Saratoga County

AMD project should fill nearby housing

When the Adirondack Development Group bought the development plans for a 124-lot housing subdivision
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When the Adirondack Development Group bought the development plans for a 124-lot housing subdivision project off of Route 9, company Vice President Paul Hodorowski had never heard of Advanced Micro Devices.

Three years later, Hodorowski is anticipating AMD to be a major business driver at his Travers Meadows housing community in Malta. The Sunnyvale, Calif., company on Tuesday committed to build a $4.5 billion chip manufacturing plant at the Luther Forest Technology Campus — four miles away from Travers Meadows.

“It’s going to increase the demand for the project,” said Hodorowski.

So far, Rotterdam-based Adirondack Development has built 27 homes at Travers Meadows, leaving 97 lots available for some of the 1,465 workers AMD and its Abu Dhabi partner plan to employ at the sprawling facility.

Since state officials in 2006 announced AMD’s tentative plans to build the Malta plant, the area’s real estate market has been abuzz with speculation over how strong buyer demand would be if AMD completed the Malta project.

Workers at the 180,000-square-foot plant, which AMD will build with the Advanced Technology Investment Co., are expected to gobble up excess housing inventories and stoke residential development in Saratoga County. But elsewhere in the region, the impacts from the joint venture, called The Foundry Co., will likely be significant but far from a boom, area real estate and planning experts said.

“While it’s very positive and very good, it’s not going to drive up the price of my house by very much more,” said Lief Engstrom, program manager of the Capital District Regional Planning Commission.

Engstrom is skeptical about The Foundry’s impact on home values. He noted how the company’s 1,465 workers — plus the estimated 5,000 indirect service jobs it is expected to bring to the area — would account for only 1 percent of the region’s work force. By August, the region had 448,700 nonfarm workers.

From August 2007 to August 2008, the Capital Region’s professional, scientific and technology sector experienced a Foundry-sized influx of jobs, growing from 1,700 to 30,000. But during the same period, the greater Capital Region’s median home sale price decreased by 2 percent to $197,500.

However, that decline in home values might have been far steeper had it not been for those high-paying technology jobs. They are making up for losses in the region’s ailing economic engines, such as financial services and manufacturing.

“They’re offsetting jobs being lost. … You’ve got to balance that out before you get a gain,” said Wayne Perras, an associate broker with Spa Realty in Saratoga Springs.

With Saratoga County containing an estimated year’s worth of excess housing stock, Perras said most of those houses would have to sell before upward pressures start playing on home values. He is “really cautious” about appreciation projections “because of the immense supply.”

Edward Cupoli, a professor and head of nanoeconomics at the University at Albany’s College of Nanoscale Science and Engineering, said the technology sector has been increasing Capital Region home values at a faster rate than the national average for at least six years.

Cupoli attributed much of that growth in home values to the 2001 designation of the Nanoscale College as a Center of Excellence in Nanoelectronics. Since then, its work force has grown from 72 to 2,200 workers, with an average annual salary of $82,000. With Foundry workers expected to receive similarly high salaries, Cupoli said they, too, will likely drive up home values.

“When it does happen, it’s going to make our real estate market all the better. … Certainly, it will help the rates of appreciation, make them go up, but we can’t say how much,” said James Ader, the chief executive officer of the Greater Capital Association of Realtors, a Colonie trade organization.

Although Saratoga County’s excess supply of housing stock helped drag single-family home sales down 26 percent in August from year-ago levels, developers have been lining up to add more residential units to local inventories.

Developers have already received planning board approvals for hundreds of residential units in towns such as Halfmoon, Clifton Park and Malta. But they shelved many of those projects, waiting for AMD to give the Luther Forest plant a green light, said Pam Krison, the executive officer of the Capital Region Builders and Remodellers Association, an Albany trade organization.

“They’re going to get those plans back out and moving along, and that is a lengthy process,” said Krison said.

While Engstrom said future gas prices or the strength of the dollar might curb how far Foundry workers are willing to commute, Perras put that distance as within a 30-mile radius of Luther Forest.

Long Island investor Uri Kaufman is planning to convert the former Victory Specialty Packaging building into a 100-unit upscale apartment complex in Victory Mills. He plans to pump $30 million into the 275,000-square-foot mill, which Kaufman bought in February and which is a 10-minute drive from Luther Forest.

“It’s going to be a tremendous benefit. … We’re going to be going online the same time as the plant,” Kaufman said.

In Cohoes, a 20-minute drive from Luther Forest, city officials over the past two years have granted approvals for 800 residential units. Cohoes Mayor John McDonald III expects baby boomers and Foundry workers to move into many of those units, which will be primarily apartments and condominiums.

Kaufman is expected to start construction next month of the second phase of his renovation of Harmony Mills in Cohoes. In 2005, Kaufman started building 96 apartment units in the mammoth mill, and he plans to add 143 more units to it. Financial hurdles have delayed much residential development in Cohoes, and only 30 percent of the approved units have been built or are being built, McDonald said.

“This announcement is going to get people to move it along,” said McDonald.

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