The state comptroller questioned the effectiveness of independent public authorities that are tasked with attracting business and creating jobs via public and private benefits, saying, “Taxpayers should know if the projects they are paying for are creating the jobs that were promised.”
One county development chief, Burt Houseworth in Putnam, said, “People are quick to criticize. They don”™t get all the facts. The projects on my walls have created 850 jobs and I can tell by the project how many jobs were created. We revisit them annually.”
Another, Ellen Lynch in Yonkers, said, “There”™s no effort to trick people.”
Comptroller Thomas DiNapoli released his assessment of 2009 industrial development agencies (IDAs) and local development corporations (LDCs) July 12, essentially citing an overabundance, “The 115 IDAs operating in the state in 2009 are just one type of entity that performs economic development functions. Additionally, there are 279 local development corporations operating in the state. A number of the state”™s most populous areas have multiple IDAs and LDCs,” including 19 in Westchester County and 14 in Orange County, he said. “The overlapping nature of these economic development efforts can make the task of establishing a regional, coordinated approach difficult.”
Houseworth ”“ who identifies himself a “a bottom-line kind of guy” and who came to public service from the private sector ”“ defended the system and noted his IDA”™s two salaried positions ”“ CEO and CFO ”“ are mandated by the state, but paid by developers”™ fees. “There are a number of $100 million and $150 million projects in the state that could not be done without the help of IDAs. We help create the bonds that money managers and venture capitalists then buy, with very little input from the state. I think what happens is a couple of negative audits land on the comptroller”™s desk and it causes a stir.”
Houseworth criticized the harsh nature of some job metrics, saying, “If we help a business and that business creates 200 jobs, but they fall on hard times because of the recession, should they lose their abatement? No. We examine the state of the economy; there”™s no mention of factoring that in the comptroller”™s report.”
“New York has a lot of local economic development entities; developing a regional, coordinated approach is very difficult,” DiNapoli said in a statement. “We have to fix that.”
DiNapoli noted there has been some improvement in the quality of the reports submitted by IDAs, but data shortfalls continue. DiNapoli”™s report includes four recommendations for making IDAs more effective:
· Improve transparency;
· Improve accuracy of jobs data;
· Ensure projects are likely to meet economic goals and selection criteria; and
· Require repayment of benefits if economic goals are not met.
Houseworth said Putnam has long had a provision for repayment when job goals go unmet, plus annual accountability visits on job numbers. “We can remove the benefits at any time in the 10-year deal or a percentage thereof if they”™re not providing the job benefits.”
A 5 percent loss of jobs on a Putnam IDA-sponsored project would not be enough to endanger benefits, he said, but 10 percent to 15 percent would initiate another codified Putnam IDA rule: a warning period during which numbers improve or benefits are lost.
As the comptroller waves a caution flag, others besides Houseworth are also praising the work of IDAs.
The state”™s Economic Development Council saw good news in the comptroller”™s report, citing the IDAs as rare success stories in tough times. The state for four decades has “spent too much, taxed too much and piled on debt,” the council said, but “the number of projects assisted by IDAs in 2009 increased by more than 100; project investment rose by $8 billion; net exemptions fell by $150 million; job creation on projects assisted by IDAs exceeded 204,000; and the average cost per job gained was a remarkable $2,429 per job.”
In 2008, the cost per job created was $3,300, according to the comptroller.
The city of Yonkers recently released data on 10 IDA-sponsored projects that Mayor Philip Amicone, who also serves as IDA chairman, said equaled some $158 million in development.
Yonkers IDA President and CEO Ellen Lynch called the $2,492 job-creation figure “a fabulous number. If we”™re seeing a family with a job that came through IDA efforts and they”™re paying rent and supporting themselves as taxpayers, that”™s a really fabulous number.
“There”™s this image out there that we”™re creating these entities willy-nilly ”“ that we”™re creating them for no purpose,” she said. “That”™s not the case.” Regarding the number of LDCs, she said, “There”™s no effort to trick people. Many of these are set up to get a single project off the ground. We”™re making it better, not worse. And if times are bad, that”™s all the more reason to support them.” As for transparency, “We”™re providing all the information they want.”
“In every section of this city ”“ downtown, Ridge Hill, the Hudson shore, the Ashburton Avenue corridor and elsewhere ”“ you can see that Yonkers is a city of progress,” Amicone said in a statement. “Foundations are being laid and buildings are rising ”“ even the long buried Saw Mill River is being ”˜daylighted”™ ”“ all examples of an energetic community in the middle of an economic rebirth. The Yonkers IDA has been a key partner in developing an aggressive strategy that has made Yonkers a national model of smart economic development.”
The county IDA since 2001 says it has helped to attract nine major companies to the county, including New York Life Insurance in Mount Pleasant and Nokia in Harrison; has helped another 17 expand, including Dannon Co. in Greenburgh and Heineken USA in White Plains; and provided bonding for 14 organizations that include Guiding Eyes for the Blind in Yorktown and Children”™s Village in Dobbs Ferry.
