Help understanding TIF's........

Comment

Comment by Art Brigades on January 6, 2010 at 2:29pm

Tracy- another approach is thet go for PILOT - or Payment in Lieu of Taxes. They essentially negotiate a set annual fee, to be paid for perhaps 20 years. It is always better for the developer than the town. Look at what Trans Canada negotiated with Franklin County, then look at how they reneged on the deal. They might add candy like playgrounds and fire trucks, and, if I recall, they funded a scholarship for kids in Oakfield. When they start saying "this is for the children" it's time to start throwing your vegetables at them. They pay very influential public opinion firms (who leave their Audis in Boston) to spin this stuff. They call it a ground war. Do not underestimate the advances they have already made. By the time good people like you start to yell that the emperor has no clothes, the pillagers already have infiltrated the community, sat at kitchen tables with elderly couples, and negotiated land options, leaving these folks with visions of condos in Tampa and sending their grandkids to college... It's just like Potter talking to George Bailey in that Xmas movie. Dirty-rotten scoundrels to the core.

Comment by Brad Blake on January 5, 2010 at 10:08pm

Tracy, I presented the case against the TIF in Lincoln and might be able to help you. My email is bblake02@maine.rr.com I could spend some time on the phone with you on Saturday if you would like. If you haven't already done so, here is the link to the TIF law in Maine: http://www.mainebiz.org/business_assistance/tif.asp One of the things I despise the most about First Wind is the corporate greed they have. On top of all the subsidies and preferential treatment they get from the Feds & the state, they have the audacity to come to the town or the county and demand a TIF, which amounts to a local tax subsidy! They present it as though its good for the town, a collaboration. They are not good coporate citizens. They state that they will not (cannot) do the project without the TIF. They feign walking away and gullible local officials fear they will, so they fall for it. They are laughing all the way to the bank at the expense of the local rural rubes. Meanwhile, they do nothing for the town. Call Lisa Goodwin in Lincoln and ask her how much First Wind has donated to the town or any charitable contributions they made. Oops! I overlooked the "bribe" they gave the Snowhounds Club so the snowmobilers would all be in favor of them.

Comment by Dan McKay on January 5, 2010 at 6:58pm

Upon further pondering your questions, Tracy, it occurred to me that even though First Wind is no friendly player to you or any of us, they are pouncing on an opportunity brought forth by the federal government and facilitated by the state government. I hope, if your town hasn't already put a moratorium on wind farm construction, they do so. Many fellow citizens, when presented the facts of wind farms (noise, adjacent property devaluation, higher electric costs, permanent scars to scenic topography, being a fad destined to go out of public favor, etc. ) will oppose them. You need to tell your people that there is more to these wind machines than meets the eye. Have them examine this website before they buy into these things.

Comment by Dan McKay on January 5, 2010 at 6:36pm

Who pays the increase in taxes? The landowner if he has a lease agreement with first wind would remain on record at city hall as obligated to pay property taxes. First Wind would be assessed an equipment tax on the value of the wind turbines. Current federal laws allow a 5 year depreciation rate on the value of the turbines. How this would affect municipal equipment taxing is a good question.
I would assume the property these turbines are located upon would normally increase in value, much as property subdivided for housing development would. How this increase in property value is determined, I do not know. And who would pick up the tax assessed for this, I do not know.
If the landowner sells his property outright to first wind, then first wind would be responsible for all taxes.
The electricity produced is not taxed. A royalty on electricity produced may be negotiated, but not normally offered by the wind company.

A TIF. Stay away. To the wind company, this is normally called credit enhancement, where they are reimbursed a portion of their tax obligation to help see the project through. Remember, the wind company, with all the federal subsidies and regulatory help from the state is eager to get these machines up. A tax incentive from the town is a bonus to them and a loss of revenue to the other taxpayers in town. A town would better serve itself and it’s taxpayers by demanding full payment of the wind company’s tax obligation and if the people would like a new fire truck, district improvements, or whatever, then a portion of the money from the wind company could be put aside in a reserve account. A bond could be issued for the purpose of an immediate town expenditure with expectations of paying for it with future revenues received from the wind company. TIFs are no good in this situation.
If the wind company goes bankrupt, the town would lose all tax benefits from them. If the wind company has not put aside decommissioning money for removal of the towers or if this money gets tied up in a court proceeding as may happen with investors looking to recoup for losses, then the landowner, if so stated in his lease, would own them, I suppose. If the company goes belly up, and the towers do get removed with decommissioning money, the roads and redistributed earth would remain and require much attention to prevent soil erosion problems.