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Cuomo's signature Start Up plan is revised

Posted by Karen DeWitt on

One of the governor’s signature economic development programs is being downsized in Cuomo’s new state budget. Start Up New York is being rebranded, as other economic development projects have suffered setbacks.

The Start Up New York program which offered ten years of freedom from income, business and other taxes to companies that want to begin a business on a college campus, was initially a centerpiece of Governor Cuomo’s big plans for more jobs in upstate New York.

$50 million dollars was spent on advertising, a move criticized by the State Comptroller, though Cuomo’s administration said at the time that the money was spent towards the larger goal of promoting the state’s business climate to the nation.

But in the governor’s budget, Start Up is rebranded as the Excelsior Business Program, and it is easier to participate, with companies only required to create one new job in order to get the tax breaks.

Governor Cuomo did not emphasize the changes in his budget presentation, but as recently as last summer, he was expressing doubts about the program, after a report found that it had created just over 400 jobs.

“For most businesses just saying ‘you don’t have to pay taxes’ is not enough,” Cuomo said in Plattsburgh on July 5th.

A spokesman for the governor’s Empire State Development agency says the changes were made based on “feedback” from businesses, and the administration is still “firmly committed to the model”. ESD spokesman Jason Conwall says the board that chooses Start Up eligible companies is not being disbanded and will remain in place.

Start Up New York is just one of a number of economic development programs that have faced set backs recently, after the architect of many of the ventures faces federal corruption charges. Dr. Alain Kaloyeros, former head of SUNY’s Polytechnic Institute,  has been indicted on bid-rigging and other charges, along with eight others, including a former top aide to Governor Cuomo.

In the last couple of months, projects have been canceled or have faced major delays. In Utica, the Austrian company AMS backed out of a plan to occupy a $2 billion dollar chip fab plant being built by the state.  In Rochester, one of two companies pledged to starting a photonics center backed out of the deal.

And in Syracuse, an LED factory is a year behind schedule, and a multi-million dollar film hub remains virtually empty and unused. Syracuse Mayor Stephanie Miner calls it a “crisis” and says there are “huge” concerns for her community.

“When you’re spending $480 million dollars on a film hub that you announce in the City of Syracuse, saying that ‘Hollywood is coming to Onondaga’, and you promise hundreds of jobs and there’s been one job created, “Miner said. “And now they’re looking to offload it.”

Mayor Miner says the process to choose the projects was secretive and lacked public input.  

In addition a $4.8 billion dollar consortium of the five largest computer chip companies at SUNY Polytechnic in Albany maybe not be renewed, and the giant  Solar City factory, the centerpiece of the Buffalo Billion project, is also behind schedule.

The leader of the state’s Republican Party, Ed Cox, pins all of the troubles directly on Cuomo.

“These are billions of dollars of taxpayers’ funds going down the drain,” said Cox. “And he’s going around talking about new projects.”

Cox spoke outside the governor’s series of State of the State speeches earlier in January, where Cuomo announced $500 million more dollars in economic development in Buffalo. In a break with protocol, the GOP Chair was not invited into the speech.

Cuomo, during a budget briefing, downplayed any reversals in the economic development programs, saying, you need to look at the bigger picture. He says he’s pursuing around 500 different projects.

“By definition, there will be transactions that you start that don’t get finished,” Cuomo said.

And Cuomo admits the federal indictments for corruption against Kaloyeros and some of the governor’s former associates have slowed some things down.

“Frankly, because of on- going investigations, the projects didn’t get the level of sustained attention that they needed,” Cuomo said.

He says the trick now, is getting the projects to completion.

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