Another Buffalo Billion boondoggle
Economic development officials in Genesee County have spent more than $26 million on a massive industrial park in an “if you build it, they will come” gambit.
So far, no one has come.
The Genesee County Center for Economic Development not only doesn’t have any business deals to show for its decade of work, the industrial park consists of little more than empty fields.
There’s no infrastructure, aside from a six-tenths-of-a-mile road. No water service. No sewer lines. No electricity. No telecommunications.
The agency has nevertheless managed to spend $26.8 million dollars, including some $13 million in Buffalo Billion funds. It’s got another $23.8 million available for future expenses, most of it from the Buffalo Billion.
Spending so far has gone mostly for soft costs — lawyers, engineers, purchasing the land and the like. There’s also the cost of erecting a sign at the entrance of the Science Technology and Advanced Manufacturing Park — STAMP, for short. Records show the center’s board of directors approved a bid of $49,798 for the sign’s construction.
There’s also administrative overhead. Steve Hyde, executive director of the economic development center, made $240,193 in 2019. That makes him one of the highest paid economic development officials in the state. (His counterpart at the Erie County Industrial Development Agency earns $174,000 for managing a much larger portfolio of projects.)
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Hyde argues that the STAMP project puts Western New York in a position to be “in it to win it” as the region competes for high-tech manufacturing jobs.
“It’s gonna happen, but it is a marathon, it’s not a sprint,” Hyde said.
So far, Hyde has had no luck landing a tenant.
One manufacturer backed out of a deal three years ago. Two others, including Samsung, are considering the site. But, as reported Wednesday by Investigative Post, the Samsung project is likely headed to Austin, Texas.
While efforts to land STAMP’s first tenant continue, some question the park’s location and cost.
Howard Decker, a retired architect who serves on the board of the non-profit Community Design Center of Rochester, said it “makes no sense” to spend tens of millions of dollars on a large industrial park — and all infrastructure that goes with it — in the tiny Town of Alabama, a rural community with fewer than 2,000 residents. While he supports efforts to lure high-tech jobs to the region, he thinks STAMP should have been built in Buffalo or Rochester, not in between.
“Why wouldn’t we want to have something like this happen in a place that is already prepared?” he told Investigative Post.
Big industrial park for a small town
At 1,250 acres, the STAMP is huge, bigger than Central Park in New York City and equal in size to 945 football fields.
The project grew out of a conversation nearly a decade ago between Hyde and Richard B. Henry III, senior vice president of the engineering firm, Clark Patterson Lee, of Buffalo.
A 2018 blog post appearing on the firm’s website describes Hyde and Henry surveying a large plot of farmland along Route 77 in Alabama as they talked about the so-called “megasite.” According to the post, Henry initially considered Hyde’s idea “crazy” but said he was “willing to ride along” because he felt the project would create “long-term advanced technological employment for younger generations.”
Clark Patterson Lee has subsequently received contracts for engineering and other work at STAMP.
The Town of Alabama is located in the northwest corner of Genesee County. Its main intersection, known as “Alabama Center,” is found at the crossroads of State Routes 63 and 77. Downtown, such as it is, consists of a restaurant on one corner and a small market on another. That’s it.
The industrial park’s first investment came in 2012 when then State Senate Majority Leader Dean Skelos announced a $2 million state grant to acquire the land and design and construct roadways.
Two years later, following an endorsement from the Finger Lakes Regional Economic Development Council, the Cuomo administration authorized $33 million from the Buffalo Billion program.
Officials said the county also received an additional $8 million state grant for the project.
In addition to environmental reviews, design, engineering, utility infrastructure, and road and sign construction, Buffalo Billion dollars were spent to bring water service to the edge of STAMP and install about 15 miles of transmission lines to service 1,500 residences in Alabama and neighboring Pembroke. Because STAMP is adjacent to both the Tonawanda Indian Reservation and the Iroquois Wildlife Refuge, money was also spent on environmental and archeological work.
Officials said the remainder of the Buffalo Billion money will cover additional build-out costs, including installation of a sewer line and construction of an electric substation.
Related story: Samsung plant likely headed to Austin
Economic development center officials don’t appear troubled by the lack of on-site infrastructure. They say it can be added within 18 months once tenants have been secured.
Hyde likened the effort to “big-game hunting” and said balancing infrastructure development while simultaneously attempting to sell STAMP is a “long game.”
Supporters say that STAMP, once fully developed, will offer everything big tech manufacturers need: acres of space, access to water and power, proximity to the Thruway and a skilled workforce within an hour’s drive of Buffalo and Rochester.
The project was originally designed to attract 9,300 workers. Hyde said he realistically expects STAMP to employ between 3,000 and 4,000 at full build.
Mark Masse, senior vice president of operations for the economic development center, considers the sheer size of STAMP to be one of its best assets.
“I think if you were to look across the country and across the world, the types of sites with this size and this capacity that are available are pretty far and few between,” he said.
Thomas Kucharski, executive director of Invest Buffalo Niagara, a regional economic development group, agreed.
“Because it’s a megasite, it will recruit the type of facilities and industries that we really don’t have any other place for in this half of the state,” he said.
The site has critics, however.
Criticism of remote location
Decker, a former principal with DLK Architecture in Chicago who also served as chief curator of the National Building Museum in Washington, D.C., said recruiting thousands of workers to an area that lacks basic infrastructure is “indefensible,” especially considering climate change.
“Going and seeing the site, seeing what was around it and seeing its distance from other communities and knowing that I had to drive an hour to get there and knowing that Buffalonians would have to drive a similar distance to get there, I just thought, ‘This is all wrong.’ It’s just the wrong place to put such a thing such as this,” he said.
Greg LeRoy, executive director of Good Jobs First, a national subsidy watchdog group, said successful sites are part of a regional ecosystem of similar industries and located close to universities offering advanced degrees in related fields.
“You don’t start with land. You start with knowledge,” he said.
Locating a major plant in a rural area also shuts out low-income workers who may be dependent on public transit, LeRoy said.
“If you locate a plant out in this STAMP facility — very far away from public transportation links in either Rochester or Buffalo — you are talking about denying work opportunity to low-income workers and low-wage families,” he said.
Like Decker, LeRoy said STAMP will contribute to one thing no community can afford: sprawl.
“We know from history that a lot of people will move into the area to fill those jobs,” LeRoy said. “That would be true anywhere this plant gets located, frankly. And then that means taxpayers are going to have higher costs because workers are going to come with their families. We are going to hire teachers and build classrooms and widen lanes and pick up trash.
“That’s growth, and there’s no such thing for taxpayers as free growth.”
Given the high cost and the potential consequences for the community and the climate, Decker fears STAMP could become a “legacy mistake” the region will spend “100 years regretting.”
“One wonders how far along they get before reality catches up with them.”
Failure attracting tenants
Years before Samsung expressed interest, STAMP was tied to another potential large-scale private investment deal.
In 2015, Gov. Andrew Cuomo visited the county to announce a “game changer” involving the solar company 1366 Technologies. Plans called for the company, which manufactures silicon wafers used in solar cells, to build a $300 million facility that would create 1,000 full-time jobs.
In March 2018, the company withdrew from the project, choosing to build its factory in Malaysia. A company spokesperson cited the U.S. Department of Energy’s withdrawal of a previous loan guarantee as a significant factor in the company’s decision to build elsewhere.
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Genesee County is reportedly one of five sites being considered by Samsung for the development of a $17 billion plant that would employ 1,800. The other locations include two sites each in Texas and Arizona. Austin, Texas, is considered a frontrunner, as Samsung already has a facility in Austin and has purchased land and submitted a request for $1 billion in tax breaks to local officials.
Plug Power, an Albany-based company that specializes in “green hydrogen” production for the transportation industry, is also considering STAMP for a facility that would employ 62. The company received approval for a $1.5 million grant from the Western New York Power Proceeds Allocation Board on Feb. 3. However, a company spokesperson told the Rochester Democrat and Chronicle that Genesee County is one of “a number of sites” under consideration.
LeRoy said there are fewer corporations seeking subsidy deals these days, which means large employers “are really in the catbird seat.”
“They can really demand huge subsidies because mayors and governors and county executives can be very desperate for landing jobs and getting deals to help themselves get reelected. They’re really prone to overspending.”