Council May Renegotiate French's Landfill Solar Deal
Bond approved on first reading, but more negotiations could take place
The township coucil this week voted 6-1 in favor of approving a $34 million bond measure to fund the construction of a solar array at the former French's Landfill site, but they may renegotiate some terms of the deal surrounding the project.
Councilman Jim Fozman cast the lone dissenting vote on the bond measure, which was passed on first reading. Before the bonds can be issued, a second vote must be taken after a public hearing.
Council President John Ducey said this week that the council may look to renegotiate some terms of a deal with the project's redeveloper, Standard Alternative, LLC, in the interim.
"Our focus is on trying to get the town as much money out of the deal as we can," Ducey said.
Under the deal that was negotiated under the previous council, the township would borrow the cost of constructing the solar array at the former Superfund site at a special reduced interest rate reserved for municipalities, but Standard Alternative would pay the money back – not taxpayers.
The company would pay Brick a $2.5 million upfront lease payment, then up to $85,000 per year for 15 years. During that time, the township would purchase energy from the the company at a significantly reduced rate, saving taxpayers what will amount the millions of dollars over the 15 year period, officials have said.
After 15 years, the township would take over the array.
Sean Conneamhe
6:24 am on Friday, February 17, 2012
"Let the Sun Shine In."
patriotmfd
7:56 am on Friday, February 17, 2012
Someone help me here. What am I missing? If the town borrows 34 million and the developer pays 2.5 million up front plus (85K over 15 years = 1,275,000) that’s a total of 3,750,000 the town makes toward the note. Who pays the remaining 30.25 million If the developer pays off the note at 2 million a year plus interest Great . if something does not play out “like the sun does not shine” the town is holding 30 million dollar dept. will the solar panels produce over 2 million a year ???? sounds like risky business to me !!!!!
Mickey
8:00 am on Friday, February 17, 2012
funny how that question was never addressed in the release, has anyone been able to determine that this company is legit ?
Daniel Nee
11:05 am on Friday, February 17, 2012
Mickey -- The company is 90 percent owned by Iron State Development, which has done a great number of redevelopment projects, about $1 billion worth. Locally, they did Pier Village in Long Branch. I'm not sure what your definition of "legit" is, but here's their website if you'd like more info: http://www.ironstate.net/
Daniel Nee
11:07 am on Friday, February 17, 2012
patriotmfd -- The $2.5 million and annual lease payments are in addition to the debt service.
Brian
2:23 pm on Friday, February 17, 2012
Daniel,
Who owns the other 10% of Standard Alternative, LLC??? Why doesnt anyone on the council seem to care who the silent owners are??
patriotmfd
8:06 am on Friday, February 17, 2012
How did the town come with the 34 million dollar figure for solar panels? ? Did the town write a specification and put it out to open public bidding with Solar Panel Contractors who have experience with multi million dollar projects ????
Minimew726
8:27 am on Friday, February 17, 2012
Patriotmfd... I was thinking the same thing, but also what happens if the company defaults on the payments or God forbids they end up like a lot of other companies and go bankrupt or out of business what then? They taxpayers have to pay back the remaining balance? Sounds risky to me.
Daniel Nee
11:07 am on Friday, February 17, 2012
If the company defaults, Brick would take full ownership of the array and be able to keep all of the profits for itself – more than enough to cover any debt service. Everyone involved in the project actually seems to agree that this would ironically be the "best" outcome financially.
BW
11:25 am on Friday, February 17, 2012
Dan if the company defaults, Brick is stuck with 34 million in debt. Even selling the power we generate, we will still be in a hole and on the hook for the debt, so anything we make will have to go towards debt, and will not see a profit for a minimum of 15 years, until the bonds are paid off.
If it walks like a duck and quack like a duck......it must be another money pit this admin got us into.
Daniel Nee
11:42 am on Friday, February 17, 2012
I can inquire again about the debt service versus the revenue that would be generated by the array.
BW
8:42 am on Friday, February 17, 2012
Mickey, the companies address is an apartment in a high rise residential building in Hoboken. Does that help answer the question?
Mickey
9:01 am on Friday, February 17, 2012
"Me"...as fishy as that sounds....I'm more concerned about Artie & John C. they always try and put a positive spin on anything this administration does...and their absence & silence on this & the DPW isn't like them. just hope they're well...<smirk>
BW
9:03 am on Friday, February 17, 2012
Mickey, remember, loose lips , sink ships. <wink>
Vince Latchford
11:01 am on Friday, February 17, 2012
Please folks, let's all show up at the "public comment" meeting and express our serious reservations about this new questionable bonding action. I'll try my best to make it and, if all you posters are truly interested in the town's finances, you should be there too.
JAY
12:46 pm on Friday, February 17, 2012
seriously? if the mayor can change what the voters voted for, why wouldnt the councel do whatever they want too? i have lived in brick all my life and this is the worst i have ever seen it.
Oscar Wilde
11:05 am on Friday, February 17, 2012
BOND = DEBT = SLAVERY
Vince Latchford
4:48 pm on Friday, February 17, 2012
I'm composing my list of questions in re: the Landfill Bond issue. So far I have.....
*Which financial instution will place the bonds and get the comission ?
*Are there other solar companies that might install this field ? Why no other bids ?
*If Standard Alternative is in charge of construction and they have problems, can they declare bankruptcy, have Iron State wash their hands of the deal, and leave the town a site problem and a bond problem?
Anybody got any more ?
Oscar Wilde
5:01 pm on Friday, February 17, 2012
why does Scott Pezzaras need a $150,000 Assistant ?
Brick Skeptic
5:31 pm on Friday, February 17, 2012
Here is the issue laid out and the problem. The mayor and the previous council did a bad job negotiating this deal. They keep saying that they were not getting any bids. Here's why. The mayor made part of the deal that the developer would pay the town all of the rent money for the 15 years up front - $2.5 million. The mayor wanted to fill a hole in his budget. Collecting this money up front represents poor fiscal policy - No surprise from Acropolis.
Of course, nobody wanted this deal to give us $2.5 million up front. It would be like saying "I am going to pay you $1000 to paint my house, but first I want you to pay me $200." No wonder we didn't get any bids other than the Standard Alternative bid. So they finally get a company to agree to this bid and it is not competitive because only one company was willing to do it this way. so it is not a very good deal.
So, why not renegotiate a completely new deal with another company? Good question. The problem is that there is a federal subsidy that pays for 30% of the project, which saves the developer (and by extension, the town) $9 million. So we can't get a better deal than this because the federal subsidy program expired on Dec 31, 2011.
I summary, this is not a very good deal, but we can't do better without the 30% federal subsidy, which we are no longer eligible to get. I just hope the new Democrats on Council can renegotiate portions of this deal so it will be more profitable for the town.
Waste
7:26 pm on Saturday, February 18, 2012
This whole solar thing is out of control. No matter how you look at it there is no way that it will pay for itself without some sort of government assistance or tax. The taxpayers and All current rate payers of the electric company are footing the bill for this nonsense. Wake up people, do some homework on the industry, it is estimated that the solar panel scam will be over installed by 35 to 45 percent this year causing the SREC prices to continue to drop. Germany is already abandoning the solar industry because it’s too costly to maintain. http://www.slate.com/articles/news_and_politics/project_syndicate/2012/02/why_germany_is_phasing_out_its_solar_power_subsidies_.html
time2go
11:36 pm on Sunday, February 19, 2012
thay should look at a wind fram instead wind blows 24 hours a day the sun is out 12 hours max and that if there no clouds and you will pay the note off faster .
Dawn Marie White
12:03 am on Monday, February 20, 2012
All of these questions have been asked and answered in detail. Watch the Feb 7th council meeting http://brick.granicus.com/MediaPlayer.php?view_id=2&clip_id=389
And once they post last weeks meeting watch that one too. As more questions and valuable information was given.
Iron State is multibillion dollar company with 4 decades of experience in the industry (formally Applied Housing Company which was formed in 1970 by Joseph Barry and Walter Barry..
They are Backing standard Alternative as subsidiary, in light of the green building boom. Most multimillion dollar company's set up subsidiaries when they partner with additional principals.
As far as negotiating this contract . We all would like to see more in Bricks Bank Account especially if the price of the SRECS skyrocket. Which if you truly do the research you will see how SRECS work and why the price has declined and what the future expectations are. They will go back up especially once federal subsidies end. When is the last time your electric bill went down? Yeah right! Once they close Oyster Creek everyone who is a naysayer will bit their tongues. What most people do not understand is there are maybe 7 companies in the United States that are capable of completing such a project, those companies were looked at and Standard Alternative gave Brick the best Bottom Line...
Germany ! Where is the sun? ..... Here is the difference http://www.solarmash.com/articles/2011-04-21/top-10-solar-friendly-states-12939/