Judge limits Roseton assessment cuts
Fears that the sale of the Roseton power plant to LDH Energy (Louis Dreyfus Highbridge) of Stamford, Conn., will result in astronomical tax increases for property owners in the town of Newburgh and Marlboro School District have been partially allayed by Bankruptcy Court Judge Cecelia Morris.
Judge Morris approved the sale of Roseton and Danskammer power plants and ruled that in the case of Roseton, the buyer “shall be permitted to negotiate with the relevant tax authorities to reduce the aggregate tax liability on the facility for tax years commencing after the closing date by as much as reasonably practicable (and in any event not less than 50 percent of the 2012 assessment on a per annum equivalent basis), which reduced liability may be implemented over a multi-year period not to exceed three years.”
Town of Newburgh Supervisor Wayne Booth said that while taxing entities must negotiate a settlement with the purchaser, the assessment cannot be less than $447.5 million (50 percent of the current $895 million assessment).
Booth said that negotiations will begin right after the first of the year.
“I have a meeting with the new owners of Roseton on Jan. 7,” Booth said Friday.
Asked if LDH could still walk away from the deal, Booth responded in the affirmative. But he expected the new owners to bargain in good faith.
Another part of the judge’s ruling forbids the seller (1) from entering “into any agreements with, or engage in any discussions or negotiations with such tax authorities regarding the matters contemplated by this Section without the prior written consent of the buyer (not to be unreasonably withheld, conditioned or delayed) and (2) shall provide the buyer, at least 24 hours in advance, notice of and an opportunity to participate in, all in-person, telephonic or other meetings with such tax authorities regarding any other matters, and shall copy the buyer on all correspondence with such tax authorities.”
No one (at least locally) is happy about the sale.
Marlboro School Superintendent Ray Castellani expressed shock when he first learned of the sale price for Roseton ($19.5 million). He said the school district has already cut expenses by $5 million while anticipating a reduction in assessment. The next step will be further cuts, the renegotiation of contracts and an appeal to the Legislature for help, or at a minimum, a plan to improve the flow of state aid.
The district continues to investigate the possibility of the sale or lease of two of the district’s three elementary schools although it isn’t something it wishes to do.
John Kaiser, president and business manager of Local 320 of the International Brotherhood of Electrical Workers, called the closing of the Danskammer plant “unfortunate,” disputing the bankruptcy judge’s characterization of Danskamnmer as a coal-fired plant.
“It’s a multi-fuel plant,” Kaiser said emphatically. “It was refurbished in 1982 and again in 1986.”
Kaiser also took issue with Dynegy’s assertion that Hurricane Sandy left the Danskammer plant uninhabitable.
“That plant had a lot of life left in it,” he said.
“It’s kind of curious why they did that,” he said, lamenting the fact that the decision to sell Danskammer for scrap has left 60 workers unemployed.
“Local 320 will continue to work with those workers to try to find them jobs,” Kaiser said.
“From the beginning, Dynegy has been a bad actor,” he said. “The Hudson Valley embraced Dynegy when they puchased Roseton and Danskammer and they’ve left us with a wake of financial havoc.”
Kaiser said he planned to meet with the new owners of Roseton early in the new year to determine what role workers of Local 320 can play in the new operation.
Hudson Valley Area Labor Federation President Paul Ellis-Graham said that “the people in this community hoped that a responsible buyer could be found for the Roseton and Danskammer generating stations. Based on news reports, we have a buyer but it is not clear that they are a responsible one.
“I am dismayed to learn that the Hudson Valley is losing the Danskammer plant and the electricity, tax revenue and good middle-class jobs that it provided. In addition, it seems that the new buyer, Louis Dreyfus Highbridge Energy will continue with Dynegy’s policy of relentlessly demanding concessions from its workers.
“Dynegy has proven to be a reckless out-of-state speculator and has left a path of economic destruction in its wake. I sincerely hope that Louis Dreyfus Highbridge Energy will prove to be the responsible community member that Dynegy was not and bargain fairly and honor its tax obligations to this community. The livelihood of our neighbors and the education of our children in our community should not be sacrificed to corporate greed.”
By ALLAN GAUL