The Buffalo Niagara Enterprise business marketing group has its focus firmly to the north.
Seven months after Empire State Development closed its Toronto office in a cost-cutting move, the Buffalo Niagara Enterprise hired Lee Meister, the same Canadian business consultant who represented the state, as the local group’s representative in Canada’s largest city.
The move helps fill what had been a growing void caused by the shutdown of the Canadian consulate and the closing of the state’s economic development office in Toronto in April.
BNE officials decided the Canadian market was too important to be without a representative in one of its biggest markets – one that the business group has long focused on as a fertile market for new business ventures.
“We were all left … looking around wondering what short-term strategies and longer-term things we’d like to put in place to try to capture as much of the services that were evacuated out of the community,” said Thomas A. Kucharski, the president of Buffalo Niagara Enterprise.
“It was something that we knew we had to do, regardless of where the Buffalo Billion goes, where the regional development council goes, where the [Buffalo Niagara] Partnership and all their partners go with what they’re doing to try to offset the [closing of the] consulate. We still needed to have somebody on the ground in southern Ontario and the [Greater Toronto Area],” Kucharski said.
“It’s a BNE contract, but it’s really something that will benefit the entire region,” he added.
Canada has been accounting for a big share of the projects that the BNE lists as ventures that it played a significant role in landing. Two-thirds of the 12 project “wins” claimed by the BNE from July 2011 through June 2012 involved Canadian companies. Since the BNE was founded 10 years ago, Canada has accounted for 57 projects that the BNE claims as “wins,” funneling $511 million in investment and 1,361 new jobs to the region.
“This is a need that has been identified. It’s a void we’re trying to step up and fill, and it’s something that’s going to benefit the entire region. All of our economic development partners will benefit,” said Paul Pfeiffer, a BNE spokesman.
The challenge – one that’s made even tougher with the economy remaining sluggish – is converting interest on the part of companies into an actual commitment to do a project.
“One thing that’s really important in going from an expression of interest in exporting to actually putting a facility here is the sequence of events in how you develop that opportunity,” Kucharski said. “The fat part of the curve is companies with 15, 20 to 40 employees.”
Immigration issues are important, and those hurdles can be both time-consuming and potential deal-breakers, which is why the BNE tries to guide Canadian firms through the sometimes complex process.
“If you don’t get your visa, all that effort has gone to waste. If you don’t have your immigration house in order, really all of the other stuff is moot because the opportunity won’t develop,” he said. “In a couple of projects, we’ve come perilously close to that happening.”
Every contact is taking on more importance these days, because the weak economy has made it harder to land projects.
The BNE’s 12 “wins” during the last year was the second-weakest tally in the past decade, although it still met the business development and marketing group’s goals.
The 12 projects are expected to bring 473 new jobs to the region, paying an average of $44,142, which is about 10 percent higher than the slightly more than $40,000 a year that the average job in the Buffalo Niagara region pays, the business group said in its annual report. The job creation is about on par with the 465 new positions that the 14 project wins from 2010-11 were expected to create.
The BNE’s project wins are down from their pre-recession level. Part of that stems from the group’s more focused approach on targeted industries, from life sciences and logistics to advanced manufacturing and back office work. Investment levels, which dropped sharply during the recession, last year were on par with the low end of the group’s range leading up to the downturn.
Nearly all of the $225.6 million in investment comes from a single project – the $206 million yogurt plant that Muller Quaker Dairy plans to build in Batavia, which is expected to create 186 jobs, or more than a third of all the jobs generated by the BNE-backed projects.
The project capped a long effort spearheaded by officials in Genesee County, who spent about nine years laying the groundwork to prepare a site in Batavia so it would be ready when opportunities arose. About $8 million was spent acquiring land to form the business park and adding infrastructure suitable for food processors, according to Steven G. Hyde, president and chief executive officer of the Genesee County Economic Development Center.
That effort paid off when the Muller Quaker Dairy project came along.
“The land was ready, and the willingness of the local people was great,” said Kathy Alfano, director of economic development at Pepsico, a partner in the yogurt plant. “We like to be in a community where people want us. And up here, people wanted us.”
The BNE said its goal during the current fiscal year, which runs through June, is to secure 10 project wins and attract $60 million in investment, which would be the second-lowest in both categories over the past decade. The group said it hopes to retain or attract 700 jobs, down from 810 during in 2011-12.