Editor's note: This story was corrected on Dec. 6, 2018. An earlier version incorrectly stated the proposed Mohawk Solar project would receive funding from the New York State Energy Research and Development Authority.
MONTGOMERY COUNTY -- The Montgomery County Industrial Development Agency is set to approve a 15-year Payment in Lieu of Taxes Agreement [PILOT] at its Dec. 20 meeting for a $135 million, 900-acre "Mohawk Solar" project in the towns of Canajoharie and Minden.
County Economic Development Director Ken Rose said all five taxing jurisdictions affected by the agreement — Canajoharie Central School District, Montgomery County, Fort Plain Central School District and the towns of Canajoharie and Minden — have already passed resolutions approving the PILOT, which will be granted and administered by the IDA.
"We decided to go last," Rose said, explaining the IDA board wanted to make certain the deal was supported by the affected municipalities before voting on it.
The PILOT takes into account that 80 percent of the project is in the town of Canajoharie and 20 percent in the town of Minden.
If the project is completed in 2019, it will pay a combined $300,000 in taxes to the five municipalities:
- $134,700 to Canajoharie Central School District
- $107,000 to Montgomery County
- $33,300 to Fort PlainCentral School District
- $19,100 to the town of Canajoharie
- $5,900 to the town of Minden
After the first year, the percentage of the solar farm's assessed value that will be taxed would increase by 2 percent per year for 15 years, after which it will be assessed at full value.
Rose said the Montgomery County IDA did not grant a sales tax abatement for the project, which should result in an estimated $800,000 to $900,000 in revenue from eligible purchases during the construction phase.
"The project initially requested a 30-year PILOT, but we negotiated that down to 15 years," Rose said. "We felt that was the way to go, given that these solar projects tend to only create a few permanent jobs -- maybe three or four."
Montgomery County has been targeted by several large-scale and many smaller-scale solar energy projects due, in part, to a 115-kilovolt transmission line that crosses part of the county.
The county has had three different policies on how to tax new solar projects in recent years.
In 2017, Montgomery County opted out of a New York state real property tax law that allows solar energy projects to have zero property taxes for 15 years after construction. The county then passed a local law to require a 15-year PILOT agreement for all commercial solar energy projects in the county but dropped that policy after about a year.
"We didn't possess the administrative capacity, nor did we feel like that was a good thing to keep that going, moving forward," said County Executive Matt Ossenfort. "After doing it for about a year, we decided that wasn't the way we wanted to go. We were trying to find a middle ground between opting out and just going all or nothing, but at the end of the day, we've decided to take all of these on a case-by-case basis."
Ossenfort said that all commercial solar energy projects in Montgomery County will now start out as fully taxable, but they could receive PILOT agreements through the county IDA.
Rose said the IDA plans to use the same process -- seeking approval from all affected taxing districts -- before granting PILOTs to future commercial solar projects.
Mohawk Solar is being built by Community Energy Solar.
Ossenfort said the project could set Montgomery County apart in the state, as an example of how to handle such projects.
"When this is built, and if everything goes smoothly, this will be the largest solar project in New York state," Ossenfort said.