Foreign investors smile on Saratoga
Arab investments, high-technology hopes putting international focus on county that still has rural feel
By DENNIS YUSKO, Staff writer
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First published: Saturday, January 10, 2009
SARATOGA SPRINGS — Arab executives looking to invest billions in high-technology and horses have discovered a welcoming haven in Saratoga County.
The still-rural area offers an environment that values foreign investment and its horse-racing history, important factors in making it attractive to investors in the oil-rich United Arab Emirates, said Robert Wages, executive director of private equity at the Abu Dhabi Investment Co.
United Arab Emirates is a federation of seven states, including the wealthy cities of Dubai and Abu Dhabi, and it borders Saudi Arabia and Oman. Those areas are trying to supplement their energy-based economies with new business models and equine holdings, Wages said.
"A lot of countries and regions are not very welcoming," Wages said, in an interview from his Saratoga Springs residence, while home for the holidays. "I think New York, other than its taxes, has made a conscious decision to welcome foreign investment. And Saratoga, with its racing and equestrian activities, is very unique in the world."
That wealth from abroad could remake parts of Saratoga County:
• The Emirate of Abu Dhabi has committed up to $9.6 billion in Advanced Micro Devices Inc. Company officials say that will allow a joint venture, The Foundry Co., to build a $4.6 billion computer chip factory in Malta and Stillwater. The project could begin as soon as March.
• In May, a Dubai company purchased the Fasig-Tipton Co. and is now making millions of dollars in renovations to the historic four-acre horse auction site in Saratoga Springs. The company hopes to have the work done by August's annual yearling sales.
• Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, is renovating a 106-acre horse farm adjoining Saratoga Race Course. He bought the property for $17.5 million two years ago.
The private development arrives during a recession and credit crisis. Local leaders point to thousands of jobs that AMD says the chip fab factory would generate in the 215,000-person county, and additional tax revenues created by the horse-related renovations.
"Where else is the money coming from these days," Saratoga Springs Mayor Scott Johnson said. "In the state of the economy, I welcome any kind of reliable investor. Just because you're a foreigner doesn't mean you can't be a good community investor."
But a handful of county residents who have opposed the AMD deal question the reliability of the foreign investment, especially amid declining oil profits. At a recent Empire State Development Corp. hearing, Kyle York of Saratoga Springs and Bob Radliff of Stillwater criticized the project's $1.2 billion in state subsidies to build on what is mostly forest land.
"About $1 million per job is an excessively high cost for taxpayers," Radliff said. "We are highly dependent on one company, on one business model in a highly vulnerable and volatile industry." Foreign companies would siphon profits out of the state and could abruptly pull out of the area if higher profits or tax subsidiaries are offered elsewhere, Radliff said.
Area economic leaders and investors argue that money from the UAE will make Saratoga County and New York into an international player in computer chip manufacturing and the city into the world's premier horse sales site. The federal government's Committee on Foreign Investment in the United States signed off on The Foundry Co. deal this week.
The AMD offshoot will produce computer chips for companies, including AMD, at the Luther Forest Technology Campus.
Synergy Investments Ltd. — the new owner of Fasig-Tipton — is headed by Abdulla Al Habbai, a close associate of the ruler of Dubai.
"The ultimate goal is to make Saratoga the premier yearling sale in the world, plain and simple," said Boyd Browning, president of the Kentucky-based operation. "It's a substantial investment."
Currently, September sales at Keeneland in Kentucky score higher average prices for yearlings than Saratoga does, Browning said.
Wages, 45, who works in the UAE, couldn't say if additional investments in the region were planned.
Roughly 75 percent of the UAE's population are non-citizens. Investments like those into AMD are part of a long-term plan to bring industries and development to the UAE, Wages said.
"The United Emirates love Americans," he said. "They are very interested in being good friends with us. I don't think that aspect is appreciated much in the U.S."
Dennis Yusko can be reached at 454-5353 or by e-mail at firstname.lastname@example.org.