Green Development back before Town Council for tax treaty

Green Development back before Town Council for tax treaty

Smaller project means reduced payment

NORTH SMITHFIELD – The financial incentives for a massive solar farm first proposed last year off Iron Mine Hill Road are now up for consideration by the Town Council, though councilors say they’ve still got several discussions ahead before finalizing the agreement with North Kingstown-based Green Development.

On Monday, the council considered a draft of a tax stabilization agreement presented by Stephen Bursini, the attorney representing the renewable energy company.

According to the proposal, the company has offered to pay the town $7,000 per megawatt per year for 10 years, with an option to renew the agreement for another 10 years. If approved as written, the agreement would amount to $5.46 million in tax payments over 20 years based on a 39-megawatt energy output.

The per-megawatt figure is the same that was presented to the council when the company first sought a zoning change for the project in April of last year. However, due to changes in the scale of the project, the overall financial benefit to the town has been scaled back. At the time, company representatives told the council the project would generate 57.5 megawatts of energy and last 25 years, figures that would have amounted to a total tax payout of $10.1 million over the course of the project.

Since then, the expected output of the project has dropped to 39 megawatts, a number likely chosen to avoid incurring a state law that requires energy projects 40 megawatts or larger to submit to review by the state Energy Facility Siting Board. The timeline of the agreement was reduced to 20 years to comply with a state law that limits the length of tax stabilization agreements, as noted in the draft document.

Company representatives last year also offered the town a one-time donation of $5,000 per megawatt, a payment that would amount $195,000 based on the current expected project size. Though the one-time donation was not included in the draft document, Bursini told councilors they would be able to negotiate the donation from the company separately from the agreement.

The $7,000 per megawatt figure is $2,000 higher than the $5,000 in tax payments required by the Office of Energy Resources, which oversees solar policy for the state. Asked by councilors why the company chose to offer more than was required by state law, Bursini said the company was trying to be a good neighbor to the town.

“Unlike a typical tax stabilization agreement that’s for the benefit of the developer, this is a tax stabilization agreement that’s for the benefit of the town. It’s the developer giving the town more, and this is the document that binds it,” he said.

Though Green Development is the company behind the project, the document actually lists nine separate LLCs identified as GDIM 1 through 9 representing separate portions of the project as parties to the agreement. As Bursini explained, the project was split into nine separate legal entities in order to avoid size limitations in the state’s renewable energy growth program.

Though the document had previously been discussed in closed session, Councilor Paul Zwolenski said he still had several concerns over the agreement and wished to continue talks with the company before opening up the matter to a public hearing as required by town ordinance. In particular, he pointed to his previous hope of using the tax funds generated by the agreement to purchase open space for the town, an opportunity no longer available after the sale of a large open space property the town had been targeting to a developer earlier this year.

“I was one of the council people that voted to make the solar overlay district, and I did so because it was done under the purpose of purchasing other open space in town,” he said. “Those opportunities have eluded us. The overlay’s there, I’m just not really comfortable with the agreement.”

Zwolenski, Council President Paul Vadenais, Town Administrator Gary Ezovski and Town Solicitor David Igliozzi agreed to sit down with the company to further discuss the terms of the agreement in the coming weeks. Once it is finalized, the agreement would be required to undergo a public hearing before it could be approved by the council.