“Rowing in the Same Direction”: Regional Economic Development in NYS

By Nick Herubin, Albany Government Law Review

An ongoing problem in economic development is getting the municipalities in a particular region to work together to grow the area’s economy.  New York’s “home rule” essentially gives towns and cities complete control over planning and zoning.[1]  This can create problems including sprawl and a general lack of a coherent economic development plan.  When an economic development plan is effective, it can allow a region to capitalize on its strengths and boost the entire area’s economy.  When there is no regional plan or an ineffective plan, however, economic development can lead to haphazard development as towns and cities squabble over state funding for the latest big project.  The key is for state leaders to get local officials around a particular region working together, or as one local development official in Schenectady puts it, “rowing in the same direction.”[2]

There is a long list of economic development projects that have been adopted around New York without the benefit of a larger, regional plan.  These are rarely successful for anyone other than local politicians getting their picture in the paper at the ribbon-cutting ceremony.  The New York Times cites the New York State Museum of Cheese as an exceptional example of wasted economic development dollars.[3]  Indeed, even the most enthusiastic civic booster would have a tough time arguing that the museum has been any kind of economic success story for Rome, New York.  Yet, when economic development is done with, and as a part of, a well thought out regional plan, there is a much greater chance of success.  For example, consider the growth of New York’s Capital Region as a leader in nanotechnology.  Global Foundries, a computer chip manufacturer, is investing billions of dollars in the region building a plant. [4]  International Sematech, a consortium of nanotech companies, has moved its headquarters from Austin, Texas to Albany, a move few would have predicted a few years ago.[5]  Efforts to “rebrand” the region “Tech Valley” were once laughed at by people from other high-tech cities.  Today, however, the area is being taken much more seriously.

Much of this progress began at the planning stage in the Pataki administration with an effort to bring nanotech researchers to SUNY Albany.[6]  Today, over 200 companies have researchers working at the college.[7]  In addition, the school has spent over $1 billion building research facilities.[8]  The result is that Albany has become a hub of cutting edge research.  As one former IBM researcher who works at the Nanocollege said, “[w]e develop technology before anybody else in the world.  Not just New York, the world, he said.  When I go to conferences, people are listening.” [9]  For a city in upstate New York, it is tough to overstate how significant this progress is.

It did not happen overnight; indeed, it has taken over a decade of effort from leaders around the region.  State and local officials worked with businesses and academic institutions to bring real economic growth in the nanotechnology sector.  It is a clear example of the success that can be achieved when economic development is looked at regionally rather than one project at a time.  Yet, oftentimes, getting regional government and business officials working together can be much easier said than done.

Since taking office, Governor Andrew Cuomo has adopted a regional approach to economic development.  His “regional councils” are designed to compete with each other for funds.  The councils are made up of local leaders from each region of the state, including representatives of businesses, local governments and academia.[10]  The idea is that each council will create a comprehensive plan for what they would invest the money in.  The best ideas from around the state will be funded while the rest will not.  Governor Cuomo believes this will be a way to separate plans that are likely to be successful from those that are short-sighted or otherwise unimpressive.  This is not the first time Governor Cuomo has tried a competition-based system of distributing limited funds.  He implemented a similar program called “empowerment zones” while leading the Department of Housing and Urban Development during the Clinton administration.[11]

Governor Cuomo called New York’s new, regional approach a chance to “empower individual areas . . . to chart their own course for job creation and growth . . . .” [12]  The press release announcing the councils said they “represent a fundamental shift in the state’s approach to economic development, from a top-down development model to a community-based approach that emphasizes regions’ unique assets, harnesses local expertise, and empowers each region to set plans and priorities.”[13]

However, the regional councils have not been without their critics.  The fact that one region “wins” state funds necessarily means that another region will “lose” the competition.[14]  A potential problem is that proposals from already healthy regions will be more attractive than the proposals from the struggling areas.  This could have the effect of exacerbating the problems even further.  Others have argued that Governor Cuomo hasn’t gone far enough.  Paul Bray of the Albany Times Union called his plans “regionalism lite.”[15]  He wrote that the Governor’s plan used “smoke, mirrors and hoopla.”[16]

After the councils met and created proposals, each region’s submission was reviewed by a panel selected by the governor.  In December, it was announced which projects would be funded at an event that was described as a “pep rally” for the state’s economy hosted by CNBC anchor Maria Bartiromo.[17]  The big winners included Long Island and three of the most economically depressed regions of the state: western New York (Buffalo), central New York (Syracuse) and the Adirondack North Country.  Each of those regions received about $100 million to spend on economic development projects while the six other regions received between $49 million and $69 million.[18]  The projects approved by the panel ranged from the creation of the Central New York Biotechnology Research Center in Syracuse to an electric grid project at Stony Brook University on Long Island.[19]

Governor Cuomo’s attempt to implement a regional approach to economic development is not an easy task.  In fact, the New York Times has written that it may be at least as difficult as passing same-sex marriage or last year’s tough budget. [20]  Time will tell whether Governor Cuomo’s regional approach to economic development will have a positive effect on New York’s economy.  However, even at this early stage, it certainly seems to be a step in the right direction.

[1] Paul Bray, Real Regionalism Needs to be Restored, Times Union (Alb.), Jan. 10, 2012, at A9.

[2] Tom Precious, Boomtown, with a Capital A: State Money and Planning Pave the Way for Albany’s Rebirth, Buffalo News, Jan. 6, 2008, at A1.

[3] Peter Applebome, Regions Will Compete for New York State Cash, N.Y. Times, Nov. 13, 2011, at A23.

[4] Jeremy Smerd, Chip Manufacturing Finds a Place Upstate, Crain’s N.Y. (Nov. 7, 2011), http://www.crainesnewyork.com/article/20111106/SMALLBIZ/311069980.

[5] Id.

[6] Larry Rulison, Region also Bested Russia, Brazil for Fab, Times Union (Alb.), Oct. 6, 2009, at A1.

[7] Smerd, supra note 4.

[8] Id.

[9] Id.

[10] Peter Applebome, In a Job-Creation Experiment, New York Regions are Vying for Development Cash, N.Y. Times, Nov. 14, 2011, at A23.

[11] Id.

[12] Press Release, Office of Governor Andrew Cuomo, Governor Cuomo Launches Central New York Regional Economic Development Council (July 26, 2011) (http://www.governor.ny.gov/press/07262011CentralNewYorkRegionalEconomicDevelopmentCouncil).

[13] Id.

[14] See id.

[15] Bray, supra note 1.

[16] Id.

[17] Peter Applebome, Long Island Gets Big Grant in Cuomo’s Competition, N.Y. Times, Dec. 9, 2011, at A30.

[18] Id.

[19] Id.

[20] Bray, supra note 1.

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