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LeRay rejects PILOT for biomass plant at Fort Drum


Concerned about losing sales tax revenue from the deal, LeRay Town Council members in a 3-2 vote rejected the five-year payment-in-lieu-of-taxes agreement for the biomass energy plant to be constructed by ReEnergy Holdings LLC, Albany, at Fort Drum.

The PILOT agreement had already been approved by the Jefferson County Board of Legislators on June 5 and the Carthage Central School District on Monday, and the company needed only LeRay's stamp of approval to make it official.

The tax break was voted down by William R. Jesmore, Samuel J. Biondolillo and Jennifer J. Dindl-Neff; Michael J. Gracey and Supervisor Ronald C. Taylor voted yes.

But while board members who voted against it touted the $34 million project — which would create 33 jobs at the retrofitted plant — they all cited the fact that the plant's $10 million assessment would be removed from the town's taxable assessed value over its five-year term from 2014 to 2018.

The company would have been required to pay 50 percent of the property taxes it would have normally owed over the five years, with an average annual assessment of $30 million. The discount would have provided $1.4 million among the town, school district and county.

But because the plant's assessed value would have been taken off LeRay's tax rolls for the five-year period, it would not have received $31,000 it now gets annually because of the reduced assessed property value in the town.

ReEnergy CEO Larry D. Richardson, who made a presentation at the meeting outlining the project's benefits, said the PILOT would play a key role in funding the plant, which would supply energy to Fort Drum and be a boon to the region's timber industry.

But board members initially balked when asked to vote on the project following the presentation, which prompted Mr. Taylor to postpone the decision until after an executive session for further discussion. At that time, board members Ms. Dindl-Neff and Mr. Biondolillo said they would vote no on the proposal.

When the board went into executive session at the meeting's end, Mr. Taylor said it was to “discuss employment history,” making no mention of the PILOT agreement.

But when the board went back into open session, it voted on the PILOT immediately. No town residents were present.

“I was elected by my constituents, and I've talked to lots of people who don't support this agreement,” Ms. Dindl-Neff said. “I think it's an awesome business but I don't want to go against residents. It goes hand-in-hand with the sales tax issue.”

Mr. Jesmore said he voted against the project because of the sales tax loss. He suggested the project for the former coal plant, which was purchased by ReEnergy in December, would likely still move ahead with a tax break.

“I don't think this project needs a PILOT to move forward,” he said. “I think it's a good project but don't think it deserves a tax break.”

Of the same mind, Mr. Biondolillo said the town would “lose too much sales tax” to make the deal worth it.

Mr. Taylor, on the other hand, called the board members' concerns about sales tax “a separate issue” that shouldn't have influenced their decision.

“I support this project for the betterment of the town, and these are two separate issues that shouldn't have been brought together,” he said.

Steven T. Harter, administrative clerk to the supervisor, originally attempted to negotiate a revised PILOT deal that would have allowed ReEnergy to still receive a tax break while keeping the property on the tax roll.

That plan was shot down during negotiations, however, and county officials decided the sales tax issue should be discussed separately and involve all towns and villages in the county.

Nevertheless, Mr. Harter said he still supported the tax break for the project. Also a county legislator, he abstained from voting on the project June 5 because of his role in the negotiations.

“I feel bad because we negotiated this PILOT for the town, and now the board blew it out of the air with this decision when the other taxing jurisdictions approved it. The sales tax issue has nothing to do with ReEnergy and is an issue between the town and county,” he said.

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