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First Niagara 'jacked' up about Buffalo

John R. Koelmel, First Niagara Financial Group's chief executive officer, says downtown Buffalo was the Pendleton-based banking company's first -- and only -- choice for its new headquarters.

That's reassuring, especially since First Niagara soon will have more branches and deposits in Pennsylvania than in its original upstate New York markets once it closes on the $237 million deal it announced in July to buy Harleysville National Corp., a suburban Philadelphia bank.

"No intent to cut and run on our part," Koelmel says. "We're more than loyal players."

Indeed they are. Rather than take the National Fuel Gas Co. route from six years ago and hold the region hostage while threatening to move their headquarters to Pennsylvania, First Niagara moved quietly to shore up its local operations.

And with the promise of 300 new jobs acting as a juicy carrot during the worst recession since the 1930s, it only took a few months to hammer out a deal that cements First Niagara's future here, even as it looks elsewhere for growth.

It also shows the importance of building the local economy around companies that already are here. There's no need to sell them on the quality of life here, the abilities of the local work force, the resources available from the region's colleges and universities. They already know it.

It's even more important when it's a company like First Niagara, which has a solid track record of growth and plans for even bigger things down the road. That's just the kind of wagon you want the region hitched to.

"We continue to push our shopping cart up and down the aisle, looking for bigger and better deals," Koelmel says. "We're even more excited for what the next three to five years hold."

And as First Niagara grows, it will need more back-office banking jobs, which have long been one of the region's strong points. Maybe that means a new data center or a bigger call center. You can also be sure those will be jobs that folks in First Niagara's new Pennsylvania markets would love to have.

"They're growing to the point where they don't have to be in Buffalo," says Buffalo Mayor Byron Brown.

Dennis Mullen, the chairman and chief executive officer designate for Empire State Development, says First Niagara's vote of confidence in Western New York, along with decisions this summer by Yahoo! to build a data center in Niagara County and insurer GEICO Corp. to add 300 jobs in Amherst, show that the region can be competitive nationally.

"GEICO had Virginia as a competitive site. These guys had Pennsylvania as a competitive site. And we won," Mullen says. "Make that your headline."

Of course, Mullen notes that those companies also know all about the region's warts; its high taxes, frequently dysfunctional politics and burdensome regulations. At the same time First Niagara was announcing its expansion, Pfeiffer Foods was telling its 150 workers in Wilson that they'd be out of work by Thanksgiving.

"Let's not kid ourselves: We are going to be challenged every day," Mullen says. "But hold on to this and see the glass as half full . . . as we go through the challenges and deal with an economy that is very difficult."

No one sees the bright side of First Niagara's growth more than Howard Zemsky, the principal of the Larkin Development Group, which owns the Larkin at Exchange Building. With First Niagara growing, the Larkin Building now is full, validating the faith Zemsky and his partners had when they took a huge risk and renovated the old Larkin Soap Co. headquarters without a single tenant lined up in advance.

Since the expansion talks started a few months ago, Zemsky told Koelmel last week that "I've really resisted the temptation to give you a big hug."

Zemsky says he tried to stay calm on the outside, "but inside, I was doing this whole Mardi Gras kind of thing" as the buttoned-down landlord demonstrated a little dance.

A couple of minutes later, the burly Koelmel got his hug from Howard Zemsky.


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