Loss of economic development commissioner hurts state
Story tools:
Share this story:
The 2010-2011 executive budget includes merging and streamlining state agencies. One proposal would make permanent a mistake that drove New York — mostly upstate — to the edge of an economic cliff.
Dissolving the Department of Economic Development to form a new Job Development Corp. is this administration’s latest move to cap a 15- year effort to concentrate economic policy and power into a public authority, the downstate-based Urban Development Corp., also known as the Empire State Development Corp.
The Urban Development Corp. was once a small entity that managed housing and development projects. Because it can administer loans and grants, when incentive programs ballooned it grew larger.
Gov. George E. Pataki nominated his chief fund raiser to serve as UDC chairman. By also nominating this person as commissioner of the Department of Economic Development, Pataki let the chairman carry back to Manhattan the state’s economic duties and a cabinet position.
The Urban Development Corp. then took over the department’s senior “exempt” (non-union) staff, and resources were shifted from Albany to downstate where salaries and expense accounts soared, along with degrees of arrogance.
With its large project focus, the Urban Development Corp. abrogated or downplayed core department duties. It did not produce good strategic plans for achieving economic growth, gutted small business programs, failed to advance entrepreneurship and was unresponsive to successful high-growth businesses. Because the Urban Development Corp. did not “get” technology development, former Senate Majority Leader Joseph Bruno spun a technology-development effort called NYSTAR into its own orbit. All of the state’s blind spots happened to be where 90 percent of net new jobs come from.
The UDC chairman ruled his empire from Manhattan. For decades, Department of Economic Development staff joked that the commissioner’s Albany office had a red velvet rope across its threshold so that workers could peer in and wonder what life was like when someone led economic development.
The Urban Development Corp. then legally adopted a second name, Empire State Development Corp. (ESDC). Overnight the department and the UDC were branded under a larger umbrella, “ESD” (a marketing moniker—adding the “C” legally applies just to UDC) and further distanced itself from upstate and public accountability.
Pushing the delete button now and creating a new Job Development Corp. is akin to throwing the baby out with the bath water. The baby in this case is a strong Department of Economic Development led by a commissioner who can pull the state back into the competitive universe.
From the mouths of politicians expect to hear that the new Job Development Corp. will do things better. To placate unions and upstate, expect pledges that the agency will be legally headquartered in Albany. But get real: The people, power, programs and influence will still be heavily tilted toward Manhattan and big projects.
Gov. Eliot L. Spitzer created equal co-chairs for ESD to restore economic prosperity upstate. Smartly, he nominated the upstate chair as commissioner to give that person strong constitutional powers to help neutralize the bastardized powers of the UDC chairman. Imperfect, but upstate finally got traction.
As we know, the current administration did not endorse a strong commissioner, even when it proved better for upstate. The proposed JDC plan cuts the commissioner and substitutes a new title, chairman and CEO. It’s more of the same self-inflicted pain without strategic gain.
To fix the mess take these steps:
•Do an abrupt U-turn and return economic development management control and accountability, staff and resources to Albany under a robust Department of Economic Development.
• Put a leaner Urban Development Corp. back in the real estate development business to actually get projects done, and realign NYSTAR with the Department of Economic Development. Both should report and be accountable to the department’s commissioner.
• Empower the Department of Economic Development to underwrite and service loans and grants; if this cannot be done, then contract with the UDC and house that division in Albany.
• Save a fortune on rent. (In 2008, Buffalo’s annual rent was less than the annual cleaning contract for Manhattan’s headquarters!)
• Dump “Empire State Development” references and avoid name games. (If you can’t resist, then consider renaming the Department of Labor as the Department of Career Development.)
• Hire the best economic development professional as commissioner. Do not reward a businessman, large contributor, political aspirant or Wall Street wannabe with the job. Why? Because it is imperative to have a commissioner who is not above using a government title, state office in Albany, doing the management, strategic and advisory work or bearing the duty of hitting the road to see what’s going on in communities far removed from corridors of twisted power.
New York State needs a robust department in Albany, managed by a cabinet member who works full time there, understands economic development and is hell-bent on expanding prosperity for all regions. This is good business and good government.
From 2007 through June 2008, Dan Gundersen was commissioner of the Department of Economic Development, Empire State Development co-chairman and ESD’s first and only upstate chairman.
Reader comments
Log into MyBuffalo to post a comment
MyBuffalo is the new social network from Buffalo.com. Your MyBuffalo account lets you comment on and rate stories at buffalonews.com. You can also head over to mybuffalo.com to share your blog posts, stories, photos, and videos with the community. Join now or learn more.
Comments have been disabled.
Due to a high volume of submissions that violate The News’ guidelines, commenting is no longer available on this story. If you’d like to share your thoughts on this story, click here to get information on contributing to The News’ opinion pages.