Economic development agreement with solar developer says county owes if abatement canceled

MUNCIE — Delaware County Commissioners entered into a 2021 economic development agreement with Invenergy, developer of the planned Meadow Forge solar project. That agreement promised tax credits equal to the amount of tax abatement should county council withdraw the solar project's tax abatement.

County member Bill Hughes said that if the council repealed the Meadow Forge tax abatement, estimated to be worth about $5 million, the agreement requires that Invenergy receive a credit against future property taxes of $5 million. Additionally, Invenergy would no longer being required to hold up its part of the economic agreement.

"It's sort of a heads they win tails we lose proposition, from my point of view," said Hughes, a former local attorney.

The provision in the economic development agreement was discovered by the Council's Tax Abatement Committee members who studied documents related to abatements granted to the Meadow Forge and Hawthorn utility-scale solar projects in northern Delaware County. The committee met on Jan. 9 to discuss the issues.

The Invenergy agreement with commissioners states the company would pay Delaware County up to $200,000 annually for 10 years. That amount can decrease if tax assessments rise to more than $8,000 per acre for the land after the solar panels are in operation on the acreage. The amount can also fluctuate with the production capacity of the solar development.

Council members have discussed canceling the abatement after a substantial number of residents living near the proposed project objected to the planned solar field that would stretch from near Gaston north to the county line in Washington Township. Hawthorn Solar is a separate company proposing a smaller solar project in Delaware Township and does not have an economic development agreement with Delaware County. Property owners have entered into lease agreements for the Hawthorn Solar developments.

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According to the report to the full council, attorneys for the developers have expressed an intent to file a lawsuit against the county if promised tax abatements are rescinded. Kristina Kern Wheeler, an attorney for Invenergy, warned the council that it cannot legally take away the abatements.

Meadow Forge property tax abatement was for 10 years, starting at 100% the first year and decreasing by 10% each year after.

In Indiana, tax abatements have gone away because projects have failed or the recipient has failed to live up to its part of the abatement agreement, such as not hiring an agreed upon number of employees. Muncie-based attorneys Beasley & Gilkison provided a memorandum to council that said local council members have the right to revoke abatement as they have other matters.

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Attorneys on all sides have said there has not yet been a court ruling on the matter. But Hughes noted that by saying in the agreement that Invenergy is entitled to a tax credit if abatement is withdrawn, Invenergy concedes the council has the power to repeal.

"They're conceding we have the authority," Hughes said.

Should the $5 million provision be enforced, it would do financial harm the county, he said.

But Hughes also noted the commissioners and Invenergy signed the agreement, not the county council, which is the fiscal body for the county.

"I don't know how the county commissioners have the authority to grant a tax credit," Hughes said.

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He suggested the attorneys for commissioners and council research that issue. But should the matter go to litigation, it could be a lengthy and expensive process for the county with little guidance from previous cases how the courts might decide the issues involved.

Another matter addressed by the council committee dealt with having the countryside of Washington Township declared an economic revitalization area, which is described in statute as an area as an area of deterioration, substandard buildings and obsolescence. However, attorneys for Hawthorn and Meadow Forge both noted two cases from Pulaski County in which the Indiana Court of Appeals held that farmland developed in a solar energy project can be an economic revitalization area, which makes that the law in Indiana.

Council member Matt Kantz said the county council does not know where the projects stand and suggested conducting a public hearing in which representatives from both companies can give a report on the solar developments.

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Jessica Piper, council president, said the council should get with commissioners on the abatement issue first before scheduling a public hearing with the solar companies. She said council representatives could discuss matters with commissioners and look to have a possible hearing with the solar developers for after the next county council meeting, which is scheduled for Feb. 27.

Council member Ryan Webb later told The Star Press that council leadership was working to set up an executive session with commissioners ahead of the late February meeting.

David Penticuff is a reporter with The Star Press. He can be contacted at dpenticuff@gannett.com.

This article originally appeared on Muncie Star Press: Private talk with commissioners due ahead of solar developer hearing