WTF, ESDC? Recession Twists State’s Economic Development Arm

The two have a rancorous, strained relationship, causing frustration for Ms. Lago, according to numerous people who have discussed the issue with her. The two have also clashed over hiring, according to multiple people with knowledge of the situation, as ESDC has not yet hired that downstate president, a position Mr. Wilmers said in July he expected to create. At least four candidates have been interviewed, with none yet hired, in what apparently involves a rigorous vetting operation, complete with a psychological test.

Asked about her interactions with Mr. Wilmers, Ms. Lago described her relationship with the chairman as a “professional” one, with frequent calls and emails.

“I have a relationship with Bob, who is an involved, active chairman who cares about the agency; and the two of us speak daily, interact daily,” she said.

With regard to the downstate president, she declined to discuss why the position remains vacant other than to say that it is a “keen priority” of hers, and work downstate continues without the position filled. “It’s a big job—we want to make sure we find the right person,” Ms. Lago said.

Speaking generally about the agency’s mission, she rejected the notion that the ESDC has a murky economic development strategy, saying that she expects to devote much of her energy to devising a successor program for Empire Zones—whose projects are mostly upstate—while moving previously planned development forward in the city. She pointed to the Javits Center renovation, a $463 million overhaul of the convention center that was approved last month; and to Brooklyn Bridge Park, where about $100 million in construction contracts have been awarded.

 

STILL, multiple business leaders and others who deal with the ESDC said that in New York City and elsewhere in the downstate region, the agency does not seem to have adopted a new approach amid the recession. The ESDC’s downstate efforts have generally been defined by a series of high-profile private and public development projects—Atlantic Yards, the expansion of Penn Station—many of which have been stalled.

“I think it is fair to say that if ESDC has a plan for economic development, nobody downstate knows what it is,” said a leader of a downstate economic development organization who interacts with the ESDC.

And among upstate business group leaders, there is frustration with the level of funding for development efforts, and the length of time taken to release $120 million in previously allocated funds that were announced by the Spitzer administration.

Of course, with budgets getting cut, criticism of state government, including its development efforts, is bound to rise from all quarters.

A Paterson administration spokeswoman, Erin Duggan, defended the state’s economic development record, saying that it has been able to push a long list of economic development projects forward statewide in the past nine months. These include $120 million in loans and grants for job retention and creation; the completion of a study to add development at Belmont Park; $150 million in community investment grants; and a foreign trade mission that toured upstate New York.

“Despite the economic downturn, projects are moving forward and economic development is continuing in New York State,” Ms. Duggan said. “It’s important to keep a very realistic eye on the state’s financial situation; in the middle of the worst recession in decades, the state is continuing strong programs and incentives to retain and grow business.”

ebrown@observer.com