Cuomo announces first 12 companies for tax-free zones

The first beneficiaries of Gov. Andrew M. Cuomo's tax-free zones for businesses that locate near colleges will be upstate and in Brooklyn, the governor announced Wednesday.

Eight of the 12 companies will be affiliated with the University at Buffalo, two with the SUNY Downstate Medical Center in Brooklyn and one each with the Rochester Institute of Technology and Cornell University.

On Long Island, only Stony Brook University has won state approval for a tax-free zone under Cuomo's START-UP NY program. The university has received more than 125 inquiries from companies since securing the designation in March, SBU spokeswoman Lauren Sheprow said Wednesday.

State officials confirmed that Farmingdale State College and LIU Post are under consideration for the program.

As a group, Wednesday's awardees have promised to create 395 jobs in the next few years and invest $50 million in construction and equipment. In return they will pay no state and local taxes for up to 10 years, and their employees will not pay state income tax for up to 10 years.

Cuomo said START-UP NY aims to reverse the trend of high costs leading technology startups to leave New York. Five of the awardees are startups.

"You were created here, stay here, because we aren't going to chase you out of the state because of taxes anymore," he said in Rochester.

Cuomo also said he didn't initially want the program to include New York City and Long Island because "their economy has been doing well" compared with depressed upstate. But he said the State Legislature insisted last year.

The state has spent about $25 million on national television ads for START-UP NY, which state Republican Party chairman Edward Cox Wednesday called a poor investment.

Among the first beneficiaries, Datto Inc., which helps companies recover information lost when computer systems go down, will create the most jobs: 77. The Norwalk, Connecticut-based company is opening a branch office in RIT space.

"Governor Cuomo made us an offer we couldn't refuse," said Datto chairman Paul Sagan, noting its founder graduated from RIT in 2009.

At Stony Brook, two out-of-state startups -- specializing in medical devices and energy efficiency -- are nearing the end of the approval process, Sheprow said Wednesday. If approved by Albany, they likely would be housed in existing business incubator space at the school; another building is planned.

Farmingdale State president W. Hubert Keen told Newsday last month that the college has identified startups for one of two incubators on campus and is seeking a large company for the second. He said, "We'll be ready to go once they approve our application."