A new solar energy farm being built in Sherman will only have to pay 50 percent of its property taxes for the next five years.
The Sherman City Council unanimously approved a tax abatement agreement for West Moore Solar’s facility in the 900-2000 blocks of West Moore Street on Monday. The agreement, which was approved following a public hearing on the matter that saw no one from the public come forward to speak, is expected to save the facility around $119,000 over the five-year period.
“The total taxes is $238,000 — about $119,000 each to the taxpayer and to the city, over the five-year (period),” Director of Finance Mary Lawrence said.
Council member Jason Sofey asked what kind of taxes the city currently collects on the land and Lawrence explained Sherman gets next to nothing.
“There’s an ag (agricultural) exemption on it now, so it’s pretty close to zero,” Lawrence said.
During its last meeting, the council approved the creation of an industrial reinvestment zone for the facility’s property, which was required before the tax abatement could be approved. Information provided to the city said West Moore Solar expects to begin working on the facility this spring and have it complete by December of this year. The facility is expected to have one full-time employee and the solar equipment is expected to last for at least 25 years.
The council approved a specific use permit last year to allow Cypress Creek Renewables to build the 112-acre solar energy facility. It is slated to have around 5,000 photovoltaic cell panels individually mounted on posts and automated to face the east in the morning and move to the west by the end of the day.
“I know it’s a large number for an abatement but it’s a tract of land that would be difficult to develop for other (reasons),” Sofey said of the utilities line that go over the site.
Documents provided to the city state “the power generated from the solar farm will be sold to Oncor for use by consumers to replace energy produced from a nonrenewable source.”
Aaron Wilson, a senior developer with Cypress Creek Renewables, said last year, the facility would produce 25.2 million kilowatt-hours per year.
A document created for the council states West Moore Solar plans to invest $1.1 million in property and between $10 million and $12 million in equipment at its solar energy farm in Sherman.
“The depreciation schedule for these projects are set by the state,” Wilson said Monday. “They have a 10-year useful life. At the end of the year 10, they implore at 20 percent of their original value and they hold that value in perpetuity.”
Last year, council member Shawn Teamann said Wilson told him the project is anticipated to bring in almost $19.5 million in property value in personal property and increased land values for existing properties. The facility’s property currently has an agricultural exemption and city staff said it will be returned to the tax rolls at its full $1.1 million value.
“It’s a very exciting project,” Wilson said, explaining he lives in Sherman and is a local taxpayer. “(I’m) excited about the revenue going to the school district and the college and the city.”
City Manager Robby Hefton quickly responded that city staff is also excited about the new revenue.
The Sherman solar farm is Cypress Creek Renewables’ fourth project in Grayson County — the other three are in Southmayd, outside of Whitesboro and just east of Sherman right outside the city’s extraterritorial jurisdiction.
The tax abatement is the third put in place or extended by Sherman over the last month, following a new abatement with Finisar Corp. that will save the company $3.3 million in property taxes over the next 10 years and an extension of an abatement agreement with Texas Instruments that will save the local facility around $117,000 over the next five years.