We Need to be Realistic

Buffalo is dying that is for sure we need to be realistic.

This is a quote from a commenter on a Buffalo Pundit blog earlier today.  I see lots of people writing pretty much the same thing in the local blogs.

I think they are wrong.  They are not realistic at all.

I’ve spent the past few years getting involved in the community at a number of different levels; first within my town, now within the local business community and especially the University at Buffalo and the Life Sciences initiative.  This is what I’m seeing:

  • An enormous growth in life sciences and other biotech-related companies.  The life sciences downtown corridor, first established around 2000, has already had two major buildings erected and with the addition of the $200 million Cleveland BioLabs corporation, is so close to full that UB purchased the M. Wile and Trico buildings as part of a biotech corridor expansion.  UB is also adding a brand new building to house the new Educational Opportunity Center at Goddell and Oak Streets.
  • Including Southern Ontario and places as far east as Syracuse, the “Golden Horseshoe” is the fourth-largest biotech area in North America.
  • Up to this point the growth in Life Sciences has centered on hiring the best and brightest researchers – which is now spilling over into product development and manufacturing as these researchers take their ideas to market.  SmartPill is a great example of this, as is Empire Genomics and Cleveland BioLabs.  The Bank of America recognized the need for home grown technical support in this field, and donated $250,000 to help train the technicians needed to support these rising companies, from the Buffalo labor force.
  • $120 million is being pumped into The Statler renovation.  The Dulski Building is going through a $60 million makeover.  New Era Cap and Health Now just finished their new (gorgeous!) downtown facilities.  The $100 million Federal courthouse is going up.
  • Bass Pro really is going in (and it had nothing to do with either Donn Esmonde or Tim Tielman) and the Inner Harbor really is going to be built.
  • Love it or hate it, the Seneca nation announced a $300+ million hotel and gaming complex in the Cobblestone district, adjacent to the Inner Harbor and Bass Pro.  One needs to stop and think about how close we are to reaching critical business mass in this region.
  • UB 2020, the big gorilla, is well on the way to getting the community and more importantly, every single politician behind the push for a huge increase in higher education in Western New York.  The resulting impact on the community is huge.  Higher education already accounts for a significant fraction of our local economy and is destined to grow substantially in the next 10 years.
  • Moog is growing so fast they can’t find close to enough talented workers and have to import staff from as far away as Utah.
  • Buffalo is rapidly becoming the nation’s call center capitol.  Ingram Micro, Geico and HSBC are recent examples of call center companies that the community has lured into growing here.
  • People in other upstate communities are looking to Buffalo (and moving to Buffalo!) as an example of how to rebuild an economy.

Too many people around here have been focusing on the losses in manufacturing, the layoffs and general economic malaise without bothering to look at the entrepreneurial growth that’s happened lately.  Huge manufacturing complexes are being replaced by highly flexible small businesses.  People who have ambition and vision are employed and growing their businesses.  More and more programs are being established by the Buffalo Niagara Partnership, UB, Canisius and other institutions to teach successful business practices to those who are willing to try.

Too many people around here have wanted instant gratification; in reality, building new business takes both nurturing and time.  We are about to reach a tipping point where everything is starting to happen at once, and where the renaissance will soon become obvious, even to the most cynical.

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4 Responses to We Need to be Realistic

  1. […] I added the above to Pundito’s piece in one form or another…but I have to give Buffalo Blood Donor credit for pointing to some local things which are starting t…. […]

  2. Hype Patrol says:

    Saying “Buffalo is dying” has never been true, so I am not one of those people.

    But a couple things:

    Buffalo is rapidly becoming the nation’s call center capitol

    Sounds overstated to say we’re rapidly becoming the #1 call center in the U.S. Any figures on what we’re ranked at for number of call center workers? If we’re even in the Top 20 or Top 30, I’d be presently surprised. But rapidly becoming #1? Really?

    the addition of the $200 million Cleveland BioLabs corporation

    Great news they’ve moved here. I wish them total smashing success. But is it appropriate to describe them as a 200M company? They’re about 30M in assets. Their net profit margin and operating margin are negative.

    http://finance.google.com/finance?q=NASDAQ:CBLI

    Yes market cap as of Friday is 149M. Biotech stocks can sometimes have speculative stock prices. They have no P/E ratio, since no earnings (profits), but their stock price-to-sales ratio is twelve times the industry average (101, compared to an industry average of 8, and sector average of 5. Average for S&P 500 is 3.).

    http://stocks.us.reuters.com/stocks/ratios.asp?rpc=66&symbol=CBLI.O

    Again, it’s GREAT they and their 35 employees are in Buffalo now. But describing them as a 200M company sounds inappropriate. I don’t think they’d describe themselves that way. 30M is more like it, based on their assets.

    Sorry if that sounds negative. It’s not meant to be.

    About biotech and life sciences in general, literally 100s of U.S. states and cities are making similar efforts as Buffalo (not to mention across the world). Hopefully the companies that start here will be among those that survive the upcoming shakeouts, but there’s a lot of potential for irrational exuberance fed by politician ribbon cuttings.

    It will be very interesting to watch over the next few years the count and growth rate of the number of biotech workers in Buffalo, based on stats from Dept of Labor or Federal Reserve.

    Curious what’s some reference that shows and explains what it means to say “Including Southern Ontario and places as far east as Syracuse, the “Golden Horseshoe” is the fourth-largest biotech area in North America.”? What’s meant by “fourth-largest area” in that context? Adding up Toronto, Buffalo, and Syracuse biotech workers yields the fourth largest compared to… what… other whole U.S. states? Just wondering what that means.

    Not sure how the shiny new courthouse helps the economy other than short term construction, but it will look nice so maybe that’s just a psychological boost. Moog’s recent success is GREAT NEWS.

  3. Paul says:

    Hype,

    Wow, lots of great comments. Way to hold my feet to the fire.

    In response to the biotech stuff: To your question on what constitutes biotech regions – it’s states and provinces in most reports. Ontario is ranked 3rd in North America in number of companies (behind CA and MA), 6th in revenues. Add in Western New York, Rochester and Syracuse (which is being done locally to promote Upstate), and you get what is claimed to be the 4th-largest in revenues. NJ/NYC also claim similar numbers and downplay CA because it’s actually composed of three distinct regions in the state, so all these numbers are up for debate. The “Golden Horseshoe” used to stretch only around Lake Ontario from Toronto to Fort Erie, then it included Buffalo and Rochester, and now also includes Syracuse. Everyone wants to be at that party.

    The Call Center (properly called Customer Contact Center) is a huge market both nationally and internationally. Western New York is recognized as having cheap labor, cheap office spaces and high telco bandwidth, making it attractive for companies who want English-speaking service agents. It is one of 4 major industries that the BNE has targeted for strategic growth in WNY. And you’re right, I may have been caught up in the hype at the latest BNP/BNE meeting; finding out about where we stand actually relative to the rest of the country would cost me $3395 for the report, which is a bit pricey for me.

    BBD

  4. Hype Patrol says:

    BBD: the addition of the $200 million Cleveland BioLabs corporation

    HP (Oct 28): Yes market cap as of Friday is 149M. Biotech stocks can sometimes have speculative stock prices. They have no P/E ratio, since no earnings (profits), but their stock price-to-sales ratio is twelve times the industry average (101, compared to an industry average of 8, and sector average of 5. Average for S&P 500 is 3.). ….describing them as a 200M company sounds inappropriate. I don’t think they’d describe themselves that way. 30M is more like it, based on their assets

    Recalled this discussion when seeing in today’s Buffalo News that the company lost over half its market cap this week due to a contract loss. At closing Friday, the market cap of the “$200M company” had dropped down to 40M. Was 149M less than 3 months ago. Assets currently listed at 24M, down from 30M on Oct 28.

    http://finance.google.com/finance?q=NASDAQ:CBLI

    Still great that they’re here in Bflo, still wishing them the best, and it’s a good reminder of harsh volatility in this sector.

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