Tipton — Preliminary approval has been given for a 10-year tax abatement for the development of a wind farm in eastern Tipton County.
Tipton County Council voted 6-1 Tuesday to approve a tax abatement for Chicago-based E-On Climate & Renewables. The company plans to invest $300 million to $400 million in Madison and Tipton counties to develop Phase 1 of the Wildcat Wind Farm.
“The tax abatement is necessary for the project to move forward,” said Andy Melka, E-On development manager.
Councilman Scott Friend cast the lone dissenting vote on a procedural concern raised by fellow Councilman Brad Nichols.
Nichols said council members attended an executive session on May 12 to discuss the project.
“The merits of the project have been laid out,” Nichols said. “This is a two-step process. I feel the council is getting this rammed down our throats. We’re passing this in six weeks. Why is the council always on the tail end? I don’t understand what difference another month will make.”
Nichols questioned the costs and benefits of the project.
“I’m not going to drag my feet on it,” he said. “The only thing that bothers me is a procedural one.”
Councilwoman Beth Roach said Tuesday’s meeting was publicized and she hoped more people would have attended.
Several council members noted that E-On has conducted several informational meetings.
Friend said information provided by E-On at the public meetings is different from what the elected officials have received.
Construction is expected to start in October or November in Tipton County with the wind farm in operation next summer. The tax abatement will save the company $3.4 million over the 10 years, Melka said. He said the company will pay $3.5 million in property taxes over the next decade and then pay approximately $800,000 annually in property taxes.
Matt Eckerle with H.J. Umbaugh & Associates, a financial consulting firm hired by the county, said the company would make a $175 million investment in Tipton County.
In addition, Melka said the company has leases in place with property owners in Madison and Wildcat townships for the placement of wind turbines on their property. Royalties on the leases will total $500,000 and $700,000 annually.
Eckerle said the higher assessed value from the wind farm will benefit all property owners in the county through lower taxes.
Property owners in Wildcat Township will see the tax rate will drop from $1.64 to $1.55, and in Madison Township from $1.46 to $1.38 per $100 of assessed value once the tax abatement ends, Eckerle said.
Eckerle said county government will receive through taxes paid by E-On an additional $123,530, Tipton Community Schools, $406,742 and Tri-Central Community Schools $252,016 as a result of the investment over the next decade.
Rick Hall, an attorney with Barnes & Thornburg hired represent the county, said a committee of local officials and the county commissioners has recommended the council approve the tax abatement.
“This is a large influx of assessed value to the county with no increase in services,” he said. “The use of the property can be enhanced to bring economic development benefits to the county.
“The company has made it clear the economics don’t work without a tax abatement,” Hall responded to a question on the need for the tax abatement.
E-On last week signed two agreements with Tipton County commissioners. A road agreement during construction to make the roads in equal or better condition before the project is started and an economic development agreement, in which the company agreed to pay the county $1.2 million over four years.
A resident asked about the impact on property values in the area of the wind turbines, Melka said several independent studies have been conducted which show no impact from the locating of a wind farm in an area.
Tuesday’s council vote was the first of two required votes. The council is expected to vote on a second reading at its June 21 meeting.