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Salem Tax Burden On Its Residents And Small Businesses

Largely overlooked in the rush to permit Footprint/Toyota’s proposed dangerous gas power plant is the long-term payment in lieu of taxes (PILOT) agreement quietly negotiated by the City and the developer. It will levy a combined annual real estate and personal property tax of $4.75 Million on a property with a market value when complete of $800 Million. The $4.75 Million annual payment is equivalent to the taxes that would be levied on a property with a full fair market value of approximatey $150 Million with no PILOT agreement. This agreement is entirely inconsistent with the statute (GL Ch. 59, Sec 38H) which requires any PILOT agremeent to be based on a property’s full fair market value.

The agreement is based on the fiction that a power plant that will cost $800 Million to build will have a market value of $150 Million upon completion because future wholesale energy prices are unpredicatable. How “unpredicatable” can the price for Footprint/Toyota’s power be when it has a five year (2016-2021) capacity agreement with ISO New England at a price several times higher than the capacity price for existing plants in New England?

The PILOT agreement is a $15-20 Million annual operating subsidy for the owners of a fossil fuel plant. It will come directly from the pockets of the property owners (both residential and commercial) in Salem and from Salem’s schoolchildren, teachers, police and firefighters.

The PILOT agreement negotiated in the shaddows in Salem is a handout to Footprint/Toyota. Maybe you should visit your local Toyota dealer today and demand a 75% reduction in the price of a new Prius? Threaten to buy a Ford Focus hybrid if you don’t get exactly the price you want. See how far that gets you.


  • Derrick Julien April 03, 2014 at 02:05 AM
    we need the power sad this area grew but the plant was here before most marbleheaders and salem people and most people understood we need power and its good for our national security and cant have business growth without power.
    Brenda Coughlin April 03, 2014 at 07:35 AM
    Derrick, this is the fallacy our city leaders want you to believe. Footprint Power's assertion that this new dangerous gas plant is going to be a “bridge” to a renewable future is the most outlandish and regressive plan for both our energy infrastructure and the city of Salem. The REAL “bridge” would be to keep Salem Harbor’s no. 1 and 2 boilers running on oil, leave 3 and 4 off-line. This would both serve as the “bridge”, and also provide power to the region due to low natural gas pipeline capacity. On cold days our electrical grid is currently running on 25-30 % oil and coal because we don’t have ENOUGH gas coming into the region due to heating loads. Next simultaneously tear down the section of the old plant that is not being used and build the wind farms off Cape Ann and Salem Sound bringing the lines into the current Salem power station. The next step would be to perform the tie-ins, which would take less than a month. The final step is get the wind turbines spinning, making renewable energy, and tear down the rest of the old plant and develop the site. Salem would continue to get the RGGI (Regional Greenhouse Gas Initiative) funds in the tune of 3.74 million dollars for the next eight years ,to supply the city with a tax base during the whole process. Also it would be getting a tax revenue from the owner of the site for hosting the wind farm terminal. Once the site is further developed for commercial/industrial uses without violating the Chapter 91 MA. Waterways Law, it would further generate more money for the city. Instead our politicians have decided to” Ad captandum vulgus” and give an out of town company, complete with foreign investors, the red carpet treatment and build a dangerous gas plant for a 167 MW regional power shortfall that can be made up with renewables, conservation and transmission upgrades further locking us into a high priced gas infrastructure for the next fifty years. This plant is going to cost at least 1 billion dollars, as quoted by Mr. Keenan, of which 60% is going to be paid for by the ratepayer. Recently, the six New England governors signed an agreement to place a tariff on all electrical ratepayer customers. Their intention is to have this tariff pay for the power industry’s NATURAL GAS infrastructure. Be prepared in the next few years, to pay heavily for your gas and electrical consumption. Because the increases are going to drive industrial and commercial customers out of the region and cause the residential rates to be increased incrementally to epic proportions. Hey, but that’s what our short sighted politicians and energy legislatures want, so that’s what we’re going to get!
    Brenda Coughlin April 03, 2014 at 07:48 AM
    If their is going to be such a shortage of power available in our region, how are we ever going to cope if the current plant is shut down for three years while Footprint is building the new one. Doesn't make sense.
    Derrick Julien April 03, 2014 at 02:26 PM
    The point here is those water way laws were made to try and squeeze industry. the only type of industry and things will be drawn here because of past industry and contamination and rain and water access. those fundamentals built this country. this is someones land and we need power. you can say they are spewing fallacy but you are not realizing the ideas of this country and capitalism the liberals will squeeze you edit censor you threaten harass and defame you and demonize you if your right and try to do something that goes against there agenda. they wont serve your rights and needs and respect you way of life. this place has been here before most people and business or homes were built. most people who were from salem or born here owned businesses or worked in factories. salem was rebuilt by shipping and factories after the fire. salem was grown because of trade and shipping. to not have commercial water front is a shame for a city that was built on shipping. recreation is bad idea considering the contamination and the longterm affects of what will wash out from north river Peabody areas and forest river. industy is the only option. salem needs a tax cut. more people will invest in homes and business and hire employees. salem will loose more jobs and businesess now that the state wants to push a minimum wage increase. salem cant manage the streets and schools. there looseing revenue so fast they thing raising taxes is the answer. if they were enforcing laws and traffic laws there would be revenue and raises are no the answer especially when the work isn't getting done. we are not gaining much business if you look at whats gone and what changed hands and what is closed. the fire depart and police department go after small business people and don't respect rights and even private property owners. but when some people in this city do things they get away with it. john keenan was a monkey and had no real grasp on working men and business he was a potted plant. we are in a cold war spat and gas and oil prices will sky rocket so the need to have power and to export will be there as well and this pier can load ships. we will be selling gas to Europe and Ukraine soon Russia is manipulating the world market. the biggest headache is the mass liberals are so dependant on dc and handouts from the state or feds they cant cut waste and use there own money for things.
    Derrick Julien April 03, 2014 at 02:28 PM
    That's good if they used oil but we would have to import oil like that. all the oil we have in our country is light sweet good for kerosene and gasoline or plaxtic petro fertilizers. the type of oil for heating or high burning is heavy crude found in dif places in the world.

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