Economic chiefs call on Cuomo for action

Kathy Kahn | Dec 20, 2010

Will Gov.-elect Andrew Cuomo make good on promises to reform the way New York attracts and retains business? Economic development corporation presidents are putting their trust in Cuomo’s business acumen and plans to put the state back on top again.

Ron Hicks, president and CEO of Rockland’s EDC is ready to see a revolving fund for shovel-ready sites.

“This is taking money from the comptroller, not the state. Let him (Thomas DiNapoli) use the pension fund by investing in our communities at a reasonable interest rate at a good return on its investment – at least five percent, better than any other that is available.”

Lance Matteson, president and CEO of Ulster’s EDC would like to see those shovel-ready sites happen, and “particularly see the permitting process tweaked.”

And he’s not alone. All of the economic development chiefs who HV Biz spoke with voiced concern over the amount of time it takes for a company to get through the process.

“Here in Putnam,” said Kevin Bailey, the county’s economic development president and CEO, “it is not our local boards that are causing the delays – it is the state and New York City.”

In Putnam’s case, since more than half the county is in the New York City watershed, it is even more difficult to find a clean, environmentally acceptable business to pass muster, “but it shouldn’t take years to get the green light.”

Hicks said companies look to southern states where the permitting process allows a company to be up and running within 18 months. “Yes, we need to plan and make sure the company is a good, sustainable one, but we also need to help owners get sites shovel-ready – not sit around and wait for someone to come along and do it.”

John MacEnroe, president of Dutchess County’s economic development team, said IBM’s East Fishkill building is being marketed to high-tech companies and a commutable 90-minute drive from Fishkill to Albany, where the College of Nanoscale and Engineering is headquartered.

“IBM still plays a big role in the region and we are creating a cluster of clean-tech companies as a result. The Fishkill property is in the Foreign Trade Zone and helped considerably in marketing the property, but the Empire Zone was a much more effective tool to get business here; the Excelsior Program is just not making enough of an impression,” MacEnroe said.

“Empire State Development Chairman Dennis Mullen has fought for the packages we’ve needed to land business deals – that’s fundamental to me,” Matteson said. “The rest is rhetoric without that real kind of championing. The governor-elect seems to want to make this a priority; now, he’ll have that chance. Mullen has been a tremendous asset. He’s a businessman – and he understands the needs. I’d like to see him stay on.

“Cuomo has said he wants to fix the Excelsior program – that’s welcome,” Matteson said. “We need accountability and focus the Excelsior program is set up for, but we also need appropriate scale. The Empire Zone had an aggressive program for investment tax credits, whereas Excelsior is much weaker.”

Bailey said unfunded mandates coming from Albany and New York City during the Spitzer-Paterson years have hurt both EDCs and IDAs.

“We are now mandated to have a chief executive officer and a chief financial officer for both organizations. I understand the logic, but for a small county like Putnam, it’s a financial burden. We filled the positions at relatively low salaries, but the money is running out. I’d like to see Gov.-elect Cuomo make it illegal to pass any more unfunded mandates. As far as the Excelsior Program, it’s not worth the paper it’s printed on.”

Matteson said another sore point is the “egregious example of assessments levied on IDAs. If it gets a grant and sub-grant, it is taxed on it. IDAs are nonprofit entities – for some, it is not a significant hit to their bottom line. To others, it’s hurtful. Even if you lose money, you must still pay the assessment.”

Bailey said Putnam challenged the ruling when it was first instituted and received a refund. Putnam plans to withhold its 2010 payment until the new administration comes in and decides what to do.

All economic development leaders are staying positive when it comes to Cuomo. They perceive him as more in touch with the business community and with the property tax concerns than his predecessors, since he resides in Westchester, the highest-taxed county in the state.

Every EDC president was disheartened to learn Macy’s chose West Virginia over Orange County for its new distribution center, a company Orange County Partnership and its economic partners “put thousands of hours of hard work into making happen,” said Maureen Halahan, president. “Everyone in the region, from our own county, to Hudson Valley Economic Development Corp. to our neighboring counties, worked with us. It was an unbelievable effort by everyone and it is an overwhelming loss for our state. When you think of Macy’s, you think New York – its flagship 34th Street store is known the world over – but it is taking its distribution center to another state,” Halahan said.

The 1 million square feet of space the distribution center would have needed, the $189 million that would have been infused in the building of the distribution center would have created 1,000 permanent jobs and created temporary jobs during peak seasons in the hundreds, has been felt by all.

“New York had better wake up,” Halahan said. “I’m hoping the dynamic team we have here in the Hudson Valley from my county and from the entire region can talk to the incoming administration and let us show them how we can help them to achieve the goals Cuomo would like to achieve – retain and create jobs. Would the Empire Zone program have changed Macy’s mind? I do believe it would have,” Halahan said. “But we don’t have it, and we have nothing like it to offer. It’s time for New York to change its tune and become business-friendly.

Hicks said grandparents and parents were able to build companies and provide a future for their children. “But will we be able to do the same? We’re losing our young talent. We have to build a future here for our children and for their children’s children if we truly want to be the ‘Empire State’ once more.”