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Editorial: TIF and Acciona’s lawsuit
Op-Ed · September 24, 2015


The federal judge’s rulings on the lawsuit by Acciona Windpower against the City of West Branch may favor the city in an immediate financial sense, but it leaves a gray area for the City Council when considering similar Tax-Increment Financing incentives.


Acciona set up its wind turbine assembly plant in West Branch in 2007 in part due to the tax incentive package offered by the city. In return, Acciona had to create “approximately 110 jobs” to get the rebates. Our interpretation of the contract was that Acciona had to create and maintain those jobs for five years, but Judge Jon Stuart Scoles felt the contract favored the average over that time span. That said, he ruled that Acciona met its contractual obligations and that the city did not have legal standing to cancel the contract.

However, he also found language in the contract that the City Council is not obligated to pay the tax rebates every year. The contract only states that the council “shall” consider those payments each year.

Acciona tried to get the court to force the city to pay the money the council has withheld since canceling the contract in 2013, but Scoles said the company is not entitled to it in one lump sum. Scoles still has to decide if the council must, eventually, make those payments to Acciona. The trial is set for October.

In the agreement, the city would make eight annual payments — roughly $265,000 each — in return for five years of job creation. So far, the city has paid Acciona three of those eight payments.

Now the city council must consider the larger ramifications of this case: What message does this situation send to other companies considering West Branch for their new location? But this question itself needs a bit of a breakdown. Not every business wants to locate in the TIF district, and not every business can bring enough jobs to draw tax rebates.

Acciona Windpower North America is, by federal government standards, a small business when counting employees but a large business when counting annual receipts. Worldwide, even Acciona’s parent company is one of the smaller ones in the wind industry; yet compared to other businesses in West Branch, the local subsidiary is quite large in both employees and revenues.

A city’s economy is healthiest with a mix of more small and fewer large companies when both show growth. Reid’s Beans and Procter & Gamble are two good examples at different ends of this spectrum. We don’t want a single failed business to turn West Branch into a ghost town.

We like Acciona’s clean energy contributions though we’re sorry to see its current struggles in the U.S. market — it has acquired contracts in the U.S., but not enough to restart its West Branch assembly plant — even though its factories in Europe and Brazil are faring better.

We hope the city continues to see the value of TIF incentives and that Acciona can soon restart its assembly plant and thrive again.