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

Summary of specific provisions

Would add a new section 16-w to chapter 174 of the laws of 1968 constituting the NYS Urban Development Corporation (UDC) Act creating a kitchen incubator/shared-use kitchen facility grant program. Section 1. Subdivision (1) establishes that the Corporation (UDC) would be authorized to award competitive grants to local development corporations, municipalities, educational institutions and other not-for-profit organizations for the costs involved in starting or expanding a kitchen incubator/shared-use kitchen facility. The Corporation would be authorized to contract with the Commissioner of Agriculture and Markets, to prepare and issue requests for proposals, accept grant applications, recommend those applications that best meet criteria, establish criteria and administer grants. Grants may be used for construction, rehabilitation, equipment, training, technical assistance and other approved purposes and 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. 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) grants and loans shall not exceed $250,000 per year. Preference would be given to applicants: from highly distressed areas or empire zones; providing a local match; meeting a substantial local or regional need; complementing local programs or providing services not available from local programs or local government or the private sector; providing services, including, but not limited to, food production or processing technical assistance, marketing, distribution, purchasing, storage, packaging, insurance, on-site retailing or other services; and, who have developed a plan, to assist businesses in the facility with purchasing NYS agricultural 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 underused 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 go al 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 fox 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.

Summary of amendments

Would authorize the Commissioner of Agriculture and Markets to contract to administer the grant program. Removes reference to licensing of facilities. Removes reference to applicants developing plans with Agriculture and Markets. Removes limit on grants per application.

Fiscal implications for state and local governments

Subject to state appropriations.

Regulation impact

State regulations establishing grant application-requirements may be needed.

Effective date

Immediately.