Establishes the GrowNY pilot program, an economic gardening pilot program within the department of economic development

BILL NUMBER:S6940

Title of bill

An act to amend the economic development law, in relation to establishing an economic gardening pilot program within the department of economic development

Purpose

The purpose of this economic gardening pilot program is to stimulate investment in New York's economy by providing technical assistance for expanding businesses in the State.

Summary of provisions

Section 1: Creates an economic gardening pilot program known as "GrowNY". Directs the department to promulgate all necessary rules and regulations to implement the GrowNY program.

The department shall contract with regional non-profit economic development entities to administer the program. The department shall award competitive grants up to $500,000 a year, for a period of up to 5 years to such entities to implement the program.

A participating economic development non-profit entity administering the pilot program shall provide technical assistance for eligible businesses, which includes, but is not limited to:

*Access to affordable information services and consulting services, including information on markets, customers, and competitors, business databases, geographic information systems, internet and social media strategies, business to business referrals, and search engine optimization.

*Development of business connections, including interaction and exchange among business owners and resource providers including colleges and universities, trade associations, think tanks, academic institutions, business roundtables, financial service and workforce development providers, peer-to-peer learning sessions, and mentoring programs.

*Assistance in developing a listing of shovel ready sites currently available to the needs of the business.

* Assistance in understanding NYS laws and regulations applicable to such business.

* Any other form of consultation and technical assistance that may be provided to the eligible business to assist with its business and marketing needs.

This program shall be targeted at emerging growth businesses, known as "Second Stage" companies. To be eligible for assistance under the pilot program, a business must be a for-profit, privately held business that employs at least 5 persons, but not more than 99 persons, has maintained its principal place of business in the State for at least the previous 2 years and generates at least $750,000, but not more than $50 million, in annual revenue.

This bill establishes reporting requirements for the contracted entities to show the impact of the program on NYS businesses.

Section 2: Effective date.

Justification

Economic gardening is a long-term entrepreneurial strategy designed to generate new jobs from the existing base of businesses in the community. According to the Edward Lowe Foundation, the target businesses with the largest potential for job growth are second-stage companies. Second-stage companies are those that have grown past the startup stage but have not grown to maturity and typically have between 10-99 employees. According to YourEconomy.org, between 1993 and 2008 second-stage companies only represented 10.9% of U.S. based businesses but represented 35.7% of jobs and 24.8% of positive job growth.

Economic gardening was pioneered by Chris Gibbons in 1989 in the city of Littleton, Colorado, a community that in the ensuing 15 years saw a 136% increase in new jobs. While it was introduced as a demonstration program to deal with the sudden erosion of economic conditions following the relocation of the largest employer in the city at that time, it has emerged as a prototype for a rapidly expanding movement to generate sustainable economic growth for communities, regions, and states.

Legislative history

A.9603 (2011-12)

Fiscal implications

It is estimated that the GrowNY program would cost $10 million annually to support regional economic gardening pilot programs.

Effective date

This act shall take effect immediately.