To date, everything about the state’s new regional economic development councils has been a little vague.
There have been plenty of “open for business” sound bites; plenty of talk about “job creation.” But not so much in terms of details - not so much in terms of mechanics.
With a billion dollars of state resources on the line, there seems to be a lot of half-answered questions: How do you get a team of 30 to agree upon a region’s economic future? How do you execute a $1 billion shot in the arm?
For answers, we turned to the man in charge of the agency with the biggest stake in the regional councils initiative: Ken Adams, CEO of Empire State Development (ESD). We pulled him aside after the first meeting of the Finger Lakes Regional Economic Development Council on Wednesday.
Below is an abridged transcript. You can listen to the full conversation above.
Q: So, the money [set aside for this initiative] is disbursed to each council and then they parse it out? How does that work?
Some background here. The councils are really advisory groups. That’s why in their structure they’re not, like, these official committees that are subject to open meeting laws and things like that. That’s why all this public process is being worked on. There’s a certain amount of flexibility built into the process.
The 10 councils will apply through this new Consolidated Funding Application for the state resources that the governor’s collected and put on the table for regional councils. Then there will be judgment of the plans, and the top plans – the plans that are viewed to be the most competitive, the most realistic and the strongest – will get an allocation of the funding that will be used to advance projects that they’ve outlined in their applications.
The council as a body doesn’t receive the funding. The council outlines key projects in its region that underscore its plan.
Q: So ultimately the plan undergirds the work that [Empire State Development is] doing in your regions, correct?
Well, no. [The plans are] going to guide us, they really will. ESD, across our 10 regions, has tax incentives like Excelsior, a limited amount of loans and grants and other services. And with the regional council initiative, we’ll deploy those resources to support the objectives of the [council’s] plans. We’ll be guided by the plans. We’ll be guided by the regional councils.
An important point is that many more resources are being brought to bear on the council initiative. As the governor points out, there’s close to a billion dollars in state resources, going far beyond the resources of ESD and stretching over nine other agencies that are putting all their resources on the table.
The regional councils, by November 14, have to submit their plans. And in that process they’ll identify key projects that will advance the long-term economic vision outlined in those plans. So the best plans will receive a disproportionate amount of the funding – this is performance based. The strongest plans will get extra funding, but the funding will go to the projects they identify as part of their planning process.
Q: As administered by you?
It gets a little wonky I’m afraid. Specifically, of the billion dollars in resources that governor Cuomo has put on the table for this regional council initiative – resources coming from nine state agencies – fully $270 million are resources administered by Empire State Development.
There will be this Consolidated Funding Application, which is a brand new device so that you don’t have to go knock on those nine agency doors. With one application you get access to all of those resources from across state government.
Now, in terms of administering the actual allocation of the resources, at least for the $270 million, that will be done by [ESD] regional staff in [ESD] regional offices – but always in accordance with the plans. Always to advance projects identified by the regional councils – projects that are the foundation for their long-term economic vision.
Q: OK. I get that. That makes sense.
Q: You gotta tell those guys [like Lieutenant Governor Bob Duffy] to say that. That makes sense. But I know you’re supposed to be in the background.
[Laughs] Well, it’s a little tricky because it’s grown, right? Originally, there was $200 million. I have an unfair advantage because I’ve followed the development of the whole thing. If you go back to the budget process in March, the governor secured $200 million of state funding for this initiative –
Q: Wasn’t it 180 at one point?
[Ed. note: Adams listed several of the ways it grew to $1 billion. Here’s the complete breakdown of how the Cuomo administration got to that number. Bonus points: the Canal Corporation is involved.]
Q: So, is the Consolidated Funding Application the only way to get [Empire State Development’s] Excelsior money now?
Good question. Once this process gets underway, our regional offices of ESD – if they receive applications for Excelsior, for example, from outside the process – will have to run them up the regional council flagpole.
You may have noticed that there are 10 regional councils and they’re each staffed by the existing network of regional directors who work for ESD, who are already on the ground in those regions receiving applications for projects, working with local economic development experts, working with local IDAs, working with local elected officials to identify key projects. What happens now – because they are also the executive directors of the regional councils – is that anything from outside the regional council system gets flagged by that staff member and brought to the attention of the regional council – [at least] its leadership – for vetting, and to make sure that that project, if it didn’t come kinda organically from the regional council itself, is one that fulfills the vision of the regional council and receives its support.
Q: So the flagpole is the executive director [of the council]?
Same person. [ESD’s] regional director doubles as executive director [of the regional council]. There’s a built-in control for assuring that resources are always allocated according to regional plans.
Q: From here out?
From here out.
Let’s not forget, as the lieutenant governor announced, there’s this new chairman’s council made up of the 20 vice chairs of the 10 regional councils and a select group of other statewide business and economic leaders. For projects that span multiple regions – think about energy infrastructure, think about drilling for gas in the Marcellus Shale – for multi-regional initiatives, they can be judged by this larger group that brings the regional council leadership together. And, frankly, I’ve heard already about regions trying to do joint projects. They’re 10 regions, they don’t all have to work in isolation. And those proposals, those [multi-region] ideas could be vetted by this higher level chairman’s committee that Lieutenant Governor Duffy’s going to lead.
So you’ve got the most local projects that get run up the regional council flagpole. You’ve got the projects that are priorities of the regional council. And then you’ve got projects that come from mega, multi-regional projects.
In real life, we’re getting more and more interest from large companies from around the country and around the globe that are giving New York state a second look – much of that frankly I think because of the reforms and the success of Governor Cuomo in his first six months in office. It’s making waves. So when our phone rings with a company from China or India or Ohio or Florida that wants to come to New York but isn’t sure where to go, you can’t drive that company to a particular regional council. But you can bring it in – it would often come through ESD – and we could take it to that higher chairman’s level, to the council of councils.
These fall into the category of good problems to have.
When there’s an opportunity for a project that doesn’t neatly fit into the regional council system, you’ve got this oversight group in the chairman’s committee led by lieutenant governor Duffy that has all of the leadership [members] of the councils in it that can make judgments on how to respond to big initiatives like that.
Q: But, I mean, that could be seen as a way circumvent the local in that case.
I have thought about this, believe it or not. Because I worry about this. So, again, in the category of a good problem to have: that multinational company interested in a New York location approaches us and we discuss it at the level with lieutenant governor Duffy and the chairman’s committee. And as the proposal gets more refined and the company gets more serious, they become more location focused. That’s when they say, “I need incredible access to abundant quantities of fresh water. Finger Lakes might work for me.” Or, “I need to be right near the action of the Marcellus Shale because I make steel pipe.” So once the project becomes more location-sensitive it can be brought down to the level of the corresponding regional council for consideration.
These big projects, again, if they’re multi-regional, you can have discussion on both levels: chairman’s committee, regional council.
Q: OK. Gotcha. My last question is: does the billion dollars have to be spent in a year’s time? Or is that multi-year number?
Technically, Governor Cuomo has identified a billion dollars in resources – existing state resources across nine agencies. It’s already out there. He’s simply consolidated it, brought it together and made it available for regional councils through one common application form called the consolidated funding application.
Q: And is that a billion dollars per budget year?
That is a billion dollars of resources available this fiscal year. It is not all cash. It includes bonding, it includes some loan programs in some agencies, it includes tax credits and it includes actual grant money. So it’s state resources that are available now that technically can be allocated by the end of the year – checks won’t all be cut and it won’t all go out the door because of the nature of different types resources, but it is available this fiscal year. It’s on the table.
Q: So. A billion dollars?
It comes from nine different agencies in various forms. But before the regional council process, finding it would’ve been knocking on nine different doors of different agencies, each with different application procedures requiring knowledge and experience and contacts. It’s kinda spread all over the map. This process consolidates it, brings it together and makes the application for it much more user-friendly for groups of well-intended citizens like these regional council members.