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WHEATFIELD – The Niagara County Industrial Development Agency board voted Wednesday to grant the new owners of a Niagara Falls power plant a tax break on a $3 million warehouse they plan to erect to store their wood fuel.

The IDA last month allowed Sterling Energy Group of Gary, Ind., which recently purchased the Niagara Generation plant on Frontier Avenue, to assume the 14 years left on the former owners’ tax abatement.

Wednesday’s unanimous vote granted Sterling a 15-year payment-in-lieu-of-taxes, or PILOT, arrangement, and a sales tax exemption on building materials and equipment for the warehouse will save Sterling an estimated $318,837, according to an IDA calculation. Two jobs would be created at the warehouse.

The warehouse is to be built on the now-vacant site of the former Carborundum Co. plant on Niagara Falls Boulevard. Sterling plans to buy the site from NFB Carbon Products for $1.25 million, according to its IDA application.

The 200-by-300-foot warehouse, about a quarter-mile from the power plant, also would include a fueling station for vehicles that run on compressed natural gas.

Sterling executives told the IDA last month that they intend to invest $2 million in the power plant, called a biomass facility. The company has pledged to the IDA that 18 jobs will be created at the power plant within three years. The workforce was down to two; the plant last operated in March, plant manager Michael A. Boslet said at the August IDA session.

The IDA last month gave Sterling an exemption from sales tax on building materials and equipment used in refitting the plant, a savings estimated by the IDA staff at $64,000.

The wood to be stored in the new warehouse would be primarily ground-up remnants, similar to yard mulch, supplied by BFI Canada. Sterling said that it intends to burn 90 percent wood and 10 percent coal. There also is a leftover supply of tire chips to be used up.

In another matter, board member Stephen F. Brady said the IDA’s staff will be assigned to research and write policies to require companies receiving IDA aid to hire local labor on their construction projects, and to bar them from using contractors that employ undocumented immigrants.

The measures had been urged by County Legislature Minority Leader Dennis F. Virtuoso, D-Niagara Falls, who induced the Legislature to pass the requests June 18.

Brady said that the IDA also has a provision saying applicants must “comply with all laws” but that Virtuoso convinced the board Wednesday that something tougher is needed. That something apparently will be an extra fee charged to applicants to cover the IDA’s cost of hiring an outside agency to audit company compliance with the new rules.

“The IDA doesn’t have the manpower to police it. It’s better to have a third party do it,” Virtuoso said, noting that Monroe County’s IDA has a similar procedure.

“We have an obligation to taxpayers, who are providing these benefits, to make sure companies are doing the right thing,” Brady said.

Lockport Mayor Michael W. Tucker, the acting IDA chairman, said he hopes the new policies will be ready for a vote at the agency’s Oct. 9 meeting.

email: tprohaska@buffnews.com