LS Power finally caught a break.
After getting shut out of a state incentive program back in March, and with a deadline looming on an agreement with Gloucester County to buy 302 acres for their proposed 620-megawatt natural gas-fired power plant, the company scored a breather Wednesday night.
The freeholders voted unanimously to extend that land agreement, which was set to expire in a few weeks, through next summer, clearing away a potentially derailing block for the planned power plant.
There was a catch, though.
The extension includes a nonrefundable $1 million deposit by LS Power, which would come off the total proposed $14 million sale price for the property. The county originally bought those 302 acres from West Deptford for $9.3 million in 2007.
“We wholeheartedly believe this project is going to go through,” Freeholder Director Robert Damminger said. “In this climate, for a business to turn around and put down a million dollars as a commitment…they’re going to do it.”
The extension comes on the heels of talks between both the county and the township with LS Power that left both entities convinced of the company’s credibility.
West Deptford Township Administrator Eric Campo said there have been several talks with LS Power about the power plant, and noted that the fact that the company has virtually everything set, from permitting to site plan approval, to get shovels in the ground is evidence they’re serious about seeing the project to fruition.
Campo said the township is on board with the freeholders’ move to extend the deal; though the project has hit delays, thanks in part to getting left out of a state incentive program, he said LS Power has indicated to West Deptford that they can get the project underway within the extension, starting most likely in 2012.
“It's something that's always been a long-term interest,” Campo said.
That long-term interest includes the construction jobs and permanent power plant jobs, as well as the $107 million in Payment In Lieu of Taxes (PILOT) money that would be split between West Deptford and the county over a 30-year span.
Tom Hoatson, director of development and regulatory affairs for LS Power, has previously said the company anticipates 300 to 500 temporary construction jobs and about 25 permanent positions at the plant.
The jobs and long-term economic benefits are what Campo said is the main focus, and not just for West Deptford.
"It benefits the whole area, not just the township,” he said.
And while there are significant benefits, the freeholders said they've also weighed the potential negatives, should the deal fall through.
Damminger said requiring the extra $1 million deposit helps soften the blow should a worst-case scenario happen, and LS Power were to walk away from the deal. He said there could also be potential interest from businesses connected with the Port of Paulsboro, currently under development.
The 302 acres LS Power plans to buy is along what will be an access road to the port, and Damminger said it could be a good fit for warehousing or other port-connected businesses.
Freeholder Deputy Director Warren Wallace said, while they have those plans for a worst-case scenario, the freeholders spent considerable time looking over the deal, and still believe the power plant is a solid venture.
“We think it’s going to work out well, and Gloucester County will be a winner,” Wallace said.
A call to LS Power representatives for comment was not returned Wednesday.