Penobscot commissioners delay approving TIF for Passadumkeag Mountain project

Posted July 24, 2012, at 1:11 p.m.
Last modified July 24, 2012, at 3:18 p.m.

BANGOR, Maine – Penobscot County leaders delayed approval of a tax break agreement
with a Texas industrial wind site developer on Tuesday
, expressing concerns that the site might lack adequate fire protection.

The Penobscot County commissioners voted 2-0 to approve a community benefits agreement with Passadumkeag Windpark LLC that is part of the company’s plan to build 14 wind turbines generating 42 megawatts on Passadumkeag Mountain.

But the commission reserved its right to reject the 30-year Tax Increment Financing deal that accompanies the agreement until the Maine Department of Environmental Protection decides whether to approve the project. The DEP’s review is continuing.

The project will proceed even if commissioners reject a TIF and oppose the project, said Mike Beckner, a vice president at Passadumkeag Windpark parent company Quantum Utility Generation of Texas.

“The importance of a TIF in developing any project is really a function of the tax rate and millage within a township that you are building the project in,” Beckner said Tuesday. “It isn’t a situation where it would break the back of the project if it isn’t approved.”

Commissioners want to see the permit agreements the DEP would make with Passadumkeag Windpark and questioned whether the county or the developer would provide the project with enough fire protection, Commissioner Peter Baldacci said.

One of the project’s opponents, Clyde MacDonald of Hampden, raised the issue, saying that one wind site developer experienced 110 serious wind turbine fires over a 20-year period. He said that with turbines typically employing as much as 200 gallons of flammable hydraulic fluid, dry forest conditions could turn turbine structure fires into forest fires that could consume hundreds of acres in the craggy mountain area.

Beckner said the tentative DEP permitting agreement with his company provides adequate fire protection to the project and surrounding area, but he had no details.

“This was first time I had heard this particular issue come up on this project,” Beckner said. “From a practical standpoint, we are incentivized to respond immediately to a problem up there.”

The project maintenance building, which company workers would man, is about 16 miles from the project site, Beckner said.

MacDonald and another project opponent, Steve Cravin, said commissioners were wise to wait on the permits before weighing the TIF agreement, which commission attorney Erik Stumpfel has been negotiating with Quantum for several months.

A tax incentive program for economic development available to all local governments in Maine, a TIF permits a municipality or county government to use some or all of the new property taxes that result from an investment project within a designated district to assist in that project’s expenses and also generate economic development funds for the local government.

A TIF with the county would provide Quantum with tax breaks toward the project in exchange for a portion of tax revenues, which may be used for county initiatives totaling $7.8 million over 30 years. The money would be used for economic development projects.

To encourage further project development within the Unorganized Territory the commission represents, the developer would receive about $5 million over 30 years for potential reinvestment as part of the TIF, Stumpfel has said. And as part of the deal, the commission retains all of the tax dollars the project would generate during the last eight years of the 30-year period.

If the commissioners didn’t opt for a TIF, more than half of the approximately $13 million in taxes it is expected to generate would go to the state, presumably for distribution statewide, instead of staying within the Unorganized Territory for reinvestment there by the commission or the developer.

Cravin said he was pleased commissioners were aggressively pursuing answers to questions about the project. Beckner said he was also satisfied with the questions.

The commissioners’ deliberations were brief. They expressed satisfaction at the 20-year community benefits agreement, which they said would draw about $200,000 a year into the Unorganized Territory they represent, or about 3½ times more than generated by a typical agreement with wind-to-electricity developers in Maine.

The agreement would provide tuition payments and other benefits to county residents.

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