March 25, 2013
Indiana

Residents seek ironclad guarantee; Illinois model under consideration

Scott Smith, News Columnist | Kokomo Tribune | 25 March 2013 |

The moment of high drama at Wednesday’s wind farm showdown in Tipton County came in the form of a question.

“Can you tell all of these people,” Tipton County Board of Zoning Appeals member Neil Planalp demanded, “that their property values will not decrease?”

When the representative for juwi Wind Energy sought a bit of wiggle room, the board member cut him off.

Instead of taking an expert’s opinion on the matter, the BZA decided to require a property value guarantee from juwi.

That condition, along with increased setback requirements, could be enough to sink juwi’s planned $300 million investment. Then again, it might not.

“We are excited for the opportunity to continue working on this project in Tipton County,” juwi CEO Michael Rucker said in a statement Thursday. “In the coming weeks, we hope to better understand the process and conditions of the approval, so we can continue to advance the project.”

In other words, juwi wants to discuss Wednesday’s decision with county officials before making any further statements.

Mike Barnard, a veteran wind energy sector watcher who advocates for the industry, said faced with a demand for a property value guarantee, wind companies might simply decide to go elsewhere.

“Wind energy is a business, not a charity, and inadequate profits are a reason to kill a proposed project,” Barnard said. “Or they might just use their community consultation to identify the 1 percent of people most likely to have problems, no matter what, and ensure that those people get higher setbacks.”

Companies budget for contingencies and have been known to buy out properties which may show adverse effects from things like turbine noise, he said.

All of that, of course, would be after the fact, and after a wind farm is approved.

But there’s probably a reason why DeKalb County, Illinois, is the only place in the U.S. with an iron-clad property value guarantee.

Under the DeKalb model, which applies only to the owners of record when the local wind project was approved, an appraiser – hired by the wind company – determines a fair asking price for the property.

The appraiser has to base the fair price on comparable rural property which sits away from any wind turbines. If the property owner doesn’t like the appraisal, they can split the cost of a second appraisal with the wind company. If the property owners still aren’t happy, they can pay for a third appraisal themselves.

Once the property goes up for sale at the fair asking price, the seller has to accept any full price offers and can consider offers below full price.

If, after six months, the seller still hasn’t gotten a full-price offer, he or she can accept a lesser offer, and then make a claim for the wind company to make up the difference between the asking price and the sale price at closing.

The guarantee has been in place for three years, and so far the local zoning board – which acts as the contract arbiter – hasn’t had to mediate a dispute, according to DeKalb County’s planning, zoning and building director, Paul R. Miller.

How many properties have sold for below appraised value is anyone’s guess. Any settlements between the wind company and property owners remain confidential.

Though that’s roughly how it works in DeKalb County, there are numerous caveats, and Tipton County residents and juwi officials will be reviewing each and every one.

Barnard warns that a guarantee might open the door to frivolous lawsuits, but said that concern could be managed “with the right terms in the guarantee.”

“The onus would have to be on the property owner to prove the wind farm caused property value damages. These would have to be specific impacts and lack remediations.”

That sort of arrangement might not appeal to Tipton County residents, who have already signaled an interest in DeKalb County’s model.