In a year when the global recession topped international financial stories, some surprisingly strong local business stories were selected by the staff of the Business Today section as the most important regional business news of 2010.
1. Buffalo's continued emergence as a super-regional banking center took major strides forward with several purchases by First Niagara Financial Group and M&T Bank Corp. and the continued presence of HSBC Bank. First Niagara bought Harleysville National Corp. in eastern Pennsylvania in April, and agreed in August to buy NewAlliance Bancshares for about $1.5 billion. "I'm a shooter and I'm comfortable taking the shots," said John Koelmel, First Niagara CEO. The deals have pushed First Niagara into the top 25 largest U.S.-based banks with $29 billion in assets, $18 billion in deposits, and $14 billion in loans. The bank has tripled in size in two years. M&T Bank, meanwhile, announced a deal in November to buy Wilmington Trust Corp., Delaware's No. 1 bank. M&T now has $78.6 billion in assets, $58.9 billion in deposits and $57 billion in loans. Last week, a noted Wall Street analyst compared Buffalo to Charlotte, N.C., as an emerging banking center.
2. The construction of the Yahoo data center in Niagara County and the granting of 25 megawatts of low-cost power to Verizon to build a giant $1.12 billion data center, also in Somerset, has shown one possible industrial future for the region. The low-cost power and cool temperatures are attractive to the companies that operate the giant computer farms. On the downside, the facilities were attracted using huge tax concessions and they do not employ as many people as a factory or large service center.
3. As the rest of the country struggled back from the Great Recession, the slow-and-steady Western New York economy sidestepped most of the damage. The housing bubble that popped across the nation didn't have much effect here, so people in our region were better off. The other reason for our stability is less bright: the region has never fully recovered from previous recessions, so there was less to lose, particularly in manufacturing. Looking forward, William C. Dudley, president of the Federal Reserve Bank of New York, said the region's economy will be less cyclical and could see growth from the medical sector and the banking industry.
4. The Statler Towers has a powerful hold on the region's imagination. It stands as a monument to Buffalo's former greatness, and seeing it boarded up has hit a nerve. A Facebook page devoted to the building has more than 580 members. But saving the building has been a yearlong debacle in Bankruptcy Court, with bidders trying and failing to secure ownership. As of today, local restaurateur Mark Croce hopes to be the designated developer of the 18-story hotel, either as the owner or with the city owning the building.
5. The threat of HSBC Bank and the Phillips Lytle law firm leaving the HSBC Tower in downtown Buffalo puts terror into the commercial real estate community. Losing the two principal tenants would open up 738,000 square feet of Class A office space and could draw tenants from many of the city's older buildings, creating large vacancies in a city with little growth. That would depress the value of much of the other commercial real estate. The mayor's office is in a tough spot: first it wants to make sure the bank and its 2,200 employees stay in the city, and second it hopes they stay where they are.
6. Nerves were getting a little frayed at the General Motors engine plant in the Town of Tonawanda as the automaker struggled through bankruptcy and closed numerous plants elsewhere. Yet rather than withering, the 664-job plant has earned more work from the company. In February, GM announced a $425 million investment at the plant to produce the automaker's four-cylinder, next-generation Ecotec engine, and in April the company announced another $400 million investment in the plant to build a new V-8 engine. The turnaround comes a year after two engine lines were phased out and workers were laid off. And the year ended with another coup: 42 workers were called back from layoff to build parts to ship to China.
7. The Western New York real estate market has been the envy of much of the nation. The lack of any speculative investment in area homes to drive prices up during the years of easy credit meant the region was protected from the mortgage default crisis that triggered the recession. In addition, the federal homebuyer tax credit, which gave some buyers up to $8,000 for a home, spurred sales to a record 1,379 homes sold in June. The bottom dropped out when the federal credit ended, with home sales falling 43 percent in August from the previous year. But escaping the housing bubble saved homeowners in the region from huge losses. In fact, the Buffalo Niagara region was one of only six in the top 100 in the nation that saw home prices increase in the spring. The year also saw the $1 million price exceeded for homes and condos so often that it ceased to be surprising.
8. Rosa's Home Stores defied the odds for 30 years, selling furniture and appliances in the face of growing competition from the big box stores in a stagnant economy. The local chain grew to four big stores, and stayed busy by advertising heavily and discounting. But the drop in consumer spending during the recession proved too much to handle and the company filed for bankruptcy in December and planned a going-out-of-business sale.
9. The growth of the downtown Buffalo apartment scene continued in 2010. The 48 apartments in the long vacant AM&A's warehouse on Washington Street were filled soon after developer Rocco Termni opened them in May. Termini also announced plans to develop the neighboring Lafayette Hotel, including up to 115 apartments. Elsewhere, the former Alling & Cory Building on Elm and Division streets opened for students, many from nearby Erie Community College. And J. Roger Trettel bought the former Wm. Hengerer Co. warehouse on Ellicott Street near the Erie County Public Library and plans to build 22 apartments, while another group is planning apartments in the former Spaghetti Warehouse on Elm Street, and yet another group plans 18 units for the Bosche Building in the 900 block of Main near Allen Street.
10. The abundance of natural gas being extracted from the Marcellus Shale region of Pennsylvania has captured the nation's attention. The controversial practice of "fracking," cracking underground rock to allow gas pockets to escape, has been hailed by the industry as a key to nearing U.S. energy independence, and reviled by environmentalists as a threat to ground water. Williamsville-based National Fuel Gas controls 745,000 acres in the Pennsylvania region and plans to expand its drilling operations. Fracking is currently prohibited in New York while it is studied.