Niagara Gazette

Local News

January 9, 2013

Covanta unanimously granted tax breaks for Falls facility

Niagara Gazette — A Niagara Falls waste-to-energy plant has been granted a tax break on its infrastructure expansion project by the Niagara County Industrial Development Agency.

The agency's board of directors voted unanimously to enter into a 15-year payment-in-lieu-of-taxes agreement with Covanta Energy Inc. of New Jersey. The company burns waste at its facility located off of 56th Street and converts it to steam and electric energy, which it then sells to a handful of neighboring factories.

Members of the public criticized various aspects of the deal — environmental concerns, questions of the value gained through the abatement — at a recent public hearing and city council meeting.

A project summary from the agency projects the company's total tax savings to be $8 million and the community benefit created by the expansion at $37 million.

The infrastructure expansion will create 23 new full-time jobs, retain the 86 jobs at the facility now and will create 160 construction jobs, according to the project summary.

But company and government documents suggest the expansion plans are not dependent on the tax break. The documents — Securities and Exchange Commission filings, company presentations to stock holders — show the company needs to complete sections of the expansion to meet contracts that it has already entered in to and will complete other sections of the expansion only if it secures garbage contracts in New York City.

Kevin O'Neil, Covanta Energy's business manager at the Niagara Falls facility, said that two sections of the expansion project — the new steam line being built to supply the paper lining factory Greenpac and the natural gas furnace that will act as a back up for the waste incinerators — are already under construction.

"I'm under contract with Greenpac to provide steam," O'Neil said. "I'm going to have to move forward with that no matter what."

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