GlobalFoundries will be paying nearly $1.6 million to the county Industrial Development Agency for its most recent application to the agency, the largest application fee the IDA has ever received.
At least some of the money will be plowed back into projects that will benefit GlobalFoundries or the infrastructure in the Luther Forest Technology Campus.
The IDA in June approved the computer chip manufacturing giant’s application for state sales tax exemptions on the manufacturing tools now being installed at Fab 8.
The tools’ value is estimated at $5.7 billion, and based on that number, IDA officials calculated the application fee at $1,593,538, IDA chief executive officer Larry Benton said.
The fee is calculated using a complex formula tied to a project’s value.
The IDA board agreed to the amount at a meeting Monday in Ballston Spa.
The new fee income will be added to a current IDA fund balance of about $2 million, which includes about $1 million GlobalFoundries paid in 2009, when it first applied for sales tax exemptions on building materials for Fab 8’s construction. The payment would bring the agency’s fund balance to $3.6 million.
Under IDA policy, the fund balance has been used to give loans and grants for projects that promote economic development in the county.
Benton recommended that some of the new fee be set aside specifically for future projects that benefit the Luther Forest Technology Campus or the preparation of a work force for the semiconductor industry.
The board appeared to accept the idea, but hasn’t decided how much of the money will be set aside. It also discussed whether a separate fund should be set up, with GlobalFoundries having some input on how the money would be spent.
“I think we’re basically in agreement to take part of this and put it back into something that benefits the technology campus,” said IDA Chairman Raymond F. Callanan.
The new sales tax exemption is estimated to be worth $405 million in savings to GlobalFoundries, which is based in Sunnyvale, Calif.
Fab 8 is now installing the expensive manufacturing tools in anticipation of starting commercial production in late 2012.
It currently has a work force of nearly 700 people, which is expected to reach 1,200 to 1,400 by the end of next year.
In addition, there are about 1,000 construction workers on the site, doing the tool installations and starting work on a $35 million second administration building.