ALBANY - The revival of the upstate economy was the focus in Albany Tuesday, as Beech-Nut Nutrition Corp. announced it would expand and relocate its headquarters to New York and the Senate pushed a $3.7 billion proposal to attract more jobs.

Both actions addressed the long sluggish upstate economy, which Gov. Eliot Spitzer compared to Appalachia a year ago during his campaign.

Using tens of millions of dollars in public grants, loans and tax breaks, Beech-Nut will replace its flood-damaged baby food factory in Canajoharie with a new plant in another Montgomery County town, Florida, 20 miles away.

That will also be the site of headquarters when it's relocated from St. Louis, Mo., according to company and state officials.

The $124 million investment by the company will be met with as much as $84 million in state and local incentives.

The result is a promise to retain and relocate 356 jobs and create 135 more positions in the headquarters that will be built 30 miles northwest of Albany.

“Not only does it mean jobs immediately, but it's hope for the future as you bring these headquarters together,” said Assemblyman Paul Tonko, a Montgomery County Democrat.

He said the deal also makes the existing plant more marketable to food processors because the Beech-Nut facility will be nearby.

The company will also work with New York farmers and Cornell University researchers which could yield new products and processes, Tonko said.

The announcement came a day after General Motors Corp. said it will phase out operations at it's aging Powertrain plant in northern central New York by the end of 2008, eliminating almost 500 jobs.

The Massena plant is near the Canadian border, 144 miles northeast of Syracuse.

That's the kind of news that prompted the Senate's Republican majority to call for more business incentives - $3.7 billion over three years.

The Senate would use the money, mostly from budget surpluses, to cut taxes for small businesses and manufacturers, reduce energy costs for employers, cut health care costs for employers, create “thriving Main Streets” statewide, create a 24-hour help line for business operators to navigate through state regulations, and more marketing of upstate's recreational and tourism offerings.

“We should have immediate results,” said Senate Majority Leader Joseph Bruno, an upstate Republican.

Asked how many jobs would be created, Bruno estimated 300,000 in five to 10 years.

Despite the common themes, though, Bruno and Spitzer still found some conflict. Bruno said Spitzer hasn't addressed the upstate economy as promised.

On Monday, leaders of International Sematech, a global computer microchip consortium that last week announced it will establish its international headquarters in Albany, were in the Capitol.

They attended the vote and were photographed as the Democrat-led Assembly voted for the $300 million in state aid that will make the move possible.

Bruno said he didn't think he was given enough advance notice that Sematech officials - who are expanded in his district - were even around.

Then on Tuesday the Democratic governor responded to the Senate Republicans' proposal saying he has “made economic development a true government priority and produced real results in just a few months. ... Today the Senate released a plan that suggests they are now ready to join us in this effort.”

Spitzer said some of the Senate's proposals appear to mirror programs already under way and others come late for funding because the budget was passed April 1.

Spitzer said Beech-Nut's announcement is the 15th this year involving upstate economic development projects that they said will keep or create nearly 6,000 jobs in Albany, Broome, Steuben, Monroe and Erie counties. Spitzer made reviving the upstate economy - which he compared to the decline of Appalachia - a major campaign theme in his run for governor last year.

But Tuesday also held a caution for the decade-long process of using government loans, grants and tax breaks to retain and lure companies. Solar cell developer DayStar Technologies that was lured to Saratoga County in 2004 with $11.1 million in state and local incentives to employ 250 people announced it will move its headquarters to California, leaving a quarter of the jobs promised. “We're going to take a close look at it,” Bruno said. “We have to hold companies accountable.”

The Senate plan is one of the Senate majorities top priorities to be discussed at a public leaders meeting which legislative majority and minority leaders and Spitzer and Lt. Governor David Paterson will try to start working out compromises by the end of the scheduled legislative session on June 21.