Dryden Solar: Developer Sues Landowner, Claiming Secret Lease Damaged Project

Categories Energy

By Josh Brokaw

Distributed Sun, the national solar developer planning almost 30 megawatts of solar arrays in the Town of Dryden, filed a lawsuit on Friday against another solar energy company and the landowner of one of its proposed solar farms.

SUN8 PDC LLC, the subsidiary of Distributed Sun planning a solar farm at a 157-acre property at 2150 Dryden Road, filed suit on Friday, Oct. 27, in Tompkins County Supreme Court against landowner Scott Pinney and Pennsylvania-based solar energy company Dynamic Energy Solutions LLC. The suit is seeking monetary damages and a declaration by a judge in Distributed Sun’s favor that the property is theirs to lease – or, in lawsuit-speak, the suit is seeking “a judicial determination of the rights and interest of the parties with regard to the Property.”

The suit is also asking for no less than $25 million in damages from Pinney, should the lease be found in Dynamic Energy Solutions’ favor, and another “no less” than $25 million from Dynamic.

The lawsuit claims that after signing a lease with Pinney, Distributed Sun “discovered that the property owner had also signed an option to lease the same property with a different solar energy company, Dynamic Energy Solutions.”

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The lawsuit paints Dynamic Energy as a a hustling outfit, looking for a way to make a profit by either sitting on properties or using their positions to “extort funds” from other solar developers. SUN8 had already invested more than $500,000 in the Dryden project when it became aware of the Dynamic option in March 2017. The “claim to a lease option threatened to disrupt the entire solar project,” the lawsuit says. “Dynamic later offered to abandon its claim if Plaintiff either offered it a construction contract or entered into a settlement agreement.”

The lawsuit reveals that Distributed Sun first learned of the 2150 Dryden Road property in March 2015 from Ron Szymanski, a solar energy developer. A Distributed Sun represntative visited the property in August 2015 and March 2016, and in April Distributed Sun made an offer to the legal owner, Pinney. A letter of intent was signed on June 23 2016, between Pinney and Distributed Sun. The lawsuit claims that Pinney also signed an option with Dynamic that same day in June. Distributed Sun and Pinney signed their lease in October 2016, and the suit lays out a series of documents in the following months that Pinney gave Distributed Sun confirming that he was leasing the property free and clear of other encumbrances.

When Bharath Srinivasan, the Distributed Sun representative, was shown that the Dynamic lease existed on March 1, 2017, “This came as a shock,” the lawsuit reads, “as Mr. Pinney had repeatedly guaranteed Plaintiff that no other party had any claims to the Property.”

Distributed Sun officially filed its lease agreement in county court later that week. Pinney also backed away from the Dynamic deal. The Dynamic lease was “nothing more than an agreement to agree,” Pinney’s attorney, Charles Guttman, wrote in a letter to Distributed Sun dated March 3. Guttman’s letter accompanied a $1,000 check to Dynamic, returning upfront money Dynamic had paid Pinney in June 2016.

After a March 24 conference call between the parties, Dynamic contacted Distributed Sun by telephone and allegedly told them they could “make all this go away” if Dynamic was hired to do the installation. Whether Dynamic has since taken any actions regarding the 2150 Dryden Road property is unclear from the court documents.

Distributed Sun’s attorneys argue that the Dynamic lease was never specific enough to be considered legally binding, and anyway, the lease was never publicly filed.

The suit also claims that Dynamic “actively provoked opposition from town residents” against the Distributed Sun project, and “worked to disrupt the town permitting process.” No further documentation of this claim can be found in the supporting exhibits in the lawsuit filing.

If the SUN8 PDC LLC project fails, the company says it will lose a $237,068 payment to NYSEG to begin constructing distribution line upgrades and $711,204 in upcoming payments to NYSEG is scheduled in coming months. Distributed Sun has spent about $400,000 in internal costs; spent $115,000 in “project-level due diligence assuring the Town of Dryden’s Planning Board and Town Board that the property is suitable,” and spent $70,000 in legal fees over the secret Dynamic lease.

In the lease that Distributed Sun and Pinney signed, Pinney is to be paid a total of $4,000 for the 18-month development term, when Distributed Sun expects to have use of the whole property. Pinney will be paid $300 per acre of his property that’s used for solar equipment, during construction, and $750 per operational acre once the panels are running, with the lease payment per acre escalating annually by 2 percent. It’s estimated that the solar facility will use 49 acres of the 157-acre 2150 Dryden Road tract.

If the project fails, “in the event the Dynamic lease option is valid,” Distributed Sun is estimating a $20.5 million loss in investment, “resulting in a loss of up to approximately $7 million in net profits.”

Distributed Sun is estimating that all its solar projects, including another, 18-megawatt project on Turkey Hill and Dodge Roads, will contribute $8 million to local taxes over the next 20 years.

The environmental quality review for the 2150 Dryden Road project was approved in July and the subdivision of the property was scheduled for Dryden Planning Board review in September –  this reporter can find no confirmation that was approved online, at the moment.

TruthSayers made a request for comment to Distributed Sun, asking about the project’s status. Attorney Jack Jacobs, of Cleantech Law Partners, had this response:

“The project is in great shape.  As the public records indicate, our client holds an executed lease and are well on the way to securing all the permits necessary to build a solar farm on Scott Pinney’s property.  They plan to construct the system and are eager to provide local, zero emissions electricity to area residents.
We filed the lawsuit to protect our client’s interests in the land that they leased, and ensure the project’s success.”

Scroll down below TruthSayers’ pitch – for continued funding to do this kind of reporting – to see the complaint and lease as it was filed in Tompkins County Supreme Court.

TruthSayers is a start-up organization that hasn’t sold any advertising or secured any grant funding. Maybe we’ll figure that stuff out someday – and we’d love your help with that – but right now, your contribution of cash money goes to keeping the website online, to equipment expenses, to gas money, and other occasional necessary purchases as founding editor Josh Brokaw sees fit – who’s doing this on a pretty much volunteer basis so far. Any money you can spare would be helpful in keeping this independent reporting project going. 

The following are documents filed in Tompkins County Court on Friday, October 27.

SUN 8 PDC LLC vs. Pinney/Dynamic Energy Solutions, complaint (Text)

Distributed Sun, Scott Pinney, 2150 Dryden Road solar lease (Text)

Pinney’s attorney to Dynamic, refunding monies, March 3, 2017. (Text)

Featured photo via Wikimedia Commons, used via Creative Commons license.

Josh Brokaw is an independent reporter based in Ithaca, N.Y.
Email josh.brokaw@truthsayers.org with tips, story suggestions, and gentle criticism.
Twitter: @jdbrokaw