It’s been a year that Goldilocks would love for Buffalo Niagara business.
Not too hot, since our growth hasn’t kept pace with the rest of the country, in keeping with our recent pattern.
But not too cold either, with the job market tightening, unemployment dropping and hiring moving along at a slightly better-than-average pace.
With that in mind, here’s a look at some of the Buffalo Niagara business community’s winners and losers in this most moderate year.
ACV Auctions – The online auto auction company already was a winner after walking away with the $1 million grand prize from the 43North business plan competition in 2015. But it was an even bigger winner this year, as its newly launched business took root and branched out into new markets.
Along the way, it raised $5 million in new funding and brought on Synacor Inc. co-founder George Chamoun in a move to add a CEO with experience turning a startup into an established business. And it’s already hired about 30 people in Buffalo.
Frank Heard - When the Gibraltar Industries CEO joined the company in May 2014 as the heir apparent to then-CEO Brian Lipke, the Hamburg building products maker was just starting to recover from the recession, which battered its key construction markets.
Under Heard, Gibraltar has gotten a makeover. He hit a home run by branching out into solar racking systems. He’s focused Gibraltar’s capital on its most profitable and fastest-growing businesses, jettisoning money-losing laggards like its Alabama bar grating and European solar racking operations.
It’s paid off, too. Gibraltar’s stock has nearly tripled since Heard was hired in May 2014. Its sales are above $1 billion, and analysts expect Gibraltar’s profits this year, excluding one-time items, to be more than three times higher than they were in 2014.
Himesh Bhise – The Synacor Inc. CEO didn’t have it easy when he took over the Buffalo internet content provider in August 2014. Its business was sagging after losing a key web portal customer and Bhise had to beat back a challenge from disgruntled shareholders. Meanwhile, Bhise urged patience as he tried to refocus Synacor’s business.
That patience paid off last May, when Synacor snatched a big contract away from Yahoo to provide portal services for AT&T – a whopping piece of new business that will nearly double the technology company’s sales and quickly take it out of its doldrums and put it back on a growth track.
For now, the benefits of that three-year AT&T deal haven’t appeared, only its costs, which have cut into Synacor’s earnings this year and kept its share price depressed, at around $3. But that should change once the AT&T revenues start flowing next year.
Howard Zemsky – The Buffalo developer with the Steven Wright sense of humor is probably the only winner to emerge from the Buffalo Billion corruption scandal.
But emerge Zemsky has. He’s now the undisputed head of Gov. Andrew M. Cuomo’s economic development efforts now that Alain Kaloyeros, Zemsky’s rival in state economic development circles and the flamboyant SUNY Polytechnic president, is on the outs at SUNY Poly and is facing corruption charges for allegedly steering key Buffalo Billion contracts to favored firms, like Buffalo developer LPCiminelli.
That puts Zemsky in an ideal position to make his mark on development across the state, and especially in Buffalo, as he comes up with plans for what Cuomo intends to be the Buffalo Billion, Part 2.
Louis Ciminelli – Nobody took a bigger hit in 2016 than the CEO of Buffalo contractor LPCiminelli after U.S. Attorney Preet Bharara charged Ciminelli and two other top executives in a pay-to-play scheme for lucrative Buffalo Billion contracts.
Not only is Ciminelli in legal trouble, but the allegations are tarnishing LPCiminelli’s reputation and weakens the contractor’s position when it tries to win new work.
So while winning the contract to build the SolarCity plant was a lucrative prize for LPCiminelli, the ultimate price Ciminelli and the company pay may not be worth it.
Cliff Bleustein – The former Computer Task Group CEO barely had time to settle into the top job at the Buffalo information technology company before he was on his way out.
Bleustein, a former Dell executive, lasted just 16 months as CTG’s CEO and the successor to the late James Boldt. Bleustein tried to steer CTG away from the health care markets that Boldt had focused on until its key electronic medical records business dried up.
But that shift didn’t stop CTG’s three-year decline in both sales and profits. And with CTG’s stock, which traded for nearly $23 in June 2013, down to $5 and sales and profits headed even lower for a fourth straight year, CTG’s board didn’t have the patience to give Bleustein more time and sent him packing in July.
Tax break promise breakers - For the longest time, companies looking to pay less than their fair share of taxes could promise the moon to get lucrative tax breaks and never fear any consequences if they didn’t deliver.
Not anymore. The Erie County Industrial Development Agency this year started cracking down on promise-breaking companies by following through on its new policy to claw back tax breaks from companies that don’t deliver on their job creation and investment promises.
It’s a tough policy, and it’s hurt three companies – API Heat Transfer, Niagara Blower and Derrick Corp. – that already were reeling from the collapse of their key oil and natural gas markets. A fourth company – Seneca Mortgage – simply didn’t deliver and effectively thumbed its nose at the IDA by not telling the agency about its summertime sale to a competitor.
But it also puts Corporate Welfare recipients on record: There’s now a price to be paid for broken promises.
Boulevard Mall – The linchpin of Northtowns retail is facing a new reality. Enclosed malls are feeling pressure from open-air competitors, like Boulevard Consumer Square, as well as online shopping.
That’s showing up in the value of the Boulevard Mall Its owner, Forest City Enterprises, marked down the value of the Amherst shopping mall by 44 percent. That matters because it values the mall at $66 million at a time when Forest City is trying to sell it.
Even more ominous, that value is less than the $92.4 million Forest City owes on a loan for the mall, which means it essentially is under water and raises the possibility of a default that could lead to a foreclosure.