An $84 million new economic development project in South Buffalo could result from a Canadian medical device manufacturer creating significantly more jobs than state officials announced on Thursday.
Gregg Gellman, the new CEO of Thinking Robot Studios, said the planned new project at the Buffalo Lakeside Commerce Park will create "well over" the 88 jobs initially listed in Thursday's announcement from the New York Power Authority.
Gellman would not be more specific, saying that the company – which was launched in 2011 in Halifax, Nova Scotia – is still developing its plans and talking with economic development officials about potentially obtaining additional incentives from the city, county and state.
"It’s a moving target, because as we’re finalizing our negotiations, the metrics will change," said Gellman, a veteran Western New York entrepreneur. "We’re in fluent negotiations on dollar amounts, and those dollar amounts will be indicative of the number of hires."
The project's disclosure, which came after the Power Authority approved its part of the incentive package, was not the way details of the development were supposed to be made public. The short press release – two understated paragraphs which caught many other agencies and government officials off-guard – effectively pre-empted an announcement the governor's office planned to make in a couple of weeks.
The company was recruited to Buffalo as part of Invest Buffalo Niagara's aggressive outreach to Canadian companies in recent years, and was courted by state and local officials in a bid to capture both jobs and dollars in a high-tech target industry. But those talks are not yet completed, Gellman and others noted.
“There’s still a lot to do,” said Thomas Kucharski, CEO of Invest Buffalo Niagara, the economic development organization. “It doesn’t mean they’ve selected Western New York, that they have a site, that they’re purchasing or leasing anything. It just means there’s an allocation of power if they decide to locate somewhere in Western New York.”
In fact, the Buffalo Urban Development Corp. – which owns the industrial park where the company plans to locate – held a confidential executive session discussion about the project for its board members on Wednesday, but the board wasn't in a position to take any public action because there was no sales contract yet, agency officials said at the time.
"We're doing a formal announcement later this month, but when NYPA released this today, it advanced it," Gellman said Thursday evening. "The [job] numbers that are being presented are preliminary numbers to get the ball rolling. They will change once we have numbers from all entities."
Thinking Robot – whose online messaging is "The Robots are Coming" – is an eight-year-old research firm founded by Kendall Joudrie, its president, and Jourdan Dakov, its vice president. With its "robust patent portfolio," it will use industrial-grade 3D printing machines to customize and then mass-produce medical devices such as artificial orthopedic implants and systems to reconstruct bones and joints.
Kucharski said the Thinking Robot project fits with the region's development strategy of building up its medical services and manufacturing sector. "But there are plenty of other places that have the climate and incentive to attract this also," he said.
The company sought a location for its first manufacturing operation, and said it selected Western New York over Detroit, Cleveland and other locations after months of negotiations, codenamed Project Chardonnay by IBN officials.
"The site plan and all of the support is what drove us to want to be here," said Gellman, a Buffalo native.
With the exception of some research functions, the bulk of the firm will relocate here. Plans call for a three-phase construction of an advanced manufacturing facility of over 63,000 square feet, to be located on 22 acres just off Tifft Street.
In the first phase, totaling $9.43 million, the company would set up its design and manufacturing process, including the purchase of 3D printers, CNC machines, finishing products and other equipment. The second phase would be similar in focus but much larger, with an investment of $68.9 million, followed by development of a new imaging center for $5.489 million.
NYPA, which approved a 2-megawatt allocation of hydropower to support the project, said the company plans to start construction in October and begin operations a year later. According to NYPA, the company had sought an allocation of 2.7 megawatts.
In exchange for NYPA's 10-year power incentive, the agency said that Thinking Robot committed to creating 88 new permanent, full-time jobs, with average pay and benefits totaling over $130,000 each, including $90,000 in salary.
"The NYPA announcement is an important factor that will drive the project to completion," Gellman said. "It’ll contribute heavily to our success."
But that's only part of the incentive package that the company is pursuing. That broader incentive package could include Excelsior Jobs tax credits through Empire State Development Corp., as well as state brownfield tax credits, and property and sales tax breaks through the city or Erie County Industrial Development Agency.
"We’re going to leverage every resource that is made available to us," Gellman said, adding that those benefits would be based on hiring over seven years. "It is our intention to increase job growth and attract people to Western New York and leverage the universities."
Erie County Executive Mark Poloncarz tweeted his support for the project. "This is just another example of how we can grow our region by focusing on Canadian businesses," Poloncarz wrote, confirming efforts by Invest Buffalo Niagara, Empire State Development and Buffalo Mayor Byron Brown.
Gellman, a 50-year-old Buffalo native and SUNY Buffalo State graduate, is a veteran entrepreneur who is also founder and chief operating officer of StimMed, a local company that makes a device that uses electricity to stimulate blood flow in lower extremities of the body to prevent deep vein thrombosis. He is transitioning into an advisory role at that company to focus his efforts on Thinking Robots.
He previously worked at 22nd Century Group and Garwood Medical Devices, and helped all three companies raise nearly $18 million in capital. He started his career at what is now Zimmer Biomet and then Greatbatch Ltd.
"My goal is to make Western New York a model. I want to see it succeed," he said. "The region is ripe for economic growth, and the company could be the model for the future of economic growth here."
Story topics: BUDC/ buffalo lakeside commerce park/ Buffalo Urban Development Corp./ canada/ economic development/ Empire State Development Corp./ Invest Buffalo Niagara/ jonathan d. epstein/ New York Power Authority/ NYPA/ south buffalo