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The GlobalFoundries juggernaut builds more force

Dec 20, 2010 1:45 pm
So how ARE the chances of Greene Columbia getting feeder businesses in place to work with the giant new GlobalFoundries plant being built in souther Saratoga County, just to the north of Albany off I-87? The Albany Business Review reports today that the Saratoga County Industrial Development Agency has just agreed to grant $139 million in sales tax breaks to the massive computer-chip manufacturer currently building a plant in Malta, based on its expected purchase of up to $5.7 billion in chip-making tools. And this is anticipation of further state tax breaks, on top of previous exemptions, all tied to the growing anticipation of what the new business will mean for local employment, as well repercussions throughout the region's long-in-decline manufacturing sector.

In recent weeks, Greene County Industrial Development Agency director Sandy Mathes noted that companies are starting to inquire about the possibility of locating in Greene County as part of the supply chain for GlobalFoundries new Malta operations, which have already spurred the building of massive arehouses in the Albany area.

The IDA approved $99.7 million in sales tax exemptions to cover manufacturing equipment and another $39.5 million to cover sales tax related to construction at the Luther Forest Technology Campus in Malta.

Of the $39.5 million, $27.8 million previously had been approved. That piece was increased to account for a $336 million expansion to give GlobalFoundries more manufacturing capacity.

GlobalFoundries also had asked the IDA to grant sales tax exemptions on a quarter of the manufacturing tools as an insurance policy in case the state does not provide such breaks.

In most cases, manufacturing equipment in New York state is exempt from sales tax.

Kevin McAuliffe, an attorney representing GlobalFoundries, asked the IDA to provide the tax breaks on equipment due to fears that the state may not view some semiconductor or wafer fab tools as eligible for tax exemptions.

“When taken in the context of a project of this magnitude, any lack of clarity and anything short of complete certainty is problematic,” McAuliffe, wrote in a letter to the IDA.

McAuliffe is a partner with Hiscock & Barclay in Syracuse.

The IDA board vote on the exemption request Monday morning following separate hearings in the towns of Stillwater and Malta. The plant will straddle both towns.

GlobalFoundries began construction of the $4.6 billion plant in the summer of 2009 and production is expected to begin by late 2012.

If the company installs all $5.7 billion in tools, the total project costs would grow to roughly $6.8 billion.

GlobalFoundries could employ up to 1,400 by 2014.

Scott Rajeski, director of finance of the Malta plant, said his company expects to begin meeting with staff from the state Taxation and Finance Department in February to begin discussing how various pieces of manufacturing equipment are used.

McAuliffe said he was pleased with the IDA’s decision to grant exemptions for a portion of the tools

Read more: IDA OKs $139M GlobalFoundries tax break | The Business Review
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