The investigation Pat Lakamp and I have in Sunday's paper should not invoke nostalgia for the economic development practices of Tony Masiello and Jimmy Griffin. Read this and weep -- or at least shudder.
Give Griffin and Masiello credit for swinging for the fences, and leaving behind something tangible in terms of physical projects, such as a restored Theater District.
But keep in mind the huge price the city paid, and continues to pay, because borrowers defaulted on 22 cents of every dollar the city lent -- more than double the national average for government economic development lending. Much of the borrowing involved loans the city has been required to repay the federal government out of its annual anti-poverty allocation.
This year, the city will fork over $2.9 million in block grant funds to Uncle Sam, almost double what the Buffalo Economic Renaissance Corp. will lend this year.
So, the Good Old Days were not so good, unless you were a bill collector working for the city, and to some degree, we've traded in one set of problems for another under Mayor Byron Brown. Not that there's not overlap.
To use a baseball analogy, while Griffin and Masiello swung for the fences and often struck out, Brown is playing small ball. Really small ball.
As Sunday's main story details, lending under Brown has dropped by nearly half, compared with Masiello's last term, and job creation, not exactly great under Masiello, has also taken a big hit.
In addition, nearly half of the money BERC has lent has gone to restaurants, bars and stores -- retail typically delivers a low return for the economic development buck -- and one in three companies are behind in repaying their loans.
Folks, if the staff responsible for making loans at BERC worked for a bank, they'd be looking for a job. And the bank would be surviving off TARP funds.
But the problem doesn't start with the rank and file. No, as usual, it starts at the top.
As I detail in the companion story, Brown, who also serves as chairman of BERC, has been a no-show in more ways than one.
Brown has skipped more BERC meetings than he has attended and Deputy Mayor Steve Casey's chair was vacant almost all of the time before he finally just up and quit a year ago.
Brown also has been slow to fill key vacant jobs, and when the BERC has hired, the choices have often been less than inspiring.
Brian Reilly has proved more adept at getting taxpayer-supported health insurance for his girlfriend than he has at closing business deals for the city.
And how do you hire a chief lending officer who had never handled a commercial loan before?
Add to this a governing board that, depending on who you ask, was kept in the dark by staff or failed to ask questions.
The end result has been a rudderless organization lacking a game plan, something economic development agencies across the nation have found essential for success.
Think of it -- Buffalo is the nation's third poorest city and the agency charged with rebuilding its economy has been essentially sleepwalking its way through life.
It's not the least bit surprising, considering that Brown is in charge. His administration obsesses on politics, not policy, and tends to deal with the latter only reluctantly.
Dennis Penman stepped in to head BERC on an interim basis back in August and he's made some headway. Having formerly chaired the Erie County Industrial Development Agency, he knows how things work outside City Hall and recognizes that BERC has serious shortcomings.
He's made some changes and reached out for advice on how to make more, but as I noted a few weeks back, he's turned mostly to former insiders, many of whom didn't exactly shine when they were calling the shots. Penman needs to widen the circle -- considerably.
The Brown administration, meanwhile, made what has turned out to be a very good hire in bringing E.J. Walton on board as the agency's chief fiscal officer. He's sharp and brings a fresh perspective, having worked out of town in both banking and development.But it's going to take more than E.J. Walton sweating the numbers and Dennis Penman picking brains to get BERC on track.
We're talking major overhaul -- policies, practices and personnel. As long as BERC dishes big bucks to bars and restaurants and keeps the likes of Joe Tomasulo on the payroll, any talk of reform is not going to be taken seriously.
Ultimately, rebuilding the city's economy is going to require more than just BERC running on all cylinders.
For starters, it would help if the region's plethora of economic development agencies got on the same page, or, even better yet, consolidated.
I mean, BERC alone is spending $1.2 million a year on payroll. I shudder to think what the collective price tag is to staff all the IDAs, Buffalo Niagara Enterprise, the Buffalo Niagara Partnership and the local operation of the Empire State Development Corp.
Remind me what we're getting for our investment?
Oh yeah, the nation's third poorest city, a region sinking under that weight and dead-on-arrival wish lists.
taggedCity Hall | Economic Development