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New supervisor wants talks on tax breaks

Incoming Supervisor Richard Meyers is calling for negotiations with AES Corp. on freezing the assessed valuation of the company's power plant as a substitute for a controversial payment-in-lieu-of-taxes plan, or PILOT, granted by the Niagara County Industrial Development Agency.

Meyers, who will be sworn in Tuesday to succeed John E. Sweeney Jr., said over the weekend he wants to see the PILOT rescinded, but acknowledged that AES, the largest property taxpayer in Niagara County, also has needs.

"Both sides need to be open to compromise," Meyers said.

The Barker Central School District Board of Education has authorized a lawsuit against the IDA if the PILOT isn't rescinded.

If the agency fails to act, Meyers said: "I would not oppose a lawsuit. But I would rather negotiate." He said he didn't envision the IDA as a party to such talks.

Meyers says freezing the plant's taxable value, currently set at $666.6 million, might encourage the company to build more facilities in Somerset. "There's no guarantee, but that's a motivating factor," Meyers said.

The company lost a bid for a state "clean coal" power plant contract last month, but AES Somerset President Kevin D. Pierce said AES hasn't dropped the notion of building a second coal-burning plant or a wind power operation.

"We still have interest. We're monitoring things as they progress," Pierce said.

Pierce said Meyers hadn't approached him about reopening talks.

But based on the current situation, Pierce said the company would rather have the PILOT.

Henry M. Sloma, the development agency's chairman, said he would welcome talks between the town and AES. "I think that would be a positive outcome," he said. "If that were possible, it would certainly be desirable."

Meyers said he hasn't talked to the Barker school district about such discussions. The school district would take the biggest blow -- $23 million of an estimated $40 million in lost revenues over the 12-year tax break, based on current tax rates.

Sloma said he would have to consult the IDA board about whether the PILOT would be rescinded if Somerset and AES made a deal. The tax break was approved Oct. 27, but it has yet to be closed.

AES wants the deal finalized by Feb. 28, the day before taxable status of all Somerset properties is to be determined for 2007-08 school taxes and 2008 town and county taxes.

Meyers said he realizes AES already receives a break on its assessment, since the state Office of Real Property Services suggested valuing the plant at $796.5 million for this year. "But I also understand how business works in New York State. Nobody pays a full assessment," he said.

e-mail: tprohaska@buffnews.com

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