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AES-Cayuga Payment in Lieu of Taxes Agreement Approved |
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by Marcia E. Lynch
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Friday, 14 November 2008 |
 The County’s Industrial Development Agency (IDA) today gave final approval to a 20-year Payment in Lieu of Taxes (PILOT) agreement with Lansing’s AES-Cayuga power generating facility. The approved agreement culminates five months of negotiation and discussion and backs up the IDA’s initial endorsement two months ago, prior to a public hearing on the proposal. In two unanimous votes, the agency approved the agreement itself and determined that the financing arrangement would carry no adverse environmental impact.
The agreement, which calls for a valuation and a tax, not a tax abatement, spans the years 2009 to 2028 and is projected to nearly double the total property tax burden for the Lansing coal-fired generating facility during its first five years, from the current value of $3.7 million to an anticipated $6.6 million by 2013, covering county, school and town taxes.
Parties have praised it as a “win-win” agreement, which addresses the difficult challenge of determining the appropriate valuation for the facility in today’s volatile electric generation market. The State Office of Real Property Tax Services, which oversees the valuation of electric generation plants for real property tax purposes, recommends PILOT agreements such as this be used wherever possible to help address the valuation issue.
At the time initial review, some on the IDA had expressed concern about small percentages of female and minority employees contained in the utility’s employment profile. County Workforce Development Director Julia Mattick reported today that she has since had two positive consultations with AES administration, which is committed to work toward diversifying the workforce, in part by joining the Tompkins County Diversity Consortium and by posting job openings with Workforce Development’s One Stop Center.
Before the approval vote, IDA members had words of praise for AES and the negotiating process. Legislature chair Mike Koplinka-Loehr called the utility “a generous corporate citizen” which negotiated in “extremely good faith.” He said “the public is well served by the agreement.” Legislator Mike Hattery added that the agreement will benefit the County by substantially reducing administrative costs in the Department of Assessment, and Legislator Martha Robertson, who chairs the IDA, said she looks forward to ongoing cooperation with AES-Cayuga on a number of initiatives which will benefit the community.
Representatives of both the Lansing town and the Lansing School District have expressed support for the PILOT agreement. Official letters of support will be included in documentation related to today’s IDA action. AES bond holders must still approve the PILOT agreement.
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