An Investment Playbook Grows in Buffalo

by Bruce Katz and Colin Higgins · August 20, 2021


With enactment of the $1.9 trillion American Rescue Plan, the recent bipartisan infrastructure deal and Congressional movement on innovation and workforce funding, it is clear that the federal government is actively engaging in an unprecedented multi-act effort to spur an equitable economic recovery. The combination of new resources, the Biden Administration’s commitment to high-poverty “qualified census tracts,” and existing federal programs and tax incentives raises the prospect of creating a new practice of Community Wealth that systematically regenerates disinvested neighborhoods and lifts disadvantaged residents by upgrading skills, growing entrepreneurs, increasing incomes and building assets.

To realize this tantalizing prospect, it has become increasingly clear that new tools and approaches need to be created to bridge the disconnect between a federal government that is organized vertically via siloed Congressional committees and executive agencies and communities that function horizontally across multiple sectors.

The clash between the vertical and the horizontal is deeply structural. As we have written before, the federal government is intensely balkanized, focusing on discrete kinds of topically-organized investments (e.g., small business or infrastructure or workforce development) delivered through singular projects and separate transactions. It is structured to “look down,” operating through compartmentalized agencies that flow resources at different times via different distribution mechanisms and channels with different rules, recipients and reporting requirements. The federal government is, incredibly, designed to send funding via dozens of federal programs to one place (a city or county or neighborhood), without even a semblance of coordination.

Communities, by contrast, are organized via networks of public, private and civic institutions and strive to create local initiatives that are holistic, integrated and multi-dimensional. They are able to “look across” multiple sectors and projects, connecting the dots between disparate issues that ultimately come together in place and geography. They have also learned, out of necessity, to braid and blend different sources of capital for different purposes to create a whole greater than the sum of its parts.

The pioneering of an Investment Playbook in in Buffalo, New York gives us reason to believe that the vertical/horizontal chasm can be bridged.

Buffalo’s East Side Avenues Initiative is one of the most ambitious community transformation efforts that we have seen in the United States. The commitment of $165 million in state funding, a product of the state’s Buffalo Billion effort, has spurred a series of transformational investments along key commercial corridors and has already leveraged additional public, private and civic investments. It was built as a multi-year co-investment strategy in which funders leverage investments to build a larger ecosystem in a coordinated approach where funding streams add up to be greater than the sum of their parts. In this approach, capital funding is accompanied by operational, capacity building support for local intermediaries and community-based organizations.

Buffalo’s East Side Avenues Initiative has pursued a multi-dimensional strategy that includes investments in small business, placemaking and workforce development.

Small Business: The Initiative’s small business efforts have helped local entrepreneurs start and scale businesses while giving owners of small properties the expertise and capital needed to bring their assets to productive use. The creation of a Community-Based Real Estate Development Training program is particularly noteworthy. This program trains local building owners in commercial real estate development so that they can make the most of their holdings. These efforts have successfully leveraged additional public, private and civic investments and helped catalyze new sources of alternative finance (e.g., Open4, a consortium of CDFIs and BSOs) and anchor procurement (Buffalo Purchasing Initiative).

Placemaking: The Initiative’s placemaking efforts have targeted nine discrete investment areas located within four commercial corridors (Michigan, Jefferson, Fillmore and Bailey Avenues). These corridors were chosen based on the presence of existing yet underused assets, strong community interest and momentum, and likely return on investment. This targeted approach triggered a series of investments in key neighborhood anchors and catalytic development projects nearby that had been selected for their strong promise of transformational change. The result is a more coordinated and collaborative approach to economic development (as opposed to a scattered set of individual transactions). Thus far, the Initiative has made initial investments in the restoration and re-use of such critical anchors as:

Workforce Development: The Initiative also acknowledges the critical role of workforce development for economic growth and broadly shared prosperity. A remarkable partnership that brings together employers, educational institutions, community organizations and state and local government resulted in the Northland Workforce Training Center, which is helping East Side residents gain the skills necessary for quality jobs in the local manufacturing sector.

Visionary and Capable Local Intermediaries: Key to Success

This initiative clearly did not happen overnight. It is the product of lots of hard work done by key intermediaries. The University at Buffalo Regional Institute (UBRI, a research center of the UB School of Architecture and Planning, has acted in a critical intermediary role by connecting all the pieces, engaging multiple stakeholders and working closely with the community on planning and implementation. It has also forged a strong partnership with Empire State Development, New York State’s economic development entity.

Many cities focus on just one of the strategies Buffalo is deploying on the east side. Of course, there’s nothing wrong with just revitalizing a historic building, just supporting black and brown entrepreneurs, or just doing streetscape and walkability improvements. But East Side Avenues shows other cities it’s possible to dream bigger and do all these and more simultaneously. Not only is it possible, it’s also necessary if cities want to achieve the sort of results they aspire towards in their comprehensive plans.

Doing so, however, requires that an institution — or a coalition of institutions — steps up to move the ball forward on big-picture projects. The time is now, given the Biden Administration’s investments in Building Back Better; this is why we’ve called for the creation of Stimulus Command Centers to coordinate the local deployment of disparate federal investments.

In anticipation of federal investments, UBRI has now created a draft “next phase” plan to take Buffalo’s East Side Avenues Initiative to the next level of impact by harnessing the full power of the Biden Administration’s Build Back Better agenda. This plan proposes activating almost $200 million in state, federal and philanthropic and corporate funds to scale up early successes, invest in transformative community anchors and build one of the nation’s strongest small business ecosystems rooted in supplier diversity, entrepreneurial support and capital access.

An Emerging Investment Playbook: Three Early Moves in Buffalo

While the aims of the Buffalo plan are impressive in their own right, our enthusiasm for the plan comes from its process. The Buffalo plan has followed a logical three-step process for scaling existing efforts and created the foundation for a replicable Investment Playbook. We believe this effort can be routinized as a common tool and template and followed by the federal government and other communities alike.

First, UBRI has partnered with stakeholders to create a vision for community transformation that is highly specific and granular. It has gone through the painstaking process of concretizing and costing out the next investments that are needed to bring current efforts to full fruition. As seen in the Next Phase plan, UBRI has provided precise estimates for the next wave of investments in such community anchors as Broadway Market, Central Terminal and Michigan Avenue and assigned these costs to different investors.

Second, UBRI is striving to connect the proposed investments to existing or likely federal sources of funds. This matching of sources and uses is, for now, a work in progress, since at least two relevant pieces of legislation — the U.S. Innovation and Competition Act and the Infrastructure Investment and Jobs Act — have both passed the senate but have yet to be enacted (and the larger reconciliation bill has yet to be introduced). We still do not know the final programmatic composition of these bills or the size, scope or delivery mechanism and criteria of individual programs.

Yet scenario planning is possible. As we wrote at the start of the year, local leaders must organize for uncertainty in 2021. UBRI, is doing just this. They are working with government and philanthropic funding partners to scrutinize the funding already appropriated under the American Rescue Plan and determined that different sources could be used to support various aspects of the next phase. At the same time, UBRI has closely followed the infrastructure and innovation legislation in Congressional evolution and scoped out potential sources of funding.

Third, UBRI has undertaken the sophisticated process of thinking through the staging and sequencing of different forms of capital to ensure the maximum leverage for this unique moment of time. Given the origins of the Buffalo’s East Side Avenues Initiative, it has shared its plan with state legislators and agencies. But it has also informed key local philanthropies of its aspirations, given that civic backers of a project are both able to “go where federal funds cannot go” (e.g., supporting ongoing operational support rather than one-time only investment in construction) and move more quickly than government agencies, given the lack of statutory constraints.

Three Lessons for Other Communities for bridging the federal/local chasm

The Buffalo effort, while still a work in progress, presents three key lessons that other communities can use to prepare themselves to bridge the federal/local chasm in the deployment of the Biden Administration’s Build Back Better agenda.

First, create an Investment Playbook

UBRI has followed a replicable process in creating the next phase of the Buffalo East Side Initiative. The lessons are simple to state (but require work to execute): Create a vision for neighborhood transformation that is concrete and priced; match local uses to federal sources; and start a path towards staging and sequencing investment. Together these amount to a local playbook for inclusion and innovation in federal investments.

There is precedent for creating such a tool. In 2018 and 2019, Accelerator for America and the Nowak Metro Finance Lab at Drexel University created a replicable product — an Opportunity Zone Investment Prospectus — to enable cities, counties and states to communicate their competitive advantages, trigger local partnerships and identify sound projects that are ready for public, private and civic capital. The aim was to help communities and investors get smarter and more precise about the broad range of investment possibilities that exist in Opportunity Zones and, literally, help make and shape markets where there were none. In the end, dozens of cities and counties created their own Investment Prospectus, which, in retrospect, was almost a dry run for the federal funds now flowing or about to flow.

Unlike the landscape during Opportunity Zones, where private capital evaluated projects by the return of dollars on an investment, the current landscape is composed of a series of federal funds that will be invested in projects according to a broader set of criteria (e.g., equity, national competitiveness, climate mitigation) and on different timelines. Since the moment is different, the purpose of the tools must differ. As in Buffalo, the investment playbook must communicate projects that meet national goals and can leverage up federal funding to expand the resources a community has to solve its problems; it must implicitly or explicitly sequence federal investments to create a multi-year plan; and, it must take a broader audience into account, from federal and state administrators to interested philanthropies and private investors.

Second, bake in equity

Buffalo’s East Side Avenues Initiative demonstrates the importance of having a focus on equity throughout the entire process. Equity isn’t something that their leadership is thinking about once they’ve sparked growth; it’s something they’re thinking about to spark growth. The largest projects being undertaken thread equity through the entire process. The Broadway Market food hub, for example, centers on international, owner-operated vendors that provide entrepreneurial opportunities for residents in addition to fresh food. The Northland Workforce Training Center will scale up as the neighborhood develops, providing quality local jobs to ensure that residents will be able to continue to afford living in the neighborhood. These intentionally flip the traditional neighborhood regeneration paradigm, which typically yields profits for outside investors but not current — often low-income — residents.

Finally, build a new capital stack

The federal investments that are already appropriated or are likely to come are of a historic scale. But an inclusive recovery will not be exclusively funded by the federal government. UBRI has already concluded that the strategies and transactions needed to drive the next phase of Buffalo’s East Side Avenues Initiative will require a blended “capital stack.” Cities will, therefore, need to align broader pools of public, private, civic capital and create new forms of innovative financing that can be captured, codified and transferred from city to city.


The early explorations in innovative, multi-year co-investing by government, and the philanthropic and corporate sector on Buffalo’s East Side has proven that it is a model worth scaling up. It has demonstrated that funders do listen to collaborative, creative, cohesive, and community-driven strategies, and they acknowledge that these efforts need to be fully resourced to invest capital with operational capacity to implement successfully.

This is a time for leadership stepping up in innovative models. The struggle of building a capital stack is that all funders want to be the “last one in.” That mindset won’t drive the momentum of good ecosystem plans forward. With the unprecedented moment to leverage public and private funding, the country has the opportunity to implement and scale up collaborative models that have community-led local momentum with a strategic lens of wealth building for those historically excluded from the benefits of American prosperity.

Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Colin Higgins is a Senior Research Fellow at the Lab.

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