With the promise in hand for $1 billion in state economic development funding over the next few years, the Buffalo Niagara Enterprise now has a powerful conversation starter.
The challenge will be turning those conversations into projects that bring a significant number of jobs to the Buffalo Niagara region.
"Hopefully, this will be a distinguisher in our marketplace," said Thomas Kucharski, the BNE's president. "What it gives us is an entree to have a dialogue" with corporate executives and site selectors.
Kucharski sees the state's commitment as an attention grabber that the region can use to open doors to opportunities that otherwise might have remained shut.
While state officials have been vague about exactly what type of aid is included in the $1 billion figure and how much of it was already on the table for projects that might come along, Kucharski still sees the commitment from the administration of Gov. Andrew Cuomo as a big positive for the region.
"It's kind of exciting, but everybody's still trying to figure out what's happened," he said. "I don't know if other areas have these kind of resources they can tap into."
Still, the availability of incentives won't make projects carrying thousands of good-paying jobs magically appear. With the economy still struggling and companies continuing to pinch their pennies, getting businesses to commit to making the kind of major investments envisioned by Cuomo won't be easy.
The governor has spoken about his vision of the state incentives attracting a small number of big projects that produce hundreds of jobs, if not more. But Kucharski hopes the focus isn't just on huge deals.
"The sweet spot in the economy right now is those smaller projects," he said. "We hope that it won't be geared toward a silver bullet or two."
Regardless, attracting any kind of investment these days requires a compelling case that the project will yield a significant return in fairly short order, Kucharski said.
While incentives can help make up for a shortfall in a region's sales pitch or help offset what otherwise might be higher costs in a certain area, Kucharski said government aid alone can't turn a marginal project into a no-brainer.
"A company is not going to pull the trigger if, long-term, it doesn't make sense," he said. "I don't think anyone can buy jobs or investment at this point. The business proposition has to make sense. Incentives, historically, have been used to plug a gap."
With the economy still struggling to gain momentum coming out of the Great Recession, the BNE, like all economic development groups across the country, has been having a hard time convincing companies to make major investments. But the climate has improved from the dark days during the height of the downturn.
The BNE claimed 14 project "wins" during its fiscal year that ended in June 2011, and the $472 million in new investment that those projects will bring to the region is a marked improvement from the depressed level of activity the BNE experienced in 2010, when it booked only nine wins and $11.8 million in new investment. The BNE claimed 19 wins in 2009 and 20 wins in 2008.
The group's goal for the current year that runs through June is to snag 12 project wins that yield 800 new jobs and $72 million in new investment.
"I certainly wouldn't describe it as robust," Kucharski said. "It seems like we're faring pretty well, but it has diminished from what it was three, four or five years ago, and a lot of that has to do with companies still figuring out where they're at and what they're doing."
Canada has become an important target for the BNE. The group said 10 of its 14 "wins" for the fiscal year that ended in June involved Canadian companies, and that continues to be a major focus. The group currently is working on 25 active leads involving Canadian companies and eight active projects, Kucharski said.
The BNE also is continuing to target specific industry sectors in the United States and Canada, including data centers, back-office services, advanced manufacturing, life sciences, agribusiness and logistics. The group recently conducted a series of evaluation sessions to look at how the BNE is approaching each of those sectors and whether those efforts are still effective in today's market.