New York State Urban Development Corporation

CURRENT FUNCTIONS. The Urban Development Corporation (UDC) is a public finance and development authority that initiates and assists in a broad range of development projects. UDC's overall goal is to create and retain jobs, particularly in economically distressed areas and in circumstances where it is not financially or organizationally feasible for the private sector to do so alone.

To accomplish this, the State legislature has provided UDC with unique statutory powers, including the powers to condemn real property, to invest in property at below-market interest rates, to issue tax-exempt and non-tax-exempt bonds, to offer tax benefits to developers, and to provide flexibility in the application of local codes. UDC addresses the economic needs of the State in the following seven areas: industrial development, downtown development, university research and development, regional economic development, minority and women-owned business development, new communities, and planning and special projects.

ORGANIZATIONAL HISTORY. The UDC was created as a public-benefit corporation, Laws of 1968 (Chapter 174), to generate industrial, commercial, and civic development in distressed urban areas and to create jobs through construction of low and moderate income housing and the renovation or expansion of industrial and commercial facilities. It originally concentrated on initiating and implementing large-scale housing development to low- and moderate-income people. In the mid-1970s, the UDC had become overextended and its capital base was in danger. State government had to expend public funds to "bail out" the corporation. This prompted a reorganization of the UDC in 1975, and it moved away from functioning as a housing developer (initiating or cooperating in design and construction projects and often managing public housing projects after completion) to economic development projects.

This shift was due in large part to the difficulties that arose in financing the completion of the extraordinary amount of housing launched by the corporation. In recent years, UDC has financed no new residential projects and has focused its efforts on the broader issues of economic development. It no longer depends its general credit to finance new projects but rather relies solely on State appropriations, grants, non-recourse public borrowings secured by a particular project, or combinations of these mechanisms.

In 1995, under the direction of Governor George E. Pataki to reduce the size of government, the Chairman and Directors of the New York State Urban Development Corporation (UDC) began a consolidation of the State's economic development entities, including UDC, the Department of Economic Development (DED), the Job Development Authority (JDA) and the Science and Technology Foundation (STF). In May 1995 the Directors approved the incorporation of a subsidiary, the Empire State Development Corporation (ESDC), under whose name UDC would do business. The entity is known collectively as Empire State Development (ESD).

The corporation is headed by nine directors: seven gubernatorial appointees, the superintendent of banking, and the chairperson of the New York State Science and Technology Foundation.

UDC has the following four operating subsidiaries:

42nd Street Development Project. This project involves plans for the construction of four new office towers, the renovation of the Times Square subway station, and the acquisition of nine historic theaters in the Times Square area of New York City.

The Western New York Economic Development Corporation. WNYEDC was created in 1984 in response to economic troubles and increased unemployment in western New York. It provides both leadership in rebuilding the regional economy and direct assistance in expanding the region's economic base through a variety of loans, training, and other initiatives.

The New York State Mortgage Loan Enforcement and Administration Corporation. The MLC was established as a joint venture of UDC and the Project Finance Agency (PFA) in 1979 to preserve and improve the financial and physical condition of UDC-built housing projects throughout the State. MLC manages the more than $1.2 billion housing portfolio that was developed by UDC from 1968 to 1978.

The Harlem Urban Development Corporation. The HUDC was created in July 1971 through a memorandum of understanding between the Harlem Community and the New York State Urban Development Corporation. As a full-service development agency, HUDC is responsible for planning, feasibility studies, design, financing, construction supervision, and technical assistance.

The UDC was created as a public-benefit corporation, Laws of 1968 (Chapter 174), to generate industrial, commercial, and civic development in distressed urban areas and to create jobs through construction of low and moderate income housing and the renovation or expansion of industrial and commercial facilities. It originally concentrated on initiating and implementing large-scale housing development to low- and moderate-income people. In the mid-1970s, the UDC had become overextended and its capital base was in danger. State government had to expend public funds to "bail out" the corporation. This prompted a reorganization of the UDC in 1975, and it moved away from functioning as a housing developer (initiating or cooperating in design and construction projects and often managing public housing projects after completion) to economic development projects.

This shift was due in large part to the difficulties that arose in financing the completion of the extraordinary amount of housing launched by the corporation. In recent years, UDC has financed no new residential projects and has focused its efforts on the broader issues of economic development. It no longer depends its general credit to finance new projects but rather relies solely on State appropriations, grants, non-recourse public borrowings secured by a particular project, or combinations of these mechanisms.

In 1995, under the direction of Governor George E. Pataki to reduce the size of government, the Chairman and Directors of the New York State Urban Development Corporation (UDC) began a consolidation of the State's economic development entities, including UDC, the Department of Economic Development (DED), the Job Development Authority (JDA) and the Science and Technology Foundation (STF). In May 1995 the Directors approved the incorporation of a subsidiary, the Empire State Development Corporation (ESDC), under whose name UDC would do business. The entity is known collectively as Empire State Development (ESD).

The corporation is headed by nine directors: seven gubernatorial appointees, the superintendent of banking, and the chairperson of the New York State Science and Technology Foundation.

UDC has the following four operating subsidiaries:

42nd Street Development Project. This project involves plans for the construction of four new office towers, the renovation of the Times Square subway station, and the acquisition of nine historic theaters in the Times Square area of New York City.

The Western New York Economic Development Corporation. WNYEDC was created in 1984 in response to economic troubles and increased unemployment in western New York. It provides both leadership in rebuilding the regional economy and direct assistance in expanding the region's economic base through a variety of loans, training, and other initiatives.

The New York State Mortgage Loan Enforcement and Administration Corporation. The MLC was established as a joint venture of UDC and the Project Finance Agency (PFA) in 1979 to preserve and improve the financial and physical condition of UDC-built housing projects throughout the State. MLC manages the more than $1.2 billion housing portfolio that was developed by UDC from 1968 to 1978.

The Harlem Urban Development Corporation. The HUDC was created in July 1971 through a memorandum of understanding between the Harlem Community and the New York State Urban Development Corporation. As a full-service development agency, HUDC is responsible for planning, feasibility studies, design, financing, construction supervision, and technical assistance.

The Empire State Development Corporation operates the following subsidiaries:

Governors Island Preservation and Education Corporation (GIPEC). GIPEC was established on September 13, 2002, when it became clear that the federal government would transfer control of part of Governors Island (New York, N.Y.) to New York State. The corporation is responsible for the planning, redevelopment and ongoing operations of 150 acres of Governors Island; the U.S. National Park Service owns and operates an additional 22 acres of the island.

Harlem Community Development Corporation (HCDC). HCDC was created in 1995 to foster the redevelopment of vacant or underutilized commercial and residential property in the upper Manhattan neighborhoods of East Harlem, Central Harlem, West Harlem, and Washington Heights. It also provides training, technical advice, and other services to area businesses and community groups seeking to undertake their own economic development projects.

Harriman Research and Technology Development Corporation (HRTDC). HRTDC was established in 2004 to lead the transformation of the W. Averill Harriman State Office Campus in Albany into a research and technology park. It oversaw the development of a master redevelopment plan and oversees ongoing efforts to redevelop the campus.

Lower Manhattan Development Corporation (LMDC). LMDC was created in July 2002 to redevelop the World Trade Center site, revitalize the economy of lower Manhattan, and memorialize those who perished at the site. It is a joint city-state public benefit corporation governed by a sixteen-member board of directors, half of whom are appointed by the Governor and half of whom are appointed by the Mayor of the City of New York. It has been responsible for distributing federal Community Development Block Grant funds to area businesses and cultural institutions affected by the September 11, 2001 attacks on the World Trade Center, creating a master plan for redeveloping the site, and sponsoring a design competition for a memorial to be built at the site.

Queens West Development Corporation (QWDC). QWDC was established in 1992 to oversee the redevelopment of the Hunters Point (Queens, N.Y.) area into a residential and commercial neighborhood. It is governed by a board of directors composed of representatives from the Empire State Development Corporation and the Port Authority of New York and New Jersey.

USA Niagara Development Corporation (USAN). USAN was established to leverage private investment and encourage the renewal of the tourist industry in the City of Niagara Falls.