March 6, 2015
New York

JCIDA chief: Galloo Island wind developer to seek tax break

By Ted Booker, Times Staff Writer | March 6, 2015 |

SACKETS HARBOR – A developer who plans to revive the long-dead Galloo Island Wind Farm project wants to seek a tax break, and the chief of the Jefferson County Industrial Development Agency doesn’t expect the proposal to be as controversial as the previous one.

Donald C. Alexander, JCIDA CEO, said that’s because wind developer William M. Moore has proposed an underwater transmission route as opposed to an overland line, which had been proposed by Upstate NY Power Corp. of West Seneca.

Mr. Moore, principal of Albany-based Hudson Energy Development LLC, plans to seek a 20-year payment-in-lieu-of-taxes (PILOT) agreement that would be similar to the one narrowly approved in 2010 by the Jefferson County Board of Legislators for Upstate NY Power, Mr. Alexander said.

In addition to the county, the town of Hounsfield and Sackets Harbor Central School District would have to approve a PILOT. The project tentatively calls for 32 turbines that would each generate about 3.3 megawatts of power – smaller in scope than the original 246-megawatt, 82-turbine version proposed by Upstate NY.

The PILOT approved by taxing jurisdictions in 2010 for Upstate NY’s project – a moot point because the project never broke ground – would probably be similar to the agreement Mr. Moore would seek for his project, said Mr. Alexander, who met with Mr. Moore last month.

“If the project materializes, they would certainly ask us for a PILOT, and it would be based on the 20-year PILOT. It was based on the energy being generated – the lower the generation, the lower the payments,” Mr. Alexander said, adding it probably will take at least two years of planning before Hudson Energy could be ready to pursue a PILOT.

The 20-year PILOT approved in early 2010 for Upstate NY’s proposal would have been worth about $54 million collectively for the three taxing entities. Payments from the developer would have started at $2.14 million, increasing by 2.5 percent each year, plus supplemental payments if higher electricity costs prevail. That’s different from a standard PILOT, where businesses pay a portion of what their full taxes would be.

Under the PILOT, Sackets Harbor Central School District would have received 50 percent, the county 35 percent and the town of Hounsfield 15 percent. Normally, PILOT proceeds are based on proportional distribution of property taxes among the jurisdictions.

Although the town and school district approved the PILOT unanimously, it was narrowly passed, 8-7, by the county Board of Legislators in February 2010 during a meeting attended by about 200 people.

Many opposed the project because of its 50.6-mile transmission line, which would have crossed about 40 miles of mainland in the towns of Henderson, Sandy Creek, Richland and Mexico. Affected farmers and landowners adamantly opposed the route.

Mr. Alexander said he expects the underwater route proposed by Hudson Energy, by contrast, to be viewed more favorably by the public. He said it appears likely that the underwater transmission line could run from the island to the town of Scriba in Oswego County. That route of about 50 miles was designed as an alternative by Upstate NY, but the developer rejected it after estimating it would add $32 million to the project cost.

“I think we’re going to have a less controversial project, because the underwater route will eliminate concerns that town of Henderson residents had,” Mr. Alexander said. He said the view “shouldn’t be a concern because the turbines would be about seven miles from the shoreline. Only a few people would mind looking at something the size of a thimble.”

Mr. Alexander added that when Upstate NY proposed its PILOT, some people were concerned it would set a precedent that would be beneficial for other wind projects being planned in the Thousand Islands region, notably the Cape Vincent Wind Farm that had been planned by BP Wind Energy.

“The greatest objection to the Galloo Island PILOT was the result of the feeling that if it was approved, (a similar agreement) could be used by BP for its project,” Mr. Alexander said.

He said that while PILOT proposals approved by the JCIDA have been controversial in the past because of perceived negative impacts, the Galloo Island project doesn’t have any polarizing issues. Unlike large-scale housing projects, for example, the project would not affect school enrollment. And it would not require municipalities to invest in supporting infrastructure, he said, such as roads and sewer systems.

“This would be more revenue for the taxing entities – and people forget that,” Mr. Alexander said. “And we’re talking about maybe a million a year or more in revenue to the taxing entities.”

Mr. Alexander pointed out that this could have a direct effect on residents’ tax bills.

“If we can moderate the tax base,” he said, “our taxpayers will pay less property taxes.”

Under the PILOT proposal for Upstate NY, Hounsfield would have received roughly $320,000 in the first year, which would have covered most of its tax levy. The school district would have received more than $1 million and the county more than $700,000.

[rest of article available at source]

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