Establishes a kitchen incubator/shared-use kitchen facility program within the urban development corporation

Summary of provisions

Would add a new section 16-t to chapter 174 of the laws of 1968 constituting the NYS Urban Development Corporation Act creating a kitchen incubator/shared-use kitchen facility grant program. Section 1. Subdivision (1) defines these facilities as government licensed food processing or preparation facilities, sponsored by not-for-profits or government agencies, and used by small emerging food businesses who are either full-time or temporary tenants. The sponsors must provide low-cost space and financing and business support services. Other services, such as technical, production, distribution and sales assistance to tenants, may be provided. The corporation is authorized to award competitive grants to sponsors for construction, rehabilitation, equipment, training, technical assistance and other approved purposes. Subdivision (2) requires grant applicants to provide management plans for financial self-sufficiency, community needs assessment, and planning for providing assistance described in paragraph (1). Subdivision (3) allows for one grant per applicant per year, up to $250,000. Preference is given to applicants: from distressed areas or economic development zones; providing a local match; meeting local needs; providing services not offered by local governments or business; providing services and assistance in addition to that required in subdivision one; and, with a plan, developed in cooperation with the Department of Agriculture and Markets, to assist facility businesses with purchasing NYS farm products and promoting the facility to regional farmers. Section 2. amends paragraph b of subdivision 1 of section 16-m of section 1 of chapter 174 of the laws of 1968 as added by chapter 84 of the laws of 2002 to include kitchen incubator/shared-use kitchen programs in the Economic Development Fund.

Justification

Small businesses provide a significant portion of the jobs, and opportunities for financial success, in our State. This is especially true for distressed communities, rural areas, immigrant populations and women and minorities. In the food sector of our economy many successful enterprises have been started at home or on the farm by individuals who may not have an advanced degree or investment income but have created a great recipe or family dish that could be developed into a profitable product. The growth of these types of businesses is often dependent on affordable, available processing space, financing, management assistance and other services that can nurture an emerging

firm. A facility assisting the growth of new or expanding businesses is called an incubator. Kitchen incubators are similar to other types of business incubators; they provide inexpensive space, shared services, access to financing and other support to multiple small enterprises such as specialty food producers, farmers, street vendors, restaurants, caterers, and food service training programs. These food business incubators can be built from scratch but most often are located in buildings, such as abandoned or under used food service facilities, that already have available food preparation space and equipment. The goals of these "kitchen" facilities are to foster entrepreneurship, job development, and community revitalization. An additional goal is improving local farm sustainability by providing an outlet for farmers to sell, or add value themselves, to their farm products. This bill would provide seed funding for communities to establish facilities that provide opportunities for all segments of our society to become food business owners. New business owners create jobs for the surrounding area. The facility could also participate in workforce training and development. The proposed funding for these facilities would be targeted and carefully allocated. Program sponsors would be required to develop a facility that is based on a sound plan that analyzes community needs, and ensures fiscal responsibility. The State's economic development efforts currently focus financial assistance to large companies, however, major food processors have virtually disappeared from New York. Creating a program for small-scale food businesses will help reverse this trend, benefiting local economies, workers and farmers.

Legislative history

1999/00: A.7312 2001/02: A.747 2003/04: A.675-A 5.3270 2005/06: A.3717-A 2007/08: A.3680 S.7570 2009: A.4166 S.3594

Fiscal implications

Subject to state appropriations.

Regulation impact

State regulations establishing grant application requirements may be needed.

Effective date

Immediately.