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October 27, 2010


DiNapoli Public Authority Spotlight: Urban Development Corp.

Hundreds of Millions Spent on No-Bid Contracts and High Salaries

The Urban Development Corp. awarded $344.9 million in contracts in fiscal year 2008-09 without seeking competitive bids and paid 28 percent of its employees more than $100,000 in 2009-10, according to information reported by the public authority that was reviewed by New York State Comptroller Thomas P. DiNapoli.  

“These numbers raise more questions than answers,” DiNapoli said. “The state’s public authorities spend billions of dollars of taxpayers’ money in the dark shadows of state government. We’ve been auditing authorities like the MTA to hold them accountable, and the Public Authorities Reform Act will help shed light on no bid authority contracts.  But there’s still too much taxpayer money being spent without enough taxpayer accountability.”

DiNapoli’s review found the Urban Development Corp.’s largest contracts were awarded without a competitive process. In FY 2008-09, the corporation awarded 97 contracts, with a value totaling $216.1 million, through a competitive process while 32 contracts, with a value totaling $344.9 million, were not competitively bid.  

Without the benefit of a competitive process, the corporation cannot be sure it is getting the best value for the state. Under the Public Authorities Reform Act of 2009, the Office of the State Comptroller now has the authority to review all non-competitive public authority contracts greater than $1 million.

DiNapoli’s review of the corporation’s reported payroll, as of March 31, 2010, revealed that 102 of the corporation’s 359 employees, or 28 percent, are paid more than $100,000 while the average number of employees making that amount for all New York state public authorities is 11 percent and the average for New York state employees is 7 percent.

In addition, the Urban Development Corp. had $8.4 billion in outstanding debt, as of March 31, 2010, of which $8.2 billion was state-supported debt that was borrowed without voter approval. This represents 18 percent of all outstanding state-supported public authority debt.

The corporation was created in 1968 to promote economic growth, prevent further economic decline and encourage job creation. Today, the Empire State Development Corp. serves as an umbrella organization for the Urban Development Corp., the Department of Economic Development and the New York Job Development Authority.

Urban Development Corp. has three main offices in Albany, Buffalo and New York City and ten regional offices around the state. In addition, the corporation has locations throughout the world including offices in Australia, the United Kingdom, France, Germany, India, Israel, Mexico, Brazil, Chile, South Africa, Turkey, two offices in Canada and three in China.

The Public Authorities Accountability Act of 2005 and the Public Authorities Reform Act of 2009 created new reporting, disclosure and accountability requirements but public authorities continue to operate with a tremendous amount of autonomy. DiNapoli’s review of the Urban Development Corp. is part of his office’s continued efforts to strengthen government oversight and improve public access to information.

In August, DiNapoli released a report entitled “Public Authorities by the Numbers” to shed light on the scope and size of the state’s public authorities. To view the report, visit here.

To view DiNapoli’s spotlight on the Urban Development Corp., visit here.



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