NYS Cultural Development Areas Act
Gary M. Schuster, Esq.
TIMES June, 2005
A proposed law
is now pending in the New York State legislature that could mean significant
new opportunities for New York artists, arts organizations and communities.
bill is called the New York State Cultural Development Areas Act (Assembly
bill A3433A, Senate bill S3317). The bill's many co-sponsors include Hudson
Valley Assembly members Richard Brodsky, Kevin Cahill and Aileen Gunther.
The bill demonstrates the lawmakers' recognition that the arts can create
jobs, economic growth, increased tax revenues and revitalized neighborhoods.
In particular, the bill's sponsors state:
has been shown — as detailed in Richard Florida`s report
the "Creative Engine" —
that those communities with a strong local arts community often
are home to creative thinkers in all industries. Vibrant arts communities
often supplement arts education, and provide for leisure and intellectual
stimulation. By supporting a local crop of creative people, companies
seeking ingenuity in their workforce often gravitate to those communities
that can cater to this population.
bill is primarily an economic development measure, much like the well-known
Empire Zone program. It authorizes the creation of 2 to 4 Cultural Development
Areas (CDAs) in the State. Every county may propose CDAs, but the final
selection will be made by the State Commissioner for Economic Development.
A county's selection of a CDA requires adoption of a plan for the CDA
and passage of a local law. Criteria include: the CDA must be less than
2 square miles; at least 25% of the CDA must be vacant, abandoned or otherwise
available for development; and the CDA must have at least one "arts
corporation", or must have one within a year.
county plan must demonstrate how creation of a CDA is necessary to create
or enhance arts corporations, preserve cultural heritage or stimulate
development of an arts community, and how the CDA will have a positive
impact on the local economy.
bill also calls for the designation of 100 Cultural Assets throughout
the State. These are buildings owned by arts corporations, which are used
primarily for the presentation or exhibition of artistic or cultural performances
or exhibits. The purpose of designating Cultural Assets is to provide
them with benefits even though they are located outside CDAs. As with
CDAs, any county, city town or village may designate a Cultural Asset
by passing a local law, but the final selection will be made by the State
Commissioner for Economic Development.
Arts corporations in CDAs and Cultural Assets will be
eligible for benefits that include real property tax exemption, utility
tax exemption, investment tax credit, employment incentive credit, wage
tax credit, sales and use tax exemption, and gas or electric rates reduction.
Some of these benefits may also be available to partnerships of which
an arts corporation is a partner.
bill has many other provisions covering such matters as job training and
placement, and health insurance. Fundraising and capital formation are
addressed through the authorization of CDA capital corporations and facilitation
of the issuance of private activity bonds for the benefit of municipalities
or arts corporations. There is also a personal State income tax credit
for individuals who make qualified investments in or donations to CDA
capital corporations. The entire text of the bill and further information
is available on the Internet at http://assembly.state.ny.us/leg/?bn=03433.
Communities selected for CDAs are likely to become economic
magnets where the creative community would open studios, galleries, production
facilities and performance venues, in the process creating jobs, stimulating
commerce and enhancing tax revenues. Several Hudson Valley communities
seem to be suitable for selection as CDAs including Cornwall, Fishkill,
Hyde Park, Newburgh, Rhinebeck, Sugar Loaf and Woodstock. It is hard to
predict how the CDA Act will fare. The bill was introduced in 2004 but
failed to gain passage. Contacting your State Senator and Assembly member
could help make a difference this year. If the bill does become law, county
and arts leaders throughout Hudson Valley should be encouraged to work
together to coordinate their selections of CDAs and Cultural Assets.
(Gary M. Schuster is an arts and entertainment attorney with Jacobowitz
& Gubits, LLP, of Walden, New York. He can be reached at email@example.com.
The firm’s website is www.jacobowitz.com.)
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