Friday, February 21, 2014

The Dangers of Messaging

By Evan D. Robertson, Senior Project Associate

Community messaging is about hitting a sweet spot, playing to your strengths and above all, being truthful. It’s about projecting an image that – be they a relocating company, family, or young professional – everyone knows exactly what they are going to get. For a stunning 30 seconds the other night, the state of New York nailed it. Within a single advertisement they effectively communicated that their state is a center for innovation, ambition, and business. “Move here, expand here, or start a new business here and pay no taxes for ten years,” was the one liner that caught my ear. I couldn’t help but think that New York had single handily cornered the economic development market – at least until other state’s caught on. Unfortunately, my skepticism didn’t kick in until I went to the website.

Upon reading the fine print on Start-UP NY’s website, I fear the 30 second advert oversold its promise:

START-UP NY is a groundbreaking new initiative from Governor Andrew M. Cuomo that will provide major incentives for businesses to relocate, start up or significantly expand in New York State through affiliations with public and private universities, colleges and community colleges. Businesses will have the opportunity to operate state and local tax-free on or near academic campuses, and their employees will pay no state or local personal income taxes. In addition, businesses may qualify for additional incentives.

To obtain tax free status, businesses must align with the academic mission of the partnering higher education institution. Businesses must also locate within New York’s tax free zones. Eligible properties run the gamut of underutilized university property and pre-fabricated buildings to nearby green space. Business operations outside of the tax free zone are taxed, based on the percentage of assets and payroll outside of the eligible zone. New York also excludes the following businesses:

  • Retail and wholesale businesses;
  • Restaurants;
  • Real estate brokers;
  • law firms;
  • Medical or dental practices;
  • Real estate management companies;
  • Hospitality;
  • Finance and financial services;
  • Businesses providing personal services;
  • Businesses providing business administrative or support services (unless the business is creating at least 100 new jobs and has received permission to participate);
  • Accounting firms;
  • Businesses providing utilities; or
  • Energy production and distribution companies.
The exclusions and stipulations are simply too much to fit into a 30 second commercial unless it ran similar to a pharmaceutical ad listing all the drug’s side effects. What seems like an initial call for all businesses quickly leads to serious, careful consideration on the part of a new, relocating, or expanding business. And I can’t help but think that perhaps the 30 seconds would have been better spent not selling New York as open to all businesses but instead open to a subset of businesses – particularly those requiring cutting-edge research or in need of innovation capacity. Positioning Startup NY as an effort to give businesses greater access to university staff, resources, and research may have been a more accurate message. 

To me, the value-add is in the research partnerships and providing companies with access to a skilled, graduating labor pool. Georgia Tech, for instance, has developed robust partnerships with private companies who lease laboratory space at the institution. Start-Up NY as a mechanism for talent attraction and innovation is immense. For an existing or relocating business whose concern is operational efficiency, distribution, or building specifications; the 30 seconds will surely lead to disappointment upon further research. All of which may have been avoided if Start-Up NY narrowed its message ever so slightly to an otherwise brilliant campaign.