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Debate on preference for local firms delays contract on economic hub for Buffalo’s East Side

A routine vote over hiring a construction manager for a Buffalo Billion project went awry Tuesday, as the discussion turned into a debate about whether agencies should give preference to local firms when spending public dollars.

Buffalo Urban Development Corp. members effectively delayed approval of a $150,000 construction management contract for an out-of-town construction company, disappointing agency officials who had recommended approval of the agreement with Providence, R.I.-based Gilbane Building Co.

But the argument also demonstrated the degree to which business conditions and attitudes have changed in Western New York amid a construction and redevelopment boom.

Specifically, it reflected both a renewed interest by outsiders in bidding for work in a region once considered insular, as well as a counterdesire to maintain a focus on strengthening the local economy and local firms. And it shows the challenge of balancing those factors.

The contract at stake involved pre-construction services for the Western New York Workforce Training Center, a key $44 million component of a new light-industrial economic hub on Buffalo’s East Side. The 100,000-square-foot facility will be built inside a larger existing complex at 683 Northland Ave. The project is part of the larger 35-acre Northland Corridor hub that BUDC is redeveloping with state funds to bring business, jobs and investment back to an impoverished East Side neighborhood.

“I just feel like the locally owned headquarters should get the work,” said Dottie Gallagher-Cohen, president and CEO of the Buffalo Niagara Partnership business group and a member of the BUDC board. “Our business folks who have been headquartered here and have been with us from the beginning deserve to do this kind of work.”

This doesn’t mean that it should be automatic or that an out-of-town headquarters is a barrier to entry for bidding on contracts, she said. Nor does it necessarily mean that an outsider still won’t win the day. But if all things are equal, local roots should be given more weight to support those businesses and create wealth here.

One of the bidders for the contract management contract, LPCiminelli, is represented on the Gallagher-Cohen’s Buffalo Niagara Partnership board, through Frank L. Ciminelli, but Gallagher-Cohen said that she “was not advocating for LPCiminelli.”

“For me, this is not even about this deal. This is about a philosophy when a professional services contract comes up,” she said.

“It should not be overlooked when we’re spending public money,” she said. “We’re sending that money out of town instead of improving our own economy.”

Not so fast, countered Thomas A. Kucharski, president and CEO of Invest Buffalo Niagara, the nonprofit regional economic-development organization that actually shares office space with the partnership. Kucharski said he has heard outside developers say for years that they won’t do work here because Western New York is “a closed society.” Now, he said, “that is starting to turn.”

“We are seeing growth in our community because we’re seeing interests other than the ones we’ve seen for several decades investing in our community,” he said. “Having outside perspective and outside money is always very good.”

BUDC officials defended their recommendation of the Gilbane group, which beat out two rival teams led by Buffalo-based LPCiminelli and Turner Construction Co. Turner is based in New York City, but has long done work in Western New York, including on the John R. Oishei Children’s Hospital that is now under construction.

“They had the most compelling and enthusiastic approach for this project,” David A. Stebbins, BUDC vice president, said of Gilbane.

In particular, Stebbins cited the firm’s mentoring partnership with the 3480 Group, a minority startup construction firm that is co-owned by legendary former Buffalo Bills running back Thurman Thomas and a former teammate with a background in the construction industry. “We’re not hiring them for that reason, but we thought it was a great way to build capacity in the minority community,” Stebbins said. “That was one of the reasons that tipped this in favor of them. We thought Gilbane had one of the best approaches to that.”

Board members voted to table the contract proposal, and may bring the top three bidders back for meetings with the full board in the coming weeks to answer additional questions before making a decision.

BUDC spent $6.7 million from Empire State Development Corp. to buy a dozen properties with 700,000 square feet of existing space, largely along Northland and East Delavan avenues, but several facilities are in bad shape and will be torn down. Significant environmental cleanup is also needed. So BUDC is getting another $10.3 million – approved separately Tuesday – for demolition, remediation, renovation, construction and site improvements.

BUDC in early June issued a “request for qualifications” for experienced construction managers, and received 10 responses a month later – itself an unusually high number that delighted agency leaders. A committee reviewed them before short-listing the three finalists, who were interviewed Aug. 10-11 before Gilbane was selected.

Gilbane is one of the nation’s largest privately held construction contractors. It has an office in Buffalo – as well as in Rochester, Syracuse, Albany and Corning – and included several local firms on its team. The 3480 Group also is relocating its headquarters from Atlanta to Buffalo, where Thomas lives, and hopes to use its relationship with Gilbane to gain experience and credibility to grow.

Including minorities and women is a core part of the contract. But Common Council President Darius G. Pridgen questioned how much effort is being made to reach minorities in neighborhoods, as opposed to just paying lip service to it.

“I’m not sure if we are really reaching as far and as hard as we could. We have to think out of the box in ways to involve the community, where people really get benefit,” Pridgen said. “I think that we can do a lot better.”

email: jepstein@buffnews.com

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