Prohibition on Tax Exemptions For Luther Forest Overturned

MALTA– The ban on property tax exemptions for Luther Forest campus was struck down by the Malta Town Board during a Monday night workshop.

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Meeting Set To Discuss Luther Forest Tax Breaks

MALTA– The Town of Malta is hosting a special meeting next week to discuss whether tax incentives should be granted to Luther Forest Technology Campus, The Albany Business Review reports.

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Time to Cook Some Bacon in Luther Forest

On Monday, the Saratoga County Industrial Development Agency proposed issuing $70 million worth of bonds to GLOBALFOUNDRIES in order to finance infrastructure projects the company needs for expansion. The IDA has set June 10 as the date for public hearings on the proposal, and it’s possible they could approve the bonds later that same day.

There is no question the company needs the infrastructure the bonds would target for completion. And anyone would be hard pressed to argue the pace of development in Malta has been at the level most of us expected. Clearly, it hasn’t. It’s not all that difficult to come to the conclusion GLOBALFOUNDRIES has taken it upon themselves to do what needs to be done, especially with the possibility of a second, even larger plant in Luther Forest looming in the middle distance.

But as fascinating as the scale and technological prowess of GLOBALFOUNDRIES is to all of us, a more immediate issue is how much of a follow-on economic impact the plant has really had. One of the great selling points from the very beginning has been the multiplier effect–for every job at GLOBALFOUNDRIES, we were told, a few more would be created in the surrounding community. And of course there were all those new families to consider, people moving in from all points of the globe to buy or rent homes, spend money in local businesses and provide a powerful engine for economic growth.

Has it happened? Statistics mostly say yes, but one always has to be careful with numbers. Pointing to economic growth “in the area” does little for locals if the area in question is so wide as to include all of the Capital District, and maybe even beyond, instead of just the part we live in. To most of us it probably looks like little has changed.

And there’s been little sign of the suppliers and other tangential businesses we were told to expect actually setting up shop here, either. A lot of big numbers get thrown around, and there’s no doubt GLOBALFOUNDRIES is, by any measure, a gigantic project. There’s no doubt it represents a tremendous opportunity for our young as well, something Superintendent Dragone and the school district recognized from the outset. But as hard and as intelligently as they’ve worked to build a system to take advantage of those opportunities, there’s no guarantee their students will find them here at home.

And why not? One reason is surely the failure of local political leaders to really understand the enormity of the task they were taking on, or, if they did understand it, their inability to move quickly enough, at least for some. As always with politics, there are many reasons things don’t go smoothly, not the least of which being they’re not supposed to under our system. Our Founding Fathers designed our particular brand of democracy to be messy in order to ensure every voice would be heard, and sometimes that means moving slowly. In the case of Malta and GLOBALFOUNDRIES, whatever delays have occurred in building infrastructure and making changes have mostly been to ensure the local community gets a seat at the table.  It’s exactly what the Founders wanted.

In the case of the local business community, the picture is a lot less rosy. While Dragone and the Ballston Spa Central School District moved quickly to implement programs to take advantage of the opportunities GLOBALFOUNDRIES was offering, a lot of the organizations one would expect to be doing the same for business instead seemed to spend more time touting their achievements than following them up.

Where is the infrastructure to support merchants and entrepreneurs and teach small businesses how to reap the benefits of economic growth on this scale? Where is the research to show the local business community where the supposed influx of GLOBALFOUNDRIES employees is shopping, or dining, or choosing a home? Why was the local public school district able to commit themselves to making the most of the chip maker’s arrival and put the programs in place to do just that, while the local business support network was not?

So much is made of the ability of local business organizations to attract new business to the area, and truth be told, most of them have done a pretty good job of it. The local chambers of commerce especially have worked very hard to present the virtues of our area to the wider world, and we commend them for it. That’s their job after all, and they do it well.

But we find it more than a bit ironic to see the school district doing business while the business community is not, and we think some elements of the latter have done a lot more in the way of self-promotion than execution. We need jobs, growth, dynamism and intensity, not a parade of beautiful statistics without the reality on the street to back them up. In the end, bringing home the bacon is a wonderful thing. Leaving it uncooked is mystifying.

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Up, Up and Away Over GLOBALFOUNDRIES

Following the Monday, April 15 public hearing on the amendments to the GLOBALFOUNDRIES Fab 8.2 environmental impact statement, discussion resumed among Malta officials at a Wednesday morning workshop. The meeting was another step in their continuing effort to parse out just how the possible expansion to the chip maker’s Luther Forest campus would take place.

The details of such an effort can at times take on a complexity akin to that of microchip fabrication itself.

“I try to look at this stuff, and it takes you five minutes to go back and figure out what each acronym stands for,” admitted Councilman John Hartzell during the workshop.

One component of GLOBALFOUNDRIES’ plan has proven especially difficult to figure out completely: traffic mitigation. But at the Wednesday workshop the biggest development addressed visual impacts.

The Ballston Journal/NEWSIn order to provide area residents and town officials with an idea of the scale and scope of the planned chip plant, a three-dimensional computer generated simulation will be created. The animated model will show the projected increased building height of Fab 8.2, with the stacks on top visible in some parts of the community, particularly on various points of Saratoga Lake.

There are significant benefits to using a digital model compared to simply using enlarged photographs, as is now done.

“There is value added to the digital version of it,” said Joe Lanaro of Chazen Engineering, “because that becomes something that you can keep for a long time.”

But Councilwoman Tara Thomas expressed dissatisfaction with using just the simulation and argued for a balloon test, so residents could physically see the height and location of the planned foundry.

“You can float more than one balloon … you can put up 8, 12, 20,” Thomas said. “I don’t see the harm in having both evaluations done.”

Balloons are floated over the approximate location of the plant to the proposed height of the stacks. The advantage of the test is balloons can be seen from anywhere, while the simulation only shows one basic view.

However, both essentially reveal where the visual impact would be greatest.

GLOBALFOUNDRIES Director of Risk Management, Sustainability, and Real Estate Steven Groseclose indicated he did not believe balloon testing to be necessary, since it had already been performed, though not following public notification.

“I’m sorry, Steve, is there a problem?” Thomas asked.

“It’s not a simple endeavor,” Groseclose said. He also pointed out the added expense of balloon testing on multiple days, which includes taking multiple photographs from different locations.

“You might want to check the math,” Groseclose said. “I paid the bill once. It’s around $10,000.”

Lanaro repeated the advantages of the simulation model several times, but also cited the cost of balloon testing as potentially not outweighing the benefit. Many seasonal Saratoga Lake residents would not be in their homes and therefore miss the testing, he pointed out.

“I’m not really concerned about that,” Thomas responded, noting that homeowner’s associations could relay information. Along with Councilwoman Maggie Ruisi, she insisted the “comfort level” of residents was a priority, despite town Supervisor Paul Sausville’s assertion he personally had only received one tangential comment related to visual impacts, ever.

The majority of public comments in previous meetings have been directed towards traffic issues and noise, although some have expressed concerns about property values being negatively affected by visual impacts.

“I think we need the simulation,” Sausville said, adding a “level of comfort” could perhaps be reached instead by public outreach efforts.

“I’d be satisfied with just the computer simulation,” Councilman Peter Klotz said.

The board ultimately settled for flying one or two balloons on a set date, with the public to be notified beforehand, in addition to the computer generated model. The model will be uploaded to the town’s website for viewing anytime.

The Malta Town Board will meet for their agenda meeting on April 29 at 6:30 p.m.

To contact the reporter on this story email wyatt@theballstonjournal.com

To contact the editor on this story email kevin@theballstonjournal.com 

All Pull Together Now

After first being proposed almost six years ago, it looks like construction of the left turn lane in front of McCrea Hill Industrial Park on Route 50 is finally ready to begin. At last week’s meeting of the Ballston town board, members were informed the last property owner had agreed to a necessary easement and there is nothing left to stand in the way of the project.

There are several reasons for the delay, but by far the biggest one is the number of different agencies which must approve a job of this kind. There are a lot of moving parts involved even in something as simple as a new turn lane, and getting all the necessary paperwork in order can take a lot of time.

If so much goes into a project of the turn lane’s scale, you can imagine what Malta and GLOBALFOUNDRIES were facing with the prospect of having to get another exit from the Northway, 11A, built in order for the chip maker to build a second plant in Luther Forest. A project of that scale could potentially take a very long time, maybe even as much as a decade or more from start to finish. Which explains why GLOBALFOUNDRIES worked so hard to get around the issue with other traffic mitigation proposals.

From a business perspective, the company will obviously need to decide very soon whether to proceed with the plant. They’re in a pretty tough fight with Intel, a much bigger competitor who’s been around a lot longer, and Taiwan Semiconductor, who is bringing yet another plant online overseas right now. But lately GLOBALFOUNDRIES has really been gaining ground. They grew their business about 31 percent last year, good enough to make them the fastest-growing chip maker in the world.

GLOBALFOUNDRIES has also developed some pretty interesting technology recently, and they clearly think they have what they need to pull even, or at least get very close. The big question is whether they can bring enough of their product to market in time.

Which explains why GLOBALFOUNDRIES has been in such a hurry to get the original requirement for Exit 11A out of their Planned Development District. They need to have all the approvals in place before making a decision on the new plant, and if they decide it’s a go they need to move quickly. Were they held to the requirement to get the exit built there is little doubt they’d have to pass and build the new facility elsewhere, should they decide they need it.

The timeframe has put local officials, especially in Malta and Round Lake, in a bit of a bind. Residents in those communities are worried about the potential increase in traffic, and rightfully so. Add onto that the increased truck traffic a second plant would mean–and the dangerous nature of some of the chemicals those trucks are carrying–and its easy to see why some of the people in our area are looking at the prospect of another chip plant in Luther Forest with something less than enthusiasm.

GLOBALFOUNDRIES has traffic studies they say show their ideas on handling additional cars and trucks on the existing road net would work. They may be right. But those studies are based on their one additional plant. Taiwan Semiconductor is also thinking about increasing their manufacturing capacity by building another plant somewhere, and one of the places they’re reportedly looking is Luther Forest. Should GLOBALFOUNDRIES move forward with Fab 8.2 and Taiwan Semiconductor then decide to follow with a plant of their own, Exit 11A would certainly have to be built to get it approved.

It might have to be built anyway if the new plant goes through. GLOBALFOUNDRIES could be wrong. It’s possible Fab 8.2 alone could make the traffic situation unbearable for local residents. If it turns out they missed the mark it’s going to take a lot to fix the mistake, and everyone–company, government, agencies, residents, everyone–is going to have to work together to straighten it out as quickly as possible. Given how hard it can be to build a simple turn lane, let’s hope they got it right.

Malta: Despite Development, Vacancy An Issue

In a June 6, 2011 letter submitted to the Times Union in response to a Jay Holick blog post, Malta Town Supervisor Paul Sausville spoke of his vision of the town and the direction he thought it was going.

“We have … the very best form of growth that the community can be favored with,” he wrote.

Malta is, and was becoming, “truly the American dream for our residents.”

“However, success brings serious challenges,” he wrote. “Can we bring Malta the right kind of development?”

That particular question is being answered in different ways at every meeting of town government and every citizen’s discussion. It is, by any measure, a work in progress, and development in Malta is still far from where many expected it to be.

There are two good indicators of the status of development in the town: Economically, what is the market for real estate? Visually, what does Malta actually look like?

Vacant storefronts at Ellsworth Commons in Malta. Photo by Wyatt Erchak

Vacant storefronts at Ellsworth Commons in Malta. Photo by Wyatt Erchak

The real estate market is relatively strong, but uneven. According to statistics provided by Pinnacle Realty in the Malta Business and Professional Association’s April newsletter, there are 99 single family homes on the market, with an average price of about $300,000. Fourteen homes have been sold this year, and houses stay on market for an average of 118 days.

Pinnacle Realty’s Director of Relocations Monica DiSchiano said the market has shifted from a buyer’s to a seller’s market.

“Inventory is low and demand is high for both residential sales and rentals,” DiSchiano said in an email. “There are so few rentals that they often lease out on the first day they are listed.”

In one recent instance DiSchiano rented out a townhome in Luther Forest in a matter of three hours, she said. Yet one aspect of the market’s economics should be driving home sales rather than rentals.

“Rent prices are high, which has many people realizing that it is more affordable to buy than it is to rent,” she said, citing a Trulia statistic which showed it is 30 percent cheaper to buy than rent in the Capital Region.

And because the inventory of listed homes is low, new residents, such as workers at GLOBALFOUNDRIES, often need to look elsewhere. But DiSchiano says homes “aren’t all jumping off the shelf either,” despite the low inventory.

In Luther Forest, there are a number of homes listed, but only the updated, energy-efficient units are selling fast. And there is an important demographic factor affecting the market as well. “Not many people relocating here from other states are interested in townhomes,” DiSchiano said, because most new residents are “mid-level employees with a conservative budget.”

All of this makes for the uneven situation in Malta. On the one hand, many new employees at GLOBALFOUNDRIES and other major local projects are eager to live and work in the community; on the other, there just are not enough affordable options for the kind of workers coming in.

Meanwhile, the town is steadily moving ahead with development. GLOBALFOUNDRIES is of course the main project, and the town board has been hard at work on the process of granting approval for their possible expansion to a second chip foundry, Fab 8.2. Should the second plant actually be built, it would bring thousands more employees to the area. Meanwhile, construction has already begun on the new Technology Development Center adjoining Fab 8.1, and National Grid is building a new four-mile gas pipeline to feed GLOBALFOUNDRIES’ growing energy needs.

Both the Malta town board and the town’s planning board have been regularly approving additions to sub-developments, as with Woodfield Estates, adding residential and commercial space.

But the official focus remains on creating a viable “downtown” for Malta along the Route 9 corridor. Some development along Route 9 is obvious, most especially the looming Ellsworth Commons. However, a drive down Route 9 also reveals something else to the discerning eye: vacant properties.

Beginning at the Malta border with Saratoga Springs, and continuing down to Clifton Park, a visual count of the number of “for rent/lease/sale” signs totals around 40. From the southern border of Round Lake down Route 9 to the Arbor Hill section of Albany, the number comes to approximately 50. So Malta-Round Lake on its own contains nearly half of the vacant or available properties visibly advertising in the entire length of the Route 9 corridor between Saratoga and Albany.

A vacant lot just off the intersection of Route 9 and Dunning Street in Malta. Photo by Wyatt Erchak

A vacant lot just off the intersection of Route 9 and Dunning Street in Malta. Photo by Wyatt Erchak

The number of empty lots and spaces is accompanied by a comparatively higher number of empty and decaying buildings. Drive south from Malta’s “downtown” area, and within seconds there is a blighted gas station, an overgrown plaza, and lots strewn with litter, constituting what could reasonably be called “suburban blight,” in place of the more regularly used “urban” term.

DiSchiano told the Journal she wasn’t used to seeing many “rundown buildings” when she moved to the area from Austin, Texas.

“It doesn’t make sense to me why they wouldn’t want to sell off the land to all these developers coming in,” she said.

DiSchiano believes the answer to increasing property values would be to tear down the abandoned buildings and let the developers come in and put up nicer ones in their place.

“They would be easy to fill if offered for lease at a decent price,” she said.

But “nice buildings” like Ellsworth Commons have also fallen victim to the problem of vacancy and Malta’s uneven development. A large percentage of the commercial space at the Commons is virtually empty, while many of its apartments are rented out.

“It isn’t easy to find good commercial space in Malta, it’s very scarce,” DiSchiano said. “I ask people what they think of Ellsworth Commons and they say there’s not enough parking. If they had put parking spaces along the frontage of Route 9, it would have helped them tremendously.”

“Clearly,” she added, “business owners don’t want to rely on just walk-in traffic from Ellsworth residents.”

Nationally, the vacancy rate in commercial properties is expected to reach 15.9 percent by the end of the year, and rents are projected to rise by 2.6 percent, according to the National Association of Realtors. For retail, the numbers are forecast to be a 10.6 percent vacancy rate and a 2.3 percent rise in rents. Industrial space should see a 9.5 percent vacancy rate and 2.3 percent rent rise, and the vacancy rate for apartments should hold steady at 3.9 percent (down from 5.2 percent in 2011) with rents going up by 4.3 percent.

DiSchiano explained that while she gets people looking for commercial space weekly, Ellsworth Commons is “too expensive, starting at $18 per square foot, plus triple net,” meaning tenants pay all taxes, insurance, and maintenance fees.

Development, then, is a mixed bag in Malta. Many properties are half-filled or empty even as the need is high, while some decay in neglect. Commercial space is a hard sell in some cases, even though there are more workers spending their money in the community.

In a message to residents posted on his biography page on the town’s website, Supervisor Sausville wrote “Expect to see a continuation of the transformation of Malta from a bedroom community to a real town with a ‘sense of place;’ a sense of community and a real sense of home.”

Until that transformation is complete, Malta residents may have to accept the uneven pace of development which has so far come with it.

To contact the reporter on this story email wyatt@theballstonjournal.com

To contact the editor on this story email kevin@theballstonjournal.com

GLOBALFOUNDRIES gears up for growth

BY KEVIN J. ROGERS

On Friday, Feb. 1 GLOBALFOUNDRIES submitted an application to the Town of Malta containing proposed amendments to the company’s Planned Development District (PDD), which includes the Fab 8.1 chip manufacturing plant in Luther Forest. The move is meant to pave the way for the possible construction of a second chip foundry, Fab 8.2, at the site.

“This early planning work is part of our strategy to evaluate capacity expansion opportunities around the world in order to support long-term customer demand and achieve our global business objectives,” said Travis Bullard, GLOBALFOUNDRIES’ senior manager for public affairs and communications, in an email to the Journal. “As we continue to grow our business, we continue to invest resources in advanced planning to meet the future needs of our growing customer base.”

The Ballston Journal, GLOBALFOUNDRIES, Town of MaltaAccording to the company’s Industry Requirement Report, officials at GLOBALFOUNDRIES are in the process of assessing the feasibility of the project and would make a separate determination on whether to proceed sometime in the near future. Market conditions and the readiness of the site for immediate development would be key factors in the decision.

“GLOBALFOUNDRIES must be secure in the knowledge that the site is compatible with its operational needs and ready for construction at the appropriate time,” the IRP reads. “Therefore, GLOBALFOUNDRIES is pursuing amendments to local law necessary to satisfy the programming prerequisites for the project.”

The company followed a similar pattern last year in seeking approval to build a Technology Development Center (TDC) at the Luther Forest campus before actually committing to the project. The Malta town planning board granted the necessary approvals in October 2012. Last month, the company announced they are going ahead with the TDC and will begin work on the facility in March.

Fab 8.2, if built, would be slightly larger at just under 1.9 million square feet than Fab 8.1, which is just over 1.7 million square feet overall. The building height would be 125 feet with appurtenances, as opposed to 110 feet at the first plant.

After an approved expansion last year, the clean room at Fab 8.1 now totals 300,000 square feet. The clean room at Fab 8.2 would total 475,000 square feet.

GLOBALFOUNDRIES currently employs around 2,000 people at Fab 8.1 and its administration building. The TDC is expected to add another 1,000 jobs. If the chip maker proceeds with Fab 8.2 it would need to employ around 2,000 additional personnel at the Luther Forest campus.

“While we are only in the initial design and planning phase this project, our global business continues to grow and we are excited about the possibility of expanding our investment and capabilities in New York,” Bullard said in his email.

According to a statement by GLOBALFOUNDRIES president and CEO Ajit Manocha at SUNY Albany’s College of Nanoscale Science and Engineering last month, the total cost of a new plant, wherever it is built, would be about $10 billion. Between Fab 8.1, the administration building and the TDC, GLOBALFOUNDRIES has invested approximately $8.5 billion in Luther Forest so far, including almost $2 billion in tax incentives.

During the height of construction activity at Fab 8.1 contractors employed between 1,500 and 2,000 people on site at any given time. M + W US, Turner Construction and LeChase Construction had a either a lead or significant role in various stages of the project.

M + W US was lead contractor on Fab 8.1, while Turner built the adjoining administration building, designated Admin 2. No announcement has been made on the companies to be tapped for any future project.

GLOBALFOUNDRIES is the currently the fastest-growing chip maker in the world, according to company documents. Last year saw sales increase by approximately 31 percent year over year.

The company’s most significant competitor, Taiwan Semiconductor, is also reportedly eyeing a new manufacturing facility somewhere in the world, but has given no hint as to where.

GLOBALFOUNDRIES will make a formal presentation on its application at special meeting of the Malta Town Board on Tuesday, Feb. 12 at 6:30 p.m. at Malta Town Hall, 2540 Rt. 9. The meeting is open to the public.

To contact the reporter and editor on this story email kevin@theballstonjournal.com 

GLOFO TO COMPLETE MODULE 1

Company commits to final stage of construction; clean room to top out at 300k sq. ft.

In a July 24 press release, GLOBALFOUNDRIES announced it is moving forward with the final construction for the extension of Module 1 at the Fab 8 campus in Malta. The project will add 90,000 square feet of manufacturing capacity, bringing the total capacity for Fab 8 Module 1 to 300,000 square feet.

Construction activities are scheduled to begin in August and work is expected to be completed in December 2013.

“During the construction of Fab 8, we extended the shell of the Module 1 building with the expectation that our business would continue to grow,” Eric Choh, vice president and general manager of Fab 8, said in the statement. “Today we see increasingly strong demand from our customers, especially at the 28nm node, and we are excited to be moving forward with this next phase in the development of the Fab 8 campus. By continuing to expand our investment in the project, GLOBALFOUNDRIES is delivering more options to our global customers, while helping to redefine upstate New York as a premier hub of the global semiconductor industry, creating thousands of new advanced manufacturing jobs, and contributing billions of dollars to the regional economy.”

Consisting of approximately two million square feet of clean room space, Fab 8 is being developed as the world’s most advanced semiconductor foundry manufacturing facility and is consistently hitting all major development milestones, the company said.

GLOBALFOUNDRIES began construction on Fab 8 in July 2009 and began moving people and equipment into the facility in mid-2011. Initial wafer starts began earlier this year and the facility is on track to begin risk production by the end of the year, with volume production in early 2013, the company said.

Extending the Fab 8 cleanroom is expected to increase the Fab 8 capacity to approximately 60,000 wafers per month and increase the capital budget by approximately $2.3 billion, taking the total capital budget from $4.6 billion to approximately $6.9 billion, once tools and equipment are installed, the company said.

Since breaking ground on Fab 8 in 2009, GLOBALFOUNDRIES has created more than 1,500 new direct jobs, developing a unique and diverse workforce drawn from local talent in the region as well as experienced professionals from across the United States and more than 30 countries, the statement said.

In addition, the project has created an additional 4,300 construction-related jobs and established the largest private Project Labor Agreement in history, generating hundreds of millions of dollars of economic development throughout upstate New York during the worst economic downturn since the Great Depression, the company said.

GLOBALFOUNDRIES has a total of about 1,800 employees across New York, including research teams at the IBM facilities in East Fishkill and at CNSE at the University of Albany, and more than 12,000 employees worldwide with additional manufacturing campuses in Germany and Singapore.

GLOBALFOUNDRIES was spunoff from parent company Advanced Micro Devices in March 2009. Earlier this year the company completed its separation from AMD and is now a wholly-owned subsidiary of the Advanced Technology Investment Company (ATIC) of Abu Dhabi.

At the time it was begun, Fab 8 Module 1 was the largest private construction project undertaken in the United States. Once completed, it is expected to employ over 1,800 people.

For information, visit the company website at www.globalfoundries.com.