Buffalo and New York City are worlds apart economically and almost 375 miles apart physically.
But that distance and difference may not stop the Buffalo Niagara region from being shaken by the ripples spreading from Amazon’s decision to scrap plans to put part of its coveted second headquarters in New York City.
New York already had a big image problem as a state where it was hard to do business. And now, Amazon is essentially saying it doesn’t want to do business in New York, even with the state promising $3 billion in incentives to the online retail giant in exchange for 25,000 new jobs.
It’s not a good look.
Now, I know what you’re thinking. Buffalo isn’t New York City.
Besides, a second Amazon headquarters in New York City wouldn’t have helped the Buffalo Niagara economy anyway, so why would it hurt it?
You’re right. The two cities are on opposite ends of the state and they might as well be opposite countries.
New York City is a growing global financial center. Buffalo Niagara is a slow-growing manufacturing center that is trying to remake itself into a hub for higher education, back-office finance jobs that can be done on the cheap here, and hopefully, the medical sector.
New York City is high-priced real estate, big salaries and Wall Street. Buffalo Niagara is offices, affordable housing and below-average wages.
“It’s not New York City,” said David Mingoia, the executive director of the Amherst Industrial Development Agency. “You get a completely different feel for projects in upstate New York.”
But they share one thing in common: They’re both in New York State, and that will tar Buffalo Niagara with the same brush as New York City in the eyes of some.
“I don’t think it was a blow to Buffalo,” Mingoia said. “But it might put a bit of a stain on New York State.”
Even Gov. Andrew M. Cuomo, in a statement Thursday defending the Amazon deal, acknowledged that the Amazon deal wasn’t just about New York City.
“Bringing Amazon to New York diversified our economy away from real estate and Wall Street, further cementing our status as an emerging center for tech and was an extraordinary economic win not just for Queens and New York City, but for the entire region, from Long Island to Albany’s nanotech center,” he said.
“The fundamentals of New York’s business climate and community that attracted Amazon to be here — our talent pool, world-class education system, commitment to diversity and progressivism — remain and we won’t be deterred as we continue to attract world class business to communities across New York State,” Cuomo said.
But some of the same factors that pushed Amazon to pull out of its lucrative New York City deal exist here.
First, there’s the broader question about the wisdom of giving $3 billion in tax breaks to a company run by the world’s richest man, Jeff Bezos, even if it results in 25,000 jobs. After all, the state’s $750 million bet on Tesla Inc.’s solar plant — now averaging about $1 million in state aid per job — hasn’t yielded nearly the payout to the region and taxpayers that was originally hoped.
Big bets on single companies — as the first round of the Buffalo Billion has shown — are risky business. And big subsidies for big business are getting a lot more scrutiny nowadays, for good reason.
“For nearly four decades, our leaders sought that one big project to turn our economy around,” Erie County Executive Mark Poloncarz said on Twitter. “The people of this region stopped waiting for the Lone Ranger to come along with his silver bullet to save us and instead created the New Buffalo — the New Erie County — one small project and job at a time.”
Unions also grumbled about the Long Island City project because they viewed Amazon as being hostile to organized labor, just as unions here have been trying to organize at the Tesla solar panel factory.
And Mingoia worries that the Cuomo administration is walking a fine line between its progressive political agenda and what it takes to succeed at economic development.
That’s partly why Mingoia thinks it’s important to keep stressing how Buffalo Niagara is different from New York City, from its lower costs and affordable housing to its expertise in advanced manufacturing and its easy access to transportation.
“We’re not New York City,” he said. “But we’re an easy access point to that market with low-cost advantages.”
Officials at Invest Buffalo Niagara, who were part of the unsuccessful joint bid with Rochester to lure the Amazon 2HQ project to Western New York, agreed.
“Regardless of outcome, a compelling case was made to Amazon leadership illustrating why New York State was an excellent expansion opportunity for the company,” said Invest Buffalo Niagara, the local economic development group that was involved in the unsuccessful joint effort with Rochester to lure Amazon here.
“From a local perspective, Invest Buffalo Niagara remains laser-focused on our mission to attract new businesses to the Buffalo Niagara region and we remain excited about our own prospects currently in the pipeline.”
That makes sense.
The sad thing is, a second Amazon headquarters in New York City wouldn’t have helped the Buffalo Niagara region. But New York City losing it could hurt us.