Glouco sues W. Deptford over PILOT payments

Posted: June 21, 2014

The squabble between Gloucester County and West Deptford over payments for an energy station will be resolved in court, after county officials filed suit against the municipality.

The two governing bodies have been pitted against each other over a payment in lieu of taxes (PILOT) agreement for LS Power's natural gas facility on Paradise Road in the township, scheduled to come online this summer.

The company agreed to pay the township $107 million in lieu of taxes over 30 years. The contract stipulates that the township will give 10 percent of those payments to the county, but the township failed to deliver on that promise and now owes the county $250,000, according to the suit.

Township officials have maintained that they are only legally obligated by state law to remit 5 percent of a PILOT to the county. The agreement was executed in 2011, just before Republicans in the town gained the majority in the longtime Democratic stronghold.

The county's lawsuit, filed last week, also names LS Power, operating under its West Deptford Energy Associates Urban Renewal arm.

"We did not want to see a lawsuit," said Brandon Umba, West Deptford's acting administrator. Umba said a meeting between town and county officials yielded no remedy.

"There were two clear sides of what we were looking at, and it didn't seem there was any compromise in the middle for either of us to take back" to the governing bodies, he said.

Not long after the dispute was made public several weeks ago, the township delivered a check for nearly $80,000 to the county - an aggregate of the 5 percent of the PILOT payments it received in 2012, 2013, and the first two quarters of 2014, minus certain taxes (another point of contention).

In a statement to The Inquirer, Freeholder Director Robert Damminger said: "It is always the county's last resort to take legal action, but in fairness to all of the county taxpayers we must seek what is owed us by West Deptford Township through the courts."

Umba, who was unaware Thursday the suit had been filed, declined to comment on the specific points of litigation.

"It's obviously the township's intent to vigorously defend any attempts by the county to get more than their statutorily mandated share," said Mark Cimino, the township's redevelopment attorney.

LS Power officials could not be reached for comment.

The suit not only asks for a judge to order the payments, but requests yearly interest in the amount of 18 percent because the missed payments are "akin" to unpaid taxes. It also requests the agreement be amended, splitting the 10 percent into two categories: 5 percent as a "statutory share" and 5 percent as a "contractual share."

County officials have said the higher-than-required payment was agreed upon because of the county's aggressive role in brokering the redevelopment deal. The county purchased the land and sold it later to LS Power.

In its last count, the county requests that, if the requested relief isn't granted, the PILOT agreement be voided and the property be assessed and taxed on its value.

856-779-3917 @AJFichera

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