State Races To Attract an Economic Tsar

Governor Paterson is struggling to lure a top-tier talent to take over the state's most important economic development agency, as pressure is building on him to settle for a candidate from within his political circle.

A growing list of heavyweights in the business and real estate world has turned down the offer to become the sole chairman of the Empire State Development Corp., which has been left in a state of limbo since Mr. Paterson assumed office more than two months ago.

Sources said at least eight people have declined interest in running the agency, which functions as state government's liaison to the business community and whose past leaders have acted as the top investment and economic policy adviser to governors and a key political fund-raiser.

Despite the rejections, the administration is marching forward with its search. The latest candidate in the ring is a 41-year-old managing director at Goldman Sachs, Alicia Glen, a former assistant commissioner at the New York City Department of Housing Preservation and Development. Senator Schumer is said to be pushing Ms. Glen's candidacy.

Paterson administration officials say they have set the bar high and are holding out for a business leader who has transaction experience and a network of business relationships that would enable the agency to attract private investment in a state with high taxes and regulations. As the number of rejections grows, Mr. Paterson may be forced to turn to a less experienced and more politically connected candidate.

Mr. Paterson's aspirations were reflected in his appointment of a blue-ribbon panel led by a former chairman and CEO of Citigroup, Sanford Weill, to advise him in the search process.

According to sources, among those who have turned down the job are: the executive director and deputy chairman of National Grid, Robert Catell; the commissioner of the New York City Department of Housing Preservation and Development, Shaun Donovan; a former chief executive of Independence Community Bank and chairman of Meridian Capital Group, Alan Fishman; the president of the School Construction Authority, Sharon Greenberger; the CEO and president of the Upper Manhattan Empowerment Zone, Kenneth Knuckles; a former chief executive of North Fork Bank, John Kanas, and the president of Trinity Real Estate, Carl Weisbrod.

Among those who are seeking the job are a former state comptroller, H. Carl McCall, the dean of the Milano The New School for Management and Urban Policy and son of Lillian Vernon, Fred Hochberg, and a former president of the New York State Urban Development Corporation, Richard Kahan, who runs a nonprofit education group called the Urban Assembly, sources said.

Messrs. Paterson and McCall, both Harlem politicians, have known each other since the former was a teenager. Mr. Hochberg is a major Democratic donor who is also close to the governor.

The erstwhile prospects privately offered the administration a variety of reasons for not wanting the job. Some were unwilling to accept a public-sector salary or had business dealings that would be disrupted by their departure. Others are said to have been wary of the intense public scrutiny that accompanies such a high-level government position.

Sources said that underlying the administration's frustrated recruitment efforts are broader factors that have to do with the governor's fragile political standing and with the unsteady economy.

The next chairman of the development agency would be reporting to a governor who wasn't elected and may be out of office in two and a half years, which would be too small a window to carry out an ambitious agenda. Mr. Paterson, who isn't well known among New Yorkers and is not wealthy, is perceived as vulnerable in 2010.

Compounding the concerns is the state's financial turmoil, which means a smaller pool of public capital and private investment in costly development projects. The development agency is already mired in setbacks. It recently scrapped plans for a $1,8 billion expansion of the Javits Center and has been unable to breathe life into plans for renovating Penn Station and for the construction of an Atlantic Yards basketball arena and residential complex in Brooklyn.

The state's economic tsar would also be tasked with picking up the pieces of the past leadership, whose turf battles and conflicting agendas overshadowed the Spitzer administration's economic development goals.

The hired chairman of the agency would be filling a job that under Mr. Spitzer's tenure was held by three people: Co-chairman Patrick Foye, who oversaw downstate projects, Co-chairman Daniel Gunderson, who handled upstate investments, and Avi Schick, who was responsible for ground zero projects. Mr. Foye resigned two months ago and Mr. Schick last week announced that he's leaving to take a job in the private sector.

In returning the agency to its former structure of one leader, Mr. Paterson said the division of responsibilities under Mr. Spitzer led to infighting and gridlock. Mr. Gunderson has been resistant to eliminating his co-chairmanship, another complication for whoever takes the job.