March 26, 2010 GlobalFoundries seeks new incentive money from state to expand operations By DREW KERR dkerr@poststar.com
MALTA -- Officials with GlobalFoundries are asking New York lawmakers to add more state money to their existing $1.2 billion incentive package as they consider whether to expand their facility being built in Saratoga County.
The idea has been under discussion at the state Capitol for weeks, but lawmakers and officials with the computer-chip maker were hesitant on Friday to reveal many of the details being considered as part of the potential agreement.
Travis Bullard, a spokesman for GlobalFoundries, would not say precisely how much money the company is seeking from the state, how large the expansion could be or how many jobs may be created if the expansion occurs in an interview on Friday.
Officials with the Empire State Development Corp., the state's economic development arm, also refused to release details of the discussions, citing ongoing negotiations.
"Once a resolution has been arrived at, we will inform you and your public," agency spokesman Warner Johnston said.
State lawmakers with knowledge of the deal, though, said they have been told GlobalFoundries is seeking at least $100 million, to be paid over the course of several years, to help add as much as 90,000 square feet of clean room space to the factory now being built at the Luther Forest Technology Campus in Malta.
Under its current design, the $4.6 billion facility - expected to be finished in late 2012 - will include 210,000 square feet of clean room space, a tightly controlled area in which the computer chips are made.
With that amount of space, the company can produce up to 40,000 computer chips a month.
But the company's customer base has grown through acquisitions over the last year, and officials are now looking to add production capacity to meet the demands.
Expansions are also being contemplated in Dresden, Germany and in Singapore, where GlobalFoundries also has computer-chip manufacturing facilities.
Whether New York state provides an incentive package or not may or may not be the ultimate deciding factor in whether officials chose to build here or elsewhere, Bullard said.
"There are a number of other options that we're evaluating now," he said. "We'll weigh all of the variables and determine what makes sense."
State leaders who have been briefed about the plans have been receptive despite the state's troubled finances, Bullard said.
"Obviously, this is a very challenging time for New York state, but our conversations have been going very well," Bullard said.
A decision about whether the state can provide more incentives to the company should be made in the coming weeks, so that contractors who are already on site and working can be used effectively, he said.
It was unclear on Friday whether the money is being sought as an outright expense in the state budget, or if the funds would be raised through selling bonds, as money for the existing incentive package is.
State Sen. Roy McDonald, R-Saratoga, said he did not believe the money would be included in the state budget now under consideration and due by Wednesday, however.
McDonald has been briefed on the negotiations, but said the conversation has largely occurred within the executive chamber and he has not been given all of the details.
Still, he said he is supportive of the idea, billing it as a win for a region long ignored by his peers in Albany and in need of investment.
"We're trying to build an economy in upstate New York," McDonald said from the Senate chambers.
"Nobody's given us a better course of action."
Neil Breslin, D-Bethlehem, also said he supports the idea of providing more incentives to the company, which has estimated it will directly employ at least 1,400 people.
"Even with a looming state deficit, the state is very sensitive to economic development and job creation," he said.
The original $1.2 billion state-financed incentive package being provided to GlobalFoundries includes up to $600 million in tax breaks, and up to $600 million in cash reimbursements.
After construction began last year, the Empire State Development Corp. sold $400 million in bonds to help make reimbursement payments for the facility's construction.
The first payment to GlobalFoundries was made on March 16 for $49.47 million, and a request for another $58 million in reimbursements is under consideration now, officials said.
If GlobalFoundries ultimately decides to move forward with a local expansion, the plans would have to go through the permitting process with the town of Malta before acted upon.
