Tax-free campus havens for business
Westchester County”™s largest business membership group and about 60 elected officials ranging from White Plains to Niagara Falls have thrown their support behind the tax-free business zones at college campuses that Gov. Andrew Cuomo proposed in broad outline in late May.
But a state legislator”™s objection to an element of the governor”™s plan that would exempt zone employees from paying state income taxes suggests the proposal in its details could face opposition ahead.
Cuomo on May 22 unveiled his administration”™s latest economic development initiative, “Tax-Free NY,” calling it a game-changing plan to transform SUNY campuses and university communities statewide by offering tax-free campus space for 10 years to job-creating businesses that start, relocate or expand there and partner with their SUNY hosts. Eligible businesses would pay no sales, property and business or corporate taxes, and their employees would be exempt from state income taxes for a decade, the governor announced.
The tax-free zones would include all SUNY campuses outside of New York City and up to 200,000 square feet of commercial space surrounding each campus.
The governor”™s office gave no details on whether the plan would make use of existing buildings only or include new construction. State Assembly Speaker Sheldon Silver in a statement of support said the Tax-Free NY program will use both vacant campus office space and vacant land.
Under Cuomo”™s plan, Westchester County”™s private colleges would be excluded from selection as tax-free zones. Beyond New York City and Westchester, an additional 3 million square feet of tax-free commercial space will be available at designated private universities statewide.
Twenty state properties, called “strategic state assets” in the governor”™s outline, also would be designated tax-free.
Eligible businesses would include companies with a relationship to the academic mission of the host university and companies creating jobs, including new businesses, out-of-state companies relocating to New York and existing businesses that expand their New York operations while maintaining their existing jobs.
Marsha Gordon, president and CEO of The Business Council of Westchester and a member of the state”™s Mid-Hudson Regional Economic Development Council, joined the governor for the Tax-Free NY announcement on the SUNY New Paltz campus. She called the plan a “groundbreaking initiative that will spur economic growth in Westchester and the entire Hudson Valley region.”
“Westchester”™s colleges and universities are a tremendous resource for our economy, and Tax-Free NY will bring new jobs and investment into our communities,” Gordon said. Both SUNY Purchase and Westchester Community College in Valhalla would qualify for the tax-free zones, she said.
Gordon indicated the Business Council is looking to clarify the restriction on private universities in the governor”™s plan to those north of Westchester. “That”™s something that we”™re working on with some of the private colleges,” she said.
“I think a lot of this is (yet) to be determined.”
“What”™s positive from the business point of view is that the governor”™s intention is to spur tech transfer, to spur entrepreneurship,” Gordon said, “and to continue the model he”™s using of strengthening the links between academia and business.”
Eileen Mildenberger, Westchester County director of economic development, said the county administration wanted Westchester”™s private colleges to be included in the tax-free zones, as they are in almost every county of the state.
“As New York”™s intellectual capital,” Mildenberger said, “Westchester welcomes the governor”™s initiative as it relates to the public colleges.” However, “We want to be able to use that economic tool for private colleges as well. Why not have it for all colleges?”
Commenting on the Tax-Free NY plan at the Westchester County Association, Marissa Brett, executive director for economic development, said the WCA “applauds efforts from the state to creatively entice job growth and innovation. We believe these efforts will be most effective long term by coupling creative incentive packages with mandate relief.”
One day after Cuomo”™s Tax-Free NY unveiling, the WCA launched its STOP Albany campaign, an alliance of elected and school officials and business advocates to pressure state officials to relieve the spending burden on local municipalities for state-mandated programs.
Assemblywoman Sandy Galef, whose 95th District includes parts of northern Westchester and Putnam counties, said of the Tax-Free NY plan, “I generally support it.”
“The thing that concerns me the most is excluding someone from paying income taxes,” she said. “I have a real problem with that one.” It would leave SUNY employees paying taxes while workers “right next door at a technology center” would pay nothing, she noted.
“I just think that that goes too far. But some of the other exemptions from taxes are potentially OK,” Galef said.
Dutchess County Executive Marcus Molinaro was among some 60 elected officials across the state who offered public support of Cuomo”™ tax-free proposal.
“The SUNY system is one of our greatest assets, and at the same time, one of our most underutilized resources, when it comes to economic development,” he said. “The governor”™s initiative attracts investment and innovation through startups on property already exempt, provides them with all the resources of the SUNY system, incubates them, and then pushes them out of the nest intro private space to expand, create jobs and contribute to the economy.”
“This is one more step Cuomo is taking to facilitate tech transfer,” Molinaro said. “The initiative not only benefits the community by attracting startup businesses, but our students by cultivating entrepreneurial thinking, which will hopefully lead to even more new businesses.”