wind farm abatement fails at county council

ANDERSON, Ind. – A proposed wind farm in northern Madison County may have reached a snag after the County Council voted against allowing a 10-year tax abatement.

The vote was tied 3-3 with one council member, president Larry Crenshaw, crossing partisan lines and voting for the abatement with Democrats Buddy Patterson and John Bostic. Republicans Rick Gardner, David McCartney and Mike Phipps voted against the abatement with Democrat Larry Higgins absent from the meeting.

Last month the council voted 5-1 for a resolution that tentatively declared an economic revitalization area for thousands of acres in Duck Creek, Pipe Creek and Boone townships north of Elwood, where the Wildcat Wind Farm I, LLC, is proposed for construction. Phipps was the dissenting vote.

Andy Melka, E.ON Climate & Renewables North America development manager, has told the council and County Commissioners, in separate meetings, that the proposed wind farm would be built on about 8,500 acres of land in Madison, Grant, Howard and Tipton counties, with about half the construction in Madison County. Officials said the facility would produce about 250 megawatts of electricity and represent investment of $175 million to $200 million in the county.

E.ON has agreed to make a $1.2 million payment to the county over four years with the first installment of $300,000 due when the company breaks ground.

Based on projections, the tax due the county from the project would be $11 million over 10 years. Melka has said the tax abatement is necessary to build the farm, meaning the tax due would be $5.1 million. Construction would create 100 to 150 jobs and about six jobs would be in place when the wind farm is finished.

Phipps said tax abatement is used to overcome an economic disadvantage of site selection. The area the company is looking at, he said, is one of the top five Hoosier sites for wind energy, according to the U.S. Department of Energy. He said there are already high voltage lines in place, meaning there aren’t economic disadvantages to the site.

“If E.ON doesn’t come, someone else will,” Phipps said. “This is the ideal place for wind energy. I’m not going to second guess what they may or may not do if they don’t get the abatement, I just think if they choose not to come someone else will.”

Crenshaw said he was frustrated by the deadlocked vote. In his mind, it is a win-win situation.

“When you are talking about economic development, abatement is a tool used,” he said. “I don’t really like it, but when it comes to negotiating to lure a company to a community it is going to be there. The abatement costs us nothing. It is just part of negotiations.”

Crenshaw said he’d rather not gamble and risk not giving E.ON the abatement and having the company go somewhere else. If the abatement is given, it costs the community nothing; instead, they take in a percentage less. In Crenshaw’s mind, guaranteed income is better then “rolling the dice.”

“It is clean energy, good for the county and area, and puts more money in our hands than we have now,” he said. “I don’t know what is holding us up. For me, I think it is a way for the county to generate some funds and create economic development for Madison County. It doesn’t necessarily have to be about job creation. What else are we going to do with this property – it is in the middle of nowhere.”

Crenshaw pointed out that one of the dissenting votes came from someone who “hadn’t done his homework.” McCartney – who is the councilman in the area where the wind farm is proposed to go – requested the vote be delayed so he could research the topic a little more. The topic had been on the agenda for more than a month.

The number listed for McCartney in election records is disconnected.

Phipps said there are three standards to be looked at when considering abatement: job creation or retention; amount of income tax increase the project brings; and the increase in the taxable assessed property value. He said the project fails on two of those.

“It is a $6 million abatement, and taxpayers are going to see three permanent jobs and less than $15,000 in an increase to local income tax collection,” Phipps said. “You can’t justify the maximum abatement they requested.”

Gardner stressed that the vote during Tuesday’s council meeting had nothing to do with their opinions of the validity of the project, just if it met the criteria for tax abatement.

During the same meeting, the council voted 5-1 to continue the abatement for Brockway Glass. Gardner said it was like “comparing apples and oranges” when it came to the two abatement proposals. Brockway Glass has 231 employees, up 33 since their abatement began.

The abated amount is significantly higher for the wind farm project and the outcome is four to six permanent jobs, he said, with Brockway’s total employees at more than 230.

“If a company comes in and wants to bring in a good number of employees, I’d be totally for an abatement,” he said. “I just don’t see this project benefiting the whole county and its citizens other than the few tax dollars it will bring in.”

Patterson said those he’s talked to in the northern part of the county in the past seem to be in favor of the wind farm, and he was surprised at the number of residents at Tuesday’s council meeting that expressed concern. Most of the issues the residents raised, Patterson said, were answered by E.ON representatives. Some of the concerns were noise, pollution and how close the turbines would be to properties.

“I had an open mind listening to both the concerns of residents and what E.ON had to say,” Patterson said. “I do think this will be a great thing for Madison County. I can’t think of a reason why we wouldn’t want it. If it takes a tax abatement to get it here, why would we hesitate to give it to them?”