Editor’s note: This is the third installment of Spotlight Newspaper’s series on AMD coming to the town of Malta.
AMD Fab Technologies Inc., the subsidiary of Advanced Micro Devices that will be building a microchip manufacturing facility in Malta, recently applied for $27.8 million in tax exemptions relating to the construction of the $4.6 billion project.
Those millions are only the tip of a tax break iceberg that AFT will reap by locating in Saratoga County, however. By building in an Empire Zone, the project qualifies for a slew of breaks that are included in the state’s $1.2 billion incentive package.
The Empire Zone Program qualifies the project for a waiver of the 4 percent sales tax, but the Saratoga County Industrial Development Agency can provide relief from the remaining 3 percent county tax on the estimated $807 million in construction costs. The $27.8 million in tax breaks would cover the whole 7 percent.
It’s going to be the biggest project for the IDA as far as projects we have helped in working with the [Saratoga Economic Development Corporation], said Mike Valentine, senior planner with the SCIDA.
In essence, the scale is the only remarkable part of the project; the IDA will treat it as any other initiative.
`We’re doing what we’re set up to do, it’s just happens to be a very large project,` said Valentine.
The SCIDA is a part of the county planning department, and is controlled by a seven-member board appointed by the county board of supervisors. The AFT facility will be its 83rd project in its 20 years of operation.
It often works with the SEDC, a private organization, funded by Saratoga County and private donations. It primarily helps businesses apply for Empire State Zone and other benefits.
`We have a marketing agreement with [the IDA],` said SEDC President Dennis Brobston. `We bring them projects that fit their criteria. The AMD and Foundry project is a manufacturing project that fits their criteria.`
The application to the SCIDA reveals AMD will seek to purchase between 200 and 340 acres of land at the Luther Forest Technology Campus.
AMD says the facility will supply 1,465 jobs directly, with a payroll of $88 million. Hopes are to have the doors open by 2011 and ramp up operations over the following years.
Created in 1986, the Empire State Zone program is meant to entice businesses to build in certain areas by offering tax breaks. There are 82 zones across the state, and businesses must prove to the Department of Economic Development that their project will create new jobs and invest in the area.
The benefits of enrollment in the program include wage tax credits, reduced utility rates and tax credits to compensate for the cost of creating new jobs. In most cases a qualifying business will also receive a 10-year exemption from sales and, in some cases, property taxes.
`It alls comes down to competition,` Brobston said. `The state of New York is one of the highest taxed states in the nation. The Empire Zone Program was designed by the state of New York to make us competitive in the national competitions for manufacturing projects.`
`The people that are on [the IDA] board look at this as a very important job, to get this business here, get these quality jobs, and make Saratoga County stand out from the counties around it,` said Valentine.
In AMD’s case, the roughly $1.2 billion state incentive package will include $650 million in grants to the company, and the rest will be paid out over a period of 10 years in Empire Zone benefits.
Under Malta’s zoning legislation for LFTC, businesses that locate there will have to pay full property and school taxes. The Ballston Spa School District and the Stillwater Central School District will split the taxes, 75 percent and 25 percent.
A number of Empire Zones are scattered across Saratoga County, but the largest by far are in the Malta area, at Luther Forest Technology Campus and the Saratoga Technology and Energy Park.
The project recently had to reapply for Empire Zone status, as the new company, AFT, is to take over. The Town of Malta recently approved the new entity.
`That allocation was made a few years ago, we just had to change the name,` said Malta Supervisor Paul Sausville.
The Town of Stillwater and Saratoga County will have to sign off on the changes to make AFT part of the Empire Zone, as well.
The IDA will hold public hearings on AMD’s application for county sales tax exemption for construction materials on Dec. 8, at 8 a.m. at Stillwater Town Hall, and at 10:30 a.m. at Malta Town Hall.
It is likely that a decision will immediately follow the hearings.“