Area officials place blame at state level for no chip plant

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MARCY — Local officials reacted with dismay and disappointment Friday to the news that a much-anticipated and ballyhooed computer chip plant won’t be built adjacent to the SUNY Polytechnic Institute campus.

Nonetheless, all of the speakers during the hour-long news conference at the County Office Building also expressed optimism and confidence that the Marcy Nanocenter will eventually be home to a semiconductor facility.

That said, they had plenty to be sad about. The ams AG facility held the long-term prospect of more than 1,000 new direct and indirect jobs following the start of commercial production in 2018. Construction jobs were estimated at more than 900.

When the plant was first announced by Gov. Andrew M. Cuomo in August 2015, more than one local government official predicted the project — with its well-paying jobs — and related positive spinoff effects would have a “transformative” impact on the Mohawk Valley economy. After years of attempting to bring nanotechnology to the site, the wait looked to be over. The plant was a major part of the governor’s NanoUtica program.

There was even a ceremonial groundbreaking at the site in April, led by Lt. Gov. Kathy Hochul and company officials. While site preparations were well underway at that point and continue today, no actual building construction ever was started.

Now, 16 months later, the project has been pulled. Assemblyman Anthony J. Brindisi aptly summed up the tone of Friday’s session when he likened the termination by ams AG to “a real punch in the stomach.” However, he, like speakers before and after him, was not giving up on nanotechnology locally.

“Good things will continue to happen at this site,” said Brindisi, D-119, Utica.

State Sen. Joseph A. Griffo, R-47, Rome, used a weather analogy to describe his feelings.

“Much like the air outside today, it is bitter,” he said. The senator later said, “We can still see success in the future.”

The speakers squarely placed the blame at the state level for the company’s decision to back out of the project. 

County Executive Anthony J. Picente Jr. spoke of “ineffective” and “improper” leadership by the original project managers.

At the outset, SUNY Polytechnic Institute, led by Alain Kaloyeros, and its Fort Schuyler real estate affiliate were responsible for building the plant. Austria-based ams AG was going to lease it.

There were delays that put the aggressive planning/design and construction timetable in question. The situation was further complicated this summer when questions began surfacing about how some of the state’s prized economic programs, such as the Buffalo Billion, were being run at the state level. 

Responsibility and management for the Marcy project was moved to the Empire State Development Corp. after SUNY Poly President Kaloyeros, a close ally of Cuomo, and others were indicted in September on corruption charges in connection with signature state economic development ventures that involved SUNY Poly.

This situation added to the delays in moving the ams AG plant from proposal to actual construction.

As part of the realignment at the state level after the indictments, EDGE was given a larger role in overseeing the ongoing infrastructure improvements at the site to serve the ams AG plant. This work will continue in seeking to make the site as shovel-ready as possible for a tenant.

The Marcy Nanocenter project has never surfaced in the state and federal legal action involving Kaloyeros and the others. 

By the end of November, ams AG had decided to end the project because of the delays that were compounded by uncertainties surrounding the Kaloyeros situation. The products that were to be made at the ams AG plant will now be outsourced.

The facility was to be home to ams AG’s advanced sensor manufacturing. The company makes sensors for the consumer, communications, medical, automotive and industrial sectors.

Even after the ams AG decision, Empire State Development and Mohawk Valley EDGE officials continued to talk with the company to see if the project could be salvaged, even if it meant a change in what was to be manufactured in Marcy. This week, ams AG ended the discussions.

“If this project was in the hands of the right people at the beginning, we wouldn’t be here today,” declared Picente in the legislative chamber at the County Office Building.

The amount of time it takes to go from chip plant site selection to commercial production is critical in the semiconductor industry, said EDGE President Steven J. DiMeo. A compressed schedule of about 18 months is imperative — something the ams AG project could no longer achieve. 

“We did everything we were supposed to be doing” locally, said the EDGE official. His group has been working to attract a computer chip plant to the Marcy site since the late 1990s.

Officials from ams AG did not return telephone messages or emails seeking comment on the company’s decision to back out on the project. But a Swiss publication is reporting that internal ams AG documents blame delays by New York state for the project falling through. 

State still committed

Picente said the state’s financial commitment to the ams AG project “remains intact.”

Empire State Development gave the final go-ahead July 21 to spend nearly $600 million in state money on the project on the western edge of the SUNY Poly campus. Approved were: $539.9 million for construction, tooling and equipping the ams AG complex and $49.1 million for infrastructure improvements. The money is part of the 2016-17 state budget and could still be applied to a future project if one surfaces.

“We’re going to keep moving forward,” he said.

Brindisi said, “We have a commitment from the governor that the money will stay here.”

Picente said companies should feel reassured about doing business with the state going forward with Empire State Development heading up the state’s future involvement with the Marcy Nanocenter.

“They know how to manage projects,” he said. Picente worked at Empire State Development prior to becoming county executive in 2007.

Griffo too said companies should feel comfortable working with Empire State Development despite what has happened with the ams AG project.

“The players have been replaced,” he said. “The process has been changed.”

Still marketing the site

“This is not the only company we have been marketing to,” said DiMeo.

The site was designed to accommodate three semiconductor facilities.

He said recent infrastructure improvements intended to serve the ams AG plant will help attract another company.

”We are now marketing a site that will be truly shovel ready,” he said. “We are better prepared, better positioned than we were two years ago.” 

Rome Mayor Jacqueline M. Izzo said, “We still have a very viable site. Our eye is still on the prize. I think we’re going to get there.”

DiMeo expects Empire State Development and EDGE working hand-in-hand can attract a semiconductor facility.

“I’m fully confident in our (Empire State Development and EDGE) abilities to get a project here,” he said.

State response

Empire State Development separately released a statement about the situation at about the same time the news conference was taking place in Utica.

“While this is certainly a disappointing development, New York state remains strongly committed to making investments in the Mohawk Valley that will create well-paying jobs and grow the regional economy,” said the statement. ”In fact, the state’s funding committed to the ams AG project will be available to support projects in the region and multi-million dollar construction work will continue at the site to provide the needed infrastructure for future projects.”

It also said, “We are moving forward with plans for the facility and are confident that we will find a new anchor tenant in short order. ESD and local partners are already working tirelessly on potential alternatives consistent with the region’s economic development strategies and we are actively in discussions with other chip fabrication opportunities for the Marcy Nanocenter.”

Howard A. Zemsky, Empire State Development’s chief executive officer, is expected to be in Oneida County next week to huddle with local officials about the situation, several of the news conference participants said.

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