Four companies, four stories,
of state's business progams

The state and local governments spend hundreds of millions of dollars a year in tax breaks, loans and outright grants trying to either entice new businesses to move to New York or to persuade ones who are already in the state to stay. Sometimes the efforts work, sometimes they don't.

These four companies had different experiences:

Refcon

Rockland business leaders remember Herman Jakubowski weeping when he got up at a meeting in 2003 and said he was moving his West Haverstraw-based company to New Jersey.

Jakubowski is president of a 60-employee company called Refcon that he started about 20 years ago. It manufactures custom display fixtures for supermarkets and colleges, among other clients. He decided a few years ago to expand and said he met with Rockland Economic Development Agency officials more than 10 times.

"I just filled out forms. I never got a response from them," he said. He also met with state Empire State Development Corp. officials in upstate Kingston, but had similar luck.

Then he called New Jersey economic-development officials, who helped ease the way for the company to move to Norwood, N.J., with about $500,000 in tax breaks and other incentives.

"If you're IBM in New York, no problem," Jakubowski said. "But if you're a small-business man, forget it."

A spokesman for the state-run Empire State Development Corp. said his records showed that Refcon officials met only once with the agency, in 2000 concerning a training grant. A spokeswoman for the Rockland County Economic Development Corp. said she had no information about Refcon.

The ESDC spokesman, Ron Jury, said the agency had spent $864 million since 1995 trying to either retain jobs in the state or to lure new ones. The agency has had a hand in retaining 205,000 jobs and creating 102,000 others, he said.

Intercos

While New Jersey sometimes wins one, sometimes it loses one.

In 2000, Intercos, an Italian-based cosmetics manufacturer, moved into what had been an empty 103,000 square-foot electronics plant in Congers, spending $12 million to buy it and the 27 acres it stood on. It moved 139 jobs from Ridgefield, N.J., and now has about 180 full-time workers.

To help clinch the deal, the Rockland Industrial Development Agency floated $12 million in tax-free bonds, lowering the company's debt-service payments considerably. The company also got 35 percent knocked off its property-tax bill in the first year. The Empire State Development Corp. threw in $100,000 for the company.

"After a thorough survey of the market availability and the incentives offered in other states, we came to the conclusion that New York and more specifically Rockland County was the best choice for us," Intercos boss Charles Gounod said when the deal was announced.

PAETEC

This Rochester-based telecommunications company wasn't looking for tax breaks or incentive payments — just a fair shake at winning a lucrative state contract.

"If you're a New York state company, it's difficult to do business with state agencies," said Arunas Chesonis, PAETEC's president. "It's unfortunate because there are other states, like Michigan, Massachusetts and New Jersey, that give the home team an edge."

PAETEC wanted to supply telecommunications services for state agencies, but the state ruled his company wasn't a qualified bidder. Chesonis suspects why.

"Companies like AT&T and Verizon can throw 30 lobbyists into Albany," he said.

Lobbyists aren't required to report their activities regarding efforts to win state contracts. A spokeswoman for the state Office of General Services said that PAETEC wasn't allowed to bid because its proposal didn't meet all of the requirements of the job.

PAETEC has decided to build a new facility that will have about 500 workers in southern New Jersey, Chesonis said.

Fala Technologies

Frank Falatyn, president of this Kingston-based precision machine shop, had never been to a trade show before state economic-development officials persuaded him to travel to "Semicon Europa" in Germany.

"It's the best thing I have ever done," he said. "We partnered with two German firms. We got some business out of it."

Before they left, the New York businesses went to meetings in Albany, where they were advised how to get ready for the show.

"It looks more credible when you have a state booth and there's a dozen manufacturers around it," he said. "We all went under one umbrella and used the 'I Love NY' logo."

When the company decided it wanted to do three-dimensional designs for precision parts on computers, he sent employees to a state-sponsored class at Ulster Community College.

"The state has been great at providing us with training," he said.