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Duffy: Off-campus firms in tax-free program must ink PILOT deals

Rochester Business Journal
May 23, 2013

Businesses that qualify for Gov. Andrew Cuomo’s tax-free initiative for locating near SUNY schools would be required to negotiate payment-in-lieu-of-taxes agreements with local governments, Lt. Gov. Robert Duffy said Thursday during a stop in Rochester.

Cuomo’s proposal, unveiled Wednesday, pitched tax-free communities on or adjoining all SUNY campuses beyond New York City, including up to 200,000 square feet surrounding a campus, for 10 years.

SUNY schools in the Rochester region include SUNY College at Brockport and SUNY College at Geneseo, and Monroe Community College, Finger Lakes Community College and Genesee Community College.

In addition, 3 million square feet of commercial space at designated private universities north of Westchester County, such as the Rochester Institute of Technology and the University of Rochester, would be included.

“Is there a cost to localities?” Duffy said during a news conference at SUNY Brockport’s Rochester Educational Opportunity Center on Chestnut Street. “There really is not.

“MCC, SUNY Brockport (and) the state universities do not pay property taxes right now. If a company were to be eligible for this program and move in, and if this company would be off campus on a privately owned property, they would negotiate a PILOT agreement with local governments. There will be no net loss to local governments.”

As many as 20 state-owned properties also would be tax-free. What and where the 20 state properties are has yet to be determined, Duffy said.

“It could be closed state prisons, closed state facilities, state properties around the state that may be in areas that are really in dire need of a jump-start economically,” Duffy said. “Those may be eligible as well.”

“They have not been clearly defined. We’ll work that out. In some areas of upstate, correctional facilities have been closed; juvenile detention facilities have been closed. If we can somehow get back into circulation these closed facilities and make them economically viable, it’s going to be a big win.”

Cuomo’s Tax-Free New York communities would be designed to attract startups, venture capital, new business and investments from around the world, representatives said.

Businesses at the tax-free sites would be exempt from sales, property and business/corporate taxes for 10 years. Employees of those businesses would be exempt from income taxes for that period.

“It’s not costing the state any money, which is really a good reason why the governor has done this,” Duffy said. “What the governor and the state will give up is some potential future revenue.

“Clearly, that can happen, but that will be offset. I’m sure we’re going to draw a lot of companies in this program. Sales tax revenue and some of the other ancillary issues, with new employees and new companies coming, I think will pump money into the local economy.”

Companies must have a relationship to the academic mission of a university and create jobs to qualify, Cuomo said. New businesses, out-of-state businesses locating to Upstate New York and existing businesses that expand operations in the state while maintaining existing jobs are eligible.

“There is still work to be done and details to be finalized,” Duffy said.

He and other members of Cuomo’s cabinet spanned the state Thursday plugging the proposal, which needs approval from the state Senate and state Assembly.

“We are competing constantly with other states,” Duffy said of business recruitment and retention. “What the governor has done with this is try to pick things that he could do now, pick areas that he can focus on.

“A marriage with SUNY campuses, and this whole economic development concept with tax-free zones, just was a perfect marriage. It fits. It works well.”

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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