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START-UP NY exec addresses program criticism in Cazenovia stop

By Eric Reinhardt


CAZENOVIA — The START-UP NY program not only “caters” to startup companies but also to those firms that want to expand or grow.  


Leslie Whatley, executive vice president of START-UP NY, spoke during the May 8 ceremony in which Empire Brewing Company formally started construction on its Empire Farmstead Brewery. 


“We are trying to harvest empty space, empty land that does not currently have any economic activity on it and we want to bring jobs to that empty space and to that empty land,” said Whatley.


Whatley most recently served as global head of corporate real estate at Morgan Stanley. Prior to that, she was the global head of corporate real estate at JPMorgan Chase, and she held several leadership positions in General Motors real-estate staff earlier in her career, according to an Oct. 21, 2013 news release from the governor’s office. Cuomo announced her appointment in that same news release.


In more than a year of existence, the START-UP NY program has attracted about 110 companies; 52 of them are new companies, 30 are expansions of existing New York companies, 11 are from out of the country, and 16 are from out of state, she said in her remarks. 


The space Whatley referred to has to be associated with a college or university. The affected company and school need to have a “meaningful affiliation” for the company to qualify under the program, she said.


Under the START-UP NY program, if a company creates net new jobs and a meaningful affiliation with a university or college, they can locate in the tax-free area and enjoy tax-free status for 10 years. 


“That means no income taxes for the company or its employees; no sales tax; no property tax; no franchise tax; no transfer tax,” said Whatley.


New York graduates about 40,000 students with degrees in science, technology, engineering, and mathematics (STEM) annually and “export most of them,” she said.


“The attempt here is to create the jobs in the community so one… while they’re at school, they can get an experiential learning opportunity, and two when they graduate, they can stay in the community and have employment opportunities at places that have jobs that complement what they studied while they’re in school,” said Whatley.


Program criticism

Whatley then acknowledged that people may have read articles about the program that “aren’t so nice.”


She made the comment just days before New York State Comptroller Thomas DiNapoli provided the most recent critique of the program.


DiNapoli’s office on May 11 released an audit of ESD and concluded that the $211 million spent on advertising the START-UP NY program had produced “no tangible results.” 


A month earlier, Assemblyman Christopher Friend (R–Big Flats) in a statement called on Gov. Cuomo to end the START-UP NY program following the release of a government report citing low job-creation numbers from the program. 


The report released in early April stated that in 2014, the program’s first year, a total of 30 companies located to and began operating in START-UP NY zones and created 76 jobs.


 “START-UP NY has been an expensive failure,” Friend said. “This program illustrates everything wrong with the argument that government creates jobs, and that, somehow, centralized economic planning will work this time. This is a failed ideology. Instead of solving the whole issue of high taxes and burdensome regulations, Gov. Cuomo attempted to pick winners and losers. Instead of helping the small businesses that continue to struggle against an ever-increasing stream of regulations and taxes, he spent millions on out-of-state advertisement. Businesses aren’t made in Albany — they’re made in basements and garages and end up on Main Street. We need to get out of their way, and we need to do it now,” Friend said.


As she continued her remarks, Whatley addressed the concern.


“Thoughtful economic development does not happen overnight. Thoughtful economic development creates a sustainable economic future in the community.”


In its first year, Empire State Development had to “do a lot of work to build the foundation” for the program, she said.


The work included developing regulations that people could “understand” to learn the processes and procedures for involvement in the program.


It also included making sure the colleges and universities were aware of and understood the program.


“Because the businesses have to apply to the schools to get in the program, so by definition, we had to have the schools buy in first,” said Whatley.


START-UP NY currently has 69 participating colleges and universities, she added.        



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