Feb 23
2012
Cuomo’s welcome break with the past
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by Jim Heaney, editor of Investigative Post
A fair number of folks I’m talking to in economic development circles aren’t entirely sold on Andrew Cuomo’s plan to spend $1 billion to jump start the Buffalo economy.
For starters, a lot of the details have yet to be worked out. There’s skepticism over the governor’s motives. And there’s his apparent intent to throw a lot of money at companies willing to relocate to the region, which has the makings of good photo ops but a poor return on investment.
But Cuomo is showing a willingness – indeed, an eagerness – to abandon the mindset behind the failed policies of the past generation. And that, to me, shouldn’t be overlooked and can’t be underestimated.
I covered economic development issues for The Buffalo News for a decade and if I had to summarize the thinking of our economic development decision makers, it would read something like this:
“HANG ON TO WHAT WE HAVE!!! AT ALL COSTS!!! GROWTH??? LET’S NOT SHRINK!!! AT LEAST NOT TOO MUCH!!! AND CERTAINLY NOT ON MY WATCH!!!”
Such thinking has given us IDA’s dangling tax breaks to lure businesses from cross town and subsidizing the construction of doctor offices and dollar stores.
It’s also resulted in City Hall doling out grants and loans to bars, restaurants and barber shops.
Perhaps most troubling, there’s the New York State Power Authority squandering the region’s most precious asset, low-cost hydropower generated at the Niagara Power Project in Lewiston. It’s our most potent economic development tool, providing industry with discounts worth up to $200 million a year when energy prices are high. Rather than getting the best bang for that buck, NYPA, with Albany’s tacit approval, simply treats the discounted power as a birthright to the companies lucky enough to have been in line when it was first doled out in the 1960s.
How many new ventures it could have powered, we’ll never know. Except that we know there haven’t been many new ventures.
So, in this context, Cuomo’s push to create jobs, not just retain them, and to invest in companies with a future, not just a past, marks an important change. Huge, in fact.
Ditto for his embrace of smart growth principles – in this region of shrinking population and expanding suburban borders – and desire to make the city and inner-ring suburbs ground zero for the next wave of development.
The last 20 years or more has seen developers exert a great deal of influence over the local economic development agenda. They wanted subsidies and they wanted them where they wanted them. And where they wanted them wasn’t in the city.
Thus we have the huge CrossPoint office park in East Amherst, along with GEICO and Citigroup. Yahoo in an industrial park in Lockport. And we would have had a Verizon data center way out in Somerset if that deal hadn’t fallen through.
OK, to summarize — focus on the urban core is a welcome departure. Ditto for measuring success by creating jobs rather than simply not losing them. And a billion dollars is, well, a billion dollars, even if some of the money is recycled.
But sinking millions – hundreds of millions, actually – into corporate welfare isn’t going to revitalize the regional economy.
Do a handful of deals like Yahoo, with subsidies of $2.1 million a job, and you’ll count the number of new jobs in the hundreds.
That’s got all the appeal of another 6-10 season by the Bills.
But use subsidy ceilings of under $100,000 per job that are employed by some key federal programs and the job count will be 15,000, 20,000, maybe 25,000.
Hey, baby, we’re talking Super Bowl. Or at least a playoff berth.
How it all plays out? Who knows. The devil will be in the details, as they say. But for the time being, anyway, let’s keep in mind that Cuomo’s big-picture thinking represents a big departure from the failed group think of the past couple of decades.
How big? You tell ’em, Billy.
