Tag Archives: ESDC

If It Weren't For Pyrrhic Victories…

25 Sep

first-niagara-logo-300x71A few weeks ago, Mark Byrnes wrote a piece excoriating First Niagara Bank for not choosing to locate its HQ in downtown Buffalo, opting instead to remain on the Pendleton side of South Transit Road. He argued:

1. Historically, financial companies like to be located next to other financial companies. So what about being footsteps from HSBC, M&T, Bank of America, and Key Bank-some of the largest banks in the country, and world.

2. Downtown Buffalo is about 10 minutes closer to the airport and there is better public transit options for the airport and higher-speed roads with closer access to a downtown site parcel for the airport (the 33). There are also far better options for business meetings over lunch or dinner or even sporting events.

3. On the most simplistic base…if most of your workforce is in Erie County, then why don’t you locate in the most centralized part of Erie County?

4. Image-wise…how does your site-surrounded by farm land and subpar retail enhance your image as a growing regional bank? Not very well. This ties into #2.

Also:

Nothing like seeing significant development continue to pop up in remote, low-density areas while our high-density areas continue to hollow out. This is not to fully blame First Niagara, we have pretty poor local leadership that doesn’t try to make our high-density areas worth investing in. Fist Niagara is just a new example to an old story.

Literally two days later, it was announced that First Niagara was moving its HQ to the Larkin at Exchange complex in South Buffalo. All of the bank’s top management is moving. The Niagara County location will not technically lose any jobs, but will instead switch places with Buffalo to become the new back-office operation. Buffalo will gain 300 jobs, funded in part by you.

This being western New York, the Empire State Development Corporation (ESDC) sweetened the deal for First Niagara, giving it a $1.3 million grant to make the move to Buffalo.

Predictably and understandably, Niagara County is pissed. Niagara County is losing a HQ and the highest earners at that bank. Niagara County loses a bank headquarters. Niagara County also happens to pay taxes to the state, which in turn funds the ESDC. Niagara County’s own money, therefore, was used against it, funding 300 new jobs, none of which will go to the existing Niagara County headquarters.

And what of the LCo building? It’s not “footsteps from HSBC, M&T, Bank of America, and Key Bank”. One of the LCo’s selling points is the fact that it runs a diesel London cab to and from the downtown core for the convenience of its tenants.

There’s no downtown density at the LCo building. It’s not in the downtown core or central business district. It’s an island of adaptive reuse surrounded by ample parking, much of it at-grade. There’s also handy access to and from the I-190 northbound at Smith and Hamburg Streets. It’s completely isolated from the surrounding neighborhoods; its employees, for the most part, drive in and drive out. They shop at the on-site stores, use the on-site dry cleaner, and also enjoy an on-site commissary (featuring Starbucks coffee!).

Seriously, from an urban planning/urban density perspective, this is not at all different from locating it in a nondescript office park in Williamsville. Or, say, Pendleton.

The ESDC shouldn’t be spending money shuffling jobs around the WNY chessboard. How is WNY made better if Erie County poaches high-paying jobs from Niagara County? The state should be poaching jobs from Toledo or Des Moines. It should be looking at other chessboards altogether.

While everyone in Buffalo and Erie County pats themselves on the back for bringing the old Lockport Savings Bank to the LCo, realize that this comes at a cost for our WNY neighbor to the north. How that’s fair and neato-nifty is beyond me. It seems like a pyrrhic victory, and Niagara County has a right to be pissed, Yahoo! notwithstanding.

This is, pathetically, what counts for economic development in Western New York, I guess.

At least there’s ample, free parking.

The Empire State Development Corporation

6 May

Isn’t developing much, and is otherwise in turmoil.

The Failboat’s reach is far and wide.

"Mother of All Taxpayer Lawsuits"

3 Aug

Jim Ostrowski is representing a large group of plaintiffs who are suing the state, state leadership, and several companies who have (or may) receive state economic development incentives. The defendants include Delphi, American Axle, IBM, and Bass Pro.

Ostrowski argues that this provision of the state constitution prohibits “corporate welfare”:

“The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes.”

The Bass Pro example wouldn’t apply because there isn’t a loan or donation being given by the state (or any state-controlled entity) to Bass Pro. The incentive package has to do with tax reduction or elimination – not a handout. But other examples do involve outright grants from the Empire State Development Corporation to private firms to enable some form of expansion with corresponding pledges of job creation.

The Empire State Development Corporation, however, is not named as a defendant in the lawsuit despite the fact that it is the entity that makes the incentives.

By way of a guess, I’d suspect that the creation of the ESDC is the workaround this constitutional prohibition. By using the ESDC, it is not the “state” per se which is giving out the money, but a public benefit corporation (a.k.a. Authority). As we all know, Authorities in New York have been carved out and created in such a way as to best avoid public oversight and scrutiny, so the counterargument will most likely be that the ESDC is a legal creation, and it – not the state – hands out the pork.

But it’ll be interesting to see what happens. Also, as far as I’m aware, the Wendt Foundation is not funding this lawsuit.

Wilmers to head Empire State Development Corp.

6 Jun

You’ll recall the hubbub last month when new Governor Paterson announced that he wanted to abandon old Governor Spitzer’s notion to split the Empire State Development Corporation into upstate and downstate entities. He reasoned that New York was one state, and it didn’t make sense to split the state’s economic development agency.

People upstate wrung our hands, wondering whether this meant that Paterson would cede to downstate pressure to jettison Mr. Gundersen and pick some Wall Street type (for instance) to head the agency and thus would upstate lose out yet again.

I guess Governor Paterson heard these concerns:

Robert G. Wilmers, chairman and chief executive officer of Buffalo-based M&T Bank Corp., was tapped Thursday to head Empire State Development Corp., the state’s key economic-development agency.

Gov. David A. Paterson said he selected Wilmers because of his business experience, his outspoken opinions on the steps needed to rejuvenate the state’s economy and his history of “civic engagement.”

“We are serious about this,” Paterson said. “And this is the reason I have asked a person of this type of stature. Normally, it would be unusual to ask someone like this, and normally it would be unusual for someone like this to accept.”

Paterson announced the appointment and other economic-development changes during an afternoon news conference in Rochester City Hall.

He said Wilmers, 74, who will keep his M&T position and be based in Buffalo, will serve as the agency’s voluntary chairman.

I think it’s a great sign that Wilmers, who runs one of the largest companies based in Buffalo, and who is quite outspoken about what’s wrong with New York and how to fix it, has been selected. Fingers crossed, wood knocked upon.

Singing Just Leave Well Enough Alone

7 May

Yes, it’s true that New York is one state; geographically and to a degree politically.

Economically, though, there’s a distinct difference between upstate and downstate; between east and west. The upstate economy is saddled with fail. Whether it’s taxes higher than that of neighboring states, regulations that are too onerous, or a general business unfriendliness, there’s really no compelling reason why a company might locate in Utica or Rochester or Buffalo when Erie and Toledo and Columbus are also available.

I’ve said before many times that, to compete, all of upstate should be a massive empire zone. That hasn’t happened. But under former governor Spitzer, at least upstate had a dedicated upstate economic “czar” named Dan Gundersen. Not only that, but his office was going to be based in Buffalo.

Governor Paterson is considering scrapping the downstate/upstate economic czars. Upstate business leaders and the heads of Unshackle Upstate aren’t happy, and they hope that – if this does happen – that Gundersen become the head of the united Empire State Development Corp.

I think that it’s a given that, when forced into competition, downstate interests will prevail over upstate interests, and losing a dedicated advocate for upstate business development is a massive step backwards.

Upstate New York of the 2000s is not unlike the eastern Europe of the 1990s. It needs Sachsian shock therapy. It needs people to fight for it. It needs fundamental change in the way government works.

All I know is that, Albania and Slovakia have more robust economies than Western New York.

UPDATE
: Read what In Java, Literally has to say. NYCO notes this Rochester D&C article alleging that Gundersen is very loosey-goosey with his state plastic.

Hindsight is 20:20 and Expensive

25 Apr

The Erie Canal Harbor Development Corporation has asked its daddy, the Empire State Development Corporation, for some changes to stuff that’s already been done to the Canal Side site. From a letter penned by ECHDC chair Jordan Levy:

  • Removing the interpretative facade and relocating its glass map along the bottom half of the structure to another location on the site. The top panels should stored and used later in a proposed Erie Canal museum, Levy said.
  • The lime green “Commercial Slip” lettering across an existing bridge be removed and the bridge re-painted to hide the sign’s presence.
  • Small signs offering historical information, perspective and back stories should be installed along the brick ruins from what remains of the Steamboat Hotel that sits alongside the commercial slip. A second series of signs designating which stones along the commercial slip are original should also be installed.
  • Relocating see-through, glass historical signs along the railroad bridge walkway down to the commercial slip.
  • Adding a second locator sign along the west side of the commercial slip.
  • Building a temporary fence with a historic feel that separates the public portion of the harbor project from those sections still under construction.
  • The “interpretive facade” is dumb as bricks, cost $200,000, and it’s incredible to me that this was permitted to move forward in the first place.

    The lime green lettering? I say spread it around! Tourists should always know at all times what they’re looking at, and it should be in lime green lettering 5 feet high.

    The scoreboard thing?

    Hell, it was the only opportunity for the state to recoup some money. It should just be leased to Lamar and feature the smiling faces of Mssrs. Cellino and Barnes. (If you think I’m kidding, I’m kind of not. I think the state should make an effort to monetize everything it does through advertising because its mission should be to minimize the taxpayers’ cost. Why is EZ-Pass not sponsored? Why aren’t there ads or coupons on the back of the parking slips you get from the pay & display meters? Why aren’t certain displays at the canal project “brought to you by Rich Products” or similar?)

    Seriously, after so much hand-wringing over the location of a store, is it too much to ask that items that cost public money to create be vetted before the fact?

    HT All Things Buffalo for the pix.