Rochester, N.Y., March 16, 2009 —Leaders of industrial development agencies (IDAs) and Greater Rochester Enterprise (GRE) today announce they are stepping up efforts to grow our local communities as New York State faces its worst fiscal crisis in decades and state leaders in Albany debate proposed legislation that could jeopardize our region's competitive cost advantage.
With the future of economic development in the Finger Lakes Region at stake, 11 IDAs representing Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates counties, as well as the Village of Fairport and the City of Geneva, together with GRE, believe it is essential to increase efforts to help local businesses and local workers.
"Now is exactly the time for IDAs to step up and continue to be pro-active in our outreach to local businesses, local workers, and to the public at large," said Michael Manikowski, Executive Director of the Ontario County Industrial Development Agency, and Chairman of the New York State Economic Development Council (NYSEDC). "Business owners and workers in our communities feel that "somebody" should be working to create local jobs for local workers. We want them to know that "somebody" is — every day, the men and women of your local IDA work to help businesses expand, create jobs, and invest in our communities."
A campaign communicating that pro-growth message is slated to start today.
Manikowski and other economic-development leaders testified earlier this month at a public hearing on IDAs before the state Assembly's Committee on Local Governments in Albany. Proposed IDA legislation, including A.3659 (Hoyt) and S.1241 (Thompson), could result in dire unintended consequences by removing the Finger Lakes Region's competitive labor cost advantage.
"There are many aspects of this legislation that we find egregious; however, most troubling is the mandate it would impose on companies to use the prevailing wage for any project that receives IDA incentives," said Mark Peterson, Interim President of GRE. "Based on a recent study conducted by the Center for Governmental Research, requiring IDA projects to pay prevailing wage would increase the wage cost in Rochester by 43 percent, and the total cost of the project by 22 percent. In addition, companies that receive IDA assistance would be required to pay all employees at least the Rochester MSA's median wage of $15.42, regardless of their skill set or job description. Can you imagine what that would mean for cost competitiveness?"
According to a study by CGR, such a mandate would increase Upstate labor costs by 52 percent — an unsustainable figure.
IDAs play a major role in helping businesses create local jobs for local workers. Assistance from the County of Monroe Industrial Development Agency (COMIDA) was critical in the recent expansion of Mirror Show Management, a trade-show exhibition company in Webster. Mirror Show recently completed a $4.7 million expansion project in which the company invested $1.8 million to acquire a 126,000-square-foot warehouse, invested $2.7 million to build a 25,000-square-foot addition to the facility, and spent an additional $258,000 on equipment.
Similar IDA support occurs in other communities throughout the Finger Lakes Region,
including Livingston County. Just three years ago, the local IDA worked to attract Barilla America to the village of Avon. In part through IDA assistance, the largest pasta manufacturer in the world was able to invest $100 million in a new manufacturing plant and distribution center, which were built in 53 weeks as part of an aggressive
"shovel-ready" program. Among the most critical forms of assistance was the IDA's help in securing $3.3 million in infrastructure investment, including roads, water, sewer, lighting and rail.
When it first announced its project in 2006, Barilla America expected to create 120 jobs in three years. However, since locating its plant in Avon, the company has already expanded twice and today employs 125 workers, exceeding IDA requirements.
Private companies are not the only ones helped by local IDAs. For years, non-profit organizations were able to access low-interest financing through their local IDAs through "civic facility" legislation. The legislation expired in January 2008, and since then, according to NYSEDC, approximately $2.3 billion in non-profit construction and expansion projects have been on hold. GRE and IDAs from the Finger Lakes Region are working hard to convince state legislators to renew it this year by supporting A.5700 (Morelle) and S.2898 (Stachowski).
"This is an immediate economic stimulus package that would generate $70 million in state revenue at a time when it's needed most and at no cost to taxpayers," said Steve Hyde, President and CEO, Genesee County Economic Development Center, the local IDA for Genesee County. "Civic facility legislation should be renewed without delay."
To learn more about your local IDA and how it can help local businesses and local workers, visit www.yourlocalIDA.org.