Niagara Gazette

Bob Confer

May 20, 2014

CONFER: Economic cannibalism: developers eat their own

Niagara Gazette — It’s not often that you’ll find me celebrating the loss of an economic development project that would have created 200 jobs in Western New York. But, I did just that a few weeks ago when a deal to bring a Toronto-based plastics manufacturer to the Buffalo waterfront fell through at the eleventh hour.

That company would have been in direct competition with mine. Even though news reports identified them as a “furniture manufacturer” – which they are – they also produce products that we do like kayaks and spa cabinets.

As a free market capitalist I typically welcome competition. But I don’t when competitors, especially those new to a region we’ve called home for 40-plus years, are given special privilege by the government. To bait the Canadians, the Cuomo Administration and the NFTA would have given them, among other incentives, $2 million in Excelsior tax credits, a sweet deal on publically owned real estate, and 3.7 megawatts of cheap electricity produced by the New York Power Authority.

It’s that last item that struck me as the most offensive. Long-time readers of this column know that my company has attempted time and again to acquire cheap electricity (to no avail) in hopes of decreasing our third largest cost of doing business. Compared to other plastics manufacturers across the United States, we pay twice what they do for electricity – even though the mighty Niagara River flows in front of our plant.

Had the Canadians pulled the trigger on the NFTA’s real estate offer, the state would have enabled our competitor to produce the same products we do with power at less than one half the cost of ours, all while operating in what’s basically our backyard. It would have been disastrous to the 170 families that I work with as we would have lost clients to the local and cheaper alternative. While the region might have gained 200 jobs from the new company, it could have lost half as many due to disadvantageous competitive factors that were of the governments doing.

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Bob Confer
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