Cross-state rivalry heats up
As New York and Connecticut officials lock in a cross-border tug of war over the Pepsi Bottling Group and its more than 1,000 jobs, Westchester County”™s economic development chief says the interstate competition to keep and attract businesses is good ”“ and Westchester most often prevails.
“It”™s not a rivalry,” said Salvatore Carrera, director of the county Office of Economic Development, alluding to Fairfield County and Connecticut, which recently succeeded in wooing the digital animation production company, Blue Sky Studios, to Greenwich from downtown White Plains with what Carrera said was an $8 million incentive package and in keeping Greenwich Associates L.L.C., a 160-employee investment research firm, from relocating to Westchester County with a $1.5 million low-interest loan. “I”™d call it competition,” he said.
“There”™s always going to be competition between Westchester County, Connecticut, Jersey, New York City, with retaining and attracting as many small and mid-sized companies as you can,” said Carrera, who has seen office vacancy rates drop from 35 percent to 12 percent and 10,000 jobs added countywide during his 10-year tenure in the county post. “It”™s good competition.”
Lately that competition has focused on one of the county”™s largest companies and a major employer, The Pepsi Bottling Group Inc. in Somers. With its lease at 1 Pepsi Way due to expire in 2010, the global bottler and distributor reportedly has been offered some $30 million in incentives by Connecticut officials to move to Danbury. New York state and northern Westchester stand to lose about 1,200 jobs with the move.
Concerns about the company”™s intentions and the economic consequences here recently prompted U.S. Sen. Charles Schumer to personally call Pepsi Bottling Group CEO Eric J. Foss to urge him to continue to work with Empire State Development Corp. (ESDC) on an incentive package to keep the company in Somers and continue to profit from the area”™s highly skilled work force. According to Schumer, Foss said he would continue to work with local and state economic development leaders. ESDC recently offered the company a second incentive package, Schumer said.
“It”™s very sensitive negotiations that are currently going on,” Carrera said last week. “We have been well aware of this (possible relocation) for six to eight months.”
Compared to the Connecticut competition, “It is just a completely different ball game when it comes to giving out benefits” in New York through the ESDC and the county Industrial Development Agency, he said. In the cross-border tug-of-war, the economic development team on this side is financially outmatched.
ESDC officials are looking “to get the biggest bang from their buck” and allocating much of their resources to the economically depressed upstate region, Carrera said. And IDA benefits are strictly tied to the number of jobs retained and added in the county by a company.
With Blue Sky Studios, for example, officials here offered the company “a couple hundred thousand dollars” in incentives to stay at 44 S. Broadway in White Plains, “and they”™re getting $8 million from Connecticut,” Carrera noted. For Blue Sky, employment numbers fluctuate greatly. “If they don”™t have a show to produce, they don”™t have anybody,” Carrera said. “If you don”™t have a show, you don”™t have those 360 people working on animation.”
At a Westchester County Association breakfast in January, County Executive Andrew Spano sought to assure concerned business members the county is doing all it can to keep Pepsi Bottling Group in Somers. “We have offered them every penny we could offer them,” he said. “We just can”™t compete with what Connecticut gives.”
Alluding to that tug of war that has prized companies playing off one state against the other, Spano said heatedly, “It”™s like a blackmail game. We both don”™t like being in that position.”
Spano said he has spoken with business leaders about forming a coalition of Fairfield and Westchester counties. That has yet to materialize.
In the business relocation game, “You win some and you lose some, Carrera said. “I probably lost one-tenth of 1 percent of any of the transactions” that involved Westchester and Connecticut. “We”™ve won a majority of them. You can”™t win them all.”