A potential tax break for solar farms in Malheur County is seen as one method to attract big-time employers such as Amazon and Google. Both firms demand clean power, such as solar, as a requirement to build as new facility. (The Enterprise/Pat Caldwell)
VALE – They draw energy from the wide open, southern Oregon sky but the solar farms that dot Malheur County are part of a long-term economic development gamble that may or may not pay off.
Greg Smith, the county’s economic development director, said he believes the gamble is a good one, especially since some big-time firms demand renewable energy as an essential condition to build locally. It’s all part of creating a “business friendly” environment, said Smith.
As large firms take advantage of state-sponsored incentives to skip paying local taxes for five years, the payoff for local taxpayers is not always evident.
Smith said the payoff comes later and isn’t a certainty.
That long-range hope led local officials to give largest tax break in the county to a constellation of six solar farms built at a cost of about $120 million.
The tax break came into public focus last fall when county officials declared that Cyprus Creek Renewables had missed the deadline to act and avoid $1 million in local property taxes. The company is seeking the intervention of state officials to restore a tax break that Smith said was key to bringing the projects to Malheur County.
A national company built the large solar plants and then sold them in 2015 to Cyprus Creek, a national firm with offices in North Carolina, California and Arizona. The projects were all in what’s called a rural renewable energy development zone.
Under state law, counties can grant tax breaks in such zones for companies that utilize wind, geothermal, solar, biomass or other alternative forms of energy to produce electricity.
Last year was the first year the Malheur County project could qualify for the tax break but county officials said Cyprus Creek Renewables missed a county deadline to submit paperwork to receive the tax cut. The company filed for the tax exemption in November but a number of required forms were missing, according to Assessor Dave Ingram.
Instead of an exemption, the company got a property tax bill for $1.1 million.
Smith said the solar farms are needed to attract even larger investments by firms such as Google and Amazon. They have invested billions erecting data centers in places such as Prineville and look for access to renewable energy.
Data center jobs can pay anywhere from $15 to $28 an hour.
Smith said he has yet to be approached by those companies “but they are constantly looking,”
“You have to put these fundamental building blocks in place. Now, when a lead comes up with one of those companies we have excess power capacity and it is renewable,” said Smith.
“You can’t compete unless you have the right infrastructure. We are now competitive. We have excess power capability, we have land zoned industrial and a significant portion of our power will be classified as renewable,” said Smith.
Ingram agreed the solar farm tax abatement is about a long-term economic development.
“It is part of the bigger picture as far as bringing new industry into the county,” said Ingram. “This type of growth is good.”
The Malheur County Court approved the energy zone but Smith, working in his role managing the zone, makes the final decision.
Smith said he approved the hefty tax exemption for three reasons.
The deal benefited local landowners who negotiated with solar firms to lease their land. Much of that land, said Ingram, was otherwise of marginal value.
The solar installations are south of Ontario, near Owyhee Junction, the Vale Airport, Vines Hill, along Railroad Avenue between Vale and Ontario and between Cairo Junction and Nyssa.
Smith said a “lot of folks,” including Idaho Power and the city of Ontario, want to attract data centers to the area.
“The third element is they (the solar firms) agreed to provide certain construction jobs,” said Smith.
According to the 2014 application for the tax break, construction would attract more than 500 workers.
Cyprus Creek now employs five people in the county.
Smith said without the tax incentive, the solar firms would go somewhere else.
“That would be lost revenue for landowners,” said Smith.
Smith also said that once the tax exemption expires, the property goes back on the tax rolls.
With the solar farms in place, said Smith, Malheur County is prepared to attract a major firm.
The 2017 tax break, though, remains an issue.
Ingram insists that Cyprus Creek was alerted ahead of time of the need to get its paperwork in order.
“They just failed to take action and get this office the required paperwork,” said Ingram.
The company disputes that.
“It is disappointing that the county has responded publicly asserting that they complied and notified us – twice – of the need to file via email message,” said Jeff McKay, Cyprus Creek spokesman. “We never received this email message and have our server records to prove it.”
McKay said his firm has taken the matter to state officials to resolve and grant the tax credit.
Malheur County Treasurer Jennifer Forsyth said the firm paid $394,630 in November on its 2017 bill and made a second payment of $394,630 on Feb. 15. The company still owes the county $394,425, due in May.
Have a news tip? Contact reporter Pat Caldwell at [email protected] or at (541) 473-3377.