ANDERSON – A request for a 10-year tax abatement for the proposed Lone Oak Solar Energy Center was defeated Tuesday by the Madison County Council.
The County Council voted 4-3 to deny the requested tax abatement.
Opponents applauded the outcome of the vote at the Madison County Government Center.
The denial of the tax abatement could leave the fate of the project unknown as Invenergy officials, developer of the project in northern Madison County, said it was needed to move forward.
Invenergy was seeking a 100% tax abatement once the proposed $110 million project is completed and generating 120 megawatts of electricity. The company requested the traditional 10-year abatement.
The company promised to make a $1 million payment to the county as early as 2021 or once the project is completed. That amount was increased from an initial $850,000.
Katya Samoteskul, lead developer on the Lone Oak Solar Energy Center, said the tax abatement was needed because it impacted the price of power. Samoteskul explained a contract is signed for the sale of the electric power and then obtain a construction loan.
“With no tax abatement, it will increase the cost of providing power,” she said. “That will impact the possible construction of the project.”
A financial analysis by Baker Tilley Municipal Advisors for the project said the tax abatement will save the company $5 million over 10 years. The project will pay $24.2 million in taxes during the tax abatement period.
Opponent Debbie Spooner questioned the designation of the area as an economic revitalization area.
“Is this an economic revitalization area?” she asked. “Did the council conduct an investigation of the area as an economic revitalization area?”
Spooner said if the project is approved the impacted property owners will appeal their assessed value, which could reduce in lower property tax payments to the county.
Attorney Mary Solada, representing Invenergy, said the Indiana State Board of Accounts has never determined a renewable energy project didn’t qualify as an economic revitalization area.
The Madison County Board of Zoning Appeals voted earlier this year to approve two special exceptions for the development.
The BZA in May approved a special use for the Lone Oak Solar Energy Center on 850 acres.
The company said the additional acreage was required because the BZA set a 500-foot setback from nonparticipating land owners’ property lines.
A 10-year tax abatement was approved in 2011 when E.On Climate & Renewables developed its wind farm in northern Madison County. In exchange, the company provided $1.3 million to Madison County for economic development.