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

The billion-dollar economic development allocation heading to the region from Albany has a primary purpose of encouraging private-sector investment.

But a question remains: How and where will that money be spent?

That was the overriding theme during a Jan. 19 Business First Power Breakfast. Panelists included Empire State Development President Kenneth Adams, Buffalo Niagara Partnership President and CEO Andrew Rudnick, developer Howard Zemsky and Jennifer Parker, president and founder of the Black Capital Network.

The $1 billion was announced earlier this month by Gov. Andrew Cuomo to boost economic development in a region that's been hard hit by a weakened economy and high unemployment.

"This is to encourage private-sector investment, for companies to grow or retain workers," Zemsky said. "This is not an infrastructure program. This is not a Bills lease program."

As co-chairman of the Western New York Regional Council, he has had several meetings with Cuomo and Adams about the allocation and its intended use.

Cuomo is hoping for 5-to-1 return on the investment. That is, the money could result in $5 billion in new, private-sector jobs in the region, according to Adams. He said he wants to see the money used to bring more businesses into the community.

"Roofs on schools will not get funded through this," Adams said. "It is for something much bigger and much more significant. We want deals that will be transformational."

Everyone agrees that the investment is a long-term process. A five-year window has been created by Cuomo.

In his just-released budget, the governor allocated $100 million of the pledged $1 billion. Another $100 million is being offered, meaning the region could receive a $200 million down payment on the proposed allocation.

"It isn't going to happen today," Adams said. "It's not going to happen overnight."

At the same time, however, Adams said New York will be expecting a solid payback. Companies will be asked to justify the incentives by showing how many jobs were created or retained.

"This is not a blank check," he said.

The money will be delivered in a number of ways ranging from outcome incentives to low-cost hydropower to job training grants. It may be added in tandem to existing incentive and abatement programs offered through regional industrial development agencies.

Parker, meanwhile, said the program should pay close attention to the small-business community, particularly women- and minority-owned companies. Those are frequently overlooked, she added.

"We're not doing very well on that front," Parker said. "They can't be left behind."

And while a billion-dollar announcement is headline-grabbing, the panelists agreed that it's going to take more than that to truly encourage investment by the private sector.

"Nobody is going to make a $100 million investment on a whim," Zemsky said. "We are looking for sensible investments, probably in the same way you do when you spend your own money."

The money is key, Rudnick said, but so are regulatory and perceptional reforms that will send a new message that Western New York and New York state are business friendly.

"We need a delivery system that has to be customer-friendly and developer-savvy," he said.

Parker agreed.

The Buffalo business owner said she is impressed with Cuomo's initiatives to change the state's perception in key circles.

"There is no one shot," she said. "Everyone has to be strategic."

Furthermore, according to Rudnick, the region must be ready. And that includes having an ample supply of shovel-ready development sites.

In Buffalo, nearly 400 acres of land are available at Buffalo Lakeside Commerce Park and RiverBend Commerce Park, although Buffalo Lakeside is fully infrastructured and more shovel-ready than RiverBend.

"It's true we have to be prepared," Parker said. "But I believe the Buffalo region is more prepared than we may think we are."

The panelists agreed that the real estate and economic development community needs to see tangible proof that projects will be handled expeditiously.

That was maded quite clear during last fall's regional council public hearing and vetting process.

It was also a major theme at the Accelerate Upstate seminar presented last summer by the Buffalo Niagara Partnership.

"Getting government out of the way was a universal theme," Rudnick said.

"Across the state, that was a pretty common theme from every regional council," he said.

Adams agreed that while the Cuomo administration has made some inroads in that regard, more work is needed.

"We have to do more to make this a more business-friendly state," he said. "The perception of this state is that it is not very welcoming (to business). If we aren't making these reforms, then we will lose some opportunities."

Cuomo has been successful in making some forward thinking change in New York, Adams said, including instituting a 2 percent property tax cap last year and pushing for more mandate relief items.

"We've got to build CEO confidence," he said.

Other issues must be addressed, including those covering training of the local workforce - a key selling tool to real estate and development site selectors - and making more venture capital available.

That's especially important for Upstate firms.

Adams said Empire State Development will launch a new, $50 million venture capital fund this spring that targets Upstate.

The fund comes from federal, state and private sources.

"More and more, we need to get the message out that New York is open for business," he said.