An image of White Pine Commerce Park, where Micron is putting its chip fabrication plants. Credit: Courtesy of Onondaga County

Micron and town of Clay officials have agreed to a host community agreement that would require Micron to pay the town $30 million instead of the building permit fees it would have spent to build its first chip fabrication plant, town officials said Thursday night. 

Building the first fab would have cost Micron $62 million in building permit fees, town officials said. 

Town officials made the agreement because building permit fees can only be spent on administrative costs related to the permits. The host community agreement allows Clay officials to more freely spend the money or offset tax increases. 

The agreement is not final, however. 

A local law making the agreement possible and the agreement itself will be discussed at two separate public hearings. The first, likely to be held July 7, will cover the local law. To finalize the agreement, the town must first pass a local law allowing themselves to waive the building permit fees for projects that cost more than $100 million

The second public hearing will focus on the agreement itself. 

“People have said, ‘Oh our taxes are gonna go up, our taxes are gonna go up, we’re not getting anything,’” said interim Clay Supervisor Joe Bick. “Well, we kinda are.” 

Micron has since 2022 been planning to build up to four semiconductor fabrication plants that could employ up to 10,000 people. The agreement covers the first chip fabrication plant. Clay officials will negotiate future agreements for future development by Micron. 

Bick, who is currently filling in as town supervisor while the elected supervisor, Damian Ulatowski is on leave, announced the agreement today at the Clay Town Hall. The agreement was negotiated by Micron and Bick, in consultation with Ulatowski, Bick said.

Under town law, Micron would have had to pay approximately $62 million to Clay in building permit fees. But building permit fees are subject to regulation that requires them to be spent on administrative costs related to permitting.

Since this project represents a large influx of cash, the town wanted to be able to spend that money in other ways. 

Instead, it will put a one-time fee of $10 million into a fund that can be used for projects of Clay’s choosing. Those projects will likely include a splash pad, buying parkland and a community center. Clay can still determine how the money will be spent but plans will be formalized once the agreement is signed. 

An additional $20 million will be given to Clay in the form of three equal payments of about $6.67 million spread over three years. The last payment could be extended until the town issues the final certificate of occupancy. 

That money will function as a kind of endowment for the town. Most of it will be held in a reserve, said Bick. Interest on it will likely be used to offset potential future tax increases as costs and salaries paid by the town rise.

“Are we gonna hold it for two centuries? Probably not,” said Bick. “But we are fiscally conservative in this town, and probably will continue to be.” 

Clay’s current tax levy is just under $26 million per year.

Micron will independently assess whether the expenditures will qualify for credit towards its Green CHIPS Community Investment Fund, according to the draft agreement. 

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Laura Robertson is a staff reporter covering Onondaga County. Prior to joining Central Current, she lived on the edge of the Bering Strait in Nome, Alaska, where she worked as a reporter for a year. She...