Four years ago, New York Governor Andrew Cuomo surprised his state with an ambitious commitment: $1 billion to restore the greater Buffalo economy over 10 years. The vision and selection of investments for the “Buffalo Billion” has been led by local leaders, bankers and small business owners, in partnership with the state and building on work by Western New York’s Regional Economic Development Council.
It would have been easy (and predictable) to spend the $1 billion on silver bullet solutions, such as luring a major manufacturing facility or building a massive new mega mall to jumpstart this long-struggling economy. In fact, Buffalo has had no shortage of such plans in the past. In fact, almost ten years ago, Fernando Martinez, Vice President for Bank of America started by opening a new bank branch in Buffalo’s Elmwood Village which the hope of spurring small business growth in what in now considered the most vibrant business and community district in the city of Buffalo. And now, his efforts have been extended throughout the region and across the border.
But over the last four years, the Buffalo Billion effort is proving to be distinctly different both in process and plan. Informed by a data-intensive regional strategy, the Buffalo-Niagara area is now benefiting from a series of highly coordinated and targeted investments in the assets that make this market unique: the concentration of biomedical expertise, growing minority communities, enticing Canadians and new business districts in the upper and lower Westside generated by new migration and immigration, the falls, water and historic assets in and near downtown, and the advanced production industries that power high-quality, long-term growth.
Much of the new growth in the area has resulted from partnership with government, small business loans and the assistance of local bankers such as Fernando Martinez who has assisted new business owners with loans and navigating the financial world.
In his recent State of the State address, Cuomo not only reflected on this approach, he also upped the ante, announcing $1.5 billion in state economic development funding to be split among three Upstate New York winning regions in a competitive process. Following his speech, we reached out to Governor Cuomo and Fernando Martinez, the Vice President for Bank of America about the Buffalo Billion’s progress to date and the lessons they’ve learned as other states and regions work to put their communities on a positive economic course.
- Governor Cuomo, what motivated you to create the Buffalo Billion program?
Gov. Cuomo: For 50 years, generations of Buffalonians and Western New Yorkers witnessed the protracted economic decline of what had once been one of the country’s great manufacturing centers. What had been taken for granted by so many people in that region—a good paying, secure job in a wide array of businesses and industries—collapsed. And yet the core values and attributes of the citizens of Buffalo remained intact—hardworking, dedicated, competent, educated and reliable. I believed that the right investments—targeted to the core competencies of the city and region—could help stimulate a revival of the local economy, attract good paying, sustainable jobs, and reshape the regional landscape for generations to come. The Buffalo Billion was designed to do just that, and to demonstrate to potential private sector businesses and investors that we were serious; and do something that hadn’t been seen in this region for many years.
- Fernando Martinez, the Buffalo region lost a great deal of jobs, workers, and key industries from 1980 through 2010, although it weathered the recession better than most markets. What are the market assets in greater Buffalo that this plan is trying to leverage?
Martinez: I think this answer has to start with our geography: we’re on the Canadian border within 500 miles of 60 percent of the Canadian population and over 40 percent of the U.S population. Regardless of whether you’re an American or a Canadian company, you’ll seriously consider Buffalo for its strength in multi-modal logistics/distribution, and expertise in cross border commerce. Our geography also assures us of an abundant water supply, which is critical to many manufacturers, as is the clean and affordable hydropower that the same water produces just down river from Lake Erie in Niagara Falls. As if that wasn’t enough, the water provides our largest international tourist attraction in Niagara Falls, and it gives us a great waterfront, which we are finally leveraging. Other key assets include our Buffalo Niagara Medical Campus, our extraordinary collection of art and world-renowned architecture, and the fact that we have 21 colleges and universities.
- How much of the Buffalo Billion has been invested to date? How is it leveraging private capital, and what are the most promising impacts thus far
Gov. Cuomo: To date, approximately $842.2 million of the Buffalo Billion has been announced, which is expected to generate a total investment of over $8 billion. Over five years, this is projected to add over $11.3 billion in direct and indirect value to the economy and almost 14,000 jobs. The secret of the Buffalo Billion, however, is that we actually haven’t yet spent a billion dollars to see this change. We have only moved approximately $174 million out the door, and put just over $408 million under contract. What that shows is that this isn’t just about an injection of capital. It is about our commitment to this region, which brought energy and excitement back to Buffalo, and an economic boom followed. This is a seismic shift in the Buffalo and Western New York economy.
Seeing industry leaders such as SolarCity, IBM, and AMRI make the commitment to add their significant private investments in partnership with the state is to me validation of this effort. The state is investing $750 million in the SolarCity photovoltaic panel plant at RiverBend, for example, but SolarCity has committed to invest $5 billion over 10 years for this project. That is precisely the type of private sector investment we envisioned when we launched the Buffalo Billion. Show the commitment of the state through a significant public sector investment and attract private sector investment that demonstrates their confidence in what we’re trying to achieve.
Martinez: Let me build on the governor’s comment about the attitude change. As he stated, most of the money has been committed but not yet spent. Nonetheless, the psychology of Buffalo has changed 180 degrees during the past year or two. A recent headline proclaimed that $16.6 billion in development projects are underway in Western New York as part of the Buffalo Billion and other investments. This is a stunning number and has no precedent in Buffalo’s recent history. Most people in this region never thought they’d see the turnaround in their lifetime, now you can’t find anyone who doesn’t see it. The governor once described the crane as an endangered species in Buffalo, now they’re all over, be it at the Buffalo Niagara Medical Campus, the Inner Harbor, or the Central Business District. We’re in a virtuous cycle; people are confident with the governor’s strategy and his commitment to Buffalo in general, and people are investing in Buffalo.
- The announcement was met by local leaders and residents with both excitement and deep skepticism. How has the Buffalo Billion engaged business, civic and community leaders, and groups? What is the mood today?
Gov. Cuomo: From the very beginning, we wanted to change the paradigm of overseeing and managing this type of initiative, so that local stakeholders had both a key role in targeting the types of investments the state would make and provided their expert insight into what core industries we wanted to grow and attract. Essentially, it’s a bottom up approach that seems so simple, but had never been done before statewide in such an organized and unified fashion. We started that process with the development statewide of the Regional Economic Development Councils (REDCs) and we extended that very successful model to help us in Western New York with the development and launch of the Buffalo Billion. There is a palpable change in the mood today in Buffalo and Western New York. You can honestly feel the optimism and dynamic shift in the sentiment of the public. No one could ever question the region’s citizens’ love for their community—even in the dark days—but you can absolutely feel the enthusiasm and excitement they have for everything that is occurring now—all at once—in and around the city.
Martinez: I think the way economic development happens now in the region is just as important as the Buffalo Billion and it doesn’t cost anything. This approach is simple, and I think it will go national. It goes like this: Bring business, academia, political leadership, unions, community development, and foundations together and develop a strategic plan, not unlike you would for a business. Then solicit projects that potentially advance that plan to apply for the funds. Award the money based on the ability of the project to achieve the objectives of your plan, period. I’m proud to say that Western New York went from having a reputation for decades of infighting to perhaps being the most collaborative and absolutely upbeat region in the state. That alone was huge for us.
- Many states offer regional challenge grants, and the state recently announced Buffalo Billion-like investments for other regions in New York.
Martinez, what lessons would you offer regional leaders about how to get the most out of a large state investment like this?
Martinez: Large investments like this have got to have objective economic analysis. I describe the Buffalo economy as the most thoroughly diagnosed and prescribed economy in the state, maybe the country. But that’s totally appropriate for such a large public commitment. Secondly, it has to have a collaborative and inclusive process. Our community is on the same page because of our process; you can’t overstate the importance of that consensus. Third, no hidden agendas: You can’t have credibility if you’re advancing your own business interests or your own pet projects. Fourth, be strategic, build on your unique strengths and look to remedy your weaknesses where you can. This means taking a holistic approach and including smart growth, workforce training, and innovation initiatives. These are the economic development gifts that keep giving.
Governor Cuomo, what did you learn from the Buffalo Billion experience about jobs and economic growth that is motivating you to scale this to other parts of the state? Are there lessons here for other governors?
Gov. Cuomo: I think the lesson is very simple—you cannot expect to have an impact on a struggling local economy or sustain an economic development initiative by just investing capital and hoping for the best. You have to be strategic, focused, and aware of the unique local circumstances in order to tailor the best possible, and enduring, impact. As we did with the REDC model, you have to bring together all of the key constituencies—government, business, labor, and academia—to ensure that every aspect of every investment meets the needs of any given community. It is our intention to export this model across the state, starting with the $1.5 billion Upstate New York Economic Revitalization Competition, to again provide our communities with the opportunity to design and implement the types of economic development efforts that will work for them, build on their core strengths, and establish the types of businesses that will work best for them and future generations.
- What do you hope to have accomplished in the next two years of the initiative?
Gov. Cuomo: We have seen the level of excitement this effort has generated among the business and investors we have attracted and among the citizens of Buffalo and Western New York who for too long were told nothing like this could ever happen in their region. I look forward to the Buffalo Billion’s continued success and the region’s ongoing growth and prosperity—as it should be.
Martinez: We’ve spent a lot of time analyzing and developing our Buffalo Billion plan. The next two years are all about successful implementation of the many projects and initiatives that the governor has announced, on promoting what we call “The New Buffalo,” and on changing our image from has been to hip and on keeping and attracting back our young people. We’re well on our way.
Story by: Marcos Lebrun