Green Development, town at odds over tax agreement

Green Development, town at odds over tax agreement

NORTH SMITHFIELD – More than a year after the Town Council approved a special zoning district to allow Green Development to build a 40-plus-megawatt solar farm off Iron Mine Hill Road, councilors and the company are finding themselves unable to come to an agreement on a proposed tax treaty for the project.

At issue is a clause prohibiting the town from increasing taxes for either the solar equipment or the property underneath it due to the value of the project or reclassifying the area from rural residential to commercial use. Councilors on Tuesday night said they had concerns with the clause and did not want to sign an agreement unless it maintained their rights to reassess the property.

The agreement offers the town $7,000 per megawatt per year over 20 years. The company has also offered the town a separate, one-time payment of $5,000 per megawatt. Under the current scale of the project, the financial benefit totals $5,655,000 over the lifespan of the project.

However, councilors questioned whether they might obtain more tax payments from the landowner, in this case Ralph Ferra, owner of Iron Woods Golf Practice Center, by reassessing the land or changing the use to commercial. Town Solicitor David Igliozzi explained that several towns have attempted to do just that after signing tax stabilization agreements with Green Development or other solar companies, and those cases are currently making their way through the state court system.

“There are actually a bunch of cases in Superior Court that are dealing with this issue,” he said. “There is an ambiguity in that statute that doesn’t answer that question.”

State law currently requires solar companies to pay towns $5,000 per megawatt in annual taxes for their arrays but is vague on whether towns can also charge higher taxes to landowners leasing their land for solar use, according to Igliozzi. Though the Office of Energy Resources sides with the landowners, he explained, the issue will likely be decided in Superior Court in the coming months or resolved by the General Assembly.

“You’ve got to decide whether you want to negotiate it, litigate it or accept the Office of Energy Resources position,” he said.

Green Development Chairman Mark DePasquale and his lawyer, Stephen Bursini, told councilors they didn't plan to offer incentives beyond what's required by state law if the town can't guarantee they won't raise taxes on the property. Pointing out the agreement already offers $2,000 per megawatt more than required by state law, Bursini told councilors the agreement would revert back to $5,000 in that case, leaving the town with $1.56 million less over 20 years.

“You can’t ask me to sign something to give you the right to allow you to change the taxes,” said DePasquale.

Both Councilor Paul Zwolenski and Council President Paul Vadenais said they don’t plan to sign an agreement unless it maintains the town’s right to reclassify the property, and Councilor Terri Bartomioli said she wants to see the difference in tax funds a commercial classification would make. Councilor Douglas Osier Jr. also raised concerns with the agreement, pointing out he wasn’t on the council when the developer first brought the plan to the town last year.

“I would like to see us personally slow down with the project, I think we’re moving a little too fast,” he said.

Unable to come to an agreement, councilors scheduled a public hearing on the issue for Monday, Sept. 23. They also requested details about the current tax payments on the property and the tax laws from the town administration, saying they need more information before moving forward with a vote.


Pave paradise, put up another solar farm.

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