Under a proposal criticized as a workaround strategy by some county officials, a tax break for the proposed Galloo Island wind project could be approved by the Jefferson County Industrial Development Agency without authorization from taxing jurisdictions.
The proposed change in policy – adamantly opposed by several county legislators – would allow the agency’s board to approve payment-in-lieu-of-taxes agreements for all renewable energy projects without approval from taxing jurisdictions. The change is outlined in a draft version of the agency’s proposed Uniform Tax Exemption Policy that was last updated in 2004. The policy, being reviewed by the agency’s loan review committee, also has been criticized by elected officials because it calls for extending the maximum duration of PILOT agreements from 15 to 20 years. It is available at http://wdt.me/9LFWXw.
The IDA’s board has the authority to revise the policy without approval from the county Board of Legislators or other municipalities. If the board decides to do so, the proposal would first be sent to all taxing jurisdictions for feedback: the county, the city, towns, villages and school districts.
The IDA’s current policy enables the board to grant PILOTs of 10 or 15 years for manufacturing and industrial projects without approval from taxing jurisdictions; agreements for commercial developments that aren’t manufacturing-related – such as renewable energy projects and housing – need approval from taxing jurisdictions.
The IDA’s proposal that would enable its board to approve PILOTs for renewable energy projects without approval from taxing entities comes as Hudson Energy, Albany, has planned a 31-turbine, 102.3-megawatt wind farm on the island in the town of Hounsfield. The developer has said it plans to seek a 20-year PILOT for the project, which is being reviewed by the state Public Service Commission. Under the agency’s current policy, such an agreement would have to be approved by the county, Hounsfield and Sackets Harbor Central School District.
The PILOT to be sought by Hudson would be similar to the 20-year proposal narrowly approved in February 2010 by the county Board of Legislators for Upstate NY Power Corp., West Seneca. The board voted 8-7 to approve the PILOT, while the town and the school district passed it unanimously. But the 82-turbine, 246-megawatt project died in 2013 after nearly three years of inactivity.
Hudson’s project, which calls for 575-foot turbines, has been overwhelmingly opposed by residents in the town of Henderson. The island’s closest mainland access is about six miles away at Stony Point in Henderson. The PSC, meanwhile, has required the visual study area for the turbines to be least 15 miles surrounding the island, including the coastal area along the northeastern Lake Ontario shoreline.
IDA board member Scott A. Gray, a county legislator representing District 13 who is a member of the IDA board of directors, said he believes the IDA’s attempt to exclude taxing jurisdictions from the PILOT approval process for renewable energy projects was motivated directly by the Galloo Island wind project. He contended the move is designed to ensure that the county Board of Legislators doesn’t have the chance to reject a proposed PILOT for the project.
“If you look at the totality of the changes, it certainly would lead you to believe this thing is being structured around a pending Galloo Island project,” he said Wednesday. “This is what I see as a workaround of the Board of Legislators … This is being redone with an eye on the prize, and the prize is the Galloo project.”
Mr. Gray said if the county board were to vote on a PILOT for the Galloo project, he believes only two legislators might support it.
The revised policy includes a new section for renewable energy projects, which are defined as “including wind, hydroelectric, photovoltaic and biomass energy production facilities.”
The section describes how, unlike traditional PILOTs, annual payments for renewable projects made by the developer to taxing entities would be based on how much energy is generated by the turbines. It also states the agency “shall take into account whether a project sponsor is required to enter into one or more host municipality agreement(s),” referring to payments that would be made to taxing jurisdictions.
That, Mr. Gray said, does not give taxing jurisdictions the authority to negotiate agreements and decide how payments will be split up.
“A company just can’t come in and hand a municipality money in exchange for not paying taxes,” he said. “Everything that’s being written here is to circumvent the whole process that happened the last time the Galloo project came up for a vote.”
Mr. Gray is among five JCIDA board members who serve at the pleasure of the county Board of Legislators. Other members are W. Edward Walldroff, Michelle D. Pfaff, David J. Converse and John H. Jennings.
If the agency’s proposed policy is approved, Mr. Gray contended, it would be a challenge to the Legislature, which he believes is overwhelmingly against it. “If this gets approved, I think the county’s appointments to the IDA board should be reviewed,” he said.
District 9 county Legislator Patrick R. Jareo, who represents the towns of Hounsfield, Henderson and Ellisburg, said he opposes the agency’s proposal to revise its policy for PILOTs.
“The policy is specifically designed for industrial development and job creation,” he said. “And anything that varies from that in scope, like renewables, shouldn’t be in the uniform plan and should be looked at by taxing jurisdictions on a case-by-case basis.”
District 1 county Legislator Michael J. Docteur, who represents the towns of Cape Vincent and Clayton, served as an IDA board member in 2012 and 2013. He said the agency’s board had previously considered loosening its PILOT policy for renewable energy projects when he was a board member.
“I didn’t support doing it back when I was on the board and don’t support it now. It’s important that all elected officials that represent taxing jurisdictions have a say,” Mr. Docteur said, adding the Galloo Island project could have motivated the IDA to propose the change. “It might be possible that the IDA is trying to do a run-around of the elected officials who include the county Legislature.”
District 2 county Legislator William W. Johnson, who represents the towns of Lyme and Brownville, said he believes taxing jurisdictions should not be excluded from reviewing PILOTs of renewable-energy projects.
“I think PILOTs’ renewable-energy projects should be looked at individually by the county board and not just lumped in with other projects that don’t need approval,” he said. “I’m also against extending the PILOT to 20 years. I think 15 years is enough.”
JCIDA CEO Donald C. Alexander did not return numerous calls Wednesday seeking comment.
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