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Opening of Oishei Children's Hospital, UB Med School top business stories of 2017

After three years of construction and anticipation, 2017 was the year the big projects came to fruition.

From the opening of the Oishei Children's Hospital and the new University at Buffalo Jacobs School of Medicine on the rapidly expanding Buffalo Niagara Medical Campus, to the beginning of production at the Tesla solar panel factory in South Buffalo, the big construction projects of years past now are functioning parts of the Buffalo Niagara economy.

The question now is how much of an impact those projects, along with a boomlet of redevelopment projects turning old downtown buildings into new apartments and commercial space, will have on the region's growth going forward.

For now, the impact has been limited. The pace of hiring last year slowed, despite the high-profile projects opening up, as the labor market tightened and the region's population remained stagnant.

But there is the promise of more. Further adaptive reuse projects to convert old buildings into new uses are in the works. Hundreds more workers are expected to be hired as production ramps up at Tesla. And new businesses, like Strategic Financial Services, are promising to become big employers here in the coming years.

Against that backdrop, here's a look at the top 10 business stories from 2017.

1. The Buffalo Niagara Medical Campus took a giant step forward in 2017.

Visitors check out the atrium of the new UB Jacobs School of Medicine and Biomedical Sciences on the Buffalo Niagara Medical Campus on Dec. 12. (Derek Gee/Buffalo News)

Two major, long-awaited projects opened for business - Oishei Children's Hospital and the University at Buffalo Jacobs School of Medicine and Biomedical Sciences. Less visible but also important, the UBMD Physicians’ Group moved into the Conventus medical office building, centralizing in one location many of the doctors affiliated with the medical school.

The changes go the heart of collaborative efforts to improve the quality of care in the region, enhance the environment for recruiting doctors and researchers, and more closely align the medical school with key teaching hospitals. They've also produced a positive side effect: downtown development.

2. They're finally making solar panels at the mammoth Tesla factory in South Buffalo. Only it's Panasonic – and not Tesla – that's making them.

Production of solar panels finally began at the Tesla factory in South Buffalo, but it's Panasonic, not Tesla, that's making them. (Derek Gee/Buffalo News)

Panasonic, which signed a deal with Tesla late last year to invest more than $250 million in the Buffalo factory, started making panels in October and plans to expand its production to include the solar cells that go into those panels beginning in February. Panasonic expects to have 300 people working at its portion of the factory by the end of the year.

Tesla, which will operate the factory, built with $750 million in state incentives through the Buffalo Billion, plans to make its innovative solar roofing panels at the factory. But Tesla still is testing the roofing panels, which look like a conventional roof with solar cells inside, and hasn't started making them in Buffalo yet.

3. M&T Bank lost its leader when its chairman and chief executive officer, Robert G. Wilmers, died unexpectedly in mid-December.

End of an era: M&T's Robert Wilmers, force in community, dies at 83

Under Wilmers, M&T made more than two dozen acquisitions to grow from $2 billion in assets when he took the helm at the bank in 1983, to $120 billion today, with more than 17,000 employees across its operations that now span the entire mid-Atlantic region.

His death also left a void within the Buffalo Niagara civic community. Wilmers had long been a big supporter of local non-profit groups and had put M&T's substantial backing behind efforts to improve schools within the City of Buffalo.

The bank quickly named long-time M&T executive Rene F. Jones as its new chairman and CEO and appointed another bank veteran, Richard Gold, as president and chief operating officer.

4. In September, Amazon turned a vacant grocery warehouse in Lancaster into its newest sortation center. Packages that have already been picked, packed, sorted and shipped from an Amazon fulfilment center elsewhere are further sorted by zip code in order to get them into customers' hands more quickly.

It is Amazon's first tangible investment in Western New York, and a welcome one. But the local economy will need a lot more like it to replace the retail jobs that have been lost at brick-and-mortar stores as they struggle to adapt and compete with online retailers.

5. The disruption of retail continued, with Boulevard Mall defaulting on its debt and was sold, while the nearby Northtown Plaza attracted new tenants and many longtime beloved local stores closed.

Boulevard Mall escapes foreclosure through $97 million sale

As the retail landscape changes, all eyes will be on the mall, which has lost several stores and struggled amid competition from nearby chains and big boxes, online retail and a redeveloped Northtown Plaza.

Roughly a year and a half after being put up for sale, Forest City Enterprises gave up control of Boulevard Mall on Dec. 5 rather than face foreclosure, putting Western New York's oldest enclosed shopping center into the hands of its loan servicer, LNR Partners. The mall, nearly $97 million in debt, was valued at just $53 million according to the deed of sale.

6. After a long wait and much political lobbying, ride-hailing companies such as Uber and Lyft were finally given the green light to operate in Western New York this summer.

As Uber and Lyft take off, cab drivers feel left behind

Hundreds of people signed on to work with the company as independent contractors, drawn by the promise of flexible hours and autonomous schedules. Consumers have flocked to the service, with Canalside, Riverworks and Walden Galleria among its top drop-off locations.

Local cab companies, however, have taken a big hit since Uber and Lyft arrived. Some have reported business declines of as much as 50 percent.

7. Strategic Financial Solutions made a splash in June, when the Manhattan-based financial services firm announced it would expand to the Buffalo Niagara region. The payoff could be big, in the form of up to 1,500 jobs within five years.

Strategic Financial Solutions sticks to ambitious goal: 1,500 jobs in Amherst

Strategic Financial Solutions is a debt-consolidation firm, not a debt collector. It works with clients burdened by credit card debt to solve their financial problems. The company moved into temporary space at Fountain Plaza, with plans for permanent space on Lawrence Bell Drive in Amherst.

A Buffalo connection helped draw Strategic Financial Solutions' attention to Buffalo. Jordan A. Levy and Ronald M. Schreiber, co-founders of Z80 Labs, invested in the firm several years ago. Levy gave the company's CEO, Ryan Sasson, a tour of the region, talking up its advantages.

Empire State Development committed up to $10 million in tax credits, which kick in if the company delivers on its job pledges.

8. Rochester real estate mogul Robert C. Morgan has accumulated a vast empire of apartments, mobile home parks, self-storage facilities and other commercial properties across more than 14 states, and is growing his presence in Buffalo.

Behind the scrutiny of Buffalo's newest real estate mogul

But he's now drawing scrutiny from the FBI and U.S. Attorney's Office in Buffalo, who are investigating how his companies acquire and finance their multi-family apartment buildings. Investigators are focusing on rent rolls and other financial information submitted to lenders to justify loans.

A Buffalo News probe found Morgan borrowing substantially more than he paid for his properties, often on the same day as the purchase closed, and he also admitted to trying to conceal the actual purchase prices in order to avoid an assessment increase.

9. The follow-up to the state's Buffalo Billion economic development program is evolutionary, not revolutionary.

What will $500 million in Buffalo Billion II buy?

While the first Buffalo Billion, launched three years ago by Gov. Andrew M. Cuomo, was focused on big projects, the Buffalo Billion II, unveiled by Cuomo in January, is designed to build on the shock and awe factor that was so much a part of the first round.

The first round aimed to create hundreds of new jobs and jump-starting entire industries, while also giving a psychological pick-me-up to the Buffalo Niagara region’s battered psyche.

Round Two is far less flashy, intended to build on the foundation laid out by the first Buffalo Billion, while also spreading the economic development plan’s focus into smaller initiatives that  build on the first phase and branch out into new neighborhoods and communities that were not part of original initiative.

10. Western New York's largest locally-based construction company, LPCiminelli,  struggled in the wake of the September 2016 arrests and indictments against owner and longtime CEO Louis P. Ciminelli and two of his senior lieutenants.

LPCiminelli cites $3.88 billion in lost work from criminal probe

In a February legal filing, the company said it had lost nearly $4 billion in business as a result of the bad publicity and damage to the firm's reputation. The three executives stepped down in January, turning the reins over to Ciminelli's son, Frank Jr., but the new president in the summer formed his own construction management firm, Arc Building Partners, and left his father's firm in November. LPCiminelli shut down its construction business in December to focus on construction management, and auctioned its equipment.

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