Schumer: New Bureaucratic Squabble Could Freeze Additional Growth at Watervilet Arsenal for as Much as Two Years, Preventing Creating of Hundreds of New Jobs -- Senator Pushes Army to Keep Plan for New Development Moving Forward

Press Release

Today, at the Watervliet Arsenal, U.S. Senator Charles E. Schumer called on the U.S. Army to quickly resolve a bureaucratic debate over the source of power for the expansion of the Watervliet Arsenal that threatens to delay additional job growth by as much as two years. The Arsenal Business & Technology Partnership is seeking permission from the Army to construct a co-generation steam and electric power plant that is essential to attracting high-tech manufacturers and data management companies to the site, which could help bring hundreds of additional jobs to the Capital Region. The Army has told the Partnership that it may need up to two years to study the proposed power plant that would serve as the lynchpin for the further development of the campus. Delaying its construction could mean that the arsenal misses out on the opportunity to attract hundreds of new jobs, particularly those related to the opening of the GlobalFoundries plant in Malta, and the continuing rapid growth at the College of Nanoscale Science and Engineering. As companies decide where to build and invest over the next several years, they may choose to bypass the arsenal if an appropriate power supply is not up and running.

"As the economy builds to recovery, it is essential that we make winning investments that will spur hundreds of new, good-paying jobs," said Schumer. "The power plant is the magnet that's going to attract hundreds of high-tech jobs to Watervliet -- we can't let it get wrapped up in red tape. This bureaucratic dispute could put the brakes on the tremendous growth we've seen at the arsenal over the last several years, and we simply cannot let that happen. This development plan at Watervliet Arsenal is just what the doctor ordered for the Capital Region, and I urge Secretary McHugh to expedite project approval and lease negotiations so that high-tech growth at Watervliet can proceed."

Schumer was joined by former Congressman McNulty as he announced his push to speed up construction of the power supply that is essential to attracting new jobs to the arsenal. In December 2008, Schumer, McNulty and the Army announced that then Army Secretary Pete Geren had suggested an Enhanced Use Lease (EUL) as a means of freeing up 60 acres of additional space at the arsenal for job development. At the time the Army committed to an expedited process. The Arsenal Business & Technology Partnership, the local development corporation, submitted its fourth iteration of the development and financing plan for an Enhanced Use Lease (EUL) on the Watervliet Arsenal campus in June 2011. Since that time, the approval process has not moved forward. To the contrary, a new entity under the Secretary's Office called the Energy Initiatives Task Force, visited the Arsenal in December 2011, and stated that the Partnership's plan needed to be reconsidered.

Despite the fact that plans for a power source have been in the works for three years, the Task Force put forth a 2 year timetable for these new considerations to complete all of the necessary legal arrangements. This time would also include processing the construction agreement and the possibility that selling the power to the Army may have to be competitively bid, despite the fact that low-cost steam generated on site is the obvious choice. Schumer stated that this bureaucratic red tape must be broken, so that the EUL can move forward with construction of a co-generation power plant as the lynchpin to plans of developing 60 acres on the site.

Since 2008, the Partnership has responded to Army questions and comments during the EUL approval process, and even though the Partnership has refined the development plans and increased the benefits to the Army, there has been limited progress. Currently, there is no Master Lease or Site Lease that would permit the Partnership to build a new steam plant and expand it into a co-generation electric and steam plant, which would be the first of many projects at Watervliet. Upon completion of this plant, the Partnership would then be set to continue in its multimillion dollar development plan, which will invest more than $350 million in the site, create more than 500 permanent and 1,700 temporary jobs, and strengthen the Army missions as well. Specifically, the Partnership would be able to offer low-cost energy as part of its effort to attract high-tech manufacturers to the 60 acres available for lease on the campus.

The execution of a commercial development plan at Watervliet Arsenal has been one of Schumer's highest priorities as a senator, and the Arsenal Partnership has done that with great success. The Partnership has raised more than $100 million in private, state and federal funds, and has created more than 250 new jobs for Upstate New York. With this, the Partnership pays more than $2 million in fees to the Watervliet Arsenal each year for a total of $20 million over the last ten years -- money that helps pay the salary of 60 employees and that underwrites the Army's annual operating expenses for their core mission: making our nation's cannon.

"We never want to lose sight of the cannon mission -- that's why the Arsenal is here. But we need far fewer cannon today than we did in the last century, so using the unused space makes the core mission leaner and meaner. Buying steam from the new, efficient co-generation plant will save the Army $400,000 a year off their bottom line. It's a no brainer." Schumer continued.

In addition to the economic benefits to the Capital Region, Schumer noted a variety of major benefits to the Army in expediting the project approval and lease negotiations at Watervliet Arsenal. Some of the most notable include: the payment of more than $24 million to the Army's in-kind project fund; the realization of the Army's national energy security goal, and the construction of a new biomass steam and electric cogeneration facility to replace the existing steam heating system at the Arsenal which operates for seven months of each year. Also, the project will bring additional operation, maintenance and overhead savings to the Arsenal as essential site infrastructure improvements are executed for the new development projects. Energy, parking and road improvements, site amenities and historic elements will be enhanced throughout the project development.

In the Capital Region high-tech manufacturing and nanotechnology are growing rapidly. Schumer is urging the Army to approve Watervliet's development plan ahead of the 2 year timetable so that the 60 acre campus does not miss out on this development. GlobalFoundries in the Capital Region is set to create over 1,600 jobs in the next several years, and possibly more if additional chip fab plants are built. According to the New York Department of Labor, the Computer and Electronic Product Manufacturing industry is expected to see jobs grow by 135% between 2008 and 2018. During that time period, there will be an additional 100 jobs per year created in network systems and data communications analysis, and about 80 jobs per year in computer programming.

Constructed in 1813, the Watervliet Arsenal has played a vital role in America's defense throughout its long history producing large bore cannon and a wide variety of other products for military needs. The Arsenal is also home to the Army's Benét Laboratories, a Malcolm Baldrige Award recipient, whose mission includes the development of Arsenal products and technology for future combat systems. This arrangement of research, development and manufacturing at a single site facilitates concurrent design and manufacturing. But more than land, equipment, and buildings, the Arsenal represents thousands of great Americans who have proudly served their country since 1813 by supporting our nation's war fighters in every conflict for nearly 200 years.

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