Saratoga County approves its portion of $405 million sales tax exemption for GlobalFoundries
Published: Tuesday, June 14, 2011
By PAUL POST
ppost@saratogian.com
MALTA — GlobalFoundries won approval Monday for the county portion of a more than $405 million sales tax exemption.

The exemption is for construction of a $35 million building expansion to its huge new chip fab plant at Luther Forest Technology Campus and equipment — estimated at $5.7 billion — that will be used there.

Saratoga County Industrial Development Agency approved the county exemption by a 4-1 vote. The company must still obtain state approval for the state portion of sales tax exemption.

“We expect to get a certificate of occupancy for Phase I in the next couple of months,” GlobalFoundries spokesman Travis Bullard said. “Then we can start moving tools in. It’ll take about a year to get all tools installed. The target date for first revenue production is

12-12-12 (Dec. 12, 2012). We’ll be in full volume production in early 2013.”

The facility is expected to employ 1,400 people.

IDA board member Charles Hanehan, a town of Saratoga councilman and dairyman, cast the one dissenting vote for GlobalFoundries’ sales tax exemption. The company has already been granted more than $1.2 billion worth of tax incentives.

“Enough is enough,” he said. “The towns in the county could use that sales tax money.”

Also, Hanehan criticized GlobalFoundries for challenging its property tax assessment and said the $405 million sales tax exemption wouldn’t affect its decision to expand facilities at Luther Forest.

“So why give this money away?” he said.
GlobalFoundries’ website says it had revenues of

$3.5 billion in 2010.

However, board Vice Chairman Richard Dunn of Saratoga Springs said the exemption reflects the IDA’s commitment to supporting GlobalFoundries.

“Frankly, the more they build, the greater the likelihood they’ll stay here on a long-term basis,” he said. “At the end of the day, that’s what we want. Even to a wealthy company, $400 million is a big number.”

He said the company’s assessment is a separate issue and that GlobalFoundries is entitled to challenge it the same as anyone else.

“I don’t hold that against them,” Dunn said. “There are several different opinions about how they should be assessed. I believe the courts will ultimately come up with an assessment that all parties can agree to.”

But Hanehan disagrees.

“They’ll (GlobalFoun-dries) take anything they can get,” he said. “They don’t really care about the community.”

However, Dunn said the company paid roughly

$3 million worth of property tax in 2010, most of it to Ballston Spa and Stillwater school districts, and that its assessment has gone up significantly during the past year as construction has progressed.
“Their tax bill is going to more than double this year,” he said.

And someday the IDAs will be reformed. In the meantime, without measures, they get to do what they want. Sheer boosterism unabated by reality. Sigh

quote:

Originally posted by Bop:

“They’ll (GlobalFoun-dries) take anything they can get,” he said. “They don’t really care about the community.”

Exactly - just like any other corporation ... i work for a Fortune 500 - billion dollar company - the only thing they care about is the bottom line, how many houses the CEO can buy and how rich the stockholders can get ....everything else is thrown out the window.

Saratoga IDA approves GlobalFoundries property assessment plan



BALLSTON SPA -- The Saratoga County Industrial Development Agency signed off Monday on a deal to settle two years of property assessment challenges by GlobalFoundries, finalizing an agreement that will dictate the computer chip manufacturing facility’s taxable value for the next 47 years.
The agency was the last stakeholder to approve the settlement, which was previously approved by the Stillwater and Ballston Spa school districts and town governments in Malta and Stillwater.
The settlement requires the company to abandon its challenges to the 2010 and 2011 assessments of the facility known as Fab 8. Under the terms of the settlement, the property’s base assessment would peak at $635 million this year and would fall to $125 million in 2027, where it would remain through 2059.
Future construction at the site will be valued through formulas spelled out in the agreement.
Malta Supervisor Paul Sausville said he was told by experts the value of the facility depreciates at a fast rate due to changing technology. He said the terms of the settlement are fair.
“It’s based on the research of similar facilities around the county,” he said. “It provides certainty and predictability for GlobalFoundries and everybody, for that matter. We can budget going forward knowing exactly what the taxes are going to be.”
In July 2011, the company filed a complaint in Saratoga County Supreme Court after Malta assessed the chip fab at $400 million. The company, which had invested $700 million in the facility at the time, said it was worth $210 million.
In 2010, they similarly challenged a $160 million assessment.
Travis Bullard, a spokesman for GlobalFoundries, said the settlement makes the company the area’s largest private taxpayer. He said in 2010 and 2011 the company paid a total of about $11 million in taxes locally.
“We’ve always been prepared to pay our tax obligation based on a fair and reasonable assessment of the Fab 8 property,” Bullard wrote in an email. “GlobalFoundries challenged the first two years of property tax assessments because we felt the assessments were not reasonable. But we’ve worked collaboratively for over a year with the towns of Malta and Stillwater and the Ballston Spa and Stillwater central school districts to reach this approved settlement agreement.”

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