Court upholds verdict in PP Energy Center property tax lawsuit

Submitted by Michael Bordelon on Sat, 06/14/2014 - 15:37

A state appeals court ruled on Wednesday, June 11, in favor of Pine Prairie Energy in its suit against the parish. The ruling upholds an agreement PPE made with the parish’s Industrial Development Board to exempt PPE from paying ad valorem property taxes to the parish.
Proponents of the tax exemption agreement between PPE and the IDP have argued that a ruling against the agreement would damage economic development prospects, specifically involving PPE but also future economic activity in the parish.
PPE entered into the agreement with the IDP in 2005. The agreement stated the IDP would own the property and lease it to PPE. In 2006, PPE entered into the agreement with the police jury to exempt the property taxes. Two months later, the tax assessor’s office sent a letter to PPE confirming that as long as the IDP owned the property, the taxes would be exempt.
But in 2011 the assessor’s office placed the property on the tax rolls. PPE objected and started paying the taxes under protest. PPE filed the suit in the 13th Circuit Court at the beginning of 2012. The appeals court got the case at the beginning of 2013.
Owners of the gas storage facility have invested about $700 million in the project. More than 500 people were employed during construction. Court documents say the 20 full-time workers at the storage facility earn double the average parish wages.
Construction and operation of the gas storage facility has resulted in about $10 million in sales and use taxes to the parish, and it is paying the parish $1.2 million in ad valorem taxes a year. Court papers also state PPE has made “significant financial contributions” to the parish, including $3.2 million to retire general obligation bonds issued by the parish school board in 2001 to enhance educational facilities in Pine Prairie.
PPE has slowed expansion of the energy storage facility, although there is more room for underground storage, as the case has been pending.
The ruling was issued by the Third Circuit Court of Appeals.

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