Ward: public not invited to invest


(1/10/2010)

by Sarah Squires

Government and at least one private investor are on the verge of an unprecedented public and private partnership in Winona County for a $3.6 million wind energy project.

But one of the project’s most vocal critics, and a county leader herself, says that local people weren’t given the chance to invest in the project. And for an investment coupling tax money with private dollars, one that required special legislation, County Board member Marcia Ward said that the Winona County wind turbine project is not setting a good example for any future marriages of public and private money.

The board is expected to be briefed on the project Tuesday, but Ward said answers to her questions about the turbine project have always come too late, or not at all. She’s been waiting for months to see information on the project and how local citizens could invest from Juhl Wind, a development firm contracted to oversee the project and to find investors.

But apparently Juhl Wind and Winona County never did compile a prospectus for potential investors, and the investor that has been found was one who had been “waiting in the wings for awhile,” according to an e-mail from Winona County Economic Development Director Linda Grover.

“I’m a Winona County citizen who has, so far, up-fronted the [money for wind studies] and such with tax dollars, and I don’t even have the opportunity to invest in it?” asked Ward. “That isn’t the way it was supposed to be.”

Appeal for investors stems from a combination of projected revenue and tax incentives. And some have questioned whether the county will be in a good position to make much money after the 10-year mark, when ownership and profits will become the county’s.

“Investors make all the money, depreciation, tax write-offs and everything, at no benefit to the local people?” asked Ward. “And then [we] get it when it’s 10 years old. It’s like buying a 10-year-old car. If we’re setting up a model [for other projects], I don’t have a good feeling about it.”

Winona County has been working on the turbine project for years, and received special legislative approval last year to form a Limited Liability Corporation (LLC) to partner with investors. The ownership model for the agreement is expected to follow what has been dubbed the “Minnesota Flip,” with the private investors owning 99 percent of the developments and profits for the first 10 years, and the county to own 90 percent after.

Projections show that the county could make a profit of about $1.5 million over the next 20 years with the twin turbine project planted in Mount Vernon Township. Winona County has already put about $200,000 into plans, and is expected to be reimbursed for some of that expense through the investor agreement.

County leaders have already signed off on the project and the LLC, and won’t have to vote again to see it through construction. But that approval didn’t come without controversy: first, from those who simply felt the Mount Vernon site wasn’t windy enough and questioned projections, and second, from those who objected to the very nature of the project. Tax dollars, they said, shouldn’t be gambled with, and public money shouldn’t be funneled into an investment project guised as a private business endeavor.

The twin turbine, 1.5 megawatt system is expected to provide wind energy to several hundred neighbors in Mount Vernon Township. The public-private partnership will be one of the first of its kind in the state, and supporters say that the project is meant to serve as a prototype for future partnerships here and across the country.

 

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