Sullivan County Democrat
Callicoon, New York
January 22, 2010 Issue
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Dan Hust | Democrat

LIBERTY COMMUNITY DEVELOPMENT Corporation Executive Director Heinrich Strauch is one of the leaders of the new initiative.

Wanted: Entrepreneurs

By Dan Hust
MONTICELLO — Envision this: a centrally located business incubation center, where entrepreneurs can not only find advice and services but financing, investment, even copiers, fax machines, secretaries and website designers.
That’s what a group of Sullivan County economic development officials have been brainstorming for the last few months, and on Tuesday they pitched their ideas to the Industrial Development Agency (IDA).
In fact, their hope is that the IDA will at least partially fund what they’re calling the Local Small Business Development Stimulus Package – Phase I.
And after that, they’re hoping it will sweep the county in a gathering tide of business revitalization, eventually leading to a Phase II.
“How do you get people on Main Street?” group member and Sullivan Renaissance Program Director Glenn Pontier said was the focal question.
Joined by fellow Renaissance Community Organizer Richard Sush, Workforce Development Board Director Laura Quigley, Sullivan County Chamber of Commerce President Terri Ward and Liberty Community Development Corporation Executive Director Heinrich Strauch, Pontier said the group had produced four ideas.
1. Using the Bangladeshi Grameen Bank as a model, a microcredit program would be set up to provide no-collateral loans to people who have the passion and ability – but not the finances – to start a new business.
Loan amounts would likely not exceed $1,500, though borrowers would be encouraged to pool their efforts in small groups.
2. The Sirolli Institute’s Enterprise Facilitation program would be copied locally, creating a grassroots, individual-centered effort to effectively direct the motivation and intelligence of entrepreneurs.
The Sirolli Institute calls it a “social technology” that promotes “quality local enterprises that diversify the economic base, create jobs, respect the natural environment and infuse the community with local vigor and content.”
3. This one’s already got a name: the Main Street Incubator and Small Business Portal (MSISBP), which would nurture the development of startup companies to ensure their survival and growth.
A key component would be a centrally located facility open to all entrepreneurs, where communications equipment (phones, faxes, computers, etc.), personnel (secretaries, business consultants, bookkeepers, etc.), and business development and employee training classes would be available.
4. Finally, a countywide Small Business Development Strategy would be written, allowing coordination and cooperation between Sullivan County businesses of varying ages and sizes.
The group maintains that the strategy should be developed by “unbiased outside consultants and lead to a detailed plan of action.” In fact, they’ve already developed a “request for qualifications” to be sent to potential candidates.
Total cost: $350,000 in the first year, $250,000 for each of the two years thereafter. Thus, the group was looking for the IDA to contribute to a startup tab estimated at $850,000.
However, said Pontier, that request comes with no strings attached.
“I would love it if they owned the whole program,” he remarked after the presentation.
IDA board members seemed intrigued by the proposal.
“Here you have an opportunity to develop businesses within the county for the first time without big bucks,” observed board member Harold Gold.
“We need to do more with economic development in a direct way,” mused fellow board member Charlie Barbuti. “There’s no better time than right now to do something like this.”
IDA leaders said they’d review the proposal, with Executive Director Jennifer Brylinski mentioning utilizing the Main Street loan fund – about $120,000 “that’s really just been sitting there for a few years.”
IDA CEO Allan Scott cautioned after the presentation that “there are various limitations and restrictions on the funding” that would prevent the IDA from immediately responding to the request, especially by its next meeting in May.
However, “I think it was a very interesting presentation,” he said, a “nice proposal” that he wished the IDA had been involved with sooner. (The group had informally talked with a few IDA members ahead of time, Pontier explained.)
Partnership for Economic Development President Tim McCausland also wished his group had been involved in the brainstorming process – though evidently his predecessor, Pete Gozza, had been the original impetus behind that process.
McCausland and Scott both rejected Pontier’s assertion that the Partnership’s mission is only to attract businesses to the county, as opposed to stimulating their growth once they’re here – which this new proposal is targeted toward.
Nevertheless, McCausland is entirely supportive of the initiative.
“There is a need to address the main streets of Sullivan County,” he agreed. “... We need to draw on all our resources to revitalize our downtowns.”
He promised the Partnership would work with the initiative in whatever way it could.
Pontier and crew are counting on that support, along with gaining state and federal grants so as to provide as low-cost an opportunity as they can for entrepreneurs.
“I think it would be great for your reputation,” he told the IDA board. “... No other county has done anything like this. Sullivan County could be way out in front.”
He’s also eager to hear from others in the county, including businesspeople and those who have faced trouble in realizing their dreams of self-employment.
Comments and suggestions are welcome by calling Pontier or Sush at 295-2445, Ward at 791-4200, or Strauch at 292-8202.

State plans to
"tax" IDAs

By Dan Hust
MONTICELLO — The state’s new budget has yet another surprise – and not just for taxpayers.
Sullivan County Industrial Development Agency (IDA) Executive Director Jennifer Brylinski told her board Tuesday that she had just been informed of a “tax” the state will assess on IDAs statewide.
“It will be based on a formula to be determined by the state,” she said – a formula designed to raise about $5 million in revenue for state coffers.
Many public authorities already reimburse the state for the use of its centralized government services, but IDAs traditionally have not, in order to provide business incentives that are competitive with other states. This new fee is intended to put IDAs in the same category as those authorities in a state struggling mightily to find new sources of revenue.
Evidently, the initiative was part of Governor David Paterson’s proposed budget, which made it into the official budget adopted earlier this month.
It’s a sibling, indicated Shawn Griffin of the Harris Beach law firm in Rochester, of the bond issuance charges IDA benefits recipients already pay to the state.
This time, however, it’s a direct fee assessed on the agency, one to be determined for each IDA by the state budget office no later than November 1 of each year.
“They don’t call it a tax,” said Griffin, who represents as bond counsel several dozen of the more than 115 active IDAs around the state (including Sullivan County’s). “They call it a cost allocation.”
He and Brylinski call it a problem.
“This is the biggest frontal attack on upstate economic development we’ve ever seen,” Griffin stated, worried that the state will increase the fee over the next few years – and that the Empire Zone program’s phaseout and a proposed IDA Reform Bill will only make matters worse.
“It won’t allow IDAs to offer cost-effective benefits,” Brylinski told her board Tuesday, noting that such a fee will have to be passed on to the recipients of IDA benefits. “All the money we get are fees from projects. So if they tax us, we have to increase fees.
“It sounds strange to me that the state is taxing its own entities,” she added.
NYS Senator John Bonacic’s office expressed a lack of awareness of the issue when contacted earlier this week, but Assemblywoman Aileen Gunther said she had voted against that particular part of the budget.
“IDAs are much smaller (especially Sullivan’s) in comparison to the public authorities,” she explained. “While the amount Sullivan may owe should be fairly small, it is still another tax to burden the IDA which is so essential to helping Sullivan achieve its economic development goals.”

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