A project in the works for the New Carlisle area would build a massive solar energy farm while also setting up a new special taxing district that could be used to funnel money toward tax incentives for the company and St. Joseph County’s development efforts in the “Indiana Enterprise Center” industrial zone.
County officials are working with renewable energy company RES to build the farm, nicknamed “Project Honeysuckle,” on up to 1,900 acres of farmland bounded roughly by U.S. 20 and Spruce, Tamarack and Darden roads.
The company this week confirmed the plan, which was also presented to members of the St. Joseph County Council, Redevelopment Commission and Board of Commissioners during a closed-door meeting in April, according to a slideshow presentation obtained by The Tribune.
With a proposed 365,000 solar panels and an output of 150 megawatts per year, the $164 million project would dwarf the county’s current largest solar farm and, according to RES, could provide enough clean energy to power more than 25,000 homes.
The project also is likely to spark debate over the creation of a new tax-increment financing district, which would allow the county to spend tax dollars generated by the project both on financial incentives for RES and ongoing work to bring new industry to the New Carlisle area.
County Commissioners President Andy Kostielney, economic development director Bill Schalliol and County Council member Mark Telloyan, who represents the New Carlisle area, either declined or did not respond to interview requests about the project.
Commissioner Derek Dieter, whose district includes New Carlisle, said he was aware of the project but still had “more questions than answers.”
‘A really positive addition’
Anne-Marie Griger, the developer of the project for RES, said Tuesday the Honeysuckle solar farm had been in the works for more than a year. She said the company has already leased 1,900 acres from private property owners, though the solar panels would likely end up covering less than 1,000 acres.
Griger said RES hopes to begin construction next year and finish in 2023. But she added the project will not go ahead for sure until the company finds a buyer and signs a purchase agreement for the electricity the farm produces.
“Once it would be constructed, it would be, from what I’ve seen publicly available online, the biggest solar farm in the state,” Griger said. “We feel like it’s a really positive addition to the diversity of things you guys have going on there.”
Indiana Michigan Power earlier this month cut the ribbon on the county’s first major solar farm, with 60,000 panels covering about 210 acres of farmland at Bittersweet Road and the Indiana Toll Road in Granger. The University of Notre Dame committed to help fund the project by buying clean energy credits worth 40% of the farm’s output.
Griger said RES, which is not a utility itself, could sell to utilities looking for new sources of energy, or to companies or institutions looking to buy clean energy, similar to Notre Dame’s arrangement with I&M.
According to the April presentation to county officials, RES would spend about $164 million in property and equipment. It would create 150 to 200 construction jobs to build the farm, plus a maximum of three permanent full-time jobs.
County officials this week had yet to publicly disclose the proposed solar farm or details of the new tax-increment financing district, or TIF, that would be created for the project.
TIF is a common and controversial economic-development tool used by local governments nationwide and throughout Indiana.
When a local government creates a TIF, the “base” property value within the district is locked at its level before the creation of the district. From that point on, any new taxes on increased value in the district go directly to the city or county redevelopment commission.
Redevelopment commissions typically use those tax dollars largely to finance debt in the form of bonds. The city or county then uses that borrowed money to either help pay directly for a private construction project or to pay for infrastructure, land acquisition, consulting fees or other activity within the targeted “economic development area” where TIFs are allowed.
Other government entities, such as schools and police departments, never see the new tax revenue from development in a TIF until after any borrowing is paid off and the TIF expires, often decades later.
In the case of the solar farm, the county is exploring using revenue from the TIF to pay RES back for some or all of the property taxes the company pays on the project.
Griger, the RES developer, said the county approached the company about using the TIF to offset the company’s taxes in lieu of a traditional tax abatement. Griger declined to discuss the details of the proposed tax incentive.
According to the slideshow presented to county officials, the arrangement would involve the company purchasing a redevelopment bond from the county.
Similar arrangements elsewhere in Indiana have called for a project developer to guarantee the bond, while the redevelopment commission pledges to return taxes generated by the project toward payments on the debt, with interest, as a form of tax offset.
Griger said RES is seeking the tax incentives because of the substantial upfront costs it will shoulder to build the farm, and because the solar farm itself will put a minimal burden on government services. She pointed out the property is unlikely to use police and fire services, and without many full-time employees, it won’t add students to local schools.
“These types of projects are very capital intensive — hundreds of millions upfront to build it,” she said. “We will be paying increased property taxes on the land and we’re not asking the county for any services, really, so we’re seeking to reduce some of that tax to help the project make sense.”
‘What we’re opposed to’
Critics of the county’s Indiana Enterprise Center, or IEC, plans have attacked the use of TIF dollars in general as a wasteful gamble on industry that siphons money away from other government needs, and they are likely to fight the expansion of TIF financing for the solar farm.
Chris Cobb, a member of the Open Spaces and Agricultural Alliance, a group that has organized against the IEC, said he supported the general idea of a solar farm, but not a project that relies on TIF.
“If what was being proposed was simply a 1,900-acre solar farm on that land, full stop, we would not be opposed to that,” Cobb said. “What we’re opposed to is the expansion of the TIF district as part of the design of the project because of all the negative effects of a TIF.”
To create the new TIF, state law requires the county to file a new economic development plan for the New Carlisle area that provides justification for the new TIF usage. That plan must be approved by the Redevelopment Commission and the County Council.
The Redevelopment Commission was also required to give permission before the county even began studying changes to the boundaries of the New Carlisle economic development area, which would be expanded by hundreds of acres to include the new TIF.
The commission voted 4-1 at its May 11 meeting to approve the study of the boundary changes. But details of the potential changes remained vague during the meeting.
“There’s one development project on the northern end of the site that may require being included into the development area,” Schalliol, the county’s director of economic development, told commission members.
When a Tribune reporter asked Schalliol about the scope and reasons for the boundary changes earlier this week, he listed several points unrelated to the solar development but did not disclose that project or details of the proposed new TIF district.
Schalliol said county officials were looking at adding property near Larrison Drive and Indiana 2 to the southwest corner of the New Carlisle development area so that TIF money could go toward road improvements.
He said the county may bring land west of Bendix Woods County Park into the development area in case the county wants to spend TIF dollars to acquire the land and add it to the park as a buffer against future development.
Schalliol also said the county may look into expanding the TIF area to include properties the county has acquired just east of downtown New Carlisle, such as an old mobile home park where officials have floated the idea of a passenger rail station.
A reporter called Schalliol seeking further comment after learning of the plans for the solar project and new TIF. Schalliol did not return the call.