Economy of Buffalo, New York

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Downtown Skyline of Buffalo Buffalo Skyline from Drone 1 (cropped).jpg
Downtown Skyline of Buffalo
"Elevator Alley", the stretch of the Buffalo River immediately adjacent to the harbor that is lined with historic grain elevators Master-pnp-highsm-52600-52682u.tif
"Elevator Alley", the stretch of the Buffalo River immediately adjacent to the harbor that is lined with historic grain elevators

The Buffalo area economy consists of a mix of industrial, light manufacturing, high technology, and service-oriented private sector companies. Instead of relying on a single industry or sector for its economic future, the region has taken a diversified approach that has the potential to create opportunities for growth and expansion in the 21st century. [1]

Contents

History

For a long time, Buffalo and the surrounding area was involved in railroad commerce, steel manufacture, automobile production, aircraft/aerospace design and production, Great Lakes shipping, and grain storage. Over the years, most of these industries have left the city. Major steel production no longer exists in the area, although several smaller steel mills remain in operation. As of the 1950 United States Census, Buffalo was the 15th largest city in the country, the nation's largest inland port (12th overall), second biggest rail center, sixth largest steel producer, and eighth largest manufacturer. [2]

Employment

Overall, employment in Buffalo has shifted as its population has declined and manufacturing has diminished. Buffalo's 2005 unemployment rate was 6.6%, contrasted with New York State's 5.0% rate. [3] From the fourth quarter of 2005 to the fourth quarter of 2006, Erie County had no net job growth, ranking it 271st among the 326 largest counties in the country. [4] The area has recently seen an upswing in job growth as unemployment has dropped to only 4.9% in July 2007 from 5.2% in 2006 and 6.6% in 2005. [5] The area's manufacturing jobs have continued to show the largest losses in jobs with over 17,000 fewer than at the start of 2006. In contrast, educational and health services added over 30,400 jobs in 2006 and over 20,500 jobs have been added in the professional and business (mostly finance) arena. [6]

Life sciences

Buffalo has increasingly become a center for bioinformatics and human genome research, including work by researchers at the University at Buffalo and Roswell Park Comprehensive Cancer Center. This consortium is known as the Buffalo Niagara Medical Campus. It also includes: Buffalo Hearing & Speech Center, Buffalo Medical Group Foundation, Hauptman-Woodward Medical Research Institute, Kaleida Health, Olmsted Center for the Visually Impaired, Cleveland BioLabs and Upstate New York Transplant Services. The DNA samples used in The Human Genome Project were also collected from anonymous donors from Buffalo.

Entrepreneurial resources and life science business consultants accelerate the growth and development of emerging companies found within the Buffalo Niagara Medical Campus and Upstate New York Region. For example, Buffalo BioSciences is a technology commercialization partner to the New York State Center of Excellence in Bioinformatics & Life Sciences and contributed to the launch and early success of Empire Genomics –- a firm based on research conducted at Roswell Park Comprehensive Cancer Center by Dr. Norma Nowak [7] enabling the delivery of personalized medicine.

Banking

Buffalo Savings Bank Building Buffalo savingsbank.JPG
Buffalo Savings Bank Building

Buffalo is the headquarters of M&T Bank, a large regional bank with assets over $79B (as of June 2011). [8] Its rival Marine Midland Bank operated for decades from downtown Buffalo before being acquired by HSBC and being rebranded as HSBC Bank USA. HSBC has reduced its local operations in Buffalo, and Upstate NY as a whole, as it closed its retail banking centers. Many of the shuttered HSBC retail banking centers in upstate were acquired by First Niagara Bank (see below). Other banks, such as Bank of America and KeyBank have corporate operations in Buffalo, the latter expanding its own operations after acquiring First Niagara. Citigroup also has regional offices in Amherst, Buffalo's largest suburb. Buffalo has also become a hub of the debt collection industry. [9]

First Niagara Bank had recently moved its headquarters to downtown Buffalo from nearby Lockport. It had branches from Buffalo to Albany, New York, and since September 2009 has had branches as far south as Pittsburgh. On September 10, 2009, First Niagara announced the relocation of its corporate headquarters from Lockport to downtown Buffalo. [10] First Niagara, which had been considering expanding into Western Pennsylvania for some time, [11] benefited from PNC Financial Services being required by the United States Department of Justice to sell off 50 National City branches in the Pittsburgh area and 11 more branches in and around Erie to competitors. [12] PNC Financial Services had acquired National City with funds from the $700 billion bailout plan after National City became a victim of the subprime mortgage crisis. PNC Financial Services and First Niagara Bank had significant overlap in Western Pennsylvania and had potential antitrust issues in that area. First Niagara took advantage by buying 57 of the 61 National City branches from PNC that had to be divested. The move affected the area by creating 200 more jobs, some in the Buffalo area. [13] On July 31, 2011, it was announced First Niagara had acquired all of HSBC Banks Western New York branches; after closing some and selling other branches to its competitors its total number in Upstate New York had almost doubled. [14] In 2015, First Niagara was acquired by KeyBank. [15]

Other

One M&T Plaza, the headquarters of M&T Bank. One M&T Plaza, Buffalo, New York.jpg
One M&T Plaza, the headquarters of M&T Bank.

Buffalo is home to Rich Products, one of the world's largest family-owned food manufacturers. [16] Canadian brewer Labatt moved its US headquarters to Buffalo in May 2007. [17] This is in large part due to Buffalo's location directly in the middle of the Northeastern Trade Corridor. The city is the heart of the Canadian-American corridor. Over 80% of all U.S.-Canada trade occurs via border crossings in the eastern United States and with five bridges to Canada, the Buffalo area is one of the key eastern border crossing locations. Cheese company Sorrento Lactalis is also based in Buffalo. General Mills has a cereal mill in the city, and Tops Friendly Markets, a regional supermarket chain, remains headquartered in nearby Williamsville. Delaware North is also headquartered in Buffalo, having built a new building in downtown recently. [18] Del Monte Foods' Milk Bone dog biscuits are still manufactured in a small factory on the city's East Side.

New Era Cap Company, the largest sports-licensed headwear company in the United States, is based in Buffalo. It opened new headquarters in 2007 in the former Federal Reserve Building in downtown Buffalo. [19]

The windshield wiper maker Trico, founded in Buffalo by John R. Oishei, operated three major manufacturing facilities but has since closed all of them and moved operations to Mexico. In 1998, the company head office moved to Rochester Hills, Michigan. [20] Trico's Plant No. 1 was placed on the National Register of Historic Places in 2001 and in 2014 was being re-developed by the State University of New York at Buffalo. The John R. Oishei Foundation is western New York's largest and the new Women's & Children's Hospital, scheduled to open in 2015, will be named the John R. Oishei Children's Hospital.

For many years, Buffalo was the nation's second largest rail center, after Chicago. Peak traffic was reached during World War II, but declined soon after the war. [21] Through the 1960s and 1970s freight traffic via Buffalo declined, air travel and the New York State Thruway took railway passengers away as well. [21] By 1980, the rail hub in the city was gone. [21]

Regionally based insurance companies also have maintained their headquarters in Buffalo, New York. There's Merchants Insurance Group and Lawley Insurance. Merchants Insurance Group is a property and casualty insurance company that provides commercial, personal property and casualty insurance throughout the Northeast and North Central United States. Lawley Insurance provides commercial insurance, employee benefits, risk management and personal insurance.

Some industry remains in Buffalo and its surrounding area in the 21st century. Ford maintains a stamping plant in South Buffalo. [22] General Motors also runs the Tonawanda Engine plant by the Niagara River, [23] and there are additional chemical and technology companies that continue to operate factories throughout the city and region. In addition, Tesla has partnered with Panasonic and New York State to operate Gigafactory 2 on the former Republic Steel site. The facility, which opened in 2017, manufactures photovoltaic modules for Tesla's SolarCity subsidiary and will gradually phase into manufacturing individual solar cells. [24] It is the largest facility of its type in the Western Hemisphere. [25] The current incarnation of Republic Steel still maintains a facility in nearby Blasdell. [26]

43 North is a venture capital startup competition funded from the Buffalo Billion program. It awards $5 million to its winners each year, and also offers them mentorship, workspace in the Buffalo Niagara Medical Campus, and tax incentives from the state of New York, among other benefits. [27] [28]

Standard of living

The loss of traditional jobs in manufacturing, rapid suburbanization, and high costs of labor have led to economic decline, making Buffalo one of the poorest among U.S. cities with populations of more than 250,000 people. An estimated 28.7–29.9% of Buffalo residents live below the poverty line, behind either only Detroit, [29] or only Detroit and Cleveland. [30] Buffalo's median household income of $27,850 is third-lowest among large cities, behind only Miami and Cleveland; however the median household income for the metropolitan area is $57,000. [31]

This, in part, has led to the Buffalo-Niagara Falls metropolitan area having the most affordable housing market in the U.S. today. The quarterly NAHB/Wells Fargo Housing Opportunity Index (HOI) noted that nearly 90% of the new and existing homes sold in the metropolitan area during the second quarter were affordable to families making the area's median income of $57,000. The area median price of homes was $75,000.

Buffalo faces issues with vacant and abandoned houses, as the city ranks second to St. Louis on the list of American cities with the most vacant properties per capita. Since 2000, the city has torn down 2,000 vacant homes but as many as 10,000 still remain. Mayor Byron W. Brown recently unveiled a $100 million, five-year plan to demolish 5,000 more houses. [32] The city's move away from heavy industry and toward a service and bioinformatics economy [ citation needed ] has brought improved air and water quality, which benefit not only residents and tourists but the bioregion as a whole. In July 2005, Reader's Digest ranked Buffalo as the third cleanest large city in the nation. [33]

Buffalo's economy has begun to see significant improvements since the early 2010s. [34] Money from state governor Andrew Cuomo, plans for different construction programs, and hundreds of new jobs have brought strong economic change to the area. [35]

Principal employers

According to the city's 2019 Comprehensive Annual Financial Report, [36] the principal employers in the Buffalo Metropolitan Area are:

#Employer# of Employees
1 State of New York 23,600
2Federal Executive Board (United States of America)15,000
3 Kaleida Health 8,301
4 M&T Bank 7,400
5 Catholic Health 7,184
6 University at Buffalo 7,076
7 Buffalo City School District 6,528
8 Tops Markets 5,374
9 Erie County 5,010
10 Erie County Medical Center 3,450

Major companies located in the Buffalo Niagara metro area

This is an incomplete list of notable companies with major operations or headquarters in Buffalo or within the surrounding area.

References: [37] [38]

Related Research Articles

<span class="mw-page-title-main">Buffalo, New York</span> City in New York, United States

Buffalo is a city in the U.S. state of New York and the county seat of Erie County. It lies in Western New York at the eastern end of Lake Erie, at the head of the Niagara River on the Canadian border. With a population of 278,349 according to the 2020 census, Buffalo is the second-most populous city in New York state after New York City, and the 81st-most populous city in the U.S. Buffalo is the primary city of the Buffalo–Niagara Falls metropolitan area, which had an estimated population of 1.2 million in 2020, making it the 49th-largest metro area in the U.S.

<span class="mw-page-title-main">Upstate New York</span> Region of New York state

Upstate New York is a geographic region of New York that lies north and northwest of the New York City metropolitan area of downstate New York. Upstate includes the middle and upper Hudson Valley, the Capital District, the Mohawk Valley region, Central New York, the Southern Tier, the Finger Lakes region, Western New York, and the North Country. Major cities across upstate New York from east to west include the state capital of Albany, Utica, Binghamton, Syracuse, Rochester, and Buffalo.

<span class="mw-page-title-main">KeyBank Center</span> Multipurpose indoor arena in Buffalo, New York

KeyBank Center is a multipurpose indoor arena located in Buffalo, New York, United States. Originally known as Marine Midland Arena, the venue has since been named HSBC Arena and First Niagara Center. Home to the Buffalo Sabres of the National Hockey League since 1996, is the largest indoor arena in Western New York, seating 19,070. It replaced the Sabres' former home, Buffalo Memorial Auditorium, where the team played from 1970 to 1996. The venue is also home to the Buffalo Bandits of the National Lacrosse League.

<span class="mw-page-title-main">Western New York</span> Region in New York, United States

Western New York (WNY) is the westernmost region of the U.S. state of New York. The eastern boundary of the region is not consistently defined by state agencies or those who call themselves "Western New Yorkers". Almost all sources agree WNY includes the cities of Buffalo, Niagara Falls, Jamestown, and the surrounding suburbs, as well as the outlying rural areas of Niagara Frontier, and Chautauqua-Alleghany. Many would also place Rochester and the Genesee Valley in the region, although those legally belong in the Finger Lakes Region and are separate from Western New York Region.

<span class="mw-page-title-main">HSBC (Hong Kong)</span> Hong Kong subsidiary of HSBC Group

The Hongkong and Shanghai Banking Corporation Limited, commonly abbreviated as HSBC and formerly known as HongkongBank, is the Hong Kong–based Asia-Pacific subsidiary of the HSBC banking group, for which it was the parent entity until 1991. The largest bank in Hong Kong, HSBC operates branches and offices throughout the Indo-Pacific region and in other countries around the world. It is also one of the three commercial banks licensed by the Hong Kong Monetary Authority to issue banknotes for the Hong Kong dollar.

<span class="mw-page-title-main">PNC Financial Services</span> Major bank based in Pittsburgh

The PNC Financial Services Group, Inc. is an American bank holding company and financial services corporation based in Pittsburgh, Pennsylvania. Its banking subsidiary, PNC Bank, operates in 27 states and the District of Columbia, with 2,629 branches and 9,523 ATMs. PNC Bank is on the list of largest banks in the United States by assets and is one of the largest banks by number of branches, deposits, and number of ATMs.

<span class="mw-page-title-main">National City Corp.</span> American bank and part of National City Corp

National City Corporation was a regional bank holding company based in Cleveland, Ohio, founded in 1845; it was once one of the ten largest banks in America in terms of deposits, mortgages and home equity lines of credit. Subsidiary National City Mortgage is credited for doing the first mortgage in America. The company operated through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, Florida, and Wisconsin, and also served customers in selected markets nationally. Its core businesses included commercial and retail banking, mortgage financing and servicing, consumer finance, and asset management. The bank reached out to customers primarily through mass advertising and offered comprehensive banking services online. In its last years, the company was commonly known in the media by the abbreviated NatCity, with its investment banking arm even bearing the official name NatCity Investments.

<span class="mw-page-title-main">Marine Midland Bank</span> Defunct bank based in Buffalo, NY, USA

Marine Midland Bank was an American bank formerly headquartered in Buffalo, New York, with several hundred branches throughout the state of New York. In 1998, branches extended to Pennsylvania. It was acquired by HSBC in 1980 and changed its name to HSBC Bank USA in 1999. As a result of several transactions since the turn of the millennium, much of what was once Marine Midland is now part of KeyBank with the exception of Downstate New York and Pennsylvania, that is now part of Citizens Bank. Branches in Seattle are part of Cathay Bank.

<span class="mw-page-title-main">Buffalo Niagara Medical Campus</span>

The Buffalo Niagara Medical Campus (BNMC) is a medical center of health care, life sciences research and medical education institutions, co-located on 120 acres (49 ha) in Buffalo, New York. The BNMC was founded in 2001 by a consortium. This project comprises one of the five "Strategic Investment Areas" that make up Buffalo, NY's Queen City Hub Plan, the city's strategic plan for urban redevelopment.

<span class="mw-page-title-main">KeyBank</span> American regional bank headquartered in Cleveland, Ohio

KeyBank is an American regional bank headquartered in Cleveland, Ohio, and the 25th largest bank in the United States. Organized under the publicly traded KeyCorp, KeyBank was formed from the 1994 merger of the Cleveland-based Society Corporation, which operated Society National Bank, and the Albany-headquartered KeyCorp. The company today operates over 1,000 branches and 40,000 ATMs, mostly concentrated in the Midwest and Northeast United States, though also operates in the Pacific Northwest as well as in Alaska, Colorado, Texas and Utah.

<span class="mw-page-title-main">HSBC Bank USA</span> US subsidiary of multinational bank

HSBC Bank USA, National Association, an American subsidiary of the British banking group HSBC, is a bank with its operational head office in New York City and its nominal head office in Tysons, Virginia. HSBC Bank USA, N.A. is a national bank chartered under the National Bank Act, and thus is regulated by the Office of the Comptroller of the Currency (OCC), a part of the U.S. Department of the Treasury. The company has 22 branch locations.

HSBC Finance Corporation is a financial services company and a subsidiary of HSBC Holdings. It is the sixth-largest issuer of MasterCard and Visa credit cards in the United States. HSBC Finance Corporation was formed from the legal entity that had been known as Household International—shortly after Household International settled for US$486 million in charges pertaining to predatory lending, after burning through $389 million in legal fees and expenses—and is now expanding its consumer finance model via the HSBC Group to Brazil, India, Argentina and elsewhere.

First Niagara Bank was a Federal Deposit Insurance Corporation-insured regional banking corporation headquartered in Buffalo, New York. Its parent company, First Niagara Financial Group, Inc. was the 44th-largest bank in the United States with assets of over $37.1 billion as of June 30, 2013.

<span class="mw-page-title-main">Trico</span>

Trico is an American company that specializes in windshield wipers. Trico, then known as Tri-Continental Corporation, invented the windshield wiper blade in 1917. Its original Trico Plant No. 1 is listed on the National Register of Historic Places. Trico is today one of the leading manufacturers of windshield wiping systems, windshield wiper blades and refills globally, with wiper plants on five continents.

<span class="mw-page-title-main">Trico Plant No. 1</span> United States historic place

Trico Plant No. 1 is a historic windshield wiper factory building located in Buffalo, New York. It is an example of a style of architecture sometimes referred to as the daylight factory, a style for which Buffalo is well known. The building was mostly constructed in the 1920s and 1930s of reinforced concrete and features curtain walls of metal sash windows and brick spandrels, although a portion of the plant incorporates an historic brewery building from the 1890s. It was the original home of Trico Products Corporation, the first manufacturer of windshield wipers, and was an important factory during a period when Trico was the largest employer in the city of Buffalo. The building is also known for once being the office of John R. Oishei (1886–1968), the company's founder and an industrialist who went on to become one of the most important philanthropists in the Buffalo Niagara Region.

The National City acquisition by PNC was the deal by PNC Financial Services to acquire National City Corp. on October 24, 2008 following National City's untenable loan losses during the subprime mortgage crisis. The deal received much controversy due to PNC using TARP funds to buy National City only hours after accepting the funds while National City itself was denied funds, as well as civic pride for the city of Cleveland, Ohio, where National City was based.

Integra Financial Corporation was a Pittsburgh-based bank that was eventually acquired by National City Corp. in May 1996 as one of National City's first attempts at becoming a major powerhouse in American banking.

<span class="mw-page-title-main">John R. Oishei</span> American industrialist and philanthropists (1886-1968)

John R. Oishei was a businessman who founded Trico products and became one of Buffalo’s wealthiest citizens and philanthropists.

<span class="mw-page-title-main">Economy of Greater Cleveland</span>

The economy of Greater Cleveland is diverse, but is based on healthcare, banking, finance, education, insurance, manufacturing, sports, and tech. The metropolitan area based in Cleveland is the 33rd largest in the country, and is home to over 2 million people.

<span class="mw-page-title-main">Larkinville</span> Neighborhood of Buffalo in Erie County, New York, United States

Larkinville, also known as The Hydraulics, is an area of Buffalo, New York located near downtown, South Buffalo and Canalside. Once an industrial neighborhood, it is now home to offices, shops, and a public gathering space called Larkin Square that regularly features food trucks, events, and concerts. The current form of the neighborhood came as a result of the gentrification of the former headquarters complex of the Larkin Soap Company, which includes the Larkin Terminal Warehouse, and other abandoned warehouses nearby.

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