In a room filled with economic development chiefs from Westchester to Ulster in New Windsor”™s Empire State Development Corp.”™s office on July 13, New York State Economic Development Corp. President and CEO Dennis Mullen detailed how the state”™s new Excelsior Program will benefit business and clean up the abuses that happened under the Empire Zone plan, which ended June 30.
Between 2006 and 2009, more than 1,700 companies statewide received more than $253 million in Empire Zone benefits. Approximately $51 million of the nearly $127 million in benefits in 2008 went to Global Foundries in upstate Malta, a company that was, Mullen said, “worth every dollar, because we are going to see a huge return on our investment. If we had another company like that come along, we”™d no doubt make it as attractive for them to relocate to New York.”
But many others, particularly in real estate and services, did not truly qualify for benefits, “particularly since you can”™t take real estate with you,” said Mullen. Mullen, former CEO for Bird”™s Eye Foods in western New York, was upstate chief of economic development under former Gov. Eliot Spitzer and was elevated to president of the ESDC once it was put back together by Gov. David Paterson in August 2008.
Mullen asked his audience to be be “open-minded and if we disagree, let”™s agree to disagree.” He said that Empire Zones did not work. “Thousands of firms did not truly qualify,” said Mullen, “particularly since they were going to move here anyway. Bars and restaurants did not really qualify for the Empire Zone program, but they were included.”
Under the Excelsior Program, which offers tax incentives for jobs once they are created, not before they come into being, will be one way the state can track the program”™s progress. There are a bevy of other incentives for businesses under the state”™s tax incentive umbrella that can be used to attract and retain business as well as the power that individual county industrial agencies have to put together business attraction opportunities, said Mullen.
“There are more tools in the toolbox,” he said. “But we are not going to give away the taxpayers”™ dollars ”“ we are not going to invest without fiduciary responsibility…when we look at the return on investment under the Empire Zone program, we will be very disappointed.”
Mullen said Excelsior is not created “in isolation””rather than the boundaries created by the Empire Zone, any business in any location can qualify for the credits.” The 46 areas of the state considered “distressed” will remain in that category, Mullen told Teri Waivada, executive director of the Westchester County IDA.
Mullen hoped the seed capital program of $50 million cut from the budget, would be restored. An additional revolving fund of $25 million for business micro-loans is also tied up in the budget process.
To ensure the Excelsior program is not abused, the ESD will conduct annual audits. “The numbers need to be substantiated; this is taxpayer money, and we are determined to see a return on our investment,” said Mullen.
New York”™s SUNY system and its Chancellor Susan Zimpher will be working with the ESDC, said Mullen, which will boost its effectiveness dramatically. “We are very fortunate to have them as economic partners.”
“We have a better grasp of how the Excelsior Program is going to help us,” said March Gallagher, deputy director of Ulster County”™s economic development board after Mullen”™s presentation.
