Property tax breaks urged for tech park

PHOTOGRAPHER: Stephen Williams

The two towns should consider allowing property tax breaks for companies to locate in the Luther Forest Technology Campus, according to one Malta Town Board member.

The requirement that companies in the campus pay full property taxes may be one reason the campus hasn’t developed faster, said Councilman John Hartzell.

“The current property tax policy has discouraged additional businesses from locating in the tech campus,” Hartzell said this week.

Local economic development officials who are marketing the Luther Forest site to high-tech companies agreed that not being able to offer tax breaks as an incentive has hurt.

“The rest of the world operates on incentives,” said Michael Relyea, president of the LFTC Economic Development Corp.

But Town Supervisor Paul Sausville said the policy of requiring full tax payments is a promise to residents that they won’t have to subsidize new businesses in the campus.

“It’s a promise I want to keep,” Sausville said Friday.

The 1,414-acre technology campus is split between Malta and Stillwater.

Both towns approved it in 2004 after extensive negotiations over tax incentives and other issues, amid high hopes that it would become a world-class magnet for high-tech companies. Two years later, plans were announced for a major computer chip plant.

Over the past decade, the state has invested around $100 million in building roads, sewer and water lines, and other infrastructure for the campus.

But so far, no other companies have followed GlobalFoundries, which is now completing its $4.6 billion plant. More than a dozen businesses that service GlobalFoundries have arrived in Saratoga County, but they’re renting space elsewhere.

State break phased out

When the full-tax-payment provision was written into the town zoning approvals, the state’s Empire Zone incentive program was in effect. Under it, companies could get a state income tax credit for their entire property tax bill.

GlobalFoundries remains under an Empire Zone, and pays full property taxes to the two towns and their school districts. It is also receiving $1.3 billion in total state assistance.

But the Empire Zone program was phased out in 2010, so new companies can no longer get the property tax credit.

They can, however, request lower property taxes as an incentive, through local industrial development agencies that offer payment-in-lieu-of-taxes (PILOT) agreements. But the LFTC’s town approvals prohibit that.

“The town needs to change its policy for the campus to allow for the same property tax incentives in the campus that are available in the town for property outside the campus,” Hartzell said.

The property is being marketed at industry conferences internationally, but without any recent success.

“There have been projects for the LFTC that we have talked about, that have been deterred by lack of a PILOT,” said Dennis Brobston, president of the Saratoga Economic Development Corp., the county’s chief marketing agency.

“Marketing-wise, it is very difficult for us to enter into a conversation. The first thing they ask us is what our incentives are. When we can’t offer incentives, that stops the conversation pretty fast,” Relyea said.

Sausville, however, said the kinds of companies the town wants the campus to attract will have regional and statewide economic benefits, and any tax incentives should be offered from the county and state levels.

“I’m very opposed to incentivizing statewide economic development on the backs of local taxpayers,” Sausville said. “We’ve been successful with the existing formula.”

Hartzell said re-examining the LFTC zoning would also allow Malta to consider whether changes are needed to address two unexpected impacts from GlobalFoundries: complaints from neighbors about high-pitched noise from backup power units, and the amount of GlobalFoundries traffic using Dunning Street as a shortcut.

“We need to act now to begin to deal with these challenges, so that we can most effectively realize the potential of the campus in a way that best serves the town,” Hartzell said.