NEW YORK GOVERNOR CUOMO BEGINS ‘START-UP NY’ PROGRAM

(The following is a reformatted version of a press release
issued by New York Governor Andrew M. Cuomo and received via e-mail. The release was confirmed by the sender.) 
October 22, 2013 
GOVERNOR CUOMO LAUNCHES START-UP NY PROGRAM AT INTERNATIONAL
CONFERENCE IN NEW YORK CITY 
Former CEO & Chairman of the Board at Morgan Stanley John J.
Mack to serve as Economic Development Advisor to NYS & Special
Advisor to Board of ESD 
Governor Andrew M. Cuomo today formally launched START-UP NY,
the game-changing initiative that, starting today, will create
tax-free zones to attract and grow new businesses across the
state. The Governor was joined by John J. Mack, Senior Advisor
and former CEO and Chairman of the Board at Morgan Stanley, as
well as more than 300 international and domestic business, high-tech industry, academic and community leaders for the launch in
New York City today. 
“Hundreds of business leaders and CEOs from around the globe
have come together for the official launch of START-UP NY to
take advantage of the most ambitious economic development
program in New York State’s recent history,” Governor Cuomo
said. “In a tax free environment, no one can match what New York
has to offer. Businesses that are looking to startup or expand,
and most importantly create jobs, should look no further. We are
leveraging our world-class SUNY system and prestigious private
universities to partner with new businesses, providing direct
access to advanced research, development resources, experts in
high-tech and other industries and all with zero taxes for ten
whole years. With an opportunity like that, it’s no wonder that
companies are lining up for the launch of START-UP NY.” 
START-UP NY seeks to accelerate entrepreneurialism and job
creation across the state on a large scale, with a particular
focus on Upstate New York. The State University of New York
campus system, along with other college communities, serves as
the framework of the START-UP NY program to attract high-tech
and other start-ups, venture capital, new business and
investments from across the world. Under the program, businesses
have the opportunity to operate completely tax-free for 10 years
on eligible campuses and spaces. Businesses will partner with
the higher education institutions in the SUNY system as well as
other universities and be able to access industry experts and
advanced research laboratories. 
Businesses can visit www.startup-ny.com to more about the
program, find answers to frequently asked questions, and search
for eligible space. 
“Governor Cuomo’s transformative new approach to drawing
businesses and jobs to New York, particularly to Upstate,
capitalizes on SUNY’s academic strengths and unique position as
an economic engine across the state,” said SUNY Chancellor Nancy
L. Zimpher. “Enthusiasm at SUNY campuses across New York is high
as we anticipate a windfall of innovation-driven public-private
partnerships that, because of the START-UP NY program, will
create jobs and amazing new opportunities for students and
researchers.” 
New Economic Development Advisor to NYS & Special Advisor to
Board of ESD 
The Governor also announced that John J. Mack will serve as
Economic Development Advisor to the State of New York and
Special Advisor to the Board of Empire State Development (ESD),
which includes the Department of Economic Development (DED) and
the Urban Development Corporation (UDC). In his two roles, Mr.
Mack will advise the Governor and ESD on various economic
development programs and issues, including START-UP NY, to help
grow New York’s economy and make the state a more attractive
place for businesses. 
John Mack said, “Governor Cuomo has demonstrated a steadfast
commitment to encouraging and pursuing opportunities for
economic development in New York. With programs like START-UP
NY, which offers businesses the unparalleled opportunity of a
tax-free environment with New York’s world-class resources for
research and development, the Governor is pursuing a truly
innovative approach to growing the State’s economy. I am honored
to serve both the Governor and Empire State Development as they
continue working to build a new New York.” 
Mr. Mack is currently a Senior Advisor of Morgan Stanley. He
retired as Chairman of the Board of Morgan Stanley at the end of
2011 and also served as Chief Executive Officer of Morgan
Stanley from June 2005 until December 2009. 
Mr. Mack first joined Morgan Stanley in May 1972 as a member of
the Firm’s bond department and rose steadily to positions of
increasing responsibility. He was named a Vice President of the
Firm in 1976, a Principal in 1977 and a Managing Director in
1979. From 1985 to 1992, Mr. Mack headed the firm’s Worldwide
Taxable Fixed Income Division. In 1987, he became a member of
the Board of Directors. In March 1992, he assumed responsibility
for Morgan Stanley’s day-to-day operations as Chairman of the
Operating Committee. He was named President of Morgan Stanley in
June 1993. Mr. Mack served as President, Chief Operating Officer
and a Director of Morgan Stanley Dean Witter & Co. from May 1997
when the firm was created by the merger of Morgan Stanley and
Dean Witter, two of the world’s leading financial services
companies. 
Before rejoining Morgan Stanley as Chairman and CEO in June
2005, Mr. Mack served as Co-Chief Executive Officer of Credit
Suisse Group and Chief Executive Officer of Credit Suisse First
Boston. 
Mr. Mack is a graduate of Duke University. He serves as Chairman
of the Board of Trustees of New York-Presbyterian Hospital and
the University Hospital of both Columbia and Cornell, the
Chairman of the Board of Tri Alpha Energy, a Board Member of the
Bloomberg Family Foundation, Glencore International AG, Lending
Club, and Rosneft; he is a member of the Business Council and
the Business Roundtable. In addition, Mr. Mack serves on the
Advisory Board for China Investment Corporation, the
International Business Leaders Advisory Council for the Mayor of
Beijing, and the Executive Committee of the Partnership for New
York City. Mr. Mack is a Senior Advisor for KKR and a director
of Corinthian Ophthalmic. He is a member of the International
Business Council of the World Economic Forum, the NYC Financial
Services Advisory Committee, and the Shanghai International
Financial Advisory Council. 
About START-UP NY 
Tax-Free: Participating companies in START-UP NY will not pay
any taxes (no income tax; no business, corporate state or local
taxes; no sales tax; no property tax; and no franchise fees) for
10 years. Employees in participating companies will pay no
income taxes for the first five years. For the second five
years, employees will pay no taxes on income up to $200,000 of
wages for individuals, $250,000 for a head of household, and
$300,000 for taxpayers filing a joint return. The number of net
new jobs eligible for personal income tax benefits will not
exceed 10,000 new jobs per year. 
Eligibility: In order to locate into a START-UP NY tax-free
community, a business needs to be aligned with or further the
academic mission of the campus, college or university sponsoring
the tax-free community. Businesses participating in the program
will need to have positive community and economic benefits.
Every business must create and maintain net new jobs in order to
participate. Businesses must: 
· Be a new start-up company; 
· Be a company from out-of-state that is relocating to New York
State; or 
· Be the expansion of an existing New York State company - for
example, a company creating a new line of business or opening a
new advanced manufacturing facility - as long as it can
demonstrate that it is creating new jobs and not moving existing
jobs. 
In addition, New York State start-ups that “hatch” from New York
State incubators will be eligible to enter tax-free communities
and be eligible for the benefits under the program. 
In New York City, Long Island and Westchester County, businesses
must be start-ups or high-tech companies. Statewide, certain
types of businesses are excluded from the program, including
retail and wholesale businesses; restaurants and hospitality;
professional practices like law firms and medical practices; and
energy production and distribution companies. 
Companies will be eligible to enter into the program until
December 31, 2020 and by that time, ESD will prepare an
evaluation of the effectiveness of the program in order to
determine whether eligibility should be extended. 
Each university community will develop a plan for the types of
businesses it intends to attract and the locations that will be
tax-free. Businesses will apply directly to the participating
college and, once a business is accepted, ESD will have 60 days
to review the application to ensure eligibility. 
Bans Competition with Existing Businesses: Under the START-UP NY
program, businesses that might compete unfairly with other local
businesses outside the tax-free area would be ineligible to
participate. 
Eligible Colleges and Universities: SUNY, CUNY and independent
colleges and universities will all have the opportunity to
develop tax-free communities. 
SUNY: Every SUNY community college and 4-year college/university
can establish a tax-free community using: 
· Vacant land on the SUNY campus (for every campus outside of
New York City); 
· Vacant space in buildings on the SUNY campus (for every campus
outside of NYC); 
· Any business incubator with a bona fide affiliation to the
campus, university or college; and 
· Up to 200,000 square feet within one mile of a campus (for
every campus north or west of Westchester County), or further
with approval from ESD. 
CUNY: CUNY will be able to establish a tax-free community on a
campus in each borough - Manhattan, the Bronx, Queens, Brooklyn
and Staten Island - in an area of economic distress. CUNY Tax-Free NY communities may include: 
· Vacant land on the CUNY campus; 
· Vacant space in buildings on the CUNY campus; and 
· Any business incubator with a bona fide affiliation to the
campus, university or college. 
Private Colleges: The program also provides 3 million square
feet (with the potential of another 600,000 more) of tax-free
areas primarily dedicated to private colleges and universities
on land north of Westchester County, to be allocated by the
START-UP NY program board (consisting of three members with
significant experience in academic-based entrepreneurship
appointed by the Governor, the Speaker of the Assembly and the
Temporary President of the Senate) in a manner that ensures
regional balance and balance among eligible rural, urban and
suburban areas in the State. 
For private colleges and universities north of Westchester
County, the tax-free areas can include vacant land and vacant
space on- or off-campus, as well as any business incubator with
a bona fide affiliation to the campus, university or college. 
Of these 3 million square feet, 75,000 square feet will be
allocated for each of the following: Nassau County, Suffolk
County, Westchester County, Brooklyn, the Bronx, Manhattan,
Queens and Staten Island. Private colleges and universities in
New York City and Westchester, Suffolk and Nassau Counties, as
well as SUNY and CUNY campuses not specifically designated, may
apply to sponsor these tax-free areas on college campuses. Once
the 75,000 square foot cap is reached in these counties and
boroughs, the board may designate up to an additional 75,000
square feet in each. Therefore, a potential of 150,000 square
feet of space will be available in these counties and boroughs. 
20 Strategic State Properties: In addition, the 3-member board
can also designate up to 20 strategic State assets as tax-free
communities. These must be State-owned vacant land, State-owned
vacant facilities or State-owned facilities that are in the
process of closing and becoming vacant. Each will be affiliated
with a SUNY, CUNY or independent college or university to
attract new employers and new jobs and transform the site into a
regional economic engine. 
Robust Protections Against Fraud: START-UP NY includes strong
provisions to protect against fraud. Businesses will have to
submit certification to ESD, and falsifying certifications will
be a felony. The legislation also includes strict provisions to
guard against abuses such as shifting jobs among related
entities or “shirtchanging,” when a company simply
reincorporates under a new name and claims its existing
employees are now new jobs. In addition, START-UP NY includes
measures to prevent self-dealing and conflicts of interest. In
cases of fraud, the State will be empowered to claw-back
benefits granted to the business. Companies that do not meet the
terms of the program - including meeting their job creation
targets - may have their benefits reduced, suspended or
terminated. ESD will have the authority to review company data
to ensure that jobs have been created and maintained, and to end
participation by companies that have not created net new jobs.
ESD will be required to publish a comprehensive annual report to
enable the public to evaluate the program’s impact. 
(sgp) NY 
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