Two economic development opportunities, one in the short term and another in the making, could position Rochester as a hub for infrastructure and innovation.
Amazon has chosen to expand its footprint in the town of Greece with its decision to locate a distribution center on Lexington Avenue within Eastman Business Park. The more than $50 million project is expected to create 100 jobs, evenly split between full-time and part-time positions.
Additionally, under just-introduced federal legislation, the Rochester region’s economy has a chance for a $9 billion boost.
The money—spread in nearly $1 billion annual grants over nine years—would come under the Innovation Centers Acceleration Act, a bill introduced this week by Monroe County’s Rep. Joe Morelle.
The measure calls for the creation of nine regional Innovation Centers, each of which would be awarded $987.7 million a year for nine successive years. The idea behind the act is to foster research that would birth optics, software, biomedical, precision manufacturing and other high-tech startups. Funds would be channeled through the National Institutes of Health and the National Science Foundation.
A yet-to-be formed committee made up of NIH and NSF representatives with input from labor, research institutions and private industry advisers would devise criteria for evaluating applicants.
In addition to innovation and research bona fides, the act calls for the selection committee to consider social-responsibility criteria in areas like racial diversity and affordable housing.
Institutions like the University of Rochester and Rochester Institute of Technology that already have plenty of high-tech talent would make this region an ideal candidate to win Innovation Center status, Morelle believes.
Despite an abundance of talent and resources, he adds, this area has yet to attract the national and global attention and venture capital backing enjoyed by high-tech hubs like Silicon Valley or the Greater Boston area. Designation as an Innovation Center would go a long way toward curing that deficit.
Winning designation as one of the act’s hubs, says Morelle, “would strengthen our economy and create jobs at a time when they are needed the most. It would help ensure that students who are already coming to Rochester to benefit from our extraordinary academic institutions like the University of Rochester and the Rochester Institute of Technology could stay in Rochester and find jobs in a growing sector.”
Becoming a hub
UR president Sarah Mengelsdorf and RIT associate provost Nabil Nasir concur.
“Innovation has not only been a cornerstone of the Rochester economy, it has been central to the growth of RIT. The talent in the Greater Rochester region is second to none when it comes to innovation and entrepreneurial spirit. The opportunity to attract significant funding as an Innovation Center is a very exciting thing,” Nasir says.
“This legislation would create an innovation surge to drive economic recovery, build resiliency and increase U.S. global competitiveness in critical technologies,” Mengelsdorf predicts.
Like Morelle and Nasir, she sees the region as well-positioned to capture one of the nine Innovation Center designations. Citing institutions like RIT and UR as well as high-tech manufacturing like optics already situated in the region, Massachusetts Institute of Technology professors Jonathan Gruber and Simon Johnson in their book “Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream” identified Rochester as the best-positioned U.S. metropolitan area to profit from high-tech job growth, Mengelsdorf notes.
That encouraging assessment aside, a recent Brookings Institute study that looked at rates of job-density growth in U.S. metropolitan areas found Greater Rochester to have suffered a 30 percent decline while the highest-growth region, San Francisco, saw a greater than 60 percent gain.
While the $1 billion annual funding the Innovation Center designation would shower on the region would be substantial, Robert Duffy, president and CEO of Greater Rochester Chamber of Commerce, sees the federal money as a pump primer that would attract private capital.
“One of the things we have fought with over the last several years is a lack of venture capital. So much venture capital goes to the East Coast or the West Coast—New York City, Boston, Silicon Valley,” Duffy says. “If you invest $1 billion a year here, you’re going to draw those venture capitalists here and that will actually spawn and support other technologies and other businesses.”
While that all sounds good, the act has yet to face a vote in a Congress that for several years has been gripped by partisan gridlock. Bills passed by the Democrat-controlled House of Representatives have been squelched in the Senate by Majority Leader Mitch McConnell, a Kentucky Republican who declined to bring some 400 bills passed by the House to the Senate floor.
Only Democrats so far have signed on to the innovation hub bill. Morelle and Rep. Teri Sewell, D-Alabama, are co-sponsoring the House measure. Senate sponsors are Dick Durbin, D-Ill., and Chris Coons, D-Del.
The bill is virtually certain not to be debated until a new Congress is seated in January, Morelle says.
Democrats lost seats in the recent election but are on track to retain control of the House. Control of the Senate is uncertain. Republicans have won 50 seats to the Democrats’ 48. Who wins Georgia’s two Senate seats will not be decided until runoff elections slated for early January. Senate Republicans say McConnell will continue to lead their caucus.
Still, Morelle is optimistic.
“There’s no question that going into the new Congress, whatever happens in Georgia in the runoff, without regard to whether it’s a Republican or Democratic (Senate) majority, it’s going to be very close,” he says. “Everything we do is going to require bipartisanship and we’re working with our colleagues across the aisle. I’m very comfortable with that. I welcome that and I think the new president-elect is clearly signaling that’s what he wants to do, and we’ve already been working with (President-elect Joseph Biden’s) transition team, so this is going to be a priority.
“We have begun conversations,” he added. “I actually have a number of Republican colleagues (who are) in areas very much like Rochester (that are) identified by the Brookings report and identified in ‘Jump-Starting (America)’ as having all the key ingredients, so we’re talking to them.”
Another effort that is expected to jump-start the post-pandemic regional economy is construction of a 180,000-square-foot warehouse distribution facility, with a 100,000-square-foot awning, at 1200 Lexington Ave.
The Amazon project has begun and will be complete by early August, officials say. Some 400 temporary construction jobs will be created by the project, “a huge boost to the skilled laborers and workforce” in the community, Monroe County Executive Adam Bello says.
“Despite the pandemic we are facing, we are still recognized by many industry leaders as an ideal place to attract and grow businesses of all sizes,” he notes.
The site is owned by Buffalo-based Acquest Development, a firm that also owns property on Grand Island, once a potential location for a large Amazon warehouse.
The Greece site, known as the final mile, it will be the last stop for products before they reach customers’ doorsteps, says Bill Reilich, town supervisor. Under the code name Project Python, the town and members of its management team have been working for six months to bring this project to fruition, he says. The parcel lies within Greece’s newly adopted economic development innovation and overlay district. The county is offering nearly $21 million in tax incentives.
Reilich says he made it very clear, as the town worked on the deal, that Greece welcomes any future development that Amazon would like to bring its way.
Meanwhile, Acquest plans to build a 280,000-square-foot warehouse with office space, 76 loading docks on roughly 30 acres at 2600 Manitou Rd. in Gates. Michael Huntress, vice president at Acquest, would not say whether Amazon was considering that property.
“We are working currently with a number of tenants,” he says.
In the last eight weeks, Acquest has received approval for two projects totaling roughly 500,000 square feet between the two projects in Greece and Gates. Huntress says there is a shortage of such space and a demand for it in the Monroe County market.
“We own 3 million square feet in the Rochester market and there’s a significant need for high-bay, industrial-type facilities,” Huntress says.
Bello hopes the Greece warehouse is the start of a partnership with Acquest and the online retail giant, resulting in a “multiplier effect,” prompting other businesses to consider Rochester.
Will Astor is Rochester Beacon senior writer. Smriti Jacob is managing editor.