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Bell Tenant Champions rebrands with new compensation model
SYRACUSE — Bell Tenant Champions, a Syracuse–based firm that represents tenants and buyers in real-estate negotiations, has rebranded and changed the way it earns client compensation based on the amount it helps a client save in lease or purchase negotiations. Bell Tenant Champions was formerly known as The Bell Group. It operates on the fourth […]
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SYRACUSE — Bell Tenant Champions, a Syracuse–based firm that represents tenants and buyers in real-estate negotiations, has rebranded and changed the way it earns client compensation based on the amount it helps a client save in lease or purchase negotiations.
Bell Tenant Champions was formerly known as The Bell Group. It operates on the fourth floor of the Bentley Settle Building at 120 Walton St. in Syracuse’s Armory Square.
The firm rebranded during the summer with a name that it believes represents its role in negotiations.
“We believe we’re trying to champion the deal for the client and help them maximize what their real-estate dollar will buy them in the marketplace,” says Mark Bethmann, CEO of Bell Tenant Champions.
At the same time, the company is working under a different compensation model.
Bethmann explained it to the Business Journal News Network in an interview on Oct. 31.
The model
The real-estate tenant representation brokerage model has been “broken or misaligned,” Bethmann contends.
He’s felt that way “for several years.”
In the brokerage industry, a landlord has a listing agent and a tenant has a tenant-representation agent and the two generally split a commission, Bethmann explains.
Under this system, the landlord and his broker are aligned because they’re trying to secure the highest rent or purchase price possible from the buyer or the tenant.
But Bethmann sees a “misalignment” with the tenant representative.
The tenant hires a tenant broker to reduce the cost and negotiate the best deal possible.
“Yet they’re paid a commission, which means the more the tenant pays in rent, or the more they pay on the purchase of a building, the bigger the commission that the landlord broker and the tenant broker split,” says Bethmann.
Bell Tenant Champions believes a tenant-landlord negotiation should involve a “complete separation in commissions.”
The program that Bethmann’s firm has set up involves collecting a commission that’s tied to the tenant’s savings.
“We would be financially compensated based on our ability to help our clients save money, not spend money,” says Bethmann.
He says tenant clients had told him they didn’t see what financial incentive he had to reduce their costs if his commission was tied to the amount they agreed to spend.
Now, Bethmann sees his firm’s new compensation system as in “alignment with our clients.”
The firm’s website refers to it as the “Bell success sharing model.”
The website outlines what it calls the “typical CRE [commercial real estate] model” in which the broker’s compensation, calculated as a percentage of the total deal, is higher if the deal’s dollar value is higher.
In the Bell model, the firm bases its compensation on the “value we create.”
“Quite simply, the more we save you, the more we earn,” the website says.
New York City–based Ayni Brigade, a marketing and advertising services firm, helped Bell develop the new name and worked on its website.
With this new model, Bell Tenant Champions has picked up four new accounts in the last 90 days, Bethmann says. He declined to name them.
Bell Tenant Champions employs nine people, including eight full-time workers. The firm plans to add more employees in 2015, Bethmann says. “We will grow.”
The company operates in a 3,800-square-foot space on the fourth floor of the Bentley Settle Building. Bell Tenant Champions leases its space from Brookline Development.
William Bell founded the firm in 1986 as William T. Bell & Associates. Bethmann acquired the firm in 2001 and renamed it The Bell Group. The founder retired in September 2013.
Contact Reinhardt at ereinhardt@cnybj.com
Tri-County Mall demolition begins to make way for luxury apartments
BALDWINSVILLE — The site of the former Tri-County Mall property on Downer Street is being demolished in preparation for a 442-unit luxury apartment complex. The redevelopment comes after years of stalled plans for the site, which has sat vacant since a 2008 demolition plan fell through. Demolition began Sept. 15. Morgan Management of Rochester plans
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BALDWINSVILLE — The site of the former Tri-County Mall property on Downer Street is being demolished in preparation for a 442-unit luxury apartment complex.
The redevelopment comes after years of stalled plans for the site, which has sat vacant since a 2008 demolition plan fell through. Demolition began Sept. 15.
Morgan Management of Rochester plans to construct a 17-building apartment complex, similar to its Rivers Pointe development in Clay. Each building will contain 26 one-, two-, or three-bedroom units ranging from 850 to 1,400 square feet in size. Monthly rent is expected to be about $1 per square foot.
“There’s been talk for a long time about different people buying it and doing some work on it, and it never materialized,” Baldwinsville Mayor Dick Clarke says.
“Now, it’s finally happening.”
Baldwinsville’s code enforcement officer, Gregg Humphrey, says the demolition would be completed within four weeks.
“The builder of the apartments looks to start their site work in November,” Humphrey says.
Before Morgan Management can begin construction, National Grid must make sure the property is completely disconnected from electricity.
“We have to get confirmation with National Grid that the electricity has been disconnected from the site, not just the buildings themselves,” Humphrey says.
“They’ve got to make sure they’re not digging into live [wires].”
Morgan Management could not be reached for comment about the project, but Humphrey provided The Baldwinsville Messenger with a copy of the site plan.
In addition to the 442 apartments, Morgan Management’s complex will include a clubhouse with a pool, a maintenance/storage building, and a restaurant. There will also be private parking lots and garages for the tenants.
Previously, the Tri-County Mall was home to the popular Tri-County Mall Theater, which showed discount movies from 1974 to 2007. The mall’s final tenant, the indoor baseball and softball training facility Perfect Practice, moved to Hiawatha Boulevard in Syracuse in 2008.
Clarke says Baldwinsville is a prime location for young professionals because of its proximity to Route 690 and the Thruway. His hope is that the influx of new residents will attract more businesses to Baldwinsville.
“It’d be nice if this would encourage more shops that cater to people who are going to the Route 31 corridor, but instead might find something in Baldwinsville to shop for,” Clarke says. “Everybody’s going to benefit because there’s that many more customers.”
Clarke is optimistic about the coming apartment complex. “[The site] looked awful. Now it’s going to be developed,” he says. “I’m assuming it’s going to be a good neighbor for the people around there.”
Editor’s note: This article was excerpted from the Sept. 24 to 30 issue of The Baldwinsville Messenger, an Eagle Newspapers publication, and reprinted with permission of Sarah Hall, editor.
Former Unshackle director takes over ABC’s Empire State chapter
The former director of an upstate New York business-advocacy group is settling into his new role as president of the Empire State Chapter of the Associated Builders and Contractors, Inc. (ABC). Brian Sampson left his role with Rochester–based Unshackle Upstate in October and started his new duties with the state’s ABC chapter on Oct. 13.
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The former director of an upstate New York business-advocacy group is settling into his new role as president of the Empire State Chapter of the Associated Builders and Contractors, Inc. (ABC).
Brian Sampson left his role with Rochester–based Unshackle Upstate in October and started his new duties with the state’s ABC chapter on Oct. 13.
He had worked for Unshackle Upstate since 2009.
Sampson assumed the role that Steve Lefebvre had vacated in December 2013 to move back to Delaware.
Sampson, who lives in Rochester, will work through all of [the] ABC Empire State Chapter’s offices and its members statewide.
“It’s a position that tends to be a bit more mobile, while our headquarters are there in [DeWitt], I’ll be bouncing between all of the offices,” he notes.
Besides its main office in DeWitt, the ABC Empire State Chapter operates offices in Buffalo, Albany, and Ronkonkoma in Suffolk County, which serves the Long Island and metro New York City area, according to the ABC website.
ABC had also previously operated an office in Rochester, but due to some restructuring, closed it. But the organization plans to establish a new Rochester location “relatively soon,” says Sampson.
ABC is a national construction association devoted to merit contractors.
“Merit shop contractors are typically non-union contractors,” says Sampson. He spoke with the Business Journal News Network on Nov. 4
The Empire State chapter serves nearly 400 members throughout New York state.
ABC had joined Unshackle Upstate as a member in 2011, Sampson says.
When asked what he found appealing about his new position, he indicated that ABC stands for the principles of free enterprise and open competition.
“We need to create an environment where contractors can be free to bid whatever work they choose to bid. We shouldn’t have laws and regulations that tilt the playing field in the favor of some groups at the detriment of others,” says Sampson.
He contends ABC needs to be “more aggressive” in how it pursues those beliefs in New York.
In his first few weeks as chapter president, Sampson has been focused on the proposed amphitheater on the western edge of Onondaga Lake in the town of Geddes. The Onondaga County Legislature on Nov. 3 voted to borrow more than $49 million for the project.
The county legislature and Onondaga County Executive Joanie Mahoney have decided the amphitheater construction will include a project-labor agreement (PLA), says Sampson.
A PLA sets the terms and conditions of employment on a construction project, including wages, hours, and work rules.
“PLAs tend to be [anti-competitive] because they restrict the willingness and the ability of merit-shop contractors to bid that work because of the work rules [involved],” Sampson contends.
He says a PLA typically stipulates that for every one employee a non-union contractor has assigned to the job, the contractor has to hire four people from a union-affiliated contractor.
“That’s just not fair to the contractor, nor is it fair to the people they employ, or their families,” he asserts.
In his time as director of Unshackle Upstate, Sampson points to the state’s property-tax cap, which state lawmakers approved in 2011, as one of the accomplishments of his tenure.
It was part of the Unshackle legislative agenda in both 2009 and 2010, he says. Then Democratic gubernatorial candidate Andrew Cuomo made it part of his campaign in 2010. Sampson contends the tax cap has helped both homeowners and the business community.
“From the business community’s standpoint, the largest tax a business pays is its property taxes. If we can make it more competitive and less costly, then our businesses will have a little bit of an advantage that they didn’t have before,” says Sampson.
Contact Reinhardt at ereinhardt@cnybj.com
New York’s new title-agent licensing law goes into effect
SYRACUSE — A new state title-agent licensing law that went into effect Sept. 29 means the clock is ticking for title agents across the state, who have until Jan. 1, 2015, to submit their license application. The New York State Land Title Association, Inc. (NYSLTA) supported the new law, which will bring a new level
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SYRACUSE — A new state title-agent licensing law that went into effect Sept. 29 means the clock is ticking for title agents across the state, who have until Jan. 1, 2015, to submit their license application.
The New York State Land Title Association, Inc. (NYSLTA) supported the new law, which will bring a new level of transparency to real-estate finance, says Robert Treuber, executive director of the association. Formed in 1921, NYSLTA offers membership to title-insurance companies licensed in the state, abstract companies, title-insurance agents, law firms, individual attorneys, surveyors, and others actively engaged in real estate.
The new law also guarantees a level of professionalism in the title-agent field, he contends.
Title agents conduct searches on properties undergoing sale to make sure the new owner will have free-and-clear title to the property and they write an insurance policy to protect the new owners from unforeseen claims, fraud, and other risks. The vast majority of lenders require title insurance before approving financing, Treuber notes.
The problem in the past was that there wasn’t a lot of transparency behind this process and homeowners weren’t sure what all their fees were paying for, says William Collins, a title officer with Rochester–based Frontier Abstract & Research Services, Inc., which also has an office at 224 Harrison St. in Syracuse. The company services all of New York’s 62 counties.
“Agents are now going to have to give a lot more disclosure than we used to,” Collins says.
This aspect of the law creates some challenges because different counties across the state handle real-estate transactions differently, Collins says.
For example, title agents in zone 1 — which includes Broome, Erie, Livingston, Monroe, Niagara, Onondaga, Schenectady, and Wayne counties — do not include recording fees and charges among their billable services. Those costs have always been charged by the attorney overseeing the transaction. But now, title agents must track down those costs and disclose them even though they aren’t actually charging them, Collins says.
As part of the new law, title agents will also have to apply for a license if they wish to continue working as a title agent, Treuber says.
He doesn’t expect the licensing requirement to affect overall business practices or increase the cost of title services, but it will add some additional paperwork for title agents.
“I would not say they are in any way onerous,” he adds.
Agents will also have to meet mandatory pre-licensing education and examination requirements or apply for a waiver, Treuber says. Those waivers apply to attorneys in good standing and professionals who can demonstrate five years of continuous experience as an agent.
For that reason, Collins encourages his colleagues to submit their license applications well in advance of the Jan. 1 deadline.
He expects this may be more difficult for smaller companies that don’t have a lot of free time to devote to filling out applications or the money to hire someone to oversee the process.
The state Department of Financial Services will regulate and administer the title-agent licensing law, including overseeing the licensing process.
Avalon Document Services expands in Utica with acquisition
UTICA — Avalon Document Services has worked with Graphics of Utica, a locally owned graphic design and printing business, for about a decade. On Nov. 3, Syracuse–based Avalon announced it had acquired the Utica company. The acquisition closed that same day. Avalon didn’t disclose any financial terms of the deal. Both firms focus on printing
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UTICA — Avalon Document Services has worked with Graphics of Utica, a locally owned graphic design and printing business, for about a decade.
On Nov. 3, Syracuse–based Avalon announced it had acquired the Utica company.
The acquisition closed that same day. Avalon didn’t disclose any financial terms of the deal.
Both firms focus on printing jobs from concept to the end result on items such as brochures and booklets, says JP Midgley, CEO of Avalon Document Services.
Midgley spoke with the Business Journal News Network on Nov. 4.
Elaine Kovach, owner of Graphics of Utica, had been thinking about retirement as well, Midgley noted.
“She’s been talking to us for years about maybe being the company that could … take her business over and make sure her clients were taken care of properly,” he adds.
Since opening in 1970, Graphics of Utica built its client base offering full-color printing, graphic design, and duplicating services.
Avalon has had a “growing presence” in Utica for more than 10 years offering those same services, the Syracuse–based firm said.
Under the agreement, Avalon will consolidate both firms’ operations into Avalon’s existing Utica office at 54 Franklin Square, the company said.
“For us, it was [an] easy transition from a production standpoint and to … strengthen our foothold in the Utica market by expanding our client base,” says Midgley.
It also means that clients of Graphics of Utica can access Avalon’s services and resources, including offices in Syracuse, Rochester, Buffalo, and Cleveland.
With the acquisition complete, Kovach will work as a consultant for Avalon during the transitional period of the acquisition.
“I want to thank all my customers for filling my days with challenges, conversation, and laughter. We’ve designed, printed, and created some amazing projects together. It’s been a pleasure, and I know my customers will be in extremely capable hands with Avalon,” Kovach said.
Colin Owens, who previously worked for Graphics of Utica, will join the Avalon team in Utica as a document specialist.
Kovach and Owens were the only two employees of Graphics of Utica.
Avalon’s Utica office now employs four people, and the firm’s total employee count now stands at 95, the company added in its email response.
Founded in 2000, Avalon specializes in document services with offices in New York state and Ohio. It provides copying, scanning, printing, appellate publishing, and litigation-support services for law firms, architects, engineers, and the general business community.
Contact Reinhardt at ereinhardt@cnybj.com
Syracuse, Ithaca startups recognized in Cleantech Open Northeast competition
SYRACUSE — Full Circle Feed, a Syracuse–based startup company, captured a prize of $30,000 in cash and in-kind services in the Cleantech Open Northeast competition in Boston. The same organization also recognized PureQuantum, an Ithaca–based startup, with its $1,000 “Rising Star” award for “best early stage technology with impressive future potential,” Cleantech said. PureQuantum “can
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SYRACUSE — Full Circle Feed, a Syracuse–based startup company, captured a prize of $30,000 in cash and in-kind services in the Cleantech Open Northeast competition in Boston.
The same organization also recognized PureQuantum, an Ithaca–based startup, with its $1,000 “Rising Star” award for “best early stage technology with impressive future potential,” Cleantech said.
PureQuantum “can produce low-cost, easy-to-process phosphors, an important component of solid-state lighting devices, and in doing so will make the LED [light-emitting diode] bulb affordable enough to replace the more wasteful CFL bulb in homes and offices,” according to a description on the Cleantech Open Northeast website.
CFL is short for compact fluorescent lamp, according to a Google search of the abbreviation.
Cleantech Open Northeast is the Northeast division of Cleantech Open, described as the “world’s largest cleantech accelerator” in a news release posted on its website. The nonprofit says its mission is to “find, fund and foster entrepreneurs with big ideas that address today’s most urgent energy, environmental, and economic challenges.”
Full Circle Feed was one of four regional winners at its awards gala held Oct. 28 in Boston.
Full Circle Feed uses discarded people food from institutional dining halls to create dog treats.
The firm contends its dog biscuits “fill a niche,” providing a “sustainable and environmentally friendly” treat in a market “where none exists.”
Besides the Syracuse firm, Cleantech also honored three other startups, all of which are based in Boston, the organization said.
A total of 32 startups participated in the competition.
The regional winners move on to represent the Northeast region at the National Cleantech Open competition in San Francisco Nov. 12-13.
They will compete with “emerging” environmental and energy-technology firms throughout the nation for the national grand prize of $200,000 in cash and services.

Syracuse Manufacturers Mobilize for Victory in World War II: the Story of Brown-Lipe-Chapin
Before the outbreak of World War II, factories located in Syracuse and Onondaga County made shoes, typewriters, air conditioners, washing machines, and many other civilian products. Military preparedness was low on the nation’s list. However, shortly after the Japanese bombed Pearl Harbor, Hawaii on Dec. 7, 1941, and the U.S. declared war on Japan and
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Before the outbreak of World War II, factories located in Syracuse and Onondaga County made shoes, typewriters, air conditioners, washing machines, and many other civilian products. Military preparedness was low on the nation’s list. However, shortly after the Japanese bombed Pearl Harbor, Hawaii on Dec. 7, 1941, and the U.S. declared war on Japan and Germany a few days later, President Franklin Delano Roosevelt set very challenging goals for many American manufacturers, including producing 125,000 airplanes, 120,000 tanks, and 55,000 anti-aircraft guns by 1943. Several local manufacturers answered the president’s call for making war material between 1941 and 1945.
On July 28, 1944, the War Workers Cavalcade paraded along Salina Street in downtown Syracuse. Comprised of many local businesses that had shifted from manufacturing civilian products to war material, the cavalcade displayed these companies’ patriotism via elaborate floats in a procession that took 2 ½ hours to pass 70,000 spectators.
This article is the third in a series that will focus on six local manufacturers that participated in the War Workers Cavalcade 70 years ago, and which played vital roles in supplying the Allied military forces with much-needed war items during World War II.
Producing for war & victory: Brown-Lipe-Chapin goes to war
Two inventors and entrepreneurs, Alexander T. Brown (1854-1929) and Charles E. Lipe (1851-1895) formed a business partnership in Syracuse in 1895. Brown, an amazing inventor and engineer, is credited with about 300 inventions, including the L.C. Smith breech-loading shotgun, the Smith Premier typewriter, a two-speed gear for bicycles, a pneumatic clincher tire, an air rifle, and an automatic telephone switchboard, which eventually led to the rotary dial telephone. In 1902, he also would become one of the founders of the H.H. Franklin Manufacturing Co., the makers of the air-cooled Franklin automobile from 1902-1934.
Brown’s friend and business partner, Charles E. Lipe, was a mechanical engineer who opened the C.E. Lipe Machine Shop in 1880. At the Lipe Shop, Lipe worked on his own projects, including a handheld corn planter, a broom-sewing machine, and a cigar-box making machine, while renting space to other budding inventors and entrepreneurs. The shop became an incubator for new inventions and was known as Syracuse’s cradle of industries. The Syracuse Journal credited these men with sowing “the germs that sprouted into major business enterprises in Syracuse and elsewhere.”
Together, these two gifted individuals invented and patented the Hy-Lo Bi-Gear for bicycles in 1894, and a year later formed the Brown-Lipe Gear Company. Their gear wasn’t well-liked by bicycle makers but soon became popular with automobile manufacturers. In 1895, Lipe died and his brother Willard replaced him, and the company began making three-speed transmissions for Franklin, Ford, and the Yellow Cab Company.
In 1910, Alexander Brown and Willard Lipe teamed with Winfield Chapin to form Brown-Lipe-Chapin (BLC) to make automobile differentials, transmission gears, and clutches. This new company constructed a five-story building between West Fayette, Marcellus, and Seneca streets, and had almost 5,000 employees.
During World War I, the federal government awarded BLC a $1.5 million contract to produce rear-axle differentials for 17,000 military vehicles. In January 1923, BLC affiliated itself with General Motors and became one of that company’s divisions. As production waned between 1930 and 1933, GM closed the plant and converted it into an industrial center housing several small businesses, with GM retaining ownership of the building. This venture lasted three years until GM resumed production of automobile parts at the factory site in February 1936.
That same year, BLC became affiliated with Guide Lamp Division of General Motors, and instead of making transmission gears and clutches, employees turned to making flashier chrome parts: headlamps, tail lamps, hub caps, and bumper guards. The Syracuse Herald announced the resumption of operations at the plant as a major financial development for 1936. The product line grew to include steering gears and automobile emblems. However, the new iteration of BLC employed about 1,700 workers, not even half of the 5,000 workers employed by the former gear division.
While making the chrome parts for new and different GM vehicles in the late 1930s, plant personnel became accustomed to retooling the machinery. This experience became invaluable when employees were called upon to convert to wartime production.
The first military contract came to BLC in September 1940 to make .30 caliber Browning machine guns. To produce the machine guns, employees of the new gun-manufacturing department installed new machinery and trained new hires in the art of machine-gun manufacturing. By September 1941, the department occupied the entire fourth floor of the factory, made 265 parts integral to the composition of the Browning machine gun, and set up a test firing range on the roof where guns were fired through a large cylinder and into tons of sand.
BLC eventually made other wartime products, including barrels for carbines, and the .50 caliber Browning air-cooled machine gun. This machine gun, affectionately known as “the stinger” by military operators, was used on the wings of the B-17 Flying Fortress, on PT boats and submarines, as well as for anti-aircraft defense. It was this product that became the mainstay of BLC wartime production, replacing the .30 caliber gun, and by 1943, “stingers” were rolling off the assembly lines at the BLC plant 24 hours a day. The gun was utilized throughout the European and Pacific war theaters.
The “stinger” had a very low malfunction rate and military operators often praised the ordnance workers at the Syracuse plant for the quality of their workmanship. They knew that it wasn’t only design that gave the weapon the designation of “America’s most deadly small arms”; quality of machining the parts and properly assembling them also were critical to its overall performance. The Army and Navy recognized the company’s workmanship in March 1944 by presenting it with the “E” Award for excellence in production of war equipment. By mid-July that year, BLC ordnance workers had made their 100,000th Browning machine gun, and testers had fired more than 13.5 million ammunition rounds. Later that month, Browning machine guns were featured on the BLC float for the War Workers Cavalcade.
But as the war came to an end, so did the demand for related wartime products. Soon after Germany surrendered in May 1945, BLC was winding down its production of machine guns. The War Department discontinued production of Browning machine guns that June. As the war continued against the Japanese, 1,100 war workers were reassigned to making other wartime products. That same year, women working at the BLC plant received retroactive back pay amounting to $500,000. The payout was in response to an equal-pay settlement by the UAW. The women employees were either wives of fighting men or worked at the plant to fill positions vacated by fighting men. During the war, employees increased from 1,700 to 3,000.
In July 1945, BLC began to produce parts for civilian vehicles again. Employees uninstalled the machinery used to make the machine-gun parts, replacing it with the previously dormant machines used to make civilian vehicle parts.
In 1951, BLC received its largest defense contract in history for making parts for the Curtis-Wright J-65 Sapphire jet engine.
The following year, BLC built a new plant on Town Line Road in DeWitt, where it began to build the jet engine; employees continued making chrome vehicle parts in the old plant, which was eventually closed and sold to Porter-Cable Machine Co.
In December 1961, General Motors consolidated BLC into the Ternstedt Division. At the time, Ternstedt was the third-largest GM division, producing several different vehicle body parts. Eight years later, in November 1968, Ternstedt Division merged with Fisher Body Division. Fisher Body made vehicle bodies for U.S. and Canadian passenger cars. About 2,000 employees at its Syracuse–area plant made automotive body hardware, parts, and accessories.
For the next 25 years — from 1968 to 1993 — employees at the Fisher Body plant continued to make automotive body parts for General Motors vehicles. In October 1993, General Motors closed the plant, known by then as the Inland Fisher Guide plant, due to major corporate restructuring. The 70-year relationship between the original Brown-Lipe-Chapin Company and the various iterations of General Motors divisions had ended for good. Today, the former GM plant has been revitalized as the Salina Industrial Powerpark, housing nine new businesses, none of which makes automotive parts. The park’s largest tenant is Syracuse Glass Company, a 105-year-old company with its own illustrious history.
Thomas Hunter is the curator of museum collections at the Onondaga Historical Association (OHA) (www.cnyhistory.org), located at 321 Montgomery St. in Syracuse.
Celebrating CNY’s Economic Champions
It takes a vision to see a challenge and create new opportunities. Recently, I was again reminded of the impact we can all have when
Tax Foundation ranks New York a sad 49th in business tax climate
The Tax Foundation, an independent tax-policy research organization, recently released its 11th annual report, which indicated that New York’s business tax climate is second to last in the country. California, New Jersey, and Minnesota also received shameful ratings while states like Wyoming, South Dakota, Florida, and Nevada ranked among the best. The report measures how
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The Tax Foundation, an independent tax-policy research organization, recently released its 11th annual report, which indicated that New York’s business tax climate is second to last in the country. California, New Jersey, and Minnesota also received shameful ratings while states like Wyoming, South Dakota, Florida, and Nevada ranked among the best.
The report measures how well structured each state’s code is by analyzing more than 100 tax variables in five different categories: corporate, individual income, sales, property, and unemployment-insurance taxes. According to the Tax Foundation, states are punished for overly complex, burdensome, and economically harmful tax codes, but are rewarded for transparent and neutral tax codes that do not distort business decisions.
We don’t need a report to tell us that our tax climate is bad for business. Those of us who live and work here know firsthand. We need to change the climate. To be sure, some changes instituted in the last two years are not reflected in this study, such as New York’s estate-tax reform.
This was meaningful reform that passed in the budget and increased the exclusion threshold. By 2017, the exclusion threshold will be $5.25 million — well over the current $1 million exclusion threshold in New York state. By 2019, the exclusion threshold in the state will be in line with the federal level. This means that those with farms or larger estates can pass the estates onto future generations without the descendant being penalized up to the threshold amount.
We also combined the corporate franchise and banking franchise taxes and, more importantly, reduced the rate from 7.1 percent to 6.5 percent. But, this won’t be effective until 2016. We provided significant income tax and real property tax relief to New York’s manufacturers, one of the state’s most vital industries. We provided a net income-rate elimination if manufacturers meet certain criteria and manufacturers will be eligible for a tax credit equal to 20 percent of their real property taxes paid.
These two provisions will provide manufacturers nearly $300 million in tax relief in 2015. We also phased out 18-a, a utility assessment placed on utilities and handed to consumers, but this too won’t be realized fully until 2018 when it’s expected to save every rate payer in the state.
More still needs to be done, including the following:
• We need to make permanent the middle-class tax cut, which was first enacted in 2011 and is set to expire (A.4575).
• Let’s use some of these financial settlements the state is positioned to receive, which are projected to total more than $5 billion, to lower property taxes.
• Pass Work NY and provide tax credits for businesses that create new jobs and repeal the ton mileage tax for truckers.
• We need to establish incentives for businesses that are starting up by cutting all application fees by 50 percent for their first year and eliminate business income taxes for the first year so they can feel confident in their investments. (A.4567)
• Let’s make out-of-pocket college expenses for course requirements tax deductible (A.1564) and provide tax credits for New Yorkers paying college tuition and student loans to encourage them to stay in our state (A.4891).
• Establish a division led by a commissioner who has a fixed term, to review and make binding recommendations for the elimination of burdensome regulations (A.5044).
These are just a few of many ideas that we can use to make our state more attractive for everyone. I am pleased with some of the tax cuts we made during the budget last year, but we’ve made little progress on cutting property taxes.
We’ve provided band-aid relief with the property-tax cap, but nothing meaningful. Out of the rankings in the study, we scored number 46 for our high property taxes and number 40 for our convoluted codes and high sales tax. Those rankings will not change unless we provide mandate relief to localities to lower our taxes.
William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us, or (315) 598-5185.
Nichole Weaver recently joined Preferred Mutual Insurance Company as the controller in the Finance Department. Prior to this position, she was the assistant controller at
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