When Gov. Andrew M. Cuomo announced his plan for the Buffalo Billion – an all-in bet by the state to revive Western New York’s moribund economy – people didn’t know what to make of it. Was it just a political ploy? A drive-by headline grab? Too good to be true?
Turns out, none of the above. ¶ The announcement three years ago became a rallying cry for the region’s business community to get busy, get onboard and make it work. And in 2014, the results started showing up.
• Ground was broken at the RiverBend complex where SolarCity is building the largest solar panel factory in North America.
• The first 43North business plan competition drew entries from around the world. A local company from Tonawanda, ASi, took first place, and 10 other winners are setting up shop in the region for at least a year. And the contest has been funded by the New York Power Authority for another year.
• The $45 million Buffalo Niagara Institute for Advanced Manufacturing Competitiveness took up residence in the former SmartPill building on Main Street
at the edge of the Buffalo Niagara Medical Campus. Michael Ulbrich, a former Morgan Stanley executive, was hired in June as president of the institute focused on a high-tech revival of manufacturing, Buffalo’s economic engine of the last century.
• Daemen College opened its $2 million visual-effects facility, focusing on growing Buffalo Niagara’s film and post-production industry. The facility evolved from a $4.5 million Buffalo Billion-funded collaboration with Empire Visual Effects, a post-production and animation company.
There is more to come, from genomic research to workforce training, but there is little doubt that the billion-dollar initiative has gained traction. As Cuomo said, it’s not just about the spending. “The money is there, but a relatively small percentage of the money has actually been used.”
Its real effect has been in changing the region’s outlook.
2. RiverBend catches lightning
Silevo was a small California company with some advanced solar panel technology when it was selected to come to Buffalo to operate in a state-funded factory on the RiverBend site. Then, lightning struck in June.
SolarCity, the nation’s largest solar panel installer, whose chairman is billionaire Elon Musk, bought the company and announced it wanted to make the factory in Buffalo five times bigger. The factory and associated companies will employ up to 2,900 people.
And the global star power of Musk immediately put Buffalo’s RiverBend site on the global map.
With the ability to make enough solar panels to generate more than 1,000 megawatts of electricity, the factory will be the biggest solar panel factory in the Western Hemisphere and one of the biggest in the world. It is scheduled to open by early 2016, with full production a year later.
The state’s investment is jumping from $225 million to $750 million.
“It’s a historic day for Buffalo,” said Howard Zemsky, the co-chairman of the Western New York Regional Development Council. “It’s about next-generation industries. It’s about next-generation jobs.”
With Musk behind the project, the sky is the limit.
3. HarborCenter pops up
HarborCenter, the double-rink hockey mecca with restaurants and a soon-to-be-finished hotel, stands as an example of Buffalo’s new can-do attitude. Terry and Kim Pegula, owners of the Buffalo Bills and Sabres, had the HarborCenter built in 22 months, from concept approval to completion of the rinks, training facilities, 716 Food and Sport restaurant, Tim Hortons Cafe and Bake Shop and six levels of indoor parking.
Twenty-two months. That is can-do.
Two giant construction cranes fed teams of workers as the building rose out of the parking lot in front of First Niagara Center.
Upon completion, Canisius College started playing its hockey games there, along with the Erie Community College team. Youth hockey tournaments were booked far into the future. And lines formed outside 716, which boasts a 38-foot television screen, and the tribute Tim Hortons restaurant, with a life-sized statue of its namesake.
Already, other downtown hotels report that the HarborCenter has contributed to increased bookings.
4. Tax-free sites
New York taxes have long been blamed for the dearth of startup businesses across the state, and in the 2013 state budget, lawmakers approved a plan by Cuomo to get around that problem. StartUp NY would designate areas near state universities and colleges as tax-free zones, where companies could avoid all state taxes – including employee income taxes – for up to 10 years.
This year the program took off, with businesses clamoring to get in.
Thus far, zones exist at University at Buffalo, SUNY Buffalo State, SUNY Fredonia, Jamestown Community College, Canisius College and D’Youville College. More than a dozen companies have announced plans to move into the sites.
In the cutthroat competition among states to launch or land promising companies, this puts New York in the game.
5. Downtown Buffalo revival
Buffalonians know a good deal when they see one, including the region’s developers.
They have utilized historic tax credits to fuel the renaissance of downtown apartment construction. Credits of up to 40 percent of the cost of a project are available, and builders have rushed to use them. The results have been spectacular.
Buffalo’s stock of abandoned or little-used warehouses and buildings – saved from the wrecking ball for years by the lack of money to demolish them – are jewels for shrewd builders looking to add to the downtown housing stock. The conversion of old buildings into loft apartments and hotels has accelerated this year, and thus far builders say they have had no trouble filling the apartments as young people and empty-nesters move in.
6. Buffalo Niagara Medical Campus
The Buffalo region’s scattered medical resources are being pulled together into a world-class Medical Campus surrounding Buffalo General Medical Center and Roswell Park Cancer Institute. Hopes are that the campus will improve care and research and help attract new talent.
The latest addition to the campus, the Conventus office building at the corner of Main and High streets, will be connected to the new UB School of Medicine and Biomedical Sciences and the new John R. Oishei Children’s Hospital, which are both under construction. Add to that the 11-story Roswell Park Clinical Services Center going up.
The Medical Campus has helped boost real estate prices in the surrounding neighborhoods.
7. First Niagara’s challenges
Gary M. Crosby’s first full year as CEO at First Niagara Financial Group was a rough one. Promoted after former CEO John Koelmel was let go after an era of acquisitions damaged the stock price and left investors fuming, he had to take actions that the market has not embraced.
First, the bank announced spending up to $250 million over the next four years on technology to better link all the acquisitions and boost profitability.
Then in October, the bank shocked the market by announcing an $800 million write-down (later boosted to $1.1 billion) to recognize the drop in value of some of the banks it had purchased. In addition, the bank said it may have to pay up to $45 million in restitution to some depositors for unspecified problems.
All that sent the stock price tumbling 16.5 percent, to $7.30 a share.
But no one is panicking. The bank, with about 2,200 employees in Western New York, says it is not planning any more acquisitions and is focusing on operations. And insiders have shown their support by buying stock. Eight buyers, including Crosby, four other directors and three officers, bought more than 88,000 shares, with a market value of about $690,000 in late November.
8. Whole Foods coming to Amherst
Foodies were elated in May when Whole Foods announced it would build a store in the Buffalo Niagara region in 2016. The next month, the company picked the Northtown Plaza on Sheridan Drive in Amherst as its site.
The natural foods supermarket chain that started in Austin, Texas, in 1980 has grown into a nationwide phenomenon, with stores in Canada and the U.K., as well.
In addition to the excitement among shoppers, the company has a history of expanding in areas where they open a store. The development company Whole Foods works with, WS Development out of Chestnut Hill, Mass., could join the competitive local development community.
9. Young people like Buffalo
That’s what is happening in Buffalo. Following the Great Recession, the decades-long exodus of young people from the Buffalo Niagara region in search of better jobs turned around. A combination of available jobs here and soaring costs elsewhere has fueled the change.
Since 2006, the number of people between the ages of 20 and 34 – often called millennials – in the Buffalo Niagara region has jumped by a little more than 10 percent, according to Census Bureau statistics. And it comes at a time when the region’s total population shrank by almost 1 percent.
In fact, the uptick in the number of young people in the Buffalo Niagara region during that six-year period from 2006 to 2012 – the most recent data available – has been among the strongest among all of the counties in New York and easily exceeds national growth in that age group.
10. Home prices hot
Homes have always held their value in Western New York. The downside of that was they never really shot up in value.
That has changed in certain areas of the region. Popular neighborhoods in Buffalo – Allentown, North Buffalo, the Delaware District – have seen double-digit percentage growth in value.
Overall, Buffalo prices rose 16 percent since May 31, 2006 – highest among the nation’s 100 largest metro areas, according to research by Clear Capital.
Bidding wars for homes in desirable areas – unheard of in years past – are now commonplace.
Not all areas of the region are facing this situation, but house hunters in the hot areas now have to contend with another issue: frustration.