Scottsdale City Council inks development agreement with ASM Tuesday, Sept. 17
By Terrance Thornton | Digital Free Press
Scottsdale City Council inked a development agreement Tuesday, Sept. 17, formalizing the plans for Advanced Semiconductor Materials to establish its North American headquarters along Loop 101 within municipal limits.
The development agreement now under terms with the city of Scottsdale outlines, among other things, a contemplated city reimbursement to be no more than $6,352,659.84 for public infrastructure costs — and a water allocation purchased by ASM from the Salt River Project guaranteeing 600 more acre feet of water to flow into municipal allocations.
ASM was founded in the Netherlands in 1968 at the onset of the now blossoming global semiconductor industry whereas the multinational company today has locations in Hong Kong, Japan, Singapore and the United States.
In short, ASM supplies wafer processing equipment to semiconductor behemoths like the Taiwan Semiconductor Manufacturing Company, which has just formalized plans to bring a major chip manufacturing facility to the Deer Valley area of Phoenix.
The development agreement marks a $300 million investment by ASM and city officials contend the new high tech development will bring in 500 new, high-wage jobs creating hundreds of millions in positive economic impact to the region.
“Scottsdale will become their national headquarters,” said Scottsdale Economic Development Director Teri Kilgore at the Sept. 17 public hearing.
“ASM is seeking reimbursement for accelerating the construction of public infrastructure the city has in its capital plans. In return, ASM will relocate 720 jobs from other facilities in the Phoenix metro to this campus and add 500 new jobs in the next six years, housed In a new, over 400,000-square-foot facility.”
ASM purchased about 21 acres of state trust land — proceeds of that sale help pay for public education in Arizona — at the northwest corner of Mayo Boulevard and Miller Road, which is immediately south of Loop 101.
“They are looking at next generation technology,” Ms. Kilgore, who spent the last decade working in economic development in the Silicon Valley of California, said of the technology sector swirling around the prospects of artificial intelligence.
“This will become a significant economic driver for us as the planned 400,000-square-foot facility and the new employees, about 1,200; ASM will become one of our top 10 private employers.”
Also, the envisaged North American headquarters in Scottsdale does not require a rezoning case, city officials say.
“Unlike other parcels in the area, ASM does not need to rezone as their planned operations are consistent with the existing zoning of I-1,” Ms. Kilgore said of the industrial entitlements granted with the aforementioned state trust land sale. “Their design will be reviewed by the Development Review Board later this fall.”
Here is a breakdown of key elements part of the ASM development agreement with the city of Scottsdale:
- ASM plans to develop over 400,000 square feet in Scottsdale for its North American headquarters — Center for Excellence, which employs approximately 720 people in Arizona.
- ASM will secure and transfer to the city a total of 600 acre-feet of renewable water supplies to support the project, and ASM has agreed to secure the requested Water Credits and transfer them to the city within thirty (30) days following ASM’s receipt of the first building permit issued. City officials say 600-acre feet of water is 195,510,857 gallons and equivalent to a 20-year supply.
- If all performance milestone requirements are met, the maximum reimbursement to ASM for public infrastructure costs incurred by ASM is capped at $6,352,659.84 and includes water, stormwater, transportation, and other improvements.
- The development agreement outlines minimum improvements required for reimbursement, which includes construction of over 400,000 square feet of commercial space and 500 new employees at a minimum payroll of $55 million.
- If the minimum requirements are met but the milestone requirements are not met within the specified timeline, the payments of no more than $6,352,659.84 million will be reduced by 5% every calendar month following the milestone date.
- ASM will return a minimum of 75% of the water supplied to the property back to the sewer and will meter both the water supplied to the property and the wastewater returned to the sewer.
Ms. Kilgore explained a recent economic impact analysis shows the opportunity the ASM headquarters brings not only to Scottsdale, but the entire north Valley region.
“The overall economic impact of this project over 10 years is estimated at $4.1 billion, including $1.5 billion in total output related to new jobs from the expansion, and $2.6 billion in total output related to existing jobs that will be relocated to Scottsdale,” she said of the Applied Economics study.
Scottsdale City Council inks agreement to diversify economic development portfolio
As the global economy remains frenzied about the prospects of artificial intelligence in all things technology, elected leaders of Scottsdale appear to have secured a starring role in chip manufacturing development some have coined a burgeoning ‘Silicon Desert.’
“I have witnessed tremendous growth over the last nine years working at our facility in Phoenix,” Steven Reiter, ASM corporate vice president, said during the Sept. 12 public hearing at City Hall, 3939 N. Drinkwater Blvd.
“We supply disposition equipment to the leading chip manufactures of the world and we design this equipment in a true research-and-development setting — another thing to note about ASM, is we have been around a long time, more than 50 years and 48 years here in Phoenix.”
Mr. Reiter points out the Valley of the Sun offers one of the most talented, educated and trained work force pools on planet Earth.
“There is an extremely talented workforce here in Arizona and we are committed to creating 500 new quality jobs and this marks a $300 million investment by our company here in Scottsdale,” he said.
Mr. Reiter also explained to City Council that ASM is partnering with the Scottsdale Unified School District to help boost and grow STEM education in local public schools.
Scottsdale Mayor David Ortega explained during the public hearing this development agreement makes Scottsdale a participant in the global economy.
“This technology is part of our national economy, this is part of our global economy — even our national security,” he said during the Sept. 17 public hearing. “Now we have the opportunity to help create patented technology. We look forward to your amazing success.”
For Scottsdale Councilman Tom Durham, he says this agreement is a step toward true diversification of the economic base of Scottsdale.
“This is not a rezoning request as this is slated for industrial use,” he said of the parcel of land purchased by ASM. “Something with an industrial use sooner or later is going to come in here and I think this is an excellent use for the area. This gives us a piece of the technology business that is booming across the Valley.”
