When the Erie Canal opened in 1825, it put Buffalo, New York on the map. Buffalo became a favorite port-of-call for people heading westward, and the port continued to develop through the nineteenth century. Passenger and commercial traffic expanded dramatically until the Great Depression. Still, Buffalo bounced back from the Great Depression relatively quickly due to the strength of its manufacturing industry during WWII.
However, Buffalo’s success did not last. Like many Rust Belt cities, Buffalo’s heavy industry migrated from the downtown core to the suburbs and more southern cities. Infrastructure, which had once lured industry to Buffalo, also contributed to the city’s decline. Rail became more efficient, reducing the importance of the Erie Canal. The St. Lawrence Seaway opened in 1957, connecting the Great Lakes to the Atlantic and allowing shipments to bypass Buffalo altogether. A number of expressways, including the Niagara Thruway and Kensington Expressway, displaced thousands of residents while existing infrastructure was left to crumble.
Buffalo tried to reinvent itself over the years with the financial support of the federal government. Major employers, local colleges and universities all contributed to the effort. Yet by the early 2000s, Buffalo was still a long way from the economic engine it used to be, and many doubted the possibility of the city’s revival.
In 2012, in his State of the State address, New York Governor Andrew Cuomo announced a bold initiative, unlike any Buffalo had seen before.
The initiative, known as the Buffalo Billion, is New York State’s commitment to invest $1 billion in the Buffalo area’s economy. The initiative uses a combination of state grants and tax breaks to spur economic growth. Early investments included $50 million toward the Buffalo Medical Innovation and Commercialization Hub, a biomedical research and development facility, and $225 million for the Buffalo High Tech Manufacturing Innovation Hub at RiverBend, an 88 acre campus for clean energy businesses. With the assistance of tax incentives, Tesla’s SolarCity is developing a $900 million, 1.2 million square foot solar panel factory at RiverBend. Set to open later this year, SolarCity has committed to have nearly 1,500 employees in the Buffalo Niagara region when complete.
These investments are all aligned with the Buffalo Billion Investment Development Plan. Released in February 2013, the plan identified six high-level strategies and the unique assets needed to move the region forward. The Plan identified advanced manufacturing, health and life sciences, and tourism as three high-growth sectors ripe for investment. The Plan also urges investment in entrepreneurship, workforce training and smart growth strategies to ensure growth is sustainable over the long-term.
In order to achieve the Plan’s goals around entrepreneurship and foster a culture of innovation, Governor Cuomo launched 43North in 2014.The ambitious startup competition is designed to attract early-stage growth firms (and related venture capital) to Western New York. The startup competition includes $5 million in cash prizes, with the winner walking away with $1 million each year. In exchange, the winning teams agree to locate in Buffalo to further grow and develop their businesses. Oncolinx , a company developing powerful, targeted cancer therapies, won the competition in 2016. Oncolinx is currently headquartered in the 43North Incubator in the heart of downtown Buffalo.
All of these efforts, thanks to the Buffalo Billion, are gaining attention. “Buffalo’s tech scene reboots the city,” writes USA Today. “Millennials are moving to Buffalo and living like kings,” notes the Gothamist. “New York’s second largest city has sprung back to life with retro-cool restaurants and watering holes that recall its industrial glory days,” writes Travel + Leisure magazine. “Millennials and young entrepreneurs are moving to Buffalo as ‘re-pats,’ staking their claim by helping revitalize a place they once fled,” recognized the Chicago Tribune.
Momentum has continued to build now that people from outside the region are recognizing Buffalo’s potential.
When benchmarked against similar metros, Buffalo is finding reason to celebrate:
Building on the momentum of Buffalo Billion’s initial investment, Governor Cuomo announced in January of this year that he’s committing another $500 million to the initiative. “Phase II” builds off Phase I efforts but puts a heavy emphasis on investing in local infrastructure. A number of projects have already been announced as part of Phase II, including funding the Metro Rail’s expansion; converting the Scajaquada Expressway into a slower, landscaped boulevard; creating the Buffalo Blueway, a network of waterfront access sites; and building a new Buffalo train station. Other investments will include recapitalizing the 43North competition, creating an innovation hub at the Buffalo Niagara Medical Campus, creating a $10 million workforce development fund for projects with a track record of success, and launching a “downtown revitalization” contest among 18 local municipalities.
Nonetheless, not everyone is on board with the state spending another $500 million on Buffalo’s revival. Some investments have certainly come under fire. The $900 million SolarCity factory, for instance, required a hefty $750 million taxpayer-funded incentive package to become a reality. And at least ten people tied to Governor Cuomo’s Buffalo Billion plan have been indicted for bribery or other crimes. Some Cuomo donors have also benefitted directly from a number of the investments.
Of course, no economic development project as ambitious as Buffalo Billion has ever gone perfectly as planned. Mistakes will inevitably occur. A project of this scale is a learning process, and success doesn’t happen overnight. Despite how impressive the first five years of the program have been, Buffalo still has a ways to go. And despite its steep price tag (as its name implies), millions of dollars will be returned to local, state and federal coffers if the Buffalo Billion initiative is successful. As lessons are learned from this historic endeavor, other cities should take note of which aspects are most worthy of replication in their community.
To learn more about the Buffalo Billion, visit: www.buffalobillion.ny.gov
ICIC drives inclusive economic prosperity in under-resourced communities through innovative research and programs to create jobs, income, and wealth for local residents.
PO Box 191297
Roxbury MA 02119
Sign up for our mailings and stay up-to-date on all research, commentary, and news related to ICIC as we continue to drive inclusive economic prosperity in America’s under-resourced communities.
© 2023 ICIC. All rights reserved.