Syracuse Billion

Syracuse Agenda

Syracuse Billion - Syracuse Agenda

Overview Focus on Infrastructure

Projects
CNY Natural Chilled Water Project
and Water Main Replacement

Syracuse Broadband (1 Gbits/s) Network

Interstate-81 Reinvestment Fund

Road Reconstruction

World Market Square

Say Yes to Education Endowment

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Exhibits
A Assessing the Feasibility of a Central New York
Naturally Chillded Water Project

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B CenterState New York Agenda for Economic

Opportunity

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C Initial Feasibility Analysis of a Community Owned

and Operated Telecommunications Network in
Syracuse, NY

68

D Bloomberg Philanthropies Mayors Challenge

Syracuse, NY World Market Square

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November 2014

Overview Focus on Infrastructure

The Mayors Office in City Hall is located in the back side of the building; not in a turret, and not on a
high floor to provide a memorable view. No, in fact, it is fair to describe my office as squirreled away on the
second floor back corner with ordinary windows showing a slightly elevated street view of a city working.
I often find myself looking out those windows to try and find extraordinary solutions to our challenges.
Perhaps, the greatest and most preeminent challenge facing us is to develop ways to foster economic growth
for our entire community.
Sadly, for most of our recent history, Upstates economic vitality has sputtered. While the data clearly
establishes this, none of us need to see the data because we live it every day children moving away,
traditional jobs disappearing, and once-proud economic giants gone. In the face of wave after wave of bad
economic news, many have conversely pinned their hopes on one silver bullet strategy after another that
would surely be transformational. Yet, for those of us who live here, we have seen no transformation.
While this question of how to create a prosperous future may seem like it is something unique to us, it is
not. Each of the generations that preceded us too faced the same challenge lots of problems and strained
resources. Despite that, though, they seemed to rise to the occasion and left us with a history of wide-spread
economic growth. One day as I was looking out the window, I realized the difference was not the questions
they faced, but, rather, how they chose to answer them. Where I once saw a rather mundane world of people
going about their business, I now see an historic system of the public investments which allowed Syracuse to
grow and prosper.
We all know the Erie Canal, the engineering marvel of the 19th Century, put Syracuse on the map. What
often gets lost in the story is, at its most basic level, the Erie Canal was a huge, unprecedented investment
in infrastructure. It was an investment that transformed the Upstate economy and, in the process, our
entire countrys future. And, our leaders did not stop there; instead, they built one engineering marvel after
another: a gravity fed water distribution system from Skaneateles to Syracuse which continues to deliver
such high quality water there is no need for a filtration plant and roads that could withstand the harshest of
elements. So what started with the Erie Canal became roads, water mains, and communication systems; in
short, infrastructure for an entire community that ignited growth. Surely, it is not a coincidence that as we
failed to invest and update our infrastructure, our economy started floundering too.
So while we find ourselves mired in the seemingly unanswerable quandary of how to build a successful
city for all, the answer is really all around us and, in my case, right outside my window infrastructure.
Our history establishes investing in infrastructure builds useful and cost-effective public improvements
allowing for economic growth for everyone. Infrastructure does more than simply support basic needs,
it facilitates interactions, communication, and the sharing of ideas all of which are fundamental to
innovation and economic growth. And, infrastructure gives everyone an opportunity to utilize the good
rather, than picking winners and losers.
Clearly, infrastructure has a critical role in a citys success in providing energy, water, and transportation.
Not unimportantly, these are improvements that make it easier for business to create jobs. The Syracuse of
tomorrow must have a plan to build and maintain itself as a center of innovation and growth. The only way
to do this is to invest in infrastructure. By doing so in a smart and strategic way, we will be able to stimulate
economic growth, improve social mobility, and have long-term competitiveness.
Accordingly, if the City of Syracuse were to have access to a billion dollars this is how the money should
be invested to foster growth and ensure a bright future.

Projects
CNY Naturally Chilled Water Project ($125M)
and Water Main Replacement ($726M)
Construct a Central New York Chilled Water Cooling System to use
naturally chilled water from Skaneateles Lake to cool buildings in Syracuse.
The CNY Naturally Chilled Water Project would update and add to Syracuses existing water distribution
infrastructure, adding a system which would cool buildings using water from Skaneateles Lake as opposed
to electricity. Similar infrastructure projects are currently in use at Cornell University and the City of
Toronto. The State University of New York College of Environmental Science and Forestry and a host of
qualified experts found such a project to be viable. A copy of the Executive Summary of the Feasibility
Report, dated April 13, 2011, is attached as Exhibit A.
The cooling requirement for most large buildings in Syracuse is supplied by mechanical chillers. These
mechanical chillers are powered by electricity and the annual costs for the CNY region are approximately
$6.5 million. Moreover, New York State imports approximately 12 percent of its electricity. Energy
generation from renewable sources like water reduces dependency on imported energy, reduces greenhouse
gas emissions, and improves urban resiliency in the face of fluctuating commodity prices and natural
disasters.
In 2013, the Brookings Institution and a number of CNY regional organizations engaged in a datadriven research process to design a comprehensive, strategic approach to assess the regions challenges
and align its assets and draft strategies for success. The result was the CenterState New York Agenda for
Economic Opportunity, which presented several strategies to push the region forward in the transition to
its next economy. (Attached as Exibit B.)
This seminal report found that many of the [CNY] firms that make up thermal and environmental
control systems trace their roots to the Carrier Corporation. The report further stated that these firms
specialized in areas relating to heating and cooling, water filtration, and commercial and residential control
systems. And, importantly, these fields are seeing significant growth and offer opportunities for the
region. Moreover, the report found that the Region Holds Strong Potential to Excel in New Technology
Fields, including: specializing in equipment to monitor and control energy use and environmental
quality. And, also, there is rising global demand and opportunity for thermal and environmental control
systems. Given the Regions abundance of water, the alignment of intellectual resources, and the existing
infrastructure, building a naturally chilled water system would be transformational.
As the feasibility report makes clear, Skaneateles Lake is both large and deep enough to provide a
reliable source of naturally chilled water. A new deep water intake structure would need to be built, but the
system could use existing city pipeline segments where appropriate and available. A heat exchange facility
a location for a device to transfer heat from one fluid to another would need to be built on existing
(Syracuse) Water Department property as well as a closed loop pipeline system. Potable water would be
pumped to existing City reservoirs after thermal harvesting.
This system would give Syracuse a competitive advantage by lowering utility costs and allowing the
same water to be sold twice once for potable use as is done now and also for cooling use. By replacing
2

mechanical chillers with less energy intensive and renewable sourced water, Syracuse could offer lower
utility costs, reduce strain on the electricity grid, and significantly reduce our carbon footprint.
At the same time the CNY Naturally Chilled Water Project is being built, the opportunity to rebuild the
aging water system should be seized. Since much of the same footprint and infrastructure would be utilized
or updated, it only makes sense to rebuild the water main system. Syracuse's water system is well over
100 years old. In previous years, water main breaks only occurred in the winter months with the shifting
of temperatures. This past summer, emergency crews were out every night for a three week period fixing
water breaks. What once was a seasonal repair is now becoming a year-round repair. We are on the pay
as it breaks approach. Utilizing a dig once philosophy, the mains would be replaced and updated to add
sensors to track usage, efficiency, and resiliency. The Syracuse water main system has 550 miles of main and
the industry standard for replacing mains in $1.32 million per mile, which includes labor, materials, and
restoration. Given the current age of the water main system and the disinvestment in infrastructure, these
pipes will all eventually have to be replaced.

Syracuse Broadband (1 Gbits/s) Network ($84M)

Construct a municipally-owned fiber network to 42,000 parcels in Syracuse
to enable Fiber to the Premise (FTTP) providing 1 gigabit per second (Gbit/s)
ultra-high-speed internet service.
High speed internet is necessary infrastructure for our community to thrive and succeed. The internet
has been referred to as the electricity of our generation, as such, those communities without fast, reliable and
affordable service will be left behind economically, socially and culturally. Unfortunately, the private sector has
failed to meet this need. Verizon offers its high-speed offering Fios only into extremely limited areas of the
City of Syracuse and even when it does it is cost-prohibitive.
Syracuse has already recognized the importance to its future of being able to offer high-speed, reliable
internet service. An Initial Feasibility Analysis of a Community Owned and Operated Telecommunications
Network in Syracuse was conducted in September 2012. (A copy of the Report to MetroNet and the Syracuse
Community Broadband Initiative is Attached as Exhibit C.) This report presented a business plan and a
corporate structure to provide Syracuse: universal affordable access, superior service, and accelerated economic
development. Syracuse has followed-through on the recommendation of the report by bringing together a
working group of experts to advance this project through the next steps.
The importance of high-speed broadband offering to our Citys future is becoming more and more evident.
Recently, I was told that two companies specializing in visual effects came to Syracuse to investigate locating
some of their operations here. They toured the city and liked the space they looked at downtown, the people
they met at Syracuse University, and the potential collaborations they could do with the University. Their biggest
obstacle was that the nature of their business requires high speed broadband connections to send large files.
Verizon quoted $10,000 a month for the service, which was cost-prohibitive. Additionally, there was another
instance where a business that wanted to expand in downtown Syracuse could not because of the lack of highspeed internet service. These instances will surely become more and more common as all types of businesses
begin to require affordable, higher-speed service.
This point was made in September of this year when Fitch upgraded Kansas City's bond rating and cited
the Citys internet offerings as grounds for the upgrade. "Kansas City is a host city for Google Fiber, which is
an ultra-high-speed broadband network up to 100 times faster than current broadband. The network is already
attracting a number of smaller internet and data companies to the city and has the potential to make a significant
economic impact. Governor Cuomo recognized this when he announced a Broadband Initiative stating,
broadband availability is going to be what the interstate road system was in the 50s, The way you needed road
access and access to basic utilities to do business, electric and phone, youre going to need access to broadband if
youre going to be competitive.
Indeed, our progress as a region should be limited only by our intellectual capacity and ideas, not by the
speed and volume with which we exchange and share our data.

Interstate-81 Reinvestment Fund ($3.66M)

Support local planning and development efforts that
enhance the positive impact of the I-81 project and strengthen the
viability of Syracuses urban core.
In the months ahead the New York State Department of Transportation (NYSDOT), in partnership with the
Federal Highway Administration (FHWA), will be continuing its planning process for the future of the Interstate
Route 81 corridor through the City of Syracuse. The highways elevated viaduct is reaching the end of its useful
life, and a decision must be made as to what will be constructed to succeed it. While the future of the I-81
viaduct is unclear, with no alternative yet selected, New York State and our local community must be thoughtful
about the sort of future we want for the center of the Greater Syracuse area. For Syracuse, this is perhaps
the most significant planning decision of our generation. The ramifications for our regional transportation,
economic, environmental and social systems will be significant.
The overall project cost, including engineering, design, construction, inspection, as well as various related
environmental, cultural and other mitigation efforts, is expected to exceed $1 billion. While the completion of
such a large project will be a feat for the state and federal agencies involved, a truly successful outcome must
involve a holistic approach inclusive of support for local efforts that create a sustainable trajectory for our
urban center as a whole. Success is more than a new transportation solution. Long-term success means being
equipped with the capacity to effectively stimulate private sector reinvestment and job-creation, provide safe and
welcoming community gateways, and foster beautiful, engaging and dynamic urban places in and around our
downtown.
With the goal of capitalizing on the I-81 opportunity to strengthen Syracuse and Central New York, this fund
will support the City of Syracuses efforts to:
Conduct land use planning, zoning and urban design activities
Maintain, beautify and program public spaces
Program, manage and market redevelopment opportunities
Planning and installation of world-class public art
Planning and installation of various interventions that highlight our history and cultural heritage
Expand or improve various infrastructure networks, including but not limited to water, sewer, road,
parking, lighting, pedestrian, bicycle, stormwater management and information infrastructure
Market Syracuse and its urban core area as a great place to live, work and locate or expand a business

Road Reconstruction ($48M)

Provide resources required to upgrade Syracuses heavily traveled
road network to support local quality of life and economic activity.
Syracuses roads face some of the toughest punishment imaginable. With the highest average annual snowfall
in the state, and one of the highest in the nation, winter subjects our road network to incessant freeze-thaw
cycles, and the constant punishment of salt and plow blades. Our challenges with water and sewer infrastructure
cause our roads to heave, crumble and undergo excavation that leaves them with the scars of work that make
them further prone to degradation. In the context of our ongoing fiscal storm, maintaining a road network that
keeps Syracuses economy moving is daunting. Support for basic infrastructure is critical to fostering economic
stability and growth in Syracuse and in New York State.
The cost per mile to reconstruct a city street is $1.5 million. Over the past three years the City has budgeted
$3 million dollars a year for road reconstruction. Prior to that, the budget was $5 million. With less money, fewer
streets have been repaved.

World Market Square ($3.34M)

In order to expand CNYs skilled workforce, build a resource center focused
primarily on the burgeoning immigrant and refugee populations that will:
(1) offer training and small business development assistance;
(2) assistance to provide services necessary for new Americans to
transition from surviving to thriving; and,
(3) house a marketplace for new Americans to showcase their local
goods with a global influence.
Syracuse, New York, like most post-industrial cities, was battered by deindustrialization and suburbanization
in the late 20th century. As of the 2010 Census, however, Syracuses population had begun to stabilize, largely
due to an influx of New Americans, particularly the 8,000 refugees who have been resettled here since 2001.
Our New American populations bring vitality and hope, but they also face intense challenges (over 50% live
below the poverty line). Yet New Americans often thrive when given tools and opportunities, while their
children commonly excel in city schools. Translating this potential into a force for long-term change is a defining
challenge for Syracuse in the 21st Century.
In order to prosper, our Region must retain and expand a skilled workforce and, in order to accomplish
this, the Centerstate Agenda for Economic Opportunity found the Region should invest in programs that drive
economic entrepreneurism and innovation, as well as strengthen the human capital pipeline, particularly in
communities of need. World Market Square would meet these criteria as well provide catalytic support and

training to our most underutilized assets our New Americans. (World Market Square was a Top 20 Finalist in
the Bloomberg Philanthropies Mayors Challenge in 2013. A copy of the proposal in attached as Exhibit D).
The project will be placed within our Northside neighborhood, an historic gateway for New Americans
from the original Germans and Italians to todays refugees and immigrants who come from more than 30
countries. A microcosm of Syracuse, the Northside struggles with poverty and blight but also has tremendous
assets - including a major hospital, historic businesses, and distinctive architecture. These are building-blocks
for the Northsides comeback, which is evident in new commercial investments and a slowly returning middle
class. Yet the Northsides greatest asset largely remains uncultivated: a diverse and dynamic population longing to
pursue their aspirations.
Our intention for World Market Square is to harness the energy of our community and unleash it into the
neighborhood and our City. A dynamic nexus of culture and opportunity, it will radically improve quality of
life on the Northside empowering residents, filling vacant storefronts, and restoring vitality to a once-great
urban district. The Square will be strategically located within a prominent site linking the Northside to St.
Josephs Hospital, Downtown Syracuse, and Interstate-81. The Squares anchor will be The Marketplace a large
indoor commercial space, featuring local products with a global influence (similar to Midtown Global Market
in Minneapolis), which will employ residents while allowing them to work towards their own entrepreneurial
ambitions. A resource center, featuring classrooms and program spaces, will be connected to The Marketplace.
Adjacent to these buildings, a plaza will serve as a community gathering place. A community-driven design
and planning process will ensure that World Market Square is a place that reflects the diverse identities of
neighborhood residents.
More than just physical places, these spaces will be animated by people and unique programming that
fosters community vitality. Opportunity Enterprises (OE) will offer three tracks designed to increase prosperity
and civic engagement among community residents. The Employment program places residents on career
paths within local industries by offering intensive industry training and work readiness. An expansion of
dramatically successful pilot programs (90% placement rate) in health care and construction, these employercustomized trainings will now be available in locally-expanding industries such as financial services, hospitality,
culinary, and advanced manufacturing.
Entrepreneurship programs will offer aspiring business owners the tools and resources they need while
insuring a steady income as they learn. To do this, we would create social enterprises, informed by rigorous
market research and planning and developed to offer products and services that are relevant to a broad audience
(a component inspired by Homeboy Industries in Los Angeles). Aspiring entrepreneurs will be employed in
these enterprises, while receiving hands-on management practicum. Outside the workday, they will partake in
a suite of services that include business planning, entrepreneurship training, mentorship/technical assistance,
financial counseling/credit building, and product innovation.
The Marketplace will feature both start-up businesses and notable regional businesses that come with
established customer bases. A suite of Empowerment programs will be integrated with Employment and
Entrepreneurial programs as well as offered to others in the community. Designed to enhance residents quality
of life and foster civic engagement, we will offer classes in homebuyer education, financial capacity building,
citizenship, and community leadership.
World Market Square will have a transformative impact on the City of Syracuse by empowering people,
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enlivening place, and fostering possibilities. The idea has strengths within each of the overarching types of
innovation but is especially innovative as a New Program. The project represents a strategic integration
of people-centered and place-based development. When we invest in place without engaging and providing
opportunities for residents on the frontend, the result is either prolonged market weakness or gentrification.
Meanwhile, providing economic opportunities for low-income individuals, without addressing their
neighborhoods, results in people leaving for elsewhere once they can afford to do so. World Market Square
charts a different course by empowering Northside residents, economically and civically, and then creates
incentives for individuals to remain and invest in the neighborhood. This innovation will increase prosperity,
maintain diversity and draw visitors from the region and beyond, and it will inform strategies for achieving the
same dynamic in other neighborhoods, both in Syracuse and throughout the country.

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Say Yes to Education Endowment ($10M)

Ensure financial sustainability for the Say Yes to Education program, giving
countless Syracuse school children greater opportunity to achieve their academic
potential, attend college and find pathways to success.
Strengthening the available workforce is a regional goal here in Central New York. In the Centerstate CEO
New York Agenda for Opportunity, the regions business, governmental and civic leadership noted that In
addition to skills, the current geography of economic growth limits access to opportunity, particularly in older
urban neighborhoods. Centerstate supported a strategy to strengthen human capital, specially, through
community initiatives focused on raising education attainment across the board, with particular focus on lowerperforming school districts and ground-breaking initiatives such as Say Yes to Education.
Syracuse was the first city in the nation to partner with the national Say Yes to Education Foundation.
The goal is to assure every graduate of City of Syracuse high school with guaranteed tuition to one of nearly
100 colleges and universities. In addition, the school district with its city, county and Syracuse University has
developed and funded a variety of new programs to help every child reach graduation.
The Central New York region is working to fund scholarship promise with an endowment. To date,
approximately half of the $20 million to permanently fund the endowment has been raised. An investment of
$10 million would complete that work, and send an immediate message to families that a college education
awaits a Syracuse child regardless of income if they stay in school.
Say Yes is already showing results in Syracuse. Since 2009, more than 2,600 Syracuse City School District
graduates have enrolled in college using Say Yes supports. For those attending public colleges and universities
the Say Yes Endowment, Say Yes foundation and individual donors have provided more than $4.5 million in
direct tuition assistance. In addition, $406,000 in aid has been provided to those attending private colleges in the
Say Yes Higher Education Compact. As of June 2013, nearly 90% of Say Yes Syracuse Scholars attending private
colleges and universities advanced from freshman to sophomore year a critical measure of persistence and a
predictor of graduation. More than 250 Say Yes Scholars have graduated from four-year colleges and universities.
Through a groundbreaking collaboration between the City of Syracuse, Onondaga County and the Syracuse
School District, students and their families are offered a wide variety of help to address problems hindering
academic performance. After issues are detected at the school level, counselors reach out, often visiting parents at
home, to address issued that are keeping children from attending and succeeding in the classroom.
There are now mental health clinics in 23 schools in the Syracuse City School District, allowing clinicians
to provide critical services during the school day and on site, preventing lost instruction time. In 2013 alone,
the in-school support collaboration served 603 families, providing help to 748 parents and guardians and 1,623
children.
Other facets of the community have joined the effort to help children and families succeed. More than 300
attorneys have provided pro bono legal services as part of the Say Yes Legal Clinics. With the support of the
Volunteer Lawyers Project and the Onondaga County Bar Association, the clinics provided a direct benefit

12

to 231 Say Yes Syracuse families representing 442 children and 345 adults. In 2013, Say Yes Syracuse families
received legal assistance through housing court. This program benefitted 464 adults and 797 children facing
eviction, keeping them out of emergency housing and saving Onondaga County thousands of dollars per family.
Say Yes, the school district and Syracuse Teachers Association have developed after school and summer
programs intended to enhance academic success.
In 2013, more than 4,100 Syracuse City School District students participated in after school programs. Since
2009, Say Yes to Education, the SCSD, the STA and community-based organizations have provided summer
academic programs for 2,000-3,000 students per year with a focus on English Language Arts and Mathematics.
As a part of this program, approximately 200 college students, many of them Say Yes Scholars, work leading
activities in arts, crafts, music and sports.
Say Yes offers students in the Syracuse City School District free SAT Preparation classes. In the 2013-2014
school year, more than 450 students participated in the classes, which are held in collaboration with 100 Black
Men and are taught by tutors from Syracuse University.
Staff from Say Yes, with help from OnPoint for College, Hillside-Work Scholarship Connection and the
Financial Aid Counselor Network, provide support to students and families who need help completing the
FAFSA form for financial aid by offering FAFSA nights at area high schools. More than 500 students attended
these events in the 2013-2014 school year.
All of these programs are aimed at one goal to help Syracuse students graduate from high school and attend
college.

13

Exhibit A

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Exhibit B

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c e n t e r s tat e
N e w Yo r k
Agenda for
Economic
Opportunity
E x e c uti v e

M E T R O P O L I T A N

S ummar y

B U S I N E S S

P L A N
47

C e n t e r S tat e N e w Y o r k A g e n d a f o r E c o n o m i c O p p o r t u n i t y
A M e t r o p o l i ta n B u s i n e s s P l a n
p r e pa r e d i n c o l l a b o r at i o n w i t h
T h e B r o o k i n g s I n s t i t u t i o n M e t r o p o l i ta n P o l i c y P r o g r a m
N ov e m b e r 20 1 3
The generous financial support of the following regional partners made this project possible:
CenterState CEO
City of Syracuse
Onondaga County
Onondaga Civic Development Corporation
Syracuse University
Mohawk Valley EDGE
The Community Foundation of Herkimer and Oneida Counties, Inc.
Central New York Community Foundation, Inc.
National Grid
Welch Allyn
The Allyn Foundation
Seneca County IDA
Central New York Technology Development Organization
Operation Oswego County
The Gifford Foundation

Clarkson University | Cornell University | Syracuse University | the CNY Regional Planning and Development Board | the Syracuse
Center of Excellence | Onondaga County | the City of Syracuse | Saab Sensis Corporation | SUNY Environmental Science and
Forestry | Mohawk Valley Edge | Excellus BlueCross BlueShield | Tompkins County Area Development | Welch Allyn | KS & R |
M & T Bank | CNY Community Foundation | Bristol Myers Squibb | Bousquet Holstein PLLC | SUNY Upstate Medical University |
the Gifford Foundation | Cayuga Community College

Brookings Institution Metropolitan Policy Program 2013

48

c e n t e r s tat e
N e w Yo r k
Agenda for
Economic
Opportunity
A M e s s a g e f r o m t h e C e n t e r S tat e N e w Y o r k R e g i o n

ver the last decade, the CenterState region bore witness to manufacturing decline, the
Great Recession, and a long, sluggish recovery. These realities have created new competitive dynamics that now demand new interventions. The imperative we face is to carefully
craft strategies to transform our unique strengths into globally competitive assets.
The CenterState Agenda for Economic Opportunity responds to that imperative. Steeped

in extensive data analysis, it reflects more than two years of work. It drew from the engagement of hundreds of stakeholders across the region as well as national experts. Anchored in the commitment to grow
opportunity across the entire twelve-county region, together we designed a comprehensive, strategic
approach to make the most of our opportunities and address our challenges.
CenterState CEO convened leading institutions from the public, private, and non-profit sectors to guide

development of the Agenda for Economic Opportunity. A steering committee composed of representatives from business, government, philanthropy, and education worked in collaboration with the Brookings
Institution Metropolitan Policy Program and RW Ventures as part of a national pilot. Battelle Technology
Partnership Practice provided extensive assistance, along with KS&R, which expanded input from regional
stakeholders through an interactive on-line forum.
The work proceeded in tandem with the New York State Regional Economic Development Councils. It
drew extensively from the unprecedented public input and planning by the Central New York, Southern
Tier, North Country, Finger Lakes, and Mohawk Valley Regional Economic Development areas, all of which
include some counties in the region.
We are grateful to all of our partners for the time, resources, and insights they provided. But publication of the Agenda marks only a beginning as it inaugurates a new approach to economic development
and a new way of doing business centered on closer coordination and collaboration across the region. It is
intended as a living document that will grow and change as new partners become engaged and new opportunities and challenges arise.
It will only gain traction with the support of citizens and leaders, however. As a region, we must continue
to think through the value proposition we offer to the global market. We need the involvement of many
more citizens and organizations to carry out the strategies presented here and to expand their reach to
push the region forward in the transition to its next economy.
We invite you to join with us.

CENTERSTATE
n ew yo r k
ag e n da fo r
Eco n o m i c
o p p o rt u n i ty

1
49

Introduction

lobal economic forces buffeted Central Upstate New York

over the closing decades of the last century, eroding its traditional industrial base and economic vitality. For more than

a decade, regional partners have worked collaboratively to strengthen

the regions knowledge assets and define a new economic profile for
the new century.
Today, the region is in transition. Investments to
spur entrepreneurial activity have generated new

tion and establish a new center of gravity for the next

energy and opened new pathways. Cities and town

economy.

centers are seeing new vibrancy, and universities

BROOKINGS
M e t r o p o l i ta n
POLICY
PROGRAM

work to further the regions economic transforma-

The region possesses significant assets for that

and other anchor institutions are investing to attract

purpose: emerging and established technology sec-

knowledge workers and firms. Local government lead-

tors, enhanced infrastructure for innovation, expand-

ers are testing new approaches to gain efficiency and

ing entrepreneurial networks, and an extraordinary

cost effectiveness.

network of 35 colleges and universities that give the

Building on that momentum, the Agenda for

region one of the highest concentrations of college

Economic Opportunity charts a next phase in the

2
50

students in the nation.

CenterState New York is a 12-county region that includes the Syracuse,

Ithaca, Utica/Rome, and Watertown metropolitan areas. Treated as one region, it
equates to the 55th largest region in the country, home to 1.5 million people, with total employment of just
over 650,000 and economic output of $62.9 billion in 2012.

At one time, the regions natural resources pro-

industrial land and buildings. Since the beginning

vided the foundation for its economy, advanced in

of this century, total economic output in the region

the early 19 Century by the Erie Canal and growing

increased 11.8 percent, well below the national aver-

demand for its products up and down the Eastern

age of 19.7 percent. The regions productivityor out-

th

Seaboard. The Syracuse area became a great manu-

put per jobof $91,105 is rising but registers slightly

facturing center, attracting major firms and large pro-

below the national average of $96,024. Productivity

duction plants. Ithaca grew around Cornell University;

in the Syracuse region is notably higher than the

Utica/Rome became a center for U.S. Air Force opera-

national average, however, at $102,900.

tions and research. Farmland and the waterways of

Employment in the region did not fall as drastically

Lake Ontario and the St. Lawrence River defined

during the Great Recession as it did nationally, but

Watertown and the North Country.

it dipped again over the last year. And the average

It was a region of educators, farmers, and makers,

with original equipment manufacturers providing

wage of $39,660 is almost 20 percent lower than the

national average.

business and civic leadership. Over the last decades

Poverty rates in some areas have risen signifi-

of the 20 century, new service sectors grew up, but

cantly with high concentrations in both urban and

many large manufacturers closed production plants

rural areas. In the city of Syracuse, 38 percent of

or left the region. That decline continued through the

residents live below the poverty line, among the high-

decade of the Great Recession, when another

est concentrations of poverty in the country.

th

40 percent of its manufacturing base decamped.

Decades of de-industrialization left a region of

Beneath those troubling indicators lie others that

CENTERSTATE

hold more promise: the potential for a next economy

n ew yo r k

older cities, small towns, and rural communities char-

and renewed competitive strength based on capaci-

ag e n da fo r

acterized by low wages, long-term unemployment,

ties in regional firms that have emerged from legacy

Eco n o m i c

hollowed out urban neighborhoods, and obsolete

manufacturing sectors and defense research. n

o p p o rt u n i ty

3
51

T h e C e n t e r S tat e R e g i o n L a g s t h e N at i o n i n M o s t C r i t i c a l
I n d i c at o r s o f E c o n o m i c P e r f o r m a n c e
1. Change in Economic Output, 2000-2012 compared to national average
25.0%
United States 19.7%

20.0%
15.0%

CenterState, NY 11.8%

10.0%
5.0%
0.0%
-5.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2. Change in Employment, 2000-2012 compared to national average

5.0%
4.0%
3.0%
2.0%

United States 1.3%

1.0%
0.0%

CenterState, NY -0.8%

-1.0%
-2.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

3. Change in Output per Worker, 2000-2012 compared to national average

$100
United States $96.24

$95

CenterState, NY $91.15

$90
$85
$80
$75

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

4. Change in Household income, 2000-2012 compared to national average

$55
$50

United States $49.20

$45
BROOKINGS
M e t r o p o l i ta n

$40

CenterState, NY $39.66

$35

POLICY
PROGRAM

$30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Brookings analysis of Moodys Analytics, U.S. Census, and American Community Survey data

52

The Next Economy

fundamental transformation is underway in the global economy, where knowledge assets centered in people and technology are prized and concentrated in metropolitan areas.

The rise of technology, innovation, and globalization are changing the

dynamics of productivity and economic growth. Market dynamics are

Photo courtesy of: CCEO

more fluid and geared to reward continuous innovation in products,

production techniques, and business models.

CENTERSTATE
n ew yo r k
ag e n da fo r
Eco n o m i c
o p p o rt u n i ty

5
53

The global economy is rapidly evolving toward

Additionally, the agenda is committed to inclusive

even greater integration as well, with goods, services,

growth and the expansion of opportunity to all parts

talent, capital, and supplier relationships seamlessly

of the region, recognizing that, in a metropolitan

crossing national boundaries. Metropolitan regions

economy, the prosperity of all communities and

have emerged as the vital hubs of these activities, the

populations is inextricably linked. Reversing the

engines and essential units of the new economy.

impact of long-term job losses, low growth rates, and

This more dynamic environment demands a new

rising poverty is not only a matter of equity: inclusive

approach to economic development: one that is

growth is good for business. Regions that develop and

anchored in a deep understanding of the regions

deploy more of their total human capital, land, and

market assets and challenges, focused on carefully

production assets do better in the long run than those

calibrated strategies built on strengths and designed

that do not.

to foster a culture of collaboration between public

and private sector institutions and leaders.

For more than a century, CenterState New York

represented a production center fueled and driven

Regions with the greatest capacity to think strategi-

by innovative entrepreneurs and skilled workers who

cally, act globally, and build on their unique strengths

created and built the legacy industries for which

will forge ahead in this new environment. Those that

it became known. Its challenge going forward is to

dont will fall further behind.

re-create an ecosystem that is as supportive of new

entrepreneurial energy and innovation but focused on

E s ta b l i s h i n g a N e w
C e n t e r o f G r av i t y

21st century industries, technologies, and skills.

This new reality shaped the Agenda for Economic Op-

thirteen sectors identified as pivotal to its economic

portunity developed through the metropolitan busi-

health and prospects. Accounting for a third of all

ness planning process. It is a business plan in the best

employment, eight of those sectors are more highly

sense of the term: Objective and based on rigorous

concentrated in the region than across the country.

data analysis, it evaluates the regions strengths and

Six are in manufacturing, which are tradable sectors

weaknesses along five mutually reinforcing market

(those that bring outside resources into the region

levers that, when aligned, drive productivity and

rather than serving only local markets) and exert

prosperity.

strong multiplier effects throughout the economy.

The regions current industry profile encompasses

Among the five market levers, the regions eco-

Those include biomedical, clean technology, digital

nomic clusters, or concentrations of related indus-

and electronic devices, metals production and manu-

tries, and the quality and effective deployment of its

facturing, packaging, and precision metalworking.

human capital, along with its capacity for innovation,

The regions best promise for the future lies beyond

impact the productivity of firms directly. The quality

those traditional industry classifications, however.

of government and civic governancethe cross-sector

At the points of intersection between its technology,

networks that enable economic activityalong with

production, human capital and innovation capacities

the built environment and the regions physical form

lies the potential to establish a new center of gravity

create underlying conditions that support or hamper

in emerging markets and new products. n

The long-term strategic actions proposed in the

Agenda for Economic Opportunity represent tangible
steps designed to build momentum and synergy to
enhance those capacities in the region. It is grounded
BROOKINGS

in market realities and confronts head-on the chal-

M e t r o p o l i ta n

lenges facing the region. It recommends eight inte-

POLICY
PROGRAM

grated strategies and three ambitious initiatives as a

first wave of implementation.

6
54

Photo courtesy of: Jeff Kulikowski

growth.

Key Findings:

xtensive market analysis conducted over the last two years

produced key findings with clear implications for redefining
the regions economic profile for the knowledge economy.

It identified new areas of strength and understanding of its competitive assets. It also crystallized points of weakness and challenges that
the region must confront in order to establish that new economic profile. The full market analysis that produced the Agenda for Economic
Opportunity can be read at www.centerstateopportunity.com

Key findings critical to shaping the Agenda for

currently use and offer opportunities for dramatically

Economic Opportunity include:

expanding markets for this potential global specialization in D2D technologies. Those sectors include

Key Finding:
The Region Holds Strong
Potential to Excel in New
Technology Fields

digital electronics primarily in defense and aerospace

applications, equipment to monitor and control
energy use and environmental quality in buildings,
diagnostic and remote monitoring technology for
healthcare, and information technology for data man-

Data to Decisions Offers a

Platform to Establish a Globally
Competitive Niche in Rapidly
Developing Fields

agement, analysis, transmission, and security.

Sectors that have D2D components represent a
highly innovative part of the CenterState economy,
accounting for nearly half of all patents generated in

From across several of the regions most prominent

industry concentrations, at least 50 technology companies create and build systems or components for
an emerging field identified as Data to Decisions,
or D2D.
Along with cutting-edge researchers in the regions
universities and labs, D2D firms share expertise in a
variety of fields involved in the processing of massive
flows of information to manage increasingly complex systems in real time. They possess world-class

the region in recent years, including many that have

capabilities in sensing technology, signal processing,

emerged from the United States Air Force Research

CENTERSTATE

cybersecurity, systems integration and engineering,

Laboratory in Rome, which is a powerhouse of

n ew yo r k

data mining, and decision support.

enormous importance for the region. Major universi-

ag e n da fo r

ties also play an active role in development of this

Eco n o m i c

specialized knowledge, particularly Cornell, Syracuse,

o p p o rt u n i ty

This group of firms employs more than 9,000 workers, and overlaps with closely related sectors which

7
55

Key sectors Using

T ec h n o lo gy:
Digital Electronics
Information Systems
market growth and offer opportunities for the region.

Medical Equipment and Applications

Another small but significant cluster centers on the

Environmental Products

rapidly evolving field of cybersecurity, working primarily with the U.S. Air Force Research Lab in Rome.
The challenge for those firms is to move beyond
and Clarkson whose faculties are leading regional

defense contracting to enter the private market,

generators of D2D intellectual property, indicating

which is expected to double by 2017.

strong potential for new ventures based on cuttingedge research.

In another key area, rising global demand for food

and energy offers opportunities for growth in the

Building on these capabilities, D2D represents an

regions strong biosciences sectors, with implications

exciting platform upon which to establish a globally

for agriculture and natural resources. The recent

competitive niche for the region in market sectors

boom in the dairy industry that created thousands of

that are growing and expanding rapidly.

jobs in the production of yogurt illustrates the poten-

The potential impact of that specialized niche goes

tial in new agricultural techniques and products.

beyond the D2D cluster itself with the prospect that

building world-class capacity in D2D applications will
strengthen the competitive positions of four larger
clusters that D2D serves: digital electronics, information systems, medical equipment and applications,
and environmental products.
Developing this platform requires a multi-pronged

Key Finding:
The Growth in Global
Markets Can Boost the
Regions Exports and Global
Fluency
While many of the CenterState regions economic

approach to fuel innovation and growth in the D2D

strengths are rooted in major multi-nationals and

cluster, particularly the formation of new partnerships

globally competitive firms, as they relocated produc-

to adapt technologies and product to new markets

tion away from the region global market orientation

across sectors. It requires complementary action to

waned. In an increasingly global economy, and with

strengthen the involvement of the regions research

consumption expected to more than double in emerg-

centers to build overall capacity for innovation and

ing markets by 2025, the CenterState region must

simultaneously build a competitive workforce in

become more globally fluent.

Currently, the region exports approximately

these fields.

$8.7 billion annually to international markets with

Rising Demand Offers

Opportunities for Targeted
Technology Sectors

firms in emerging technology sectors playing signifi-

Among tradable sectors in the regions top concen-

must boost its orientation to international markets

trations, three in particular are experiencing rising

and ramp up exports.

cant roles. But that total represents only 11.5 percent

of the regions total economic output. The region

global demand and new market opportunities. Two

Many of the regions most significant technology

of themthermal and environmental control systems

sectors and clusters present compelling opportuni-

and cybersecurityoverlap with the D2D cluster. The

ties for expanding the regions global reach. Products

region must also recognize ongoing investment in

and services related to the Data to Decisions cluster,

computer chip manufacturing and R&D facilities in the

agribusiness, clean technologies, higher education,

town of Marcy and at Cornell University.

Many of the 40 firms that make up the thermal
and environmental control systems cluster trace their
BROOKINGS
M e t r o p o l i ta n

roots to the Carrier Corporation. They occupy a wide

variety of specialty niches related to heating and cool-

POLICY

ing, water filtration, and commercial and residential

PROGRAM

control systemsall fields that are seeing significant

8
56

Global fluency is defined as the

level of global understanding
in a region, its competence,
level of practice, and reach into
world markets in an increasingly
interconnected global economy.

Entrepreneurial Networks
and Programs:
Syracuse Student Sandbox
Emerging Business Competition
Startup Weekend
Startup Labs
Grants for Growth
healthcare and engineering all represent areas for

Tech Garden

potential expansion in the global marketplace.

Syracuse Center of

On another front, not all parts of the region are

Excellence

attracting foreign-born workers at adequate levels, or

CNY Biotech Accelerator

retaining the international talent that earns degrees

Rehs Center for

in the regions universities.

Entrepreneurship at Clarkson University

Thrive Incubator at SUNY Oswego

Key Finding:
T h e R e g i o n s I n n o va t i o n
Ecosyst e m I s St i l l
Emerging and Requires New
Investment

Cayuga Venture Fund

EDGEcellerator
Shipley Center for Innovation at Clarkson
University

The regions investments over the last decade to

renew its entrepreneurial ecosystem catalyzed

annual funding, plus $800 million through the Rome

more than a hundred companies now involved in its

Air Force Lab. Further, industries in the Syracuse

networks and a growing base of entrepreneurs and

region appear to be investing in research and develop-

startup firms. Through these programs the region is

ment, indicating that closer alignment between firms

identifying small businesses with high growth poten-

and the regions research institutes could generate

tial and connecting them to the resources they need

greater economic impact.

to grow and stay within the region.

Those investments represent only a down payment
on the long-term strategy to rebuild the regions inno-

Key Finding:

CenterState economy, as well as strengthening other

T h e R e g i o n M u s t R e ta i n
a n d E x pa n d A S k i l l e d
Workforce to Grow Economic
Opportunity

aspects of the innovation ecosystem.

The CenterState region is a strong talent generator

vation capacity. The next stage requires new vehicles

for investment in companies with significant potential to support their sustained contribution to the

A snapshot of the Syracuse region shows that

the rate of new business formation still lags behind

with its exceptional concentration of colleges and

universities enrolling approximately 140,000 students

national averages for larger metropolitan regions.

and awarding thousands of degrees each year. Yet

Venture capital flow into the region averaged $27 per

one of the regions greatest challenges lies in meeting

capita over the last decade compared to $933 per

the need for higher-skilled workers for the knowledge

capita in larger regions. Between 2005 and 2008,

economy.

firms in the region attracted a cumulative total of

Disruptions in the regions labor markets over sev-

only 0.1 percent of the $2.8 billion invested annually

eral decades created long-term unemployment and

by venture capital firms located in New York State,

limited opportunities for many workers. As a result,

CENTERSTATE

prompting a series of studies that have described the

the regional workforce today is both older than the

n ew yo r k

region as a venture capital desert.

national average and actually smaller than it was five

ag e n da fo r

years ago, dropping from slightly above 720,000 five

Eco n o m i c

years ago to just over 700,000.

o p p o rt u n i ty

The region boasts an exceptional research base

in its universities and institutes with $600 million in

9
57

Education levels in the region remained virtu-

accessible on public transportation. National compari-

ally unchanged during those years, with high school

sons have identified the Syracuse area as one of the

attainment rates above the national norm but college

most racially and economically segregated regions in

attainment slightly below the national average. The

the country.

presence of so many college and university students

complicates an accurate assessment of education
levels and skills in the workforce, but what is known is

Key Finding:

with graduate degrees, resulting in the loss of nearly

T h e 2 1 st C e n t u r y R e q u i r e s
Modernizing Local
G ov e r n m e n t

3,600 potential higher-skilled workers.

The next economy favors regions that are highly

that between 2006 and 2010, the region experienced

a net annual reduction in the number of residents

The skills gap spans the full spectrumfrom the

networked with fluid movement of goods, people, and

challenge of recruiting and retaining the most highly

ideas. It favors regions in which both government and

educated workers, to shifting demand for middle

civic governance are transparent, open, and adept at

skill workers, to effective entry and re-entry portals

working collaboratively across sectors. The Center-

for workers struggling to gain a toehold in the new

State region faces formidable challenges in this area

economy. National estimates are that half of all new

largely related to the structure of local government

jobs over this decade will require middle skillsmean-

and tax climate.

ing some postsecondary training but not necessarily

The region has nine times the average number of

a degreeincluding technical jobs that form the back-

governmental units per capita compared to the larg-

bone of the knowledge economy.

est U.S. metropolitan areas. National comparisons

also rank the tax climate in New York State among the

In addition to skills, the current geography of

economic growth limits access to opportunity,

worst, with a combined state and local tax burden that

particularly in older urban neighborhoods and rural

is the second highest in the nation as a percentage of

income. Property taxes in five counties in the region
are among the highest in the nation as a percentage
of home values.
Local government leaders in Onondaga County
have taken initial steps to address this critical issue
through the consolidation of some agencies and
services, and they support the need to bring about
further change.
In addition to cost and efficiency, the large number
of government jurisdictions also complicates decision-making in critical areas, such as investments in
infrastructure. CenterState faces significant needs to
upgrade infrastructure for the 21st century, including
utility systems, electricity transmission, air service,
freight capacity, and the extension of broadband in
rural areas. n

areas. Traditional urban-suburban growth patterns

BROOKINGS
M e t r o p o l i ta n
POLICY
PROGRAM

characterize the region, along with small towns and

rural areas. Center cities are experiencing a resurgence that is an asset in the knowledge economy, but
newer job centers have developed in areas not easily

10
58

AGENDA FOR ECONOMIC OPPORTUNIT Y

ased on these findings, the Agenda for Economic Opportunity

recommends eight strategies designed to drive growth, build
synergies across the region and create a new center of grav-

ity for the next economy.

CENTERSTATE
n ew yo r k
ag e n da fo r
Eco n o m i c
o p p o rt u n i ty

11
59

S t r at e g y 2 :
Strengthen the Regions
Position as a Leader in
Cyb e r s e c u r i t y, T h e r m a l
a n d E n v i r o n m e n ta l C o n t r o l
Sy s t e m s , a n d A g r i b u s i n e s s
The regions strong natural resources, 21st century
manufacturing sectors, and capacity for research and
technology development position it for growth but
require sustained focus on key tradable sectors. To
that end, the region will:
Accelerate the Growth of the Thermal and Environmental Control Systems Cluster, particularly
the regions small and medium-sized firms
Establish the Region as a Center for Cyberse-

S t r at e g y 1 :

curity, maintaining the critical asset offered by

E s ta b l i s h t h e R e g i o n a s a
G l o b a l C e n t e r f o r D ata t o
Decisions Firms, People, and
Ideas
The businesses that form the emerging D2D cluster

the Rome Laboratory and assisting the industry to

enter new markets such as finance and healthcare
Grow Agribusiness, Bioscience and Natural Resource-based Industries leveraging the regions
logistics capabilities, land and water resources,

have individual market opportunities for growth but

aligning research and technology development

a potentially larger opportunity exists for the region

to support innovation in agriculture and other

to carve out a specialized niche in the application

industries.

of technologies across multiple sectors. To pursue

that opportunity as a platform for growth, the region
will undertake a multi-pronged approach: develop a
cluster with world-class capabilities, provide a skilled
workforce, and create stronger connections to the
regions formidable research institutions:
Establish the Data to Decisions Innovation Alliance with the mission to grow and expand the
cluster and related innovation capacity across the
region
Create a Skills Broker to match pre-qualified
candidates with job openings in the D2D cluster
and technical fields
Position the Region as a Leading Center for D2D
Research through Stronger Linkages between
this critical growth sector and the regions universities and research institutes.
BROOKINGS
M e t r o p o l i ta n
POLICY
PROGRAM

12
60

Photo courtesy of: Boyce Thompson Institute

particularly high-skilled positions in engineering

S t r at e g y 5 :
D e v e lo p E m p loy e r - D r i v e n
Approaches to Align
Workers and Jobs
Higher skills command higher wages and drive economic growth. Meeting the regions pressing need to

S t r at e g y 3 :

increase the talent and skills of its workforce requires

Grow Exports and Foreign

Direct Investment

expanding the portfolio of education support, effec-

With 95 percent of the worlds consumers living out-

tives and aligning them with targeted growth sectors.

side the United States, the region must strengthen its

To strengthen the human capital pipeline and skills at

presence in the global marketplace and grow exports.

all levels, the region will:

First steps:

Establish a Demand Aggregator to catalyze an

Implement the Metropolitan Export Initiative to

double regional exports in five years
Support Immigration Reform to increase opportunities for international students to work in the
region
Seek Foreign Direct Investment to attract new
sources of capital.

tive workforce training, and talent attraction initia-

employer-driven workforce development system,

beginning with the proposed skills broker for firms
in the D2D cluster
Strengthen the Human Capital Pipeline through
community initiatives focused on raising education
attainment across the board, with particular focus
on lower-performing school districts and groundbreaking initiatives such as Say Yes to Education

S t r at e g y 4 :
Build Out a World Class
E c o s y s t e m f o r I n n o va t i o n
and Entrepreneurship

Build on Existing Efforts to Engage, Retain, and

Attract Talent by expanding successful programs,
particularly those focused on younger workers.
Expand training programs that address the issue

The region must take to the next level its agenda to

of re-connecting low-income workers to new eco-

develop a robust innovation ecosystem by enhancing

nomic opportunities, such as Green Train, Health

the range of capital resources available to entrepre-

Train and Visions for Change.

neurs and building stronger connections between the

regions research institutions and firms in its critical growth sectors. In addition to the pilot for D2D
research described above, the region will:
Create a Regional Seed and Venture Fund
Build the Entrepreneurial Ecosystem by expanding incubation space, strengthening support for
student entrepreneurship, and forging stronger
relationships between entrepreneurs and mentors.

CENTERSTATE
n ew yo r k
ag e n da fo r
Eco n o m i c
o p p o rt u n i ty

13
61

 Enhance Transportation to Employment Cen-

S t r at e g y 6 :

ters particularly those with high concentrations of

Set Priorities for

Infrastructure
Investments and
I m p r ov e m e n ts

entry-level and middle-skill jobs

Develop and Promote Market Rate Housing and
Urban Infill through programs such as land banks
Implement Onondaga Countys Sustainable

In an era of limited resources, the

Growth Plan and encourage development of simi-

region must set priorities among com-

lar plans in other counties.

peting needs for investments in 21st

century infrastructure. Top priorities
should include:
Attract New Air Service to reduce costs and
increase available flights
Develop an Inland Rail-Freight Port and Upgrade
Capacity of the Port of Oswego
Create a Transformative Approach to Renovate
the I-81 Viaduct in Downtown Syracuse
Enhance Transit Services linking neighborhoods
to job centers
Support Extension of Broadband into the North
Country and underserved rural areas
Support Infrastructure Upgrades by helping communities locate new sources of funding.

S t r at e g y 7 :
C u lt i va t e O p p o r t u n i t y R i c h
Environments
The smaller metropolitan and rural areas that make

S t r at e g y 8 :

workers that drive the next economy. Among ap-

Build Effective Public

and Civic Institutions and
C u lt u r e

proaches to consider are initiatives designed to:

Community structures for making decisions, respond-

Leverage Anchor Institutions in higher educa-

ing to changing economic conditions, and delivering

up the CenterState region require different approaches to create communities that attract the firms and

tion, healthcare, and the arts as key partners for

critical public services must be nimble and effective.

jobs and community development

To lay the groundwork for proposing improvements

Strengthen the Job Pipeline in Communities of

to local government structures in the region, regional

Need through neighborhood-based training and

leaders should undertake to:

strong linkages to employers with middle-skill jobs

Develop a Government Modernization Commission for Onondaga County viewing it as a pilot for
other counties
Support Regional Economic Development Councils as powerful drivers of economic development
Support Citizen-Driven Solutions by making government data publicly available and encouraging

BROOKINGS

innovative, citizen-driven solutions.

M e t r o p o l i ta n
POLICY
PROGRAM

14
62

Implementing Action To Build the

Next Economy

year of operation, the Alliance will enroll a hundred

The Agenda for Economic Opportunity offers a road-

companies and generate up to fifty deal matches

map for the region to adopt a shared vision for the fu-

annually. Its activities will grow sales for member

ture, align priorities, organize collaborative action, and

companies by more than $20 million annually, and, by

engage a widening circle of leaders and stakeholders.

its tenth year, twenty new firms will exist as a result of

The leadership team that oversaw development of

the Agenda is committed to continuing its work, guid-

Conservative projections indicate that by its fifth

its work.
The expectation is that the Alliances impact will

ing and honing its strategies, and translating strategy

expand geometrically as it develops cross-sector

into action. CenterState CEO will serve as the hub

partnerships among firms that use D2D technology

and guardian of the Agenda, taking responsibility for

in digital electronics, information systems, medical

implementation of its first wave of initiatives, securing

equipment and applications, and environmental prod-

resources, and expanding the circle of engaged part-

ucts clusters.

ners throughout the region. It will establish and track

Transferring knowledge and technologies among

performance metrics and report progress, monitoring

several of the regions most significant production

regional economic output, job growth, wages, produc-

sectors will create competitive advantage as a global

tivity, and poverty rates to measure impact.

center for D2D, leading to the establishment of new

An immediate step will involve integrating the

firms and products, creating new jobs, and providing

Agenda with the work of major partners, begin-

global leadership for research, people, and companies

ning with the five Regional Economic Development

in these important sectors.

Councils that include counties in the region.

implementation the region will strengthen its tech-

Create a Regional Seed and

Venture Fund

nology sectors, build out its innovation ecosystem,

With an initial capital call of $15 million and a goal to

and launch development of a pragmatic approach to

raise up to $40 million, the new regional Seed and

modernizing local government.

Venture Fund will close a significant gap in capital

Across three critical fronts, in the first wave of

infrastructure to support entrepreneurs and early-

Establish the Data to Decisions

Innovation Alliance

stage firms.

The Data to Decisions (D2D) Innovation Alliance will

the fund will work with entrepreneurial networks

create a membership-based, business-driven entity

throughout the region, targeting companies seeking

that will serve as a hub for firms and entrepreneurs

private financing in the $500,000 to $2 million range

involved in all aspects of this rapidly evolving field.

for expansion or growth. It will focus on firms in the

In partnership with a committee of leaders from

firms in Data to Decisions sectors and advised by a

Operating in alignment with CenterState CEO,

region although it will not be restricted to regional

firms or target industries.

panel of industry experts convened online, Battelle

business plan for the Alliance that is available at

Establish a Government
Modernization Commission

www.centerstateopportunity.com.

A Commission on Government Modernization will

Technology Partnership Practice has drafted a full

Its mission will focus on forging connections across

explore approaches for improving local government in

industries to advance the D2D cluster through market

Onondaga County and propose a practical plan, based

scouting and deal matching, supporting new product

on public input and rigorous analysis of the costs and

development within companies, and new venture

benefits of existing government structures.

development. Implementation will require intense

The Commission will evaluate government modern-

CENTERSTATE
n ew yo r k

engagement with D2D businesses, the entrepreneurial

ization efforts around the country to develop recom-

ag e n da fo r

ecosystem, and resources for commercialization and

mendations for improving the delivery of services and

Eco n o m i c

research.

increasing cost effectiveness. n

o p p o rt u n i ty

15
63

A Call to Action

enterState New York holds the potential to change its eco-

nomic trajectory, overcoming the losses of the past decades

and establishing the region as a global center for innovation

and technology in emerging knowledge industries.

The Agenda for Economic Opportunity is ambitious and comprehensive and will require sustained, focused effort backed by significant
resources. CenterState CEO and its partners will take the lead in communicating the plan and pushing forward the work already underway to
launch three lead initiatives.
The ultimate success of the Agenda is up to the region. It must make

underway, expanding the reach of collaborative action, and undertaking significant new initiatives to change the regions economic path.
Working together, its leaders and key institutions can redefine the
BROOKINGS
M e t r o p o l i ta n
POLICY
PROGRAM

regions economic profile and establish a new center of gravity for the
next economy. n

16
64

Photo courtesy of: Boyce Thompson Institute

the commitment to stay the course, building on initiatives already

C e n t e r S tat e N e w Y o r k A g e n d a f o r E c o n o m i c O p p o r t u n i t y
A M e t r o p o l i ta n B u s i n e s s P l a n
p r e pa r e d i n c o l l a b o r at i o n w i t h
T h e B r o o k i n g s I n s t i t u t i o n M e t r o p o l i ta n P o l i c y P r o g r a m
N ov e m b e r 20 1 3
CenterState CEO
City of Syracuse
Onondaga County
Onondaga Civic Development Corporation
Syracuse University
Mohawk Valley EDGE
The Community Foundation of Herkimer and Oneida Counties, Inc.
Central New York Community Foundation, Inc.
National Grid
Welch Allyn
The Allyn Foundation
Seneca County IDA
Central New York Technology Development Organization
Operation Oswego County
The Gifford Foundation

F o r M o r e I n f o r m at i o n
David Mankiewicz
Senior Vice President Infrastructure and Urban initiatives
CenterState CEO

Photography: Corbis and istockphoto

dmankiewicz@centerstateceo.com

Clarkson University | Cornell University | Syracuse University | the CNY Regional Planning and Development Board | the Syracuse
Center of Excellence | Onondaga County | the City of Syracuse | Saab Sensis Corporation | SUNY Environmental Science and
Forestry | Mohawk Valley Edge | Excellus BlueCross BlueShield | Tompkins County Area Development | Welch Allyn | KS & R |
M & T Bank | CNY Community Foundation | Bristol Myers Squibb | Bousquet Holstein PLLC | SUNY Upstate Medical University |
the Gifford Foundation | Cayuga Community College

65

Ab o u t t h e B r o o k i n g s Rockefeller Project on
s tat e a n d m e t r o p o l i ta n
i n n o va t i o n
This is part of a series of papers being produced
by the Brookings-Rockefeller Project on State and
Metropolitan Innovation.
States and metropolitan areas will be the hubs of
policy innovation in the United States, and the places
that lay the groundwork for the next economy.
The project will present fiscally responsible ideas
state leaders can use to create an economy that is
driven by exports, powered by low carbon, fueled
by innovation, rich with opportunity, and led by
metropolitan areas.

Acknowledgments
The Brookings Metropolitan Policy Program thanks
the Rockefeller Foundation for support of this work.

Brookings
1775 Massachusetts Avenue, NW

Brookings also thanks the Metropolitan Leader-

Washington D.C. 20036-2188

ship Councila bipartisan network of individual,

telephone 202.797.6000

corporate, and philanthropic investors that provide

fax 202.797.6004

it financial support but, more importantly, are true

web site www.brookings.edu

intellectual and strategic partners.

The Brookings Institution is a private non-profit

organization. Its mission is to conduct high-quality,
independent research and, based on that research,
to provide innovative, practical recommendations
for policymakers and the public. The conclusions and
recommendations of any Brookings publication are solely
those of its author(s), and do not reflect the views of the
Institution, its management, or its other scholars.

telephone 202.797.6139
fax 202.797.2965
web site brookings.edu/metro

Support for this publication was generously provided by the

Rockefeller Foundation.
Brookings recognizes that the value it provides to any
supporter is in its absolute commitment to quality,
independence and impact.

66


67

Exhibit C

68

Draft

Sep 30, 2012

Initial Feasibility Analysis of a Community Owned

and Operated Telecommunications Network in
Syracuse, NY
Provided to:
MetroNet and the Syracuse Community
Broadband Initiative

Conducted by:
ValleyNet Inc.
415 Waterman Rd
Royalton, VT 05068

Matrix Design Group

11 Melanie Lane
East Hanover, NJ 07936

69

Table of Contents

1.

Overview

2.

The Project

3.

Business Plan

4.

Financial Pro Forma

10

5.

Corporate Structure and Governance

13

6.

Financing

15

7.

Regulatory and Contractual Issues

18

8.

Timing and Next Steps

19

9.

Conclusion

20

Attachments:
A. Capital Expenditure Budget

21

B. Financial Highlights

22

C. Network Map

23

D. Network Diagram

24

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Overview
This document responds to a request by Syracuse MetroNet and the Syracuse Community Broadband
Initiative (SCBI) for a preliminary analysis of the feasibility (technical, financial and operational) of a
community owned and operated telecommunications network that will serve the City of Syracuse, NY.
The analysis outlines a project concept that the authors believe is consistent with the objectives of the
project sponsors (MetroNet and SCBI) and includes a baseline business and financial analysis of the
viability of such a project. The project concept is to build and operate a community-owned and
operated Fiber-to-the-Premise (FTTP)1 network reaching all of the City of Syracuse that is not already
served by existing FTTP networks. The analysis presented in this paper is based on conservative
assumptions about the principal parameters and a corporate structure that builds upon that of the
existing MetroNet and the SCBI. The paper concludes that from a technical, financial and business
perspective the proposed project is strongly viable in principle. Actual performance will depend more
on the soft questions of corporate organization and governance, the quality of management and
oversight, etc. The authors believe that these issues are likely to present the greatest challenge and to
have the greatest impact on outcome.

A. Project Purpose
Local telecommunications infrastructure is crucial to the social, economic, and democratic health of
our community. In the 21st century and beyond telecommunications infrastructure is equal in
importance to public roads, water, power and other utility services. As technology progresses and the
diversity of telecommunications services grow, the importance of the quality of the telecommunication
network will also grow. As with other basic infrastructure and utilities it is becoming increasingly
clear that local communitiesespecially those that do not lie in the major metropolitan areascannot
rely on private corporations to build, expand and update telecommunications infrastructure in a manner
that is optimal for the well-being of the communities themselves. Faced with this fact, more and more
communities are concluding that telecommunications infrastructure must be provided in the context of
a public utilitypossibly one owned by community institutions. This bridge has been crossed many
times before: water, fire, schools, public transport and even electricity were once the exclusive
province of private enterprise. Over long periods of time, however, it became clear that such vital
common good could often be better provided by local community entities. This is not universal: many
local governments choose to provide these services but in other places they are provided by private
companies. However, the fact that there are numerous public providers has provided a powerful and
effective check on the behavior of private monopolies (and vice versa). Diversity and competition
impose discipline on all players. Such competitive discipline is increasingly necessary in the US
telecommunication markets because the utility structure that once existed in the sector has eroded badly
(where it still applies) and, more importantly, has not been extended to the rapidly growing nontraditional areas such as Internet, cable TV etc. This erosion of public utility discipline is unusual in
the extent and degree that has occurred in the USA compared to other industrialized countries. This is
one of the reasons why the US is falling behind other industrialized (and some middle-income)
countries in the quality and availability of the most modern telecommunications. This is to be
1
The following terms are considered to be functionally equivalent: Fiber-to-the-Premise (FTTP), Fiber-to-theHome (FTTH), Fiber-to-Anywhere (FTTX). FTTP is used in this report but any of the others could be used
interchangeably.

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expected: deregulated private for-profit companies have never been good at providing critical services
which exhibit public utility characteristics.
As the public utility framework for telecommunications has eroded in the USA, services in those
regions and communities which are not considered sufficiently profitable and attractive by deregulated
providers, have stagnated and declined the most relative to their more fortunate neighbors. This is
having palpable and damaging consequences for the prosperity and vitality of the affected
communities. In the face of this processand of Federal and (often) State indifference to it--more and
more local communities are deciding to take matters into their own hands.
As a result, local community participation in telecommunicationsespecially the new segments of
the sector--is established and growing throughout America. There are, of course, wide differences in
the degree and form such participation takes. But even where private companies remain dominant, the
fact that a public option is available and proven creates a degree of competitive discipline over private
companies which is salutary from the perspective of consumers and communities. Competition by
potential entry is as effective when the entrant is a possible community entity as it is when the entrant
is another private companyand, in the utility field, probably more so. Local community
involvement in telecommunications is growing precisely because telecommunications is becoming so
important and because US private providers are failing to keep pace with the needs of communities.

B. Potential Project Benefits

A community-owned network has the financial obligation to pay its costs and its debt but does not have
to satisfy Wall Street or pay large dividends to distant stockholders. As such, it can more easily commit
itself to traditional public utility goals of universal service, affordable rates and open access. By
introducing competition into a local telecom market which, in Syracuse, like most US communities, is
dominated by two quasi monopolies, it will tend to reduce prices and improve services for customers of
incumbents as well as for customers of the new public network. Other benefits of a public network
include:
Superior Services A state-of-the-art Fiber-to-the-Premise (FTTP) network can provide superior
service and more service options than the incumbent networks based on older technology. A part of
Syracuse already experiences this through the Verizon FiOS infrastructure. But Verizon has decided to
cease the build-out of FiOS in Syracuse. This leaves most of Syracuse struggling with lesser services.
Universal Affordable Access A commitment to provide access to all homes and businesses in the
City at cost-based public utility prices
Wireless Service The ability (and plan) to inexpensively add City-wide WiFi service to compliment
and to provide ubiquitous access to the fiber network
Public AccessMore PEG channels; vastly improved public access studio, video production
equipment, and programming support
Better City Schools Ability to provide innovative learning programs, services, and student

72

experiences, in school and at home, made possible by an inexpensive and ubiquitous high-speed
network
More Efficient Government Ability for local government, police, fire, and EMT to adopt new and
low- cost telecommunication solutions due to the state-of-the-art infrastructure and technology
convergence opportunities it provides
Richer Cultural Development More local TV programming, greater exposure to local cultural
events, and low-cost TV ads to promote local events
Accelerated Economic Development Other small and medium sized cities that have built
community FTTH networks (e.g. Chattanooga, TN; Lafayette, LA; Bristol, VA) have seen their
networks attract new businesses and entrepreneurs seeking low-cost, very high-speed broadband
services. Syracuse can expect the same benefits, i.e., local jobs for S-Net services, localized network
revenue for additional job stimulus, ultra-high-speed network infrastructure or research in high
bandwidth community applications and other network hardware and software productsa major new
asset for local universities (research) and hospitals (telemedicine development)
Underpin MetroNet and its members A long-term solution to replace MetroNets expiring low-cost
network services; and new freedom for MetroNet to add new members at low rates, or change service
locations without forfeiting its low ratesas is the case today.
Beyond these specific benefits, Syracuse stands to gain significant intangible benefits. For example, the
lower prices could save the community $5$10 million, and eventually $20$30 million, per year,
which, as effectively new disposable income, the new spending would stimulate 400600 new jobs
locally. Also, the national publicity gained by creating a city-wide community owned Gigabit network
will give Syracuse the reputation of a modern and progressive and technology savvy city, and will
surely help attract people and businesses to Syracuse and its suburbs.

The Project
In order to test feasibility, it is necessary to specify the hypothetical project to be tested. For this
purpose, we have created a proposed project based on the meetings and discussions with MetroNet,
SCBI and other parties in Syracuse that we have met through these two primary sponsors. Based on
these meetings and our experience elsewhere, we have created a project proposal that consists of
building and operating a state-of-the-art last-mile optical fiber telecommunications network, from here
on referred to as "S-Net" (for Syracuse Fiber Network). S-Net would provide the standard
compliment of retail services for residents and small businesses: TV, Internet, phone, and related
services. In addition, S-Net will provide extra high-speed (Gigabit per second - Gb/s) connections and
dedicated circuits as may be required by local government, institutions, and major businesses. Finally,
S-Net will be an Open Access network which permits and welcomes other providers of services of all
kinds to use its fiber system to reach customersincluding services that compete with S-Nets own
final services. Third party service providers will be charged for the use of the network on a nondiscriminatory basis which enables them to compete fairly with S-Nets own services while still
ensuring that S-Nets infrastructure costs are covered. Security services, medical monitoring,

73

education, smart-home energy management etc are some examples of services that S-Net may not
offer itself but will welcome others to offer over its network.
The overall vision of the project is to build a city-wide network passing all households, businesses and
institutions. However, Phase 1 of the project--whose feasibility is being tested heredoes not attempt
to cover the entire city immediately. Instead, Phase I consists of two parts:
a) A local Fiber-to-the-Premise (FTTP) network covering approximately 34% of Syracuse with the
priority given to areas not currently served by other fiber networks. Further expansion would
continue based on logistics, demand and financing. Given time, Phase I it is expected that S-Net
would generate enough internal surplus cash flow to finance expansion covering the entire city;
however, this feasibility test contemplates it growing only to the point where it covers the
approximately 75% of the City which is not served by another FTTP network. Whether or not to
expand beyond is a decision left to the future.
The technology proposed for the initial deployment, Gigabit Passive Optical Network (G-PON),
would provide 100 Mb/s down and 50Mb/s up connectivity to every subscriber passed by the
network who wishes to connect to the network. However, this can be upgraded easily and
efficiently to Gigabit service when demand so justifies. In the meantime, Gigabit service can be
provided on a customized basis to anyone who wishes it.
b) An "institutional network" (I-Net) to serve the members of MetroNet, which includes local
government, school district, hospitals, colleges, and several non-profits. This network can be
provided as a VLAN (as exists now) or as dedicated circuits to each user for maximum
flexibility to choose the form of connectivity delivered (e.g. dark fiber, Gigabit Ethernet etc),
The enterprise services described for the I-Net will also be available to business customers who
may require them and have sufficient in-house capability to manage high capacity connectivity
for their own purposes. Ultra-high Gigabit service will be obtainable throughout the network.
S-Net is the name given to the two portions of the network (I-Net and FTTP) combined.

74

The Business Plan

Attached is a summary pro-forma of the proposed networks expected financial performance. As can be
seen, S-Net is expected to generate positive operating profits in the third year after financial closing,
and positive net earnings and operating cash flow in the fourth year. These are consistent with the
performance achieved by other similar municipal/community non-profit networks that have begun
operations in the USA over the last decade. Once S-Net achieves positive overall cash flow, subsequent
surpluses will be available to extend the network inside Syracuse and, if desired, to surrounding
territories. Further comments on the assumptions and characteristics of the proposed S-Net network
work are:

Network Extent
The model is based on the estimates that the combined Phase I network will involve 150 miles of cable,
of which an estimated 135 will be aerial and 15 will be underground. This cable will pass
approximately 20,600 households (including those living in both single and multi-family dwellings)
and 1,780 business/institutions.

Services
S-Net is planned as a full-service provider and intends to offer: a) basic connectivity of various forms to
final customers; b) the normal menu of retail triple-play services (TV, Internet, and phone) and related
services and features; and, c) transport capability to other service providers on a non-discriminatory
basis. Other services, such as specialized business telephony, video-conferencing, home/building
security, smart home, gaming services, distance education, telemedicine etc., will also be provided, but
may come from third parties who contract to use S-Net to deliver their services or by S-Net itself, or
both.
Independent service providers who wish to utilize S-Net to access customerseither for services not
offered by S-Net itself or in competition with S-Nets core offerings--will be welcome. Pricing for
access to the underlying transport capability of S-Net by third party providers will be on a nondiscriminatory, cost-determined basis.

Institutional Network
I-Net, the institutional component of the S-Net, would offer pure connectivity as desired by the
customer; e.g.: dark fiber, Ethernet connectivity of any desired speed, traditional circuits (T-1, DS3,
etc). It would also offer retail services if desired (e.g. TV, Internet access, and phone, etc.) However,
S-Net is not envisioned to necessarily be a provider of a full line of business services on its own
account. Rather, for complex business service needs, it is assumed that institutional customers may
prefer a combination of self provisioning and specialized third party providers whose services would be
delivered over either the I-Net or the FTTP final-mile distribution system.

Pricing and Financial Performance

75

S-Net would be designed and intended to be financially self-supporting: i.e. no subsidies or financial
support are needed or envisioned from the City or the taxpayers of Syracuse. As such, pricing would
be set on a commercial basis and designed to cover all costs and to yield a modest surplus determined
by the desire to fund: i) further network expansion; ii) network related community services and
resources; or, iii) other community- determined purposes. Because of the greatly superior capacity and
economic performance of fiber networks, plus the cost savings associated with non-profit operation,
prices are expected to be lower than other operators in the service territory currently charge for
comparable services. However, it is quite possible that other service providers will lower their prices
when faced by competition by S-Net. If this occurs, the consequent reduction in monopoly rents
currently being reaped by incumbent carriers will be one of the benefits that the community at large
gains from the project, all thanks to the existence of S-Net

Open Access
S-Net will be an open access provider. This means that, while offering retail services itself, it will
also make the network available to any other service provider on a non-discriminatory basis. To this
end, S-Net will unbundle different components of its services in a manner designed to be both: a)
transparent; and, b) to recover all costs for each element from the prices charged for that element. For
example, voice and video service to residents will contain two elements: i) the cost of the access pipe
required to deliver the service; and, ii) the cost of the voice and video services themselves, net of the
underlying transport pipe.
The prices will be set such that each covers its own costs. As a result, should a customer (or another
video provider) wish to utilize S-Net to access alternative video services they could do so by
purchasing the access pipe only without being at an unfair competitive disadvantage to S-Nets own
video services.

Universal Access
S-Net will initially be built-out to cover approximately 34% of the City, with simultaneous emphasis on
reaching all MetroNet members, serving all residential and business customers passed by the network
that serves MetroNet members, and reaching out to additional neighborhoods that have neither current
access to fiber connectivity nor lie on the fiber routes that reach MetroNet members. Within the
targeted service area, the network will provide universal service. As the network matures, It is expected
to expand throughout the rest of the city.

Notes on the Financial Pro-Forma

Capital Costs
Phase I is expected to be complete approximately 24 26 months after a firm decision is made to
proceed. Assuming such a decision is made in late 2012, this would imply the end of 2014 for Phase I
completion. Total capital expenditure (CapEx) for Phase I is estimated to be approximately $29.8

76

million, including a 7% contingency. The resulting network of 150 cable miles is estimated to pass
just under 21,700 residential, business and institutional potential subscribers. Assuming a conservative
take rate of 25% by the end of 2014, this gives an average of approximately $1,400 per passing and
$5,722 per connected customer as of the end of the 2014. These measures will decline thereafter as
more customers are connected to the Phase I network and (if/when) the network is extended beyond the
initial 150 miles. By 2017, for instance, it is projected that approximately 7,200 customers will have
been connected and the CapEx per customer will be approximately $5,000
The major components of CapEx are (not including 7% contingency):
a. Fiber infrastructure: The complete cost of fiber construction for Phase I (i.e. 110 miles of
combined I-Net and FTTH plus another 40 miles of FTTH only, including design, pole makeready, trenching and boring, all material, etc) passing approximately 21,700 subscribers of all
types is estimated to be about $11.3 million .
b. Electronics: Central Office (CO) switches, routers and servers to support connectivity and
deliver Internet and voice telephony is estimated to cost approximately $1 mm. The G-PON
access system including equipment in the CO and remote hubs and at the customer premises is
estimated to cost approximately $500 per customeror $2.7 mm for 5,400 subscribers expected
to be connected by the end of 2014.
c) Video: A video head-end and associated satellite receivers would cost approximately $2.4
mm. Obtaining and paying for video content contracts is costly and time-consuming. Monthly
payments for video content are high and rising. Given the uncertain future of the cable industry
and video services in general, serious consideration should be given to making an arrangement
with an existing video provider somewhere in the region to supply video content under that
carriers own brand in return for a negotiated monthly fee per customer. However, the capital and
operating costs of providing video services under S-Nets own brand are included in the financial
analysis because it may be necessary to provide these services directly.
c) Customer connection: In Phase I, 5,400 customers are expected to be connected at a cost of
$4.1 mm
d) Buildings: It is assumed that a combined headquarters and central office space can be
acquired for $2.25 mm and that $500,000 will be required to adapt it to
S-Net purposes. Another $600,000 is budgeted for remote, un-manned hubs located around the
city as needed.
e) Other: Vehicles, various computers, software, tools and other miscellaneous items are
expected to cost approximately $260,000.

Operating Costs
Key elements of operating cost include:

77

a. Cost of Goods/Services Sold (COGS): Cost of voice telephone related services (trunking, carrier
access, etc.), video services and Internet bandwidth are conservatively estimated to equal an
average of $28-30/month/subscriber or 18-20 % of gross revenues. Gross margin (Gross Revenues
minus GOGS) is expected to be in 2014 at 80% and to grow slowly thereafter.
b. Labor: Number of FTE employees of various skills per 1000 subscribers are assumed to parallel
other similar networks - declining from a high of 13 in the early start-up phase to a stable ratio of
just under 5. Wage rates are taken from similar municipal/community owned networks in the North
East. Senior managers will be expected and required to take an agreed portion (5%?) of their
compensation in the form of deferred subordinated debt during the first years of operation until the
network achieves positive cash flow.
c. Pole attachment fees/rental : Assumed to equal $17/pole per annum. This fee per pole is
characteristic of NE utility charges but since these vary considerably from jurisdiction to
jurisdiction, this parameter needs further verification.
d. Debt service: $40 million of debt @ 7.0% for 25 years with a one year payment holiday in the
first year and full interest and amortization over the following 24 years. Included in the borrowed
amount is a Debt Service Reserve equal to 10% of the principal amount. A key element in
obtaining the debt will be a pledge by MetroNet members to purchase a collective minimum of $2
million of services from S-Net. This constitutes approximately 50% of their estimated current
combined telecom purchases.
e. Taxes: The network would be exempt from most taxes but would make payments in lieu of taxes
(PILOT) to the City.
d. Other: Power, insurance, vehicle operations, professional services (including legal) etc. are
presumed to parallel other similar networks. A fee to the design/build/operate (DBO) contractor of
$20 per year for every paying customer connected at the end of the year is assumed. A contingency
allowance of 5% is assumed for the total of operating costs.

Revenues
Key elements of revenue projections include:
a. Take Rate: Take rate is the % of potential subscribers (households, businesses, institutions etc)
passed by the network who actually subscribe and become paying customers. For S-Net, residential
and small business take rates are assumed to parallel the low end of normal experience in other
municipal/community networks in the USA. This assumption has been chosen not because we
expect this to actually be the case but to ensure that the financial model has sufficient cushion to
assure potential lenders that the business model can sustain any adverse development that can
reasonably be anticipated. The model projects that 26% of passed residences and 12% of passed
businesses will have subscribed by the end of the second year, rising to 34% and 24% respectively
by 2017. These percentages are well below actual take rates in similar networks. Should actual

78

experience be closer to other networks, financial performance will be proportionately better than the
model predicts. MetroNet members, including the City, are assumed to subscribe to their
committed rate as soon as it is available.
b. Average Revenue Per User (ARPU): Pricing and service packaging would be aimed to yield
Average Revenue Per (connected) User at approximately 5% -10% below current prices for
comparable services. Revenue from the City and MetroNet is estimated based on existing
expenditures and pricingi.e. level pricing of existing services.

Corporate Structure and Governance

S-Net would be an independent non-profit corporation. Ideally, S-Net would issue tax-exempt bonds
through Syracuse Industrial Development Agency (SIDA), or Onondaga Civic Development
Corporation (OCDC). All funding would be raised from private sources. These lenders have a direct
interest in the network being run in a professional manner by an independent management team
authorized and required to adhere to commercial standards of efficiency and revenue generation. The
S-Net Board of Directors should be distributed between various community stake-holders and
representatives of the lenders. The entity would be required to provide annual audited accounts and
unaudited quarterly accounts to the Finance Committee of the Board. The exact form, distribution of
voting power etc. will have to be negotiated and made consistent with New York State Law. However,
a summary of the principles that should apply is as follows:
A. If possible, the charter should be structured such that the entity is eligible to raise funds in the taxexempt municipal market.
B. S-Net should be governed by a Governing Board appointed by selected community and civic
bodies, and the lenders. Total membership: in the order of 1520. The Board would meet quarterly for
the first 2 or 3 years, but would move to semi-annual meetings as the network matures.
C. The Board would appoint an Executive Committee of approximately 5 - 7 to carry out its functions
between Board meetings. The Executive Committee would include a Chair, Vice Chair, Secretary, and
Treasurer. All but the Treasurer would be required to be selected from members of the Board.
D. The Board would also appoint a Finance Committee to meet according to its own wishes. This
should include the lender representatives on the Board and the Treasurer;
E. The charter should mandate financial self-sufficiency and should convey upon all Board members
the requisite fiduciary responsibilities regarding the health and well-being of S-Net as an institution.
F. The Governing Board would function as the analogue to the shareholders of a normal corporation
and the Executive Committee would function as the Board of Directors. Neither would be directly
responsible for the actual construction and operation of the network;
G. The initial design, construction and operation of the network should be carried out by contracting
with an experienced third party (the DBO contractor). Once the network is sufficiently mature and

79

stable, the Governing Board may wish to consider transferring operating authority to its own
operational entity. (With this in mind, any contract with a third party should clearly specify the duration
and transition mechanisms that would be followed.)
H. In the meantime, the DBO contractor should be given clear authority to construct and operate the
network within the policy guidelines spelled out by the corporate Charter and the Governing Board and
Executive Committee. The latter should not benor try to bethe day-to-day managers of the
network. By the same token, the operator must not be allowed to undermine or pervert the basic
purposes and policies of S-Net Governing Board and Executive Committee.]

501(c)(12) Utility Service

One possible option for corporate form is a 501(c )12) non-profit. This mechanism offers a specific
and well-defined form of incorporation that is applicable to (indeed designed for) a public benefit
utility such as S-Net, a type of consumer cooperative2. Such an entity is normally viewed by the IRS
and state Public Service Commissions as functionally equivalent to a public entity, and so granted taxexempt status and self-regulation, respectively. Such status may allow a 501(c)(12) to access the taxexempt municipal revenue bond market at interests rates close to direct municipal bond issuesthough
this status is not automatic and will require further research to confirm. Governance could be
structured as described above, except that the Governing Board (i.e. Board of Directors) would have to
be elected by member-patrons of S-Net. It is common for a Board of Directors, executive management,
and Bylaws to be formed provisionally until such time that operations are established and there is a
representative quantity of member-patrons to elect a Board and ratify the Bylaws.

80

Financing
The initial project outline that was developed for the purposes of this preliminary feasibility study
estimates that a total of $37.5 mm of outside financing will be required to build and operate S-Net to
the point where it achieves positive cash-flow and is able to sustain itself entirely. Of this sum, $1
million is assumed to be loaned or granted to the project by local institutions, foundations, or other
community members to fund initial operations, and the remaining $36.5 million in a single offering
approximately 4 6 months later. (If it is feasible to break the latter sum down into phased financing,
or a single financing with phased draw-downs, this would be advantageous. However, for the financial
modeling exercise, it is assumed that the financing must be taken at one time.) Financing is assumed to
be available at of 7% per annum for 25 year maturity with a 3 year interest-only holiday at the
beginning followed by 22 years of full Principal and Interest amortization which extinguishes the
liability at the end. For financial modeling purposes payments are assumed to be annual in arrears.
Better terms may well be available, but assuming conservative terms is a safer and better test of overall
feasibility of the project.
Two key credit enhancements are envisaged: a) a pledge by local major institutions to purchase a total
of at least $2 mm of services from the network (approximately equal to one half of their current
telecom expenditures) providing the network is able to provide comparable or superior services to what
they are now receiving at comparable prices; and, b) creation of a Debt Service Reserve equal to 10%
of the borrowed amount. These terms are believed to be achievable without tax-exempt status for the
debt. If the latter proves possible, better terms may be available. The vehicle is presumed to be either
publicly or privately placed bonds or Certificates of Participation (COPs) in a capital lease. Senior
managers would be required to take a portion (5% - 10%) of their compensation in the form of
subordinated debt until positive cash flow is achieved. Debt would be secured by: a) the assets and
revenues of the network itself; and b) contracts with the City and the MetroNet members for S-Net
services. Bank loans, subscriber pre-payments, mortgage(s) for key property, vendor financing and
other forms of financing should also be considered for appropriate components of Capital Expenditure.
These could complement a bond or COPs offering.
Another option currently being developed by SCBI is a form of crowd-sourcing, i.e., local financing by
those who stand to benefit directly from the investment. Specifically, the concept is to sell S-Net
Service Bonds to local residents and businesses. The ECFiber project in Vermont has demonstrated the
viability of such a mechanism as one part of an overall financing plan.
The preliminary estimate for the financing needs of the total network is $37,500,000. Of this amount,
approximately $1,000,000 is for pre-financing and initial start-up costs (preliminary design, detailed
business plan development, market analysis, legal costs, pole attachment license applications etc. and
$36,500,000 is for network construction, initial operating losses, and Debt Service Reserve. It would
be desirable to raise this initial seed money from MetroNet memberspreferably on terms similar to
those outlined above but which places this debt in a subordinate position to the main debt. The most
efficient financing structure would be to issue the required debt in a series of tranches over several
years. However, this may not be practical and, therefore, the modeling has been done on the
assumption that it is all raised at one time.

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The most likely scenario for financing the network is to access the capital markets through the issuance
of revenue bonds that pledge all revenues generated by the network. Depending on the ownership
structure of the network, long-term, lower-interest tax exempt bonds may be available. At this time, the
capital markets are very risk adverse and will perceive a start-up telecommunications utility as a risky
investment. Consequently, it will probably be necessary to obtain some type of financial/credit support
from major local institutions to obtain financing from the capital markets. This type of credit support
can come in a number of forms, or combinations of forms, depending on participants' preferences. The
most common types of credit support include:
1. Partial letter of credit. Participants can purchase a letter of credit from a rated bank that

guarantees a portion of the bond issue. The size of the letter of credit would be negotiated with
the investment banking firm selling the bonds after a detailed business plan has been developed.
2. Debt service reserve. Participants can deposit funds into a debt service reserve that is available

to draw upon if network revenues are insufficient to make the revenue bond payments. Typical
debt service reserves are for an amount necessary to make bond payments for 1-2 years or 10%
of the principal amount. The model assumes the latter, giving a DSR of $3.9 million. This is
likely to be a requirement of potential lenders.
3. Minimum purchase. Participants can guarantee a minimum level of telecommunication services

that they will purchase from the network owners. The amount of services that are purchased, or
the rates associated with the services, can be adjusted downward if revenues from other
customers are sufficient. This, in ValleyNets view, is the preferred option and may (together
with a Debt Service Reserve) be sufficient to attract debt on adequate terms.
4. Equity. S-Net can seek grants or subordinated loans that can reduce the volume of revenue

bonds necessary to fund the project. Donors/lenders could include members of the 501(c)12 coop if that is the organizational form that is chosen. Also, to the extent that the initial seed loan of
$1 million, crowd-sourcing loans, or other debt elements in the financing structure can be
subordinated to the main offering, these can function as equity from the perspective of the
main lender(s). However, any such arrangement must be carefully written so as not to
undermine S-Nets status as a non-profit entity for tax purposes. For modeling purposes,
ValleyNet has not assumed any equity financing. However, the $1 million suggested initial
investment in subordinated debt would function as a form of quasi-equity from the
perspective of potential lenders.
Major local institutions represent a wide range of institutions and sizes and may have different
preferences when faced with decisions on lending and service commitments. Minimum purchase
decisions are normally made by the departments that purchase telecommunication services.
Investment/lending decisions may be made by institutional financial managers, endowment portfolio
managers or outside advisers. Ultimately, a combination of the above alternatives may be the best way
to accommodate individual institutional needs.

Future Growth
The financing plan and financial model are keyed to Phase I only. This would cover 34% of the City.
Phase I is projected to achieve positive operating cash flow in the third year and overall positive cash

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flow (including required capital expenditures) in the fifth year. Thereafter, it is expected to generate
increasing amounts of net cash surplus. This could be used to finance expansion of the network.
However, if S-Net should decide to expand the network to more of the City, and if S-Net performs as
expected, it is likely that they would be able to raise additional capital to do so beginning sometime
around the fourth year.

Regulatory and Contractual Issues

The network owners will need to obtain a range of required permits and execute contracts with
necessary partners in order to provide the data, voice and video services. These include:
Licenses and permits
a. Telephone license: To provide telephone service (called telecommunications services in New York)
a Certificate of Public Convenience and Necessity must be obtained from the New York Public Service
Commission. A list of tariffs must be posted before services are provided.
b. Cable (video) license: A video franchise agreement must be developed with each community where
television/video services are provided. Then a Certificate of Confirmation needs to be filed with the
State. This is the same type of agreement that Time Warner has with the City and includes PEG fees,
franchise taxes, etc.
c. Internet service: There are not any specific licenses or requirements to provide data services.
Primary Contracts
a. Pole Attachment: The network owner must develop an agreement with the owners of all existing
telephone poles where aerial fiber will be installed. The NY Public Service commission has published
guidelines to facilitate these agreements, include the types of expenses and charges that can be
calculated. These appear to be similar to the rules in Vermont and, depending on how they are actually
implemented in the State of New York, provide a reasonable and practical framework for new carriers
like S-Net.
b. Rights of Way: Any use of public land or airspace will need approval from the local community to
allow access to the public rights of way. Since the City of Syracuse will be the relevant ROW body in
most instances and since it is expected to be a member/partner/owner of S-Net, this is not expected to
present major problems.
c. Video Content: Access to video content will require contractual agreements with the individual and
national owners and/or distributors of video content. However, if S-Net is able to contract with a third
party cable TV provider from elsewhere in the region to supply video under the latter brand, this issue
may be avoided. (In that case, some of the Capital Expenditures associated with video service
provision may also be avoided.)
d. Network Management: The network owners will need to develop a contractual agreement with the
network and service providers, assuming the network is managed by an external entity.

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e. Engineering Services: A contract with an engineering firm for the preliminary and construction
level engineering will need to be executed.
f. Network Construction: A contract with a network construction firm will need to be developed.
This may include the network electronics components, which could also be bid out separately.

Timing and Next Steps

The next step is for MetroNet and SCBI to decide whether the project appears to be sufficiently
feasible to merit going forward with a detailed project plan per the contract with ValleyNet.
Developing such a plan will take approximately 3 4 months.
Following that, the Principals will decide whether to go forward with an actual project. The financial
modeling has been done on the assumption that a definite decision would be made to go forward
sometime around the end of 2012. Immediately following the initial decision to proceed, the following
steps would have to be taken:
i)
contribution of the $1 mln of seed money;
ii) creation of the appropriate corporate body for S-Net
iii) negotiation of contract with the DBO entity.
Once these steps are taken, the actual project implementation would commence. Year 1 in the
Financial Highlights Appendix (which is based on the financial model) would begin at this point.
The initial tasks in Year 1 include:
a) practical project implementation, eg: detailed network design, application for pole attachment
licenses, equipment system selection, hiring of key staff etc.
b) financing: selection of a financial advisor/underwriter and commencement of financing
campaign.
It is assumed that financing would be completed and closed in approximately 4 - 5 months.

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Conclusion
The creation of a community owned FTTP telecommunications utility is a bold step. But Syracuse
would not be the first to do it. Dozens of communities have done it with great success. Lafayette, LA,
and Chattanooga, TN are two cities of comparable size to Syracuse that have built successful
community FTTP networks and are now enjoying the fruits of that effort. While there have been a few
stumbles, the vast majority have succeeded--many after having to overcome major political opposition
from entrenched special interests. These communities fought for their public interest and won.
While by no means easy, S-Net should face an easier road than some other municipal or community
FTTP projects. First, Syracuse can draw on the experience of these other networks (and should make
an organized effort to do so). Second, FTTP technology has progressed rapidly so that today it is well
established, well known and almost off the shelf level of stability in both techniques and prices.
Third, Syracuse is a comparatively large and dense city most of whose telecommunications is aerial on
poles. As such, it faces and lower costs than localities where either is not the case. Fourth, the
existence of a large group of non-profit entities with substantial technical capability, large
communications needs and expenditures, public interest orientation and a history of working together is
a substantial advantage for a start-up of this sort.
The economic development effects of state-of-the-art, low-cost, ultra-high speed and reliable
broadband is potentially dramaticand has been shown to be so by comparable cities that have already
paved the way down this road. , The opportunity to significantly enhance Syracuses schools, cultural
vitality, and the local medical, high-tech, and research industries is enormous. Finally, the national
attention Syracuse will gain as a modern and progressive and technology-savvy cityjoining pioneers
like Lafayette, LA, Chattanooga, TN and Kansas City, KS - will have the single most important
economic development impact: attracting dynamic people and businesses to Syracuse.
The proposed approach to providing telecommunications services demonstrates a fundamental
distinction between community-owned networks and privately owned for-profit networks. For-profit
networks are required by their investors to provide the least services at the highest cost to its customers
using the lowest capital investment in order to maximize profits. Community-owned networks provide
the greatest achievable level of services at the lowest possible cost to its users operating in a fiscally
responsible manner.
That a universal, low cost FTTP network has a dynamic effect on a community is well-known. The
question usually is, however, is there a feasible way to create such an infrastructureespecially in the
face of reluctance to do so by a Citys main telecom providers. We believe that the analysis presented
in this report strongly suggests that the answer for Syracuse is Yes.

85

Attachment A
Capital Expenditure Budget

Access and Central Office

$3,707,248

Video Head End and Equipment

$2,550,000

Subscriber Connection Costs

$5,492,108

Business & Institution Connection Costs

$1,032,110

Fiber Infrastructure

$11,383,530

Buiildings Central Office and Hubs

$3,350,000

Vehicle and other operating equipment

OSS

$260,000

$40,000

Subtotal Capex

$27,814,996

Contingency (7%)

$1,947,050

Total Capital Expenditures

$29,762,046

Debt Service Reserve

$3.650,000

Financing Costs

$547,500

Startup Costs Years 1-3 (Debt Service, Operating Expenses)

Total Financing Need

$3,540,454

$37.500,000

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Attachment B
Financial Highlights
Year

Homes
Passed

5,321

19,954

19,954

19,954

19,954

Homes
Connected

1,064

5,188

5,587

5,986

6,186

Businesses
passed

459

1,720

1,720

1,720

1,720

Business
Connected

46

206

241

275

310

Take Rate
(yr end)

19.2%

24.9%

26.9%

28.9%

30.0%

$1,211,632

$6,449,197

$9,683,662

$10,415,238

$11,019,471

$84,367

$1,150,671

$1,910,451

$2,017,614

$2,091,135

-$1,237,087

$2,241,732

$4,605,054

$4,999,243

$5,417,582

$101,852

$2,656,252

$2,656,252

$3,401,663

N/A

0.84

1.73

1.88

1.59

$16,721,520

$1,394,858

$665,984

$374,502

$895,270

Total
Revenue
COGS
EBITDA
Debt
Service
Debt
Coverage
Ending
Cash

$2,656,252

87

Attachment C
Network Map

88

Attachment D
Network Diagram

89

Exhibit D

90

Syracuse, NY

World Market Square

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Mayors Challenge
Syracuse, NY

Executive Summary
The One-Liner:
Syracuse will establish an identity as an international city by designing the blueprint by which to
harness the talents and energies of New Americans, showcase diversity, and transform distressed
neighborhoods
The Elevator Pitch:
Syracuse was once renowned as a great American city a place for invention and production,
where New Americans, beginning with European immigrants, helped to make our neighborhoods
incredible places to live. But our city declined as industries left and our population moved to the
suburbs. Today, we struggle with poverty and blight. But a new energy in Syracuse is palpable
on the Northside, where new creators are arriving from across the world and making the city
their home. Our challenge is to harness this energy and potential to lift up the whole community.
Our idea is to create the World Market Square: A hub of activity and unique cultural experience,
created by transforming a once-blighted intersection. The Square will feature (1) a marketplace,
showcasing local goods with a global influence, and employing and empowering neighborhood
residents; (2) plaza for community gatherings, celebrations and recreation; and (3) a resource
center that offers and unites innovative business development programs, workforce training, and
other services that help residents transition from just surviving to thriving.
The Square and its core initiatives reflect three interlocking components. People: Syracuse's
Northside neighborhood is a gateway for refugees and other immigrants to our community.
World Market Square will serve as a beacon of opportunity. Place: World Market Square will
concentrate programmatic and physical investments, maximizing outcomes, and acting as a focal
point of cultural exchange. Possibility: World Market Square synthesizes programmatic service
provision, neighborhood revitalization, and, both physically and socially, strategic economic
development in a way that is nationally unique. The Square will attract visitors and investment to
the Northside, and its programs will drive community-led economic growth into the surrounding
area filling vacant storefronts and homes and restoring vitality to a historic urban district.
Evolution:
While our core vision, goals and innovation have remained the same, the Word Market Square
has evolved significantly over the last four months. From original application submission to
Ideas Camp to our coaching calls to our in-depth community dialogue process, our innovation
has been refined, tightened, and strengthened, and our vision is clearer than ever. The physical
aspect of the Square has begun to take shape with schematic plans on the board and property
development opportunities coming into focus. Our partnerships have been further galvanized,
with collaborating organizations coalescing around the World Market Square concept and
proposed activities. Our friends in the refugee and immigrant communities are validating our
collective sense of heightened momentum, and are poised to embrace the new opportunities the
World Market Square presents.
1

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Syracuse, NY

While the fundamental pillars of the World Market Square have crystalized, we have also
substantially modified and improved the way in which we articulate them. Both Ideas Camp and
subsequent coaching calls have helped us to understand the necessity of conveying our
innovation in a way that is digestible for a wide range of audiences, and in a way that will
resonate for those who stand to benefit from experiencing the Square itself. This truly has been a
challenge for us, as the problems we aim to solve -- and the strategies we propose in order to
solve them are highly nuanced and multidimensional. The various elements of the innovation
build upon one another, with interactions and feedback loops in outcomes and impacts that are
critical to the innovation itself, and that posit a highly complex network of interwoven
programmatic threads. Within the complexity of this vision, we have been challenged repeatedly
to articulate clearly and explicitly our innovation, its identifiable components, and the activities
to be undertaken within each component. This has been an incredibly enriching process, and one
that, though sometimes exhausting, has enabled us to forge a more legible project. Our improved
ability to communicate about this initiative and its essential components will be powerful as we
continue to generate new resources, galvanize community support, and build support from our
partner organizations.
There is no question that the World Market Square will continue to evolve. Indeed, this
evolution is inherent to the success of the initiative itself. The importance of neighborhood
residents refugees, immigrants, long-time residents and business owners in crafting and
driving this innovation cannot be overstated.

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Mayors Challenge
Syracuse, NY

Vision
Syracuse, New York, like most post-industrial cities, was battered by deindustrialization
and suburbanization in the late 20th century. After losing over a third of its population (220,000
residents in 1950, compared to 147,000 in 2010) and many major employers, the city faces urban
blight (e.g. 1900 vacant buildings) and poverty (32% poverty rate). As of the 2010 Census,
however, Syracuses population had begun to stabilize, largely due to an influx of New
Americans, particularly the 8,000 refugees who have been resettled here since 2001. Our New
American populations bring vitality and hope, but they also face intense challenges (over 50%
live below the poverty line). Yet New Americans often thrive when given tools and
opportunities, while their children commonly excel in city schools. Translating this potential into
a force for long-term change is a defining challenge for Syracuse in the 21st Century.
World Market Square will be the most robust, visible and catalytic response to this
community challenge to date. The project will be placed within our Northside neighborhood,
an historic gateway for New Americans from the original Germans and Italians to todays
refugees and immigrants who come from more than 30 countries. A microcosm of Syracuse, the
Northside struggles with poverty and blight but also has tremendous assets - including a major
hospital, historic businesses, and distinctive architecture. These are building-blocks for the
Northsides comeback, which is evident in new commercial investments and a slowly returning
middle class. Yet the Northsides greatest asset largely remains uncultivated: a diverse and
dynamic population longing to pursue their aspirations. Imagine what would happen if we
harnessed the energy of our community and unleashed it into the neighborhood.
This is our intention for World Market Square. A dynamic nexus of culture and
opportunity, it will radically improve quality of life on the Northside empowering residents,
filling vacant storefronts, and restoring vitality to a once-great urban district. A vacant
intersection will become a hub of opportunity for Northside residents and a unique cultural
destination for the broader Syracuse community. The Square will be strategically located within
a prominent site linking the Northside to St. Josephs Hospital, Downtown Syracuse, and
Interstate-81. The Squares anchor will be The Marketplace - a large indoor commercial space,
featuring local products with a global influence (similar to Midtown Global Market in
Minneapolis), which will employ residents while allowing them to work towards their own
entrepreneurial ambitions. A resource center, featuring classrooms and program spaces, will be
connected to the marketplace. Adjacent to these buildings, a plaza will serve as a community
gathering place. A community-driven design and planning process will ensure that World Market
Square is a place that reflects the diverse identities of neighborhood residents.
More than just physical places, these spaces will be animated by people and unique
programming that fosters community vitality. Opportunity Enterprises (OE) will offer three
tracks designed to increase prosperity and civic engagement among community residents. The
Employment program places residents on career paths within local industries by offering
intensive industry training and work readiness. An expansion of dramatically successful pilot
programs (90% placement rate) in health care and construction, these employer-customized
trainings will now be available in locally-expanding industries such as financial services,
hospitality, culinary, and advanced manufacturing.
Entrepreneurship programs will offer aspiring business owners the tools and resources
they need while insuring a steady income as they learn. To do this, we are creating social
enterprises, informed by rigorous market research and planning and developed to offer products
3

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Mayors Challenge
Syracuse, NY

and services that are relevant to a broad audience (a component inspired by Homeboy Industries
in Los Angeles). Aspiring entrepreneurs will be employed in these enterprises, while receiving
hands-on management practicum. Outside the workday, they will partake in a suite of services
that include business planning, entrepreneurship training, mentorship/technical assistance,
financial counseling/credit building, and product innovation. The entrepreneurial training
curriculum will be an adaptation of Pro-Literacy and Interweave Solutions Self-Reliance
Model an entrepreneurial training program successfully implemented in developing countries.
Once our entre-ployees are ready to launch, they will be provided the financing and support
necessary to succeed. Drawing upon Oaklands Pop-Up Hoods, we will also provide incentives
(e.g. rent subsidies and renovation assistance) that ensure graduate businesses locate within the
Northside target area. With the support of a local and national foundation, two pilot social
enterprises will kick off in 2013, before the Square is developed. A multiethnic food business
will first offer products in high traffic locations (e.g., sports arenas, the airport, festivals, and
farmers markets), and an artisan furniture business will develop products to a Syracuse company
that provides furniture to libraries and museums throughout North America. These businesses
(and, eventually, other retail enterprises) will later become anchor tenants within the
Marketplace. The Marketplace will also feature notable regional businesses that come with
established customer bases. Other planned social enterprises will provide services (e.g., a
construction enterprise that launches as subcontractor in the development of the Square; an IT
enterprise offering tech support within the Square). Entre-ployees within these enterprises may
either spinoff their own businesses, or potentially purchase the enterprises that employ them.
A suite of Empowerment programs will be integrated with Employment and Entrepreneurial
programs as well as offered to others in the community. Designed to enhance residents quality
of life and foster civic engagement, we will offer classes in homebuyer education, financial
capacity building, citizenship, and community leadership.
Combining the power of place and people, Cultural Exchange programs will attract the
greater Syracuse community to the Northside to experience a worlds worth of cultures and
customs. Classes offered in the resource center will range from foreign languages to ethnic dance
and cooking. A soccer program in the plazas green space will provide recreational opportunities
to area youth, while drawing suburban teams and their families into the Square for matches.
Cultural festivals on the plaza will draw diverse crowds, generate energy, and further establish
the Northsides identity as Syracuses International Village. Ultimately, Cultural Exchange
programs will foster reciprocal learning and shared experiences among diverse groups of people.
World Market Square will have a transformative impact on the City of Syracuse by
empowering people, enlivening place, and fostering possibilities. The idea has strengths within
each of the overarching types of innovation but is especially innovative as a New Program.
The project represents a strategic integration of people-centered and place-based development.
When we invest in place without engaging and providing opportunities for residents on the frontend, the result is either prolonged market weakness or gentrification. Meanwhile, providing
economic opportunities for low-income individuals, without addressing their neighborhoods,
results in people leaving for elsewhere once they can afford to do so. World Market Square
charts a different course by empowering Northside residents, economically and civically, and
then creates incentives for individuals to remain and invest in the neighborhood. This innovation
will increase prosperity, maintain diversity and draw visitors from the region and beyond, and it
will inform strategies for achieving the same dynamic in other neighborhoods, both in Syracuse
and throughout the country.
4

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Mayors Challenge
Syracuse, NY

Implement
As a city government, we find it crucial to empower our international populations to
become change agents. In 2012 we engaged a team of community leaders and social
entrepreneurs who had, over the past six years, coalesced around a strategy to this end when a
mixed-use corridor on the citys Near Northside was targeted for growth. During that time
Northside Urban Partnership (Northside UP) established a variety of employment training and
entrepreneurial programs, business and housing partnerships, and quality of life improvements
on the Near Northside.
World Market Square is a physical place in a central crossroads, long viewed as a
strategic site for investment (as evidenced by a Ford Foundation Creative Communities project
in 2006). It synergizes Place, People and Possibilities. Sequencing of and relationships between
these activities are found in the attached timeline.
Place: World Market Square will encompass the Marketplace, a resource center, and plaza.
A community design process will begin in 2013 to design, officially name and help brand the
project.
The Marketplace 2013: Acquisition of the building followed by a community design; 2014:
Ribbon cutting on completed building project in fall with vendors and entrepreneurs moving in;
2015: Rooftop greenhouse opening; 2016-2020: possible expansion to accommodate more
vendors and programs.
Resource center 2013: Acquisition of building followed by community design; 2014:
Rehabilitation commences in spring with classes beginning in fall.
Plaza 2013: Site acquisition and design underway; 2014: A street adjacent to the Marketplace
and resource center to be closed, retrofitted with green infrastructure, and soccer field; 2014:
Project opened to public in summer.
People: Opportunity Enterprises will include programming for employment,
entrepreneurship, and empowerment activities. Fundraising, planning, program expansion
throughout 2013.
Employment 2006: The Ford Foundation seeded our employment training, placement and
wrap-around service model with the charge that it be scalable and replicable; 2009: Employment
programs began. To date, 175 trainees have graduated with a 90% job placement rate in both
construction and health care fields, and employers continue to seek out our graduates; 2013:
Scale up and diversify these services; 2015: By the end of the year, programs will be offered in
cultural cuisines, artisanal furniture and construction.
Entrepreneurship 2012: Received $85,000 seed funding to begin planning and implementing
coordinated entrepreneurship training program; 2013: Pilot Mobile Marketplace, selling
culinary products and artisanal furniture offsite and beginning sales at area outlets, capped by the
first spinoff launch of a new business; 2014: Construction classes assist with project
development during spring and summer with first full group of entre-ployees starting in the
new Marketplace space in fall; 2015: Agribusiness and tech services programs start.
Empowerment 2014: Empowerment classes begin with the opening of the resource center. In
addition to classes targeted to trainees and entre-ployees, other classes in financial literacy,
hospitality, home-buying and citizenship begin and continue throughout.

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Mayors Challenge
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Possibilities: Cultural Exchange programming will offer visitors from within the community
and throughout the region an opportunity for engage in cultural activities.
Existing arts and cultural exchange programs, including yoga classes, sewing and gardening are
prepared for eventual inclusion in the resource center and plaza. Fall 2013 festivals (naming and
design presentation) and 2014 ribbon cutting will further enhance community pride. At this time
classes, developed and taught by community members, are piloted upon the resource centers
opening. Students from within the community and surrounding region engage in foreign
language, dance, music, crafting and other types of classes. In 2014 a soccer league is launched
in the adjacent plaza. The full cultural exchange program launches in 2015 including: community
gatherings, public art, performances, and more classes as determined by the community.
Syracuses Bloomberg Prize will be administered by the City, with Northside UP as the
lead organization. Additional key committed partners include St. Josephs Hospital Health
Center (property owner, lead developer); Home HeadQuarters (housing developer,
empowerment training delivery, strategic commercial property development); Cooperative
Federal Credit Union (community development financial institution (CDFI), empowerment
programming through microlending and small business loans, individual development accounts
(IDAs), and financial literacy); CenterState CEO (regional economic development organization,
chamber of commerce, will leverage resources and engage private sector members, tourism
promotion, entrepreneurial assistance); Northside Business Partnership (merchants association
largely consisting of historic immigrant businesses, committed to supporting new small
businesses); Gifford Foundation (community planning, leadership development); Refugee
Resettlement Agencies (Catholic Charities and Interfaith Works are committed to supporting and
guiding empowerment programs); Ethnic Community Based Organizations and other community
partners and stakeholders (community engagement, feedback and partnerships) ; Wegmans
(regional grocer, providing culinary training, exploring possible broader role including marketing
supports); ProLiteracy/Interweave Solutions (adapting entrepreneurial/literacy training used
successfully in the developing world by piloting a domestic application.)
As we discussed implementation risks in Ideas Camp and coaching sessions, we realized
acquiring and rehabilitating properties is a potentially significant financial burden. Therefore, we
are covering the majority of our capital costs by compiling existing grants and an investment
from St. Josephs Hospital with a significant portion of the Bloomberg prize to address our
capital costs. This compilation of funds minimizes our projected debt service on the properties
and ensures that a majority of revenues can be applied to programming.
To provide sustainability, a multipronged revenue strategy is being developed by:

Generating revenue through social businesses within Opportunity Enterprises.

Developing fee-for placement programs within employment programs, building upon a
Bank of America Foundation grant to develop an appropriate fee-for-service model.
Northside UP and the city will continue to align funding streams by leveraging existing
federal, state and county funding programs.

Through existing programs, Northside UP has facilitated changes on the Northside. Work to date
has positioned neighborhood properties, residents, and organizations on the cusp of a
renaissance. By condensing output and outcome efforts into the target area through 2015, we will
compound our potential impact throughout the city to 2020 and beyond.

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2013

2014
OE Entrepreneur
Program:
Cultural Cuisines

Opportunity Enterprises
(OE): Program Expansion,
Planning, and Fundraising

OE Entrepreneur
Program:
Construction

2nd Annual Cultural

Exchange Festival:
Ribbon Cutting of
World Market Square

POSSIBILITIES

70 OE Career
Placements

Cultural Exchange
Program Launch:
Soccer League

4 OE Business
Launches / 18
Residents Hired

Additional
Visitors
Attracted to
Area

Install
Greenhouse

Additional
Visitors
Attracted to
Area

75 OE Career
Placements

OE Participants
Become
Homeowners

8 OE Business
Launches / 32
Residents Hired
KEY:

98

OE
Programs
Expand

World Market Square

Facilities Expansion:
Additional Vendor
Stalls, Performance and
Recreation Venues

105 OE Career
Placements
OE Participants
Become
Homeowners

Cultural Exchange
Programs Expand

OE Entrepreneur
Program: Tech
Services

Development
Concluded: Interior
Work / Exterior
Work / Plaza /
Public Art

Development Begins:
Architectural Design /
Engineering / Financing
/ Permitting / Interior
Construction

1 OE Business
Launch / 3
Residents Hired

Cultural
Exchange
Programs
Expand

OE Programs
Expand to
Other
Neighborhoods

CULTURAL EXCHANGE

COMPLETION

World Market
Square Community
Visioning Launch:
Planning / Naming /
Marketing Strategy

OE Entrepreneur
Program:
Agribusiness

OE Employment
Programs Expand

OE Programs
Launch in World
Market Square

1st Annual Cultural

Exchange Festival:
Unveiling Official
Name / Schematic
Designs

2016-2020

PROJECT

PEOPLE

OE Entrepreneur
Program: Artisanal
Furniture

OE Employment
Programs:
Construction
and Health Care

P LA
C

2015

Additional
Visitors
Attracted to
Area

Continued OE
Business
Launches /
Residents Hired

Continued
OE Career
Placements

OE Participants
Become
Homeowners

OPPORTUNITY ENTERPRISES

Mayors Challenge
Syracuse, NY

Impact
We believe that our New American city residents are not problems to be minimized, nor
clients to be served, but assets to empower. Repeatedly we have witnessed that when given tools,
New Americans flourish. Their children also flourish; commonly in Syracuse we see the children
of New Americans becoming valedictorians of their City schools. Thus, we know that by
investing in New Americans and their children, we tap into the tremendous skills, talents, energy
and other potentials they bring. We also believe that investing in people is not sufficient on its
own in order to transform a neighborhood. Our experience in community development indicates
that when we invest in people, we must also address the place in which they live. To transform a
neighborhood dynamic we must invest in and rehabilitate the neighborhood itself, and we must
assist and incentivize residents to participate in this process. We must publicly recognize and
celebrate the cultural assets New Americans bring, and facilitate their interaction with the larger
community. By doing so, we not only change lives of New Americans and their children, but we
begin to transform a whole community dynamic.
Consistent empowerment of our residents leads to sustainable change. Thus, we will
formalize and systematize known and innovative avenues of resident empowerment and
neighborhood investment, and make them accessible to neighborhood residents by locating them
in one central and visible location: World Market Square. When we combine concrete and
sustainable investments in people and place, we create new possibilities. New Americans
become part of our larger communitys economy, culture and identity, and we make the
neighborhood a place where their children want to stay, where other New Americans want to
come, and where people from all around the region wish to visit.
By facilitating the employment, entrepreneurship, and empowerment of Northside
residents over the course of three years, we anticipate placing 212 individuals into careers;
launching 13 resident-owned businesses within a 7 block target area within the Northside, which
in turn will hire 53 individuals. Based upon past experiences, we anticipate this will attract added
investment within the target area, resulting in approximately 16 mixed-use development projects
rehabilitated, creating 25 commercial units and 94 residential units; and reducing commercial
vacancy by 82% by filling 25 of 28 vacant storefronts.
While we will utilize a variety of methods to measure outputs, outcomes and impacts, we
intend also to use analytics taken from our experience with the IBM Smarter Cities program. Our
work with IBM provided us with an analytic model to evaluate progress, understand the effects
of individual program activities, weigh the importance and priority of different initiative
elements, and employ predictive analytics to help us understand ongoing and upcoming
demographic, economic, housing and other trends. This will help us comprehend what impacts
the World Market Square is having on those trends, and vice versa.We can think of no better way
to articulate the overall impact of the World Market Square on the community and city than by
asking you to step into the life, and the future, of Ganga, a Bhutanese refugee who after 15 years
in a Nepalese refugee camp has arrived in Syracuse.
Accompanied by his mother, wife and five children, Ganga struggled to learn English
and support his family. At Bhutanese Community Association meetings, he joined community
sessions designing the new World Market Square. When the Marketplace at the Square opened,
Ganga looked into the entrepreneurship program. He had always desired to own his own
restaurant, but had no capital and few skills beyond eagerness to work, drive to succeed, and a
love of cooking. Thus, he was reluctant to leave his low-paying job as a custodian.
10

99

Mayors Challenge
Syracuse, NY

After interviews with Marketplace staff, who were struck by his unpolished yet evident
acumen, Ganga became a Marketplace employee, which enabled him to earn a living wage while
undergoing intensive preparation for owning his own restaurant. His coach assisted Ganga in
setting up an Individual Assessment Plan and he began developing a business plan while
embarking on an entrepreneurship curriculum that included ESL classes. Chefs from the noted
supermarket chain, Wegmans, began teaching domestic regulations and practices while refining
Gangas culinary skills. All the while Ganga earned enough money to support his family while
putting some in an Individual Development Account (IDA) a matching savings program that
allows people to save for key capital needs with Cooperative Federal Credit Union. With the
support of a financial counselor, Ganga also entered the Credit Unions Credit Builders club
and established a budget with his family.
Meanwhile Ganga and his family also began visiting the Squares resource center, for
classes on civic engagement and leadership skills. Ganga began volunteering for a youth soccer
league using the Plazas green space within the Square. At the World Kitchen his wife Devi
gathered with other community members to attend Italian cooking lessons given by a longtime
Northside resident. His mother, a skilled seamstress, began teaching sewing to a number of
multi-cultural youth.
Six months later Ganga is halfway through his rigorous program. His ESL level is
advancing, as is his IDA. Each day at the Marketplace Ganga prepares food not only from his
home country, but other styles as well, and is becoming skilled in comprehensive restaurant
management through hands-on learning. His 16-year old son has begun working at the rooftop
greenhouse, where he helps cultivate vegetables for the Marketplaces international cuisine and
flowers for the Squares surrounding Plaza.
A year after he entered the program Ganga has taken advantage of creative financing
and location incentives to enter into a rent-to-own program for a building two blocks away from
the Square. Needing some repairs, he bartered with another graduate from the Marketplace, a
former Somali refugee who owns a rehabbing business. Ganga employs seven people and enjoys
a loyal following from the Bhutanese community, but is also attracting a much broader audience
from around the region. In one year a vacant storefront is now filled and on the tax rolls, and
Ganga and his family are off all public assistance. He is heavily involved with the areas local
merchants association. He and his wife now mentor new Bhutanese refugee families.
Two years later After completing a first-time home buyer program at the Squares
resource center, Ganga and his wife bought a home through the Land Bank; its 5 blocks from
WMS. Additional workshops enhance Gangas marketing techniquesincreasing his business
regional popularity, so he doubled his staff. Next door a clothing store opened, owned by a
Cuban refugee, also a graduate of the Squares entrepreneurship program. On the other side, a
longtime Italian restaurant has seen its business grow due to increased interest in and traffic to
the neighborhood. Ganga and other graduates of the Squares programs are organizing a
cooperative for bulk purchasing and back office services.
And back at World Market Square? A suburban mother waits in the Plaza for her
daughter to complete an Arabic language class at the resource center, enjoying bubble tea she
picked up inside the Marketplace while she people watches and listens to a string quartet. At a
table nearby, university students surf the web through the free wireless signal thats available
within the Square. The International Village, Northside neighborhood, city and region are
experiencing growth in economic opportunity, education, tourism and civic life.

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100

What will we do?

Resources
In order to accomplish our set
of activities, we will need the
following:
Activities
In order to address our
problem, well conduct the
following activities:

Outputs
We expect that once completed
or underway, these activities
will produce the following
evidence of service delivery:

Outcomes
We expect that if completed or
ongoing, these activities will
lead to the following changes
in the short term:

Development records
Program participant tracking database

Square feet of converted vacant space

# applicants; # enrolled; # graduated; #
placed in target jobs
# of people hired; # completing program

Program participant tracking database

Certificates of completion

Program participant tracking database

Attendance/enrollment; sponsorship
dollars/revenues, visitor experience
Revenues within marketplace

Attendance estimates; Program participant

tracking database; Track social media hits
Marketplace profit and loss statements

Increase income; reduction/elimination of

public assistance; increase savings/wealth
accrual
Graduate-owned independent businesses
Graduate businesses started in target area
+ residents hired; home ownership
Participation in organizations;
Volunteerism
Change in ratio of filled/vacant units

Longitudinal surveys; DSS records; data

from CDFI partners

Program Participant Tracking Database

Program Participant Tracking Database
& Longitudinal Surveys
Longitudinal Surveys

Northside UP property canvas / database

Building permits; projects completed;

development grants received
Decreased rates of poverty and
unemployment; reduction in public
assistance voucher; maintained social &
economic diversity
Decreased vacancy rates and code
violations
Increased rates of homeownership and
resident-owned businesses
Continued OE businesses launched /
residents hired in other Syracuse
neighborhoods

City records

U.S. Census/American Community

Survey/ DOL Reports/DSS records

Syracuse City Real Property Database

Home ownership data; Mortgage lending

data; Business licenses issued by City
Hall
Program participant tracking database

Reduced commercial vacancy in target

area
Attract investment into target area

Increased prosperity on Northside while

maintaining ethnic diversity

Reduced blight throughout Northside

Increased resident-investment throughout

Northside
OE Program replication in other Syracuse
neighborhoods

On what timeline?

2013-2015

How will we measure it?

2013-2014

Graduate businesses launched

Community investment by OE
participants in target area
Civic engagement among WMS grads

Impact
We expect that if completed,
these activities will lead to the
following changes in the long
term:

Raise Money
Build Partnerships
Engage People
Acquire Property
Design/Brand WMS
Finalize WMS business plan
Launch Opportunity Enterprises (OE)programming in employment,
entrepreneurship, & empowerment
Launch Cultural Exchange (CE) Program
WMS properties rehabbed and opened
212 residents placed into careers through
employment programs
40 Entre-ployees working in
entrepreneurship programs
350 residents complete empowerment
programs
2 annual cultural festivals, 6 ongoing CE
classes, and soccer league established
Attract local and regional visitors and
shoppers to WMS
Increased prosperity among OE
participants

What will we measure?

101

2013-2015

2013-2015

2013-2020

Mayors Challenge
Syracuse, NY

Replicate
World Market Square (WMS) presents an innovative model for community development
reinforcing the empowerment of New Americans. With growing immigration numbers and largescale refugee resettlement to US urban centers, New Americans are finding themselves
concentrated in urban settings already struggling with disinvestment, blight and associated social
problems. Our model presents an opportunity for cities to embrace key lessons not least of
which is how to successfully help native-born residents, long-time immigrants, recent
immigrants and refugees navigate an emerging paradigm of shared investment and ownership.
The core principles and elements of our idea can be modified to fit other local contexts
with their own resident-generated vision, goals and outcomes. Optimally these elements are
surrounded by a community dynamic where residents both literally and figuratively become
owners of their neighborhood and destiny. The Opportunity Enterprises and Civic Empowerment
programs are designed to be replicable. ProLiteracys support of the entrepreneurship programs
adapts an internationally-used curriculum for use in Syracuse and distribution throughout the
U.S. The entrepreneurship program aggregates lessons learned across the country and can be
advanced as the next generation model.
Each community will experience its own unique challenges while adapting the WMS
model, and can expect two distinct challenges:
Partnership Building: Relationship-based partnerships are integral to successful
implementation for WMS programming but identifying necessary partners can be daunting. In
Syracuse, partnerships have developed organically in ways that can inform other cities. Early
engagement and conversation is critical. Partners need to be willing to marry community vision
with their self-interest. It is also helpful to engage partners who bring skill sets or resources
unique to the program, or those with a vested interest in participant success. Syracuses Mayors
Office demonstrated leadership, deferring to leveraging of existing partnerships. In other cities,
mayoral leadership will be necessary to identify and rally partners. These essential partnerships
would include representatives from community-based organizations, educational providers,
CDFIs, businesses and anchor institutions.
Resources: Necessary to facilitate programming, create workable spaces and provide
incentives for property investment and business placement, identifying and securing resources
for implementation will vex cities. Leveraging resources from myriad sources with creative
solutions will be required. Communities should seek to fund programs through local and national
philanthropy. Beyond this, creative resource development will be imperative. This should
include strategically aligned in-kind commitments from partners. Asking partners to contribute
resources that are relative to their size and proportional to their assets can help to offset
challenging implementation scenarios. Additionally, it may be necessary to pursue alternative
revenue streams such as fee-for-job-placement services, social entrepreneurship revenue, and
social impact bond programs.
It is evident that Syracuse has already developed an advanced set of tools and resources
for empowering New Americans. Following Ideas Camp, we have begun providing advice to the
city of Lexington, Kentucky on resettling and empowering refugees, and we intend to continue to
work together. Perhaps the most important lesson other cities can learn from Syracuse is to
identify New Americans not as people who need to be served but as individuals to be
empowered. This recognition will inspire innovations appropriate to the specific context and
community.
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