Niagara Falls, New York - Economy

Economy

The economy for the city was originally based around the Falls itself, or at least the power generated by the massive waterfall. This cheap and abundant source of power was the driving force behind the rapid rise of area industry. Around the turn of the 20th century, thousands of immigrants from predominantly European nations such as Italy and Poland came to the area to work the chemical, steel, and manufacturing plants owned by present-day companies such as Occidental.

The area is subject to the migration of manufacturing jobs to developing countries common to the rust belt. Another major toll was suburban migration, a national trend. The city, which once boasted well over 100,000 people at its peak, has seen its population decline by some 50%, as industries shut down and people left for the employment opportunities of the South and West. The unemployment rate in the City of Niagara Falls was around 10 percent as of October 2010. Approximately 60 percent of residents in Niagara Falls receive public assistance such as food stamps, welfare, unemployment insurance and Medicaid.

Also blamed for the economic decline is the presence of the New York Power Authority, whom politicians, reporters and residents have blamed for charging the city high electric bills, rendering the draw of cheap power obsolete. The New York State Office of Parks, Recreation and Historic Preservation, and especially the Niagara Frontier Parks Commission (a division of the department), has also been blamed for placing souvenir stands, parking lots and restaurants within Niagara Falls State Park, which may have resulted in tourists not patronizing businesses in the city. Recently, state officials have been negotiating with state park and NYPA officials, such as Assemblyman John Ceretto of Lewiston asking the NYPA if they would nominate a resident of Niagara County to the Board of Directors, since the Robert Moses Niagara Power Project in Lewiston is the most profitable project undertaken by NYPA and generates the most power.

Local and state government officials have vowed to embrace the physical and cultural advantages that the Niagara region naturally possesses — whether speaking of the Niagara Gorge, burgeoning wine trail, historical landmarks, Little Italy Niagara or Niagara Falls itself. This move away from the city's industrial past to embrace a tourism-based economy has led the city to reinvent itself in marketing in recent years. In late 2001, the State of New York established the USA Niagara Development Corporation, a subsidiary to the State's economic development agency, to focus specifically on facilitating development in downtown Niagara Falls, NY. However, the organization has been strongly criticized for doing little to improve Niagara Falls' economy and generating no significant progress since it was founded.

The Falls' current development strategy is focused on a pragmatic approach to revitalizing vacant and underutilized buildings in the downtown area as high profile catalyst projects with real economic impact. But the cost to demolish the city's many abandoned buildings may make it impossible to address all the eyesores, according to officials, but some have criticized the city of wasting funds elsewhere. The opening of the new Conference Center Niagara Falls in 2005; the redevelopment of the historic United Office Building and The Niagara (hotel); the restoration of Old Falls Street, once the primary tourist thoroughfare downtown but reduced to a pedestrian mall; the redevelopment of the former Holiday Inn Select as a new Sheraton resort with several restaurants including the city's first Starbucks Coffee; and other attractions such as the planned Niagara Experience Center; and of course, the Seneca Niagara Casino, attempt to reposition Niagara Falls as a premiere destination.

The arrival of the Seneca Niagara Casino in 2002 was a major undertaking designed to renew in the city's downtown area. However as of late 2012 the anticipated economic renewal the casino was supposed to bring has not been felt in the local area to the extent previously envisioned.

Niagara Falls is currently visited by almost ten million people each year and is considered one of the United States' top ten tourist destinations. The official tourism promotion agency, Niagara Tourism and Convention Corporation (NTCC), was adopted in 2005. "The Mission of the NTCC is quite simple: to enhance the economic prosperity of Niagara County by promoting, selling and marketing the County as a premier destination for meetings, conventions and leisure tourism. While everyone agrees that Niagara Falls is the region’s main attraction, there are a plethora of other attractions that make Niagara USA such a special place to visit." The NTCC has launched several campaigns, domestically and internationally,to promote Niagara Falls Hotels, Niagara Attractions, and various events and festivals in Niagara County. The NTCC's efforts have also been criticized as the city continues to struggle financially and marketing efforts have not generated a significant turnaround. A recent audit also found millions of dollars of tax dollars spent by high-ranking NTCC officials on tuxedo rentals, trips to Europe and Asia, expensive meals and backrubs.

Despite all its efforts, Niagara Falls, NY struggles to keep up with its Canadian neighbor, Niagara Falls, Ontario which has a much more vibrant tourism industry and stronger economy.

From 1982 to 2000, a shopping mall called Rainbow Centre Factory Outlet operated downtown on city land leased to The Cordish Companies. The mall was built in an effort to revitalize the downtown. The owner, David Cordish, was criticized for not keeping the mall stores rented out but The Cordish Company criticized the City Government for not maintaining the building. Cordish eventually shuttered the building and stopped paying rent in anticipation that the company would be bought out of the lease. In October 2010, Cordish announced that he would donate the 300,000 sq ft facility to Niagara County Community College to assist in the college's development of a hospitality and tourism complex that would include all of the college's hospitality and tourism programs including culinary arts, baking and pastry, winery operations, casino operations, hospitality operations, and food and beverage management. The unique complex includes fully operational retail entities operated by the academic programs serving as internship/practice sites for the students including a fully operational restaurant and lounge, Barnes and Noble boutique culinary bookstore, New York Style Deli, French Pastry Shoppe and a Wine Boutique. NCCC has set August 31, 2012 as the opening date/dedication of the 90,000 sq ft facility, giving the rest of it to the City of Niagara Falls to further develop it. Mr. Cordish also donated the one acre "balloon launch" property to the NCCC Foundation which then turned that property over to the city for future development.

There is also an outlet mall called Fashion Outlets of Niagara Falls, formerly "Prime Outlets Niagara", which is not actually part of the city, but of the town of Niagara, New York, which shares a post office with the city.

The Wintergarden was an all-glass indoor arboretum designed by Cesar Pelli adjacent to the Rainbow Centre and over Old Falls Street. It operated as an arboretum from its 1977 opening until 2003, when it was closed due to rising maintenance costs. The city then sold the structure to local developer Joseph Anderson, who operated it as Smokin Joe's Family Fun Center from 2003 to 2007. It was demolished in 2009 in order to improve vehicular and pedestrian traffic on Old Falls Street.