Mulligan Solar request for LincolnLogan County Enterprise Zone reconsidered
and decided by county

 

[March 17, 2021]  At the Logan County Board Workshop on Thursday, March 11, one focus of discussion was about reconsidering the addition of Mulligan Solar to the Enterprise Zone.

Board members present were Board Chairman Emily Davenport, Vice chairman Scott Schaffenacker, David Blankenship, Cameron Halpin, David Hepler, Steve Jenness, Keenan Leesman, Bob Sanders, Annette Welch and Jim Wessbecher. Janet Estill and Bob Farmer were absent.

It was in March 2020 that Erin Baker of Apex Clean Energy asked the county and other enterprise zone administrators to consider incorporating Mulligan Solar into the enterprise zone. Doing that would require a redraw of the enterprise zone boundaries. A measured corridor for contiguous connection must be drawn on the map extending to the new territory.

Being in the Lincoln/Logan County Enterprise Zone would allow Mulligan Solar to take advantage of sales and use tax exemptions benefits. Ninety percent of the use tax would be exempted in the enterprise zone and would be going only to the state of Illinois. Baker said there is really no loss to the county or other jurisdictions here if Mulligan Solar gets the use tax exemption.

This January, the Logan County Board approved the request for 1.4 miles of Enterprise Zone for Mulligan solar farm. A corridor would be extended to connect to the existing enterprise zone. The extension would start at Fifth Street, travel south along Route 66 to the parcels in the solar farm project.
Halpin said he would motion on Tuesday to rescind the former motion adding Mulligan Solar to the enterprise zone.

Hepler asked Halpin what the reasoning was especially in light of the past history of the enterprise zone.

Since the original vote, Halpin said a couple board members are second guessing the previous decision. While learning the board could deny future enterprise zone extensions, Halpin's concern is the lack of land that would remain available in the enterprise zone.
If there were to be approvals and then we decertify the land to regain the land as some in the city are suggesting, Halpin said that does not look good as we are asking to renew the overall enterprise zone.
Additionally, Halpin said the purpose of the enterprise zone is for economic development, job creation and neighborhood revitalization. Halpin said he is not denying solar farms in general should be considered high impact businesses by the state. He just does not think solar farms fit within the purposes of the enterprise zone.

Kyle Barry, attorney for the Mulligan Solar project, said solar farms are not currently eligible for high impact business programs That means they do not qualify for some of the tax credit and state sale exemptions wind farms get.
Currently, Barry said he is working on four or five enterprise zone expansions in other counties to include solar projects. All are larger than this one.
Years ago, Barry used to review these applications and signed off on several decertifications. He said counties can decertify territories. The developer of one solar farm has said in writing they would be willing to cooperate if the county seeks to decertify some territory later. Barry said that allays concerns about running out of territory in the future.
Over the years, Hepler said the board has approved several other projects asking to be in the enterprise zone to get sales and use tax exemptions. For example, in 2017, the board approved putting a grain elevator in the enterprise zone even though it did not create any jobs or revenue for the county. In 2014, an ag company rebuilding in Atlanta after a fire asked for enterprise zone designation to save on construction costs. In 2010, the TopFlight Grain Cooperative asked for the designation for the same reason.
Therefore, Hepler said what Mulligan Solar is asking for is consistent with what the board has approved in the last decade.
Construction on the Mulligan Solar project is set to begin in April, and Hepler said they still need to secure financing. If Mulligan Solar must go back to those lenders and say they are adding $5 million to $7M it would make financing more difficult.
Without enterprise zone designation, Hepler said they might change their mind about the project. He is worried about the impediment if they are not in the enterprise zone.
If Mulligan Solar has not taken permit fees out by May, Hepler said there is a chance the solar farm will not be built. The county would then need to remove those fees from the budget by June, which may mean making cuts in the budget. Hepler said the county should not put money in the budget they are not going to get.
Since Hepler has been speaking with Apex/Mulligan project developer Erin Baker, Davenport asked whether Baker has indicated they might change their mind about the project.
Because Mulligan Solar still needs to secure financing, Hepler said having to add $5 million to $7M would make it more difficult to sell the project to investors. Hepler said taking a vote and then rescinding the vote could make the county lose credibility as a group to do business with.

Though Welch said she does not usually change her opinion, her views on the enterprise zone issue keep swaying widely one direction or the other. Her initial understanding was that if the county lets one solar farm into the enterprise zone, they could not turn down other solar farms. Since finding out they could turn down other solar farms, Welch said she is on the fence about the decision.
Logan County Zoning Officer Will D’Andrea said in the past, some areas in the enterprise zone have been decertified. For instance, Railsplitter Wind Farm was decertified.

On Tuesday, Halpin will also motion to rescind the approval for adding solar projects to the enterprise zone.

When the board first voted on adding solar projects to the enterprise zone, Davenport said she voted for it because she wants the county to be business friendly. Since then, Davenport said she has gone back and forth on the issue. She is on the fence since finding out the county could say to no to other projects. She asked if the state could trump the county and say yes.

If the county signs off on these applications, D’Andrea said the state cannot trump it.
Barry said projects would have to show they are eligible to be included in the enterprise zone by meeting certain criteria.
With $208,000 in permit fees from the solar farm in the budget, Davenport feels the board is held hostage to approve it. She asked if Mulligan Solar had the money secured previously.
With Mulligan Solar working on securing the project for several months, Halpin asked why they did not seek financing earlier.

Until there is an agreement and understanding between buyer and seller, Hepler said people do not go to a bank to secure financing for a home. Similarly, these projects must first get to a point where the t's are crossed and the i’s are dotted and anything needed by the local authorities has been addressed. Then the project developers know the package that reflects their cost and they are ready to seek financing.
Each project has several steps to go through for planning and permit approval and Mulligan Solar received county approval this summer. Hepler said the enterprise zone was the last item before the company sought financing. Securing financing is the last step.
Halpin asked D’Andrea if he feels the project fits in with the intent of an enterprise zone and D’Andrea said he defers that decision to the county.
For the Mulligan Solar Farm to actually get the zone designation, the city of Lincoln must also approve the request. The council discussed the request at recent meetings and planned to continue discussion at this month’s meeting. Davenport said the city also has had some questions and hesitation about adding Mulligan Solar to the enterprise zone.
At the Tuesday, March 16, Regular meeting the board decided to allow the Enterprise Zone extension to Mulligan Solar. LDN will bring you that discussion later this week.
The city of Lincoln would still need to sign-off on the agreement as well and is scheduled to go before the council for a vote.

[Angela Reiners]