Forgive the loan that built Luther Forest Technology Park
The debt has been paid, and then some.
That is the message New York needs to hear on a $13 million loan from Empire State Development (ESD) to purchase the property that is now the home of
Globalfoundries.
Twenty-plus years ago, Saratoga County economic development representatives approached the state with an idea, a big idea to purchase a 1,400-acre site in Malta to attract a semiconductor manufacturer.
The state, under then-gov.
David Catalfamo is a former senior vice president of Empire State Development and is currently director of economic development in Oneida County.
George Pataki, had embarked on a long-term strategic effort to attract the semiconductor industry to invest in New York. As part of that initiative, there were a series of broad-based policy changes, workforce development initiatives and investment in the creation of Albany Nano, a world-class public/private research facility. Another key program launched in support of this initiative was SEMI-NY, which worked with communities around the state to acquire and develop sites suitable for semiconductor manufacturers.
Saratoga leaders approached Empire State Development with what they believed was the perfect site to ultimately attract a fab, but they needed a $13 million loan to get the property under control. That property is what we know today as the Luther Forest Technology Park. This was a unique opportunity, but Empire State Development, then and now, was not typically in the business of making real estate loans for speculative projects.
But Pataki and then-esd Chairman Charles Gargano, with the support of Senate Majority Leader Joe Bruno, R-brunswick, saw the bigger picture and approved the deal. The rest, as they say, is history. Today, Global
Foundries directly employs some three thousand people, has invested billions of dollars into the site and just became a publicly traded company. Most importantly, Globalfoundries has announced plans to expand its capacity in the coming years, adding as much as $15 billion in new investment, creating over 1,000 new jobs. By all accounts, the deal made by Pataki and supported and nurtured by three of his successors has been a massive success.
However, today, there is still a significant public debt owed by an organization that lacks the resources to pay it. The issue at hand today is the disposition of the balance of the loan and control over the future of development at the Luther Forest Technology Park. By holding this loan, further investment in the park by supply chain companies has been stunted, as the cost of real estate outpaces market realities. Forgiving the approximately $9 million remaining on the loan could drastically reduce the per-acre cost of real estate for Luther Forest Technology Corporation and finally jumpstart development that has effectively stalled for more than 15 years.
I predicted it in 1998 and I’ll say it again today: The overall economic impact to the community and the state of bringing a fab to New York far, far exceeds the value of the loan made by Empire State Development. In addition to the direct value in jobs and investment, the project put New York on the map, by providing the roadmap to compete globally in the semiconductor industry. Ultimately, this helped to pave the way for Cree to invest in Marcy, and, with the expected passage of Sen. Charles Schumer's CHIPS for America and Fab Act, more projects in New York are under active consideration today.
Let’s embrace that success and recognize what most of us already know: Future development in Malta should be controlled by local leaders in cooperation with the community and with the site's most important tenant, Globalfoundries. New York got what it bargained for, and it’s incumbent upon the Hochul administration to work with local elected officials to pass legislation directing Empire State Development to forgive the loan and allow future development decisions to be decided locally.