The Calvert County, Md., Board of County Commissioners voted to approve a Payment in Lieu of Taxes (PILOT) agreement and tax relief for the proposed Dominion Cove Point Liquefaction Project at its existing Cove Point liquefied natural gas (LNG) terminal located on the Chesapeake Bay in Lusby, Md.
The terms of the PILOT agreement include a one-time payment in Fiscal Year 2018 of $25 million before the proposed facility expansion is deemed taxable. This is in addition to the $15.1 million the county will receive on Dominion’s existing equipment. Additionally, the county is guaranteed $15.1 million in annual payments on existing equipment for at least an additional five years, removing the risk of financial loss to the county on equipment depreciation. Calvert County will receive approximately $55 million total per year in tax revenue once the facility is operational.
Upon completion of the five-year PILOT, Dominion Cove Point will receive 42 percent relief on real and personal property taxes for nine years. At the end of the tax relief period, the facility becomes taxable at 100 percent of its value. This investment by the county will help pave the way for the facility expansion, which is valued at $3.4 billion to $3.8 billion and expected to have a significant economic impact on the county through job creation and tax payments.
“The expansion of the Dominion Cove Point facility will be one of Maryland’s largest economic development projects,” said Pat Nutter, president of the Calvert County Board of County Commissioners. “It will create approximately 3,000 construction jobs and at least 70 new permanent jobs in Calvert County. We believe today’s tax relief and PILOT agreement is vital in seizing this opportunity amidst the global dynamics of natural gas production. Dominion has been a valued community partner for more than 30 years and we look forward to an enduring relationship.”
Calvert County is authorized under Maryland law to extend property tax relief to new or expanding businesses in the county’s identified economic development target market sectors that employ at least 25 new additional full-time employees and acquire at least $2.5 million in land, improvements to the land, or equipment in the county.
LNG World News Staff, November 06, 2013; Image: Dominion