EAST LANSING — The prospects for a proposed solar project could be in doubt after the East Lansing City Council voted 3-2 Tuesday to grant a 10-year tax exemption rather than the 25 years exemption sought by the company.
Peter Rienke, a senior account executive with Inovateus, said "we've got a lot of work to do still" for the project to proceed. "We're happy the council members have been working with us to come up with a resolution, but there's more work to do to make the project move forward," Rienke said.
The $24 million proposal by South Bend, Ind.-based Inovateus was approved by the Michigan State University's Board of Trustees last September. It's estimated it would create 65 temporary and permanent jobs. It would place five solar arrays in parking lots in the southern part of campus that would generate 10 megawatts of power, or about one-sixth the energy used on campus during peak hours. The arrays would be raised, allowing for covered parking.
East Lansing Community Development Analyst Lori Mullins said Inovateus requested an exemption because the company would be investing in equipment they would own and from which electricity would be sold to the university, all of which is taxable.
However, in a May 19 letter to city staff Inovateus president/CEO T.J. Kanczuzewski said the city's offer of a 30% abatement instead of the 82.2% tax break sought by the company meant the project would not be possible.
"We fully understand that this project, and the many benefits it delivers to East Lansing, does not move forward without your support," Kanczuzewski wrote.
The larger tax break, he added, would help the company secure financing.
The 25-year exemption would have saved the company a total of $4.4 million in taxes. The 10-year accord would save the company $2.6 million.
Since the panels would be on the MSU campus in university parking lots, city staff told council there would be no cost to the city for either maintenance or services.
"We are not giving money away," council member Shanna Draheim said. "We are getting money at no cost to the city."
Although he acknowledged a completed project would "assist both the city and the university in meeting their goals" of environmental sustainability, Mayor Mark Meadows cited a city policy dating back to 2008 in calling for the 10-year limit.
MSU spokesman Jason Cody said MSU will revisit the proposed project with Inovateus.
"We are excited about adopting solar energy options, and we will have discussions with Inovateus on finding a solution to keep this project moving forward,” he said. “Pursuing alternative energy options and finding ways to make the MSU campus more sustainable are priorities for the university," MSU spokesman Jason Cody said.