It sure is nice to be able to look back at what’s happened with local business over the past year and find more good news than bad.
But that’s what happened this year, with the Buffalo Niagara riding an unprecedented wave of investment, from projects backed by the state’s Buffalo Billion initiative to private-sector developments, like the HarborCenter and new Delaware North headquarters.
It made the task of identifying the winners among the local business community in 2014 much easier than picking the losers. Usually, it’s the other way around.
But there’s no denying that it’s a change for the better.
• SolarCity – What does it take to convince the nation’s biggest solar energy systems installer to build one of the world’s biggest solar panel factories in Buffalo? An agreement where the state agrees to not only build a plant that will span more than 1 million square feet, but also buy most of the equipment that SolarCity will use inside it.
The price to taxpayers: A steep $750 million.
But the potential reward to the Buffalo Niagara region also is sweet: Roughly 2,900 much-needed jobs at SolarCity’s factory and at the suppliers and other companies that provide services at the plant. The plant’s capacity already has grown to five times its original capacity, thanks to SolarCity’s acquisition of the state’s original target, Silevo Inc.
State officials hope the massive investment – New York will own the building and equipment even if the factory flops – will create the kind of critical mass that can turn the region into a solar energy hotbed and attract other companies to the area.
And if the factory works out – and the demand for SolarCity’s solar energy systems grows as fast as the company expects – Buffalo also gets first dibs on working out a deal for future expansions of its solar panel production.
If it all works out, it could be a game-changer for a region that has only known decades of decline and disappointment.
• Hotel owners – Everyone, it seems, wants to build a hotel in Buffalo. Little boutique hotels in old buildings in out of the way locations, like the old FWS store on Elmwood Avenue and The Henry in the H.H. Richardson complex. Towering hotels, like the Marriott Hotel in the HarborCenter or the Hilton Garden Inn in the revamped Tishman Building. New chain hotels, like the Courtyard by Marriott, across from Canalside and the First Niagara Center. Not to mention the 120-room hotel going into the new Delaware North office complex at 250 Delaware Ave.
And that’s just the city. Throw in the suburbs and Niagara Falls, and more than two dozen new hotels could open within the next five years, bringing more than 2,000 rooms to the region. But hey, financing is available, and some of the projects are getting tax breaks, too.
The big question is whether Buffalo’s economic rebound, now in its early stages, will grow fast enough and strong enough to fill all of those rooms.
• Downtown Buffalo – For decades, stores and businesses couldn’t leave the city fast enough. Now, with Canalside taking shape and things like green space and bike trails helping people rediscover the Outer Harbor, there’s a new buzz around downtown.
Big projects, like HarborCenter and the Buffalo Billion’s massive commitments to bringing IBM to the Key Center and new genomic medicine and drug development initiatives to the Buffalo Niagara Medical Campus, are a huge magnet, too.
Instead of boarding up windows in empty buildings, there are cranes and construction workers. Some city neighborhoods are chic again.
It takes a lot to reverse decades of decline, but the activity we’re seeing now is a promising start. If it keeps up, who knows, maybe suburbanites who sometimes point out how many years it’s been since they were downtown, will start bragging about how often they go now.
• First Niagara Financial Group – The parent company of First Niagara Bank had more than its share of bad news last year.
The banking company had to take a $1.1 billion write-down this fall, acknowledging that it vastly overpaid for some of the acquisitions that built a banking network that stretches from Buffalo to Albany and from Philadelphia to Pittsburgh.
Not surprisingly, its stock continues to sink, shedding 20 percent of its value so far in 2014 – while the Standard & Poor’s 500 index has been hitting record highs. It’s been five full years since First Niagara’s stock did better than an index of other regional banking stocks, according to Morningstar data.
It’s no wonder, then, that First Niagara’s name has started popping up as a potential takeover target with its stock languishing at the same price it traded for three years ago.
• Synacor – The Internet content provider hasn’t had it easy since it went public three years ago. And this year certainly wasn’t any different.
Synacor lost money during each of the first three quarters this year and its sales have steadily declined, forcing the company to slash 70 jobs, including 50 at its Buffalo headquarters. Dissident investors regularly blasted the company and its top management, urging them to sell the business and criticizing what they see as an overall strategy that leaves much to be desired.
But maybe there’s a glimmer of hope. The company’s third-quarter results finally showed some encouraging signs, with revenues nearly stabilizing and several key metrics showing promise. In addition, Synacor’s new CEO, Himesh Bhise, last month outlined a new strategy to speed up the launch of new products and to try to sell more services to its existing customers and to new customers in far-flung places like Latin America.
So there’s hope. But with Synacor’s stock still trading for less than $2 after losing two-thirds of its value since its February 2012 initial public stock offering, Bhise doesn’t have much time for his turnaround to take hold.
• M&T Bank – The Buffalo-based bank is a loser because its $3.7 billion acquisition of Hudson City Bancorp still is in limbo, nearly three years after striking the deal.
Federal banking regulators have held up the deal because of shortcomings they saw in M&T’s systems to identify and prevent money laundering. To fix those inadequacies, M&T has spent more than $210 million over the last two years and hired more than 600 people – a big investment that has cut into its profits.
M&T executives said they’ve made a lot of progress, but it still isn’t enough to win the blessings of regulators for the Hudson City deal. The two banks agreed earlier this month to extend the deadline for completing the purchase until April – the third time the drop dead date has been pushed back.
Meanwhile, the clock keeps ticking, the costs keep mounting and patience is wearing thin.