Chip manufacturer applies to economic development agency for 49-year PILOT agreement.
Micron has formally applied to the Onondaga County Industrial Development Agency a step further in the process of building their facility in Clay, NY. The company’s also asking for the county Industrial Development Agency to be declared the lead agency related to all proper reviews. With Onondaga County IDA being the agency, they’ll handle both State and Federal Environmental Reviews. In addition to their PILOT request the company is asking for sales tax exemptions on materials used to construct the facility.
With their application Micron must advance 25 million to the IDA. According to Onondaga County Executive J. Ryan McMahon, “Certainly a company’s not going to advance 25 million to a county IDA if they’re not committed. They’ve been buying other land for the project and for their commitment to childcare for their employees.”
If Micron doesn’t hit the job numbers, negotiated with Onondaga County and New York State, “you lose the benefits” according to McMahon.
The state of New York in creating their incentive package, had a consultant look at Micron’s commitment, what all the benefits they would receive, including local government to make sure that we’re getting a return on investment to the community as a whole.
McMahon is touting the benefits that extend well beyond building a manufacturing plant, “the reality is that this is going to be a huge multiplier for the community.” Said McMahon, “Micron will pay taxes on what exists on the property today, with a 2% increase annually. They’ll receive a benefit from the build-out. But the benefit we’re getting is the jobs, all that new income that’s going to generate new sales tax, and all the other commercial and housing development that’s going to happen.”
There have been questions regarding cost effectiveness of PILOT agreements. However, according to McMahon, every other semiconductor in New York State received a 49-year PILOT because these buildings and equipment are capital intensive.”
In defense of tax incentives, McMahon continues, “You can’t assess something at $20 billion and expect that tax bill to be competitive with Texas, North Carolina, Phoenix Arizona, or Michigan. Micron required an aggressive PILOT that would match the aggressiveness of their investment. “
This PILOT is large, unlike any other agreements we’ve had. To begin the project, $51 million will be remitted to the IDA under phase I. An addition $50 million for phase II of the largest project in Central New York history.
Construction is expected to begin in 2024.
The Onondaga County Industrial Development Agency (OCIDA) is an independent public benefit corporation established in 1970. OCIDA annually reports information for approved projects, including granted tax exemptions, payments in lieu of taxes (PILOT) and project employment.
