Verizon and its $4 billion data center aren't coming to Niagara County. The fallout won't be good for the Buffalo Niagara region's already shaky reputation.
"We're going to get a black eye from this," says Thomas Kucharski, president of the Buffalo Niagara Enterprise business development and marketing group, which had been working to lure the Verizon project to the Town of Somerset. "Nobody's happy about it."
The news that Verizon is scrapping the proposed data center only reinforces the perception that the Buffalo Niagara region is a tough place to do business.
"It's a shame," says James J. Allen, the executive director of the Amherst Industrial Development Agency. "I'll be shocked if it's not all over the country."
After all, one of the three reasons Verizon Regional President James J. Gerace cited for pulling the plug on the data center was a lawsuit filed in November by the Amherst resident who owns the property across the street from the data center site, challenging the environmental review of the project.
While a Niagara County Court judge ruled against Mary Ann Rizzo's lawsuit, she appealed and the Appellate Division of State Supreme Court refused to put the case on the fast track for review. That put the Somerset site on the slow track for approval, and these days, that's not acceptable for most companies.
"Projects like this are 'time-is-of-the-essence' projects," Allen says. "If you can't do it now, they're going to do it someplace else."
Other communities bend over backward to help companies, rezoning prime development sites in advance and doing preliminary environmental reviews, so they're ready when a business comes calling.
But not Western New York. We don't have a cohesive regional plan. We don't have enough sites that are, in developer-speak, shovel-ready. "A lot of these environmental issues need to be studied and resolved beforehand," Allen says.
Not only that, any opponent knows that they can tie up a project for a couple of years with a savvy lawyer and the money to pay the legal fees.
Walmart puts up with this every time they go to open a store. They know they'll have to fight local zoning and planning officials, as well as neighbors and existing retailers. They don't let those obstacles scare them away, they fight their way through the process.
But Verizon isn't Walmart. They had other options, especially after its $1.4 billion acquisition of a Florida company that had its own data centers in Virginia that it could use for its immediate needs.
So between the lawsuit and what Verizon perceived as foot-dragging by its potential Somerset neighbor, AES Corp., in selling it the property for the proposed data center, Verizon didn't need the hassle. The company also is scrapping a potential data center in Wyoming.
"What people don't realize is that companies have the flexibility to go somewhere else," says Randall Clark, the chairman and president of Dunn Tire, and a former BNE chairman.
Of course, if Verizon really wanted to put the data center in Somerset, it's hard to believe that it couldn't have made Rizzo an offer for her land with enough zeros in it that she couldn't refuse it. Why let a few hundred thousand dollars stand in the way of a $4 billion project that's already getting cheap power and other government incentives that work out to $3.1 million per job?
So maybe Verizon really never had its heart set on Somerset. The 200 jobs would have been nice, but we'll get by just fine without them, especially given the outrageous subsidies Verizon would have received.
But the damage to the region's reputation will be much harder to repair.