Adjusted     Executive
                             Appropriation       Request               Percent
                                   2001-02       2002-03        Change  Change



AGENCY SUMMARY
  General Fund                  89,504,100    95,504,100    6,000,000    6.70%
  Capital Projects Fund                  0   275,000,000  275,000,000     --  
  Total for AGENCY SUMMARY:     89,504,100   370,504,100  281,000,000  313.95%


AID TO LOCALITIES
  General Fund                  89,504,100    95,504,100    6,000,000    6.70%
  Total for AID TO LOCALITIES:  89,504,100    95,504,100    6,000,000    6.70%

Economic Development
  General Fund                  89,500,000    95,500,000    6,000,000    6.70%
  Total for Program:            89,500,000    95,500,000    6,000,000    6.70%

Payments to Municipalities
  General Fund                       4,100         4,100            0    0.00%
  Total for Program:                 4,100         4,100            0    0.00%

CAPITAL PROJECTS
  Capital Projects Fund                  0   275,000,000  275,000,000     --  
  Total for CAPITAL PROJECTS:            0   275,000,000  275,000,000     --  

Economic Development
  Capital Projects Fund                  0   275,000,000  275,000,000     --  
  Total for Program:                     0   275,000,000  275,000,000     --  



                          BUDGET HIGHLIGHTS
                   (Executive Budget: pp. 181-183)

The Urban Development Corporation (UDC) is currently doing business as
the Empire State Development Corporation (ESDC).  The mission of the
UDC is to promote economic and real estate development by providing
financial assistance to local governments, businesses and not-for-
profit corporations engaged in economic development activities.  In
addition, the Corporation is engaged in housing portfolio maintenance
and provides State facility financing for the construction and
modernization of State correctional facilities, as well as other
special projects.

The Urban Development Corporation is included in the Transportation
and Economic Development appropriation bill.  
Aid to Localities

The Executive recommends a General Fund appropriation of $95,504,100,
a net increase of $6,000,000 over State Fiscal Year (SFY) 2001-02
levels.  

The Executive eliminates $20,000,000 in funding that was included in
the SFY 2001-02 final State budget for the following:

--     $10,000,000 for High Technology, Biotechnology and Biomedical
       Initiatives.  However, the Executive proposes to fully
       reappropriate this item.  In addition, the Executive recommends
       a new $250,000,000 Capital Projects appropriation to fund
       projects which support the creation or retention of technology
       related jobs. However, the Executive's proposed Capital Program
       and Financing Plan indicates that only $62,500,000 will be
       disbursed in SFY 2002-03 to support this proposal.

--     $10,000,000 for economic development projects within the
       Liberty and Resurgence Zones.

The Executive proposes a new $25,000,000 appropriation for economic
development initiatives outside New York City, to be funded by the
Empire Opportunity Fund (EOF), which the Executive proposes to create
pursuant to Article VII language.  This appropriation is intended to
partially cover non-capital costs, including program planning and
feasibility studies for the proposed economic development and
infrastructure improvements projects supported by the Fund.

The Executive proposes $1,000,000 for Military Base Retention Efforts. 
This appropriation is designed to maintain existing operational
military facilities by providing these bases with funds to develop
planning and marketing tools that will keep a military presence at the
facilities.

The Executive proposes to maintain appropriations for the following
programs at SFY 2001-02 levels:

--     JOBS NOW                                          $33,942,000
--     Economic Development Fund (EDF)                   $29,900,000
--     Urban and Community and Development                $2,829,000
--     Minority and Women Owned Business Development
       and Lending Program                                $2,829,000
--     Payments to Municipalities Program                     $4,100

Capital Projects

The Governor proposes $275,000,000 in new Capital Projects
appropriations, an increase of 100 percent from SFY 2001-02 levels,
including: 

--     $250,000,000 for projects which support the creation or
       retention of technology related jobs.  Projects that may be
       funded under this appropriation include construction and
       rehabilitation of research facilities, acquisition of
       equipment, development of business incubators and business
       parks and other initiatives that support the creation or
       retention of technology related jobs.  The selection of
       projects will be pursuant to guidelines promulgated by the
       Urban Development Corporation.  The appropriation includes
       language authorizing suballocation of funds to the New York
       State Office of Science, Technology, and Academic Research. 
       The Executive proposes corresponding Article VII language which
       authorizes UDC to issue up to $250,000,000 in bonds for this
       purpose and to reimburse Capital Projects disbursements.  The
       Executive's proposed Capital Program and Financing Plan
       indicates that only $62,500,000 will be disbursed in SFY 2002-
       03 to support this proposal. 

--     $25,000,000 for economic development initiatives outside
       New York City funded through the Empire Opportunity Fund, which
       the Executive proposes to create pursuant to Article VII
       language  The Executive's proposed Capital Program and
       Financing Plan indicates that only $10,000,000 will be
       disbursed in the upcoming fiscal year to support projects
       funded under this proposal.

Article VII Proposals

The Executive recommends language authorizing the Dormitory Authority
(DA) to provide $1,200,000 to support the operation of the Cornell
Theory Center supercomputer.

The Executive recommends language that will allow the Urban
Development Corporation to forgive a $25,000,000 loan to Crossroads
Arena, LLC for the construction of the HSBC Arena located in the City
of Buffalo and to forgive a $14,000,000 loan to the City of Binghamton
for the construction of the Binghamton Municipal Stadium.

The Executive proposes language to make the Urban Development
Corporation's general loan powers permanent.  The Corporation's loan
powers are set to expire on July 1, 2002. 

The Executive proposes a bill authorizing the Urban Development
Corporation to issue bonds or grants, totaling no more than
$250,000,000 for High Tech/Biotech capital projects, including the
Centers of Excellence that would create or retain technology related
jobs.

The Executive recommends language to establish the Empire Opportunity
Fund to provide financing for major capital and infrastructure
projects outside the City of New York.  This bill would:

--     Establish a new subsidiary of UDC to administer the Fund;

--     Dedicate an amount equal to the amount transferred from the
       Tribal-State Account to the State General Fund for purposes of
       the Empire Opportunity Fund;

--     Authorize the issuance of up to $750,000,000 of state-supported
       bonds; and

--     Authorize the Fund to issue additional bonds to support the
       non-State share of project costs.

The Executive proposes to reduce the authorized bonding authority for
the Community Enhancement Facilities Assistance Program (CEFAP) by
$88,245,000, including a $60,000,000 reduction in the Program.  This
$60,000,000 would be redirected to the proposed $250,000,000 High
Tech, Biotech Capital Program.  In addition, the Executive proposes a
$28,245,000 reduction to reflect the use of Debt Reduction Reserve
Funds (DRRF) to finance CEFAP projects.