A tentative settlement has been reached in the high-stakes dispute between the town of Malta and GlobalFoundries over the property tax assessment on the new computer chip factory.
Settlement details aren’t being released yet.
“We’ve been working for quite a period of time with the assessor of Malta and her attorneys. We think we have put together a resolution of the litigation,” said Kevin McAuliffe of Syracuse, an attorney for GlobalFoundries.
Based on the current $400 million assessment on its computer chip plant, GlobalFoundries’ tax bill for 2011 was about $7.8 million, making it by far the largest single taxpayer in Saratoga County.
Five different jurisdictions the computer chipmaker pays taxes to will all need to sign off on the deal: The towns of Malta and Stillwater and the Ballston Spa and Stillwater school districts, as well as the Saratoga County Board of Supervisors.
The 2012 assessment on the plant is due to be filed May 1, and could be higher, due to $230 million in additional construction at the site in Luther Forest since last year. The chip plant is now largely finished, but an adjoining second office building is still under construction.
McAuliffe said the settlement would include a methodology for assessing future improvements, so annual assessment disputes don’t continue.
The Malta Town Board was to discuss the proposed assessment settlement in a closed-door meeting Monday night.
Based on that discussion, Town Supervisor Paul Sausville said, the agreement could be put on the Town Board agenda for next Monday. He too wouldn’t discuss details.
“It hasn’t been approved. It’s still a very sensitive matter at this point,” he said.
A settlement would resolve two years of litigation between GlobalFoundries and the town of Malta, which sets the property assessment.
GlobalFoundries, which is starting production at its $4.6 billion plant in Luther Forest, sued the town over its assessment in both 2010 and 2011. The cases are pending in state Supreme Court in Ballston Spa.
In the most recent lawsuit, GlobalFoundries sought to lower the assessment from $400 million to $210 million.
In 2010, the town’s assessment on the then half-completed plant was $160 million, and the company sued for a $56 million assessment.
Any settlement would also require an approval by the county Industrial Development Agency, because it administers a payment-in-lieu-of-taxes agreement for the project.
Under the PILOT agreement, GlobalFoundries pays full property taxes. The IDA provides a mechanism for the town of Stillwater and its school district to receive some of the GlobalFoundries tax money, even though the chip plant is located in Malta and the Ballston Spa School District. The split was put in place years ago because the Luther Forest Technology Campus — and the 223-acre GlobalFoundries property itself — straddles the town and school district boundaries.
All the taxing jurisdictions must approve it, or the IDA won’t, IDA officials said Monday. “Nothing happens without them all signing off on it,” said IDA Chairman Ray Callanan.
Stillwater Town Supervisor Ed Kinowski said the proposed settlement could come before his Town Board as soon as this Thursday. “It seems to me the numbers are reasonable,” he said.
GlobalFoundries began construction in 2009, and the factory first went onto the town tax roll in 2010. By law, the town can assess property taxes only on the building, and not the roughly $3.5 billion in manufacturing equipment inside it.
The IDA will hold hearings on two different aspects of the matter at 8 and 8:10 a.m. April 4 at Malta Town Hall, and then a third hearing at 9:30 a.m. at Stillwater Town Hall. It could act on the settlement immediately after those hearings.
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