Posted courtesy of The Buffalo News:

Buffalo Niagara Enterprise changes with times for a tough economy
By David Robinson; NEWS BUSINESS REPORTER, Updated: January 30, 2010, 3:48 PM

The Buffalo Niagara Enterprise is hardly on Easy Street during the steepest economic downturn since the Great Depression.

With companies everywhere hunkering down to ride out the downturn, the BNE is running into formidable roadblocks as it goes about its primary task of attracting new businesses to the region.

But Thomas Kucharski, the BNE's president, said that hasn't stopped the business development and regional marketing group from building up a solidlist of leads to pursue in hopes of turning those early-stage contacts into potential projects as the economy rebounds.

"The economy is obviously very challenging," Kucharski said. "Companies are being very cautious. Money — conventional financing — is very hard to find."

Now in its 10th year of operation, the BNE in recent years has shifted from its original mission of retaining and attracting businesses across Western New York to a more tightly defined goal of attracting companies in high-growth sectors.

"I think we're collaborating pretty well" with other local and state economic development agencies, which in the past had often competed against each other, confusing many companies interested in incentives for an expansion or retention project, Kucharski said.

"The BNE is out trying to attract businesses to Western New York," said Daniel Corwin, vice chairman of the Erie County Industrial Development Agency. "We're focusing more on retention and assisting the businesses that are already here."

So the BNE is continuing to beat the bushes, seeking out contacts, touting the region's assets — especially in targeted industries, from advanced manufacturing and agribusinesses, to back office, life sciences and logistics operations.

Over the last few years, that focus has increasingly been on companies in the fast-emerging fields of life sciences, which can tap into the expanding downtown medical corridor, and renewable energy, such as solar power and wind energy.

"We're making sure we're staying in touch with them," Kucharski said. "It's all about trying to find those opportunities, and a lot of times, it's in places you'd least expect."

Factors including idled industrial facilities, a skilled work force, an ample supply of graduates from local colleges and the region's strategic location should position the area well as demand grows for renewable, secure and environmentally friendly energy sources, said consultant Keith W. Rabin, president of KWR International.

Yet the BNE still faces other challenges beyond the sputtering economy. The state's lucrative Empire Zone program is set to expire this year, and there is uncertainty over what, if anything, the state Legislature will do to replace it, and how existing companies might be affected.

Gov. David A. Paterson this month proposed a replacement program that would be built around tax credits for job creation, capital investment and spending on research and development, although its fate in the state Legislature is uncertain.

The existing Empire Zone program, which has been a key part of the incentives used to lure businesses, such as insurance giant GEICO, to the region, has been widely criticized for granting highly lucrative tax breaks and incentives to companies that then have failed to meet their promised job and investment targets.

"Companies want to know if that's going to be in place or, if it isn't, what's going to be there in its place," Kucharski said.

The BNE's job also would be easier if there were more low-cost electricity available through the New York Power Authority, which currently is in the process of reviewing its soon-to-expire agreements with many of the companies now receiving the lucrative power.

Critics have charged that too much of the low-cost electricity is allocated to declining, old-line industries that no longer are major employers in the region. Others are calling for changes in the standards used to determine whether a company is eligible to receive low-cost power to put a greater emphasis on overall investment.

"It's imperative that we take a look at this," said Kucharski, who believes the availability of cheap electricity could be enough of an enticement for some companies to make a faster decision on some projects.

The recession took a modest toll on the BNE's budget last year when one of its founding agencies, the Amherst Industrial Development Agency, failed to make its budgeted $50,000 payment because of its own budget shortfall.

The Amherst IDA plans to resume providing financial support to the BNE this year, but its planned contribution is slated to by 60 percent less, pledging a $20,000 contribution, rather than the director-level $50,000 payment it had been making.

James J. Allen, the Amherst IDA's executive director, said the Amherst IDA can't afford to contribute at its previous level, which entitled the IDA to a seat on the BNE's board, because its own revenue stream has shrunk by more than half because fewer companies are launching projects that require IDA support.

Overall, the BNE reported what it considers to be 19 project "wins" from its fiscal year ended last June, down just one from the year before. The BNE defines a "win" as a project that has firmly committed to locating or expanding in the Buffalo Niagara region, for which the BNE served as the project manager. Those 19 wins included pledges to create 810 new jobs and retain 544 others.

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