New governor may eliminate upstate development office
By Tom Precious
- NEWS ALBANY BUREAU
Updated: 05/07/08 3:38 PM
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- Gov. David Paterson and Daniel Gundersen, right, are shown conferring in Buffalo’s Upstate Economic Development office.
ALBANY — Just one month after touting his administration’s new upstate economic development offices in Buffalo, Gov. David A. Paterson is moving away from the year-old system giving equal powers to upstate and downstate job-creation czars.
The governor is looking to have just one statewide economic development boss — leaving uncertain the future of Daniel Gundersen, the Buffalo-based co-chairman of the Empire State Development Corp.
The move has some upstate officials worried that the new Paterson administration will return to the Manhattan-centered approach that dominated economic development efforts in the state for decades. They voiced concern that rhetoric about pushing an upstate economic revival might be less achievable without adequate power being given to the person promoting the upstate region to businesses.
The changes come as Paterson is being advised by a mostly downstate group of business executives about choosing a new downstate economic development director to succeed Patrick Foye, who resigned when former Gov. Eliot L. Spitzer left office in March as the result of a sex scandal. That group’s mission appears now to have changed to help the new governor reshape the agency’s structure and choose a new single head of the economic development efforts.
The two-headed approach for the agency that is charged with attracting and retaining companies to New York was put into effect last year by Spitzer, who said upstate’s long-standing economic problems needed a new focus. He tapped Buffalo for the upstate headquarters.
The corporate structure was unusual for any government entity, and Foye and Gundersen had their share of battles. But upstate business groups said they have been encouraged having Gundersen with both the title and power to get projects and funding approved.
Over the weekend in Manhattan, Paterson said his group of elite business advisers recommended ending the dual system. “It’s not that there’s anything wrong with the talent. We thought there is a problem with the structure, and it sends the wrong message. We are one New York,” the governor said.
Paterson compared it to his ending Spitzer’s system of upstate and downstate chairs of the Democratic Party.
The governor said the cochair system for economic development “wasn’t working.” He did not elaborate and did not respond to an interview request Tuesday.
The lack of detail on his plans has many upstate officials growing increasingly worried that the job-creation attention of state government — whose leadership is dominated by downstate residents — will be shifted at a time when the state’s economy is taking a battering.
“I don’t like what’s happening. For the first time in decades, there was a focus on upstate,” said Sandy Parker, one of the founders of Unshackle Upstate, an advocacy group begun to stem the loss of jobs and population. Parker said having Gundersen as the upstate cochairman created both a perception and reality that the state was looking to revitalize the economy.
Parker, president of the Rochester Business Alliance, joined others in urging Paterson to name Gundersen the single chairman of economic development if he is abandoning the co-chairman approach.
“I think he has an alignment with upstate. He’s not going to forget us,” she said.
One approach Paterson might take, say officials, is to name a single chairman and have separate downstate and upstate directors report to that person. But some upstate business officials are concerned that Paterson, like past governors, will tap a politically connected downstate executive who will spend little time outside the state’s Manhattan offices.
“That’s the concern. The value that we had with Dan is he knows upstate. He spent time upstate. He met people who can communicate on the issues, and there’s a sensitivity to doing something about it,” Parker said.
Officials with the Buffalo Niagara Partnership were not available to comment. Gundersen also declined to comment.
Some groups have complained that the year-old dual system has led to decision-making delays in the agency, which can prove costly when trying to respond to companies considering job locations.
“We agree that a unified management structure be created, so one person is accountable,” said Brian McMahon, executive director of the New York State Economic Development Council, which represents local government and private-sector job-creation groups.
The council sent a letter to Paterson urging him, if he changes the structure, to name Gundersen the new single head of the agency. “If he did that, the commitment to upstate would not only be maintained, but strengthened,” McMahon said.
Kenneth Adams, the head of the state’s biggest business-lobbying group, said he is optimistic Paterson will pick the right person to head the agency. To avoid turf battles, Adams, president of the Business Council of New York State, suggested Paterson have the new person work full time out of Albany instead of Manhattan.
While the governor is considering the change, Paterson administration officials insist it does not represent a diminishment of interest by the governor in the upstate economy. They note he has likened the neighborhood he grew up in — Harlem — to the kinds of economic woes that have hit so many upstate cities and towns. Today, Harlem is seeing a major spike in commercial and residential activity.
Gundersen’s fate, though, is uncertain. Officials say he has not been asked to resign. But it remains uncertain if he will want to stay if he sees his role — and legal authority — cut.
