The Nutmeg State’s loss is the Town of Ulster’s gain as two of the 13 businesses given state tax incentives through Start-Up NY will be crossing the Connecticut border and laying down roots in the Hudson Valley. Those companies — a manufacturer of a patented waste-to-energy gasification method, and a remanufacturer of mine tailings — say they’re bring an estimated 44 jobs along with them.
The Start-Up NY tax-free zones to which Sustainable Waste Power Systems, Inc. and Mid-Island Aggregates/Distribution LLC will relocate are sponsored by SUNY Ulster; a partnership with a college or university is one of the requirements of the Start-Up NY program.
“What it was designed to do was take a new company, coming into the state and starting up, or a company that was expanding in New York State, to work with the college or university,” said SUNY Ulster President Don Katt. “Part of the deal is the purpose of the business has to match an academic program that the college offers. In SUNY Ulster’s case, we’re talking about companies that are in manufacturing, computer science, graphic technology, environmental sciences, and business startups and entrepreneurial activity. If a company fits into one of those categories, they can become partners with the college.”
Both businesses announced by Gov. Andrew Cuomo last month fall into that criteria, and as a result of their success in the application process, they will be able to operate free for a decade from state income tax, business or corporate state or local taxes, sales tax, property tax or franchise fees. Additionally, their employees will pay no state personal income taxes for the first five years in the campus zone; in the second five years, employees will pay no state taxes on annual income up to $200,000 for individuals, $250,000 for heads of household, and $300,000 for taxpayers filing a joint return. They will still pay local school taxes.
Approved businesses will have to maintain a relationship with the colleges and universities with which they’ve been paired.
“What the college asks is that the company allows for student internships and co-ops that the principals of the company be available for possible guest lecturing if appropriate, and also to serve on our curriculum advisory council, which is not an overtaxing job; usually they meet once a year to review curriculum and make sure it’s current with industry standards,” said Katt. “That’s what we ask of them, and in return they apply through the college to become part of Start-Up. If selected and granted that right by the New York State Department of Economic Development, then they get this 10-year state tax-free benefit.”
Katt added that the job projections may also be on the conservative side, with Start-Up NY applicants being encouraged to not inflate their expectations in the hopes of being approved.
“If they don’t meet the number of employees projected, then the tax benefits would be prorated according to the percentage they were off,” Katt said. “For example, if they were 25 percent short of their goal, then they would have a 25 percent obligation to pay what the tax is. In fact, we lost a real potential partner because when we shared that information they thought it was too risky, and while he thought he had a good product and it was going to be a successful business, he wasn’t willing to take the chance.”
Mid-Island Aggregate will relocate from Sherman, Conn. to the Callanan Industries facility in East Kingston to remanufacture mine tailings into construction materials for landscaping, remediation and construction projects, and according to Katt will send them down the Hudson on barges. Their principal, Brian Heidel, could not be reached for comment, but Katt said he thought the estimate of five new jobs was definitely on the conservative side.
“With Mid-Island Aggregate, I suggested they be very conservative,” Katt said. “That can be changed dramatically, and they will be allowed to increase their projections but not decrease their projections.”
Sustainable Waste Power Systems Inc. (SWPS) will move from Ridgefield, Conn. to the Town of Ulster and set up shop in TechCity’s Building 22. Further expansion is possible beyond the estimated creation of 39 new jobs. Sustainable Waste Power Systems will provide products and services based around its patented Garbage In-Power Out (GIPO) technology; an example used on the company’s website lists the benefits to breweries, wineries and distilleries, where the organic-material byproducts could be easily converted into heating energy. The company was founded by President and CEO Christopher P. Gillespie, and his son, Michael Gillespie, a professional engineer with years of experience working with big clients like the New York City Department of Environmental Protection, New York City Transit, the Metropolitan Transportation Authority and others.
“My son Michael was working on his master’s degree at Stevens [Institute of Technology] working in thermal systems, and we kind of got to talking one night about how all these waste management systems are doing the wrong thing because they’re trying to change waste too much, and that there should be a process that takes waste in its native form and not have to pre-process it too much,” said Gillespie. “Working through his master’s degree he came up with this wet GIPO process. I’d just finished selling off a venture capital firm out of Chicago, so I didn’t have a whole lot to do with my day, so I started putting together a business model around waste energy. People bring you your fuel and pay you to take it.”
They began working in 2006, ensuring first that what they’d created was not only functional, but also unique.