BEACON FALLS — If built, the proposed Beacon Falls Energy Park would mean nearly $50 million in tax revenue for the town over the next 22 years.
The Board of Selectmen unanimously approved a tax stabilization agreement for the proposed Beacon Falls Energy Park last week. The plan gives the town payment in lieu of taxes, in 45 semiannual payments.
Beacon Falls Energy Park, LLC, has proposed building a 63.3-megawatt fuel cell energy park on a former sand and gravel mine owned by O&G Industries, parent of the limited liability company. The energy park, which has gained approval from the Connecticut Siting Council, will be built on 8 acres of land within the 23.8-acre site off Lopus Road.
If everything goes as planned, construction is slated to start this year and the energy park is expected to be fully operational by the end of 2019.
If built, the energy park is expected to be the largest fuel cell project in the world.
Under the agreement, First Selectman Christopher Bielik said the company’s tax schedule is inverted, meaning that the taxes increase over time rather than decrease.
“So rather than the larger bite coming at beginning then tapering off, we are going to be offering a lower starting tax amount,” Bielik said.
Under the agreement, the company will make two equal payments each fiscal year for the next 22 and half years. The payments will gradually increase over time.
This year the company will pay $58,000 on the property alone. Starting next fiscal year the company will pay a total of $1.15 million. The company will pay $2.1 million in year 11 of the agreement and $3.54 million the final year of the contract.
In total, the company will pay $49.7 million over the 22 and half years, according to the agreement.
Bielik said the board had insight from multiple local officials and an attorney for the New Haven-based business management consultant company Globele Energy when crafting the agreement.
“This certainly was not done in a vacuum. We had a number of opinions to make the best decision for the town and the group,” Bielik said. “I think we did our due diligence on behalf of Beacon Falls to get best deal we could.”
William Corvo, of William Corvo Consultants, Inc. and one of the founders of Beacon Falls Energy Park, LLC, said the tax stabilization agreement does not mean that any of the company’s taxes are being abated. He said the company will pay the same amount of taxes it would have without the agreement, it will just pay in a different order.
“Once we get built we will be the largest taxpayer in the community. We will be the equivalent of town’s current largest 10 taxpayers. It’s going to have a dynamic impact on the community,” Corvo said.
Corvo said having a tax stabilization program in place that allows the company to pay less taxes in the beginning is important because it makes the company more competitive when it submits a bid for a request for proposals being conducted by Connecticut, Rhode Island and Massachusetts for clean and renewable energy projects.
Connecticut, Massachusetts, and Rhode Island have formed a coalition to bring renewable and clean energy to the states, Corvo said. Connecticut in particular is looking for Class 1 renewable energy projects, which fuel cells qualify as, he said.
With the tax stabilization program in place, the company is able to provide lower rates for the energy it produces, Corvo said. These lower rates will help the company submit a more competitive bid, which will help to gain financing for the project.
“We are working very hard to have the most competitive number we can bring to get financing,” Corvo said.
The company was expected to submit its proposal on Thursday, after press time.
Although the energy park has received approval from the siting council and secured a tax stabilization program, the future of the park is not guaranteed. The company needs to find a funding source before it can begin construction, Corvo said. However, he is confident that the work the company has put into the energy park will pay off.
In addition to the impact that the energy park will have on the grand list, Bielik said the project will also extend the natural gas line and the water line to other portions of the town. The construction and operation of the plant will also create jobs and bring people into the town, he said.
“[The energy park] will have a significant actual and derived value to the town,” Bielik said.