Marlboro Superintendent Michael Brooks said a Memo Of Understanding [MOU] has been reached between the Marlboro School District and Danskammer Energy LLC on a revised Payment In Lieu Of Taxes [PILOT] and a Community Benefit Agreement [CBA] valued at $39.5 million.
Brooks said Danskammer CEO William Reid has already signed the MOU, which outlines the terms in two phases of the new PILOT and CBA. Phase I, which could go into effect prior to the completion of a new power plant, would continue the existing PILOT of an annual payment of $1.2 million to the district for the next five years. In addition, a new five year CBA agreement would also include an annual payment of $100,000 to the district, set to begin in the 2019-20 school year.
If the power plant is approved and becomes operational, which is projected to be in the year 2023, Phase II goes into effect and will replace the Phase I PILOT with a new 20 year PILOT agreement totaling $38.3 million. This consists of an initial payment of $1.5 million, which will increase by a fixed rate of 2.5% each year for the next 20 years. The Phase II CBA would also increase from the $100,000 payment to $250,000 per year for a total of $1.25 million, pushing the final PILOT and CBA agreements with Danskammer to $39.5 million over 20 years.
Brooks said an agreement with Danskammer comes at a timely moment, as the current CBA and PILOT are set to expire in 2020 and 2022, respectively.
Brooks said this MOU paves the way for the Orange County Industrial Development Agency, that is tasked with approving the PILOT, to simply accept the Danskammer/Marlboro agreement. He expects to see a formal filing for a PILOT from Danskammer to the IDA within a few months, “and then the IDA can act on that application at any time.”
Brooks reflected on the MOU with Danskammer.
“In the end, we were successful in striking a deal that we believe would be a true benefit to the school district and the community, and would mean greater financial stability for Marlboro’s future,” he said.