Tag Archives: Jim Allen

WNY Economic Development, Obstacles and Opportunities

24 Jan

Recently, I sat down with James Allen, Executive Director of the Amherst Industrial Development Agency (AIDA) to discuss economic development strategies in Western New York.  Mr. Allen is an advocate for strategic, regionalized, economic development strategies as well as increased outreach to Canadian economic development professionals.  Mr Allen believes that economic development in the new economy is a community-wide effort focused on people, knowledge, networks, and linking community assets.

Allen holds a Masters Degree in Urban Planning from the University at Buffalo (UB) and serves as an Adjunct Assistant Professor in the UB School of Architecture and Planning focusing on regional economic development planning and industrial development. He is also a Senior Fellow at the UB Regional Institute.

The Amherst IDA is one of six Industrial Development Agencies in Erie County, along with the Erie County IDA and four more in the suburban towns of Lancaster, Hamburg, Concord, Clarence.  There are also three IDAs in Niagara County, including the Niagara County IDA and two more in the towns of Lockport and Niagara.  IDAs are primarily chartered to provide state and local tax exemptions to businesses in order to attract or retain business in local communities and/or provide low cost loans to businesses.

There are also other organizations working towards economic development in WNY, including the Buffalo Niagara Partnership, Buffalo Niagara Enterprise, and the vestigial tails of the former Buffalo Economic Renaissance Corporation; the Buffalo Urban Development Corporation and the Buffalo Urban Renewal Agency.

With a robust number of agencies, one would think that business in Western New York would be booming.  However, the region continues to struggle with development and businesses continue to move out of New York State.  It’s possible that the number of agencies chartered with economic development in the region is actually causing confusion and adding unnecessary red tape to projects.  The Partnership for the Public Good has done a load of research on the pros and cons of IDA consolidation and I encourage you to read it. While consolidation offers many benefits, IDAs in Erie County already have shared policy goals and incentives and work together using the Framework for Regional Growth.

Mr. Allen feels that significant tax and regulatory obstacles exist which prohibit growth in the region.  He points out a few specific regulations and some case studies which illustrate his point.

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The regulatory and tax environment that Allen describes is a disincentive to larger companies looking to relocate to WNY and forces the IDAs to make large scale tax concessions in order to bring jobs to the region.  With those obstacles in place, a more focused approach on developing local companies and start-ups should be the primary objective.

The lower start-up costs associated with business overhead and access to a talented, but lower cost labor pool certainly give WNY an advantage over many other regions.  However, this approach is constrained by a general lack of local capital.  Allen points out that the lack of a pipeline of ideas and projects is a limiting factor in bringing external angel and venture capital to the region.

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Finally, an under-explored opportunity is economic development outreach to Canadian companies.  Efforts by the Buffalo Niagara Enterprise have resulted in several companies doing just that, but the efforts should be municipally sponsored and much more robust.  Allen feels that we have a good start and we need to develop a regional framework for for cooperative economic development planning between governments.

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“We need to determine what kind of future we want to create.” says Allen.  An encouraging development in this direction is Governor Cuomo’s announcement of ten regional economic councils in New York. The goal is to consolidate and transform the state’s fragmented economic development programs into a coordinated effort to grow regional industries, or “clusters.” This would allow for bottom-up planning rather than top down decision making from the Empire State Development Corporation.