Anatomy of economic development

By LAURIE STUART
Posted 3/29/22

ROCK HILL, NY — Economic development is a choice about what a community wants in their community. At its best, it’s reliant on a clearly defined and articulated comprehensive plan, the …

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Anatomy of economic development

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ROCK HILL, NY — Economic development is a choice about what a community wants in their community. At its best, it’s reliant on a clearly defined and articulated comprehensive plan, the adopted town plan that determines how and where development will occur. At its worst, it is a contentious process that predicts community doom and gloom, and chases away appropriate projects that would enhance the quality of life.

To bring that point home, Marc Baez and the Sullivan County Partnership hosted an Economic Development Summit for town officials and the business community to talk about development opportunities on the immediate horizon. The breakfast meeting was held on March 24 at Bernie’s Holiday Restaurant.

“Things are happening in Sullivan County. We’re growing our community. We’re growing our businesses. There are projects that are coming here that started prior to COVID-19 but are ramping up now.”

To be ready, he said, there needs to be a dialogue. There needs to be real conversation on how projects get done, how they are incentivized, and whether they are appropriate for how a town wants to develop. “There will be no large-scale industrial commerical development in the western end of the county,” he said simply as an example. But within 40 miles of Newburgh, at the intersection of two interstate highways, there was great opportunity and great interest.

These projects have great positive impact, he said. “Kohl’s distribution, as an example, pays $567,000 in [annual] taxes. That is a significant rateable on a town budget that might be $3 to 5 million.”

Significant quotes:

About commercial/industrial rateables

“Communities that attract commercial/industrial in a balanced way are better off than those who don’t.

“Commercial industrial costs a community 0.30 to 0.40 per tax dollar received.

“Residential developments costs a community $1.30/$1.40 per tax dollar received. Anywhere and everywhere.”

About economic incentives

“The IDA doesn’t write checks. They don’t give anyone any money. They offer incentives—uniform tax exempt policies for certain industries, sales tax abatement, and mortgage tax abatements. These are incentives for the businesses that will add value and come back to the community over time.

“The IDAs were not created to help people who have no money. The IDA provides an incentive for people who have money. The reason you give them the incentive is so that they invest in your community where they... otherwise wouldn’t even think of investing. We want people who have wealth to come into our community and invest in areas where they otherwise would not invest.”

— Marc Baez, Sullivan County Partnership for Economic Development    

So for the next 90 minutes, he and the six-member panel walked the audience through a conversation about shovel-ready sites, the importance and role of a land-use lawyer, the environmental and regulatory requirements, the importance of understanding how a project fits into a community’s vision for itself, the role of the IDA and the granting of incentives, and critical infrastructure, broadband in particular. Underneath it all is a message that, done carefully and thoughtfully, with the early engagement of a team of professionals, within a clearly defined updated comprehensive plan, with communication with an informed public, balanced and responsible economic development can and does have a positive impact on a community.

What is economic development?

“Economic development is not ramming projects into communities and getting things done,” Baez said. “It’s about changing people’s lives. When we get a project in a community, and we know that the project is going to have a positive effect on that community because of the rateables [properties that bring in tax revenue], or because of the jobs that are going to be created, because of the salaries that will be paid, and the velocity of money that will be exchanged in that community, we’re excited about that. Because we know in the end, it’s really going to help people. It’s why we do what we do.”

To that end, according to Baez, the first step in considering placement of a particular project in a particular town is to begin a dialogue with the supervisor there. “We figure that they have their finger on the town’s pulse,” he said.

And even before the project begins the process of approval of the planning board, there’s a lot to be done on all sides.

Towns need to get ready themselves, said Town of Liberty Supervisor Frank DeMayo, one of the morning’s panelists. Foundationally, he said, towns need to take on the responsibility to attract and create rateables that build the tax base, create and retain jobs, diversify the economy and sustain prudent long-term economic development. This needs to be done, not just for the economic stability of the town, but for other taxing authorities, like public schools and water and sewer districts. It’s a virtuous circle: The town is the lead source for expanding revenue, expanded revenue means more money for schools and other taxing authorities, and the better those schools and authorities function, the more attractive is the area. More rateables are drawn in.

The town also needs to understand its capacity and have an inventory of existing and proposed infrastructure that supports development. (Is there available municipal water and sewer, electrical, broadband? Can the roads handle additional traffic?) These factors, he said, contribute to the ability to provide shovel-ready sites, to attract those rateables and provide the infrastructure needed to be developed and maintained with minimum impact on town service budgets.

And most importantly, DeMayo stressed, towns need to have a clear comprehensive plan.

“Diversity is key to accommodate a variety of land uses and business possibilities. Amenities need to be provided to help to drive the economy in multiple ways. This includes thriving downtowns, public parks, recreational venues, restaurants, unique sites, tourist attractions and the beautiful countryside. All these are magnets to bring in rateables.”

And, in order to get there, towns need to deal with public anti-development sentiment. Towns need to practice good planning, providing a variety of living environments to satisfy multiple preferences. “Good, clear, updated comprehensive planning with clear long-term objectives will help to minimize concerns," DeMayo said.

Everyone working together is key, he concluded, pointing to the need to create and nurture partnerships and be creative about providing additional incentives.

“Towns need to be ready to invite businesses, provide housing for the workforce, amenities for residents and visitors and, most of all, provide the quality of life that the town can be proud of and that others will recognize and try to emulate.”

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