LOWVILLE – While the financial windfall from the Maple Ridge Wind Farm payment-in-lieu-of-taxes will continue for the next four years, local leaders are already starting to think about negotiating a new tax deal, likely with much lower annual revenues.
“The municipalities just want to make sure that when they do it, they do it responsibly,” said Mark G. Gebo, attorney for the towns of Martinsburg and Harrisburg, which host the majority of the wind farm’s 195 turbines.
Representatives from affected taxing jurisdictions on Wednesday met with Kevin R. McAuliffe from the Syracuse law firm Barclay Damon, who in 2003 helped develop the 15-year PILOT plan. The municipalities – under the auspices of the Lewis County Industrial Development Agency – plan to retain his services to head negotiations with wind farm owner Avangrid Renewables.
“His knowledge of it is very helpful,” IDA Executive Director Eric J. Virkler said.
“He’s got the history,” added Lewis County Legislature Chairman Lawrence L. Dolhof, R-Lyons Falls. “I think everyone in the room was quite comfortable with him leading the municipalities.”
The wind farm is to continue making annual payments of roughly $8.1 million through December 2021. Revenues are split among the county, the towns of Martinsburg, Harrisburg, Lowville and Watson and the Lowville, South Lewis and Copenhagen school districts based on full-value tax rates at the PILOT’s inception, with Lowville school and the county being the biggest beneficiaries.
By incorporating the wind farm into the state’s now-defunct Empire Zone program, local leaders were able to negotiate a significantly higher return than has been received from other wind projects, as the state subsidized a large chunk of the payments.
“Obviously, it’s very different from any other wind PILOT we’ve ever done,” Mr. Gebo said.
With those subsidies slated to disappear at the end of the current PILOT deal, local leaders understand that any new deal will be less lucrative than the current one, Mr. Dolhof said.
“Everyone at the table is aware of that,” he said. “They’re prepared for that.”
Local officials for many years have been planning for life after the Empire Zone-fueled PILOT, with the county earmarking much of its wind farm funds for specific projects like the new county courthouse and the planned Jefferson Community College extension campus and Lowville school creating a tax stabilization fund to help avoid significant tax increases when wind revenues decrease.
County attorney Joan E. McNichol said the early renegotiation talks were also prompted by Avangrid officials.
“They are looking to do an extension sooner than later,” she said.
Both the company and municipalities at this point favor negotiating a new PILOT plan – likely facilitated by the IDA – over assessment-based taxation so both sides have a clear picture of tax revenues well into the future, Ms. McNichol said. However, she said, both sides are still “in really preliminary discussions,” and a reasonable appraisal of the wind farm and review of financial information will be needed before a payment plan can be determined.
“It’s early in the process, but we’re simply trying to exercise fiscal prudence for current and future wind power customers for this site, by exploring all cost driving options,” Avangrid spokesman Art Sasse said by email.
Mr. Gebo said the municipalities are now in “an information-getting stage.”
While determining appropriate taxation will be a complicated matter, the fact that energy costs are low and predicted to stay that way for some time will factor into the equation, he said.
“We know the economics aren’t as good now as they were when they were built,” Mr. Gebo said.
Starting the process now will not only allow plenty of time for evaluation of financial data but could also theoretically allow the municipalities to defer some funding from the final years of the current PILOT to more gradually decrease annual payments “so you don’t have the impact all in one year,” he said.
Martinsburg Town Supervisor Terry J. Thisse said he and his Harrisburg counterpart, Stephen N. Bernat, have removed themselves from renegotiation discussions, as both have turbines on their respective properties. Other board members are representing the two towns at the planning sessions, he said.