By CRAIG FREILICH

St. Lawrence County’s economic development chief helped write a new state law requiring businesses receiving state financial aid to give the money back if they don’t create as many jobs as promised.

County Industrial Development Agency Chief Executive Officer Patrick Kelly says the law will provide a clearer procedural map for IDAs around the state including application and review procedures and how to recover funds from businesses getting aid that aren’t meeting job and investment agreements.

At the same time, the local IDAs will still have the flexibility for local initiatives, he said.

The bill attempts to codify “IDA best practices that in some ways are undertaken already,” Kelly said. The law will “bring some consistency to the way IDAs across the state handle applications and reviews. If there’s clarity to the application and review process, that’s a good thing,” and could increase the chance of a project’s success.

In order to improve the business and jobs picture in the county, the IDA and its subsidiaries can employ tax incentives on real property, payment in lieu of taxes (PILOT) arrangements, mortgage tax incentives, and reduced rate financing through industrial banks for a company that wants to set up in St. Lawrence County.

An IDA can provide assistance to a business that wants to establish itself here or expand, but that help will be contingent on promises from the business that they will meet agreed-upon numbers of jobs created or retained and the amount of investment in the business they promise.

This has been one of the most scrutinized aspects of IDA development assistance, since the loans and tax breaks they arrange can be riskier than arrangements a bank will make on its own, and sometimes a business the IDA tries to help doesn’t meet the goals. So pressure to see that the performance of the venture meets those goals has been much discussed over the years.

“We have terminated programs and suspended provisions of tax incentives” due to deficient performance, Kelly said. But the new law will “clarify performance standards and will clarify the ‘claw-back’ process” where an IDA has to try to recover some expenses when a program fails to meet targets

“This law sets clear guidelines. Application and review will be more consistent. Evaluation, reporting and monitoring will be simpler,” Kelly said.

“We try to keep the complications down, but when you want to bring together a project you will use as many tools as you have to get the project moving forward.”

The bill that has been approved in both legislative houses in Albany (A.07915, S.05867) and awaits the signature of the governor is intended to improve “the accountability and efficiency of industrial development agencies and authorities; requires each industrial development agency to develop a standard application form to be used by the agency to accept requests for financial assistance from all individuals, firms, companies and developers; further requires industrial development agencies to develop policies for the suspension or discontinuance of financial assistance of PILOT,” the bill’s preamble says.

The bill contains no surprises for Kelly, he said. He as a member of the New York State Economic Development Council, and he along with other IDA directors, the state comptroller’s staff and the state’s Empire State Development office have been working with legislators on the bill.

“A lot of aspects of this law are already in place – cost-benefit analysis, reporting of job requirements. Every year we’ve been in compliance.”

“We look at a program in total. Job creation and retention levels are very strong, and investment pledged has been strong. I think we’re doing very well.”

“Every program is unique,” Kelly said. “We will still have the ability at IDA to look at and process them on a case-by-case basis. At the same time, “we can reach a level of uniformity that will make clearer to them that ‘these are the expectations.’ Their investment in property, job retention and creation aims “will be part of a standard agreement we will be utilizing.”

“We had a very busy year last year, and we hope to have a busy year this year again,” he said. “Things slowed toward the end of last year, but pre-project activity is up now. We hope this is indicated as we do project reporting. A greater number of hopefully strong projects will show that activity.”