By JAMES FINK
jfink@bizjournals.com | 716-541-1611

Until New York truly addresses the cost of doing business in the state, economic development agencies will find themselves under fire for offering incentives but also criticized for not doing enough to change the development landscape.

That theme was driven home by four panelists during last week's Business First Power Breakfast: James Allen, executive director, Amherst Industrial Development Agency; Ellicott Development Co. chairman and recent gubernatorial candidate Carl Paladino; Dennis Penman, executive vice president of M.J. Peterson Real Estate Corp.; and Mary Casilio Powell, president of Casilio Cos.

"People have this Pollyanna view of how things can get done, but I would encourage you to go to a town board meeting and see how things are really done," Penman said.

The deep-rooted and well-documented dysfunction in Albany and New York state took center stage at the event, but so did the reported lack of private-sector leadership locally. While some are quick to criticize incentive packages offered for projects, the incentives don't begin to cover the high cost of doing business in New York state, the panelists agreed.

"We have a failure in government and a failure in the private sector to lead," Paladino said.

That may be one of the reasons why his run for governor resonated with voters. He used a "Mad as Hell" platform to upset former Rep. Rick Lazio in the Republican Party primary and captured 33 percent of the vote in the November general election. That included carrying the traditionally Democratic-leaning Erie County.

Incentives are absolutely necessary and expected from the business community, Allen said.

"But (incentives) don't level the playing field because our taxes are so out of line," he said.

Powell agreed. She said she has heard that repeatedly, both from her clients and as a member of the Clarence Industrial Development Agency board of directors.

"New York state likes to roll out the red carpet (to businesses), but they don't let them walk on it," she said.

Incentives are expected to play a major role in a pending decision by HSBC Bank USA about where to locate its downtown headquarters. It's considering a number of options, including remaining in the present location in HSBC Tower or moving to a proposed building on the Webster Block near HSBC Arena. At risk are more than 2,200 jobs the bank already has downtown and others that could be created.

All four panelists agree: HSBC Bank should get whatever incentives and cooperation it needs to retain and/or expand the downtown headquarters.

"We agree that some projects don't have a big bang for their buck," Allen said, "but when it comes to HSBC, you give them whatever they want."

As for the debate about whether the bank should be encouraged to remain as anchor tenant in HSBC Tower, the panelists agreed the bank should be supported when it makes a final decision, presumably in the spring.

"Who are we to tell them what to do?" Paladino said. "Should we subsidize them? Yes. It's a no-brainer."

Locally, there are numerous other issues that should be resolved, according to Allen.

Chief among them: the lack of a regional planning board that can offer an economic development blueprint. The former Erie Niagara Regional Planning Board was dismantled in the early 1990s and never replaced.

Erie County is the only community among the Top 100 in the nation to not have a regional planning board in place. Having one could speed up the development process by addressing environmental and planning issues on both a macro and micro level.

"Our permitting process is incredibly insane," Allen said. "A controversial project may spend two years in court before construction can begin, while in Austin (Texas) they can be in the ground in two days."

Powell, meanwhile, said the private development industry is skeptical about just how much help Albany is willing to offer. Gov. Cuomo's economic-development game plan to create 10 regional councils to address specific issues has not been warmly received by the private sector.

"We are fearful of what comes out of Albany," Powell said.

"You've got to take the politics out of economic development," Paladino added.

The Power Breakfast was sponsored by the Bonadio Group and KeyBank.