GILL — Despite objections raised by some town officials over the negotiation process, 31 voters unanimously passed the single article on Monday’s Special Town Meeting warrant to authorize the Board of Assessors to enter a 10-year payment in lieu of taxes (PILOT) agreement with FirstLight Hydro Generating Co.
The PILOT agreement establishes set payments for 10 years, beginning this fiscal year.
This agreement is “coming off the coattails” of the PILOT agreement that neighboring Montague reached with FirstLight, Gill Town Counsel David Klebanoff explained.
“We’re going to watch what you do,” he said of Gill’s position in seeing how Montague’s PILOT negotiations with FirstLight played out. “You’re well-represented, and whatever the outcome is, we’ll assume that that would have happened to us as well. And that’s exactly what happened.”
Context for the PILOT agreement detailed in the warrant explains that in 2021, Gill and Montague shared the cost of an appraisal of FirstLight’s assets at Cabot Station, the Turners Falls Dam, and properties along the Connecticut River and power canal. The assessed value was placed at $146.5 million, with an 89% and 11% split in land ownership between Montague and Gill, respectively. Two hundred and thirty acres of land belonging to FirstLight are located in Gill.
This rate was used for fiscal years 2022, 2023, 2024 and 2025, and would be used for fiscal year 2026, if not for the PILOT agreement. FirstLight’s own appraisal put its assets at a $45 million value. Both towns denied abatements for FY22 through FY25, and have been part of litigation in the state Appellate Tax Board due to FirstLight contesting the value.
Rather than continue to fight in court with FirstLight, the PILOT agreement in Montague and Gill establishes rates for 10 years. Though Gill will need to return $68,790 to FirstLight for overpayments made in FY22, FY23, FY24 and FY25 as part of the settlement, FirstLight has agreed to pay $172,998 to the town in FY26. That sum will increase by 0.75% annually for the 10 years of the agreement, resulting in a total of $1.8 million being paid to Gill.
Before the unanimous vote was taken Monday, an hour after the meeting began, members of the Selectboard and Finance Committee who voted against recommending the warrant article shared their concerns.
Finance Committee Chair Claire Chang felt the process by which the PILOT was negotiated was “distasteful at best” due to the lack of say Gill had in negotiating with the utility.
“Gill’s agreement just follows Montague’s agreement. There’s no wiggle room, there’s no negotiating,” Chang said. “That’s why I voted against it, because I felt that we had no opportunity to discuss the valuations and the tax rate.”
Selectboard Clerk John Ward voiced a similar sentiment, saying he felt as though the town was “negotiating with a gun to our heads” based on the lack of participation in negotiations by the Selectboard. He added that FirstLight “splitting properties off” to diminish its land value made the process “completely unfair.”
To explain the asset splitting, Klebanoff noted that the Northfield Mountain Pumped Storage Station is owned and operated by FirstLight Power Resources, and the Turners Falls Dam and Cabot Station are owned and operated by the Massachusetts-specific FirstLight entity, FirstLight MA Hydro LLC. Gill is entering the PILOT agreement with FirstLight MA Hydro LLC, which means the value from Northfield Mountain, under the purview of FirstLight Power Resources, is not included in the agreement.
However, Klebanoff contested Ward’s characterization of the negotiations.
“To me, this is a tremendous benefit to the town of Gill. It is not a gun to your head,” he said. “I understand there’s some resentment about the way FirstLight’s arranged their assets and separated their companies, but we have nothing to do with that. There’s nothing we can do about it.”
Finance Committee member Peter Turban said that while he agrees with Chang and Ward about the fairness of the situation, the $68,790 that Gill needs to return to FirstLight for overpayments in previous fiscal years is “nothing” compared to the cost of going back to the Appellate Tax Board.
“I agree with Claire and John, it’s not a good thing for FirstLight to have split everything off,” he said. “But to me, this is the best thing for the town. You’re not gonna lose hundreds of thousands every year.”
After balancing the pros and cons of the PILOT agreement, voters unanimously approved the warrant article on Monday and the meeting adjourned just after 8 p.m.
Asked about the PILOT agreement on Tuesday, FirstLight Communications Manager Claire Belanger wrote in a statement that the company is proud to have collaborated with Gill on an agreement that will “commence the next decade of partnership.”
“This mutually beneficial agreement establishes a predictable revenue stream from FirstLight to Gill,” Belanger wrote, “and we are pleased by its recent final approval.”