OLEAN – No one attended a public hearing Friday on BQ Energy’s application for a payment in lieu of taxes, or P.I.L.O.T., agreement that could reduce the tax dollars the city receives by tens of thousands.
The silence, however, spoke volumes.
The payment proposed by the Poughkeepsie-based company on its three solar massive projects in Olean is $3,000 per megawatt for the Solean and Homerida projects and $1,700 for the Solean West project. This is an exemption to the IDA’s $5,000 per megawatt policy.
With a total of 9 megawatts in three Olean solar arrays, that would limit the P.I.L.O.T. to about $45,000 in taxes to be split between Cattaraugus County, the city of Olean and Olean City School District – a figure less than 10 percent of the more than $577,000 tax bill that would be generated under the city’s $10.5 million of assessed value.
The empty meeting was overseen by Corey Wiktor, executive director of the Cattaraugus County Industrial development Agency. Wiktor said he expects talks over the next two weeks prior to the July 25 IDA meeting when the board is expected to vote on the company’s P.I.L.O.T. request. He said the comment period remains open on whether the IDA should consider inducing the projects.
In the face of the city receiving about $16,000 in taxes – instead of $154,000 – City Assessor Gregg Piechota said he will probably recommend that Olean Common Council oppose a P.I.L.O.T. for the BQ Energy properties.
“There’s a lot of money on the table,” he said.
If approved, the P.I.L.O.T. would not start until September 2018, so BQ Energy could still face two years of school taxes and one year each for the city and county, Wiktor said after Friday’s hearings.
“They haven’t gotten any tax bills yet for the improvements,” he said. “That would start with this year’s school taxes in September.”
BQ Energy has told city officials the company they are looking into filing an Article 78 action to force the city to reassess the property at a lower rate, which Piechota said they can file with the state Supreme Court by July 30.
The 2016 city, county and school tax bills on the three unimproved parcels – including one on Homer Street – was $16,673, according to Piechota.
Piechota said he valued the updated properties based on $1.5 million per megawatt of energy produced.
The New York State Energy Research and Development Authority suggests per megawatt values of between $1,700 and $5,100, Wiktor said.
Additionally, the company contends the solar panels are personal property and not taxable.
Piechota said that’s not accurate, as the panels are connected to the electric grid and ready to generate power and money from National Grid.
BQ Energy made the P.I.L.O.T. application to the IDA on June 15 after learning the city of Olean planned to assess their properties at $10.5 million. The company unsuccessfully challenged the assessment at the city’s Assessment Board of Review, Piechota said. When that effort failed, the company decided to approach the IDA about a P.I.L.O.T. This would limit the city, county and school district to a more narrowly defined value over 15 years.
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