AMD, local officials pressing ahead on factory plans

MALTA & STILLWATER — Advanced Micro Devices is inching closer to what local leaders hope will be a final commitment to build a $3.2 billion factory at the Luther Forest Technology Campus.

Last month, the company hired Capital Region attorneys and engineers to represent AMD in the local and state application process.

The next step is for the company to propose an initial site plan to local planning boards.

AMD has until July 2009 to move ahead and commit to building the computer chip factory if it wants to receive $1.2 billion in tax breaks under an agreement it signed with then-Gov. George Pataki in 2006. At the time, it was heralded as the biggest economic good news the region had had in a generation, and officials and business leaders remain excited about it.

“We’re enthused about it and optimistic about it,” AMD spokesman Gary Silcott said last month. “I think the process that was started last week shows that we remain optimistic and excited about it.”

The hiring of local representatives is only the most recent development in an application and engineering process that will likely stretch well into next year.

“We’re hopeful,” Silcott added. “It’s a long and complex process.”

Meanwhile, local and state government agencies are gearing up for the massive infrastructure upgrades that will be needed for Luther Forest, whether or not AMD becomes its anchor tenant.

Last January, the state Department of Transportation announced a $4.2 million grant to pave and expand Cold Springs Road, which runs along the eastern side of the Luther Forest Technology Campus in Stillwater.

Stillwater Supervisor Shawn Connelly said that the town expects to have the project done by July 2009 and hopes to break ground this spring.

“It’s probably one of the very few dirt roads left in Stillwater,” Connelly said. “We’ve promised the taxpayers of Stillwater that they would pay nothing for this update on the road, and we’re going to stick with that.”

The DOT grant is a reimbursement grant, which means that Stillwater will have to pay for the project itself and submit requests along the way to be paid back by the state.

The town hopes it won’t need to borrow money for cash flow during the project, but Connelly said that if a loan is necessary, someone other than town taxpayers will need to pay for the interest.

Malta reached a similar agreement recently on a $2.5 million loan that it received from Saratoga County for cash flow for the $37 million internal roads project at Luther Forest.

Officials announced that the Luther Forest Technology Campus Economic Development Corp. would pay the interest on that loan earlier this month.

“We simply can’t afford any costs,” Malta Supervisor Paul Sausville said. “We’re moving forward on the premise that we’re being supported by other units of government.”

BUILDING A BYPASS

Another major roads project is the Round Lake Bypass, which will connect Northway Exit 11 to Route 9.

The state DOT began construction on the 1.6-mile road last fall and hopes to finish the $22 million project by December. The bypass will ease traffic flow in the area once the technology campus is developed.

Connelly said that traffic flow was a concern for some of Stillwater’s residents.

“We’re excited that it’s coming. Obviously traffic issues on [Route] 9P are an issue with some of the people that live on 9P,” he said. “Some of those people are a little worried about the construction phases.”

Once all of the roads are in place, officials will need to ensure that the new county water system and sewer system can handle the capacity that Luther Forest will need.

The county Board of Supervisors is scheduled to vote in March on a plan to authorize the borrowing of $50 million to expand the county sewer system.

Sewer commissioners have cited the 3 million gallons-per-day that the county has agreed to provide Luther Forest once it is developed as well as overall growth in the area as reasons for the need to upgrade.

If the loan is approved, the upgrades would double the current 21.3 million gallons-per-day capacity of the sewer system and raise sewer rates in the county by about $50 per user.

Officials hope to begin construction on the expansion this summer and said the $50 per unit increase may decrease as new customers are added to the system, including Luther Forest potentially hooking up as early as 2010.

The new $67 million county water system will run a 28-mile pipeline from the Hudson River in Moreau to Luther Forest.

Construction has begun on the system using state grant money, but the county water authority is the process of obtaining a $37 million loan to help pay for the project.

Luther Forest will need at least 2.4 million gallons of water per day, and the Luther Forest Technology Campus Economic Development Corp. has agreed to buy that water from the county once the new water system is complete.

“We’re building a park first and we were lucky enough to have AMD as an anchor tenant,” said Mike Relyea, the executive director of the Luther Forest Technology Campus Development Corp.

“When we get done putting the power in there, and the water, and the roads, we’re going to have one of the best, largest parks in the country.”

Local leaders are confident that the development of Luther Forest will go on with or without AMD.

“We’re very sure that they’re coming. Obviously some things could happen and they may not show up,” Connelly said. “If it’s not AMD, it may be another chip factory.”

AMD lost $3.36 billion in 2007 on revenues of $6 billion and the per-share price of its stock fell by more than half over the year.

“I think the likelihood of them coming to Malta is as strong as the financial plan that they have on Wall Street,” Sausville said. “If they’re going to stay in business, they’re going to continue to fabricate micro-processing chips.”

Sausville said Malta is excited about the Luther Forest Technology Campus because the estimated property tax assessed value of the campus is nearly equal to the town’s current total assessment. If AMD decides to come to Luther Forest it will also bring an estimated 1,2000 jobs to the area.

Both Connelly and Sausville said AMD officials have indicated to them they that the company intends to locate its next chip fabrication plant in Malta and Stillwater.

“There’s a lot of things that have to happen to make this vision a reality,” Sausville said. “It’s going to happen because of the cooperation and the vision and the partnerships that we have.”

Sausville also noted that AMD has already spent time and money on the engineering and application process.

AMD this week expects to file applications for zoning and environmental review approvals with the town of Malta, with a goal is obtaining those approvals by the end of the year. The company isn’t expected to make a final decision whether to go forward with the plant until after the town reviews are done.