Schenectady County

Metroplex job numbers show ups, downs

Schenectady County’s economic development team has created more than 4,500 new jobs and retained nea
Workers are seen during a tour of the Quirky offices on State Street in this Jan. 15 photo. Quirky is among the companies to get a financial boost from Metroplex, but the company has fallen on hard times of late.
PHOTOGRAPHER:
Workers are seen during a tour of the Quirky offices on State Street in this Jan. 15 photo. Quirky is among the companies to get a financial boost from Metroplex, but the company has fallen on hard times of late.

Categories: Business, News

Schenectady County’s economic development team has created more than 4,500 new jobs and retained nearly 5,000 in the 11 years since Ray Gillen came on board as Metroplex chairman.

So says Ray Gillen.

The Daily Gazette has requested job-creation figures from the Schenectady County Metroplex Development Authority for more than a year now, and on Wednesday the chairman of the county’s lead economic development arm provided them, but asked that they not be published because the list is still being revised and finalized.

The draft document includes a list of companies and jobs that were not in the area before 2004 — the year Gillen was made chairman of Metroplex and commissioner of planning for the county — as well as a list of new construction, expansion, renovation and retention projects in the county. But the list doesn’t note how many jobs each project was expected to create, or mention certain failed projects like the Big House, a planned restaurant on State Street that received more than $1 million in Metroplex loans and grants but never opened.

The list includes two renovation projects for companies that experienced very public cutbacks this year.

One of them — General Electric’s new battery plant in Schenectady — experienced huge staff reductions in the spring and announced that the Durathon battery it had hoped to produce in mass quantity wasn’t a big seller. When GE announced the project in 2011, it estimated it would create 450 jobs and reach $500 million in sales by 2015.

Over the course of this winter and spring, the company cut its workforce at the plant down to a core team of about 50 hourly employees and an unspecified number of salaried employees, citing a lack of demand for the product. It managed to avoid layoffs by cutting a deal with the local union to move more than 150 hourly employees out of the battery plant and over to the nearby steam turbine and generator plant. More than 50 employees accepted buyouts.

“The agreement we signed with them said they would create 350 jobs and invest $100 million,” Gillen said. “And they absolutely did. They created over 400 jobs and invested over $150 million in a space that was destined for the wrecking ball. And today their overall head count is over 400.”

Another project listed in the draft was the renovation and fit-up of two floors on the top of the Center City complex downtown for invention company Quirky, which promised last spring to create 180 jobs here over three years. This year has been a turbulent one for the company, which burned through millions in investments, experienced massive layoffs at its Manhattan headquarters, shuttered its San Francisco and Hong Kong offices, and replaced its CEO.

A spokesman for the company’s subsidiary, Wink, said the Schenectady office boasted 72 employees last month, down from a high of 150 earlier this year. Employees put the number lower, at about 50, citing several rounds of layoffs that occurred this spring and summer. Gillen puts the number at 85, which is the number Quirky said it would reach in its first year here and the number off which Metroplex based an initial $300,000 disbursement of a total $450,000 grant it promised to the company.

That grant agreement includes voluntary claw-back provisions, meaning the authority could recoup its money if Quirky fails to meet its project goals over the three-year period. Gillen declined to comment on whether Metroplex would try to recoup that money, since that would require speculation about its success or failure in the future.

“I don’t want to be in a position where I’m speculating on the demise of one of the companies that I recruited here,” he said. “They have exceeded their job numbers since day one. They are in compliance.”

State authorities have come down on Metroplex and the Schenectady County Industrial Development Agency (which is managed by Metroplex staff) in the past over their failure to adequately document job creation and retention, and recoup money when a project doesn’t hit job targets.

The state Comptroller’s Office reported earlier this year that just one out of 10 projects that received benefits from the Schenectady County IDA in 2013 met job creation goals. A big problem auditors had when trying to confirm job creation was a lack of data or even confusing data provided by Metroplex, the state said. Gillen disputed nearly all of the state’s findings, and said that the county’s economic development agencies request updated job figures on all of its projects each year.

Gillen couldn’t provide any examples of when Metroplex has recouped money on a failed project, saying there simply aren’t many failed Metroplex projects. He said it will be a lot easier going forward for the IDA to recoup money now that the state has instituted a new requirement that all IDAs include these claw-back provisions in their agreements. Since it wasn’t required before, some IDAs would require claw-backs and others wouldn’t, creating an “unlevel playing field” among IDAs competing for projects, he said.

Schenectady County’s unemployment rate was 4 percent in 1998, the year that Metroplex was created. It was 4.5 percent in 2004, the year Gillen arrived. After spiking as high as 7.7 percent in the immediate aftermath of the recession, the rate has since dropped as low as 4.8 percent as of this June.

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