Wednesday, August 26, 2015

Solar Farm's Economic Development Saga

Economic Development Director Anthony Pena added information to the Development Corporation background packet regarding the $583,814 proposed economic incentive for OE Renewables Texas LLC.

The City of San Angelo and Tenant entered into a Lease Option Agreement which commenced on August 6, 2014 for 80 acres.
City Council approved this item after discussion in executive session.  The background packet made available to the public had no lease and no information on this item.  Mayor Morrison explained the idea to the public:

"What this is we are leasing ground.  This has come through COSADC, the Development Corporation.  There's a company that wants to come in here, put some solar generating equipment up and the City of San Angelo has negotiated a lease with them that would make it profitable.  We're not giving them any money.  We do have a graduated plan as for the lease for the first five years, while they build this thing and put it together.  Then it becomes a very lucrative thing for the City of San Angelo."
The City added more ground to the lease this year.
Then on May 19, the San Angelo City Council approved an amendment to the lease to add 63 additional acres.
City Council approved leasing additional acreage in the consent agenda with no discussion and no presentation.  A lease addendum in the background packet showed the city would receive a $75 grant fee for leasing 143 acres to OE Renewables over a multi-year period.  City staff provided no information showing how this project would become "very lucrative" to the city over time.   There was no public comment on the lease with OE Renewables.

A memo by Economic Development Director Roland Pena shattered the "no money" meme:

Financial Impact:  $583,814.00 – total of annual rebate payments over the course of an eight year term (2016 year ‐2023 year)
Based on Mayor Morrison's comments last year one would expect the lucrative part of the deal to show in years five through eight.   The project remains a solar farm but it's very different than the one described to the public a year ago.  COSADC has a tough job on this subsidy, given they are supposed to fund projects that add primary jobs.  Twenty to twenty five construction jobs for several months and one full time position don't feel like much in the new job arena.

Update 8-26-15:  The Standard Times reported COSADC approved the $583,000 incentive for OE Renewables.  The news report offered city staff's position as justification.  I look forward to watching the recording to see if any board members broached any concerns about 25 short term construction jobs counting as primary jobs.  I take it City Council will consider this in their September meeting.  

Update 8-27-15:  The recording showed no questions or discussion from the COSADC board before approving the incentive in public session.

No comments: