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Resurgence in jobs started with GEICO

A decade before there was a Buffalo Billion, there was GEICO.

As economic development initiatives go, the state’s push to land a GEICO customer service center 13 years ago – and a promise of 2,500 jobs for a stagnant and job-starved region – was one of the biggest business recruitment efforts the area had ever seen.

It took $100 million in incentives and a change in state law on insurance agent licensing, among other things.

But you won’t hear much complaining about those subsidies today, not after GEICO announced last week that it would bring another 600 jobs to a second customer service site in Amherst. GEICO, which already is nearly 300 jobs beyond its hiring target, could have a workforce that approaches 3,400 people if the latest wave of hiring goes as expected.

Gov. Andrew M. Cuomo, who was in town for GEICO’s big news, can only hope the Buffalo Billion works out so well.

Since GEICO first started hiring in 2004, the 2,760 jobs that the insurer now has in Amherst amounts to one of every eight jobs that the region has added during that time. That’s an enormous impact from just one project. It also says something about how badly the region’s economy was sputtering, with job growth that only averaged about 2,000 jobs per year.

But the GEICO project also sent a far more positive message – one that Cuomo is trying to build on and amplify with his Buffalo Billion plan: That companies that invest in the Buffalo Niagara region can grow here and – believe it or not – might even be willing to expand here without demanding a king’s ransom from taxpayers to do it.

In an era where the competition for jobs is so intense that subsidies routinely cost taxpayers tens of millions of dollars, GEICO’s 600-job expansion is costing New York taxpayers just $4 million – “a paltry amount for this many jobs and this much investment,” Cuomo said.

And that, Cuomo said, is what happens when perceptions start to change, with the perception of Buffalo going from being an economic backwater to a Rust Belt resurrection.

GEICO was the first. But as our silver-bullet-loving leaders focused on Bass Pro, the GEICO project’s buzz died down.

Cuomo’s Buffalo Billion aimed to get that buzz back, luring SolarCity’s massive solar panel factory to the area, pumping new investment into the Buffalo Niagara Medical Campus and, just as importantly, putting the region behind a development strategy that is both sensible and sustainable.

“The plan was to prime the pump and get the economy started and get private companies to buy into Buffalo,” Cuomo said.

“The engine is a private-sector engine,” Cuomo said. “Then the question was, is the engine running strong enough that we’re going to come in and put money on the table?”

So far, it’s been working, even if the payoff from most of the Buffalo Billion investments are years away.

Unemployment is back down below 5 percent. Economists think our job growth is stronger than it has been in years.

Home prices, once among the nation’s lowest, are on the rise, as the housing market tightens.

There are cranes and construction work.

Canalside has turned into a happening place that proves just how powerful waterfront access can be.

Larkinville has transformed from a neighborhood of industrial relics to a business hub.

People are sticking around, too.

The region’s population, which was declining for decades, now has stabilized.

Even more encouraging, our young people, who for decades left town as soon as they were able because jobs and opportunities were so hard to come by, now are sticking around, noted Howard Zemsky, president of Empire State Development.

The numbers are shocking: Between 2010 and 2015, we gained more than 18,500 people between the ages of 25 and 34 – a growth rate of more than 15 percent in that highly coveted demographic, according to Census Bureau data.

Not that this has turned the Buffalo Niagara region into an economic hotspot. It hasn’t. We’re still growing more slowly than the rest of the country by most measures.

But our growth is inching closer to the national average – and that means the once-yawning opportunity gap is narrowing.

Sure, other places might be growing faster and have more jobs, but there are more opportunities here to find a job that pays a livable wage than there used to be.

All that is bringing in a new wave of money into the region.

Terry Pegula, the owner of the Buffalo Bills and Buffalo Sabres, has invested more than $200 million in HarborCenter to create further buzz along the now-vibrant waterfront.

Ford Motor Co. is investing millions in its Hamburg Stamping Plant. Yahoo pumped $100 million into data centers in Niagara County. New hotels are popping up across the region. And now GEICO is moving ahead with a $15 million expansion. GEICO and The Buffalo News are both owned by Berkshire Hathaway.

Tony Nicely, GEICO’s president and CEO, said the nation’s No. 2 auto insurer wasn’t interested in playing other communities off against Buffalo to try to get more money out of taxpayers.

GEICO executives are pleased with the workforce in Buffalo. They like being able to pick from tens of thousands of college graduates each year. And since none of GEICO’s existing sites had room to expand, adding jobs in Buffalo made the most sense.

“They wanted to stay here. They wanted to be here. That’s part of the success,” Cuomo said. “They’re saying ‘we want to stay here because the success is palpable.’ ”

That has to strike a chord with Western New Yorkers who have seen too many companies over the years leave town because they didn’t think they could make it here anymore.

That alone is an enormous change.

“The word gets out. It raises eyebrows,” Cuomo said. “It still is an effort, obviously, but is there a positive synergy? Yes.”

So the Buffalo Niagara region still has a ways to go. But when a company like GEICO decides to create 600 new jobs and settles for less than $6,700 in subsidies for each one, it’s a sign that our days of desperation are behind us.

email: drobinson@buffnews.com

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