Buffalo Economy News
Buffalo’s economy continues to build momentum, with nearly $8 billion in construction projects either completed or underway in the City of Buffalo since 2013, according to Buffalo Business First, a business newspaper. That figure climbs to $19.2 billion when including projects from the region as a whole.
RiverBend, a solar panel production facility operated by Solar City, is expected to begin production in June 2017 and create 3,000 permanent jobs. SolarCity, which plans to merge with Tesla, will produce solar roof tiles at the facility, as well as solar cells and modules for Panasonic. The 1.2 million square-feet facility, an artist's rendering of which is pictured, will be the largest solar manufacturing facility in the western hemisphere, and have the ability to expand five-fold to accommodate future growth. New York State spent $750 million in the construction of the facility, and SolarCity has planned to invest $5 billion.
While RiverBend is the signature project in Governor Andrew Cuomo’s pledge to invest $1 billion in state funds to spur economic development in Buffalo, the “Buffalo Billion” also led to a commitment by IBM to bring 500 jobs to a new, 100,000-square-foot, state-owned computer information technology center in Buffalo to train future and current industry workers and to create cutting-edge software for energy, health, defense and other industries.
Buffalo Niagara Medical Campus
The “Buffalo Billion” has also led to critical state investments at the Buffalo Niagara Medical Campus (BNMC), a consortium of the region’s top health care, education, and research institutions. The 120-acre site adjacent to downtown employs more than 12,000 people currently, with 17,000 employees at the BNMC expected by 2017, due to the completion of several major projects at the campus, including the University at Buffalo’s $375 million new medical school and Kaleida Health’s $270 million Women & Children’s Hospital, which are both under construction. Roswell Park Cancer Institute, which just completed a $50 million expansion at the BNMC, recently secured United States Food and Drug Administration (FDA) approval to begin clinical trials of a possible lung cancer vaccine.
The site is also home to Buffalo General Hospital, the University at Buffalo’s Clinical and Translational Research Center, the Hauptman-Woodward Medical Research Institute, and Kaleida Health’s recently completed $291 million Gates Vascular Institute.
The growth in the education sector is led by the University at Buffalo, the largest public university in New York State, with more than 28,000 students across 3 campuses. The construction of the university’s new medical school at the BNMC is part of the “UB2020” plan, a comprehensive growth strategy to increase jobs, enrollment, and research funding at the school. UB2020 is expected to create more than 1,000 jobs at the university, in addition to 2,000 private-sector research jobs and 1,600 construction jobs. In addition to the University at Buffalo, the area is home to 20 other colleges & universities, for a total of 110,000 students and 32,000 employees in higher education, creating a $3.2 billion economic impact.
Banking & Corporate Headquarters
Buffalo is the home to the corporate headquarters of M&T Bank, which was founded in the city in 1856. M&T is one of the nation’s largest 20 banks, with $81 billion in assets and more than 15,000 employees, a third of which are located in the Buffalo area. M&T’s footprint includes 750 branches in New York, Maryland, Pennsylvania, Virginia, Washington, D.C., West Virginia, Delaware, New Jersey, and Florida. HSBC bank has a major back-office presence in Buffalo, with more than 3,000 employees located in the area. Key Bank, Bank of America, Citizens Bank, and several local banks also have a major branch presence in the region.
Buffalo is home to the headquarters of several major corporations, including Rich Products, Labatt USA, the New Era Cap Company, Sorrento Lactalis, and Delaware North Companies. Delaware North’s new headquarters, an $80 million, 12-story office tower with a 120-room Westin hotel, opened in 2016.
Capitalizing on its Lake Erie shoreline and historic significance as the western terminus of the Erie Canal, Buffalo has recently made great strides in developing its waterfront. The strategy, executed by all levels of government, has been to use public investment in parks and amenities in order to spur private development.
The centerpiece of this effort is the Canalside, a year-round destination on the southern edge of downtown. The completed phases include a central wharf, a navigable commercial slip, the excavation of historic streets and buildings, a pedestrian bridge, a new building housing a restaurant and a museum, an amphitheater, and a public park. The project also included the $30 million renovation of the Donovan State Office Building into One Canalside, which includes office space, retail and a 96-room Marriott hotel.
More than 1.5 million visitors enjoyed Canalside in the summer of 2016, with more visitors expected during the colder months thanks to its popular ice rink, which is larger than the rink at Rockefeller Plaza in New York City. Three new buildings at Canalside, including the Explore and More Children’s Museum, are also planned.
Canalside’s popularity has led to more than a half billion dollars in private development in the area surrounding the attraction. This includes HarborCenter, below, where the National Hockey League’s (NHL) Buffalo Sabres have completed a $250 million project, which includes a 20-story facility with two ice rinks, a 200-room Marriott hotel, retail, and a high-end sports bar known as “716”. Connected to the Sabres’ arena, the Key Bank Center, HarborCenter hosted the 2016 NHL Draft and will host the 2018 World Junior Hockey Championships, beating out Chicago, Pittsburgh, St. Louis, and Tampa for the international event.
Waterfront development has also spread past downtown, with recent park projects leading to nearby residential developments on the Outer Harbor and the Buffalo River. Buffalo Riverfest Park and Mutual Riverfront Park has resulted in new apartment buildings on the Buffalo River, such as the $18 million Buffalo River Landing and the $9 million 301 Ohio building. Wilkeson Pointe and other improvements have led to the first residential project on the Outer Harbor, the 23-story, $85 million Queen City Landing apartment building, which obtained City approval to begin construction in 2016.
According to Kiplinger’s magazine, using data from Clear Capital, Buffalo’s home prices increased 20.3 percent from 2006 to 2015. This ranks fourth among the nation’s top 100 metro areas, behind only Austin, Honolulu, and Denver.
With the Buffalo Niagara Medical Campus and Canalside being located on the city’s Metro Rail subway system, $91 million is being invested in real estate projects, primarily housing, near the subway stations.
The impact of Canadians on the local economy is expected to increase as the “Golden Horseshoe” region of Southern Ontario (Toronto-Niagara Falls-Hamilton area) is projected to grow from 8.8 million people today to 11.5 million by 2031. An expanded Peace Bridge Plaza was completed in 2016, which will strengthen the region’s ties with Southern Ontario by making border crossings quicker and easing congestion on the bridge. The plan also includes $2 million for improvements to the surrounding neighborhood. Canadians are estimated to make up 40% of the approximately 5 million passengers that use the Buffalo Niagara International Airport each year, supporting 17,000 jobs with $1.1 billion economic impact. Buffalo’s proximity to Canada has resulted in robust retail growth at a time when the retail industry has struggled across the country.
Other major projects include:
- Buffalo’s tallest building, the Seneca One Tower, was purchased in September by Doug Jemal, the #2 commercial real estate developer in the Washington, D.C. market, who plans to spend as much as $200 million on a mixed-use redevelopment, according to the Buffalo News.
- A $40 million expansion of the Buffalo Creek Casino, including 360 new slot machines, 10 table games, a performance stage, and a high-end restaurant, is under construction.
- The historic Richardson Olmsted Complex is being renovated into a 90-room, $56 million boutique hotel and high-tech conference center, operated by the same company that runs The Mansion on Delaware Avenue.
- In October, Governor Cuomo committed $1 million in state funding for a study to build a new passenger train station in Buffalo.
- Buffalo is implementing an overhaul of the City’s zoning regulations, known as the Green Code, a development framework that aims to promote investment, facilitate job creation, restore the environment, and improve the quality of life for residents.
- The City, in an effort to revitalize its East Side and provide employment opportunities for nearby residents, is partnering with the state on the Northland Corridor Redevelopment Project, which includes the creation of a new manufacturing hub and training center. The project includes the redevelopment of 50 acres of land, with existing road, rail, and utility infrastructure, into shovel-ready industrial sites. The anchor tenant will be the Western New York Workforce Training Center, a $44 million facility that will focus primarily on training for careers in the advanced manufacturing and energy sectors.
- The long term future of the National Football League’s Buffalo Bills was ensured with the purchase of the franchise for $1.4 billion by Buffalo Sabres owner Terry Pegula, who has committed to keeping the team in the region for the foreseeable future. Pegula has also committed to building a new stadium for the Bills, which could potentially be located in the City of Buffalo.