BERLIN — The city has reached a 20-year agreement with North Country Growers on a payment-in-lieu-of-taxes agreement for two commercial greenhouses the developer is planning to build off the East Milan Road. The city council approved the PILOT agreement at Monday’s council meeting after a final review in non-public session.

North Country Growers, a subsidiary of American Ag Energy, has until Feb. 28 to exercise its option on 170-acres of city-owned land it has targeted for the two 10-acre greenhouses.

The PILOT agreement runs from tax year 2020 through 2041. It shows North Country Growers plans to phase in the greenhouses with construction of the first greenhouse to get underway this year. The developer hopes to have the second greenhouse in operation no later than 2032.

During the construction phase, tax years 2020 and 2021, the agreement provides for an annual payment of $50,000. The annual payment increases to $200,000 in tax year 2022 and $300,000 in year 2023. From tax year 2024 through 2031, North Country Growers will pay an annual PILOT payment of $500,000 until the second greenhouse is constructed or by tax year 2032, whichever is sooner. At that point the annual payment will increase to $875,000.

The agreement states that in recognition of the “back-end loading” of the payments, the increase in the PILOT payment to $875,000 will occur by tax year 2032 regardless of whether the second greenhouse gets built.

The PILOT agreement required special legislation to allow such agreements to cover an on-site combined heat and power agricultural facility. Previously, such agreements were only allowed for renewable energy projects.

Rep. Larry Laflamme of Berlin introduced the bill, which the governor signed in July.

The North Country Growers project calls for a generation plant that will tap into the natural gas pipeline. It will generate an estimated 8.8 megawatts of electrical power primarily to be used by the facility. At the time, North Country Growers head Dr. Richard Rosen said the PILOT agreement was the last legal piece to complete.

The greenhouse project has already received conditional approval by the Berlin Planning Board and was awarded a $25 million loan from the U.S. Department of Agricultural Rural Development.

When the Berlin Industrial Development and Park Authority agreed to the recent extension, the city made it clear it would be the last. The option has been extended nine times since the original option was granted in February 2017.

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