Activity: Working Downtown

Working Downtown: Context

Problem Statement

Downtown is currently home to more than 50,000 workers with an estimate of over 7,000 more in the Buffalo Niagara Medical Campus. The CBD numbers must be seen in the light of what some analysts describe as a 25 percent Downtown vacancy rate for class A and B office facilities. They also describe the continuing difficulty to retain as well as recruit tenants into Downtown. There is no business plan for Downtown development that will assure retention and new recruitment and there is no clear understanding of the Downtown economy, particularly in the regional context.

At the moment there is no single agency or person focused solely on economic development in Downtown. There is no business plan for Downtown development outside the efforts of the overall strategic action plan. Current efforts to consolidate work in the Erie County Industrial Development Agency are promising, as is the fuller integration of the functions of the Buffalo Economic Renaissance Corporation with the Mayor’s Office of Strategic Planning. There is much work to be done in the development of easily accessible information on available space Downtown. Much work also needs to be done to create further efficiencies in the development process and in the way in which urban design, management, parking and access programs assure that Downtown acquires the status of the premier location to do business in the region.

The current regional economic development strategies either ignore or do not favor Downtown as a place to do business. This is largely due to real and perceived problems regarding parking, an outdated building stock (inappropriate floor plate, floor load capacity, and floor to ceiling heights in class B and C office buildings), perceived suburban cost advantages, perceived problems with the security of Downtown, and the lack of Downtown amenities such as convenient shopping and quality streetscape.

Current Status

Downtown Buffalo is the historic center of commerce in Western New York. Being located in Downtown Buffalo offers many advantages to businesses. Downtown has a large concentration of Class A office space, and is the preferred ‘front door’ address for many businesses. Government, banking and business and legal services dominate the current landscape in Downtown. Other important industries include restaurants and entertainment services. These and other businesses benefit from proximity to clients, other businesses, ease of regional access, and a central location for employees. For the Downtown worker, advantages include availability of services and events such as restaurants, dry cleaners, Farmer’s Market, Thursday at the Square, etc. Downtown is a popular place to work, but the demands for traditional retail and inexpensive parking are issues that have to be addressed. Finally, the interdependence between the state of the economy in Downtown and the region as a whole cannot be understated. While there may have been a dispersion of economic activity into the rest of the region, the symbolic nature of the state of Downtown affects the entire region’s ability to attract new business and retain existing business.

Office uses are the heart of the Working Downtown market, but other sectors should not be ignored. There are important industrial, and visitor based entertainment, restaurant, and cultural-heritage employment markets. The economy is diversifying and should be encouraged to continue to do so.

Strategies

• Consolidate and improve delivery of services and information related to potential business locations Downtown.
• Clarify the demand for and availability of light industrial space within the Western New York region, especially in the smaller floor plate range. Downtown has a surplus of light industrial building types that can easily be converted to new light industrial space or to loft housing.
• Assure that Buffalo’s Comprehensive Plan land use strategy for business development is consistent with the realities of contemporary land use demands and define the importance of Downtown locations. All city and regional planning efforts need to take better advantage of the positive attributes of the Downtown building stock.
• Market Downtown as the regional incubator for office and light industry and demonstrate its competitive advantages.
• Reduce the vacancy rate in existing class B and C office buildings by redeveloping strategically located structures for use as residences and work to relocate existing tenants to better locations and facilities.
• Assemble land for campus settings in the BNMC and in the Downtown Education Campus to accommodate demands for future development.
• Formalize retention, relocation, and expansion support for those who wish to do business Downtown, making the process clear, equitable, and consistent with developing a more diverse and robust economy.

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Working Downtown: Action Items

Short Term Policy (6 months to 1 year)

• Agree on a regional approach to economic development that acknowledges the central role of Downtown Buffalo within the region. A common understanding of the role of Downtown will help focus economic development activities. Downtown Buffalo is a central player in the Western New York economy. Finance, insurance, real estate, legal, government, business, and entertainment/sports services are among Downtown’s dominant industries. All the major economic development agencies should define a shared approach to economic development in Downtown and incorporate that vision into their programs. Part of the regional approach involves the consolidation of services among the Buffalo Economic Renaissance Corporation, the Mayor’s Office of Strategic Planning, and the Erie County Industrial Development Agency. Another part involves the commissioned work by Erie and Niagara County on the development of the Erie Niagara Framework for Regional Growth due to offer its recommendations by 2004. This effort is focused on growth management in the two-county region.
• Focus incentives on the five strategic investment areas in the plan. This will create the critical mass of development needed to build on the strengths of Downtown and improve its retail and office market share in the region. One element of incentive may be the establishment of a fast track permit program for those projects that reinforce the implementation of The Queen City Hub plan.

Short Term Analysis (6 months to 1 year)

• Conduct a full-scale analysis of the Downtown economy. To better understand the existing and future state of the Downtown economy and to identify niche opportunities, a full-scale analysis should be undertaken. Factors to be studied include space and business inventory, employer and employee perceptions, business mix, trade area definition, local economic analysis, office market, retail market, restaurant and business services, entertainment, lodging, and opportunities for niche development, clustering, and mixed use development.

Short Term Implementation (6 months to 1 year)

• Organize and centralize Downtown economic development efforts. There are many economic development agencies active in promoting Downtown Buffalo. However, it is not one person’s or agency’s sole focus. Having one entity or individual working solely on Downtown will help coordinate information about sites, programs, incentives and other resources.
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  Develop a comprehensive online inventory of available space in Downtown Buffalo. Access to information about available space for lease or purchase in Downtown should be easy to locate. A central database identifying sites, square footage, lease options and contact information should be developed and incorporated into a stand-alone website. This site could also offer preliminary information about the multiple incentive programs available for Downtown businesses. Initial work toward this end was developed by BERC in 2002 and needs to be further developed and released.
• Implement the Buffalo Niagara Medical Campus Master Plan. The next five years will bring significant developments and changes to the Buffalo Niagara Medical Campus located at the north end of Downtown. Advocates for Downtown and the campus should maintain regular communication and whenever possible, coordinate marketing, economic development, and transportation programs to maximize the impact of the development.

Medium Term Policy (1 to 3 years)

• Establish greater collaboration between the economic development and real estate communities. The real estate community is often the first point of contact for a company interested in relocating Downtown. Economic developers and real estate agents should collaborate to develop an agreed upon system that would allow agents the opportunity to identify and share basic program information with prospective tenants and owners. This would speed up the flow of information and improve communication between the real estate and economic development communities.

Medium Term Implementation (1 to 3 years)

• Create a Business Incubator in Downtown Buffalo. Many of the smaller, but potentially valuable, spaces in Downtown Buffalo are overlooked because they are in poor condition. Many of these properties are in violation of City code and potential tenants are often asked to take on the additional financial burden of bringing space up to code as part of the cost of a triple-net lease. Most of the business incubators in Buffalo are located in somewhat remote areas of the city on large parcels of land. While they are successful, there is a shortage of larger land areas within the city that are required by large office developments and medium to heavy industries. These are businesses that generally will not locate in the Downtown area. There are many spaces in Downtown Buffalo that have smaller floor plate and load ratings that make them ideal for conversion to small business incubators. Through eminent domain or other public acquisition, one or two small but high profile properties should be developed into shared office with groundfloor retail incubator space.
• Promote Downtown Buffalo as a center for small, clean, light industrial development. Similar to the previous action item is a recommendation that more effort be made to encourage small, clean, light industrial companies to locate in Downtown Buffalo, particularly in Class B and C space. The Buffalo Niagara Enterprise reports that there is a “substantial shortage“ of warehouse, distribution, manufacturing, and high-tech R&D space in the 5,000 to 39,000 square foot range. New construction costs for this type of space ranges from $37.00 to $42.99 per square foot, while rehabilitation of existing space can be less expensive. Lease rates for similar space in the suburbs are one third more expensive than the central city. Although parking is often a concern, there are many locations on the periphery of Downtown that include on-site parking.
• Develop a comprehensive and collaborative business development plan for Downtown. Based on the results of the full-scale analysis of the Downtown economy, a comprehensive and collaborative business development strategy should be developed and implemented.

Long Term Policy (3 to 5 years)

• Advocate development of lower Michigan as a low- to mid-rise building site. Michigan Avenue is important as a historical and cultural development area. Most of this attention is focused on areas north of Eagle Street. South of Eagle Street there is a significant amount of vacant and underutilized land. It is an ideal location for single or two story large-floor plate buildings that companies often seek out when expanding their operations. New construction must be contextually designed to enhance the area. Land uses should be compatible with the new Downtown Education and Public Safety Campus and the proposed historic district and its visitor-based economy.

Long Term Implementation (3 to 5 years)

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  Develop former industrial areas into urban office parks. There are several large pockets of vacant or underutilized land that may be suitable as urban office parks. Strong design guidelines and compliance with the Buffalo Coastal Special Review District (§ 511-67) standards including the 100 foot minimum setback from the riverfront, and Buffalo’s Local Waterfront Revitalization Plan, would ensure sensitive development while still providing the ability to develop low-level, larger floor plate buildings with parking that could attract larger companies into the area.

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Working Downtown: Snapshot

Current Status

Employment

Downtown Buffalo Cnetral Business District (CBD) Employment = 50,046. This is:

• 39.3 percent of Total City Employment of 127,264
• 11.7 percent of Total County Employment of 429,515
• 9.5 percent of Total Buffalo-Niagara MSA Employment of 529,578

Business Section

• 1,375 Businesses are located in the CBD
• 28 percent of CBD employees work for government
• 35 percent of employees work in the Service Industry Classification
  • Administration and Support, 9 percent
  • Legal, 8 percent
  • Information, 5 percent
• 18 percent of employees work in FIRE (Finance, Insurance and Real Estate) Industry Classification
  • Banking, 13 percent

Company Size

• 50 percent of CBD employees work for large companies with more than 250 employees
• 2 percent of CBD businesses employ more than 250 people
• 90 percent of CBD businesses employ fewer than 50 people
• 60 percent of CBD businesses employ fewer than 10 people

Work to Date

Legislative/Policy Completed

Empire Zone

One-On-One Retention Program

Renewal Community Application and Designation

Planning/Organizational Completed

Buffalo Niagara Medical Campus Master Plan

2003 BNMC Employee Survey

1998 and 2000 Downtown Buffalo Business and Employment Trends

1998 Downtown Employee Survey

CB Richard Ellis Office Occupancy Report

BOMA Office Occupancy Report

Militello Office Occupancy Report

TCN Worldwide Market Reports

Planning/Organizational Under Development

BNMC Economic Development Plan

Buffalo Niagara Now

Coordinated Local Development Process

Permitting Reform

Renewal Community Marketing Plan

Capital Projects Completed

665 Main Street

Century Centre I

New Barrister Headquarters

The Stokes Seed Building

Working In Brief

Measures of Success

• Increase in Square Footage of Desirable (Class A/R1) Product
• Increase in Overall Occupancy Rate
• Increase in Size of Workforce
• Corporate Longevity – Retention and Expansion Rates
• Increase in Number of Companies by Type and Percent of City and Region
• Increase in Number of Employees by Type and Percent of City and Region
• Square Footage by Type and Percent of City and Region

Top Rules for Working Downtown Action Plan

• Accountability
• Bring the Real Estate Community on Board
• Empower and Educate a Broad Cross-section of Ambassadors for Downtown
• Recognize the Reality of Existing Conditions
• Stick to the Plan
• Build on Strengths and Tap into Existing Resources

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