Planning to boost the Rochester and Finger Lakes region’s job growth and general prosperity, area business organizations and local governments are forging a new partnership designed to put private money to work to attract and retain businesses.
Newly formed as ROC2025, the organization is just shy of two months old and has only been staffed for less than a month.
Though it is the latest in a bevy of area public and private economic development organizations, ROC2025 is not just another effort layered on top existing public and private economic development groups, says Heidi Zimmer-Meyer, president of Rochester Downtown Development Corp.
Rather, says Zimmer-Meyer, whose organization is one of three founding organizers of ROC2025, the new player personifies a sea change in local economic development thinking that promises to knit existing groups’ efforts into a more cohesive whole.
In the old “two-dimensional” economic development model of “jobs, jobs,” she explains, municipalities and companies most often saw each other as rivals in a race to snag businesses or public dollars. The new, more cooperative model that ROC2025, is hoped to portend, employs a “three-dimensional” approach that sees cooperation by many different public and private-sector actors across a broad region as more fruitful than zero sum competition, Zimmer-Meyer says.
Other founding partners in birthing ROC2025 are the Greater Rochester Chamber of Commerce and the Greater Rochester Enterprise. GRE and RDDC are donating office space to house ROC2025, while the Chamber is, for now, paying the salary of ROC2025’s first and only employee, the new organization’s president and CEO, Joseph Stefko.
Imagine Monroe, formerly known as the County of Monroe Industrial Development Agency as well as Monroe County Executive Cheryl Dinolfo and Rochester Mayor Lovely Warren also support the new organization, Stefko says.
An evolution of economic development
Recruited to head ROC2025 some three weeks ago, Stefko previously was a senior staffer of the Center for Governmental Research. CGR’s president and CEO since 2012, Stefko has worked for CGR in several senior positions since 1996. He took a five-year break from the prestigious Rochester and Albany based think tank between 2003 and 2008 to work as deputy and acting director of the state-appointed Buffalo Fiscal Stability Authority, which oversaw the city of Buffalo’s and the Queen City’s school district’s finances.
The newly formed ROC2025’s staff will remain lean, promises Stefko who for the foreseeable future, plans to remain its only employee.
“It’s just me,” Stefko says. “I can answer my own phone.”
Lean though it may be in terms of staff, ROC2025 aims to help bring boons to a region spanning nine somewhat diverse counties: Monroe, Ontario, Wayne, Livingston, Seneca, Genesee, Orleans, Yates and Wyoming.
Zimmer-Meyer sees ROC2025 as an important step in an evolution of local economic development strategizing that began in 2011 ago with the state’s creation of 10 regional economic development councils. Gov. Andrew Cuomo charged each council with coming up with a plan to bolster its region’s development, declaring that the plans judged to be best would win as much as a $500 million share of funding parceled under the state’s Upstate Revitalization Initiative.
The Finger Lakes Regional Economic Development Council, whose territory is the nine-county region ROC2025 covers, won the URI program’s top $500 million award, to be spread as $100 million yearly grants over five years. Projects funded through local URI money include $10 million downtown revitalization projects in Ontario and Genesee counties for the cities of Geneva and Batavia and a $50 million plan to improve the Genesee River corridor in downtown Rochester.
While such projects may indeed be sparking sorely needed local development, Cuomo’s economic development thrust has also yielded federal criminal convictions of two top state officials who helped lead it, Alain Kaloyeros and Joseph Percoco. Juries found both guilty of corruption charges linked to the state’s Buffalo Billion plans to pump $1 billion into Western New York projects.
Kaloyeros headed the state’s SUNY Polytechnic Institute, which among other projects backed the Albany and Rochester-based AIM Photonics initiative. He was convicted of bid rigging in 2018 in connection with the Buffalo Billion push and sentenced to a 3 1/2 yearprison term, which he is currently appealing.
A onetime trusted Cuomo aide who has served the governor in various capacities, Percoco began serving a six-year prison term in March after being convicted of taking some $300,000 in bribes in Buffalo Billion-connected graft.
Despite Kaloyeros’ onetime involvement, the AIM initiative continues to yield positive results for the local and the state’s photonics industry, says Tom Battley, executive director of the Rochester Regional Photonics Cluster and the New York Photonics Industry Association.
Too many incentives
Short of outright criminality, state and local government-led economic development thrusts have long been criticized as handing “corporate welfare” in the form of generous tax breaks and grants of public money as incentives to companies like Wal-Mart. Critics say these employers don’t really need them to locate and provide jobs in a given area.
Sentiment against such practices recently influenced the New York City borough of Queens to spurn Amazon’s offer to locate an East Coast headquarters there, despite Amazon’s promise to create 25,000 jobs. Queens officials said they were leery of disruptions that Amazon might cause such as spikes in housing prices that would not justify the $3 billion in tax breaks the state offered to lure Amazon. The online retail giant backed out of the deal after local politicians objected to it.
“Our money is better spent investing directly in our future: functioning mass transit, thriving schools, affordable housing,” wrote state Sen. Michael Gianaris, D-Queens, explaining his opposition to the Amazon headquarters. “We should not need to pay massive corporations to bring their largess to our communities—let us build that future ourselves.”
Critics like Gianaris are not entirely off base but no municipality can afford to completely abandon tax and other incentives as lures to induce companies to locate or in some cases remain in an area, Zimmer-Meyer says. Such lures are offered ubiquitously and any area that entirely disdained them would lose out. Still, she adds, the FLREDC’s charge includes pushing objectives that closely align with the kinds of initiatives Gianaris proposes.
The regional council’s goals include promoting “a holistic approach to economic growth that includes all our residents, and recognizes that reducing poverty and connecting underserved workers with the resources and training required to enter the workplace are vital for the success of the entire region,” wrote Vincent Esposito, executive director of FLREDC, in the council’s 2018 annual report.
While the FLREDC can legitimately claim progress, Stefko says, this region lags similar areas significantly. The Rochester region’s 1.6 percent employment growth rate, for example, compares to a 5.2 percent rate for Grand Rapids, while the Michigan city’s 4.8 percent private gross domestic product growth rate compares to the Rochester region’s nearly non-existent 0.3 percent rate.
Putting private dollars to work
In contrast to the regional council’s public funding, Stefko says, ROC2025 plans to put private dollars to work toward achieving similar goals. Organized as a 501 (c) (6) nonprofit, which allows for businesses to take a tax write-off for contributions, ROC2025 intends to get virtually all of its financial support from area private businesses. It also plans to start a 501 (c) (3) affiliate that would allow private donors to take a deduction, Stefko adds.
ROC2025 is modeled after similar region-spanning economic development groups in Pittsburgh, Columbus and Cleveland, Ohio and Detroit. Regional economic development partnerships have helped those areas’ economies surpass Rochester’s despite demographics and geographies that posed similar barriers to growth that now plague the Rochester and Finger Lakes regions.
As did its Ohio, Michigan and Pennsylvania predecessors, ROC2025 has set ambitious goals and put itself on a deadline to meet them.
At its formation in 2010, the Columbus2020 organization, for example, tasked itself with adding 150,000 jobs; raising per capita income by 30 percent; and generating $8 billion in capital investment.
Within five years, Stefko says, ROC2025 aims to add 30,000 new jobs across the nine-county Rochester region; grow the area’s per-capita income by 20 percent; boost the region’s gross domestic product by the same amount; and cut the rolls of area residents living in poverty by 20,000.
Not quite up to the 10-year mark it set for achieving its targets, Columbus 2020 has met or exceeded them, the organization states on its website.
ROC2025 plans to serve as a convener among existing economic development groups, localities and area businesses, helping to develop a regional strategy to achieve its ambitious aims, Stefko says. Given the fledgling organization’s somewhat wet behind the ears status, much about the exact nature of the strategies it hopes to promote has yet to be worked out.
Citing the new organization’s potential to bring private dollars to bear in regional economic development efforts. GRE president and CEO Matt Hurlbutt predicts that “ROC2025 will give us additional resources to expand.”
Until contacted this week by the Rochester Beacon, Battley, a former Monroe County economic development official, was unaware of ROC2025’s formation. He is not ready to jump into it with both feet, yet.
As head of the local and statewide photonics industry trade groups that represent hundreds of companies that ROC2025 might enlist, Battley is skeptical but not unwilling to be convinced of what value the new organization might add to the region’s economic development mix.
“I applaud ROC2025’s focus and mission,” Battley says. “But I thought that’s what the Chamber was supposed to be doing and then I thought that was what GRE was supposed to be doing. I’m not sure we need another organization.”
Still, he adds, “I look forward to sitting down with Joe Stefko and discussing it.”