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Saratoga County officials propose takeover of Luther Forest Technology Campus

Wednesday, July 17, 2013
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— Saratoga County officials are intervening in an effort to address growing financial and other troubles at the Luther Forest Technology Campus in Malta and Stillwater.

Under a county proposal, the town of Malta would be asked to loosen rules that are restricting development at the high-profile industrial park. In return, the county would take ownership and financial responsibility for the town-owned roads in the tech park.

Such a deal would allow the tech park to start offering tax exemptions for new businesses to move into the park, which it can’t do under current town zoning. The town would be relieved of the costly burden of maintaining the 5.5-mile internal road system.

“One of the concerns the county has had is the inability of the tech park to offer the standard incentives that are available throughout New York state,” said county Board of Supervisors Chairman Alan R. Grattidge. “We want to see if we can come up with a plan to improve the marketability of the park.”

The 1,414-acre park in Malta and Stillwater has no tenants other than the GlobalFoundries computer chip plant, though nine other development sites are designated. Efforts to market the other sites have so far failed — and the park’s backers blame the inability to offer incentives.

“The tech park is a very key element of the Saratoga County story going forward,” Grattidge said. “We recognize the importance of the park to the entire county.”

Named Tuesday to a subcommittee to pursue the matter with Malta officials were supervisors John E. Lawler, R-Waterford, chairman of the county Economic Development Committee; Jean Raymond, R-Edinburg, chairwoman of the Public Works Committee; and Arthur Johnson, R-Wilton, representing the county Industrial Development Agency.

The IDA would be the likely vehicle for any payment-in-lieu-of-taxes or other incentive agreements and has provided the incentive deals that brought Quad/Graphics, the Target warehouse and other new businesses to the county.

Lawler said something needs to be done to “jump-start” development in the park.

“The development of the tech park is important to Malta, the county and the region,” Lawler said. “We as a Board of Supervisors are working for better ways to partner with all of the parties.”

Reaching an agreement with the town of Malta may not be easy, since town Supervisor Paul Sausville opposes allowing tax break incentives in the park.

Such incentives — generally offered through an industrial development agency — are common throughout New York state and in much of the rest of the country.

The town wrote a prohibition on using them in the tech park in 2004. At the time, it was thought to mean little since the state’s Empire Zone program was giving property tax credits instead. But the program that offered those incentives has since ended, which economic development officials say has again made local incentives important.

The LFTC’s backers say the fact it can’t offer the kinds of incentives offered through industrial development agencies is a major obstacle to the park’s development — and a primary reason why no companies other than GlobalFoundries have located in the park.

The lack of tenants means the Luther Forest Technology Campus Economic Development Corp., the nonprofit corporation that owns the campus, is effectively broke.

As a result, the corporation is $800,000 behind on annual payments due to the town of Malta for maintaining and eventually replacing the campus roads — a recent bone of contention between the town and the campus corporation.

The road system was built in 2008-09, using $33 million in state and federal money.

Sausville strongly favors the county taking over the roads, but he defended the zoning provisions that prohibit IDA-provided tax breaks inside the tech park.

“We are the envy of the rest of the state. I think we’re doing pretty darned good,” Sausville said Wednesday. “The question is, do we need to incentivize even more growth?”

Town Board member Peter Klotz, who is challenging Sausville in a Republican primary in September, said he would want some limits on any industrial development agency incentives in the park but doesn’t oppose them. “I’d be willing to consider forms and types of tax incentives,” he said Wednesday.

There’s a history of county involvement in efforts to deal with problems that have come up since the campus was built in 2008, after nearly a decade of effort and approximately $100 million in state investment.

In 2010, the Empire State Development Corp. threatened to foreclose on the campus due to unpaid loans, and county officials proposed that they take ownership instead. The state later dropped its plan, and the campus remains owned by the nonprofit corporation.

Grattidge said the county has made large investments — tens of millions of dollars — in providing water and sewer infrastructure to the tech park, and that spending gives the county a stake in the park’s success.

“We’re competing in a global market and a statewide market. You cannot have a facility like we have and not be able to offer the kinds of incentives that are available elsewhere in New York state,” he said.

 
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