Defending START-UP New York: 'Everyone Should Take a Deep Breath'

ALBANY, N.Y. -- Amid sharp questioning from lawmakers in the state Assembly on Wednesday, the top economic official in Gov. Andrew Cuomo's administration staunchly defended development spending that has fallen under federal investigation.

"Everyone should take a deep breath. A lot of foundation has been laid and a lot of seeds have been planted. Let's give it a few years," said Howard Zemsky, Empire State Development Corp. CEO.

For more than two hours, Zemsky was questioned on the state's economic development spending and system of targeted tax breaks for companies. Drawing particular ire was the state's costly START-UP New York program, which has only created 408 jobs despite a $53 million ad campaign.

"Companies that have invested 40, 50 years of blood, sweat and tears in New York state are seeing very little in return," said Assemblyman Ray Walter, R-East Amherst.

Lawmakers also questioned how economic development officials were calculating the success of the program.

"Maybe their success is also attributable to some spin-off from Buffalo Billion. Maybe there are some companies related to the Buffalo Billion, so it seems like there is a layering," said Assemblyman Robin Schimminger, D-Kenmore.

Zemsky insisted that despite the costs and aggressive advertising, the economic development spending was working in helping to change the perception of the state.

"Eight million jobs for the first time. Unemployment half of what it was. We are firing on so many cylinders right now," Zemsky said.

Zemsky also challenged lawmakers leading the hearings, saying much of the money has benefited their districts.

"Both of you gentleman are from Western New York. This is the most prolific region that's taking advantage of START-UP NY. Assemblyman, I think UB is in your district. Why don't you talk to UB and see what they say about START-UP NY?" Zemsky asked.

Zemsky did acknowledge that the federal investigation into upstate economic development has led to delayed payments for key projects in Western New York, including approval for a half-billion dollars earlier this year for the Riverbend site, home to a SolarCity plant.

"Clearly there has been more scrutiny, further layers of protection and review and of course that's going to take some getting used to," Zemsky said.

The hearing was a sign lawmakers are starting to exercise more oversight on what have been pet projects for Cuomo.