Box Elder County officials have taken an important step to bring two solar farms to the county, offering tax rebates to the project developers, who are expected to invest around $130 million in the county while generating a clean source of energy.
One of the projects, named Project Rocket Solar, will be in the Howell area near Northrop Grumman Innovation Systems. The other, dubbed Project Steel Solar, will be located in Plymouth near Nucor Steel.
In return for the investments, which could significantly increase the county’s tax base, the developers would get back some of the taxes they pay on new growth under a 20-year agreement.
The tax increment financing is set up for the projects through the county Redevelopment Agency, which would allow taxing entities within the project area, including water, cemetery and other districts, to capture additional dollars as the projects grow.
The Box Elder County Commission approved Community Investment Project Areas for the two solar farms at its most recent meeting.
Stuart Clayson, of the Utah Association of Counties, has been working with the various interested parties. He said the two projects combined will generate 200 megawatts of clean solar energy.
“Box Elder County has been very successful in using tax increment financing as a tool for job creation and getting companies to locate and expand in Box Elder,” Clayson said.
While some projects in the county that have received similar deals, especially manufacturing operations, have tended to create a lot of jobs, the solar farms will offer a different sort of benefit, he said.
“The job creation number is not high,” Clayson said. “It typically is one or two people going out and checking panels, not on a daily basis.”
However, the up-front capital investment will provide growth in personal property tax revenue that will boost the coffers of smaller, local taxing entities, he said.
“It’s a very passive investment, but very capital intensive,” he said. “If you all award this and the developer moves forward, every taxing entity will capture this new growth, where otherwise they would not.”
Still, some members of the public voiced concerns in a public hearing during the meeting about providing significant tax breaks to projects that aren’t creating jobs.
“What is the level or criteria you use to give tax credits?” Richard Nicholas of Brigham City asked. “I’m not aware that you give them to every business that locates in the county, so why do you give it anybody? What is the criteria?
County Commission Chairman Jeff Hadfield responded that this project is a little different, being based on the personal property tax — essentially, the value of the equipment and technology.
“Usually we’re looking at job creation, but the increment we’re going to get off that land versus what it’s paying now is much greater having this project on it. The schools, everybody involved is going to benefit immensely from it.”
Clayson said Project Rocket is looking like total investment of about $90 million, while Project Steel would be about $95 million. However, the local taxing entities don’t get to benefit from all of that because there’s a federal tax credit of around 30 percent taken off the top. Accounting for that, the incremental value of investment into the county would be $63 million for Rocket and $67 million for Steel.
For the local entities, he said that would mean about $2.5 million of new growth over the 20-year period from Rocket, and $2.6 million from Steel.
Clayson also said there are other benefits to having such a project, not just the growth in revenue.
“The other piece, by adding something like this into your overall development portfolio, as you try to recruit other companies, it sends a signal that you are supportive of diversifying your energy base, and it aligns with the state energy policy of ‘all of the above,’” he said.