By CRAIG FREILICH

As questions are being raised statewide about the effectiveness of the Start-Up NY job creation program, Potsdam and Canton college officials say they have had little success attracting businesses interested in taking advantage of the generous tax incentives.

The program, which began Jan. 1, 2014, offers new or expanding businesses 10 years of state and local tax breaks, space to set up shop, and help from faculty at the SUNY and other campuses. But doubts have been raised about the paltry number of jobs created so far and the $50 million already spent for advertising it.

SUNY Canton hosted the only Start-Up NY business in St. Lawrence County so far, but that firm dropped out of the program. Clarkson University is hopeful one or two firms will soon submit applications to participate in Start-Up NY. SUNY Potsdam has no immediate prospects for Start-Up NY participants. St. Lawrence University is not taking part.

SUNY Canton seemed to have early success with the installation of a small business unit on its campus under the program, but the owners found having the second part of its business in the Start-Up NY cradle and the first part outside the program unworkable.

Software developers Mary Anne and Craig Kaputo hoped to create five jobs within five years with their construction management software. They wanted to create marketing internships, deliver entrepreneurship lectures, and work on campus with students and faculty at the Canino School of Engineering Technology. It seemed to be perfect fit with the requirement that Start-Up NY businesses contribute to the missions of their host institutions.

“What they found was that it was really difficult to separate the two units,” said Lenore VanderZee, SUNY Canton’s Executive Director for University Relations who was assigned oversight of the college’s participation in Start-Up NY.

The arrangement complicated record-keeping and accounting, “not the most efficient way to run the company,” VanderZee said. They had to vacate the tax-free area set aside for Start-Up NY companies, but there is still a kind of a partnership with the college.

Possibilities At Clarkson

Clarkson University had been promoting local economic development for years with its business incubation efforts and its Shipley Center for Innovation, and could be headed for success with Start-Up NY.

Of the 32 inquiries they have received so far, four were deemed worth a look to see if they could develop their applications, and two seem to be near submission of their plans to Empire State Development (ESD), the state agency overseeing the program.

LC Drives might be the most promising. The innovative electric motor developer is already operating in Goshen, N.Y. and Potsdam and is hoping to scale up production, and create new jobs, with its participation in the program.

Another new company, Agbotics, has an agreement with Clarkson to build two automated greenhouses on land recently acquired by the school.

One applicant they thought was promising was a crowd-funding web site for scientific research. But that funding model was far outside the norms established by major funders like the National Science Foundation and the National Institutes of Health, and it was feared the new model might conflict with those standards.

Another prospect was a company with an innovative approach to marketing pet supplies, but the proprietor moved out of state and took the company with him.

SUNY Potsdam was the first SUNY unit in the North Country to have its general program plan approved by ESD after Start-Up NY was announced.

By May 2014, Potsdam had had eight inquiries, including one from Italy and one from an expanding New York business, according to John Wicke, hired by SUNY Potsdam to work with interested businesses. At the time he said they were “marketing aggressively” to see what kind of response they could get.

He said this month conversations were continuing with “two prospects related to the college mission and curriculum.” Items being discussed included what facilities they would use.

Immediate Results Unrealistic

He and other defenders of the program said that expecting immediate results was unrealistic. They point out that Start-Up NY will continue through 2020, and that its low rate of success statewide in its first two years did not necessarily indicate future performance.

Wick said recently he would love to be able to announce some successful applications, but none had moved past the first stages.

“We’re all anxious to see the creation of jobs in the North Country,” Wicke said.

Asked what was the most common reason that an application might be turned down, Matthew Draper, executive director of Clarkson University’s Shipley Center for Innovation, said, “They see the marketing on TV,” suggesting some people might be applying before they know the requirements for a Start-Up NY business.

The right company will be a new startup, or one planning significant expansion, not necessarily coming in from outside the state but in no case competing with a pre-existing local business.

That’s the restriction that seems to foil many inquiring business owners: the provision that a Start-Up NY business can’t be in competition with an existing local business.

Draper said he will get calls from “hair salons, nail salons, yoga studios, and we have to say no because those things already exist. That doesn’t mean we can’t help them,” he said, since they might be able to point them to other programs that county or local development authorities could help with, but they don’t qualify for Start-Up NY.

ESD released a report in July noting that the program had generated about 400 in its first two and a half years, against the promise of more than 4,000 within the first five years.

For its part, St. Lawrence University has not taken on Start-Up NY.

“St. Lawrence does not have any Start Up NY projects underway nor do we have any plans to submit a Start Up NY proposal,” said spokesman Ryan Deuel. “However, St. Lawrence fully supports the projects that the other members of the Associated Colleges have proposed and are currently pursuing.”