GlobalFoundries has filed a new lawsuit seeking to cut in half the town’s property tax assessment on its still-under-construction Fab 8 computer chip plant.
The lawsuit over the 2011 assessment was filed last month in state Supreme Court in Ballston Spa, and seeks to lower Malta’s $400 million assessment on Fab 8 to $210 million.
The company was expected to challenge the assessment, after filing a lawsuit last year seeking to lower its 2010 assessment from $160 million to $56 million. That case remains pending before state Supreme Court Justice Thomas D. Nolan Jr., who will also hear the new case. An initial hearing is set for September.
“We continue to disagree with the valuation method used by the town to determine fair market value of the property,” GlobalFoundries spokeswoman Jessica Shahda said Tuesday. “It is still under construction and we believe that the value of the partially constructed facility as of March 1 is below the value set by the town.”
Town Assessor Susan Otis said she’s assessed GlobalFoundries based on the cost of construction, the same way she assesses any other large commercial property while it is under construction.
“It was expected. We believe our assessment is more than fair, and they are exercising their right to challenge it,” Otis said.
The town’s $400 million figure is based on the cost of construction through this past March 1, Otis said, just as the 2010 assessment was based on the cost of construction through March 1, 2010. Malta assesses properties at 100 percent of their market value.
In May, GlobalFoundries officials said their proposed $210 million assessment figure was based on a fraction of the actual construction value, which the company said is how computer chip plants are generally assessed around the world. GlobalFoundries, based in Sunnyvale, Calif., has other manufacturing plants in Singapore and Dresden, Germany.
GlobalFoundries began construction in 2009, and first went onto the town tax roll in 2010. The exterior shell of the factory is now complete, and the expensive manufacturing tools that will bring GlobalFoundries’ investment to at least $4.6 billion are being installed. The plant is expected to go into commercial production late next year.
The town has the right to tax the building, but not the manufacturing equipment, Otis noted.
GlobalFoundries is being represented in court by Hiscock & Barclay of Syracuse, and the town is being represented by Hacker Murphy of Albany.
In the 2010 lawsuit, Judge Nolan has also allowed the Ballston Spa School District, the Stillwater School District and the town of Stillwater to be parties to the case, because of their financial interest in the outcome.
The Ballston Spa School District is the biggest tax beneficiary from GlobalFoundries, but the 223-acre property in the Luther Forest Technology campus is also partially in the town of Stillwater. An agreement between GlobalFoundries and the Saratoga County Industrial Development Agency requires the Ballston Spa School District to share some of its tax revenue with the Stillwater School District.
Last year, GlobalFoundries paid property taxes of about $2.9 million based on the $160 million assessment, though a court-ordered reduction in that assessment could require some of that money to be refunded at some point in the future.
Based on the $400 million assessment, GlobalFoundries’ tax bill in the coming year could exceed $7 million.
Using either side’s assessment, GlobalFoundries is going to be the largest single taxpayer in Saratoga County.
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