CAPE VINCENT WIND TURBINE DEVELOPMENT ECONOMIC IMPACT - FINAL REPORT. October 7, 2010 Submitted hy WIND TURBINE ECONOMIC IMPACT COMMITTEE TOWN OF CAPE VINCENT, NYPrepared and Signed by: Wind Turbine Economic Impact Committee Town of Cape Vincent, NY October 7, 2010 Committee Members Robert Bamard - Local Resident, Land Owner, Cape Vincent Town Assessor Robert S. Brown - Local Resident, Land Owner, Cape Vincent Town Zoning Board of Appeals Member Rockne Burns - Local Resident, Land Owner, and Owner of Willow Shores Mobile Home Park, Cape Vincent, NY, Past Cape Vincent Planning Board Member Bin Cullen — Local Resident, Land Owner, Past Chairman Cape-Vincent Planning Board (I2yrs.) Advisor on School Related Issues siseph Menard — Locel Resident, Superintendent ~ Thousand Islands Central Schoo! District RobertBamad vga ce 7 Robert 8. Brown as Rockne Bums ine focwpe Cyrit Cullen { q = Joseph Menard a Q ° “Cara mee Page 20617 “Toon Cler lo\s}ioSummary statement Introductory comments Purpose of Initial Report dated 8/17/2010, Definitions ‘Towa and project data, Property values Income Taxes Indirect impacts Page 3 0f17SUMMARY ‘Two wind farm developers have had a presence inthe town of Cape Vincent (Town) for atleast five (5) years. These developers have been actively promoting the development of two wind farms inthe town. While there has been a lot of discussion on the economic benefits to residents with which the developers have signed leases to place wind turbines or associated equipment on their land there as been very litle, if any, meaningful discussion on the overall economic Impact othe other residents, the school or the town, ‘This WIND TURBINE ECONOMIC IMPACT COMMITTEE, appointed by Town Supervisor, ‘Urban Hirschey, has studied the potential impacts, pro and con over the past several months. ‘During this study it has become apparent that the Town and School may well see a financial gain through the PILOT payments. In addition to the Town and School, prticipating lease holders, ‘who comprise only 3.9% of the property owners, inthe Town are the only citizens thet will benefit directly. The potential of a significant negative effect of the wind turbines on neighboring ‘Property values has become apparent. This reduced property value in turn could result in a loss Of tax revenue to the Town, ‘This report concludes with series of recommendations that we believe are exiticl tothe ‘economical health of the Town and the major portion of the town’s residents, Page 4 of 17(RODUCTION Over the past 2-3 years the Town of Cape Vincent has been considering the application and site plan review of two wind turbine complexes (curently consisting of 96 and 51 turbines respectively ~ Figure No. 1), Since first becoming aware of these projects resident and nose resident property owners have taken an active role inthe review process and have raised many ‘concerns about the impacts developments of ths type and magnitude would create, These ean be ‘humerous, some postive and some negative. Since our economy is one ofthe greatest concerns, the Tovm Supervisor, Urban Hirschey established a committe to research economie impacts specific to our Town, ‘Note- The exact number of turbines and turbine sites can change, The overlay districts referred to herein have been determined by the committee based on detailed information provided by St. Lawrence Wind Farms and limited data provided by BP Energy in mid June 2010. 1t should be noted thatthe financial impact to the community first starts when the Wind Farm Developer contacts the Federal/State authorities requesting subsidies and/or PILOT programs. ‘These payments are financed by taxes. This dependence on government (public) support was recently emphasized by the Ignacio Galan, CEO ~ Iberdrola, SA. Galan has reportedly said “bat Iberdrola needs to know whether federal grants for renewable energy will be extended past 2012 and whether the goverment will establish targets for renewable energy thet will help companies ‘such as Iberdrola plan for Future investments”. (Exhibit No 1) ‘During the process of gathering information it became apparent that there is en enormous amount of information available to study. Early in the process the committe agreed that we would try to "use information that is as factual and unbiased as possible and to use information from sources that areas similar as possible to our rural, agricultural, small town, tourism based economy. ‘tia suggested that these 1econumendations be seriously considered in the regulatory and decision ‘making process, for these projects, to assure compliance with our Town Comprehensive Plan and the Towm of Cape Vincent Zoning Law. Page Sof 17oloz/vor SHEAENVH-009 ISOKUORAEVITV VW WVVVVVILIWACANISAS/AOT 16S08L1 loo yodsBoIqrdg: 1cPURPOSE OF INITIAL REPORT DATED AUGUST 17,2010 In thatthe site plan review process for one of the two wind turbine projects proposed for evelopment in the Town of Cape Vincent was atthe stage where the Planning Board had the option to accept, reject or request supplemental information fora Final Environmental Impact Statement from one developer, it was of utmost importance that the Planning Board was provided with as much information as possible to support their actions. The committee had. nearly completed its findings, however the committee was unable to finalize its report pei to 7:2M August 18, 2010 at which time the Planning Board had the option to act on the FEIS. ‘Therefore, an initial report of findings was submitted to Supervisor Hirschey with courtesy copies to Couneilman Marty Mason, Councilman Donald Mason, Councilman Brooks Bragdon ‘and Councilman Mickey Orvis. I was requested that Supervisor Hirsehey forward the report to ‘each member of the Town of Cape Vincent Planning Board. Page 6 of 17DI INS Overay dist ~ Those parcels of land where wind turbines and associated structureslequipmentaviring, te, wil be sited. Participating ~ Landowners/leaseholders that have signed agreements or options to: 1) Allow wind turbines on their property. 2) Allow wind turbine associated structures/equipment wiring ete. on their property 3) Be compensated for impacts resulting from wind turbines, Nonpartcipating ~ Landowners other than PARTICIPATING, ‘TOWN AND PROJECT DATA ‘The total current assessed value of the entire Towm of Cape Vincent (including tax exempt properties) is $310,673,097. The chart below (Table No. 1) shows a comparison of total acres for ipating land owners versus nonparticipating and a comparison of total assessments for par pricipaing land ovners versus non-participatng. Table No. Participation vs, Non-participating ‘Owners | Parcels | Acres [Assessments Parieipating St Tawrence WiF 3 % RIS| 5300001 BPW ro 3 SROLaE | S5.856300 Participating Sub-Total a Tas | 13678) SD,ATeR0T Now participating 20s | 3688 |“a2.26737 | — SI01,886,796 Fown Total 21 | 201 | SS.946.00 | SRH0.673.097 Participating parcels are shown onthe map (FIGURE No. 2) Ratios: ‘The overlay district acreage is 38% ofthe entire area ofthe Town. The assessed value ofthe overay disc is 2.94% of the entre Town assessment ‘The nonparticipatng arenge is 62% ofthe entire area ofthe Towa, ‘The assessed value of the nonpartcipant's property is 97.06% of the entire Town assessment, Participation parcel owners comprise 3.9% of the Town’s property owners while the non- participation owners are 96.1% of the Tawn's property owners. Page 7 of 17Town of Cape Vincent, NY , Wind Turbine Economic Impact Committee Figure No.2 Town of Caps Vi i Nind Turbine Economic Impact Committee LegendPROPERTY VALUES [Impacts on property values ae likely to vary depending on the proximity of turbines to neighboring properties and ste lines. Indications are there will be an overall decrease in property values with the potential for significant negative impact on assessments and related factors such as tax rates and the ability o market property ata fair price (Exhibit No, 2). This i in ‘contradiction to St. Lawrence Wind Farm’s statement (SDEIS/FEIS) and should be carefully ‘considered by the Planning Board prior to action on the FEIS, ‘The map shown in Figure No.2 shows the participation parcelsfoverlay district and 10008. and ‘30008. set back lines from the boundaries of the overlay district. It is probable that nonpartiipating properties within the overlay district could lose 20 to 40 percent of their value Itis probable that properties within 1000 fect of turbine sites could lose fom 15 to 25 percent of their value {tis probable that properties located from 1000 feet to 3000 feet of turbine sites could lose 10 to 20 percent oftheir value ILis probable that properties located beyond 3000 feet of turbine sites could lose 5 tol percent of their value. There is potential for increased property values for participating property owners that are ‘willing to sell wind turbine rights along with the remainder af ther property Property sales have been negatively impacted by the potential or presence of wind turbines (Exhibit No. 3). Exhibit No. 4 isan example ofa developer in Lincoln Township, Wisconsin, «rural farming srea similar to Cape Vincent, offering to buyout and demolish residences located close to the proposed turbines due tothe likelihood of excessive noise A mid September 2010 Kingston Whig Standard news article discusses complaints regarding property assessments on Wolfe Island now that wind turbines are up and running. A significant number of property owners are asking to have their properties reevaluated because ofthe lack of property sales on Wolf Island since the wind farm has been in operation, (Exhibit No. 6). Page 8of 17INCOME, ‘Lease holders, the Town and the Schoo! will be the major local recipients of financial remuneration asa result of wind turbines, It should be noted that the leaseholders who comprise only 3.9% of the Town's property owners ‘are the only private citizens that will reecive direct income, (Table No.1) LLeascholder’s (Participating) income could vary considerably depending on several factors: ~ Type of lease (fixed payments or royalties based on actual production). ~ Actual ouput of turbines versus design output (actual could be 20% - 30% of design, ~ Factors that can impact income ae lifespan ofa projec, decisions to stop production at ‘any time and down-time for maintenance, ~ Tis estimated that income to leascholders could exceed $4000 annually per turbine. ‘Town income would be whatever the Town negotiates for a PILOT agreement. The Town's share ofthe PILOT agreement could be as much as $8,000 to $8,300 per turbine annually. ‘School districts more than ever, must continue to investigate ways in which to increase their revenues and decrease their expenditures during these unprecedented fiscal times Currently revenues that the School would receive from the PILOT agreement do not affect the ‘amount of State Aid that district receives. Although, there have not been official discussions at fhe State level that this practice is going to change, it should be noted that school districts across ‘New York State have seen reductions in State Aid and itis possible that at some point PILOT revenues may affect school districts’ State Ai In addition, when the PILOT agreement ends, the district must have a plan on how to offset the ‘eduction of revenue. Currently school districts cannot place PILOT funds from green energy into a reserve account. Ifproperty values decrease, the district may see addtional State Aid due o the combined wealth ati. ‘There are several minor short and long term items related (0 income that will not be significant enough to cause meaningful change in the overall economy. Some ofthese are: short and mid term construction jabs, local services (food, fuel, and ‘estaurant), materials (sand, stone, asphalt, and water), communications, etc, Page 9 0f17‘TAXES ‘The income thatthe Town will realize from any realestate tx is directly related to the value of the property being taxed, assuming that Une tax rate remains constant. Ifthe assessed value of the property decreases the Town's income will decrease proportionately. Coaversely if the assessed ‘value increases so does the Town's income. Previously the potential fora decrease in the actual value (sale value) of non-participating properties, both within the overlay district and at various distances from the overlay district boundaries, was discussed. If this potential is realized, there will be a loss of real property tax income. Unless this los is recouped from another source, the Town will have to operate wit reduced income, ‘The most frequently used method for a municipal body to recoup lst income isto inerease the ‘ax rate on the existing real properties. This means that the residents will have a higher tax rate ‘on the same property. ‘Also, schol tax rates wil be impacted by any change in assessed value of properties. Income to the Town fiom a PILOT agreement is negotiable and is likely to result in increased ‘monies to the Town (but only forthe lifespan ofthe projects) Sales taxes and bed taxes would also be impacted, but this money does not stayin the Town,INDIRECT IMPACTS. ‘The relationship between real property values and tax income was discussed in the previous section (Taxes). If real property values (sales value) are significantly affected by the placement ‘of wind turbines it will be nevessary for the municipality to reassess all of the properties. This ‘will be an expensive undertaking. ‘A reassessment for the Town of Cape Vincent will cost at least $50,000 and could cost as much ‘as $135,000. ‘The actual cost will depend on the amount of assistance from the Jefferson County Office of Real Property Services. If this assistance is not available, then an “outside firm” will be needed to assist in the reassessments and the cost could be up to $50 per parcel. (850 X 2710 parcels = $135,500). ‘The reassessment will have to be performed by an independent consultant and/or the Town's assessor. Most likely it would be a jofat effort and would result in an increased workload for the assessor. Both the consultant and the assessor will have to be compensated for their efforts ‘which would be in addition to budgeted amounts, Damage, reconstruction and maintenance of roads and other areas where equipment is delivered, ‘unloaded, stored and transported is @ concern that ns been discussed with and approved by the ‘current Town Highway Superintendent. (Exhibit No.5) Page 1 of 17‘TOURISM ‘The effect of wind turbines on tourism in Cape Vincent must be addressed in two sections: 8. Tourists coming to Cape Vincent specifically to see the wind turbines ’. Tourists coming to Cape Vincent because ofthe Lake, River and existing attractions. In the first ease, the physical presence of wind turbines appears to be a curiosity in areas where ‘they currently exist. Tourists may slow down when they first go past a wind turbine, but donot spend any significant amount of time looking at them. Wind turbines do not appear to be the ‘ype of atraction that will bring large numbers of tourists to Cape Vincent nor that will hold that tourist's attention fora significant amount to time. ‘The second scenario is more complicated. For decades, tourists have been coming to Cape Vincent because iti a small, neighborly town along the St. Lawrence River and Lake Ontario, ‘The town offers spectacular scenery, camping, fishing as well as outdoor winter activities, People like the fecling that Cape Vincent offers small businesses that eater tothe individual’s ‘needs, rather than a town crammed with bars, gift shops and commercial establishments. ‘The establishment of heavily industrialized wind farms, additional roads, removal of trees and ‘general change inthe scenery will not help promote the benefits of Cape Vincent that have «drawn so many people to our town for decades. Icis felt that the negative effect of this industial complex can be moderated by careful placement of the individual turbines so as to ‘minimize their impact on the postive aspects ofthe town, Page 12 0f 17‘This section addresses the economic risks associated with large wind farms. The beneficial aspects of wind farms are discussed elsewhere in this report. ‘The risks can be grouped into four categories: Wind Farm Owner related, Tow (School PILOT payment repercussions, legal costs and effect on participating properties, ‘Wind Farm Owner related risks include 1) Failure of the owner to comply with sight plan decisions 2) Failure ofthe owner to pay agreed upon monies. This includes holding back royalty payments because of some change that neither the owner nor the town has any control over. One example would be the hold back on the PILOT payment at Maple Ridge because of the State's change in the Empire Zone rules. 3) Terminating operation by the owner ifthe operation is no langer profitable. 4) Decommissioning costs are not adequately predicted and covered. The nature of these ‘costs are such tha they will be fluid and should be reviewed on a periodic basis and ‘adjustments made tothe requirements that the Owner must meet, ‘Town / School PILOT payment repercussions include 1) The Town will have an increased income dung the tne dul they seveive PILOT payments. This increased income may affect the Town's ability to qualify for no interest ‘or low interest loans and grants that may be critical to maintaining the inftastructue, 2) The School system will also receive increased income by way of the PILOT payments, With the current economic climate at the State level it is conceivable that the School's funding from the State could be reduced to reflect the funds received from the PILOT payments, Legal Costs to the Town and Citizens ~ 1) ‘The Town will be responsible for any increased Legal casts encountered as a result of| disagreements during the negotiations with the Wind Farm Owners. Because ofthe ‘wealth of the Owners and the demonstrated tendencies of currently operating Wind Farm ‘Owners aeross the country, these costs could be substantial, Page 33 0f17