Clearing up the confusion

The governor wants all the development in the city. Or not.

He’s focused on just a couple of big projects. Or maybe more.

The answers vary regarding Gov. Andrew Cuomo’s plans for $1 billion in state incentives to rally the local economy, depending on who is doing the talking. And a lot of people are talking.

Mayor Byron Brown. State Sen. George Maziarz. Assemblyman Sean Ryan.

Among others.

Investigative Post interviewed the two local officials who have spoken directly with Cuomo about his intentions and who are among those charged with translating into action his $1 billion pledge of economic development for the Buffalo area.

Our question to Sam Hoyt,  senior vice president of Empire State Development Corp., and Howard Zemsky, co-chairman of the Western New York Regional Economic Development Council: What is the governor telling you?

Both Hoyt and Zemsky said Cuomo has outlined only the broad parameters of how he wants the $1 billion used.

“I think we have been focusing too much on assuming the details of what the governor means,” Zemsky said.

“What he means is he wants to support a well thought out plan to substantively move the needle in our economic development efforts, and he wants to make sure we leverage the State’s money to incentivize considerably more private sector investment and job creation.

Here’s where things stand with the particulars:

Cuomo wants to concentrate the incentives on projects within the city, but is willing to consider projects outside the city limits.  

“There’s a focus on initiatives in the city. It’s clearly not exclusive,” Zemsky said.

But as a proponent of “smart growth,” Cuomo is not keen on locating projects in outer-ring suburbs or rural areas. This suggests that Buffalo, its inner-ring suburbs and perhaps Niagara Falls, are likely destinations for state-subsidized projects. Lackawanna, with the sprawling Bethlehem steel site, is another candidate.

The governor most likely wants to establish an industry cluster or bolster one or more that already exist.

The Regional Economic Development Council, in its November 2011 report, identified eight clusters, including advanced manufacturing, renewal energy, health and life sciences, professional services, tourism, higher education, agriculture and cross-border logistics. No decisions have been made as to which clusters are the best candidates for a piece of the $1 billion.

The number of projects is undetermined.

“It’s unlikely a single project is going to have the impact we’re looking for,” Hoyt said before adding “I can’t imagine more than 10. The governor is not looking to dispense money into a bunch of little projects.”

Developer-driven projects, the staple of economic development efforts for decades, are not high on the priority list. 

Hoyt mentioned renovation of the Statler or work to return cars to Main Street downtown as examples of projects that “aren’t going to happen” as a result of the $1 billion.

Likewise, jobs that don’t pay well or are subject to relocation, such as call centers, are not considered part of the mix, he said.

The $1 billion will be spread out over five years and include a mix of cash – $100 million has been earmarked in Cuomo’s proposed 2012 budget – and tax breaks including tax credits, sales tax abatements, government-back bonds and allocation of discounted hydropower.

Does the $1 billion represent all “new money” or is part of it recycled from existing programs? State government has yet to answer that question. Also unaddressed is what role, if any, local tax breaks, such as property tax abatements, might play in the initiative.

The Empire State Development Corp., rather than local agencies, is going to manage the program.

Given the focus on the Buffalo, there isn’t much choice. City Hall doesn’t have a functioning economic development agency.

Mayor Bryon Brown has yet to close the books on the scandal plagued Buffalo Economic Renaissance Corp. two years after announcing his intention to shut it down. The Buffalo Urban Renewal Agency, which has taken over some of BERC’s responsibilities, functions primarily as a pass-through agency for federal aid. Its last major effort at economic development – a hotel near Erie Basin Marina – was widely panned and the site remains vacant.

Meanwhile, the Erie County Industrial Development Agency hasn’t done many major deals of late in the city.

To fill the void, ESD will handle the nuts and bolts, in collaboration with the Regional Economic Development Council headed by Zemsky and Satish Tripathi, president of the University at Buffalo. The Council produced a set of recommendations in November that serve as an economic development blue print for the region.

Zemsky stressed that while the board parameters of the $1 billion initiative are in place, the “plan,” such as it is, is going to evolve.

“If it doesn’t change over time, I’ll be shocked,” he said.

This is the second of three stories on Cuomo’s plans to revitalize the regional economy. The package concludes Friday with an interview with Howard Zemsky, co-chairman of the Regional Economic Development Council for WNY. Investigative Post Editor Jim Heaney also blogs today on the plan.