Local Leaders Oppose Job Killing Albany Legislation

April 16, 2009

Proposed bills force prevailing wage for IDA financed projects

Local business and political leaders came together this afternoon at the former AM&A's warehouse in downtown Buffalo to voice their strong opposition to proposed legislation in Albany that would inhibit private sector investment in Erie County and throughout Upstate New York. Erie County Executive Chris Collins, State Senator Michael Ranzenhofer, Assemblywoman Jane Corwin and local developer Rocco Termini spoke out against legislation that would impose prevailing wage requirements on Industrial Development Agency (IDA) financed projects.

Collins, Ranzenhofer, Corwin and Termini believe the proposed legislation (A.03659 and S.1241) would effectively eliminate the use of public incentives to encourage private investment and growth in our community. The New York State Senate's Local Governments Committee recently approved this legislation.

"At a time when this nation is facing the largest economic crisis since the great depression, we should be actively working with our small businesses to encourage investment and growth, not discourage it," said Erie County Executive Chris Collins. "Historically, prevailing wages have applied to public work projects, such as roads, bridges, and government offices, which I have opposed as an unnecessary cost burden to local taxpayers. Imposing prevailing wage legislation on IDA-financed projects would drastically weaken Erie County's ability to attract private investment."

"Even more troubling, such a requirement would undermine the significant progress we have made in recent years in attracting life sciences, biotechnology and emerging technology projects to our region," continued Collins. "Erie County and Upstate's resurgence is dependent on this exact type of development, and this proposed prevailing wage legislation would severely penalize these types of development projects."

"Albany must take positive steps to help Western New York's economy and to drop job-killing wage mandates suggested by some public officials," said Senator Michael Ranzenhofer.

"I am deeply concerned with the proposed legislation to force prevailing wage requirements for IDA financed projects," said Assemblywoman Jane Corwin. "The requirement would increase project costs immensely, far exceeding the financial benefits offered by IDAs. As New York State faces unprecedented fiscal challenges, our primary focus should be on providing incentive for prospective development projects and job creation. I strongly urge my colleagues in the Legislature to examine the negative impact this legislation will have on economic development in Upstate New York."

The Erie County Industrial Development Agency (ECIDA) recently agreed to provide financing to Buffalo developer Rocco Termini to support his redevelopment of the former AM&Amp;A's warehouse on Washington Street in downtown Buffalo. Termini's Signature Development plans to rehab the dormant building into loft apartments.

"Reforms should be designed to reduce cost," said Termini. "The proposed reforms are burdens which will increase the cost of doing business in New York State. In our current economic environment we need to reduce costs."

A recent report by the New York State Economic Development Council (NYSEDC) determined that union wage requirements would increase labor construction costs for Upstate projects by 57 percent. This same report concludes that even without a union wage requirement, construction labor costs for Upstate regions are 9 percent higher than competitor regions around the country.

A similar study by the Center for Governmental Research found that prevailing wage mandates would add an average of 28 percent to the overall cost of Upstate projects.

Projects affected would include those being planned by technology businesses, biotech companies, manufacturers, and colleges and universities, the very areas of growth that hold the most promise for Erie County and Upstate New York's economic resurgence. A 2009 survey showed projects supported by the ECIDA were creating permanent jobs with a median average salary of $40,222.

This legislation is sponsored in Albany by Senator Antoine Thompson and Assemblyman Sam Hoyt.