Let’s START-UP New York

By Armand Echeverry

York College may be nearing a deal to collaborate with a public-private partnership that could convert under-utilized campus property into a small business incubator.

This pending deal is part of Governor Andrew Cuomo’s START-UP NY initiative to have universities in the state pair with businesses and establish them in the designated tax-free zones. If approved, a corporate entity partnered with a college would not have to pay state taxes for 10 years and their employees won’t have to pay taxes for five years.

In July 2014, President Marcia V. Keizs announced the proposal for York’s inclusion in the START-UP NY program, and the appointment of Vice President of Administrative Affairs and Finance Ronald Thomas as the point man for the college’s effort.  

“I am the lead liaison with the university and in charge of the real estate for the program,” said Thomas “We’re still in the process of finding a company to collaborate with, but we contemplated seven areas where we thought businesses could lend to commercial activity.  So far companies did not meet the criteria to partner with us since we are looking to partner up with a company that’s high tech.”

However, the college is not limited to the seven areas identified in the York College Campus Plan.  These seven areas include Pharmaceutical Research and Manufacturing, Medical Device Research and Manufacturing, Water Resource Management and Purification, Supply Chain, Logistics and Aviation, Wireless Technology, Energy and Energy Related Technologies and Food Science Research and Manufacture.   

With York College becoming the first institution in Queens to join START-UP NY, the consortium between York College and their partnership is still at its infancy stage.  Amidst the process of ascertaining a partnership an air testing company, Thomas and his colleagues are searching for a not-for- profit organization that will secure a lease on behalf of the college.

“Over the past few months progress has been made with one company more so than with others,” said Thomas. “The college is working diligently to obtain the approvals from all of the applicable governance bodies which are required to bring the project to fruition.  We have to wait a period of 60 days and then there all the other approvals.  In total it can take anywhere from 5-6 months for the company to become ascertained.”

Librarian and the head of the York College chapter of the faculty’s union, Scott Sheidlower, read the proposal for the START-UP NY  program, and while his initial thoughts were neutral and passive, he found anticipated holes in the program that could cause a fiscal situation.

“These entities cost money and if you get rid of taxes, then how do you pay for it?” said Sheidlower. “Where does the money come from to pay for these entities?  Eventually you’ll have this huge gap in the budget.  It’s a temporary excess of funds.”

According to a Forbes article published last May, a START-UP NY program is supposed to generate thousands of jobs every year, but  as of last spring only 54 businesses received permission to begin operating, and only 30 actually opened.  The first annual START-UP NY report, released in April, states that 76 new jobs were created statewide in the past year.  53 million dollars was allocated for an advertisement campaign and $697,368 was  invested per job.  Ron Deutsch, Interim Executive Director for the Fiscal Policy Institute, said the report was released four months late just after legislators approved spending $50 million for the program in the state budget.

In April 2015, the Working Families Party, the NYS Conservative Party, Fiscal Policy Institute, National Federation of Independent Businesses/NY, Reinvent Albany and Citizen Action of New York joined forces to let elected officials know that the program is a bad deal for New Yorkers.

“We are concerned that START-UP NY is a rehash of previously dismantled “zone” programs, and is failing on every level: it is a wasteful subsidy that costs an enormous amount for each job it creates; it creates an uneven playing field for existing businesses; its selection process is opaque and at risk for favoritism and corruption; and sufficiently overseeing the fairness and effectiveness of the program requires expensive auditing and oversight far beyond what is in place,” said Deutsch.

Deutsch also stated that many of these organizations are concerned that START-UP NY subsidies were recently expanded to Stewart and Republic Airport without any analysis or justification.

“History should be our guide when it comes to economic development programs.  We have decades of experience with failed designated tax-free zone programs and START-UP NY seems to be on track to be the next one. It is eerily reminiscent of the Empire Zone program that was constantly being manipulated for political purposes, which we are beginning to see now with START-UP NY and its expansion to Stewart and Republic airports.  These are not good signs of things to come”, said Deutsch.

Despite the critiques of the program, Thomas remains hopeful that prosperous results will occur for the students and faculty at York.

“We’re optimistic that the program will have the potential and capacity to create jobs and once that engine rolls, the number of jobs created in New York City will be significant,” said Thomas. “Two zones in Queens and Long Island City were initial options for the location of this program. Then, the President said let’s prepare a proposal. The proposal was in consultation with faculty where eventually I worked with Dr. Chirico, the Dean of the School of Arts and Sciences.  Last summer we put the proposal into action.  Since then my colleagues and I have been speaking with CUNY central office and Empire State Development to help identify prospective partners.”

According to a recent SUNY report released in September from Governor Cuomo, 143 different companies are sponsored by 29 different colleges and universities statewide which will create 3,841 new jobs and invest over $184 million over the next five years statewide.

“York is set as the designated START-UP NY location of Queens where it will be able to establish business that could be located,” said Thomas. “Looking ahead, we are thinking about modifying the plan to expand tax free zones beyond Jamaica, but for now we’re focusing on partnering up with a well renowned company.”