The growing momentum of Buffalo’s building renaissance – some of it fueled with state money sent by Gov. Andrew M. Cuomo – led the 2013 list of top local business stories as selected by The Buffalo News business staff.
The recently announced Riverbend high-tech industrial park on reclaimed brownfield land and the dramatic construction in the city’s Canalside area were seen as indications things are changing.
The optimism among the region’s business community is reflected in several of the stories, like the purchase of Tops Markets by local mangers, the building of a new headquarters for Delaware North and the planned development the former Millard Fillmore Hospital at Gates Circle site.
The year brought change, too, at the top of First Niagara Financial Group and the Buffalo Niagara Partnership.
Overall, the stories caught the feeling that the region is moving forward with some big, dramatic projects. Here are 10 of the year’s top stories.
For a region already dependent on Albany for its economic well-being, the state’s newfound love for the Buffalo Niagara region, in the form of a $250 million investment in a “clean energy” research and manufacturing park along the Buffalo River, stands as an optimistic and aggressive investment in the people here.
The project, called Riverbend, involves the state’s building facilities and installing expensive equipment that high-tech manufacturing companies need. Companies are being recruited – with two from California already lined up – to occupy the facilities. If they do not succeed, others will be brought in.
Cuomo has made reviving the Western New York economy a cornerstone of his tenure with the “Buffalo Billion” commitment, and the Riverbend project is the largest expenditure yet.
One company moving to the site, Silevo, makes high-efficiency solar panels. The other company, Soraa, makes high-efficiency LED lights. It could be a bright start to a modern market sector.
2. Canalside makeover
Any one coming down to a Sabres game for the first time this year has been greeted with a big surprise: The makeover of the Canalside area has switched into high gear. Cranes have been erected to build the HarborCenter – the two-rink complex with a hotel, retail and office space connected to First Niagara Center. A block north, the first tenant has moved into the rebuilt former Donovan State Office Building, now called One Canalside and home to the Phillips Lytle law firm on the top four floors, and soon a hotel on the bottom four. And the faux canals on the former Aud site have taken shape.
The privately funded projects, except for the faux canals, are symbolic of the new energy in the city’s development community. Going up beside the Erie Canal Harbor park, the area looks like a future destination for locals and tourists alike.
3. First Niagara parts ways with John Koelmel
For the past seven years, John Koelmel was the face and the force behind First Niagara Bank. His outgoing personality and hard-charging business ethos fueled the bank’s amazing growth. Acquisition after acquisition took the bank into the top tier of all U.S. banks, and he was named the 2009 “Banker of the Year” by American Banker.
In addition to his role at the bank, Koelmel sat on numerous boards and personified the growing confidence among the city’s business community. His inclusive style and challenge to others to get on board the growth train expanded his influence.
But that charging spirit eventually led to his downfall in March, when he and the board agreed to part ways. His last acquisition of the upstate business of HSBC Bank proved to be the last straw. First Niagara had grown exponentially, but its stock price stayed flat.
The board decided a bank operator was needed rather than a bank builder, and it named Gary Crosby interim president and CEO. Last week, the board dropped the “interim.”
Koelmel was quickly hired by Terry Pegula, owner of the Sabres, to over see the new HarborCenter project.
4. New headquarters for Delaware North
It was no secret that Delaware North was looking for a new headquarters. The company had stated it wanted new space and that it wanted to stay in downtown Buffalo.
But when Uniland Development Corp. announced plans to build a 12-story glass office structure and hotel on the corner of Delaware Avenue and Chippewa Street, and sought some exotic tax breaks to do it, things went sideways.
Suddenly, opponents spoke out against one of the city’s most cherished companies: Delaware North started as a snack wagon in Delaware Park and grew to a global company with more than $3 billion in annual sales. The idea of granting generous tax breaks to move a company a few blocks was tough for some to get their heads around.
The tax breaks that raised ire were actually sought by the developer, not the tenant, and those breaks were eventually scaled back, along with the parking garage.
But along the way, the threat of Delaware North’s leaving the city was raised, and politicians, all the way up to the governor, and economic development people stepped in and urged calm. Ultimately, $10 million in breaks were approved by the Erie County Industrial Development Agency.
The new building will increase the growing business clout of the Delaware Avenue corridor and, conversely, increase the empty space available elsewhere.
5. Tops returns to local ownership
The purchase of Tops Markets by the top managers of the company in November is the latest chapter in the regional grocery giant’s history. Tops has bounced back and forth between a private and a publicly traded company since its inception 51 years ago. The latest purchase keeps the company private and brings ownership and decision-making back home.
A lot has changed in the grocery business since Tops was started by Armand Castellani, Thomas Buscaglia and Savino Nanula in 1962. In recent years, competition has ramped up, with Wegmans, Walmart, Save-a-lot, Price Rite, Aldi’s, Dash’s and, most recently, Trader Joe’s entering the market. And others – like Target and Walgreens – are also in the grocery business.
As a supplier of groceries in many underserved regions, and as a major employer across its empire, Tops Markets has a lot of people pulling for it to succeed. The managers who bought it, led by CEO Frank Curci, have taken on a lot of debt and will be looking to grow their company.
6. Start-Up NY
Gov. Andrew M. Cuomo caught a lot of people by surprise with his plan for tax-free zones on and around SUNY campuses and on 20 unidentified state-owned parcels, called Start-Up NY. The plan, sounding almost too good to be true for entrepreneurs, would free the company from paying state taxes and employees from paying state income taxes for at least five years, and possibly longer.
The plan requires the company to create new jobs and not compete with businesses in the area.
SUNY schools have reported very strong interest in the program, the details of which are being finalized.
7. Selection of a new plan for Millard Fillmore site
Getting rid of the Millard Fillmore Hospital at Gates Circle proved a little more complicated for Kaleida than the hospital’s owner may have expected. After the first project for the site, a veterinarian college, fizzled, Kaleida put the property out for bid again, and it included a $1 million bonus to the successful project. So, Kaleida paid to give away a 10-story hospital on one of the city’s most glamorous avenues.
The project selected – offered by TM Montante, Canterbury Woods and Frontier Industrial Corp. – could transform the site into a health care neighborhood. Canterbury Woods plans to build an adult living community of 50 to 55 units similar to its successful place in Amherst. Montante plans a combination of retail, health-centered offices and hundreds of apartments on the site. Frontier specializes in demolition, so the giant yellow brick hospital could be coming down soon.
8. Big investment in Ford Stamping Plant
The Ford Stamping Plant in the Town of Hamburg continues to prove its worth and earn more work in the competitive automotive building industry. Ford announced in November a $150 million investment in the plant that could add 350 new jobs to the 620-person workforce.
The plant has built a reputation of strong labor-management relations and the flexibility to adjust to evolving needs. The plant is also linked to the assembly plant in Oakville, Ont., in which Ford is investing about $1 billion. The Oakville plant will be building cars on a global platform, meaning its going to need plenty of stamped parts for different models. And stamped parts is what the Hamburg plant is all about.
9. Vacancies along Buffalo’s Main Street
The building boom in downtown Buffalo has a dark side: It contributes to the growing vacancy rates in the city. Because the local economy is growing slowly, chances are that the companies moving into new space will be leaving older space. Much of the older space is along the Main Street corridor downtown.
Some argue that this is precisely how cities grow. The old space is revamped or maybe converted into housing. But when a colossus like the former HSBC Tower joins the vacancy ranks, it can create a glut that a slow-growing city can not absorb.
The alternative real estate phenomenon is the long-term strength of the Western New York housing market. A recent study showed that the Buffalo Niagara region housing market appreciated more than any other in the nation during the past seven years.
10. A new direction for Partnership
For 20 years, Andrew Rudnick was the face of Buffalo-area business. He helped create the Buffalo Niagara Partnership in a merger of the Greater Buffalo Chamber of Commerce and the Greater Buffalo Development Foundation, and served as its CEO.
During his tenure, the business community began to take on a more decisive role in community affairs, and began pushing its agenda in Albany.
Results were mixed, with some blaming the entrenched business community for resisting change to protect its own interests. But Rudnick and the Partnership did hold forth during some difficult years of economic stagnation in the city.
The Partnership signaled a strong change of direction with the selection of its new CEO, Dottie Gallagher-Cohen. An outgoing leader, Gallagher-Cohen is part of a new generation of business leadership in the community, taking the reins at a time of optimism and potential.