<> $160 million assessment proposed for GlobalFoundries chip plant | The Daily Gazette
 

Subscriber login

When Credibility Matters

$160 million assessment proposed for GlobalFoundries chip plant

$160 million assessment proposed for GlobalFoundries chip plant

The GlobalFoundries computer chip plant would be assessed at $160 million for the coming year under

The GlobalFoundries computer chip plant would be assessed at $160 million for the coming year under the new tentative town tax roll filed Friday.

That would dwarf the value of any other property in town, even though the huge new high-tech factory is still only under construction. It would mean tax payments of more than $3 million over the next year for the chipmaker.

GlobalFoundries could challenge the number, but otherwise $160 million is the value that will be used in calculating its town, county and school tax bills for the coming year.

“We’ll take it into consideration and our tax and finance folks will look at it,” said Michael Russo, GlobalFoundries’ director of government relations. “It’s our intention to pay our fair share of taxes.”

The Ballston Spa School District would see the most money, a payment of nearly $2.84 million this September if this year’s tax rate were unchanged, though 25 percent of that money would be sent to the Stillwater school district. The two districts’ boundary crosses the land where GlobalFoundries is building, and a revenue-sharing deal was previously negotiated.

The proposed assessment would also mean a payment due to Saratoga County next January of more than $360,000 based on the current tax rate; to the town of Malta fire companies of $132,121; and to the town of Malta itself of $4,276.

The tentative assessment is based on construction of the much-anticipated factory at the Luther Forest Technology Campus having been 20 percent complete as of March 1, said Malta Assessor Susan Otis.

A $160 million assessment would make the factory by far the single most valuable piece of property in Malta. The State Farm Insurance headquarters complex near Northway Exit 12 is next-highest, valued at $44 million in 2009. The total value of all property in town is currently about $1.5 billion, so GlobalFoundries alone would add 10 percent.

Release of the tentative assessment figure starts a public review process that will lead to a final assessment being established by July 1. Malta, unlike many local communities, assesses properties at 100 percent of their estimated market value.

GlobalFoundries, which is headquartered in Sunnyvale, Calif., has the right to challenge the new figure through a town review process, and could then take the matter to state Supreme Court if it believes the town’s assessment is too high.

“We have a team of tax and finance people who will look at it,” Russo said.

Whatever the final assessment is, the company is required to pay full local property taxes under its incentive deals with the state and with the Saratoga County Industrial Development Agency.

Otis said she settled on the $160 million figure after meeting with GlobalFoundries officials, and then consulting with appraisal experts Donald McGrath of Fishkill, who has helped appraise the IBM chip plants in East Fishkill, and Jack Coyle of Philadelphia, who specializes in appraising heavy manufacturing facilities. Both have been working with Otis since 2008 to prepare for the day the local chip fab goes on the tax rolls.

“These two folks are experts in this kind of appraisal,” Otis said.

Beyond seeking the outside expertise, Otis said there are no special considerations being given to the huge project, expected to be completed in 2012. It is expected to employ 1,200 to 1,400 people once it opens.

“That property is being treated like any other property in the town of Malta,” Otis said.

GlobalFoundries was not assessed at all a year ago, because the company at that point hadn’t purchased the land. The land sale occurred in June. Ground was broken and site preparation work started last July, and construction of the factory’s exterior shell has moved quickly since then.

This year’s assessment would be good for just one year, with a new assessment set next year based on its state of completion as of March 1, 2011.

The assessment includes the 223 acres GlobalFoundries bought, as well as the estimated value of the building, based on what Otis says is its state of completion on March 1.

The factory is being built for GlobalFoundries by M+W Group under a contract worth more than $800 million for the building alone.

While the total value of the plant is generally given as $4.2 billion, the sophisticated chip-manufacturing tools that are more than $3 billion of that total won’t be subject to municipal property taxes.

View Comments
Hide Comments
0 premium 1 premium 2 premium 3 premium article articles remaining SUBSCRIBE TODAY
Thank you for reading. You have reached your 30-day premium content limit.
Continue to enjoy Daily Gazette premium content by becoming a subscriber or if you are a current print subscriber activate your online access.