March 27, 2010 Chip fab bid falls short of request Company asks $300M; best state offer hits $150M in incentives
ALBANY -- As GlobalFoundries pushed for $300 million in extra state incentives to expand its giant project in Saratoga County, state economic development negotiators on Friday were offering a far smaller aid package, two state officials briefed on negotiations said.
Empire State Development Corp. is offering as little as $17 million in cash plus expanded tax breaks, said one person familiar with the talks. Another official said the offer may be worth $100 million to $150 million.
Lawmakers wondered if the state can afford new subsidies for the computer chip manufacturing plant project in Malta.
"It's tough in these times," said Assemblyman Tony Jordan, R-Jackson, in whose district the fabricating plant is being erected. "The challenge is we're cutting funding to health care, to education, to roads and bridges. . . We have limited revenues. How do we best invest them?"
Jordan said company officials approached him about a week ago about expanding the chip plant by 90,000 square feet. The assemblyman, who remains undecided on the issue, said he wanted to know what the return on investment would be if the state increased its incentive as GlobalFoundries proposes. The company, according to people briefed, seeks $75 million for construction and another $225 million in capital funds for tooling and equipment over time, plus additional Empire Zone tax breaks, for the expanded project. The package is on top of the $1.3 billion in cash and tax breaks already committed by the state to the $4.2 billion project which is now under construction.
GlobalFoundries officials propose a bigger incentive package to induce the bigger project now needed because of abrupt growth of business stemming from the company's acquisition in January of a competitor in Singapore. They would like an answer by Monday on their request for the bigger incentive package for Malta now that work crews and equipment are already at the Luther Forest Technology Campus and available for the expanded assignment.
The company intends to hire 1,400 people when the fabricating plant is completed under the current plan, and several more jobs would be created if the bigger plant is constructed in Malta instead of Germany or Singapore, company officials said.
The negotiations come at a time when several groups are in Albany seeking help. For instance New York City Off-Track Betting seeks assistance because it is in insolvent and could close down, furloughing almost 1,400 workers by next month. The New York Racing Association seeks $30 million to keep the state's tracks running.
School advocates say proposed budget cuts could result in the loss of 16,000 teachers. Even the Olympic Regional Development Authority is lobbying for $6.6 million in state funds proposed to be stripped. Empire State Development Corp. and GlobalFoundries officials declined to discuss negotiations, but lawmakers weighed in.
"I'm very supportive but in these fiscal times I don't want to outrage my constituents," said Assemblyman Robert Reilly, D-Colonie. "I doubt if we're in a position, even though its an extremely worthy project. In this budget crisis I don't think we can afford it even though it is capital money and I don't think the public wants to see their money spent in this way at this time."
Other Assembly and Senate members from the Capital Region were more favorably inclined.
"It sounds like good news," said Assemblyman James Tedisco, R-Glenville, who said the company did not brief him. "I'd like to see the proposal."
