SACKETS HARBOR – The chief of the Jefferson County Industrial Development Agency said he expects a tax break for a wind farm proposed on Galloo Island would be approved without controversy. But the county Board of Legislators probably would reject such a proposal, contends Scott A. Gray, a county legislator who also sits on the JCIDA board.
“My personal head count of the board is that there wouldn’t be enough support,” said Mr. Gray, R-Watertown, who serves as chairman of the Board of Legislators Finance and Rules Committee.
Mr. Gray said Donald C. Alexander has misrepresented support for a 20-year payment-in-lieu-of-taxes agreement planned by Hudson Energy Development LLC of Albany without giving the Board of Legislators time to learn about the 32-turbine, 106-megawatt proposal. Mr. Alexander told the JCIDA board Thursday that William M. Moore, principal of Hudson, plans to seek a tax break based on the agreement approved by taxing entities in 2010 for Upstate NY Power Corp., which abandoned its plan for a wind farm on the town of Hounsfield island.
Such a PILOT would result in three taxing entities collectively receiving an annual payment of about $900,000, about 29 percent of the $3.12 million they would be paid if the property was fully assessed at an estimated $153.7 million. That figure is based on an assessed value of $1.45 million per megawatt that was used for the PILOT approved in 2010.
Hudson’s project would generate less than half of the energy proposed by Upstate NY’s plan, which called for 82 turbines that would generate 246 megawatts. Despite that reduced energy output, the developer plans to build an underwater transmission line about 50 miles from the island to Oswego County that would be much more expensive than an overland route. Upstate NY rejected an underwater route for its project after determining it would add $32 million to its $153 million proposal.
‘PRELIMINARY HEAD COUNT’
Upstate NY’s PILOT was narrowly approved by the county Legislature in 2010 in an 8-7 vote. But based on the Legislature’s current composition, at least two of those supporting votes would be dissenting votes if another PILOT was voted on, said Mr. Gray, who was among those who voted against the PILOT. He said that one legislator has indicated he’d vote against a PILOT after voting in favor of the previous one, and another, who filled a seat held by a member who voted in favor of it, indicated he’d oppose it. Mr. Gray declined to identify the two legislators.
Only two of the eight legislators who voted in favor of the PILOT are still on the board: James A. Nabywaniec and Allen T. Drake; only one legislator who voted against it, Gino M. Zando, has left.
Given the number of legislators who probably would oppose a PILOT, Mr. Gray said, he believes Mr. Alexander has publicly misrepresented the level of support expected for the project. Mr. Alexander has said that Hudson’s proposed underwater transmission line to Oswego County is expected to make the proposal much less controversial than Upstate NY’s. That plan called for a less expensive overland route, but one that would have had to cross property owned by landowners across multiple towns to reach a power station in the town of Mexico.
But Mr. Gray said the underwater route is far from being a game changer in the debate over the project.
“In the preliminary head count, the support isn’t there, and you shouldn’t prepare these people into that reality,” said Mr. Gray, who discussed the matter with Mr. Alexander at Thursday’s board meeting. “Basically he’s blatantly trying to back us into a corner by positioning this like it shouldn’t be a problem and is going to be approved by all of the taxing jurisdictions. So if something happens and it fails at our board, we accept the blame for killing the project.”
In addition to the county, Hounsfield and the Sackets Harbor Central School District would have to approve the PILOT agreement.
Mr. Gray went on to say that Mr. Alexander overstretched the authority of his position by talking publicly about the proposal without giving the county Legislature a chance to review it.
The JCIDA “works directly for the county, and their board members are appointed by us,” he said. “They should have enough respect for us to get all of the information to form a position on it.”
Mr. Gray called it “irresponsible” of Mr. Alexander to dismiss the concerns of town of Henderson residents about whether they would be able to view the turbines on the island from the shore. Mr. Alexander pointed out that the town shoreline is about 7 miles away from the island and said not many residents would be dissatisfied with the view.
“Mr. Alexander should not be so tone-deaf as to speak for the residents of any jurisdiction,” Mr. Gray said. “I think the Henderson folks can speak for themselves as to whether the view is acceptable or not.”
Mr. Alexander, meanwhile, sent an email Feb. 17 to the JCIDA board, obtained by the Times, in which he said that a public discussion about the progress of the project could be detrimental.
“It will be my intention to keep you informed as to our progress – using emails wherever possible. A public discussion at this early juncture would likely only serve to be counterproductive since, again, it is very early in the process,” the email said.
He also wrote, “Those of you who were in the trenches during the first series of battles will quickly remember the amount of time, energy and resources the first project required of the Agency. There was strong opposition to the project from a number of quarters including some in the media, some local politicians and others who simply did not want to see this type of development.”
LOWER PILOT PAYMENTS
Under the 20-year PILOT that Hudson potentially would pursue, annual payments made by the developer to taxing entities would be based on how much energy is generated by turbines.
Here’s how the PILOT formula would work: The developer would make a base annual payment of $8,500 per megawatt of production capacity for the project. Under Hudson’s proposed 106-megawatt proposal, that totals about $900,000 – down sharply from the $2.14 million base payment under Upstate NY’s proposal. That total would grow by 2.5 percent each year, and the developer also would pay a supplemental amount if wholesale electric power rates reach certain thresholds.
Mr. Gray said the project would be far from the “financial savior” that Mr. Alexander has described. He said Mr. Alexander has alluded to a tourism component in the project.
“He’s speaking without understanding the nuances of the three taxing jurisdictions’ budgets,” Mr. Gray said. “And to propose this as a financial savior that will eliminate or reduce people’s property taxes is likely wishful thinking and irrational on his part.”
In view of the county’s budget, Mr. Gray said, the benefit of the PILOT would be marginal at best. “I don’t mean to say it’s not important, but we can swallow that up with one anticipated road or bridge product that has to be done,” he said.
Under Upstate NY’s PILOT, Sackets Harbor Central School District would have received 50 percent of the annual payment, the county 35 percent and the town of Hounsfield 15 percent.
But those figures likely would change under Hudson’s plan, which would be calculated based on the current tax rate distribution schedule for the three entities, according to Paul J. Warneck, director of Jefferson County Real Property Tax Services. Assuming current tax rates are used, the school district would receive 59 percent, or $527,200, of the PILOT proceeds, the county would receive $298,200 and the town would get $74,600.
Mr. Warneck added that the PILOT formula approved in 2010 might have to be adjusted to reflect the value of today’s wind turbine projects.
“I don’t think five years down the road that $8,500 per megawatt is the number we would settle on if we review the project,” he said. “We would need to find out what other people are being paid for wind generation per megawatt, and I don’t think the county should proceed in these negotiations assuming that what was done five years ago is appropriate in 2015.”
SEEN FROM A DISTANCE
Mr. Warneck – whose waterfront home on Boultons Beach in Hounsfield looks out onto Galloo Island about 14 miles away – said Mr. Alexander’s comments about the majority of residents not being able to see turbines on the island is a far cry from what would be the reality.
“I think for Don Alexander to minimize the impact as it relates to the south end of Cape Vincent, town of Lyme and town of Henderson is a mistake and ill-conceived,” Mr. Warneck said. “There’s no doubt in my mind, depending on how they light these towers, that they’ll be seen from that distance. The supporters who believe you’re not going to see them are just totally misleading the public. When you’re fishing on Galloo Island you can plainly see the Wolfe Island turbines, and they’re about 15 miles away.”
District 9 county Legislator Patrick R. Jareo – who represents the towns of Hounsfield, Henderson and Ellisburg – said Friday that he hasn’t decided how he’d vote on a PILOT proposal from Hudson. But he said he believes that in spite of the proposed underwater transmission line, many Henderson residents probably would oppose the project.
“I don’t think you’re going to find a lot of support in Henderson,” the Republican legislator said, adding that some residents would be opposed to the view of the turbines. But he declined to give his personal view on the matter.
“It’s too early to tear my district apart over a project that likely won’t even happen – just like last time. They don’t have a power purchasing agreement, and I don’t see how the economics have evolved to where they can spend more money on the submarine line and still have a viable project with less output,” said Mr. Jareo, who in 2014 filled the seat vacated by former Legislator Barry M. Ormsby.
He added that Upstate NY’s proposal caused friction between the towns of Hounsfield and Henderson, which was opposed to the overland line that would run through the town.
In February 2010, Henderson filed a lawsuit to challenge the project, contesting the placement of the line. Though Hounsfield prevailed in the action, the state Public Service Commission ultimately rejected the project’s transmission line application in the summer of 2013 after Upstate NY had been silent for more than a year about its plan. The developer was unable to find a customer willing to buy electricity from the wind farm.
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