Cuomo's signature Start-Up NY plan is revised

Jan 20, 2017

One of Gov. Andrew Cuomo’s signature economic development programs is being downsized in his new state budget. Start-Up NY is being rebranded as other economic development projects have suffered setbacks.

The Start-Up NY program — which offered 10 years of freedom from income, business and other taxes to companies that sought to begin a business on a college campus — initially was a centerpiece of Cuomo’s big plans for more jobs in upstate New York.

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

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

Cuomo did not emphasize the changes in his budget presentation, but as recently as last summer, he was expressing doubts about Start-Up NY 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 5.

A spokesman for the governor’s Empire State Development agency said the changes were made based on feedback from businesses, and the administration is still “firmly committed to the model.”

ESD spokesman Jason Conwall said the board that chooses eligible companies for Start-Up NY is not being disbanded and will remain in place.

Start-Up NY is among a number of economic development programs that have faced setbacks recently as the architect of many of the ventures faces federal corruption charges. Alain Kaloyeros, former head of SUNY Polytechnic Institute, has been indicted on bid-rigging and other charges, along with eight others, including a former top aide to 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 chip fab plant being built by the state. In Rochester, one of two companies that pledged to start 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 called it a “crisis” and said there are “huge” concerns for her community.

“When you’re spending $480 million 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.”

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

In addition, a $4.8 billion consortium of the five largest computer chip companies at SUNY Polytechnic in Albany may not be renewed, and the giant Solar City factory — the centerpiece of the Buffalo Billion project — also is 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 in economic development in Buffalo. In a break with protocol, the GOP chairman was not invited to 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 said he’s pursuing about 500 different projects.

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

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

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

He said the trick now is getting the projects to completion.