SUNY Poly sells Smart Systems Technology & Commercialization Center in Canandaigua
ALBANY - Fifteen years of state efforts to transform a high-tech Canandaigua facility into a statewide hub will culminate with a bargain-priced sale to a small private company.
A deal to sell SUNY Polytechnic Institute's Smart Systems Technology & Commercialization Center in Ontario County will come with a steep, state-backed discount and tax breaks for Akoustis Technologies Inc., the growing Charlotte, N.C.-area company purchasing it.
Akoustis agreed last week to pay $2.75 million for the Canandaigua facility and its equipment — a price well below its current appraised value of $7.7 million and the $39 million SUNY Poly's own website says the facility cost to build.
The company, which will make the Canandaigua plant its manufacturing facility, will also receive up to $8 million in tax credits through the state's Excelsior Jobs Program as part of the deal, while a local tax break will likely be in the works in the coming weeks.
In exchange, Akoustis — a company that specializes in a patented filter that improves the efficiency of smartphones — has agreed to invest $20 million in the facility and create 200 jobs on top of keeping 30 jobs already there, according to the state board.
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The sale was approved Thursday by the Fuller Road Management Corp., a state-affiliated board that owns the property.
"I think it was an amazing opportunity that arose for a partner — a private company — to come in and have more jobs created than we currently were looking to have happen with Fuller Road Management Corp.," Michael Frame, Fuller Road chairman and SUNY Poly vice president for external affairs, said in an interview Monday.
Years of efforts
The sale comes as scandal-ridden SUNY Poly, an Albany-based college, continues to assess its future. And it comes after 15 years of limited success by the state to turn the Canandaigua facility in a burgeoning tech hub.
Then-SUNY Poly President Alain Kaloyeros was among 10 charged last September as part of a wide-ranging bid-rigging and bribery case that touched on some of the state's biggest economic-development projects. One of Gov. Andrew Cuomo's top aides, Joseph Percoco, and developers across the state were also among those charged.
Kaloyeros, who has maintained his innocence, was accused of rigging the bid for SUNY Poly projects worth hundreds of millions of dollars to contractors, including a massive solar-panel manufacturing plant in Buffalo.
The charges led to major shakeups at the Fuller Road and Fort Schuyler management corporations, the state-affiliated boards that own SUNY Poly's properties, including the Canandaigua center.
The Canandaigua facility, known as the STC Center, houses 122,425 square feet of offices, research and development space and foundry dedicated to semiconducters and silicon wafers. It sits on more than 50 acres of land.
It is located roughly five miles south of the Thruway on Route 332 as motorists enter the outskirts of the town.
An independent appraiser valued the facility at $7.7 million, according to Fuller Road.
Since the sale price was well under the appraisal, Frame was required to sign off on the deal — which he did, citing Akoustis' promise to create jobs at the facility.
Fuller Road President Robert Megna and Empire State Development President and CEO Howard Zemsky also approved.
In a statement, Akoustis co-chairman Jerry Neal acknowledged it would have cost the company "well over $50 million" and taken up to two years to build a facility like the Canandaigua center.
The company, which is based near Charlotte and was founded in 2014, saw its stock spike from $9.50 to $11.50 after the deal was approved Thursday. On Monday, the price hovered around $10.65.
"This acquisition is an enormous win for Akoustis and is consistent with our capital-efficient business model," Neal said.
Long History
Over the years, the facility has hosted a variety of firms and has gone by different names.
Xerox Corp. invested $10 million in the late 1980s to create a new Advanced Microtechnology Division to design and make products for the optical, automotive and glass industries. Xerox left in 2002.
About that time, it was designated as was one of five Centers of Excellence by state lawmakers. The plan was to develop a public-private venture with Eastman Kodak Co., Xerox Corp., Corning Inc. and regional universities.
The hope was to create a corridor of high-tech hubs along the state’s Thruway that would blossom into bigger business and more jobs. But, at the time, the partnership never took off.
Another attempt at a public-private partnership took hold in 2010, when the Infotonic Technology Center was merged with a nanotech arm of SUNY Poly to create the Smart System Technology & Commercialization, or STC center, in Canandaigua.
Carestream Health, Dynamax Imaging and Moser Baer Technologies and other firms had since leased space at the facility over the years.
As part of the terms of the deal, Akoustis will take over the two remaining leases, allowing the tenants' employees to remain.
The company will also be required to keep the 31 SUNY Research Foundation employees currently employed there.
More tax breaks
The deal will likely be further sweetened with local tax breaks from the Ontario County Industrial Development Agency.
Michael Manikowski, executive director of the county IDA, said he anticipates Akoustis will make an ask of the IDA in the coming weeks.
But even with potential local tax breaks, the Akoustis deal will add to the county's coffers, Manikowski said. The SUNY Poly facility is currently tax exempt.
"It's a technology space that's very promising," Manikowski said. "This is a facility that fits (Akostis') needs perfectly."
Despite the tax breaks and the low sale price, state and federal lawmakers praised the deal, saying it could help jump-start the facility.
U.S. Senate Minority Leader Charles Schumer, a New York Democrat, called the deal a "huge win for Canandaigua."
He called on the Department of Defense to transfer the center's trusted foundry status to Akoustis, a key federal accreditation for microelectronics producers.
"Akoustis Technology Inc. is investing in this community and creating good paying jobs in Upstate New York," Schumer said in a statement.
State Assembly Minority Leader Brian Kolb, R-Canandaigua, issued a statement signaling support for the deal, saying it "breathes life into a facility that had been underutilized."
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