Schenectady County job figures a political football (with list of jobs created)

PHOTOGRAPHER: Michael Lamendola

Political opponents are challenging job creation claims coming from Democrats seeking office Nov. 8 in Schenectady County. Democrats counter that their job figures are solid and say they have a list to prove it.

The list includes 5,587 jobs that are in the process of being created or already exist, with the bulk falling into the latter category, according to Democrats.

Schenectady County Legislator Robert Farley, R-Glenville, the body’s minority leader, said the job creation issue has taken on partisan tones because the Democrats take full credit for the numbers.

“Everybody supports economic development,” Farley said. “Where I am not supportive is where they blur the lines and use that for partisan purposes and change the focus from Metroplex and downplay the private sector job growth and up-play governmental and nonprofit sector growth.”

Farley also said Democrats do not accept responsibility for any failures since 2004, such as the Big House project, a planned restaurant on State Street that received more than $1 million in Metroplex loans and grants. The project was scrapped in 2009, replaced by a cosmetology training school.

Gary Hughes, Legislature majority leader and chairman of the Economic Development Committee, said there was no failure. “The Big House is now the very successful Paul Mitchell School and not a cent of public money was lost on this project,” he said.

Hughes said the “real key is that Metroplex is investing in buildings and infrastructure and creating jobs, which is helping rebuild our county.”

Stephen Schmidt, a professor economics at Union College, said people should be skeptical about job claims. “It is extremely difficult to know why a job was created. Everyone with a stake in it will read charitably or uncharitably about it.”

Schmidt said when confronted by job creation claims, people should ask: “What would have happened if these economic development activities had not occurred? If we had not done this action, what would we have done instead? What is the opportunity cost of the project? What would have happened otherwise?”

Sometimes, he said, there are no answers to these questions.

Schmidt also said job creation is different than job retention. “If you genuinely create jobs, it is a plus. Relocating is a gain to the community that gets it and a loss to the community that loses it.”

Ray Gillen has an answer: “We helped to create or retain these jobs using the tools available through our unified economic development team.” Gillen is commissioner of economic development and planning for Schenectady County and chairman of the Metroplex Development Authority.

“In addition,” he said, “there are many projects we are involved with that are directed at rebuilding infrastructure, and these projects position the county for future job growth.”

Brian Quail, chairman of the Schenectady County Democratic Committee, said Democrats deserve full credit for the job creation. “In our view, there was a policy shift that occurred with Metroplex and with making it work,” he said.

“The early [Metroplex] team had this incredible tool and misapplied it and then it was put into hands of people who had skill and then we saw this incredible success.”

Power shift

Indeed, for Democrats, the clock on economic development began ticking in 2004 for Schenectady County. That was the year they took control of the Legislature and the mayor’s office in the city. It is also the year Gillen joined Schenectady County government as commissioner of economic development and planning. Gillen had been director of industry development for the Empire State Development Corp. Former county Legislature Chairwoman Susan Savage hired Gillen, giving him a county salary of $130,000, which made him the highest paid county employee at the time.

At the same time, Gillen became chairman of Metroplex, a quasi-public agency created by the state Legislature — based on legislation written by Farley and others. Metroplex receives $7 million annually in sales tax receipts collected in Schenectady County and has the ability to issue bonds up to $75 million. Gillen receives no salary as chairman of Metroplex.

Metroplex was in its fifth year when Gillen took over from John Manning.

Manning was appointed by the then-Republican-led county Legislature. Over the next five years, most of the Metroplex board members, who had been appointed by Republicans, were replaced by those appointed by Democrats.

Quail said Democrats “created a positive environment for job growth and created the public-private partnership to leverage the capital needed to improve the business infrastructure and create jobs. Job creation has been at the epicenter of what we as a party have been talking about for the last 10 years.”

Gillen said economic development in Schenectady County underwent a shift when he took over. “Basically, there was no organized economic development effort. Instead there was an overstaffed, inefficient mess of programs and competing bureaucracies. For example, Metroplex had its own press agent and public relations firm on retainer,” he said. “We changed everything. We basically did the opposite of everything that had been done prior to 2004 by the previous and failed economic development regimes in the city and the county.”

Since 2004, Gillen said Metroplex has announced approximately 35 job and development projects per year, for a total of 250. “That is a pace that we believe is not met any place in upstate. It represents momentum in turning a community around,” he said.

Investing in jobs

The list of jobs includes investments made by Metroplex. Gillen said Metroplex has provided $9.4 million in grants to companies and $11.1 million in loans, for a total of $20.5 million. He said this equates to $3,761 per job. One project, the new $150 million General Electric battery plant on the company’s Schenectady campus, received a $5 million grant from Metroplex. The balance were smaller loans.

The county’s sales tax base, an indicator of economic activity, has grown to approximately $88 million from $70 million a decade ago. Moody’s Investors Service said Metroplex has an A1 rating for its bonds and the Schenectady City Industrial Development Agency has an A2 rating. Moody’s cited ongoing private development to provide greater diversification, bolstered by Metroplex.

Gillen said all loans are current, except for two made under the previous chairman, and Metroplex monitors a company’s job creation commitments annually. He said the list includes projects and jobs that are the result of using all available tools, such as the now-defunct Empire Zone program, federal historical tax credits and assistance from state and federal elected officials, Metroplex and the county and city industrial development agencies, which Metroplex administers.

“This includes a lot of sweat equity,” he said.

Farley said the list of jobs is misleading. “There has not been a lot of private sector growth here. A lot of this is retention. They have attracted some jobs and they have encouraged some expansion,” he said. “We have not had private sector growth in this county. So when they say they created jobs, it is misleading.”

Gillen disagrees, pointing to approximately 1,000 jobs created by General Electric in Schenectady. “These are jobs that could have gone anywhere in the world but came here because the company was able to work with local, state and federal officials to put together a competitive proposal.”

Peter Guidarelli, the former Republican chairman of the county Legislature and a contender for a seat Nov. 8 in District 1 of the city, said job growth in the county came at the expense of job loss in the city’s neighborhoods. “All the neighborhood business districts suffered through the last eight years or so because the focus was on downtown. There should have been a dual focus on downtown and the neighborhoods.”

Guidarelli also said that Schenectady County has fewer jobs today than it did in 2004. According to the state Department of Labor, Schenectady has 62,512 jobs for the first quarter of this year in all industries. In 2004, it had 64,255.

A comparison of other counties in region shows the following:

• Albany: 214,379, total employment for 2011; 227,598, total employment in 2004.

• Montgomery: 18,227; 18,947.

• Saratoga: 72,471; 72,320.

• Rensselaer: 50,130; 49,513.

The data is from the Quarterly Census of Employment and Wages, which counts monthly employment and quarterly wage information reported by employers.

Gillen said Schenectady County’s employment rate is “back in the high 60,000s and [unemployment] is much lower than the state or federal average. We created jobs and attracted investment despite a very weak economy.”

Schmidt said there is no easy way of knowing whether Schenectady County’s loss of jobs between 2004 and 2011 would be better or worse had it not for been for the local economic development activities.

“Metroplex is saying if we did not exist, we would have lost 5,000 more than what he had lost. That is plausible. Metroplex plugged up the dam, I would say that,” he said.