2023 New York Laws › NPC - Not-For-Profit Corporation › Article 14 - Special Not-for-Profit Corporations › 1411 - Local Development Corporations.

§ 1411. Local development corporations.
(a) Purposes.
This  section  shall  provide  an  additional  and alternate method of
incorporation or reincorporation of not-for-profit corporations for  any
of  the  purposes set forth in this paragraph and shall not be deemed to
alter, impair or diminish the purposes, rights, powers or privileges  of
any  corporation heretofore or hereafter incorporated under this section
or under the stock or business corporation  laws.  Corporations  may  be
incorporated  or  reincorporated  under  this  section as not-for-profit
local development corporations operated for the  exclusively  charitable
or public purposes of relieving and reducing unemployment, promoting and
providing   for   additional   and  maximum  employment,  bettering  and
maintaining job opportunities, instructing or  training  individuals  to
improve  or  develop  their  capabilities  for  such  jobs,  carrying on
scientific  research  for  the  purpose  of  aiding   a   community   or
geographical area by attracting new industry to the community or area or
by  encouraging  the development of, or retention of, an industry in the
community or area, and lessening the burdens of government and acting in
the public interest, and any one or  more  counties,  cities,  towns  or
villages  of  the state, or any combination thereof, or the New York job
development  authority  in  exercising  its  power  under   the   public
authorities  law  to  encourage  the  organization  of local development
corporations, may cause such corporations to be incorporated  by  public
officers  or  private individuals or reincorporated upon compliance with
the requirements of this section, and it is hereby found, determined and
declared that in carrying out said purposes and in exercising the powers
conferred by paragraph (b)  such  corporations  will  be  performing  an
essential governmental function.
(b) Type of corporation.
A local development corporation is a charitable corporation under this
chapter.
(c) Powers.
In  furtherance of its purposes set forth in paragraph (a) but not for
any other purposes, a  local  development  corporation  incorporated  or
reincorporated  under  this  section shall have the following powers: to
construct,  acquire,  rehabilitate  and  improve  for  use   by   others
industrial  or  manufacturing  plants  in  the  territory  in  which its
operations are principally to be conducted,  to  assist  financially  in
such  construction,  acquisition,  rehabilitation  and  improvement,  to
maintain such plants  for  others  in  such  territory,  to  disseminate
information  and  furnish  advice, technical assistance and liaison with
federal, state and local authorities with respect thereto, to acquire by
purchase, lease, gift, bequest, devise or  otherwise  real  or  personal
property  or  interests therein, to borrow money and to issue negotiable
bonds, notes and other obligations therefor, and notwithstanding section
510 (Disposition of all or substantially all assets)  without  leave  of
the  court, to sell, lease, mortgage or otherwise dispose of or encumber
any such plants or any of its real or personal property or any  interest
therein  upon  such  terms  as  it may determine and, in connection with
loans from the  New  York  job  development  authority,  to  enter  into
covenants  and  agreements  and to comply with all the terms, conditions
and provisions  thereof,  and  otherwise  to  carry  out  its  corporate
purposes  and  to  foster  and  encourage  the  location or expansion of
industrial or  manufacturing  plants  in  the  territory  in  which  the
operations   of  such  corporation  are  principally  to  be  conducted,
provided, however, that no such corporation shall attempt  to  influence
legislation  by  propaganda  or  otherwise, or participate or intervene,

directly or indirectly, in any political campaign on  behalf  of  or  in
opposition to any candidate for public office.
(d)  Purchase  or lease of real property owned by a county, city, town
or village.
(1) The local legislative body of a county, city, town or village  or,
if  there  is a board of estimate in a city, then the board of estimate,
may by resolution determine that specifically  described  real  property
owned  by  the  county, city, town or village is not required for use by
such county, city, town or village and authorize the county, city,  town
or  village  to  sell or lease such real property to a local development
corporation incorporated or reincorporated under this article; provided,
however, that title to such land be not declared inalienable as a forest
preserve or a parkland.
(2) Notwithstanding the provisions of any general,  special  or  local
law,  charter  or  ordinance  to the contrary, such sale or lease may be
made  without  appraisal,  public  notice,  (except   as   provided   in
subparagraph  (4))  or  public bidding for such price or rental and upon
such terms as may be agreed upon  between  the  county,  city,  town  or
village  and said local development corporation; provided, however, that
in case of a lease  the  term  may  not  exceed  ninety-nine  years  and
provided,  further, that in cities having a population of one million or
more, no such sale or lease shall be made  without  the  approval  of  a
majority  of the members of the borough improvement board of the borough
in which such real property is located.
(3) Before any sale  or  lease  to  a  local  development  corporation
incorporated or reincorporated under this article shall be authorized, a
public  hearing  shall  be held by the local legislative body, or by the
board of estimate, as the case may be, to consider the proposed sale  or
lease.
(4) Notice of such hearing shall be published at least ten days before
the  date  set for the hearing in such publication and in such manner as
may be designated by  the  local  legislative  body,  or  the  board  of
estimate as the case may be.
(5)  A  local  development corporation, incorporated or reincorporated
under this section, which purchases  or  leases  real  property  from  a
county,  city,  town or village, shall not, without the written approval
of the county, city, town or village, use such  real  property  for  any
purpose   except   the   purposes   set  forth  in  the  certificate  of
incorporation or reincorporation of said local development  corporation.
In the event such real property is used in violation of the restrictions
of  this  paragraph, the attorney-general may bring an action or special
proceeding to enjoin the unauthorized use.
(e) Certificate of incorporation.
In addition  to  the  requirements  of  section  402  (Certificate  of
incorporation;   contents)   the   certificate   of   incorporation   or
reincorporation of  a  local  development  corporation  incorporated  or
reincorporated  under  this  article shall state (1) that all income and
earnings of such corporation shall be used exclusively for its corporate
purposes or  accrue  and  be  paid  to  the  New  York  job  development
authority,  (2)  that  no  part  of  the  income  or  earnings  of  such
corporation shall inure to the benefit  or  profit  of,  nor  shall  any
distribution  of its property or assets be made to any member or private
person, corporate or individual, or any other private  interest,  except
that  the  certificate of incorporation or reincorporation may authorize
the  repayment  of  loans  and  may  also  authorize  the  repayment  of
contributions (other than dues) to the local development corporation but
only  if  and  to  the  extent  that  any  such  contribution may not be
allowable as a deduction in computing taxable income under the  internal

revenue   code   of  nineteen  hundred  fifty-four,  (3)  that  if  such
corporation accepts a mortgage loan or  loans  from  the  New  York  job
development authority, such corporation shall be dissolved in accordance
with  the  provisions  of  paragraph  (g)  upon  the  repayment or other
discharge in full by such corporation of all such loans.
(f) Exemption of income from taxation.
The  income   and   operations   of   corporations   incorporated   or
reincorporated under this section shall be exempt from taxation.
(g) Dissolution.
Upon the dissolution of any local development corporation incorporated
or  reincorporated  under  this  section  no  member  or private person,
corporate or individual, or other private interest, shall be entitled to
any distribution or division of its remaining funds and  other  property
and rights and interests in property, and the balance thereof, after the
payment  of  all  debts and liabilities of the corporation of whatsoever
kind and nature, (including the payment of loans and  contributions  the
repayment   of   which   has  been  authorized  in  its  certificate  of
incorporation or reincorporation) shall be distributed to  one  or  more
counties,  cities,  towns or villages within the territory designated in
its certificate of incorporation or reincorporation as the territory  in
which its operations are principally to be conducted, for furtherance of
the  purposes  set  forth  in  paragraph  (a),  or  to  the New York job
development authority, as shall be provided by said  corporation  or  by
order  of the supreme court of the state of New York pursuant to section
1008  (Jurisdiction  of  supreme  court  to  supervise  dissolution  and
liquidation).
(h) Corporations heretofore incorporated.
Any   corporation   heretofore   incorporated   under  the  membership
corporations law or  this  chapter,  or  under  the  stock  or  business
corporation  law  for  any of the purposes set forth in paragraph (a) of
this  section  may  amend  its  certificate  of  incorporation  and   be
reincorporated  as  a local development corporation organized under this
section by making and filing in the office of the secretary of  state  a
certificate,  stating  the name of such corporation, and, if it has been
changed, the name under which it was originally incorporated,  the  date
of its incorporation, the names and post-office addresses of its members
or  of  the  holders  of record of all of the outstanding shares of such
corporation entitled to vote with relation to the  proceedings  provided
for  in  the certificate and that such corporation has elected to become
and be a local development corporation organized and operated under  and
by  virtue  of  this  section.  Such  certificate  shall  be  either (1)
subscribed in person or by proxy by all of the members or the holders of
record of all of the outstanding shares of such corporation entitled  to
vote  with  relation  to  such  proceedings  and  shall  have annexed an
affidavit of the secretary or an assistant secretary  that  the  persons
who have executed the certificate, in person or by proxy, constitute all
of the members or the holders of record of all of the outstanding shares
of  the  corporation  entitled  to vote with relation to the proceedings
provided for in the certificate, or (2) subscribed by the president or a
vice president and the secretary or an  assistant  secretary  and  shall
have  annexed  an affidavit of such officers stating that they have been
authorized to execute and file such certificate by the  votes,  cast  in
person or by proxy, of all of the members or of the holders of record of
all  of the outstanding shares of such corporation entitled to vote with
relation to such proceedings at the meeting at  which  such  votes  were
cast,  and  that  such  votes  were  cast  at  a  meeting  of members or
stockholders held on a date specified, upon notice pursuant  to  section
605  (Notice  of  meeting  of members) or to section 605 of the Business

Corporation Law. Every certificate filed under this paragraph shall have
endorsed thereon or annexed thereto the approval of  a  justice  of  the
supreme  court  of  the  judicial  district  in  which the office of the
corporation  is  to  be  located.  A  reincorporation  pursuant  to this
paragraph shall not effect a dissolution of the corporation,  but  shall
be  deemed  a continuation of its corporate existence, without affecting
its then existing property rights or liabilities, or the liabilities  of
its  members or officers as such, but thereafter it shall have only such
rights, powers and privileges, and be subject only to such other  duties
and  liabilities,  as  a corporation created for the same purposes under
this article.
(i) Effect of section.
Corporations incorporated or reincorporated under this  section  shall
be  organized  and  operated  exclusively  for the purposes set forth in
paragraph (a), shall have, in addition to the powers otherwise conferred
by law, the powers conferred by paragraph (c) and shall  be  subject  to
all  the  restrictions  and  limitations  imposed  by  paragraph (e) and
paragraph (g).  In  so  far  as  the  provisions  of  this  section  are
inconsistent  with  the provisions of any other law, general or special,
the provisions of this section shall be controlling as  to  corporations
incorporated or reincorporated hereunder.