Trimmed down Upstate Revitalization Fund supports CNY projects

CNY Business Journal (1996+), Apr 18, 2008 by Reinhardt, Eric

SYRACUSE - Syracuse University's Connective Corridor project and Magna Powertrain in DeWitt will be receiving money from the scaled-back, $700 million Upstate Revitalization Fund, which is included in the $121.7 billion, 2008-09 New York State budget.

The overall spending plan is 4.9 percent higher than last year's, but, for the first time in a decade, spending will be less than what a governor had originally proposed. The enacted state budget trims $1 billion from state government operations.

The Upstate Revitalization Fund is part of a $1.6 billion state economic-development capital plan, and at least two Syracuse-area economic development officials say they're happy to have the money available.

In a statement from his office, Governor David Paterson says the Upstate Revitalization Fund was originally proposed for $1 billion, but"was reduced due to fiscal pressures." Paterson didn't elaborate on what those pressures were but says the fund's major components were left intact.

The Upstate Revitalization Fund has several components, each of which is targeted to a specific initiative that is deemed critical for promoting economic expansion.

The governor's office says the "regional blueprint" portion of the fund "will be used to take advantage of the unique assets in each part of New York." It was originally proposed to have $350 million, but has been reduced to $120 million, the biggest reduction of any part of the fund.

It will be administered by the Empire State Development Corporation and will build on the "regional blueprint" sessions held in the fall 2007 to identify projects that will enhance each specific upstate area's economic advantages.

In contrast, the money for city-by-city investments increased from $115 million to $180 million. Syracuse University's Connective Corridor project is slated to receive $10 million from this portion of the fund. Projects in Rochester, Buffalo, and Fort Drum will also benefit.

The remaining $30 million for city-by-city investments will be awarded competitively.

New Process Gear, Inc, a division of Magna Powertrain, will receive as much as $13 million from the fund to secure 2,800 jobs at the DeWitt facility. The dollars will come from a pot of money called the Investment Opportunity Fund.

Additionally, Assemblyman Al Stirpe (D-North Syracuse) has secured $8 million for improvements at Hancock Air Park in Cicero. The work will help to bring in a company that would create between 300 and 500 jobs. The name of the company has yet to be announced.

Stirpe says the money will come from $350 million in economic development capital funding that the State Assembly will manage.

Onondaga County will receive $4.75 million from the Consolidated Highway Improvement Program (CHIPS), an increase of 13 percent over last year's amount.

CHIPS funding is used to help pay for improvements to local highways, bridges, and railway crossings.

Oswego County's CHIPS funding will increase 15.1 percent to $2.69 million. Oneida County will get a 14 percent increase in highway funding to $3.4 million.

Other parts of the fund include $100 million for upstate housing projects, $30 million for bridge projects, $40 million for an agricultural development fund to support continued growth of the food and agricultural industry, and $70 million for rebuilding New York parks.

The state's capital plan will be supported by the issuance of $1.5 billion in personal income tax (PIT) bonds, $40 million in general fund sources, and the use of $100 million in excess Mortgage Insurance Fund reserves from the State of New York Mortgage Agency (SONYMA).

Local reaction

Deborah Warner, vice president for public policy and government relations at the Greater Syracuse Chamber of Commerce, says the state Senate, state Assembly, and Governor Paterson have consistently told local business leaders they support increased investment in Upstate.

"In all of our conversations, we never heard anyone say, 'we don't think it's right to invest in Upstate,' so that was an important hurdle to get over - that everyone was in support of it," says Warner.

She says the Chamber of Commerce isn't too concerned about the reduction in the Upstate Revitalization Fund, adding, "It's still quite a bit of money."

Warner also notes that the state Legislature has $700 million in economic-development capital funding, so she figures Upstate could still see a billion dollars in development spending.

She also says the Economic Development Leadership Council, which is made up of the city of Syracuse, Onondaga County, the Metropolitan Development Association of Syracuse and Central New York, the Greater Syracuse Chamber of Commerce, and the Manufacturers Association of Central New York, have been working on a prioritized list of projects for the Syracuse community.

Warner says officials were pleased to see $10 million earmarked for Syracuse University's Connective Corridor, and, when combined with a $10 million grant that Assemblyman Bill Magnarelli had previously announced, the project stands to receive $20 million from the state.