Jul 23
2024
STAMP struggling to fill rural industrial park
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Two companies are backing away from plans to move into the sprawling Science, Technology and Advanced Manufacturing Park in Genesee County, Investigative Post has learned.
Scannell Properties, a multinational builder, will no longer construct three large warehouse-like buildings at the industrial park, according to a June email from the Genesee County Economic Development Center, the industrial development agency building STAMP.
In addition, an unnamed company — whose proposed development was called “Project Emporium” — will no longer construct a campus of buildings, including large data centers and office buildings.
Scannell Properties had signed a “right of first refusal” contract for 88 acres which was not renewed and “Project Emporium” had “outgrown” STAMP, according to the June email. Scannell’s three buildings would have totaled 623,000 square feet, 211,000 square feet and 157,500 square feet.
The IDA has said Project Emporium would have involved a data center covering more than 100 acres. The IDA disputed that Project Emporium had made a “real commitment” to STAMP, but the agency had begun seeking environmental approvals under the State Environmental Quality Review Act for both projects.
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Jack Kelly, a Scannell associate involved in the project, said it was a “mutual decision” between the IDA and the company to part ways. Kelly said Scannell had planned the three buildings to be “build-to-suit projects for various Fortune 500 tenants.” The arrangement fell through, he said, because “tenant activity nationwide is slow.”
“We are grateful for the relationship with [Genesee County IDA] and hope to continue pursuing opportunities in collaboration,” Kelly said.
Mark Masse, who will take over as the IDA’s president and CEO August 1, said in an email obtained by Investigative Post that the Scannell property “will be marketed to new projects that will not involve Scannell Development.”
In an interview with Investigative Post, Masse said uncertain economic conditions and the upcoming presidential election may have contributed to the firms turning away from STAMP. The Democratic and Republican parties are far apart on industrial, energy and technology policy, he explained, meaning companies that are reliant on favorable federal regulations or subsidies will wait until after the election to make decisions about expanding their operations. STAMP tenant Plug Power, for example, has told investors it’s counting on a $1.66 billion loan from the Biden administration, while Edwards Vacuum is counting on assistance from the federal CHIPS and Science Act.
“There’s a lot of reasons why companies decide not to move forward,” Masse said. “There’s economic reasons, sometimes they want to do a bigger project, sometimes they want to do a smaller project.”
Setback for STAMP
The withdrawal of the projects marks a setback for the 1,250-acre megasite located halfway between Buffalo and Rochester. Over the last three years, records show, some three-dozen firms gave STAMP a serious look but ultimately chose to locate elsewhere. Included in that list is Samsung, which chose to build its semiconductor plant in Texas, rather than Western New York.
Site selection experts interviewed by Investigative Post said filling a large industrial park like STAMP can take years of effort. Former IDA head Steve Hyde described it as “a marathon, not a sprint.” But the experts said the park’s remote location has caused some companies to sour on the site. Others said its permitting issues are a significant roadblock.
In April, the U.S. Fish and Wildlife Service revoked a permit needed by the IDA to construct a wastewater pipeline after construction last year caused spills of drilling fluid into federal wetlands. Masse said the IDA is moving forward on plans to build a second pipeline for STAMP’s wastewater, but will have to reapply for the federal permit to handle “process wastewater” from industrial functions, like cooling hot equipment.
The state has invested nearly $100 million over the past decade into planning and infrastructure for STAMP.
Planned and under construction for more than 15 years, STAMP is being pitched to companies in the semiconductor, clean energy, technology and advanced manufacturing sectors. Located in the Town of Alabama in western Genesee County, the park is able to tap discounted hydropower from the New York Power Authority and offer robust electrical infrastructure to companies.
STAMP, however, is surrounded by sensitive land, including state and federal wildlife preserves as well as the Tonawanda Seneca Nation, which opposes the park’s development.
Despite the setbacks, the IDA, as well as site selection experts, expressed confidence that other companies would choose to build at STAMP in the near future. In one email obtained by Investigative Post, Masse said the agency was currently entertaining a firm that manufactures LED screens for the automotive and defense industries.
Pointing to Micron’s $100 billion Syracuse project and Intel’s $20 billion Ohio campus, Masse said STAMP is strategically located to host companies that support the semiconductor industry.
“I think that that interest will continue, and will probably intensify as you see Intel and Micron start to move forward with the construction of their facilities,” he said. “You never know what’s going to come down the pike from advanced manufacturing and changes in technology and things like that.”
STAMP advantages
STAMP’s location in rural Genesee County is both helping and hurting the industrial park, site selectors — consultants hired by companies looking to relocate or expand — said.
The hydropower generated in Lewiston served as a significant subsidy for Plug Power, one of STAMP’s tenants, helping to draw the company to the site three years ago.
“That is a huge advantage, not just for STAMP, but for other large sites in upstate New York,” said Didi Caldwell, president and CEO of the site selection firm Global Location Strategies.
Caldwell added that the electric substation the IDA is constructing will be a boon for STAMP’s development, describing it as a potential “goldmine” for the industrial park.
“One of the things that these projects need, whether it’s batteries, or it’s data centers, or semiconductors, they need a lot of power,” she said. “And they don’t want to wait four or five years on it.”
Site’s disadvantages
On the other hand, consultants said, STAMP’s remote location is a significant drawback. Michelle Comerford, a site selection consultant at the firm Biggins Lacy Shapiro & Co., said one of her clients passed on STAMP because of its location.
“In our project’s case, I think that was one of the reasons for not selecting it,” Comerford said. “It was a great site. And they felt that way, too. But I think just the remote feeling of it was hard for them to get over.”
Caldwell agreed, calling STAMP’s location its “Achilles heel.”
“If it has a weakness, it’s that it is, you know, in between two metro areas,” she said.
Caldwell explained that the location is an issue because companies worry about finding workers. Large companies — those hiring thousands, for example — may say no to STAMP because they don’t believe they can get so many people to come from Buffalo, Rochester or the surrounding towns to commute to the industrial park.
But she said smaller companies — especially those that need a lot of space and only a few hundred workers — would fit well at STAMP.
“I feel like STAMP really is well-positioned to compete for these projects and things that are capital intensive, energy intensive, but a little less labor intensive,” she said. “In the case of STAMP or any other site, workforce is not going to win you the project, but it could potentially lose you the project.”
Jerry Szatan, founder of the site selection consulting firm Szatan & Associates, agreed.
“If you have a data center, which is oftentimes a potential tenant for a megasite, you need a lot of people to build it, but you don’t need a lot of people to run it,” he said. “They’re probably more willing to go to rural areas.”
Masse agreed that while some companies have said no to STAMP over its location, others have expressed interest because it’s more isolated.
“We’ve heard some companies have concern over that,” he said. “But a lot of other companies love the site because of the ability of people to be able to commute in, as well as the number of available workers within, you know, 30-minute commute.”
Companies, especially post-COVID, are looking to move fast, the consultants said. That means they’re looking for sites that have infrastructure built, permits in place and tax incentives on deck so they can break ground quickly.
Szatan said STAMP’s challenges acquiring permits for its infrastructure could turn away potential tenants.
“If you’re the decision maker [at a] company you’re thinking, ‘Okay, STAMP says they will have this, we need to be up and running in two years. Will they come through?’” he said.
“That uncertainty can be an absolute deal breaker.”
Tomorrow: A Q&A with Mark Masse, the new head of the Genesee County IDA.
