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Luther Forest tech park seeks greater use of tax breaks

Monday, November 11, 2013
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Construction work takes place at the Global Foundries Fab 8 site in January. The plant is located in the Luther Forest tech park.
Construction work takes place at the Global Foundries Fab 8 site in January. The plant is located in the Luther Forest tech park.

— As the GlobalFoundries Fab 8 computer chip plant has grown, the rest of the Luther Forest Technology Campus has failed to thrive.

Now, after months of quiet discussions, the park’s owner has formally asked Malta to change the troubled park’s zoning law to make it easier to market to the high-tech industry and other prospective tenants.

The LFTC Economic Development Corp. wants approval to offer payment-in-lieu-of-taxes incentives and to expand the allowed uses in some corners of the park beyond just nanotechnology.

“These modifications will allow us to be competitive in a marketplace where certainty of cost to construct is expected and the flexibility to capture emerging trends is a pre-requisite to siting facilities,” LFTC Corp. Chairman J. Thomas Roohan wrote in a Nov. 6 letter to the Town Board.

The town received the letter Thursday, the day after Saratoga County officials urged the town to make changes to make it easier to land new businesses.

“What we’re doing now isn’t working … we need to take a new approach,” county Economic Development Committee Chairman Jack Lawler, R-Waterford, said last Wednesday.

The 1,414-acre site’s development is governed by planned development district zoning approved by both Malta and Stillwater, though Malta has always taken the lead on zoning issues. Stillwater officials have said they want to offer more incentives in the park.

The GlobalFoundries Fab 8 computer chip plant is the park’s only tenant, though a spectacularly successful one — it has invested nearly $9 billion to date, has more than 2,000 employees and continues to expand.

The company is currently at the center of rumors — which it won’t comment on — that future Apple iPhone and iPad chips will be made here.

More than 200 people of all ages turned out for an open house at Fab 8 Monday night to see displays and demonstrations about how semiconductor chips are made.

“We’re excited because this is the most advanced technology in the world,” said Michael Russo, the company’s director of government relations.

GlobalFoundries is building a $2.3 billion research and development center where 1,000 more people will work, and also is considering spending $15 billion on a second manufacturing plant that would be bigger than the first. “We have not made the decision to do that. It depends on customer demand,” Russo told the crowd.

But other than GlobalFoundries, no company has moved into the tech park since it was created in 2004 — and a big reason is thought to be its inability to offer economic development tax incentives. The lack of activity has driven the park, in which the state has invested about $100 million, to insolvency.

Town Supervisor Paul Sausville said the Town Board will initially have to decide if it even wants to consider making any changes, a discussion that should happen in the next couple of weeks.

“It’s a big decision, and we need input from a lot of people,” he said Monday. “The devil is in the details.”

In his letter, Roohan asked that the language currently prohibiting PILOT agreements be dropped, and that “traditional PILOT agreements for manufacturing businesses” be allowed.

PILOT agreements typically allow a company to pay less than its full share of taxes for a set period of time, and are offered as an incentive to attract new companies to a specific site.

The Luther Forest zoning currently prohibits such tax breaks. That has been blamed for driving potential business tenants away.

The Saratoga County Industrial Development Agency, meanwhile, has been talking about what kind of tax incentive packages might be acceptable to the towns.

Sausville opposes a blanket change in the PILOT prohibition, but it isn’t clear whether a Town Board majority supports him.

The towns prohibited incentives when they created the technology campus in 2004. At the time, it was thought not to be an impediment to development because the state’s Empire Zone program reimbursed companies for their local property taxes. But the program expired in 2010.

GlobalFoundries, whose predecessor in 2006 negotiated for $1.3 billion in state-funded incentives to come to Malta, doesn’t take a position on the amendment request, but has been part of the behind-the-scenes discussions.

“We’re not against having neighbors in the park,” Russo told The Gazette on Monday.

Roohan is also asking that allowed uses in the park’s prime development areas be expanded beyond nanotechnology, to include LED, solar, biotech and medical device manufacturers.

He is also asking that plans for a 40-room conference center included in the original zoning, but never built, be allowed to be a hotel and conference center, “to allow marketing to larger hospitality industry operators.”

Roohan also wants host community benefit agreements, which are now required of any company occupying more than 100,000 square feet in the park, to be required of nanotechnology companies only.

 
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