When a nonprofit housing agency recently built a low-income apartment complex on Jefferson Avenue, the 30 apartments were rented – sight unseen – before the building was completed.
“They were rented up before I could show an apartment, before there was a certificate of occupancy,” said Michael Riegel, president of Belmont Shelter, the city’s premier low-income housing assistance agency.
That was the first time in his 30 years in the nonprofit housing business that he’s experienced such a demand, Riegel said.
“The pressure is coming from both ends,” said Bob Richardson, president of the Upstate New York chapter of the Commercial Real Estate Association. ”There is pressure from people who can no longer afford market rent. There is pressure coming from people who qualify for public housing but don’t want to live there.”
Giving tax breaks to encourage adaptive-reuse development projects that include apartments and hotels has been controversial among government critics and taxpayer advocates, but a new report by the county’s economic development agency claims it’s paying off.
The report by the Erie County Industrial Development Agency, conducted by Redevelopment Resources and issued Thursday, found that the agency’s policy has encouraged more than 53 redevelopment projects in and around Buffalo since it went into effect in 2008.
Those projects, totaling $659 million in value, include Bethune Lofts, Sinclair, Foundry Lofts, 500 Seneca and Phoenix Brewery Apartments.
Specifically, the report found the incentives led to:
4 million square feet of vacant space converted to new use
1,141 new apartments
338 new hotel rooms
A tripling of assessed value of the properties, from $60.8 million to over $200 million, which generates $4.7 million in added property tax revenues, mostly for the City of Buffalo
In the past four years, Buffalo and Niagara Falls have seen a huge increase in hotel development. Commercial Real Estate Developers have taken the lead in updating and expanding the inventory of hotel products in Western New York.
In Buffalo, inventory has grown to 10,500 rooms with new hotel construction, with more rooms on the way.
There are approximately 2,900 hotel rooms in Niagara Falls, New York and 20,000 rooms in Niagara Falls, Ontario. Free Wi-Fi is being installed in downtown Niagara Falls, N.Y., to meet the demand of the large number of tourists who are filling those hotels.
Those were the messages delivered on May 16, at The Buffalo Club, during The Commercial Real Estate Development Association’s (NAIOP) forum, “Trends in Regional Tourism.”
Bob Richardson, president of the NAIOP Upstate New York chapter, reminded the audience that one of the three focus industries in the Buffalo-Niagara regional economic development plan is tourism, “the renewed focus on the industry is just beginning and there are many opportunities ahead of us. Many of you have already made substantial investments in the tourism/hospitality market in Western New York and rely on the continued focus to justify those commitments.”
There were 7.3 million person trips to Niagara Falls in 2016, up 10.1 percent from 2014 according to one of the panelists, John Percy, president & CEO, Destination Niagara USA, generating $667 million in spending, an 18.8 percent over 2014.
Percy said several new hotel projects are either under construction or in the planning stages, taking advantage of renewed interest in Niagara Falls. “The Niagara Falls USA brand is an iconic and timeless destination.”
Patrick Kaler, president, Visit Buffalo Niagara, talked at length about the need for a new convention center in downtown Buffalo. “This is a big opportunity for to continue the momentum,” he said. “Meeting planners are excited about what they are seeing in Buffalo: the waterfront, new hotels; it’s a great time to be in Buffalo. This is the missing piece for us.”
Tourism is a $1.7 billion industry in Buffalo and Erie Count, with eight million visitors in 2016.
“We’re getting travel writers from around the world who are hearing a buzz about Buffalo. Many are coming in the winter, writing about their authentic experiences about Buffalo,” he said.
Noting Buffalo-Niagara has become a year-round destination, Patrick Whalen, director of the Niagara Global Tourism Institute, said he is focused on researching winter visitors to Niagara Falls. “We don’t know enough about them,” said.
Whalen is also a member of the Council of Great Lakes Region, which studies economic and tourism trends in the U.S. and Canada. “We need more regional collaboration, to include Toronto, Montreal, Detroit and Chicago. That’s hard to do. Wouldn’t we be better off if we get more people to Niagara Falls, USA and Niagara Falls, Canada?
“What I’ve been preaching at the council is to collaborate at the highest levels. Globally, tourism numbers are staggering, they are astronomical. Ours in the Great Lakes Region are nowhere near (those numbers); globally, we have a lot of room to grow,” Whalen said.
“There’s no question, that type of collaboration would mean more opportunity our industry,” NAIOP’s Richardson said. “Our members would likely be involved in even more hotel and tourism-related development projects.”
NAIOP, the Commercial Real Estate Development Association, has selected Kelsey Padgham, a graduate student in the Master of Professional Studies in Real Estate program at Cornell University and a member of NAIOP Upstate New York, as a recipient of the 2017 Diversity Commercial Real Estate (CRE) Scholarship.
“NAIOP recognizes the value of supporting the next generation of leadership in commercial real estate and increasing the diversity of backgrounds and viewpoints in our industry,” said Thomas J. Bisacquino, NAIOP president and CEO. “We commend this high-achieving graduate student for her enthusiasm and commitment to improving the built environment and enhancing the communities in which we live, work and play.”
Padgham is expected to receive a dual degree in Master of Professional Studies in Real Estate and Master of Regional Planning from Cornell University in spring 2018. Her experience includes interning for U3 Advisors, a consulting practice that provides real estate and economic development solutions to community institutions. She also serves as the incoming president of Cornell Real Estate Women.
The NAIOP Diversity CRE Scholarship benefits graduate and undergraduate students pursuing careers in commercial real estate. NAIOP has awarded four $5,000 graduate student scholarships as well as two $2,500 undergraduate student scholarships to individuals from demographics that are traditionally under-represented in commercial real estate and whose universities are part of the NAIOP University Membership program. In addition to the scholarship, each award recipient will have the opportunity to make new professional connections and sharpen his or her commercial real estate acumen with complimentary registration for NAIOP’s CRE.Converge 2017, October 10-12, in Chicago.
There’s new energy and optimism for economic growth in Rochester and the Finger Lakes region, with commercial real estate developers playing a key role in the region’s resurgence. That message was delivered during a developer’s roundtable on Apr. 27, in Pittsford, sponsored by The Commercial Real Estate Development Association (NAIOP), Upstate New York Chapter.
Bob Richardson, association chapter president, served as moderator. “There are certainly positive signs in the Rochester. Our members have been instrumental in revitalizing the downtown residential market and creating the housing options that the millennial generation is looking for. You can see the success they are having and it’s being reflected in the latest population data,” said Richardson.
Vincent Esposito, regional director, Empire State Development, Finger Lakes Regional Economic Development Council (FLREDC), said downtown Rochester is coming back. “No doubt, transformation has started. Buildings are filling up with commercial and residential tenants. It’s the type of life you want to see in your center city if you want your regional economy to grow. This is being led by private investment and the state is doing its part to help.”
Finger Lakes Forward, led by FLREDC, is the five-year strategic plan to accelerate and transform the region to an innovation economy. Its three pillars call for job growth, increasing regional wealth and driving private investment, with a primary goal of poverty reduction, particularly in urban areas.
Esposito said there is an unacceptable level of poverty in the Rochester area. To address this critical need, FLREDC has partnered with the Rochester Monroe Anti-Poverty Initiative, helping people to move out of poverty by overcoming myriad barriers, which include child care, transportation and skills training. “We’re encouraging employers to hire people out of poverty.” He said there needs to be a different approach to addressing poverty.
Companies are also partnering to grow jobs. Esposito pointed to Eastman Business Park, which once was home to Kodak, and now consists of 70 different companies employing 6,600.
“It’s a story of resilience, how the loss of Kodak jobs has resulted in companies that emerged from technologies developed by Kodak. It’s an industrial city unlike any other in the world.
“We have momentum and we want to keep the momentum going forward,” Esposito said.
The Commercial Real Estate Development Association (NAIOP), Upstate New York Chapter, will present a developer’s roundtable, Filling the Gap in Your Capital Stack, Thursday, Apr. 27,
7:30 a.m. – 9 a.m., at Locust Hill Country Club, 2000 Jefferson Rd., Pittsford.
The capital stack is comprised of the different layers of financing sources that fund the purchase and improvement of a real estate project.
Panel participants will be Vincent Esposito, regional director, Empire State Development, Finger Lakes Regional office/executive director, Finger Lakes Regional Economic Development Council, and Joseph Rizzo, regional manager, Economic Development, Rochester Gas & Electric. Esposito and Rizzo will also offer insights on Rochester’s current economic situation and future trends.
The event will be moderated by Bob Richardson, association chapter president.