SUMMARY OF THE SUPPORTING ROLE BY THE STATE UNIVERISTY OF NEW YORK POLYTECHNIC INSTITUTE AND FORT SCHUYLER MANAGEMENT CORPORATION IN THE BUFFALO BILLION
In 2012, Governor Andrew Cuomo announced a $1 billion investment (“Buffalo Billion”) in the Buffalo, New York region for economic development. Governor Cuomo tasked the Western New York Regional Economic Development Council (the “Council”) with forming working groups, including local stakeholders, to develop a strategic investment plan for the Buffalo Billion economic development program. Howard A. Zemsky (Managing Partner with the Larking Development Group) and Satish K. Tripathi (President of the University at Buffalo) co‐ chaired the Council. Neither SUNY Polytechnic Institute (“SUNY Poly”) nor Fort Schuyler Management Corporation (“FSMC”) then had, or currently have, representation on the Council.
The Council engaged the Brookings Institution, McKinsey & Company, and the University at Buffalo’s Regional Institute to develop the requested strategic investment plan, and, in February of 2013, the Council published The Buffalo Billion Investment Development Plan (the “Plan”). Neither SUNY Poly nor FSMC participated as drafters of the Plan, and the Plan, consisting of 64 pages, does not mention FSMC and mentions SUNY Poly/CNSE only once as one of three sources of inspiration for the Council’s recommendation for the creation of the Buffalo Niagara Institute for Advanced Manufacturing Competitiveness. The Plan does not recommend the direction of any funding of the Buffalo Billion to SUNY Poly or FSMC or any of their programs or projects. The SUNY Poly/CNSE model was to be utilized in only two of the six initiatives to be implemented.
Under the Plan, the Empire State Development Corporation (“ESD”) is identified as the delivery unit for implementing the Plan’s activities, including responsibility for managing budget requests. In support of SUNY Poly led public‐private partnerships, FSMC applied for funding from ESD for the following projects: (1) $50 million for reimbursement of facility and equipment costs for the establishment of a shared pharmaceutical research and development facility known as the Buffalo Medical Innovation and Commercialization Hub; (2) $118 million for reimbursement for design and planning costs and new machinery and equipment for the establishment of the Buffalo High‐Tech Manufacturing Innovation Hub at Riverbend; (3) $107 million for reimbursement for real estate acquisition, site and infrastructure development and construction costs in support of the Buffalo High‐Tech Manufacturing Innovation Hub at Riverbend; and (4) $55 million for reimbursement for real estate acquisition and renovation and acquisition and installation of equipment and software in support of the Buffalo Information Technologies Innovation and Commercialization Hub. The ESD Board of Directors approved the FSMC applications and directed the approved funding to be paid from the Buffalo Billion.
Subsequent to the ESD Board approval, the New York State Department of the Budget (“DOB”) reviewed and provided its approval. As a condition to the grant of the Buffalo Billion funding by ESD, FSMC entered into grant disbursement agreements with ESD, which contain further conditions required for ESD to disburse approved Buffalo Billion funds to FSMC for reimbursement of costs. In accordance with the terms and conditions of the grant disbursement agreements, FSMC is currently carrying out the development, design, construction and equipping of the Buffalo Medical Innovation and Commercialization Hub, the Buffalo High‐Tech Manufacturing Innovation Hub at Riverbend, and the Buffalo Information Technologies Innovation and Commercialization Hub in support of the SUNY Poly led public‐private partnerships. As FSMC incurs costs for these activities, it submits invoices and supporting documents for review, approval, and reimbursement by ESD for grant eligible costs in accordance with the terms and conditions of the grant disbursement agreements.
Neither SUNY Poly, nor FSMC were ever in a position to be the final authority on expenditures of any state grants, and all expenditures have been reviewed and approved by DOB and ESD.