The PILOT costs Cattaraugus County, area School Districts 29M
By RICK MILLER
Olean Star
ELLICOTTVILLE — The Cattaraugus County Industrial Development Agency board voted 5-2 Friday to provide $37.8 million in tax breaks to the portion of the 340 megawatt Alle-Catt Wind Farm in this county.
The IDA met in special session to vote on the application from Alle-Catt for a 20-year payment in lieu of taxes agreement that includes PILOT payments to the county, two school districts and the towns of Farmersville, Freedom and Yorkshire worth about $20.7 million.
In addition, Farmersville and Freedom negotiated host community agreements with Alle-Catt Wind Energy, owned by Invenergy, a Chicago-based alternative energy giant. Farmersville will get $7.6 million over the 20 years, Yorkshire will get $14.7 and Yorkshire will get about $95,000.
Voting against the IDA tax breaks — which include $6.4 million in sales tax abatement and $7.5 million in mortgage tax abatement — were Joseph Snyder and Ginger Schroder, who represents the Cattaraugus County Legislature.
Schroder, a longtime wind farm opponent who participated via Zoom video conferencing, urged fellow IDA board members to consider turning down the Alle-Catt PILOT application and use the state’s uniform tax assessment model.
Under the IDA PILOT, Cattaraugus County, school districts and the towns of Farmersville and Freedom would receive a total of $41.94 million over 20 years. If the IDA denied Alle-Catt a PILOT and the company used the state uniform tax assessment model the county, school districts and the towns would receive a total of $55.17 — $13.23 million more than under the PILOT.
Invenergy representative Sean Perry pointed out to the IDA Friday that Alle-Catt had agreed to pay Farmersville, Freedom and Yorkshire $22.4 million in host community payments if the company receives a PILOT.
An attorney for Alle-Catt, Charles Malcomb of HodsonRuss, said the company would avoid purchasing materials in Cattaraugus County if it did not receive a PILOT, which includes $6.4 million in sales tax abatement.
Perry also told the IDA up to three wind turbines in Cattaraugus County would probably be shifted to the Allegany County towns of Rushford and Centerville without a PILOT.
Thirty-eight of the 76 turbines are currently set for Cattaraugus County, 28 in Allegany County and 10 in Wyoming County. A 10-mile transmission line in Freedom and Yorkshire will connect the power to the grid.
Perry said 400 construction workers would be on the job this summer during peak construction. Full-scale construction will begin in April, he said. Wind tower components and turbines will begin arriving by December and everything should be built by December 2026, he said.
The PILOT payments are based on $5,000 per megawatt generating power. The 38 600-foot towers in Cattaraugus County, topped with 4-megawatt turbines, would generate $310,069 for the county in the first year, $130,596 for the towns and $368,111 for the school districts. The PILOT increases 2% each year.
Cattaraugus County will receive $8.24 million over 20 years, the Franklinville and Pioneer school districts would get $7.72 million and Farmersville and Freedom would get $3.58 million from the PILOT and $22.4 million from host community agreements. The host community agreements are based on payments of $5,950 per megawatt.
Under the state’s tax model for wind power, Cattaraugus County would have received $23.26 million over the same 20-year period, an increase of $15.02 million from the PILOT. Franklinville and Pioneer schools would share $21.8 million — a $14.1 million increase. Farmersville and Freedom would receive a total of $10.11 and no host community agreements.
Granting Alle-Catt a PILOT would mean an extra $15 million for the towns at the expense of denying Cattaraugus County taxpayers $15.01 million and school district taxpayers $14.1 million they would receive under the state’s uniform tax model, Schroder pointed out.
She said that in denying a PILOT to Alle-Catt Wind Energy, the company would use the state’s uniform tax model. The county could use it’s share of the higher revenue from Alle-Catt to help make up for some of the loss of the towns’ host community agreements. The county would get sales tax revenue as well as the mortgage tax under that scenario.
The project will generate up to 10 permanent jobs which are expected to be shared with other Invenergy projects in the region.
IDA president Thomas Buffamante said the project was very emotional, and board member Michael Wimer said it was the most consequential and difficult decision he’s had to make.
“There’s a lot to this,” agreed IDA executive director Corey Wiktor. He declined to make a recommendation, but provided analysis. He cited a local benefit-to-cost ratio of 6-1 ($228.8 million to $39 million in tax breaks.
Buffamante said he thought the towns should get the bulk of the benefits and Driscoll said the towns negotiated the host community agreements “in good faith. They ought to get thye benefits. I believe the project will go forward.”
Snyder voiced support for Schroder’s plan to deny a PILOT and have the County Legislature use extra revenue it would receive to help the towns make up for the loss of host community agreements.
“That’s a big if,” Driscoll observed, “if we don’t give them a PILOT.”
Without a PILOT, Alle-Catt would respond by purchasing fewer goods and services in Cattaraugus County, said Malcomb.
Buffamante noted the project has already been approved by the state. After the meeting, he said the IDA had “left money on the table to benefit the towns.” No one lost anything, he added. “I hope they use it to improve the towns.” No one from the school districts contacted the IDA to complain about the PILOT, he added.
The IDA will also get a 1% administrative fee estimated to be $3 million or more since half of the $618 million project is in Cattaraugus County. Attorney Robert Murray’s law firm, Harris Beach, will also receive a fee from the wind farm project.
It will be the IDA’s biggest administrative fee the IDFA has ever received despite the fact the Great Lakes Cheese plant in Franklinville was bigger by more than $200 million. The IDA discounted their fee because the plant was bringing more than 500 jobs to the county.
Farmersville Supervisor Pam Tilton, who in recent months pushed county lawmakers and the IDA to approve the Alle-Catt PILOT, posted on Facebook soon after the IDA approved the project.
“The host communities will get their money.” she said. “Thank you to all that worked so very hard to fight for their towns. It’s over! Now to move on and be the awesome towns that we are.”
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