The jobs fund lottery

When New York City economic development officials sought to cultivate new jobs, their main rival used to be New Jersey, which lured employers with tax breaks. Now the competition sits closer to home. The New York City Regional Economic Development Council, one of 10 such groups convened by Governor Andrew Cuomo in late July, will be vying to be awarded $40 million in state funding – and if the Obama administration’s jobs bill passes, potentially billions more.

At a Tuesday public hearing of the regional council in Jamaica, Queens, Lieutenant Governor Bob Duffy and the city’s council co-chair, Chancellor of the City University of New York Matthew Goldstein, outlined how the council will decide which projects will be eligible for funding.

Led by Kathryn Wylde – president and CEO of the Partnership for New York City, a nonprofit organization of the city’s business leaders – the committee’s final plan, to be submitted by mid November, will be evaluated in competition with the other nine regional councils for an initial $200 million tranche of funding. The top four plans will be granted $40 million each, while the other six councils will have to split the remainder of the pot, which consists of capital funding, tax credits, and other investment programs.

Nine state agencies have also pooled another $800 million in state reserves that are to be distributed through a standardized funding application process, bringing the total first year funds allocation to at least $1 billion. And these regional councils could very well receive an even bigger financial boost if the federal American Jobs Act is passed.

Jorge Silva-Puras, a representative of the White House Business Council who was present at Tuesday’s hearing, said that if the jobs bill is passed, it is almost certain that New York State would receive $7.25 billion in federal funds for development. If so, these dollars would go primarily toward roads and bridges, schools, refurbishing vacant homes, building job training collaborations with colleges, and preventing layoffs. New York City stands to gain much, or lose out on a huge sum, depending on its performance in this regional rivalry. It is, after all, a competition.

Gov. Cuomo has yet to make any official statement as to how such future funds would be disbursed, but Silva-Puras said: “This money is expected to be distributed through the regional economic development councils.”

This would be in line with the way the Cuomo administration has suggested the regional councils will work, replacing what has been a tangle of uncoordinated spending by local agencies with uneven outcomes. “This is part of changing the state’s approach to economic development and coming up with more efficient ways to fund it,” said Austin Shafran, the spokesman for the governor’s initiative. “The old way meant having to slowly navigate multiple agencies, no coordination, but we now have a consolidated funding application that creates a single entry point, making it easier for businesses to grow here.”

Projects eligible for funding through the councils include a wide range of activities, by nonprofits and government agencies as well as businesses, that would create jobs or promote economic development. Goldstein announced on Tuesday that proposals will be evaluated by a scoring committee led by Kenneth Knuckles, President and CEO of the Upper Manhattan Empowerment Zone Development Corporation. To date, some 350 project proposals have been submitted, and all proposals must be submitted online by the end of the month.

Proposals formally heard this week included new transportation terminals and recreation facilities. Speaking at the hearing, Eric Landau from the Prospect Park Alliance, which oversees the restoration, operation and development of the park, tried to convince the regional council to support projects that include replacing the park’s ice-skating rink and building spaces for environmental learning.

“It would bring economic and community development, and we’re hoping to be included in the regional council process for any amount of money that’s available,” said Landau in an interview, noting that the alliance is working toward raising $74 million and still has a $11 million gap. Depends on the proposed project, funding through the regional councils could cover the entire cost of a project, or provide subsidies – “It’s all about finding a better way for the state to allocate limited resources,” said Shafran.

Members of the council vote on which projects within their regions get priority. Their advisories and scores (which count for 20 percent of any proposal’s overall score) are then handed over to a central committee, which will make the final allocations of funds. Committee members will be selected by the Governor and the Lieutenant Governor, and “will consist of leaders from independent, non-partisan and widely respected public policy, economic development, academic, and other organizations.”

The governor also directly appoints the two co-chairs in each region, a representative from the business community and another from academia. The governor’s guidebook on the regional councils states that members “are selected based on their leadership role in the region, not their political affiliation.” The New York board includes leadership from Wall Street (Kenneth Chenault of American Express co-chairs), the Real Estate Board of New York, local companies like Gilt Groupe and Brooklyn Brewery, and organized labor.

Said Shafran, “These are the best and the brightest. The criteria is we picked the best people; we tapped the people with local knowledge of the area to decide on regional solutions.” Council members will serve an initial two-year term on a pro bono basis, and must recuse themselves from evaluating projects on which they have a conflict of interest.

Queens Assembly Member Barbara Clark was among the elected officials at the hearing raising questions about the fairness of the funding process and the support for smaller businesses. “I want to make sure that the small business and also women in business really do have a seat at the table,” she said.

Responded Lieutenant Governor Duffy, “Have faith in the council.”

Data Tools


Our work has appeared in…

About TNYW

The New York World focuses on producing data-driven investigative projects.