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Ferrisburgh officals lukewarm to land lease for solar

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Posted on January 3, 2013 |
By Andy Kirkaldy



FERRISBURGH — The town of Ferrisburgh was presented in November an offer to lease about 3.5 acres of its 34.9-acre parcel next to Vergennes, an offer that according to the company making it could be worth about a half-million dollars over its 20-year term.

But the selectboard has yet to carefully study whether that claim is accurate or enter into serious negotiations with Encore Redevelopment, the Burlington firm proposing to lease the land and put a solar panel array on it that would produce 700,000 kilowatts a year.  

The board was set to sit down again with Ferrisburgh energy coordinator Bob McNary this Wednesday and discuss the proposal, but  chairwoman Loretta Lawrence said last week board members are in no hurry to move on Encore’s offer or meet with company representatives.

“We want to meet one more time, but we haven’t set that time up yet,” Lawrence said. “We’re taking our time … Our intent is to meet with Encore at some point.”

Encore has proposed to pay $10,000 a year for the land and another roughly $2,000 a year in taxes, and to sell the electricity to Ferrisburgh at current prices for the duration of the lease. Ferrisburgh would also have the right to buy the array at lease’s end, or to request Encore to remove it.

Given that power prices have risen by an average of 3 percent, Encore’s Chad Farrell estimated that savings for town buildings and Ferrisburgh’s share of the Vergennes Union High School bill would come to about $255,000 over 20 years.

McNary, who provided some information on Ferrisburgh’s power usage to Farrell to allow him to make the estimates, said he is puzzled by the selectboard’s slow pace in exploring the offer.

“I don’t understand why they’re not jumping all over this,” McNary said.

MARKETABILITY

The land is part of the town-owned parcel at the intersection of Routes 7 and 22A that the town has tried to sell for $375,000 over the past two years. Of the land’s 34.9 acres, 23.3 acres are subject to conservation easements that limit its uses; some of that land is also wet. On the remaining 9.7 acres, other easements restrict its building envelope to 4.5 acres.

Encore — a five-year-old firm that has done or is doing business with the towns of Middlebury, Milton, Burlington and South Burlington and with Middlebury College, among other entities — intends to use land on the northwest corner away from the building envelope.

McNary said the solar array would be several hundred feet from the marketable building envelope and that the solar array would be screened.

Lawrence said one of several “reservations” the selectboard has is that the solar array would make it harder for the town to sell the rest of the land.

“There’s a large concern with the marketability of the property. Does someone want to move in next to a solar array?” Lawrence said.

One who does not share that concern is Ferrisburgh real estate broker Carl Cole, who has been advising the selectboard on the sale of the town parcel.

Cole suggests there may be problems, but that the selectboard cannot know that unless it authorizes more research into Encore’s proposal.

“On the surface of it I don’t see any drawbacks, but as they say the devil’s in the details,” Cole said.

Cole said he suggested the selectboard form a committee to explore the possibility, a suggestion that McNary also made on Dec. 4, but according to board minutes was ignored.

“That was my advice to the selectboard the last meeting I went to,” Cole said. “It costs nothing to find out. It will take a little volunteer time from qualified people.”

Encore’s Farrell also weighed in on the marketability question. He said in a Dec. 29 email that Encore has seen no impact on property values near its solar arrays.

“We are not aware of any evidence out there that would support a diminution in marketability for a property due to the presence of a nearby solar array, especially for a property that is zoned for commercial or industrial use,” Farrell wrote.

REAL SAVINGS

Selectboard members also questioned the estimates on energy savings.

“We haven’t had anyone give us that information other than Bob. That’s just a citizen writing up those figures,” Lawrence said.

McNary said he was frustrated to hear that. He claimed he told the board the calculations had come from Encore after McNary had supplied the company with simple kilowatt use figures, as well as the town’s percentage of students at Vergennes Union High School.

“That’s absolutely incorrect. That information is from Chad Farrell,” McNary said.

Dec. 12 and Dec. 19 emails from Farrell to McNary show calculations made by Farrell that assumed average rate increases of 1, 2 and 3 percent over the next 20 years.

TRACK RECORD

Lawrence said the selectboard is also concerned about Encore’s long-term health and the feasibility of alternative energy projects, given that board members believe they are now strongly supported by federal grants and tax credits.

“If we do go ahead and after a year this project bellies up, does the town want to be responsible for picking up the pieces? We’d have to come in and clean up this solar array … Would it cost $10,000 or more?” Lawrence said. “The board does have some reservations. This company has been in business five years, and it looks like they came into business when this renewable money came from Washington five years ago.”

McNary and Cole both pointed to Encore’s business history and client list as evidence of its reliability.

“They’ve got a pretty good track record,” Cole said.

Farrell called the board’s reservation a “fair enough question.” He made several points in his email, including:

•  “We have partnered with a larger solar financing company (that is) aligned with some larger national banks, including Wells Fargo and PNC. Our financing partner in this project is Enfinity America Corporation.”

•  “The incentives associated with this project are one-time tax credit benefits that are taken at the time of construction and available through 2016. They are not drying up anytime soon.” 

•  “The town would be further protected by a number of clauses in the site lease agreement which would require the system owner to perform decommissioning.”

Farrell said Encore would not withdraw the lease offer while Ferrisburgh makes up its mind, but that the state now has a 4 percent cap on net-metering projects like the one Encore is proposing, and that “Once that cap is met, there is no guarantee that any additional projects will be built.”

Meanwhile, Lawrence maintains the selectboard does not have “a clear picture of what they (Encore) want to do or that we want to participate” in a lease arrangement.

“We just aren’t ready to pursue it at this time,” she said. “That doesn’t mean we aren’t interested. We aren’t sure we want to get into a lease.”

But Cole and McNary said the board should learn more now.

“Personally I don’t know if I’m convinced about this alternative energy,” Cole said. “But that’s neither here or there. If it turns out to be good for the town it ought to be seriously considered.”

McNary said town officials should keep exploring the possibility until a reason is found to say no.

“The total savings plus lease payment to the town will be well over $500,000,” McNary said. “I’m going to quote (Vergennes City Manager) Mel Hawley. That’s real money.”

Andy Kirkaldy may be reached at andyk@addisonindependent.com.

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