The remaining $680 million in promised funding for Gov. Andrew M. Cuomo’s Buffalo Billion economic development program likely will be spent over a period of several years as the projects included in the initiative move from concept to completion, a top state official said.
Kenneth Adams, the president of Empire State Development, said the funding included in Cuomo’s budget proposal for the upcoming fiscal year would solidify the state’s financial commitment to carrying out the Buffalo Billion initiative but would not require that the funds be spent within the next year or even during a specific time frame.
“The $680 million is the balance of the Buffalo Billion,” Adams said during a State Senate hearing in Albany. “Those funds, which are funds that include Excelsior tax credits and other benefits, will be allocated through Empire State Development as they arise.”
Adams, in response to questions from State Sen. Timothy M. Kennedy, D-Buffalo, said including the commitment to fund the remainder of the Buffalo Billion is important because it helps assure businesses that the money will be there in future years for projects launched under the high-profile development program. Cuomo’s budget proposal must be approved – and can be altered – by the State Legislature.
“It doesn’t have to be spent this upcoming year, but the budget process would really lock it in and create the stability so that, as we put projects together that are multiyear projects, the private industry partners of those projects would be certain that the funding is in place,” Adams said.
“You have that lead time, or project development time that’s required, and this action creates security for that funding,” Adams said.
Adams noted that the Buffalo Billion’s initiatives, which range from the creation of the RiverBend hub for clean-energy businesses in South Buffalo and centers for medical genomics, worker training and manufacturing innovation, are long-term projects that will take years to plan, build and bring up to full-scale operation.
The state funding, which can come in the form of tax credits, grants and other incentives, also isn’t released to individual companies until they have made their pledged investments or created the jobs they promised. That can take anywhere from six months to more than two years, Adams said.
“From the moment we offer an incentive package to a company, and after negotiating when it’s accepted, there can really be a period of several years for all the investments to take place because we don’t pay out the state’s funds until the companies have completed making their investments and created the promised jobs,” he said.
“As soon as a company starts making its investments – to buy the buildings, to put the roof on, to hire the people to buy the equipment – we have milestones the company has to meet,” Adams said. “As it meets its milestones, we can begin to recognize the tax credits or make payments.”
Adams noted that many of the Buffalo Billion initiatives, from the hubs for clean-energy companies, medical genomics research and manufacturing innovation, are centered around state-owned facilities with sophisticated equipment that is too expensive for individual firms to acquire on their own.
Those businesses would pay the state for access to the resources available at the centers, which would receive the bulk of the state funding set aside for those projects.
“That model of the funds going to the infrastructure – the building, the equipment and the tools and not actually to the companies – is an important model to note,” Adams said.
“The $225 million that’s been committed to RiverBend is really for the infrastructure at the old Republic Steel site … to create an environment for the investments of Silveo and Soraa,” the California-based manufacturers of solar panels and LED lighting that have agreed to be the first tenants in the clean-energy complex.