Luther Forest tech park ownership at issue

PHOTOGRAPHER: Stephen Williams

On the same day U.S. Commerce Secretary Gary Locke visited to praise the GlobalFoundries construction project, local officials reacted negatively to the idea of a state agency taking control of the industrial park that hosts it.

Empire State Development says it needs to take control of the Luther Forest Technology Campus to make sure remaining infrastructure projects, including a second water line, are finished.

The 1,414-acre campus, split between the towns of Malta and Stillwater, is where the $4.6 billion GlobalFoundries factory is due to open in 2012, creating 1,400 new jobs.

“I’ll certainly keep an open mind, but I have serious reservations about turning over the future of economic development in Saratoga County to a state agency,” said county Board of Supervisors Chairman Bill Peck, R-Northumberland.

Malta Supervisor Paul Sausville said he has “grave concerns” about changing the current ownership structure of the technology campus, which is run by a nonprofit public benefit corporation.

Empire State Development Chairman Dennis Mullen on Saturday said that the state needs to step in because GlobalFoundries is concerned about the pace of some of the infrastructure projects it says it needs.

“It is Empire State Development’s intent to take possession of the site to ensure that there is no disruption in the critical infrastructure development necessary for the GlobalFoundries chip fab facility to proceed as planned,” EDC said in a statement released Monday.

While the ownership dispute played out, Locke’s brief visit highlighted the rising national and international profile of Tech Valley, and the fact that GlobalFoundries is the largest private construction project currently under way in the United States.

“We’re seeing a lot more manufacturing come back to America,” said Locke, the former Washington governor who is the Obama administration’s top economic development official. “Semiconductor manufacturing is leading the way with exports all over the world.”

Locke visited at the invitation of U.S. Rep. Scott Murphy, D-Glens Falls, who is involved in a tight re-election fight with Republican Chris Gibson.

“We have to get the economy going again, but what’s happening here in upstate New York is really fantastic,” Locke said.

Before he took a tour of the construction area, Murphy was asked about the state takeover controversy.

“I’m not up on all the details, but the key issue is how do we live up to all our commitments to build infrastructure,” Murphy said.

A state takeover of Luther Forest would come after a decade of work that was overseen by county-level economic development officials. The state, however, has supplied almost all the $80 million in public money that has gone into the campus.

Almost all the infrastructure, including roads, water, sewer and electrical lines, has been completed in the last two years. But GlobalFoundries and state officials said there are still some outstanding issues.

Up to now, the technology campus has been developed through a complex partnership involving the two host towns, the Saratoga Economic Development Corp., an SEDC subsidiary corporation and Saratoga County. The state’s role has been primarily financial support.

“It’s the partnership that has been crafted that has resulted in this success story,” Sausville said. “Their role should be to nurture and support the Luther Forest Technology Campus.”

Mullen said that EDC will demand repayment of a $1.75 million loan, in effect allowing the state to foreclose on the property.

County and town officials said they were given no warning before Mullen’s comments appeared in newspapers over the weekend.

On Monday, Peck said he has written a letter to Gov. David Paterson asking for a meeting to discuss the situation.

“I’m hopeful he will work with us to ensure the successful economic development of Saratoga County and the state of New York,” Peck said. “The creation of new jobs has to be the top priority of all of us.”

GlobalFoundries last week gave the state a list of infrastructure concerns, one of the biggest being the need for a new backup water supply capable of meeting all the plant’s needs — about 3 million gallons per day, once manufacturing starts. That letter apparently prompted Mullen’s move.

GlobalFoundries spokesman Travis Bullard said the company has worked closely with all parties up to now and doesn’t care who owns the surrounding industrial park or builds the infrastructure, as long as the necessary improvements are made.

“We just know what we need and when we need it,” Bullard said.

A second water source would back up the newly built $67 million Saratoga County Water Authority system between Moreau and Malta, which will be GlobalFoundries’ primary source.

Water Authority Chairman John E. Lawler said he was aware of discussions about a second water source but the authority wasn’t a party to them.

One possibility would be to extend water lines that now end in Halfmoon — and ultimately are connected to the city of Troy’s water supply — to the technology campus.

But company and county officials said there are other unspecified possibilities, as well.

During construction, the site is being supplied by Saratoga Water Services, the private water company that serves the Luther Forest housing development and downtown Malta. It is the currently designated backup water source, but GlobalFoundries doesn’t believe it could provide enough water for long-term manufacturing operations.

At this point, no water supplier has been selected and there have been none of the engineering or environmental studies that would be needed before a new water line could be built.

“I think things are moving forward, but even if they broke ground tomorrow, it would be difficult to meet our deadline,” Bullard said.

It took three years to build the new county water system.

The second water source would need to be able to fully supply the company’s manufacturing operation. “We need a completely redundant system,” Bullard said.

Sausville said his concerns about a state takeover include a loss of property tax revenue if the state owns the industrial park, making it exempt from local taxes. Tax payments from GlobalFoundries, which owns the 223 acres it is building on, would not be affected.

Bullard said GlobalFoundries hasn’t yet met with EDC officials to discuss how to proceed if the state takes over the industrial park.