CHATEAUGAY — Franklin County’s Industrial Development Agency held a public hearing last week on a proposed wind repowering project and related Payment-in-Lieu-of-Tax agreement.
The Valcour Chateaugay NewCo, LLC Project, a subsidiary of AES, is looking to replace an older wind facility with fewer more efficient turbines to boost total generating capacity.
The public hearing was held at the Chateaugay Town Hall on Sept. 23, and the project involves going from 71 towers and turbines rated at 106.5 megawatts of production capacity to up to 27 towers and turbines with 116.5 megawatts of production capacity.
“This project already exists in the town of Chateaugay and the company, AES, has proposed replacing the existing turbines with fewer more powerful turbines which increases the overall capacity of the project,” Jeremy S. Evans, CEO of the county’s IDA, said.
Potential financial assistance to the company working on the project includes a sales and use tax exemption for purchases and rentals, related to the project, a mortgage recording tax exemption related to the financing undertaken by the company in furtherance of the project and a partial Real Property Tax abatement provided through a Payment-in-Lieu-of-Tax agreement, according to Evans.
“The forgoing financial assistance and the agency’s involvement in the project are being considered to promote the economic welfare and prosperity of the residents of the county of Franklin” he said.
According to Evans, information provided by the company indicates the project will involve approximately a $352,192,101 capital investment.
“As I mentioned in the notice the IDA can do tax exempt financing for projects but also, and in this case consider providing a sales tax exemption, mortgage recording tax exemption and Real Property Tax exemption,” he said, “The partial Real Property Tax exemption comes in the form of a Payment-in-Lieu-of-Taxes where the developer makes a payment in lieu of the underlying property taxes of the deed through the term of the agreement.”
According to Evans, the payments and terms are negotiated by the IDA with the company.
“In a way that tries to balance the needs of the company and the best interests of the community,” he said, “The IDA collects these payments on an annual basis and redistributes them, at the beginning of the year, back to each taxing jurisdiction.”
Evans said the jurisdictions involved in this project are Franklin County, the Chateaugay Central School District and the town of Chateaugay.
“There are a few advantages to IDA PILOTS, they provide one comprehensive and consistent review process for proposed benefits, one negotiation and long-term management, and enforcement of the PILOT agreement,” he said.
Following last week’s public hearing, the IDA board of directors can consider approving an authorizing resolution, which approves the terms of the project, according to Evans.
“We estimate this project will create 288 temporary direct construction jobs, which then results in an additional 109 jobs during construction,” he said, “Since the project already exists and it’s going to be replaced with a new project there’s no new direct permanent jobs proposed.”
According to Evans, the proposed terms of the agreement with AES include a 20-year PILOT agreement, adding in year one the total PILOT payments would be $4,000 per megawatt, adding that amount will go up 2% per year after the first year of the agreement.
“Which results in a $466,000 first year PILOT payment,” he said, “That payment would then be distributed back to the three entities based on the pro rata share of the overall tax rate for the parcels at that time.”
Evans said the first year of the agreement would go into effect in 2029.
“That’s when payments would start and it would go for 20-years,” he said.
There were no questions during last Wednesday’s public hearing and the majority of the hearing’s attendees were councilors from the Chateaugay Town Board who were joined by Greg Janisewski, D–Chateaugay, chair of the Franklin County Legislature.