LOWVILLE — The remains of the former biomass energy facility and its 46 acre property in Lyonsdale will be handed over to the Lewis County Industrial Development Agency, a result of the current owner nearly defaulting on the final payment in lieu of taxes, or PILOT.
According to IDA Executive Director Eric Virkler, in December, when the current owner of the 3823 Marmon Road facility, Latham-based ReEnergy, made it clear they were going to default on their final $100,000 PILOT, there weren’t a lot of options to salvage the situation.
“We expected they would complete their PILOT payments, at which point the property would have been back on the tax roll,” Mr. Virkler said, “If a company in a PILOT agreement goes out of business or defaults on their payment, they have to pay the full property taxes, which is usually more than the PILOT payment itself. If they don’t pay that, the property goes into tax foreclosure.”
Negotiations between ReEnergy and the taxing jurisdictions involved in the PILOT, the town of Lyonsdale, South Lewis School District and the county, led to an agreement in which the payment was reduced to $22,000, an amount equivalent to what would have been Lyonsdale’s share of the PILOT.
“The alternative was to let them default on the payment, which would have required the county to make the town and the school whole, paying out what would have gone to them from the PILOT,” Mr. Virkler said.
The agreement also stipulated that ReEnergy would demolish and clean up everything on the site except the fuel yard infrastructure and utility interconnection, ensuring that there are no environmental concerns on the property.
Once it has been cleaned, the property will be transferred to the IDA in “ready” condition to be re-marketed and sold.
ReEnergy’s demolition and clean-up efforts will begin this month and finish by early fall, according to their news release.
Lewis County Manager Ryan Piche said if the property had gone into foreclosure, added to the cost of making up for lost payments to the town and school, the foreclosure process would have taken about three years and the cost of cleaning up the site would have fallen on the county.
The ReEnergy news release made no mention of the PILOT situation but said the company plans to help the IDA “market the site and share prospect leads.”
ReEnergy Chief Executive Officer Larry D. Richardson said in the release, “We also have been in talks with biofuel companies that are interested in siting a biorefinery in New York State.”
In the December 2017 news release about the closing of the facility, Mr. Richardson had said ReEnergy signed a memorandum of understanding with Ensyn Corp., a company developing bio-crude production facilities using proprietary technology. There is no mention of Ensyn in the current release.
Mr. Virkler said the interconnection to the electricity grid make it “an interesting piece of property to solar developers.”
“It’s a marketable property because of its assets, especially being able to bring on or off-load high levels of electricity,” Mr. Piche said, “It’s a unique property for the southern end of the county,” said Mr. Piche.
Mr. Virkler and Mr. Piche both acknowledged that finding the right business to take over the property isn’t likely to be a quick endeavor.
The 22-megawatt biomass-to-electricity energy facility had used biomass material from logging operations and local sawmills to produce an average of 162,000 MWh of electricity per year.
The IDA lowered PILOT payments by ReEnergy from $225,000 in 2017 and 2018 to $100,000 for those years and extending a payment to 2019 in an attempt to help the company keep its doors open.
ReEnergy closed the plant in 2017 because it no longer had a contract to sell renewable energy certificates to the New York State Energy and Research Development Authority.
The energy company acquired the Lyonsdale biomass site in March 2011 from Central Hudson Enterprises Corp., Poughkeepsie.
ReEnergy Black River still owns the Fort Drum biomass facility.