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Power plant to get $8.7 million tax refund after suit

Huntley Power, the Town of Tonawanda's largest taxpayer, will collect more than $8.7 million in property tax refunds to settle a 2011 lawsuit.

The Kenmore-Town of Tonawanda School District owes the most: roughly $3.8 million. The Town of Tonawanda owes approximately $3.4 million and Erie County must refund a little more than $1.4 million.

Refunds are due by mid-June, according to the order signed earlier this month by acting State Supreme Court Justice Timothy J. Walker.

A spokesman for the county executive couldn't be reached to comment Friday. But officials in the school district and town said that arrangements were made last year to ensure the money would be available when the issue was resolved.

"It was about what we expected," said Gerald Stuitje, assistant superintendent for finance for the school district.

Adjustments were made on the revenue side of Ken-Ton's 2011-12 budget last summer, transferring funds into the tax reserve fund, according to Stuitje.

Town of Tonawanda officials did likewise.

"We have prepared for this long ahead of time," said Town Supervisor Anthony F. Caruana, who's also the budget officer.

Huntley Power LLC filed the Article 7 petition last July.

The company missed the March 1 deadline to implement a new 20-year PILOT -- payment-in-lieu-of-taxes -- agreement, so its River Road property remained on the 2011 rolls and tax bills were based on current assessments. The lawsuit was filed after the town's Board of Assessment Review declined to grant Huntley the exemption status or reduce the assessments.

The company sought significant reductions in the assessments for its generating plant and another River Road parcel.

According to the petition, the company proposed approximately $24.8 million, down from $193 million, for the generating plant at 3500 River Road. Further, it proposed $189,000, down from almost $1.4 million, for 4293 River Road -- an approximately 116-acre parcel.

Negotiations involved a confidential valuation summary for the property that Huntley obtained, at its own expense.

The accessibility of that valuation summary to representatives of the school district, town and county was tightly regulated -- including a 'gag order' prohibiting its discussion -- by a court-issued confidentiality order. In fact, the order states that the confidential valuation summary is exempt from disclosure under the Freedom of Information Law.

Ultimately, the assessments for 2011 were set at roughly $72.4 million and at $520,761, respectively. Those numbers apply only to the settlement.

"In no event shall the settlement assessments provided for in this settlement stipulation be offered or admitted in evidence in any proceeding other than a proceeding for enforcement hereof," the settlement order states.

Meanwhile, the PILOT is in effect for the town's 2012 assessment roll.