Empire State Development Corp. president Hope Knight speaking in Manhasset last...

Empire State Development Corp. president Hope Knight speaking in Manhasset last year. Credit: Kevin P. Coughlin / New York State

Public colleges in the metropolitan area, including on Long Island, would be allowed to establish tax-free zones for small businesses away from campus as well as on campus under Gov. Kathy Hochul’s proposed revamp of the “pay no taxes for 10 years” Start-Up NY program.

The tax-free zones also would no longer be limited to technology startups, according to the proposed legislation.

The changes put forward by Hochul must be approved by the State Legislature, where some members have expressed doubts about whether Start-Up NY can be turned around. The program, launched by then-Gov. Andrew M. Cuomo in spring 2014, has struggled to attract and retain companies despite the state spending $53 million on advertising in the first two years.

Hochul would drop the Start-Up NY name in favor of Extended Prosperity and Innovation Campuses program, or EPIC. However, the revamped program would continue to offer up to a decade of no state and local taxes for small employers and no state income taxes for their employees.

EPIC also would enroll participants through 2030, the legislation states.

“EPIC would improve on its Start-Up NY predecessor,” said Hope Knight, president and CEO of Empire State Development, the state’s primary business-aid agency.

EPIC “will also support a wider range of businesses and increase the amount of eligible space dedicated to growing innovation and creating jobs," she said last week at a legislative budget hearing.

On Long Island, four public colleges have tax-free zones: Farmingdale State College, Stony Brook University, SUNY Old Westbury and Suffolk County Community College.

SCCC President Edward Bonahue told Newsday that the revised Start-Up NY would “provide Suffolk and other community colleges with greater flexibility in promoting entrepreneurship, supporting startups and growing Long Island’s economy.”

But at last week’s hearing in Albany, a bipartisan group of lawmakers were skeptical.

Assemb. Edward P. Ra (R-Garden City South) said more businesses have left the 10-year-old program on Long Island than in other regions of the state.

In Nassau and Suffolk counties, the number of Start-Up NY participants shrank from 28 in the program’s first years to 11 in 2020, the most recent available data from ESD. The Island’s loss rate of 54% in 2017 was more than double the statewide rate of 24%, according to a Newsday analysis at the time.

“If we can figure out how to make it a successful program, great … Otherwise, I think it may be time to move on,” said Ra, a member of the Ways  and Means Committee.

Knight, the ESD chief, responded, “We know that Start-Up NY, which we would like to move forward calling EPIC, has had some bad connotations.” But she said in return for a state expenditure of $68 million in the past decade, the program’s participants have invested $1.3 billion in their operations, including employee salaries. The firms also had created about 3,300 jobs as of Dec. 31, 2021.

Knight, responding to a question from State Sen. Dean Murray (R-East Patchogue), said ESD will not purchase television commercials to promote EPIC.

"I believe it was the Cuomo promo at the time," Murray quipped, referring to the Start-Up NY ads in 2014-15 under the former governor. Murray is a member of the Senate's economic development committee. 

Assemb. Harry B. Bronson (D-Rochester), chair of the Assembly's economic development committee, called for additional money for research hubs on college campuses in

He said ESD's Centers of Excellence and its Centers for Advanced Technology program, which  have four facilities at Stony Brook, give businesses access to innovations and the professors and students who are behind them.

"Why wouldn't it make sense to continue to invest in these centers instead of proposing to reduce their funding" from the 2022-23 budget, said Bronson. 

What to know 

  • State lawmakers are cool to Gov. Kathy Hochul's proposal to remake Start-Up NY.
  • Start-Up NY has been struggling to attract and retain companies to its tax-free zones on college campuses, particularly on Long Island.
  • Hochul's economic development chief said the program has created 3,300 jobs and economic activity far in excess of the $68 million spent by the state.
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