The Buffalo Billion is taking shape.
Two years after Gov. Andrew M. Cuomo pledged that the state would invest $1 billion over as many as 10 years to revive the Buffalo Niagara economy, the Buffalo Billion is reaching the stage where the projects and ideas are moving forward.
The idea is to take a long-term approach to turning around an economy that has missed out on much of the nation’s growth over the past half century. Instead of silver bullet projects, like a Bass Pro store on the Buffalo waterfront, the Buffalo Billion is looking to the long term, trying to create a fertile environment for targeted industries where state officials believe the Buffalo Niagara region has a competitive advantage.
To do that, the Cuomo administration is repeatedly turning to the same approach the state has used to build a nanoscience industry in Albany, where New York invested more than $1 billion in cutting edge equipment that companies have flocked to use, spurring billions in private investment and creating thousands of new jobs along the way.
The Buffalo Billion is following the Albany model to try to create a hub for clean energy research and manufacturing, as well as a center for medical genomics research centered around the University at Buffalo’s supercomputing capabilities. Another center would have costly and sophisticated equipment that would help some types of advanced manufacturers develop new products and technologies that they couldn’t otherwise afford to do on their own.
Other initiatives aim to attract entrepreneurs to the region, train factory workers in high-demand skills and make Niagara Falls a better place for tourists.
None of the initiatives will pay dividends right away. In fact, all of them will take years to be fully operational.
But the most immediate benefit of the Buffalo Billion is its “shock and awe” value. It has already brought the Buffalo Niagara region notice as a place where something is going on. State officials hope that positive attention will build on the Buffalo Billion’s momentum.
Will it work? Nobody can say for sure. It could be a stunning success or an expensive failure.
But there is also no doubt that what we had been doing wasn’t working.
Where the money comes from
If you consider only funding that has been included in the past two state budgets, the Buffalo Billion is the Buffalo $200 million so far. The Cuomo administration has said the funding could be spread out over a period as long as 10 years, and there’s no guarantee that funding would continue if Cuomo were to leave office.
So far, the Cuomo administration has included $100 million in funding during each of the past two state budgets. More money for the Buffalo Billion will be included in the budget proposal for the coming fiscal year and allocations are expected in state budgets beyond that, but the Cuomo administration has takena year-to-year approach in providing funding and has never spelled out a set schedule for future funding.
Here’s what has been approved so far:
State cash: $150 million so far, through $75 million in capital included in each of the past two state budgets.
Excelsior Tax Credits: $50 million – $25 million in each of the past two years.
Proceeds from sale of unallocated hydropower: $5 million
Additional funding is expected to be included in the 2014-15 state budget and in future years to cover rising expenses as the initiatives move from preliminary stages to construction.
Where the money is going
Buffalo High Tech Manufacturing Innovation Hub at RiverBend
Buffalo Billion commitment: $225 million.
The project: The state will build a state-of-the-art facility for clean energy businesses on a 90-acre former brownfield at the Republic Steel site on the Buffalo River in South Buffalo.
The vision: The state seeks to create a cutting-edge facility with sought-after equipment and resources that will be a magnet for companies in the clean energy and high-tech fields. The state hopes to duplicate a model that has been successful in turning Albany into a center for the nanotechnology industry.
The facilities and equipment at RiverBend will be owned by the State University of New York Research Foundation, and the companies located there will have access to the machinery. Two companies, Soraa, an LED lighting manufacturer, and Silevo, which makes solar panels, have committed to become anchor tenants at the facility and have pledged to invest $750 million apiece in their ventures there, creating 850 jobs in the process.
Neither company is receiving direct funding from the state’s $225 million investment. The state is working to line up other tenants for the hub, envisioned to have six buildings at the outset, with room for expansion.
What could go wrong: Will the resources available at RiverBend be appealing enough to lure businesses to Buffalo, which has only a modest presence in the clean energy and high-tech fields? Will the companies that come to RiverBend grow as rapidly as state officials hope?
Status: Finalizing site acquisition. Groundbreaking expected in spring 2014.
Completion date: 2015.
Buffalo Medical Innovation and Commercialization Hub
Buffalo Billion commitment: $50 million.
The project: The state will build a center with biomedical research equipment and facilities. Albany Molecular Research and PerkinElmer have agreed to be the first two firms in the center.
The vision: State officials hope the $40 million in equipment that the state will provide for the facility will be a magnet to attract other health and life sciences companies. The remaining $10 million in state funds will go toward finishing the Conventus medical building on the Buffalo Niagara Medical Campus.
The goal is to leverage state money into a $250 million complex where the presence of the clinical and research institutions on the medical campus will help generate private-sector investment and jobs. As with the Riverbend project, the medical campus center aims to duplicate the public-private partnership model used to build the nanotechnology industry in the Albany region.
What could go wrong: Can the region build the critical mass needed to become a hub for medical research when other parts of the country already have a stronger presence in the industry?
Status: Albany Molecular Research and PerkinElmer will open temporary offices in the Jacobs Neurological Institute on the medical campus by March, while a permanent home is built within the Conventus building.
Completion date: 2015.
Genomic research partnership
Buffalo Billion commitment: $50 million.
The project: Create a partnership between the University at Buffalo and the New York Genome Center in Manhattan to develop new ways to treat, prevent and manage serious diseases based on genomic medical research. The initiative will tap into UB’s high-performance computing capabilities, along with research efforts now underway on the Buffalo Niagara Medical Campus.
The vision: Create “an entirely new industry” for big data genomics in the Buffalo Niagara region that creates a foothold in what Cuomo described as the next frontier of modern medicine.
What could go wrong: Genomic medical research already is a red-hot field nationwide, and many areas already have an established presence in the industry.
Status: A new initiative announced earlier this month in the governor’s State of the State address.
Workforce training and development
Buffalo Billion commitment: Unknown, but expected to be at least $10 million.
The project: With nearly 17,000 factory jobs expected to come open because of retirement between now and 2020, the project is aimed at training new workers with the skills that manufacturers need.
The vision: Part of the strategic plan developed by the regional economic development council targets advanced manufacturing as an area where the Buffalo Niagara region has a competitive advantage over other parts of the country, partly due to the area’s long industrial heritage. But because of the decline in the region’s manufacturing base over the past half century, local factory managers say they have a hard time convincing students, their parents and even school guidance counselors that manufacturing still can be a viable career path.
The workforce training center, which likely will be located somewhere in the City of Buffalo, would work with local manufacturers to identify the skills that are in demand and create a pool of trained workers to fill local factory jobs.
What could go wrong: While the rate of decline has slowed in recent years, the region continues to lose factory jobs. The roughly 50,000 manufacturing jobs in the region today are roughly half as many as were here in 1990. The 17,000 projected job openings assumes that manufacturing jobs will continue to shrink by about 1 percent a year. If that decline accelerates, local workers could see fewer opportunities.
Status: State officials have launched a pilot program to match job seekers with current openings and training opportunities. Efforts also are underway to work with local colleges and public schools to expand existing training programs and have them better meet the needs of manufacturers, including the creation of a manufacturing magnet school at Burgard High School in Buffalo that would provide welding, machining and auto mechanic training programs.
Completion date: 2015 and beyond.
Buffalo Niagara Institute for Advanced Manufacturing Competitiveness
Buffalo Billion commitment: Unspecified, but likely to be “tens of millions” of dollars. The state has spent $8 million to buy a temporary site and is paying $800,000 to the facility’s operator.
The project: Create a new center, possibly in the same facility as the workforce development center, to help local manufacturers develop innovative products. The center would provide resources and facilities that small- to mid-sized companies need – but often can’t afford – to develop new products and other innovations.
The vision: With more than 1,500 small to mid-sized manufacturers in Western New York, helping those companies come up with new products will build upon the expertise in the region. It also would capitalize on the low-cost hydropower, ample water supply, centralized location and know-how from local colleges and universities.
What could go wrong: Will the resources match the needs of local companies, and will they lead to commercially successful products and innovations that create jobs?
Status: State officials this month named EWI, an Ohio consultant that specializes in helping companies develop innovative products, as the facility’s operator. EWI created a plan for the manufacturing institute, which will open this spring in a temporary site in the former SmartPill building at 847 Main St. A hunt for a permanent facility continues.
Completion date: Opening in temporary site this spring. Permanent home still being determined but unlikely to open for at least two years.
Downtown Niagara Falls development challenge
Buffalo Billion commitment: $20 million.
The project: The state is creating a $40 million fund to support public investment and incentives for development. The fund will consist of $4 million per year from the City of Niagara Falls casino revenue funds, matched by $4 million annually from the state’s Buffalo Billion investment for five years.
The vision: The fund aims to create a competition to select a team of designers, developers and businesses that will develop signature projects for downtown Niagara Falls. The aim is to attract major investments from other private sources to help revitalize downtown Niagara Falls and turn it into a better venue for tourists.
What could go wrong: Niagara Falls has long been a place where projects go to die, or at least struggle mightily to get started. Will the ideas be good? Can the winners overcome the political obstacles that have slowed other projects?
Status: A request for proposals will be released early this year.
Completion date: Competition will be ongoing for five years.
Robert Moses Parkway removal
Buffalo Billion commitment: $11.5 million
The project: Remove a roughly one-mile stretch of the Robert Moses Parkway along the upper rapids of the Niagara River as part of a bid to bolster Niagara Falls as a tourist destination and remove a barrier between the waterfront and downtown Niagara Falls.
The vision: Make Niagara Falls a more interesting stop for tourists. While 8 million people visit Niagara Falls each year – almost-twice as many visitors as the Grand Canyon attracts annually – only about one of every five tourists stays overnight.
The project will complement the $50 million in private investment for four hotel projects that could bring 500 new rooms to downtown. It also dovetails with plans to establish new programs for visitors to Niagara Falls, such as the establishment of new bicycling and hiking trails, as well as zip-lining and even horseback riding tours.
What could go wrong: Once the upgrades are in place, changing the perception that there is more for tourists to do on the Canadian side of the border will take time.
Status: Final design is underway, with construction to begin in fall 2014.
Completion date: Spring 2016.
Daemen College/ Empire Visual Effects
Buffalo Billion commitment: $4.5 million.
The project: Daemen College and Empire Visual Effects are trying to create a visual effects industry in Buffalo. The initiative links students in Daemen College’s 16-week visual effects certificate program with potential job opportunities at Empire Visual Effects, which hopes to do visual effects for film and television studios across the country.
The vision: The initiative is an attempt to gain a foothold in a 21st century industry that has the potential to grow. Officials hope the venture could create 150 jobs over the next five years.
What could go wrong: While post-production work can be done anywhere, can Empire Visual Effects carve out a niche in a Hollywood-centered film and TV industry?
Status: The first group of students completing the Daemen program in September 2013. The second group will finish this month. State officials said the graduates have been working on feature film and TV projects. Empire Visual is headquartered in the Tri-Main Center in Buffalo, with several Daemen students expected to fill positions at the new company.
Rainbow Centre Mall
Buffalo Billion commitment: Unknown.
The project: Transform the vacant, city-owned former shopping center in Niagara Falls into a mixed-use complex.
The vision: Convert a sprawling building in a key Niagara Falls location into a vibrant development that links neighboring attractions and spurs additional tourism investments.
What could go wrong: Funding could be an obstacle.
Status: Proposals will be submitted by separate teams led by Intertrust Development, one of the largest hospitality business owners and developers in Western New York and Niagara Falls, Ont.; and Buffalo-based Uniland Development Co. by the end of January. A developer is expected to be selected shortly afterward.
Completion date: Unknown.
Who decides where the money goes
Gov. Andrew M. Cuomo has built a small team of local leaders to handle local decisions, and the 30-member Western New York Regional Economic Development Council serves in an advisory role. Key local decision makers are:
Howard Zemsky – The Buffalo developer serves as co-chairman of the regional council and has been the point man for the Cuomo administration’s economic development efforts in the region.
Zemsky led the successful effort to transform the dilapidated Larkin Building into a thriving office complex that has spurred new investment and development in surrounding buildings, creating the kind of a revival in one neighborhood that Cuomo hopes to duplicate across the Buffalo Niagara region.
Satish Tripathi – The University at Buffalo president and Zemsky’s co-chairman on the development council has played a much less public role in council affairs, but UB has emerged as a key asset in the Buffalo Billion initiative. The university is at the center of the initiative to build a medical genomics center here. UB also is playing a key role in the development of the Buffalo Niagara Medical Campus, home of the proposed medical innovation center.
State officials hope the Buffalo Billion investments will help pave the way for research done at UB, as well as other local colleges and universities, to be turned into commercially viable products that can spur the creation of a cluster of job-creating businesses here.
Christina Orsi – Empire State Development’s regional director in Buffalo is the key state staff member overseeing the Buffalo Billion initiative. She also is executive director of the development council, putting her at the forefront of all of the state’s major development initiatives. As a result, Orsi plays an important role in shaping and shepherding the Buffalo Billion initiatives from the formative stages through the state bureaucracy and, eventually, into the development phase.
Western New York Regional Economic Development Council – While the council does not have a formal role in the Buffalo Billion, the research and the economic development plan it has put together over the past three years is the foundation for all of the initiatives that are part of the Cuomo program.