Hyde: Capable workforce, low-cost energy, no equipment taxes put WNY STAMP in an enviable position
At first glance, one might think that a major metropolitan area such as Austin, Texas, or Phoenix, Arizona, would have major advantages over the Western New York Science and Technology Advanced Manufacturing Park – better known as STAMP – when it comes to convincing an international corporation to build a semiconductor facility in the Town of Alabama.
But not so fast, says Steve Hyde, chief executive officer of the Genesee County Economic Development Center, who participated in a video interview with Howard Owens, publisher of The Batavian, earlier today.
Hyde, when given the opportunity to “sell the STAMP site,” didn’t hesitate -- coming up with several reasons why it would be beneficial for a company such as Samsung, for example, to build a $13 billion chip manufacturing plant at STAMP.
Recent published reports indicated that Samsung was considering STAMP – as well as the Austin and Phoenix areas – for a new semiconductor plant and that the Albany-based Plug Power was planning on operating a “green hydrogen” facility at the Genesee County park.
“STAMP can really compete and they (potential tenants) have got to take a serious look at us,” Hyde said. “That’s why we’re seeing opportunities in a big way right now in the marketplace.”
Hyde backed up that statement by pointing out that STAMP is located between two metropolitan areas (Buffalo and Rochester), has a growing and hungry workforce, and has access to low-cost green energy, and also the fact that New York does not impose “personal property taxes” on manufacturing equipment – a significant savings to these mega companies.
“There are very discreet advantages here in Western New York that you want to seize upon and emphasize,” Hyde said. “And they also need to consider that against some of the challenges in a market that has been a boomtown for 25 years (speaking of Austin) … that you have incredible competition for the workforce there right now.”
He noted that in Austin, the home of Tesla, Oracle, Texas Instruments and Samsung, big companies are competing for the same set of workers.
“Plus, the infrastructure there is overwhelmed and the congestion is crazy. So, there’s some challenges there relative to workforce,” he said. “When you look at us, we’re at a distance of a mile a minute you can literally travel on the highways. And there’s a well-qualified workforce from New York’s second- and third-largest metros. And for the pay rate at STAMP (estimated at $75,000 to $100,000 annually) … those workers will drive 30 to 45 minutes.”
Hyde also said another big advantage is that New York doesn’t charge “personal property taxes.”
“All of the manufacturing equipment in Texas is taxed as personal property taxes. So, when you really look closely at it, we’re going to be really aggressive on the incentive side with the state … and will be far less expensive than Austin because we don’t tax the equipment that will be two-thirds the cost of the project,” he explained.
He also pointed out that this area has good workforce solutions, noting that area colleges, including Genesee Community College, and Genesee Valley BOCES are building degree programs for high-tech industry.
“These big projects that we’re talking about, whether it’s a big renewable project or semiconductor, (they’re) huge power users,” Hyde said. “They want green power and we’ve got the New York Power Authority and we’ve got Niagara Falls less than 30 miles away. We have some of the lowest-cost green energy available in all of North America – like half of what it costs in Austin.
“So, you look at power, you look at operating costs, our labor is about 10 percent cheaper than Austin right now because the market has run up so much. Those factors are a huge part of the cost profile of running an operation like this.”
Hyde’s comments come in the face of a story in the Buffalo-based Investigative Post that indicates Samsung is leaning toward Austin as the site for the microchip factory that would employ about 1,800 people.
According to the Investigative Post report:
- Austin “appears to have a leg up, as it is already home to Samsung Austin Semiconductor, which has 2,500 employees;
- Samsung has purchased 250 acres of land next to its existing facility and has applied for zoning variances, and is seeking more than $1 billion in incentives to build there. It quoted Nate Jensen, a professor at the University of Texas-Austin, as saying Samsung’s odds of expanding there are “north of 90 percent.”
- Roger Kay, a market analyst with Boston-based Endpoint Technologies Associates, said that Austin has “the inside track” and suggested other sites, including STAMP, “are most likely involved to help the company drive up the value of incentives in Austin.”
Hyde remains optimistic, stating:
“We’ve been eating this elephant a bite at a time as capital becomes available. You know what, though, we’re finally just now arriving at the season where we built the initial pieces of the infrastructure for the site and we can accommodate smaller projects. But we’ve got all of the big infrastructure fully designed, fully permitted and fully ready to build … and now the big projects are inside that window.”