KOMIPO proposes a three-year development period and offered $1,700 per acre per year rent. The annual lease payment will be $2,618,000 per year. KOMIPO also offered a $5.2M termination payment or walk away in the event it does not move forward with the project.
The City will also begin negotiations with Korean Western Power for another photovoltaic solar facility near the wastewater treatment plant. This site is approximately 880 acres in size, and KWP offered $3,000 per acre per year rent. The annual lease payment for this site will be $2,652,000 per year, and KWP has offered a $2.6M termination payment.
None of the revenue associated with these projects is incorporated into the budget or the City’s financial plan at this time. During the next several months, the City Council will be working on next year’s budget and an update of the City’s financial plan which allocates revenues. The City Council’s focus for expenditure of these new revenues has been debt management and capital expenditures; these new revenues will assist with this plan. Another potential use of these revenues is the stabilization of utility rates, and this is an area that I expect will be explored as the City Council discusses the budget and financial plan update.
Although projects such as these have the potential to generate large revenue streams, none of the revenues can be relied upon until the option periods expire and the facilities are constructed. With that being said, the projects provide the City with a very unique opportunity to establish its own financial destiny.
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