Details of the contract outlining an agreement between Brick Township and Standard Alternative, LLC show that there are protections against taxpayers ending up on the losing end of a deal to create a solar farm at the former French's Landfill site, officials said.
The township council authorized a redeveloper's agreement with the Hoboken-based Standard Alternative on Tuesday.
Under the agreement, Brick will float low-rate municipal bonds to fund the installation of solar panels at the former Superfund site off Sally Ike Road, but Standard Alternative will pay the debt service, according to Business Administrator Scott Pezarras. Additionally, Standard Alternative will pay Brick $2.5 million in the first year of the contract, then a portion of the revenue realized by the energy the solar arrays produce. Additionally, Brick will purchase energy at a reduced rate from Standard Alternative.
Standard Alternative will continue to make annual payments to Brick – in addition to paying off the bonds – over the course of 15 years. Then, after the contract ends, the township will take full control of the solar array and may use the energy in any way officials want, presumably, however, to eliminate electric bills for the municipal government at BTMUA.
"All of the market risk is going to be taken by the redeveloper," Pezarras said, explaining that even if Standard Alternative went out of business, the solar array would immediately become township property, and the energy produced by the site would far outweigh the relatively small amount of debt service produced by the bonds.
"Once he gets the solar array built, if he goes belly up, it's on our property and we collect all the money," said Pezarras.
Pezarras said in all, the township will most likely bond about $23 million for the project, after factoring in grants and an upfront down payment that will be made by Standard Alternative. In order to take advantage of federal grant money, however, an order to purchase the solar equipment must be made by the end of the year – the primary factor, Pezarras said, driving the deal to be done by the close of 2011.
Council President Brian DeLuca said Tuesday that Standard Alternative is planning a 6.5 megawatt solar array for the site.
As Brick Patch reported Tuesday, while the redeveloper's agreement is in place, the deal is not set in stone. The bonding to support to the project must be approved by the incoming, Democrat-controlled council after the start of the new year.