More than 1,800 permanent new jobs have been produced and greater than 4 million square feet of vacant derelict properties in the City of Buffalo has been redeveloped and revitalized as a result of the Erie County Industrial Development Agency’s (ECIDA) Adaptive Reuse program. Simply put, this program is one of the most impactful and efficient economic development tools available to employers in Western New York.
Today, the ECIDA released its study of the Adaptive Reuse Program, which has been utilized by area employers on development projects since 2008. The study, performed by an independent consultant, Redevelopment Resources, concludes, overwhelmingly, that the program has been extremely successful. The return on investment of this program has seen tremendous impacts for the community.
The return on investment of this program has seen tremendous impacts for the community. For every $1 of taxes abated, the program has produced $36.10 in benefit to the local community by leveraging private investment, job growth, building a larger permanent tax base and contributing to the vitality of our communities. The program is also a key implementation tool for One Region Forward, directing new investment to locations that have already experienced development and are already served by infrastructure and public services. The long-term cost savings to our communities of reusing existing roads, sewers and pipes, as opposed to developing someplace where they have to be built anew will have impacts that last generations.
Here are our top ten takeaways from the ECIDA study:
- This program is a big job producer.
- 1,865 permanent jobs and 4,500 construction jobs were produced as a result of projects utilizing Adaptive Reuse.
- It leverages enormous private sector investment.
- $27 Million in abatements over 8 years has leveraged $638 Million in overall investment in these private sector projects.
- The community’s contribution is nominal given the results.
- Abatements from the Adaptive Reuse program account for just 4% of the overall investment from participating projects
- The program effectively eliminates blight.
- Fifty-three properties, accounting for more than 4 million square feet of previously derelict and vacant space have been redeveloped and put into use.
- The program has supported Erie County’s tourism industry
- 338 new hotel rooms have come on line within projects utilizing the Adaptive Reuse Program.
- The program has contributed to a reduction in crime.
- A study of the City of Buffalo shows that crime rates for incidents of all types have significantly reduced during the implementation of the program. The report cites studies that positively correlate the reduction of vacant buildings to the reduction of crime in neighborhoods.
- The program has created a Live, Work & Play environment in Downtown Buffalo
- More than 1,100 new residential units have been created through this program, largely converting vacant office and industrial spaces into residential uses, critical for diversifying the use and activity in our urban core.
- We are revenue positive.
- Even without the investment and job benefits, the simple impact to our local tax base is an immediate net positive. Projects stimulated through Adaptive Reuse have added $4.7 million in new local tax revenue, annually, when the abatements expire. This is compared to the $3.375 Million in average abatements the program awarded on an annual basis since 2008.
- Erie County continues to be a challenging development market.
- The report shows statistics which illustrates Buffalo as having among the lowest rental rates of major cities in the nation while experiencing construction costs above the national average. It is critical to have stimulant programs such as Adaptive Reuse to get these projects to pencil out.
- Tax burden is still a significant challenge for projects
- The report offers concern that, given low rental rates in Buffalo, when tax abatements expire, limited revenue on these properties may challenge their on-going feasibility.
The next step for ECIDA is to explore potential revisions to the Adaptive Reuse Program. For a community that has suffered through decades of decline, it is essential that such an effective stimulant tool is maintained, if not strengthened to meet new economic development goals.
In the report’s conclusion, Redevelopment Resources offers ongoing concerns about the feasibility of projects given low rental rates and high construction costs. Recognizing this, and the effectiveness of this program in mitigating those challenges, maintaining and expanding the ECIDA Adaptive Reuse Program is a top advocacy priority for the Buffalo Niagara Partnership as it should be for all of our partners in economic development.
Click here to read the full ECIDA Adaptive Reuse Study.