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Malta looking for Luther Forest fees

Campus owes $800K for road maintenance

Wednesday, May 15, 2013
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— The town of Malta is owed nearly $800,000 in overdue payments for road maintenance in the Luther Forest Technology Campus, and it is looking for ways to collect.

The campus’ Economic Development Corp. owes the money under a contract with the town, but hasn’t paid last year or this year because of ongoing financial problems.

Town Supervisor Paul Sausville thinks negotiations over GlobalFoundries’ proposed second semiconductor plant might offer an avenue for collecting the money — but a majority of Town Board members Wednesday disagreed. They said the money needs to be collected, but the solution shouldn’t be to place the burden on GlobalFoundries, the technology campus’ high-profile tenant.

“I don’t believe it should all be on borne on the back of GlobalFoundries,” Councilwoman Tara Thomas said.

At issue is a 2008 host community benefit agreement under which the LFTC Economic Development Corp., as owner of the 1,414-acre technology park, agreed to pay nearly $400,000 a year to the town to maintain the 5.5 miles of newly constructed public roads within the campus, which is mostly in Malta but includes part of Stillwater. Part of the fee covers snowplowing and other routine road maintenance, but more than half goes into a fund for future repair or replacement as the roads wear out.

But even when the agreement was signed, tech campus officials said they didn’t know where that much money would come from after the first couple of years.

The corporation has since run into serious financial difficulties and is currently reorganizing. It has been unable to sell any more land since GlobalFoundries bought 223 acres in 2009.

The corporation hasn’t paid its 2012 or 2013 road bills, and town Comptroller Kevin King said the balance owed for the two years is $796,289.

Sausville appeared before the Saratoga County Industrial Development Agency on Monday, asking for its help as it considers a request from GlobalFoundries for aid in building $70 million in new campus infrastructure. Agency officials said they lack the power to intervene.

“GlobalFoundries is looking out for GlobalFoundries. The LFTC is looking out for itself. The county is looking out for itself,” Sausville said. “Nobody is looking out for the town of Malta and its taxpayers.”

The LFTC’s internal road system was built in 2008-09 with $37 million in state grant money. State officials said the roads needed to be owned by the town, but Sausville and others town officials have consistently objected to having town taxpayers pay the ongoing costs.

Malta does not currently have a highway property tax. It covers its $2.2 million highway budget from sales tax and other revenue sources.

With that $2.2 million, the town maintains 79 miles of road, for a cost of roughly $28,000 a mile. By comparison, the town is seeking roughly $73,000 a mile to maintain the Luther Forest roads.

Michael Relyea, former president of the LFTC Economic Development Corp. and now a consultant to it, said the payments sought by the town are too high, with more than half going toward future costs.

“No other developer has to do that,” Relyea said. “We think there’s some reasonable number that we can pay, but $400,000 a year is not a workable number.”

He noted the internal roads are used by more people than just GlobalFoundries workers, especially since new town athletic fields opened on the campus this spring. A 100-acre town-owned nature park is also within the campus and open to the public.

At least some of the Town Board members are weighing legal action against the campus corporation to try to collect the money. Town Attorney Thomas Peterson said he is waiting for an opinion from the state Comptroller’s Office before recommending what the town should do.

“They have not filed for bankruptcy. They have a cash problem, but they have some very valuable assets,” Councilman John Hartzell said.

“We need to go after this money, but I don’t believe going after GlobalFoundries in this legislation is the best way to do it,” said Councilman Peter Klotz.

Sausville agreed the question may end up in court.

“We’ll never know until we take it to court whether we’ll win or lose,” he said.

 
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