May 22, 2013
Colleges as tax havens
By: Eric Anderson and Larry Rulison
Source: Times Union
Gov. Andrew Cuomo — calling job creation the state's "number-one
mission" — on Wednesday unveiled a plan for dozens of tax-free zones on
public college campuses across the state.
The zones would be
available to new businesses as well as to businesses that relocate from
outside the state, and to those that create net new jobs. In the zones,
they would face no business or corporate tax, no sales tax, no property
tax, no franchise fee and no state income tax for the owner of the
company or its employees. The breaks would last for 10 years.
The move comes amid sluggish economic growth across upstate.
unemployment rate is the lowest since 2009," Cuomo said. But, "the
overall picture is of an economy that hasn't been doing well overall."
tax-free zones on SUNY campuses are limited to those outside New York
City. The initiative also permits tax-free zones at "designated private
colleges," but only those north of Westchester. And 3 million square
feet of commercial space at private universities will be available for
the zones, as will 20 "strategic state assets," presumably including
such properties as the Harriman State Office Campus in Albany and the
Saratoga Technology + Energy Park in Malta.
Another 200,000 square feet adjacent to each SUNY campus also would be eligible for tax-free status.
wasn't immediately clear how the tax-free space would be distributed
among private universities, and whether technology parks such as the one
Rensselaer Polytechnic Institute operates in North Greenbush would
Further details on how the initiative would work are expected in coming days.
new jobs means companies cannot just move jobs to a tax-free zone and
call it a new job. A new job must be created as part of the move.
Republican leader Dean Skelos, Sen. Jeff Klein, leader of the
Independent Democratic Committee, and Assembly Speaker Sheldon Silver
joined Cuomo at the event at the new NanoFabX building, which is nearing
completion at the UAlbany campus. The governor also visited Buffalo and
Syracuse later in the day to announce the initiative.
One of the
reasons the NanoCollege was chosen for the first announcement is that
the school has been buying up properties across upstate in places like
Utica and Rochester to set up research operations. Companies from both
within the state and outside have been invited to set up operations in
these college-owned labs as a job-creation tool.
Only a few years
ago, SUNY prohibited private companies from setting up operations on
SUNY campuses, although under reforms by SUNY Chancellor Nancy Zimpher,
that restriction was removed. Zimpher also joined Cuomo for Wednesday
The NanoCollege has had private businesses
operating on its campus for more than a decade now, but it created its
own private nonprofit called Fuller Road Management Corp. to own its
real estate, allowing it get around SUNY's restrictions on private
companies at the time.
The NanoCollege also set up other
nonprofits to operate in a similar manner at SUNY IT outside of Utica
where the NanoCollege has set up one of its satellite labs.
new tax-free zone plan builds upon a previously announced plan to set up
smaller tax-free zones at a select number of campuses. Those "hot
spots" were more limited in scope.