Over the summer, Gov. David Paterson (D) began to put together a team to run the Empire State Development Corporation (ESDC), first appointing M&T Bank chief executive Robert Wilmers to chair the economic development agency. Two months later, he nominated former Citi executive Marisa Lago to be president and CEO.
Since then, Lago has been traveling to communities upstate and down in an effort to better acquaint herself with the state’s dire economic conditions. She agrees that times are tough for major development projects like Moynihan Station and Atlantic Yards, but sees opportunities for job growth and retention.
Lago talks about the search for a downstate chair, the need to improve infrastructure even during tough times, and the criticisms of Wilmers as a reluctant executive.
What follows is an edited tran scri pt.

The Capitol: Were you surprised Governor Paterson asked you to take this position?
Marisa Lago: I was actually very pleased to have been selected for a couple of reasons. I’m a New Yorker, I was born in Brooklyn, this is my home state. The other reason is that it is a return almost to family. I have been involved in economic development issues, so coming back and being able to serve again, this may sound Pollyannaish, but there is something about public service that is satisfying. The ability to give back. If you look at the current economic climate, some could say, “Tough time to be in government.” It’s actually at a time when government has to be efficient and has to be more focused. But it’s also the time when government can do an awful lot of good.

TC: Getting back to public service, what can be done to improve the state’s current economic position?
ML: Well, it’s forces that are far broader than Wall Street, New York City or New York State. But having said that, if you look at the pools that we have in respect to marshalling our resources and figuring out which of the initiatives that are under way make sense to go forward even in the economic crunch. How do we invest now so that we prepare the ground, focus on infrastructure so that when the market turns around, when the economy turns around, we set the stage for development going forward.

TC: Should there be more of a focus on infrastructure?
ML: I think that’s key. That’s a question that’s broader than just our state but is felt here as well. Infrastructure is a core factor of economic development. Think about it in a more rural area. Think about roadway access, water and electricity. In a city, like New York City, people think about subways. Now that’s one facet of it. The other facet is: where can we grow business? A quick focus on job creation, but also job retention. I know the governor is working cooperatively with [New Jersey] Governor [Jon] Corzine and I think that’s a recognition that we need to focus not just on job creation for the state, but the competition for the region isn’t just Jersey City or Stamford. It’s China and Penang.

TC: Are we going to be able to finish big projects like Moynihan Station and construction at Ground Zero?
ML: What I think is what the governor has done with respect to the budget, which is you call it as you see it. Recognition for a very clear-eyed analysis of what the fiscal reality can take. Another thing I would mention is what the governor and the Port Authority have done with respect to Ground Zero which is to take a step back and take a clear-eyed analysis of what can be done, and recognize that projects announced in a different time  need to be looked at to see what can get done, even now in this climate. But let’s be realistic about what can get done.

TC: Are there projects that might have to wait until the economy rebounds?
ML: Well, it’s dependent on the project. If you look at the history of the ESDC, especially in New York City, in transformational projects, it’s hard to imagine that it was blighted land that needed to be turned around. Look at 42nd Street, I’m still smiling from it because it would have seemed inconceivable—when as a teenager I came into the city in the early ’70s—that it would be where you would go with your family to see theater. And so if you look at the projects that we’re involved with today, they have the same transformative potential, but they also require the recognition that people build projects that aren’t built in one or two years. That requires the patience and also the wise, steady investment to, let’s say, rebuild city communities at a time over multiple years.

TC: So what’s your message? Be patient?
ML: The message is invest for the future, take the long-term view. Be realistic.
And you should understand you’re talking with someone who worked at the New York City Department of City Planning in 1983 on the Midtown West rezoning that was trying to, in what at the time seemed like a radical concept, to try and build office towers over on the west side, and that might lead to a revitalization of 42nd Street. So, it’s odd that you would use the word “patient.” I am tremendously impatient. But there is also the realization that if you are engaging in this type of transformative power, one has to take the longer-term view and not be subject to the vicissitudes of today and tomorrow.

TC: Give me a technical understanding of the balance of power between you and Robert Wilmers.
ML: To talk about it in corporate terms, he is the chair of the board of directors. We have a board of directors that is a combination of private-sector citizens who are volunteering their time and some folks who serve, such as the banking commissioner. Bob Wilmers is the chair of the board and he is also in his private-sector role in his paying job, chair and CEO of M&T bank. The board sets policy directions and there are certain financial obligations that must only be entered by the Corporation after the board’s approval. Bob is a very active and involved chair, which is a huge boon for ESDC.  What do I do? I run the place during the day.

TC: Are you still engaged in trying to find a downstate president to complement Dennis Mullen as the upstate president?
ML: Exactly, we’re actively engaged in the search, and the way I think about it, there are two key deputies who will be working with me statewide or using the resources of the ESDC statewide, but with different foci. Dennis Mullen heads upstate. He knows what it’s like to be a business person upstate. For the last couple of years, at the Greater Rochester Enterprise, he’s been involved in the private sector in a way remarkably similar to what the ESDC does.

TC: What sort of people are you looking for?
ML: It’s premature. I don’t want to talk about the hiring process in public.

TC: When do you think you’ll be close to making a decision?
ML: I won’t put a timeframe on it, but I’m eager. It’s a key deputy and we all know that organizations, corporations, don’t work around one person, it’s a team that drives it.

TC: How is this going to work better than it did in the past, when the ESDC was bifurcated into upstate and downstate chairs, without one person to oversee both?
ML: I think because Governor Paterson has asked to work on a one-state basis and recognizing that the businesses in different parts of the state have different needs. It’s a function of them. I think the key difference is that the resources that ESDC has will be made available statewide rather than saying there is only going to be a team that works upstate and a separate team only working on downstate. Let me use this as an example: you are the owner of a winery on Long Island. Are you going to be more aligned with Goldman Sachs or are you going to be more aligned with a winery in the Finger Lakes?
And so, what the notion is that the team of experts that we have available, be they in Albany, New York or Buffalo, those are resources that are available to serve the businesses statewide, recognizing the specialty of the regional offices whose expertise is knowing the businesses in the region and with respect to the resources that are available upstate and down. I think it should be more efficient.

TC: How will the strategy to revitalize the upstate economy differ from downstate?
ML: The strategy for the programs available upstate is different. It’s not a major Moynihan Station-type development. The focus there is on the businesses that are the anchor of communities, and working with businesses that either are able to bring in new jobs or create jobs.

TC: What about the criticisms of Wilmers? Some say he hasn’t done anything since becoming ESDC chair.
ML: Bob Wilmers is an active, engaged chair. It’s what one would want in a chair, which is someone who has the time, makes the time. We speak on a near daily basis and his knowledge of ESDC is invaluable.