Developer Carl Montante, who owns the sprawling University Corporate Center across the street from the University at Buffalo North Campus in Amherst, wonders if the successful office complex would be eligible to be part of the tax-free zones proposed last week by Gov. Andrew M. Cuomo.
Or what if the developer struck a deal with UB officials to build and run a business incubator on the university campus?
Local Ingram Micro executive Susan O’Sullivan wants to know just how many new jobs a project would have to create to be eligible for the tax-free zone.
And officials from Daemen College in Snyder are looking for more details about how private colleges and universities can claim a share of the 3 million square feet of space that Cuomo’s plan would set aside for tax-free zones at those schools across the state.
A little more than a week after Cuomo proposed the establishment of tax-free zones in and around State University of New York campuses and at 20 other state-owned sites, the governor’s aides are still preparing the legislation outlining the economic development incentives and how the plan will work.
The clock is ticking. Less than three weeks remain in the current legislative session in Albany, which puts Cuomo up against a tight deadline if he is to succeed in getting his plan approved by the Assembly and State Senate before lawmakers head home.
“We’re still finalizing some of the bill language,” said Leecia Eve, Cuomo’s deputy secretary for economic development, during a meeting with about two dozen local business and education officials Friday to drum up support for the tax-free zones and provide a few more details on the plan.
Among those details:
• While the 20 “strategically located” state-owned sites that could be designated as tax-free zones have not been identified, Eve said a “classic example” of that type of site could be a closed prison.
“Some of these prisons really are pretty good-looking campuses,” Eve said.
• Administration officials are leaning toward including provisions that would allow off-campus facilities owned by SUNY colleges to be included in the tax-free zones.
That was a particular concern for officials at Fredonia State College, who operate an off-campus business incubator in Dunkirk, outside the one-mile radius from campus that Cuomo’s proposal targets for the tax-free zone.
Off-campus sites operated by a SUNY school that fall outside that one-mile radius will be able to apply for an exemption from Empire State Development officials to have the tax-free designation applied to those outlying locations, Eve said.
• While the Cuomo plan allows for as much as 200,000 square feet of adjacent space outside each SUNY campus to be designated as part of the tax-free zone, Eve said those off-campus properties still may be required to pay a portion of their property taxes through a payment-in-lieu-of-taxes agreement. That’s the same type of arrangement used by companies receiving tax breaks through industrial development agencies.
• Companies that locate within the tax-free zones will be subject to clawback provisions that would allow the state to recover some of the tax benefits that were granted to businesses that failed to meet their job creation or investment promises. Eve said the clawback provisions could be similar to those included in the state’s Excelsior Jobs tax credit program.
• While companies locating in tax-free zones must pledge to create new jobs, Eve said administration officials have not yet set a threshold for the minimum number of new positions that would be needed to qualify. The benchmark is likely to be fairly low because of the program’s focus on start-up companies and smaller businesses.
“It’s about smaller, midsized firms that are at that decision point” in determining whether they will set up in New York or in another state that may have lower taxes or other costs, she said.
• The proposal would give SUNY presidents an expanded role in determining which projects and which companies are eligible to be part of the tax-free zones on their campuses. “The college presidents are going to play a huge role here” along with Empire State Development officials, Eve said.
A little less than 20 percent of UB’s North Campus is undeveloped, leaving about 230 acres open for development. There also are about 230 acres of undeveloped land near the campus, stretching along an area east of Millersport Highway to Ellicott Creek. About 154 acres are undeveloped on UB’s South Campus, an Empire State Development spokeswoman said.
• Retail projects, such as stores, hotels and restaurants, will not be eligible for the tax-free zones.
“As a general matter, it’s got to be on the campus or adjacent to the campus to be eligible, and it’s got to be part of the innovation economy,” Eve said.
“There’s lots of possibilities,” said Jack F. Quinn Jr., president of Erie Community College, which hosted Eve’s meeting. “If for once we’ve got something that talks about upstate, this is it.”
Jenn Diagostino, executive director of the Coalition for Economic Justice in Buffalo, said the Cuomo plan could be a catalyst for the creation of good-paying jobs that the region sorely lacks.
But she also said the Cuomo administration has shared too few details of the plan. “If it moves forward, it must include very clear standards that ensure that it creates real community wealth, rather than job shifting or incentives for low-wage work,” she said. “It is still unclear what the criteria for awarding tax breaks to companies will be, and who will be making these decisions.”
The proposal also has met resistance from one of the state’s biggest public employee unions, the Civil Service Employees Association, which has been at odds with Cuomo over job cuts and wage issues. The union this week began a statewide advertising campaign that blasts the tax-free zone proposal as “another special giveaway to business.”