GlobalFoundries expansion could spark new building boom
Saturday, January 26, 2013
While Saratoga County is seeing the bulk of the changes so far, the plant’s impact is spilling into neighboring counties, as new employees come to the area to find housing, and developers who want to feed off the energy created by the growing regional technology sector begin to show interest in starting local projects.
“As the population has grown, so has the sale of new and existing homes — this is a Capital Region-wide phenomenon right now. I think this is happening in Warren County, in Washington County, in Albany and Rensselaer counties,” said Saratoga County Chamber of Commerce President Todd Shimkus. “GlobalFoundries, GE and the College of Nanoscale Science — those are all contributing to this, and leading the charge.”
Shimkus pointed to recent increases in Saratoga County’s population, private-sector wage growth, home sales and construction spending as increases all helped along by GlobalFoundries.
“Clearly (GlobalFoundries) has had an impact on that,” Shimkus said. “There’s no doubt.”
While home sales have risen, area developers and real estate agents agree much of the impact of GlobalFoundries on the regional housing market is on rental units. Shimkus pointed to developer Sonny Bonacio’s Market Center in Saratoga Springs and Ellsworth Commons in Malta as two recent projects fueled by the computer chip plant bringing new workers to the area.
“There are at least a half-dozen rental housing projects that have gone into Saratoga County from Clifton Park north into Malta and Saratoga Springs directly related to people relocating to the area to work for GlobalFoundries,” Shimkus said.
In Saratoga County alone, the sale of new and existing homes was up 17.5 percent over a 12-month period, as of November.
As of June, Saratoga County’s population was up by about 2.5 percent, and private non-farm wages had increased by 6 percent over a 12-month period. Manufacturing wages in the county are up by more than $200 million since 2010, Shimkus said.
Earlier this month, GlobalFoundries announced plans to build a multibillion dollar facility on its Saratoga County campus and plans to create an additional 1,000 jobs.
Those new jobs are expected to have a similar impact on the area’s housing market going forward — a growth in home sales, but a boom in rental demand.
Reasons vary as to why the rental market outstrips home buying, but Shimkus said employees may be taking a job faster than their spouse can find a new job or before they can sell another home and transition their children to a new school district, so they choose to rent.
While the most stark changes have been seen in Saratoga County, the economic impact has been felt in Warren and Washington counties.
“The perception is it’s good for everybody. There’s not a dramatic impact on us yet, but it feeds the market just in confidence,” said Tom VanAernem, of VanAernem Realty and president of the Warren County Board of Realtors. “This year is certainly a lot better than last year in the real estate market, and I think in the next four to five years we’ll really see an impact. GlobalFoundries is doing a lot and it’s pressing development.”
VanAernem characterized the activity from GlobalFoundries in Warren and Washington counties as sporadic, and mostly affecting the rental market. Occasionally, VanAernem will see someone from GlobalFoundries who is interested in purchasing a new house in the area. Oftentimes, it’s someone who has already been renting an apartment or townhouse, he said.
“We’ve gotten a lot of buyers out of those complexes. Rentals filled the void for a lot of people who weren’t ready to buy,” VanAernem said. “We expect big things over here in Washington County, there’s a lot of room for growth over here. We’re cautiously excited.”
One of the reasons potential homeowners and developers may be looking to build in Warren or Washington counties rather than closer to the GlobalFoundries campus, which is about 35 miles south of downtown Glens Falls, is the difference in cost.
“We’ve taken a look in the past at the amount of available space between where Luther Forest ends and where we are,” said Vicki Pratt Gerbino, president of Warren County Economic Development Corp. “There’s a lot of space between here and there, but the cost changes significantly.”
Economic developers in Warren and Washington counties have seen increased interest, including in available spaces in industrial parks, but there haven’t been many “shovels in the ground,” Pratt Gerbino said.
“Typically, when there’s a very large manufacturer within a 50-mile radius of your community, there’s backfill for a variety of services,” Pratt Gerbino said. “There are sites that are ready to go at a lot less cost, there are more rationalized land and building costs. We have both the space and talent to be able to support a buildout and growth from a GlobalFoundries expansion.”
When Shimkus traveled to Oregon a few years ago to see the effects of the Intel build-up there on the economy and the surrounding communities, he came away thinking the first impact of GlobalFoundries on Warren and Washington counties would be on housing, he said.
“People want that lifestyle you’re able to get there, and it’s still a simple commute to Fab 8,” Shimkus said.
GlobalFoundries works with Brookfield Global Relocation Services in aiding employees moving to the area. Many who are relocating internationally or from elsewhere in the United States work with local real estate firms, rental property management and agents to find housing, but the company doesn’t play a direct role in finding housing for its employees, GlobalFoundries spokeswoman Jessica Kerley wrote in an email.
“Our employees live from Albany County to Warren County and beyond,” Kerley wrote.
Through her conversations with area real estate agents and attorneys who handle property transactions, Pratt Gerbino said she has heard about people from all over the world who are interested in real estate in the region. And the company’s investment may mean other companies, whether they’re in the semiconductor industry or not, may take notice of the region and consider it as well, Pratt Gerbino said.
“In general, it’s wonderful to see the company make these kinds of investments. You don’t make investments for the workforce that exists today, you make investments for workforce of the future,” Pratt Gerbino said. “It’s a company that’s going to drive global innovation and it’s in your backyard. That’s a wonderful thing. It says to the world that’s paying attention: ‘Wow, look at the talent that’s got to be there.’ ”
Utica-area developer the Buck Group group last year proposed a large-scale project off Northway Exit 17, which representatives from the group said would be driven by GlobalFoundries. That project hinges on getting sewer hookups in the area, so the project remains up in the air at this point, Moreau Supervisor Preston Jenkins said.
The town recently applied for state funding to fund sewer infrastructure along Route 9, but didn’t receive it.
“It’s questionable what’s going to happen. We don’t know how much or when,” Moreau Supervisor Preston Jenkins said. “Certainly, growth from GlobalFoundries is going to hit us here. I know there’s still interest, I would like to tell you it’s going to happen next week. Once we get the infrastructure, we’ll be busy out there.”