Jan 27


Q&A: Jordan Levy

Jordan Levy is one of Western New York’s most successful entrepreneurs in recent times.

He might be best known to local residents as the former chairman of the Erie Harbor Canal Development Corp., which is developing Canalside. He served in that capacity for four years before stepping down in 2011. During that time he first supported the controversial plan to construct a Bass Pro store in the inner-harbor then lead the EHCDC  in its embrace of a more popular approach dubbed “lighter, faster, cheaper.”

Levy, 57, has enjoyed a long and successful career in the private sector. He is a general partner at SoftBank Capital NY and managing partner of Seed Capital Partners, two venture capital firms that invest in technology firms. He’s also chairman of Synacor, a technology company that employs 350 on Buffalo’s waterfront. Levy co-founded a number of other companies, including Ingram Micro and Clientlogic Corp.

He has been a member of numerous community and corporate boards, including the Seneca Holdings Corp., the business arm of the Seneca Nation (not affiliated with its casino operations). Past positions include president of the Jewish Federation of Greater Buffalo and a board member at the Albright Knox Art Gallery. 

He graduated from the University at Buffalo in 1977 with a degree in political science. He began his career working as an aide in the New York State Senate and on numerous political campaign.

Levy was interviewed Jan. 21 by Investigative Post Editor Jim Heaney.  A 3 minute, 27 second video clip featuring interview highlights is posted above. The full 21 minute, 42 second interview is posted deeper in the transcript, which has been edited lightly for clarity.


Heaney: We want to talk a lot about economic development and a little bit about the waterfront. Let’s start out by talking about the shape of this economy. You travel a lot, right?

Levy: Yes.

Heaney: What do you see when you travel around the country compared to what you’re seeing in Buffalo in terms of our economy?

Levy: You know, I think we’re very fortunate in many ways. We don’t have the highs, but we don’t have the lows. We have a sort of consistent economic situation and as a result we don’t really experience some of the real changes in the marketplace. I think the economy here is OK. It certainly could be better but it could be a lot worse. Housing is reasonably stable.

Heaney: What are our relative strengths and weaknesses compared with the rest of the country?

Levy: I think stable housing is a strength of this community. The fact of the matter is it’s very affordable and we see appreciation. It’s not huge but it’s stable and it’s steady, particularly in the city, if you will.

You know, I think we have an educated work force, which helps us a great deal. I think we have watched our dependency on union jobs. It changed dramatically over the last 30/40 years, not by choice, but by necessity. As we’ve seen the migration of Bethlehem Steel and Chevy and Ford and other manufacturing jobs migrate out of Western New York and out of the country in many ways. So I do think we’re fortunate in that we have reasonable job positions.

There are opportunities for people and there is some growth going on here. Geico’s growing, M&T’s growing, First Niagara’s growing, Delaware North is growing. Certainly New Era Cap Company is growing.

I’m one of those people who believes that we do need a silver bullet.

Heaney: But our numbers are pretty flat, especially compared with the rest of the state.

Levy: But they’re not dying, which is the real important factor. We have a fairly stable situation.

Heaney: Governor Cuomo has pledged a billion dollars of state resources to jumpstart things, advance things, however you want to look at it. The way he’s proposing doing it spreading the money around in different key sectors and to promote workforce development and entrepreneurship. He’s not looking to throw a whole lot of money at one big project and I know that you are an advocate of the silver bullet approach. I take it you would not be spending the billion dollars exactly the way Andrew Cuomo’s proposal is.

Levy: I applaud the governor for giving us a billion dollars and recognizing that Western New York needs something very very dramatic in order to change because without it it’s not going to change – at least not going to change in the foreseeable future. I give an awful lot of credit to Howard Zemksy and others who are spending a lot of time on this initiative and trying to find ways to intelligently grow our economy.

But I don’t believe we’re going to see the kind of benefit in the short term that I would like to see, that I think most Buffalonians and Western New Yorkers would like to see from that initiative. Long term, 20/30 years from now it’s going to pay huge dividends. I think it’s going to have an impact. I’m interested in short-term impact.

I’m one of those people who believes that we do need a silver bullet. I do believe that we need to go and find a corporation, a multinational corporation and give them 3, 4, 500 million dollars to induce them to build a manufacturing or a data facility and/or a job creation engine here in Western New York that will change the urban landscape. It’s that simple. It’s a philosophical point of view. I think it will change the whole mindset, whether it’s Toyota or General Motors in building a plant here.

Heaney: Is it the jobs or is it the mindset?

Levy: Both. We need the jobs. Google, for example, got a building in New York. They’ve announced they’re hiring 3,000 engineers in New York over the next five years. The average job pays $140,000 a year. They ‘ve bought land in Los Angeles and Venice, California. and they announced they’re going to hire 3,000 engineers, again $140,000 per job. Imagine what that means if you could get them to do the same thing here. Well they’re not showing up in Buffalo. I wish they would.

You love it here. I love it here. So much of the audience loves it here. Our passion for Western New York is great, but they’re not coming here unless we find a way to do it. And my attitude it bring them here, build them a building, train those people, get those jobs, 3,000 jobs paying $125/$150,000 a year. You know what the spill off benefit of that is? What that means in terms of houses that get bought, that means in restaurants that get filled, and dry cleaners that get used, and automobiles that get sold. And then new businesses that start up from these people after they’ve done this for a handful of years and they say, “I want to start my own business. I want to do this on my own.”

That’s what I want to see happen and I just don’t believe it’s going to happen in this methodical slow way. It will in time. I’m just not so patient. I’m 57 years old. I want to see this happen before my kids have made a decision they’ll never come back to Buffalo.

We just don’t have the psyche of job creation for a start-up environment.

Heaney: You’ve also got some pretty strong thoughts on entrepreneurship and start ups and the fact that you don’t think this area is ready for prime time. A lot of people say the way to grow this economy is slower, more methodical, through start-ups, through entrepreneurs, through 10, 20, 30 jobs at a time as opposed to 2,000 or 3,000 jobs at a time. But you quoted in the Buffalo News not that long ago that you think this area is just not even close to being ready to nurture entrepreneurs the way they need to be to make an impact. So let me open the floor to you: what is wrong with our culture, our infrastructure, our mindset when it comes to business start-ups?

Levy: Unfortunately, Jim, we just don’t have the psyche of job creation for a start-up environment. There is infrastructure. There is venture dollars. We have millions of dollars. We have $5 million in our incubator fund. We as a venture fund have invested over the last seven years about $225 million in New York State over 50 companies, 30 of them still active today.

Heaney: How many of them are from here?

Levy: None of them are from Buffalo

Heaney: Because?

Levy: Because we haven’t found any worthy of investing in. I think the mindset doesn’t exist. People aren’t willing to take that risk and taking that chance. And part of the reason they’re not interested is because the environment doesn’t nurture it.

I mean, think about it, you drive down Elmwood Avenue today and you see another pizza parlor that opens up, you think “there’s a guy who’s an idiot.” We need another pizza and chicken wing place like a hole in the head. We don’t think that guy be the next Tom Monahan. That might be the next Pizza Hut. That might be the next Subway. We think that guy’s an imbecile. And in other places they celebrate that guy: “Wow, that guy’s got his new business. We should go try it. We should give him help. How can we make that happen?”

Well, we don’t have that. People want to go work for the bank. They want to go work for government. They want to go to work and take a job in a big company.

Heaney: I grew up in Buffalo, but I lived in Florida for a while. And what struck me when I moved back was this terrible self image we have as a community, a kind of “woe is us” attitude, and waiting for the other shoe to drop. How much of that mindset that I just described …

Levy: I don’t think that’s it. I think it’s just that risk taking is something that’s not accepted here. It’s not something that’s encouraged. And until we do that, we’re not going to get our best and our brightest to say, “You know what? I’m going to start a business.”

I’ll tell you what’s happening all over New York. We are watching literally hundreds and hundreds of companies get started from people working for big companies that are saying, “OK, I made a good living for the last four years, but I don’t want to keep doing this. I want to be my own boss.”

They’re quitting Goldman Sachs. They’re quitting the large law firms. They’re quitting big companies. And they’re quitting the NBCs of the world and saying, “I’m going to start my own business. I got an idea about digital media. I got an idea about how to do something on the Internet differently that it’s being done today. I have a way to have weddings that are different from the way we do weddings today.”

And so they’re starting businesses. They’re quitting their jobs. People don’t do that here. Your parents will say, “You’re out of your mind” and hit you in the head. They think it’s absurd.

We don’t think that way and until we start to think that way, we’ll never have success. That’s my concern. That’s why I’m looking for maybe that silver bullet. I think it’s going to take a very long time to change the culture. We started this incubator accelerator in downtown Buffalo.

 I’m tired of people taking advantage of us. The New Yorkers do it all the time with real estate.

Heaney: What is it called?

Levy: It’s called Z80 Labs and thanks to The Buffalo News who gave us some space down there. We’ve got a really nice facility. We’ve got plenty of money. We’ve got resources, connections and relationships to bring people there. And I sat with the guys today and there was about 15 entrepreneurs there and I’m very discouraged. I don’t understand why the room isn’t filled. We have room for 60 or 70 people and there was maybe a dozen there today.

Heaney: How much money do you have to invest and how much have you actually invested?

Levy: We have – besides our own money – we have plenty to invest.  We have this $5.2 million Innovate New York grant that we got from the State of New York in order to help encourage entrepreneurs to start their businesses and so far we’ve given out a few thousand of that. We have it to give away and there’s no one to give it to. And it requires so matching dollars. They’ve got to their friends and family and raise some money.

Sure, they’ve got to go and boot strap, maybe use their credit card. We’ll do it all kinds of ways as possible. You don’t even have to raise money. You can come there for free. We’ll give you the space. We’ll give you infrastructure. We’ll give you support. We’ll give you mentorship. We’ll do all that stuff. Yet, nobody’s showing up.

I don’t get it. It’s very discouraging. I’m not going to give up. We are really committed to this thing. We’re going to try to change the culture and the mindset.

Heaney: What concrete steps can be taken to get more people to take the plunge? I mean we’re probably turning out enough educated people from the universities, right? Is it a lack of brainpower? What is it?

Levy: What did I read the other day? There’s 110,000 kids in college within one hour of Buffalo right now as we speak. That’s a lot of young people. But the first thing we’ve got to do is convince them to stay in Buffalo, to say they want to be a part of this community long-term. They don’t want to leave and go to New York or Silicon Valley or Boston points south and go to Charlotte and Atlanta and Florida. We have to be able to do that first.

And I think part of that is putting in places infrastructure, putting in place this change of attitude that, “I can start a business in Buffalo and be successful.”

And companies like Synacor and Campus Labs that have done that successfully and been able to exit and able to make a difference. That does change the mindset. We need more of those wins. It’s about wins.

That’s why I go back to that silver bullet. We need wins and wins changes everyone’s mentality. It’s no different than our sports teams for God’s sakes. When the Sabres and the Bills are winning, this is one of the greatest places in the world. When they’re not winning, we all have our heads in the sand.

As soon as the city’s involved, the political system’s involved.

Heaney: Let’s go back to the governor’s plan for a minute. One of the key elements is to promote entrepreneurship. And the key component of that is to host an international competition that would make grants available to people who file successful business plans. You’re on the committee that’s going to screen all that. What do you think of that approach and what do they have to do to make sure that works?

Levy: And I’ve said this to them and again this is just my opinion. There are very smart people engaged in this whole process and they’re working very hard for this community. But I think that the competition – there are a lot of competitions around the country, people have no idea, around the world, they’re all kinds of things. But half a million dollars of an award in a particular focus category can make sense.

We should be advanced manufacturing. This was one of the great manufacturing cities of the world. In its day, we were as good as it got. And we have infrastructure. We have capability. We have skilled labor. We should focus on advanced manufacturing. That should be one of the competitions.

To do it in Internet or digital technology or the stuff I do is wasted because there’s just so many places you can go and get that done.

The other thing is life sciences. What this community’s doing in the medical campus – if you haven’t gone down there you’ve got to see it. What we’re doing in terms of bringing the University of Buffalo Medical School there. Bringing Children’s Hospital there. Bringing the Vascular Center there – the expansion of Roswell, the expansion of the entire medical campus is going to begin to bring as many as 15,000 or 17,000 people down there everyday to work. And what’s going to happen is it’s going to outgrow itself and then have to start migrating outward. As it starts migrating outward, it starts creating private sector investment, private sector growth. That’s the thing that will fuel the economy and have a big impact. So I would do it in life sciences as well, which makes sense because …

Heaney: So stay focused is what you’re saying.

Levy: But to go beyond those two – maybe there’s something else. I don’t know what it is, but we have to focus if we’re going to win otherwise we’re going to get somebody who’s going to come up here, they’re going to win the competition, and then they’ll leave as soon as they get their money spent. I don’t want to see that happen. I’m tired of people taking advantage of us. The New Yorkers do it all the time with real estate. They got cheap real estate. They buy the HSBC Building. They’ll walk away in two years and will have made their money. They don’t care what happens. We have to live here. We have to think about what the future holds. We’ve got to think about the big picture. They don’t give a damn.

Heaney: Let’s shift gears. Canalside – you were chairman of the Erie Harbor Canal Development Corporation for how long?

Levy: Almost five years.

Heaney: You really went through a big change from going from the Bass Pro approach to the smaller, quicker, faster, lighter …

Levy: Whatever you want to define it. People like to think that they take credit for everything.

Heaney: What do you see happening down there? What they’re doing now is kind of executing what you folks couldn’t put in place while you were still there. Do you think that’s going to be successful?

Levy: I think that’s going to be very successful.

Heaney: Larry Quinn was on here a while ago with some concerns about the way things were headed. Larry was also, as you know, your vice chairman. In terms of the overall development, do you see that starting to infill fairly soon with stores and shops and businesses?

Levy: Well I don’t know if the retail segment to that is going to take off as quickly as we would have liked. We had it focused on retail as a catalyst for driving traffic down there, which was again around Bass Pro and an entire retail ecosystem. That is not as much the focus as we had to retool as a result of Bass Pro walking away. The canals are being built now and they’ll be beautiful and there’s going to be skating and there’ll be a need for a retail segment that goes with that. But I think you won’t see much of that take place until something gets built.

Heaney: Something gets built – something big?

Levy: No. I think what will happen is the external community, the retail, the hospitality, if you will, the restaurant world wants to see what gets actually built before they become pioneers. There’s been a lot of pioneers in Buffalo and most of the time they ended up as the guys with the arrows in their backs. I think they would just assume to take a little more cautionary point of view. The infrastructure is there, let’s see what that brings. The Donovan Building’s going to be there and it’ll bring 400, 500 people a day down to work. It’s a beautiful looking building. I think they’re doing a great job. There’s room for retail there. I think the Sabres project at the Webster Block …

Heaney: Talk to me about the Webster Block.

Levy: They’re going to spend $125/$130 million of private sector money. There’s going to be parking that’s going to be built. There’s going to be the hospitality aspect of it with the hotel. There’s going to be a skating rink. And then there’s going to be a need for retail.

People are going to come down there. They’re going to have a place to eat. They want to have a place to drink. Certainly in Buffalo we like our drinking. They’re going to want to have their chicken wings. And then, of course, is there an opportunity to shop? I don’t know. That’s still a question mark as to how much without a big anchor tenant whether that will be something that will take place. I think that’ll be slower rather than quicker.

Heaney: The next question I’m going to preface by saying that this happened after you left. But explain to me how the Erie Harbor Canal Development Corporation has come to partner with the City of Buffalo when it comes to the outer harbor when the city seems to have difficulty even getting wading pools at Martin Luther King Park done on time, getting Ellicott Street done through the medical campus. The intention all along in a lot of people’s minds was to get the outer harbor in the hands of the Erie Harbor Canal Development Corporation.

Levy: Which is exactly where it belongs.

Heaney: And why has that not happened?

Levy: I think the outer harbor, as I think I’ve told you before, the first day I was appointed, after the governor came up and announced my appointment and some new members of the board, that afternoon I had the chairman and the executive director of the NFTA in my office sitting there saying, “Here are the keys. Would you take over the outer harbor?”

And we spent the next few years talking about ways to do that. There were always issues and we had other things we were focused on at the time we just didn’t have the capability of doing it all but we continue to have those discussions – changes in leadership there, made some changes in terms of the conversation.

The truth of the matter is it belongs with the Erie Canal Harbor Development Corporation. They were established for the purpose of redeveloping Buffalo’s waterfront – the inner and outer harbor. They have the financial resources to get this done. They have the wherewithal to make this happen. They have the commitment and I don’t understand how the city’s even remotely involved. They should be saying, “Thank you very much, gentlemen and ladies. Tell us what we can do. We’ll get out of the way. We’ll help you in any way we can.”

Heaney: Are you concerned that the city’s involved?

Levy: It’s like anything. As soon as the city’s involved, the political system’s involved. We tried to do the Webster Block before and the Common Council stopped us from doing it.

Heaney: You folks were prepared to pay big bucks for that block.

Levy: We had $15 million allocated to acquire the Webster Block and the rest of the land that we don’t control in the inner harbor. And we had $15 million allocated from Governor Spitzer, that’s how long ago that money was allocated to acquire that land and that land was never turned over to the city. And the reason was the politics. It wasn’t that the mayor didn’t want to do things. The mayor was always a partner of ours.

The council, they claimed things, but they always got in the way. As far as I’m concerned, they were as big of a problem because of the politics as anything else, and as a result nothing happened that should have happened.

Well, now the Webster Block’s happening – thank goodness. That’s a really good thing and that would have happened one way or another. But OK, the city’s going to take credit and responsibility – we made the Webster Block happen because the city or whether it was, Carl or whoever, wanted to do something. They always wanted to do something. We’ve known that for a long time. There’s been a huge interest in the Webster Block.

Heaney: Maybe the Webster Block could have been developed anyways but the city could have gotten $15 million out of it.

Levy: It would have developed sooner. It would have been done nicely. It probably would have been done probably without the Sabres because Terry Pegula wasn’t around then. Maybe waiting is a good thing or not. The city obviously doesn’t need that money, so it was never allocated and they clearly didn’t make a case to go and get it. So you know the city’s doing well. I’m OK with it all.

I just think that if I were in a position of power I’d be sitting there saying, “Ladies and gentlemen, what can I do? How high can I drop? How far can I run? What can I do to get out of your way and go make this happen because you’ve got resources, you’ve got financing, you’ve got volunteers, you’ve got smart people. You want to go do this as the single focus? Please. What can I do to help you make this get done?”