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NEW YORK CITY-In an effort to create new jobs, New York Gov. David Paterson said Monday that the state would set aside $100 million for new “Innovation Economy Matching Grants” meant to drive federal stimulus dollars towards New York State research facilities and institutions. But, despite broad pronouncements and a pummeled financial services industry, questions remain on how best to incubate and diversify new economic engines in a city where the cost of doing business remains so high.

Speaking to an audience at the New York Academy of Sciences at 7 World Trade Center in Lower Manhattan, Paterson noted that the average salary of an individual working in the “innovation economy” is over double the salary in the “non-innovation economy,” adding later in a release that those jobs produce a “higher multiplier effect.” In other words, for every one created in this sector, 3.5 jobs get created overall.

“It is our responsibility to act, and to act with the interests of future generations in mind,” the governor said Monday. “We are a state rich in resources, the most impressive of which is our human capital.” Pointing out worldwide economic trends, Paterson said “a new economy is emerging: an economy based on knowledge, technology and innovation.”

Illustrating one place of local vulnerability, last month, the state’s bureau of labor statistics said that so far, on a seasonally adjusted basis, the city has shed around 20,000 financial services jobs since a peak in the sector last August. While some economists say that number is far less than the figures predicted at the beginning of the current economic crisis, there is fairly broad agreement that when the industry does bounce back, it will probably be a trimmed down version of itself. And, as technology takes the place of many jobs, further challenges will arise for its workplace refugees.

Hoping to diversify an economy, workforce and tax base that have been beholden to Wall Street, the governor said the grants will be made through research in medicine and life sciences, the commercialization of science and technology and investments in universal broadband. Speaking inside the city’s first LEED Gold certified office tower, 7 WTC, Paterson also detailed plans to invest in smart grid development as well as clean and renewable energy projects.

In a statement, noting potential job creation, New York Building Congress president Richard Anderson says that “the governor’s focus on renewable energy and smart grid development projects that are shovel ready would achieve a number of critical objectives for the New York State economy.”

Touting his “innovative” roster of tenants at 7 WTC, developer Larry Silverstein says in a statement that the governor made the right choice by choosing the cutting edge structure as the venue for his proposals. In the release, Silverstein, CEO of Silverstein Properties Inc., says that “7 WTC has come to serve as a symbol of Downtown’s emergence as the center of the city’s new knowledge economy.”

A Paterson spokeswoman reiterates the importance of sustainability to GlobeSt.com. “The real estate community should begin to adopt more sustainable business practices,” she says, adding “I believe many companies are beginning to do so.”

More to the point, according to the nonprofit think tank Council on Competitiveness, sustainability is likely to become what it calls a game changer. The council says that companies could “increasingly factor sustainability concerns into their site and investment decisions.”

Michael Slattery, SVP at the Real Estate Board of New York, acknowledges the Governor is right, the city is home to cutting edge research, intellectual capital as well as medical and sciences in New York. He tells GlobeSt.com that people seem optimistic that corridors similar to the Silicon Valley can emerge here. “We can be hopeful that will happen,” he says noting the certain as well as the uncertain benefits of new energy technology.

“There seem to be some areas that have proven truly beneficial,” says Slaterry. “I’m not certain if switching light bulbs is worth the effort,” while electricity generation “has been jumped on by the industry.”

Saying he’s hopeful that things will eventually blossom, Slattery adds “we are the financial capital of the world, and this is certainly a place for capital formation,” and therefore the components are in place to make some of this “new economy” a reality. “Maybe, the governor’s proposing will be a spark to make things happen,” Slattery says. “When you’ve got all those components there, trying to maximize them is the beneficial thing to do.”

But despite increased vacancy in the commercial office sector and rumors of more to come, there’s the question of how far landlords will go in the build-out to accommodate high-tech tenants. “From what I gather, this sector is a costly product in terms of providing space, depending on the nature of the activities there,” Slattery says.

Noting that the financial industry has been pummeled, not knocked out, Slattery says the commercial real estate community will follow the demands of the market. “If there’s a real demand from the innovation sector, the industry will find ways to make it work,” Slattery tells GlobeSt.com. “If they think it’s profitable, and can deal with the high costs of being in New York, they will make this work.”

Drawing upon an analogy of assisted living facilities in the city, Slattery says that when commercial real estate players started to recognize the aging population in the city, you started to see more senior living facilities here. “Seniors would rather be in New York rather than out in Pennsylvania or New Jersey because here, you’re close to medical attention, social environments and all those things that make New York special,” he says. Although senior housing hasn’t replaced regular housing, Slattery says the commercial real estate community recognized a market it could tap.

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