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While the primary selling point for a controversial New York state economic development program is the financial benefit, the CEO of one of the more than 200 businesses that have been approved to participate in START-UP NY says the initiative has provided her company with more than just tax breaks.

For For-Robin, an upstate New York company dedicated to developing treatments for breast cancer patients, joining START-UP NY has provided access to lab space, equipment, expertise and services that may otherwise be out of reach for a small start-up, CEO Dr. Sally Quataert told Laboratory Equipment. There’s also networking events and entrepreneurial training opportunities, all of which Quataert said has helped For-Robin develop as a company.

Since joining the program in 2015, For-Robin has added two employees. That puts the total number of employees at For-Robin in the range of seven to eight. Quataert said she doesn’t expect the company to grow into a massive enterprise, estimating a maximum of 25 to 50 employees “at the very top if all of our future ideas come about.”

“But I think you have to look at more in terms of benefits of what we’re doing,” Quataert said, adding that any future growth for For-Robin would be in high-end jobs “that really benefit society as a whole.”

“I think that’s where people have to sort of look beyond the actual bean counting of exactly how many jobs but what the public benefit is, particularly in the biotech area,” she said.

But there are plenty of critics who are counting beans when it comes to START-UP NY, which has been attributed with creating 1,135 jobs through the end of 2016.

Businesses that are either relocating or expanding in New York are eligible to participate in the program, which exempts companies from paying state income tax, business or corporate state or local taxes, sales tax, property tax or franchise fees for 10 years if they run their companies in particular zones near participating private and public colleges and universities. Companies have to meet job commitments in order to receive the program’s tax-free benefits.

When announcing the first wave of businesses to join START-UP NY in 2014, New York Gov. Andrew Cuomo said in a statement that the program “takes New York's number one liability—our tax capital reputation—and turns it on its head by offering companies zero taxes for 10 years, as well as access to all the assets of the Empire State, particularly the talent and research capabilities of our world-class universities.”

Long-term approach

The program created 76 jobs in its first year. That figure rose to a total of 408 in the second year, and stood at 1,135 at the end of 2016, according to an April report from Empire State Development, the agency that runs the program.

Meanwhile, the state spent $53 million on an advertising campaign to market the program after it officially launched in 2014. More than $6 million in business and personal tax benefits have also been used by participating companies, the report said.

While critics have used those figures to lambast the program, Empire State Development spokesman Jason Conwall said START-UP NY is taking a long-term approach.

“We currently live in an age of instant gratification, and in many ways this has led to short-sighted criticisms of START-UP NY. Put simply, this is a marathon, not a sprint: Starting, growing or relocating a business and hiring employees do not happen overnight,” Conwall told Laboratory Equipment.

The agency’s April report said 212 businesses have been approved to participate in the program, the majority of which were in information technology, biotechnology or research and development. Those businesses have pledged to create 4,403 jobs over five years.

Though state officials have defended START-UP NY, saying it needs to time to fully realize its potential, Cuomo’s budget proposal in January sought to rebrand the initiative as the “Excelsior Business Program” and make other changes, including reducing the number of jobs businesses had to create to receive tax incentives.

Conwall said the proposed changes “would have hit the sweet spot for START-UP NY by refining the program to focus more on true startup and early-stage companies, which account for approximately 90 percent of the businesses currently in START-UP NY.”

The state legislature ultimately rejected the proposed changes, except a provision that exempted the state from publicly reporting the number of jobs created by the program. The state said it would continue to collect the same information from companies participating in the program and will include information about START-UP NY in a new, comprehensive annual report on economic development efforts.

Meanwhile, Empire State Development officials called START-UP NY a cost-effective program that has changed the perception of the business climate in New York state, and a program that is helping drive growth in key industries, like biotech and life sciences.

“Every day, firms in this sector are developing new medical and pharmaceutical breakthroughs that have the potential to save lives, whether through new therapies or the early detection of diseases like autism and cancer,” Conwall wrote. “These firms are also making significant advancements in the realms of agriculture and environmental biotechnologies, helping create a cleaner and more sustainable future.”

The program’s companies

Some of those companies that are participating in START-UP NY include Efferent Labs, Inc., a biotech company based in Buffalo that is developing implantable biosensors that can read living cells and allow to doctors to tailor treatment for patients with diseases like cancer and heart disease. There’s also Innovimmune Biotherapeutics Holding, a biotech company located in Brooklyn that specializes in the development of drugs for the treatment of autoimmune and immuno-inflammatory diseases and cancer.

At For-Robin, Quataert acknowledges the controversy that surrounds the program, but says “in terms of what START-UP NY is supporting for us, it seems like they are making well use of already existing resources that can be fully utilized.”

For-Robin, an antibody immunotherapy company, was founded in 2012 by Dr. Kate Rittenhouse-Olson at the University of Buffalo where she is a professor of biotechnical and clinical laboratory studies. For-Robin is named after Rittenhouse-Olson’s sister who died from breast cancer at age 31.

For-Robin is working toward getting its patented antibody, JAA-F11, to market. JAA-F11 was developed in Rittenhouse-Olson’s laboratory at the University of Buffalo. JAA-F11 targets Thomsen-Friedenreich glycoantigen (TF-Ag), a well-known marker found on the surface of 80 percent of all carcinomas.

For-Robin says on its website that it believes the JAA-F11 antibody “will create a survival advantage for patients with TF-Ag expressing tumors through direct killing of cancer cells and by blocking tumor cell spread. It also will be useful in many cancers to detect metastases.”

As part of the START-UP NY program, Quataert estimated For-Robin has received less than $5,000 in direct financial benefits, which includes a few hundred dollars a year in sales tax rebates. The two new employees For-Robin has added since joining the program also are exempt from paying New York state income tax.

“From our standpoint, I don’t think we’ve used or wasted a lot of New York state taxpayer money,” Quataert said. “A lot of the other things that we access are here already at the University of Buffalo and Roswell Park Cancer Institute, which is also located in Buffalo.

“I think we are actually making well use of things that are existing, sort of opening up those things to potentially create a product that’s going to help thousands of people every year,” Quataert said. “And our product has applications to about 50 percent of all cancers. Just our first indication is breast cancer.”

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