Balancing the Upstate Billions

Governor Cuomo Presented with Buffalo Billion Investment Development Plan

Buffalo’s billion is being divvied up mostly as state investments in private enterprise – things like Elon Musk’s SolarCity. How the money is being spent is reportedly opaque, and controlled by very wealthy, well-connected people whose charge is to transform Buffalo’s economy into, according to the Buffalo News,

a hub for clean energy research and manufacturing, as well as a center for medical genomics research centered around the University at Buffalo’s supercomputing capabilities. Another center would have costly and sophisticated equipment that would help some types of advanced manufacturers develop new products and technologies that they couldn’t otherwise afford to do on their own.

That’s all very forward-thinking and laudable, but average western New Yorkers had no real input into how the state investment was made.

Some of the billion will be used for infrastructure changes, such as redesigning Niagara Falls’ sad downtown, and removing a portion of the Robert Moses Parkway, but that’s a small fraction of the billion.

More glaring is the fact that Cuomo hasn’t come up with a Buffalo or Syracuse or Binghamton billion.

During the 2014 campaign, Syracuse reporters were asking Cuomo why Syracuse didn’t have a billion, and Cuomo challenged the city to come up with a plan.

“I want to do the same with Syracuse,” Cuomo said today. “But don’t think I come and write a check and it happens. Because that’s not what happens. I don’t write the check until you have a vision and you have a plan”…

…To attract more state taxpayer help for the Syracuse area, the ideas and commitment from private companies have to be bigger, he said.

Winning communities, he said, have to be energized, coordinated and committed. “So I’m ready,” he said. “Are you ready, Syracuse?”

Syracuse is, evidently, ready, but its mayor, Stephanie Miner, has a radically different idea about how she’d use the money. More specifically, the state is staring at a $5.4 billion windfall from settlements with banks and other financial institutions, and trying to figure out how to spend it. School districts are clamoring for relief, at long last, from the Gap Elimination Adjustment, and Republicans in Albany want money for infrastructure improvement.

As set forth in this editorial, Miner would spend $851 million of a Syracuse billion to replace its crumbling water system. The balance would be spent on municipal broadband ($84 million), rebuilding roads ($48 million), develop newly created public space due to a reconfiguration of I-81 ($3.6 million), $10 million for schools, and a $3.34 million public market specifically targeted at Syracuse’s new refugee residents.

But the price tag for the new water mains has a modern addition:

At the same time, the city would create a natural chilled water system to cool buildings cheaply, efficiently and sustainably using the cold water at the bottom of Skaneateles Lake.

Miner’s ideas for this money directly benefit all Syracuse citizens by spending public money on public needs, like infrastructure and schools. It bucks Cuomo’s goals of public-private partnerships for industrial modernization. The Post-Standard likes Miner’s ideas, although its editorial board thinks it doesn’t go far enough,

It’s an “eat-your-peas” approach that aligns with Miner’s view of the role of government, versus the “shiny toys” approach favored by Cuomo and the Buffalo Billion.

adding,

Miner is right that investing in infrastructure gets government out of the business of picking winners and losers in its efforts to stimulate the economy. Infrastructure is a public good that enables and encourages economic activity. Government doesn’t create jobs; it creates the conditions for the private sector to create jobs.

The mayor is smart to capitalize on Syracuse’s distinct natural advantage — an abundance of potable water — and to piggyback on the existing paths that move it from Skaneateles to Syracuse. The question is whether “the best darn water infrastructure in the nation” is a boast worth making.

Whether by accident or design, the mayor’s plan leaves us wanting more. Think of it as an opening bid. Who’s willing to push her vision farther?

Frankly, wouldn’t it be prudent for a city to use a massive windfall to balance eat-your-peas with one or two big projects that could lead to a fundamental restructuring of its economy? This is without getting into how Cuomo’s handouts to upstate communities hardly puts a dent in the palpable damage that his hedge fund donors have done to those same communities.

But Miner makes a good argument – what’s the point, for instance, of building Syracuse’s version of Canalside if it’s going to be dependent on water mains from the 1890s?

Governor Cuomo has put up a $1 billion revitalization fund that upstate cities must compete for to receive. Business leaders have called on the governor to up the stakes to $2.5 billion.

There needs to be a good balance between direct state investment in capital projects, as well as public-private partnerships to jump-start anemic upstate economies. After all, it’s not like a complete rebuild of Syracuse’s water system isn’t going to directly benefit private contractors, as well.

But fundamental to remaking upstate, and a point that always gets overlooked because it’s far less sexy than Cuomo making it rain, is that Albany has yet to address things like making it easier and less onerous to start and maintain a business in New York State. It has yet properly to address the dysfunction of myriad stacked taxing districts and authorities that implement and make you pay for unfunded Albany mandates, over and over again.

The New York Double Tyranny

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The “independent” bloc of Republicrats in New York’s useless state Senate has cut a deal with Governor Cuomo to caucus with Democrats after the next election. This all comes on the heels of Cuomo getting smacked around by the left wing of the party for his failure and refusal to support the idea of Democrats being elected to the Senate. The Working Families Party extracted a promise from Cuomo to back a push to regain Democratic control. 

The Senate has really done yeoman’s work expanding its ability to engage in pointless nonsense. Remember Pedro Espada and the Gang of Three and the coup? Remember Malcolm Smith’s feckless “leadership”? Smith later went on to try to run for New York City mayor as a Republican, and the FBI arrested him and a few Republicans for bribery in exchange for a Wilson Pakula. 

Yet another example of electoral fusion leading to inevitable corruption. (A Wilson Pakula is a party’s authorization to allow a non-member to run on that party’s line). 

Why do we need a state Senate again? I mean, rarely does it ever actually debate an issue – same sex marriage was a recent example. But 9 times out of 10, it exists solely as a Republican, upstate balance to downstate liberal Democratic policies. But even that is completely manufactured, through gerrymandering and legislators’ ability to count inmates as members of the local “population”, even though they can’t legally vote. 

The guy who answered this question is now running for state Assembly: 

[youtube http://www.youtube.com/watch?v=XbAFbliBZiY]

So, Cuomo is being attacked from the left for being a DINO, and he’s being demonized from the right because WHAT PART OF SHALL NOT BE INFRINGED DO YOU NOT UNDERSTAND ARGLEBARGLE. He’s trying to accomplish two very difficult things. On the one hand, he’s trying to establish his bona fides as a strong leader who can get things done with people from both parties. On the other, through initiatives like the Buffalo Billion, he’s strengthening his Presidential resume by accomplishing the hitherto unaccomplishable – turning Buffalo around. There’s no “Rochester Billion” or “Binghamton Million” or “Plattsburgh Penny”. Buffalo gets the attention because it has a unique nationwide reputation for being the rust belt’s poster child – the unfixable. Fix Buffalo, and the world is your oyster. 

Long ago, I wrote a series of pieces calling for a non-partisan unicameral legislature for New York based on the Nebraska model. The way in which government conducts itself in Albany is beyond dysfunctional – here we are, in 2014, still bemoaning the dual state tyrannies of bureaucracy and “three men in a room”. Your voice – our voice is not heard in Albany, a place legislators only leave upon death or indictment. Cuomo can point to all the on-time budgets he wants, but that has no practical effect on average families anywhere. That’s grandstanding. How about rolling back some unfunded Albany mandates? How about consolidating the Regents and Common Core testing? How about taking on the tyrannical state authorities once and for all? Let’s consider how the state’s taxes, mandates, and oppressive business environment puts all the counties outside the five boroughs at a distinct nationwide competitive disadvantage? How about running the state as if it’s 2014 and not 1954?

The ongoing Albany sideshow is counterproductive, unless you’re an elected, a staffer, a bureaucrat, or a lobbyist. If the IDC decides to caucus with Democrats, what difference will that really make? 

Albany has done some good things for Buffalo in recent years, but while “Dreadful Donn” Esmonde bemoans a new Bills stadium as yet another example of typical Buffalo “silver bullet” economic development, what the hell do you think the Buffalo Billion is? It’s the platinum bullet, whereby the political elite hands an unprecedented bankroll to the city’s business elite in order to usher in top-down business development. 

Don’t get me wrong – I’m all in favor of free Albany money to attract Elon Musk’s solar energy company to South Buffalo and whatever else they’re spending the money on. But the real change in Buffalo is going to happen organically, from the grassroots. Buffalo is a palpably different and more hopeful place than it was when I first moved here 13 years ago. There are good things popping up all the time – from the microbrew revolution, microdevelopment and renovations on Buffalo’s West Side, a new focus on developing downtown, a hot real estate market, lower unemployment, and a burgeoning knowledge-based economy. Insofar as the state can enhance and assist these efforts, it should be making every effort to do so. 

The IDC is going to caucus with Democrats in the state Senate? That’s nice, I guess. 

Same as it ever was

Everybody’s Dancing in a Ring Around the Sun

1,000 jobs for Buffalo. Maybe more.

Not 19th century dirty jobs, but 1,000 jobs that are part of the new green economy. This could be the best news that Buffalo has received in decades, because this is a real thing involving real jobs. SolarCity is buying Silevo. 

Last November, Governor Cuomo announced that the state would build a “hub facility” for high tech and green energy businesses at RiverBend, as part of his “Buffalo Billion” plan. One of the two California companies to locate at RiverBend is “Silevo”, which would join with another company to invest $1.5 billion and locate operations in Buffalo. 

RiverBend is in South Buffalo, located on the site of the former Republic Steel and and Donner Hanna Coke facilities. The city is literally replacing its defunct, dirty industries with clean, green, state-of-the-art ones. At the November presser, Silevo was introduced thusly

Silevo is a California-based company that develops and manufactures silicon solar cells and modules, with an already established manufacturing plant in China. Phase 1 of Silevo’s project, with a $750 million investment which will create at least 475 jobs, involves a 200 megawatt production facility sole establishing its sole North American manufacturing operations at RiverBend.

The state investment of $225 million through Empire State Development would set up the necessary water, sewer, utility, and road infrastructure, as well as 275,000 square feet of building.  The state will also set up the equipment, which would be owned by the SUNY Research Foundation. No money was being paid directly to the companies.   

Zheng Xu, CEO and Founder of Silevo said, “Inspired by the bold leadership and demonstrated commitment of Governor Cuomo, and buoyed by the strong regional infrastructure and highly skilled workforce present in Western New York, Silevo is excited to bring its next phase of high-volume manufacturing operations to the United States with our new location in Buffalo. Working closely with the SUNY College of Nanoscale Science and Engineering, we look forward to accelerating innovative and cost-effective solar module technology that will position both Silevo and New York as leaders in driving the next wave of solar adoption in homes and business nationwide.”

 Yesterday, Tesla Motors and SpaceX wunderkind Elon Musk announced that his SolarCity venture was buying Silevo for $350 million

Peter Rive, SolarCity chief technology officer and co-founder, said the $350 million acquisition will lead to a factory in Buffalo, N.Y., and create more than 1,000 jobs within the next two years.

The plant will be “one of the single largest solar panel production plants in the world,” according to the post, and it will be followed by one or more even bigger facilities in subsequent years. Rive said he hopes SolarCity will eventually create several thousand panel-making jobs.

On Twitter, Musk’s personal feed posted “SolarCity to build the world’s largest advanced solar panel factory in upstate New York” with a link to the blog post…

…Until now, SolarCity has purchased its solar panels from other manufacturers. Rive said the acquisition will finally allow the company to make its own photovoltaic panels.

Synergy!  The Buffalo News notes

That initial plant at RiverBend was envisioned to have the annual capacity to produce enough solar panels to generate 200 megawatts of electricity. But SolarCity executives said they were interested in expanding the capacity of that plant to be five times bigger than the original plan.

“At a targeted capacity greater than 1 gigawatt within the next two years, it will be one of the single largest solar panel production plants in the world. This will be followed in subsequent years by one or more significantly larger plants at an order of magnitude greater annual production capacity,” SolarCity said.

SolarCity executives said they view the Silevo acquisition as a key step in their efforts to reduce the price of solar energy systems to the point where they can compete with electricity generated from fossil fuels without the lucrative subsidies that now are needed to offset the higher costs of solar panels.

By combining Silevo’s technology, which is more efficient at generating electricity than most other solar panels on the market today, with lower production costs from the economies of scale that come from high-volume production, SolarCity executives said they believe they can make solar systems more affordable.

“What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing,” the blog post said.

“Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed,” said the post.

Chinese companies and manufacturers dominate the global market for solar modules. Silevo and SolarCity intend to challenge that dominance by building the largest module manufacturer in the United States in South Buffalo.  

On the SolarCity company blog

[Silevo] modules have demonstrated a unique combination of high energy output and low cost. Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power.

and

Given that there is excess supplier capacity today, this may seem counter-intuitive to some who follow the solar industry. What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing. Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed.

The Buffalo plant’s planned capacity would be large enough to challenge the Chinese market with a superior product

SolarCity’s chairman who is also chief executive of Tesla Motors, said the goal is to produce solar panels capable of generating power “cheaper than coal or fracked gas power.”

Imagine a factory in Buffalo producing something that could render hydrofracking and Tonawanda Coke the NRG Huntley plant obsolete, and 1,000+ jobs, to boot. SolarCity does not yet operate in western New York, but it leases solar systems to homeowners and businesses. 

As solar systems improve in terms of energy production and storage, adoption will grow. SolarCity is setting itself up to dominate the market with a superior system that will save people money and provide sustainable, renewable energy. This is a huge deal for Buffalo and the country.