Niagara Power Project FERC No. 2216

 

THE PAST, PRESENT, AND FUTURE SOCIOECONOMIC EFFECTS OF THE NIAGARA POWER PROJECT  

HTML Format.  Text only

 

Prepared for: New York Power Authority 

Prepared by: NERA Economic Consulting  

 

August 2005

 

Copyright © 2005 New York Power Authority

 

___________________________________________________

 

ABBREVIATIONS

AAEO                                Annual Energy Outlook 2004

 

the Act                               Niagara Redevelopment Act

 

ALP                                   Alternative Licensing Process

 

BEA                                   Bureau of Economic Analysis

 

BLS                                   Bureau of Labor Statistics

 

Census Bureau                    U.S. Bureau of the Census

 

EP/RP                                Expansion Power/Replacement Power

 

FERC                                 Federal Energy Regulatory Commission

 

FPC                                   Federal Power Commission

 

kWh                                   Kilowatt Hour

 

GRP                                   Gross Regional Product

 

I/O                                     Input-Output

 

LPGP                                 Lewiston Pump Generating Plant

 

MEUA                                     Municipal Electric Utilities Association of New York State

 

MMC                                 Marsh & McLennan Companies

 

MSA                                  Metropolitan Statistical Area

 

MW                                   Megawatt

 

MWh                                  Megawatt Hour

 

N/A                                    Not Applicable or Not Available

 

N/R                                    Not Relevant

 

NERA                                NERA Economic Consulting

 

NETC                                The Niagara Economic and Tourism Corporation

 

NU                                     Niagara University

 

NYISO                               New York Independent System Operator

 

NYPA                                New York Power Authority

 

NYSEG                              New York State Electric & Gas

 

NiMo                                  Niagara Mohawk

 

NPP                                   Niagara Power Project

 

O&M                                 Operation and Maintenance

 

Project                                Niagara Power Project

 

Niagara Project                   Niagara Power Project

 

PTD                                   Permanent Total Disability

 

REMI                                 Regional Economic Models, Inc. 

 

RMNPP                             Robert Moses Niagara Power Plant

 

RG&E                                Rochester Gas & Electric

 

TBD                                   To Be Determined

 

U.S.                                   United States

 

 

EXECUTIVE SUMMARY

This study addresses the socioeconomic effects of the Niagara Power Project, a major hydroelectric complex operated by the New York Power Authority that uses the United States’ share of the water of the Niagara River to generate power.  The Project includes a 13-turbine facility and a pump storage plant that provide firm capacity of 1,880 MW and net dependable capacity of 2,400 MW.  Congress and the New York State Legislature set forth conditions for the allocation of Project power, resulting in reduced wholesale power costs for various public bodies and non-profit cooperatives—including some outside New York—as well as for investor-owned utilities in upstate New York and local businesses.

The Project has a variety of socioeconomic effects on the people of New York State, particularly those in Western New York.  These impacts include the economic benefits associated with the Project’s provision of low-cost power as well as the Project’s employment and spending.  The socioeconomic effects also include economic impacts related to the Project’s exemption from taxation as well as subtler, often unquantifiable, sociological impacts related to the presence of the Project.

The direct economic effects of the Project include the approximately 340 employees and over $30 million annual payroll (including salaries and benefits) of the New York Power Authority related to the Project.  (All values are in 2002 dollars.) The Project also spends approximately $56 million annually on other goods and services.  However, the primary economic benefits of the Project relate to the provision of low-cost power.  The Project provides electricity at below-market rates to residents, business, and municipally owned and rural cooperative electric utilities in New York State as well as to a number of public utilities in neighboring states. 

The Project’s low-cost electricity represents estimated annual savings of more than $500 million to its customers.  These customers include the “replacement power” and “expansion power” industrial customers, most of which are located in Erie and Niagara Counties.  These industrial customers have agreements with NYPA to maintain employment at a certain level in exchange for their allocation of NYPA hydropower.  Together the “replacement power” and “expansion power” customers currently employ about 43,000 people with a payroll of over $2 billion per year.  The total output of these industrial companies is worth approximately $14 billion per year.  These companies also contribute to their local economies through spending on goods and services as well as through the property taxes and sales taxes they pay and the payments they make to local non-profit organizations.  The low-cost Project power helps these companies to remain competitive in their markets. 

The Project also affects residents of local jurisdictions through its exemption from taxation.  If the exemption were removed, the ultimate impacts on residents would depend on the decisions of local taxing authorities as well as the specific outcome of negotiations between these authorities and NYPA.  Based on our estimates of the potential taxable values of Project lands and facilities, we calculate that the additional revenues due to removing the exemption could range from approximately $2 million per year if taxes were levied on only the unimproved Project lands to $53 million per year if taxes were levied on the current value of the Project lands and facilities.  

Using estimates of the direct effects of the Project—including the Project’s employment and expenditures as well as the electricity savings—and a detailed state-of-the-art economic model (Regional Economic Models, Inc., or “REMI”) that was developed specifically for this project, this study develops detailed socioeconomic impact results for 14 separate entities.   (As discussed below, the effects of the Project on Expansion and Replacement power (“EP/RP”) customers were modeled in two ways, one based upon modeling effects of the increased electricity cost for EP/RP customers using REMI—the “cost approach”—and one based on the assumption that absent the Project, jobs contractually tied to the Project would not be in Western New York—the “jobs approach.”)  The entities include eleven geographic regions that encompass New York State, Western New York, and the nine Local and Host Communities (Erie County, the City of Buffalo, Niagara County, the Town of Lewiston, the Village of Lewiston, Lewiston-Porter School District, the City of Niagara Falls, the Town of Niagara, the Niagara-Wheatfield School District, and the Niagara Falls City School District).  The remaining entities are three selected communities that receive residential power at preference rates (“Preference Customer communities”).[1] For the out-of-state customers, the study includes estimates of potential electricity savings.

Table ES-1 summarizes the overall economic results for these entities based upon the “cost approach,” including the contributions of the Project to population, employment, gross regional product (“GRP”), and personal income.  (The report provides much more detail, including results for different sectors and occupational groups as well as projections.)  These results indicate that the Project results in increases in economic activity for all 14 entities as judged by any one of the four measures.  For New York as a whole, the Project is estimated to generate approximately 12,300 jobs, and result in approximately 24,000 additional total residents (due to additional economic activity), $1 billion in gross regional product and almost $600 million in personal income in 2004 (based upon our long-term forecasts).  These impacts are concentrated in Western New York, particularly Erie and Niagara Counties.  The Project currently generates about 5,500 jobs in Erie and Niagara Counties, and results in over $200 million of additional GRP in each county.  In Niagara County, this impact represents approximately 2 percent of all economic activity in the county.  The impact of the Project on Erie County represents approximately 0.5 percent of all economic activity.  The Project has a proportionately greater impact on some of the smaller communities, such as the Town of Lewiston and the City of Niagara Falls.  The Project is responsible for 917 jobs (30.4 percent) and $108 million in GRP (39 percent) in the Town of Lewiston and 818 jobs (3.4 percent) and $94 million in GRP (5.7 percent) in the City of Niagara Falls.

Although the results under the cost approach are based upon a state-of-the-art regional economic model, it is important to note the inherent limitations of regional economic modeling in estimating the economic impacts of reduced electricity costs.  Even the complex and detailed REMI model cannot reflect the detailed circumstances of the individual businesses that receive power from the Project.  Thus, the REMI model may not reflect the particular importance of low-cost electricity to the individual facilities and thus the potentially larger role the low-cost power has in a given facility’s competitive cost structure.  These considerations mean that the actual economic benefits of the Project may be greater than those estimated using this approach (or that could be estimated using any regional economic model absent very costly and time-intensive plant-level modeling, which would rely on proprietary data).

As a result of these limitations, as noted above, we also implemented an alternative approach to modeling the direct impacts of the Project on employment at the Expansion and Replacement Power (“EP/RP”) customers.   In this “jobs approach,” we assumed that, if not for the Project, none of the 43,422 EP/RP jobs that are contractually tied to Project power would be located in Western New York.   Under this alternative modeling approach, we estimate that the Project contributes over 160,000 jobs and almost $16 billion in GRP to the economy of Western New York.   (Detailed impacts under the jobs approach are provided in the report.)

The Project affects other socioeconomic measures that are included in this study.  Details of the electricity rate benefits of the Project to various entities are presented.  The study also provides estimates of the effects of the Project on various land use categories for the study regions.  In addition, the study provides illustrative effects of the Project on tourism and the subsequent economic impacts of any changes in regional tourism due to the Project.  Moreover, the study provides assessments of socioeconomic effects on another stakeholder group, Niagara University.  NERA, with consent of the Power Authority, has honored the Tuscarora nation request that a separate analysis of the Project effects on the Tuscarora Nation not be included in the Report.  

 

Table ES- 1.  2004 Impacts of the Niagara Power Project

 Place

Population

Employment

GRP  (2002 Dollars)

Personal Income  (2002 Dollars)

New York State

24,078

12,273

1,007,137

591,335

Western NY

12,425

6,616

562,191

278,199

Local Communities

 

 

 

 

Erie County

5,255

3,003

234,040

129,441

Buffalo City

1,523

911

78,375

28,298

Host Communities

 

 

 

 

Niagara County

4,728

2,478

239,035

110,667

Lewiston Town

1,688

917

107,636

26,576

Lewiston Village

76

36

2,071

1,200

Lewiston-Porter SD

1,662

836

93,283

30,386

Niagara Falls City/SD

1,118

818

93,904

31,508

Niagara Town

243

127

8,467

7,081

Niagara-Wheatfield SD

315

122

8,965

5,875

Preference Customers

 

 

 

 

Akron Village

43

20

1,287

582

Arcade Village

59

25

1,556

371

Jamestown City

532

264

17,106

5,179

Note: Developed from NERA/REMI calculations, as explained in text.

 

1.0  INTRODUCTION

NERA Economic Consulting (“NERA”) prepared this report, under contract to the New York Power Authority (“NYPA”), to address the issues contained in Scope of Services Issue #10.  NERA developed this study as part of the Alternative Licensing Process (“ALP”) that NYPA is pursuing to renew the license for the Niagara Power Project (“NPP”). 

1.1         The New York Power Authority and the Niagara Power Project

NYPA is a state-owned power company that builds and operates electric generation and transmission facilities throughout New York.  [2] NYPA was established as a non-profit, tax-exempt energy corporation through the New York Power Authority Act of 1931.  NYPA is the largest state-owned power company in the United States.  It currently operates 17 generating facilities and more than 1,400 circuit miles of transmission lines.

In 1957, following the collapse of the Schoellkopf Generating Station on the Niagara River, Congress enacted the Niagara Redevelopment Act (“the Act”) directing the Federal Power Commission (“FPC”)[3] to issue NYPA a license for the “construction and operation of a power project with capacity to utilize all of the United States’ share of the water of the Niagara River permitted to be used by international agreement.” Construction of the Niagara Power Project (“NPP” or “the Project”) began within two months of issuance of the license.  The NPP began operation in February 1961.  

The Project consists of a number of major components, covering approximately 3,500 acres primarily in the Town of Lewiston and the City of Niagara Falls.  Two intakes are located approximately 2.6 miles above Niagara Falls.  Water entering the intakes flows through two conduits to a forebay located on the east bank of the Niagara River approximately four miles below the Falls.  The main generating plant of the NPP, the Robert Moses Niagara Power Plant (“RMNPP”), is located at the west end of the forebay, between the forebay and the Niagara River, and generates power with 13 turbines.  

The Lewiston Pump Generating Plant (“LPGP”) is located at the east end of the forebay.  The LPGP is comprised of 12 reversible pump-turbines that lift water during off-peak periods from the forebay to the Lewiston Reservoir, located east of the forebay and LPGP.  During peak periods, LPGP’s pumps are reversed to operate as generators, directing water to flow back from the Reservoir into the forebay and subsequently through RMNPP to the Niagara River.  The NPP switchyard—the interface between the NPP and the New York power grid—is located south of the forebay. 

Together, these facilities provide the Project with 2,400 MW of net dependable capacity, of which 1,880 MW is firm capacity.

In addition to authorizing the construction and operation of the NPP, Congress in the Niagara Redevelopment Act also set forth conditions governing the allocation of most of the power from the Project.  Figure 1.1-1, below, summarizes the approximate distribution of firm capacity from the NPP.  Section 836 (b) (1) of the Act designated at least one-half of the Project’s electricity as “preference power” to be allocated to public bodies and non-profit cooperatives within economic transmission distance.  The Act further specified that a “reasonable portion” of the preference power be allocated to bargaining agencies designated by each of the neighboring states.  The reasonable portion applies to the 50 percent of the Project power designated as preference power, but no more than 20 percent of the 50 percent (or 10 percent) of total Project power is required to be allocated to out-of-state recipients.  The Act required NYPA to distribute 445 MW of power to the businesses (or their successors) that were the customers of the Schoellkopf and Adams Generating Stations that formerly utilized the United States share of the water available for power production.  This allocation is termed “replacement power” and accounts for approximately 25 percent of the Project’s firm output.

New York State law further specifies that NYPA set aside 250 MW of power from the NPP for sale to businesses located within 30 miles of the Project or in Chautauqua County.  This power, known as “expansion power,” is allocated to companies on the basis of increased demand resulting from expansion of local production facilities.  The remaining NPP power (about 13 percent of total output) is distributed to investor-owned utilities in New York, including Niagara Mohawk (“NiMo”), New York State Electric & Gas (“NYSEG”), and Rochester Gas and Electric (“RG&E”), for the purpose of serving the companies’ residential customers.

NYPA is currently in the process of upgrading the Niagara Project’s 13 turbine generators.  The upgrade, which is costing close to $300 million, is primarily intended to improve the efficiency of the generating units, although it is also expected to have the effect of increasing the Project’s firm capacity by approximately 35 MW.[4] Upgrade work began in 1991 and is expected to be completed by 2006.[5]

1.2         Background and Study Objectives

The federal license granted to NYPA in 1958 for operation of the Project will expire in August 2007.  In 2002, NYPA notified FERC that it would be seeking to apply for a new license.  Under current law, the application must be submitted by August 2005.

In July 2002, FERC approved NYPA’s request to engage in an Alternative Licensing Process (“ALP”), which provides stakeholders increased opportunities to participate in the relicensing, particularly early in the process.  During the scoping phase of the ALP process, NYPA and the stakeholders identified a number of important issues relevant to the Project relicensing.  One of the sets of issues identified by the parties during the scoping process is Issue #10, titled “What are the past, present and anticipated future socioeconomic effects of the Niagara Power Project and local NYPA presence on the Host Communities, Local Communities, Western New York, New York State, in-state customers, out-of-state customers, and Niagara University.”  This study addresses the questions raised by Issue #10.

In particular, this study is intended both to describe the socioeconomic setting in which the NPP has operated (and is expected to operate) and to provide a quantitative assessment of the socioeconomic effects of the Project.[6] This study addresses a number of broad categories of regional characteristics, including demographics, employment and commerce, real estate, local taxes and services, tourism, and electricity provision.  In addition, although this study is intended to focus on quantifiable impacts of the Project, to the extent possible it also describes other sociological and cultural issues that may relate to the socioeconomic impacts of the Project.

Although this study addresses the broader geographic region described in Issue #10, it includes detailed estimates for the areas designated as “Host Communities” and “Local Communities.”  Host Communities are defined as the taxing entities of Niagara County in which NYPA owns land used by the Project, including the Town of Lewiston, the City of Niagara Falls, the Niagara-Wheatfield School District, the Town of Niagara, the Lewiston-Porter School District, the Niagara Falls School District[7], and County of Niagara as a whole.  Local Communities include all the Host Communities as well as the City of Buffalo.  Although not explicitly included in the Scope of Services, for completeness, we have also included the Village of Lewiston as a Host Community and Erie County as a Local Community.  In addition, impacts on Niagara University, a non-taxing entity located near the Project, are addressed.  This analysis does not include estimates of the economic impacts of the Project outside New York State other than the effect on the cost of wholesale power purchased as a substitute for Project power.

As part of the relicensing process, NYPA has commissioned several studies to characterize and evaluate various economic, social, environmental, or health impacts associated with the Niagara Power Project.  Section 5.2 in this report summarizes the economic and employment impacts of the project.  Although the report does not address relative impacts on specific household groups, such as low-income or minority populations, it does consider the effects on different geographic regions, different sectors and different occupational groups.  These results indicate that all relevant regions, sectors and occupational groups are positively affected by the Project.  These results thus suggest that the Project does not have adverse economic impacts on low-income or minority populations.  Several other resource reports contribute to the understanding of potential impacts of the Project to human health and the environment, and thus are related to Environmental Justice concerns.  These reports provide further reasons to believe that the Project does not raise Environmental Justice concerns.

Table 1.2-1 summarizes the socioeconomic categories and regions/places considered in this study.  Although data limitations make it impossible to consider all categories for all places, this table provides a framework that is used in all sections of the report. 

Figure 1.2-1 shows the overall structure of our analyses.  We begin by developing background on the entities covered by the study, including past information on the various socioeconomic categories.  This provides the background for the next step—developing information on direct impacts of the Project.  As noted below, the direct effects include those that depend upon the Project and the NYPA presence rather than on subsequent rounds of expenditures and other socioeconomic interactions.  The next step is the creation of the key economic modeling framework used in this study, the development and customization of a multi-region economic model developed by REMI.  As explained at considerable length in Section 4.1 and Appendix E, REMI is a state-of-the-art model that has been used extensively in many previous studies.  The REMI model allows us to develop estimates of overall effects for many of the major socioeconomic categories, including demographic information, economic and employment information, and public sector tax and expenditure information.  REMI modeling results allow us to address the current and future socioeconomic effects of the Project.  The “long-run” impacts measured by the REMI model can be seen to represent not only the current impact of the Project but also the likely impact of the Project over time.  Thus, although the REMI model is only available for the years 2000 through 2035, our estimate represents the ongoing impacts of the Project, which are essentially indefinite.

The REMI modeling results are then used in conjunction with information from other ALP studies to develop assessments of the socioeconomic/cultural effects.  The final step is to use the combined results to develop an overall integrated socioeconomic report.

1.3         Organization of the Report

The remainder of this report is divided into three major sections.  Section 2.0 is titled “Socioeconomic Background.”  This section describes the socioeconomic setting in which the Project has operated from its inception in 1961 to the present.   We present information describing the various geographic areas included in the study in terms of the broad socioeconomic categories noted above.   Our main sources for these data include the U.S. Department of Commerce, the U.S. Bureau of Census (“Census Bureau”), various government agencies of New York State as well as counties and municipalities within New York, and industry groups such as the Buffalo-Niagara Partnership and the Municipal Electric Utilities Association of New York State (“MEUA”). 

Section 3.0 is titled “Direct Socioeconomic Effects of the Power Project.” This section presents estimates of the direct impacts of the Project.  As noted, these are the effects of the Project that can be identified as resulting directly from Project activities and are not dependent on subsequent economic interactions.  These direct impacts include the employment and payroll of the Project, the monetary outlays by NYPA for supplies and services related to the Project, the direct value of the low-cost electric power purchased by NYPA customers, the effects on tax revenues and rates, public expenditures, other payments made by NYPA in the region, and effects of the Project on other socioeconomic aspects of the region.  The data on direct impacts—including employment, electricity distribution, and spending—were obtained primarily from NYPA.  Other sources include some NYPA customers, numerous state and local government agencies in New York, and the U.S. Department of Energy.

Section 4.0 is titled “Modeling the Socioeconomic Impacts of the Niagara Project and the NYPA Presence.” This section presents the results of REMI modeling of the overall effects of the Project, integrating the direct impacts, into a modeling framework that incorporates multiplier effects.  As noted, the major tool for developing estimates of multiplier effects is the REMI model, a state-of-the-art, nationally recognized model for estimating the full economic impacts of major private and public developments.  

Section 5.0 is titled “Summary of the Overall Socioeconomic Impacts of the Niagara Project and the NYPA Presence.” This section provides a summary of the effects of the Project in the major impact categories that we focus on throughout the report.  Note that this assessment discusses both the REMI modeling results as well as impacts not amenable to modeling, including real estate and socioeconomic/cultural analyses as well as the integration of other ALP studies (e.g., the Construction Effects Study and the Cultural Resources Study).  The result of these various assessments is an overall integrated assessment of the socioeconomic effects of the Project and the NYPA presence.

1.4         NERA Economic Consulting and Study Team

This study was prepared by NERA Economic Consulting (“NERA”), an international firm of economists with approximately 500 professionals operating in 16 offices across North and South America, Europe, Asia and Australia.  NERA has extensive experience evaluating the socioeconomic effects of major energy facilities and other projects and policies both in the United States and abroad.  The study was directed by Dr. David Harrison.  The other authors of this study were Dr. Jesse David and Mr. James Patchett.  Mr. Paul Reschke, and Mr. Andrew Foss also contributed to the study.  The study was supported by the New York Power Authority, which provided access to information as well as other help.   As noted in the report, many other organizations provided additional data and other assistance to the study.  We are grateful for this support and assistance, although NERA alone is responsible for the report and any errors or omissions it may contain.

 

Table 1.2-1

Study Regions and Socioeconomic Categories

Place

Demographic

Economy/
Employment

Public Sector

Electricity

Real Estate

Tourism

Sociological/
Cultural

New York State

X

X

 

X

 

 

 

Western NY

X

X

 

X

X

 

 

Local Communities

 

 

 

 

 

 

 

Erie County

X

X

X

X

X

X

X

Buffalo

X

X

X

X

X

X

X

Host Communities

 

 

 

 

 

 

 

Niagara County

X

X

X

X

X

X

X

Lewiston Town

X

X

X

X

X

X

X

Lewiston Village

X

X

X

X

X

X

X

Lewiston-Porter SD

X

X

X

X

X

X

X

Niagara Falls City / SD

X

X

X

X

X

X

X

Niagara Town

X

X

X

X

X

X

X

Niagara-Wheatfield SD

X

X

X

X

X

X

X

Additional Stakeholders

 

 

 

 

 

 

 

Niagara University

 

X

 

 

X

 

X

Preference Customers

 

 

 

 

 

 

 

Akron Village

X

X

 

X

X

 

 

Arcade Village

X

X

 

X

X

 

 

Jamestown City

X

X

 

X

X

 

 

Notes: Prepared by NERA, as explained in text.

 

Figure 1.1‑1

Distribution of Project Power (Firm Capacity)

 

Note: Data from http://www.wnyrelicensing.buffalo.edu/npp/pcom.html.

 

Figure 1.2-1

Structural Organization of This Study

 

2.0  SOCIOECONOMIC BACKGROUND

This section discusses current and historical trends in New York State, Western New York, and the Project region, including detailed information on the various entities highlighted in this study.  Table 1.2-1 above listed the defined regions for which information is developed.  We provide socioeconomic information on the topics listed below in the following order:

·         Demographic;

·         Economic/employment;

·         Public sector (taxes and services);

·         Electricity;

·         Real estate;

·         Tourism; and

·         Sociological/Cultural.

Figure 2.0-1 displays a map of all of the geographic areas considered in this study.  The map shows all of New York State, including Western New York, Erie County, Niagara County, and the City of Buffalo.  Figure 2.0-2 provides a detailed map of the Host Communities.  Finally, Figure 2.0-3 shows Erie County in further detail, with the City of Buffalo broken out.  These two regions (Erie County and the City of Buffalo) make up the Local Communities considered in this study.  This map shows the location of the City of Buffalo as well as two of the communities receiving power at preference rates (“Preference Customer communities”) that are considered in the study: the Village of Akron and the Village of Arcade.  The third Preference Customer community considered in this study—the City of Jamestown—is located in Chautauqua County and is shown in Figure 2.0-1.

2.1         Demographics

This section summarizes demographic trends in the study areas.  Specific parameters considered here include total population, age distribution, educational levels, income and poverty rates, and race and ethnicity.  We first discuss trends in total population since 1900.  The sections that follow discuss various demographic indicators, including age, education, race, and ethnicity between 1970 and 2000.  Where data are available, we present information for the Host and Local Communities, Western New York, the State of New York, and, for comparative purposes, the United States. 

2.1.1        Population and Migration

This section describes the population trends in New York State since 1900, including a more detailed consideration of Western New York, the Host and Local Communities, and the three Preference Customer communities.  We also present information on population changes in the United States (“U.S.”) as a whole, for comparative purposes.  In addition, we provide information on the population (i.e.  student enrollment) at Niagara University (“NU”).

The population in New York State grew by approximately 28 percent between 1950 and 2000, from 14.8 million to about 19.0 million, as Table 2.1.1-1 shows.  In the period from 1950 through 1990, New York’s population peaked at 18.2 million in the 1970 Census, before falling back to 17.6 million in 1980.  Since 1980, statewide population has regained its upward trend, reaching a new peak (19.0 million) in 2000.  The population of the U.S. as a whole grew at a substantially greater rate, nearly doubling between 1950 and 2000, growing from 151.3 million to 281.4 million people.

Between 1950 and 1990, like the state as a whole, the population of Western New York[8] peaked in 1970.  However, unlike the state, Western New York’s total population has been in continual decline since its 1970 peak of 1.8 million people, though it has remained above its 1950 population of 1.5 million.  Indeed, the 2000 Census recorded a population of 1.6 million people in Western New York, the lowest decennial population recorded there since the 1950 Census.

For the two counties considered separately in this study—Erie and Niagara County—the population trend has been roughly similar to that of Western New York overall.  Both counties’ populations peaked more than three decades ago (Erie in 1970 and Niagara in 1960) and have been in a gradual decline since that time.  Like Western New York as a whole, both counties recorded their lowest decennial population totals since 1950 in the 2000 Census, with a year 2000 population of about 950,000 in Erie County and just fewer than 220,000 in Niagara County.

The other Host and Local Communities have experienced a similar population trend over the last half-century.  Most of these communities experienced a population peak before 1990 and have since lost population.  For example, like Niagara County, the City of Niagara Falls experienced a peak decennial population in 1960 (just over 100,000) and has seen a significant population decline since that time, recording a population of fewer than 56,000 in the 2000 Census. 

Although many of the Host and Local Communities considered here experienced population peaks more than two decades ago, some have experienced recent growth as well.  The Town of Lewiston, for example, more than doubled its population between 1950—when it had a population of 6,921—and its peak in 1980 with a population of 16,407, before falling back under 16,000 in the 1990 Census.[9] Since 1990, Lewiston has seen some modest resurgence, however, reaching a recorded population of 16,257 in the 2000 Census.  The Niagara-Wheatfield School District has also experienced recent population growth, fueled by growth in the Town of Wheatfield.

Table 2.1.1-2 provides additional background on the nature of population changes in the U.S., New York State, and Western New York, presenting detailed data on migration patterns in these communities.  (The data presented here are provided at the county level or above, because these data are not available at the sub-county level.) The table shows that the U.S. as a whole experienced significant in-migration between 1980 and 1999, while New York had negative net migration over the same period.  Western New York had slightly greater out-migration between 1980 and 1990 (-6.9 percent) than New York State (-2.7 percent) and between 1990 and 1999 (-6.3 percent, compared to -4.3 percent).  The Host and Local Communities, represented by Erie and Niagara Counties, experienced a similar pattern of out-migration to that of Western New York, falling both over the 1980-1990 period (-7.7 percent and -6.9 percent, respectively) and over the 1990-1999 period (-6.6 percent and –4.5 percent, respectively).  The Preference Customer community of Jamestown, represented by Chautauqua County, also experienced out-migration over the period, though Wyoming County (home to the Village of Arcade) saw slight net in-migration.  (The third Preference Customer community considered here, the Village of Akron, is located in Erie County.)

Table 2.1.1-3 and Table 2.1.1-4 show population projections through 2035, at the county level, for all of the counties in which the communities are located.  The projections show that U.S. population is expected to continue to grow, reaching a population of 380 million by 2035.  Unlike the nation, however, the population of New York State is expected essentially to be level between 2005 (19.12 million) and 2015 (19.10 million), before regaining an upward population trend through 2035 (20.86 million).

As the projections in Table 2.1.1-3 show, Erie, Niagara, and Wyoming[10] Counties are all expected to follow a trend roughly similar to the State, experiencing leveling off or slight declines in population through 2015, before regaining population growth at the end of the period.  Similarly, Chautauqua County is expected to experience a slight decline in population between 2005 (136,823) and 2010 (136,656) before regaining its growth trend through the end of the period, with a projected population of 165,395 in 2035.

It may also be useful to consider the “population” (i.e., the student population) of another stakeholder group—Niagara University.  Table 2.1.1-5 shows the total enrollment in Niagara University between 1990 and 2000 (the period for which data were available).  The table shows that enrollment has remained relatively constant over the period, consistently in the range of 3,000 students.  Data provided by NU indicates that enrollment has grown to 3,186 as of 2003.

2.1.2        Age Distribution

This section discusses the age-related trends of the population in New York State.  We provide information on the percentage of the population accounted for by four broad age ranges—under 20 (Table 2.1.2-1), 20 through 34 (Table 2.1.2-2), 35 through 64 (Table 2.1.2 -3), and over 65 (Table 2.1.2-4). 

The population of New York State has aged in the period since 1970, as the tables below show.  While the population under 20 has fallen from over 35 percent of the population in 1970 to nearly 27 percent of the population in 2000, the population composed of people in the range from 35 to 64 years of age has grown from 34 percent to nearly 39 percent of the population.  Meanwhile, the population between 20 and 34 years of age composed a similar proportion of the population in 2000 as it did in 1970 (roughly 20 percent), though it constituted a greater proportion of the population in the intervening years (close to 25 percent).  The population 65 and over has also experienced some growth since 1970, though it has leveled off since 1990.  This trend is roughly consistent with the national trend as the “baby boomer” generation has aged through the population.  Indeed, as the table shows, the age distribution of the nation as a whole has tracked New York State’s population quite closely.

The age trends in Western New York have mirrored quite closely those for the state as a whole, with the population between the ages of 35 and 64 experiencing the greatest growth and that under 20 seeing the greatest decline from 1970 through 2000. 

Erie and Niagara Counties have also followed trends that are broadly similar to the state in all four age categories, though the declines in the population under 20 and increases in the population 65 and over have been particularly pronounced.  In Niagara County, in particular, the population under age 20 has fallen from representing nearly 40 percent of the population in 1970 to composing only 27.5 percent of the population in 2000.  Over the same period, the population over 65 in Niagara County has grown from 9.5 percent of the population to 15.5 percent in 2000.  As the tables show, Erie County has experienced similar trends.

Most of the Host and Local Communities have experienced similar declines in the proportion of the youth population and increases in the proportion of the senior population.  Shifts in many of the Host Communities are particularly marked.  The Town of Niagara, for example, had an under 20 population that represented nearly 45 percent of the total population in 1970 but had declined to 25.8 percent by the 2000 Census.  In addition, unlike the state and Western New York, many of the Local Communities have not experienced a “leveling off” of the youth and senior populations since 1990.  Note that this trend is similar for the Preference Customer communities, including the Village of Akron and the City of Jamestown, which have followed the same patterns as the communities around them.

The City of Buffalo, on the other hand, has experienced some “leveling off” since 1990.  Indeed, though Buffalo’s 65-and-over population grew from 13.3 percent in 1970 to 15 percent in 1980, it had fallen back to 13.5 percent of the total population in 2000, while its under-20 population grew to 29.3 percent, above 1980 levels.  As the tables show, the City of Niagara Falls has experienced a similar leveling off.

2.1.3        Educational Levels

This section describes the educational levels of the population in the United States, New York State, Western New York, the Host and Local Communities, and the three Preference Customer communities in the period from 1970 through 2000.  For the purposes of this section, two measures of educational attainment are used—the high school dropout rate[11] and the college graduation rate[12].  Table 2.1.3-1 shows the high school dropout rate, while Table 2.1.3-2 presents the college graduation rate.

In all of the geographic regions considered here—almost without exception—the high school dropout rate declined continually over the period from 1970 through 2000, while the percentage of college graduates increased continually.  In New York State, the high school dropout rate declined from 13.9 percent in 1970 to 9.0 percent in 2000, while the college graduation rate has grown from 11.9 percent in 1970 to 27.4 percent in 2000.  These trends follow quite closely those of the nation as a whole.

Western New York had a similar overall level of educational attainment as the state, though it had fewer college graduates (21.2 percent) and a slightly lower high school dropout rate (7.4 percent) in 2000 than the state, as it has throughout the period since 1970.

The Erie and Niagara County regions experienced similar trends in educational attainment to Western New York over the 1970-2000 period.  In the 2000 Census, the dropout rates in both counties were just slightly below the Western New York level, at 7.0 percent and 7.2 percent in Erie and Niagara, respectively, while the college graduation rate was above the Western New York level in Erie County (24.5 percent) and below the Western New York level in Niagara County (17.4 percent).  These trends have been roughly consistent throughout the 1970-2000 period.

The college graduation rate has grown significantly since 1970 in all of the Host and Local Communities, as well as the Preference Customer communities.  Among these communities, however, there is a fair amount of variation.  In 2000, some communities, including Arcade (12.5 percent), the City of Niagara Falls (12.5 percent), and the Town of Niagara (10.3 percent), had markedly low college graduation rates, while others, such as the Town of Lewiston (29.7 percent) and the Village of Lewiston (24.4 percent), had noticeably higher graduation rates.

As high school dropout rates in the Host and Local Communities have fallen, college graduation rates haven risen.  Indeed, all of the communities had lower high school dropout rates in 2000 than in 1970.  While most of the communities have continued to decline, some, like the City of Buffalo, have experienced recent increases in the dropout rates.

2.1.4        Income Levels and Poverty Rates

            This section discusses the income levels of the population in the United States, New York State, Western New York, the Host and Local Communities, and the three Preference Customer communities in the period from 1970 through 2000.  We rely on three measures of income level—median income, per capita income, and the poverty rate.[13] Table 2.1.4-1 shows real median family income[14] (in 2002 dollars) for the relevant geographic regions, Table 2.1.4-3 presents per capita income historically for the study regions, and Table 2.1.4-5 presents data on the poverty rate.  Table 2.1.4.2, Table 2.1.4-4, and Table 2.1.4-6 present the same data for 1999, broken out by race.

New York State has seen continual growth in both real (inflation adjusted) median family income and real per capita income over the period from 1959 through 1999.  Real per capita income increased from just under $13,000 in 1959 to just over $25,000 in 1999, somewhat greater than the 1999 U.S. level of around $23,000.  Similarly, real median family income in the state has grown from around $23,000 in 1949 to almost $56,000 in 1999.  Over the same period, however, the state has experienced an increase in the poverty rate—from 11.1 percent in 1969 to 14.6 percent in 1999, while the nation as a whole has seen a decline.

The Western New York region has also seen growth in real per capita income over the 1959-1999 period, though the region has remained below the state level over the entire period, recording real per capita income of just over $20,000 in the 1999 Census (in 2002 dollars), about $5,000 less than the state level.  The Western New York region has also seen an increase in the poverty rate, which grew over two percentage points between 1969 and in 1999.  However, the poverty rate in Western New York remained below the state level in 2000 at 12.0 percent.

In Erie and Niagara Counties, both real per capita income and median family income have increased since 1959, though, like Western New York as a whole, they have remained below average state levels.  Real per capita income in Erie County was above the Western New York level by almost $2,000 in the 1999 Census.  Niagara County’s per capita income was only slightly above the region with real per capita income of $20,753.  Poverty rates in both counties have also grown since 1969, though they remained below the state level in the 1999 Census.  As of the 1999 Census, Niagara County had ten Census tracts in poverty areas and one Census tract in an extreme poverty (see Table 2.1.4-7).[15] Four of the tracts that meet the definition of a poverty area are adjacent to the FERC Boundary.

There is a great deal of variation among the other Host and Local Communities with respect to income and poverty levels, though most communities have experienced improvements in both indicators over the 1969-1999 period.  The City of Buffalo and the City of Niagara Falls both recorded real per capita income levels well below the region in the 1999 Census—with per capita income in Buffalo and Niagara Falls of $16,188 and $16,976, respectively (in 2002 dollars).  The Town of Lewiston, on the other hand, had per capita income in 1999 well above the region of Western New York—close to the state level at just above $25,000.

Among the Host and Local Communities, Buffalo and Niagara Falls recorded particularly high poverty rates in 2000—26.6 percent and 19.5 percent, respectively.  The Town of Lewiston and the Niagara-Wheatfield School District, on the other hand, recorded particularly low poverty rates—5.8 percent and 6.1 percent, respectively.

Table 2.1.4-8 through Table 2.1.4-11 display the sources of income for the U.S., New York State, Western New York, the Host and Local Communities, and the Preference Customer communities over the period from 1959 through the present.  As the tables show, wage and salary income represents the vast majority of income over the entire period for all of the regions.  Since 1969, in both Erie and Niagara Counties, there has been some modest growth in the percentage of income represented by social security payments.  Over the same period, individuals in both counties saw wage or salary and self-employment income represent a declining proportion of total income.  The majority of Host and Local Communities mirrored these trends.

2.1.5        Race and Ethnicity

This section discusses the racial and ethnic composition of the population in United States, New York State, Western New York, the Host and Local Communities, and the three Preference Customer communities.  We report statistics for two racial groups—whites and African Americans—and one ethnic group—Hispanics[16].  We do not report historical statistics for additional racial groups because historical Census data are often not available.  However, data throughout this section include information for a number of additional racial and ethnic groups.

Table 2.1.5-1 shows the percentage of the population made up of whites, Table 2.1.5-2 shows the percentage of the population made up of African Americans, and Table 2.1.5-3 presents information on the proportion of the population composed of Hispanics.

Over the period from 1970-2000, New York State has seen significant growth in its African-American population and a corresponding decline in the percentages accounted for by its white population.  The African-American population grew from 11.4 percent of the state’s population in 1970 to 17.0 percent of the population in 2000, while the white population declined from 84.9 percent of the state’s population in 1970 to 69.3 percent in 2000.  The state has also seen growth in its Hispanic population, which nearly doubled between 1970 and 2000, reaching 15.1 percent of the state’s population in 2000.  The tables indicate that these shifts were roughly consistent with national trends over the period.

The Western New York region also saw growth in its African-American population over the 1970-2000 period, along with a decline in its white population.  The region’s share of African Americans, however, remained well below the state’s, reaching 9.8 percent of the region’s population in 2000.  The region’s Hispanic population has also experienced some growth, though it made up only 2.8 percent of the region’s population in 2000.

Erie and Niagara Counties have followed a similar growth trend to that of the region as a whole.  Erie County’s population, however, consisted of a larger share of African Americans (13.5 percent) and Hispanics (3.2 percent) than the region in 2000, while Niagara County had a lower percentage of African Americans (6.8 percent) and Hispanics (1.3 percent) than the region.  As of 2000, Niagara County had three Census tracts where the minority population exceeded 50 percent of the total population (Tracts 202, 204, and 206), all located in the City of Niagara Falls (see Table 2.1.5-4).

In most Host and Local Communities the African-American populations compose less than 5 percent of the community’s population.  The City of Buffalo, however, has a significant African-American population, comprising 38.5 percent of the city’s population, as does the City of Niagara Falls (20.0 percent).  The City of Buffalo—where the Hispanic population represents 7.4 percent of the city’s people—is the only one of the communities with a Hispanic population that comprises more than 2.0 percent of the people.

2.2         Industry and Employment

This section provides information on trends in industry and employment.  We provide data for 2000 for all of the study regions, based upon the detailed information developed in the REMI model prepared for this project.  Because of the lack of historical data on industry and employment at the town and city level, however, most of the historical trend information is developed for New York State, Erie and Niagara Counties, and the City of Buffalo and the City of Niagara Falls but does not provide information for smaller regions.

The following sections consider data on three major categories related to industry and employment: gross regional product (“GRP”), employment, and occupational information.

2.2.1        Gross Regional Product

This section presents information on the GRP in 2000 for the nation, New York State, the Local and Host Communities, and the selected Preference Customer communities.  GRP, the total output of goods and services in each region, is a measure of a region’s overall economic activity.  All figures are presented in terms of 2002 dollars.

Table 2.2.1-1 and Table 2.2.1-2 present the GRP in each of the study regions, broken out by industrial sector.  As the tables show, the United States had a GRP of $10.5 trillion in 2000.  New York State accounted for $658 billion of this total, with the largest amount, $161 billion, due to services industry output.

Niagara and Erie Counties had total GRP in 2000 of $6.3 and  $34.3 billion, respectively.  The largest three sectors—services, manufacturing, and finance—account for nearly two thirds of the region’s total GRP.  The three smallest sectors—mining, farming, and agricultural services—each contribute around $100 million to local GRP, well under 1 percent of total region product.

Buffalo was responsible for nearly a third of Erie County’s GRP, with total GRP of $10.2 billion.  The services and manufacturing industries were responsible for close to half of this total, accounting for $2.5 billion and $2.1 billion of the city’s GRP, respectively.  

In Niagara County, the City of Niagara Falls had the largest GRP with $1.6 billion.  As in the City of Buffalo, the services sector in the City of Niagara Falls was significant, contributing $294 million to the region’s GRP.  The largest sector, though, was durables manufacturing, which accounted for $428 million of the City’s GRP.

Indeed, the tables show that the manufacturing and services sectors dominated the economies across the region, while the agriculture and mining sectors were relatively small. 

2.2.2        Employment

This section reviews employment trends, providing details in three major categories—the labor force, total employment and the unemployment rate.  We first present data on the evolution of the labor force, then on total employment, by industry sector, and finally the trends in regional unemployment rates.

2.2.2.1  Labor Force

Table 2.2.2.1-1 presents information on the size of the labor force[17] over the 1950-2000 period in the U.S., New York State, Western New York, the Host and Local Communities, and the three Preference Customer communities.  (Table 2.2.2.1-2 presents detailed data on the labor force by race and ethnicity for 2000.) The data shows that roughly 138.8 million people were in the U.S. labor force in 2000, more than double the size of the 1950 labor force of 60.1 million.  New York State’s labor force has also grown since 1950, from 6.4 million in 1950 to 9.0 million in 2000.

While the national and state labor force has grown every decade since 1950, the labor force in many of the Host and Local Communities saw their first declines between 1990 and 2000.  Niagara and Erie Counties both fell slightly over the 10-year period.  Among the other Host and Local Communities, the City of Buffalo, the Town of Lewiston, and the Niagara Wheatfield School District were the only communities to sustain labor force growth between 1990 and 2000.  Among the three Preference Customer communities considered in this study, the City of Jamestown saw a sharp decline over the last decade, while the other two experienced modest growth.

2.2.2.2       Total Employment by Industry

Figure 2.2.2.2-1 through Figure 2.2.2.2-7 show trends in employment by sector from 1969 to 2000 for the U.S., New York State, Western New York, Niagara, Erie, Wyoming, and Chautauqua Counties.[18] Employment figures for 1969 and 2000 are presented in Table 2.2.2.2-1, Table 2.2.2.2-2, Table 2.2.2.2-3, and Table 2.2.2.2-4.[19]  Table 2.2.2.2-5 shows changes in industry by region over this time period.

As the tables show, 167.5 million people were employed in 2000 in the nation.  The bulk of these individuals, 53.3 million (31.8 percent), were employed in the services sector, almost twice the number employed in any other field.  New York State had about 10.5 million employed individuals in 2000, with 3.9 million (37.5 percent) employed in the services sector.

Erie County had total employment of 557,847 in 2000.  Approximately one third of these individuals—168,720—were employed in the City of Buffalo.  As with the state as a whole, the services sector was by far the largest employer, with the government, manufacturing and retail trade sectors also employing a significant portion of the populace. 

Niagara County had 95,661 employed individuals in 2000.  The services industry employed 26,199 (27.4 percent), and there were approximately 18,500 individuals (19.4 percent) employed in the manufacturing sector.  As with GRP, most of the smaller communities followed county and regional trends—with the services, manufacturing and government sectors usually accounting for the most employment.

Although the United States has seen 84 percent growth in overall employment since 1969, there have been declines in two industry categories—agriculture and manufacturing—as Table 2.2.2.2-5 shows.  New York State has seen an even greater decline (52 percent) in manufacturing employment since 1969.  Like the country as a whole, however, significant growth in other New York State sectors—such as the services sector—has acted to offset the decline in manufacturing employment, though employment in different sectors can of course lead to different levels of income.

Niagara County and Erie County have both experienced trends similar to the state.  Both counties have seen declines in agriculture and manufacturing employment, combined with employment increases in the services sector.  Indeed, employment trends across all sectors in Niagara and Erie County tracked quite closely to trends in the state as a whole over the 1969-2000 period.  One noticeable difference, however, is that Niagara County has actually seen a decline (2 percent) in total employment over the period, compared to a 24 percent increase in the state’s employment since 1969.  For context, Table 2.2.2.2-6 lists the top employers Western New York.  The table shows that HSBC Bank is the largest single employer in the region, with 5,500 employees in the City of Buffalo.

2.2.2.3  Unemployment Rate

Figure 2.2.2.3-1 shows trends in unemployment rates for New York State over the period since 1974, compared to the national average.[20] As the chart shows, New York State has followed unemployment trends in the nation relatively closely, typically experiencing employment peaks and valleys in the same periods, though their degree often varied.  For example, in the mid-1970s, the U.S. and New York State both saw rising unemployment rates, though New York State peaked at unemployment over 10 percent, while the U.S. peaked below 9 percent.  In 2003, however, New York State and the nation as a whole shared a 6.0 percent unemployment rate.  As Figure 2.2.2.3-2 shows, Western New York has also experienced unemployment trends similar to national trends.  Indeed, from the early to mid-nineties, unemployment rates in Western New York were roughly equivalent to national unemployment rates.  Since 1996, the unemployment rates in Western New York were slightly above national rates.

Like New York State, Niagara and Erie Counties have followed national unemployment trends, though again peaking at different points, as Figure 2.2.2.3-3 and Figure 2.2.2.3-4 show.  Indeed, in the mid-1980s, Niagara County peaked with unemployment rates well above national levels.  However, since that time, Niagara County has seen unemployment track the national unemployment rate quite closely.  Like Niagara County, Erie has experienced unemployment trends around or below national levels since the mid-1980s. 

Figure 2.2.2.3-5 and Figure 2.2.2.3-6 provide data on the unemployment rates in the City of Buffalo and the City of Niagara Falls.  As the tables show, both regions have had unemployment rates well above the national average over the period from 1988 through 2003.  During the period, both regions’ unemployment rates peaked in 1992 near 13 percent, before falling below 10 percent in the late 1990s and rising again starting in 2000.  Figure 2.2.2.3-7 presents data on Wyoming County, where the Preference Customer community of Arcade is located.  Figure 2.2.2.3-8 shows data for the City of Jamestown, a second Preference Customer community.  The figures show that both locations have unemployment rates slightly above the national average, though they have been quite close to the national level since 1990.

2.2.3        Occupational Information

This section provides information on the occupational mix and wage profile for the study regions.

2.2.3.1  Occupational Mix

Table 2.2.3.1-1 and Table 2.2.3.1-2 show the number and percentage of employed individuals by occupation for 2000.  In the United States as a whole by far the largest number of individuals—46.8 million—worked in occupations related to sales, office and administrative support.  An additional 16.8 million individuals worked in management, business or financial occupations.  New York State similarly had its largest proportion of individuals in sales, office and administrative occupations, with 3.1 million total.  Its second-highest occupational category was management, business and financial services, in which 1.1 million individuals were employed.

Erie and Niagara Counties share a profile similar to that of the nation as a whole with sales and office support occupations and management, business, and financial occupations significant occupational categories in both counties.  Among Erie County employees, 160,616 are in sales and office support occupations, while 56,312 are in management, business and financial occupations.  In Niagara County, 24,219 individuals are in sales and office support and 8,340 individuals employed in management, business and financial positions.  Other large occupations in the counties include education, healthcare, food preparation, construction, and transportation.

As in the U.S., the state, and Erie and Niagara Counties, the majority of employees in all of the Host and Local Communities, as well as the three Preference Customer communities considered, are occupied in the sales, office, and administrative support positions.

Table 2.2.3.1-3 presents data on the occupations of workers at Niagara University.  (Note that these data are broken down in categories provided by NU, not the more detailed categories presented for other sectors.) Data for NU were only provided for the years 1995, 1998-1999, and 2001-2003.  These data show that faculty and clerical and support staff made up the vast majority of the work force at NU in years for which data were provided.

2.2.3.2  Wage Rates

Table 2.2.3.2-1 provides information on wage rates for the Buffalo-Niagara Metropolitan Statistical Area (“MSA”)[21] as well as for New York State and the U.S. In 2001 the average wage in the Buffalo-Niagara region was 5 percent less than the national average.  Note, however, that these differences in wage rates do not account for differences in the cost of living between the Buffalo-Niagara MSA and the U.S.; lower costs of living in the Buffalo-Niagara MSA than in the U.S. would tend to shrink the differences described below.  People in legal occupations earned 20 percent less than their national counterparts, computer programmers made 19 percent less, and workers in personal care and service occupations earned 16 percent less (see Table 2.2.3.2-1).  However, some occupations in the Buffalo-Niagara region have a higher average hourly wage than the national average.  Compared to the national average, people in farm fishing and forestry occupations in the Buffalo-Niagara region earned 15 percent more per hour, workers in production occupations made 11 percent more per hour, and those in construction made 9 percent more per hour. 

In general, wages in New York State tend to be higher than national averages and substantially higher than in the Buffalo-Niagara MSA.  Again, these differences do not reflect differences in the cost of living; if the cost of living were higher on average in New York State than in Buffalo-Niagara, the differences described below would be lessened.  The average hourly wage in New York State, $19.11, was $3.33 higher than the wages in the Buffalo-Niagara region.  Indeed, average hourly rates for all job categories listed in Table 2.2.3.2-1 were lower in the Buffalo-Niagara region than in New York State.

Table 2.2.3.2-2 and Table 2.2.3.2-3 provide historical context on wage rates, broken down by industry.  The tables show that the average wages in Western New York and Erie and Niagara Counties have been well below state levels since 1975.  In addition, the highest average wages in Western New York and Erie and Niagara Counties have been in the manufacturing sector since 1980, while the highest average wages in the state have been in finance, insurance and real estate, with manufacturing second in 2000.

Table 2.2.3.2-3 presents wages by industry as a percent of total wages.  The table shows that all regions have a substantial portion of wages in the services industry, while manufacturing makes up a much higher portion of total wages in Western New York (24.3 percent) and Erie (21.7 percent) and Niagara (37.4 percent) Counties than in the state as a whole (11.7 percent).  Conversely, finance, insurance and real estate represents a much higher portion of total state wages (21.9 percent) than of wages in Western New York (6.4 percent).

2.2.4        The Project’s Industrial Customers

A significant portion of the Project’s electricity (approximately 40 percent) is sold directly to “expansion power” and “replacement power” (EP/RP) customers—companies that are located primarily in Erie and Niagara Counties.  Based on data provided to NYPA, these companies employ approximately 43,000 workers.  These jobs are tied to the Project’s low-cost electricity by contract with NYPA—in return for their allocation of NYPA hydropower, each company has committed to employment in the region.  

Table 2.2.4-1 lists the number of companies and the total employment by the Project’s industrial customers in each industry.  As shown in this table, manufacturing companies represent 97 of the 108 total EP/RP customers and approximately 90 percent of the total employment.   The main industries represented by NYPA’s customers include Food Manufacturing, Motor Vehicle Manufacturing, and Fabricated Metals Manufacturing (each with more than 5,000 committed jobs).  Other major industries include Primary Metals Manufacturing, Printing, Chemicals, and Wholesale Trade.   The Project’s low-cost hydropower is important to many of these companies’ abilities to compete effectively in their markets.

Based on average wage levels in these industries and regions, we calculate that locally these companies have a total annual payroll of approximately $2.1 billion.  Based on average levels of output per worker, we calculate that these companies generate approximately $13.8 billion in output each year.  Table 2.2.4-2 lists the number of companies and the total employment by region, with the proportional distribution of payroll and output.  As shown in this table, most of the EP/RP customers are located in Erie County.  Companies in Erie County, of which approximately half are located in the City of Buffalo, represent more than 80 percent of the total committed jobs of all EP/RP customers and account for approximately $1.7 billion in annual payroll.  Companies with significant payrolls are also located in Niagara Falls City (7 percent of total committed jobs) and the City of Jamestown (1 percent). 

In addition to providing employment to local residents and the associated direct income benefits, the Project’s EP/RP customers generate economic activity in the region through a number of other contributions.  These include:

·         Payments of property and sales taxes to local governments.  Members of the Power for Economic Prosperity (PEP), representing approximately 60 percent of the total employment by all the Project’s commercial and industrial customers, pay approximately $16 million in taxes annually.[22] Scaling this amount up proportionately to account for all EP/RP companies leads to a projection that total tax payments by these customers are approximately $27 million annually. 

·         Payments to suppliers in the Buffalo/Niagara region.  PEP members spend approximately $170 million locally each year, implying total spending of approximately $283 annually by all EP/RP customers.

·         Spending on facility investment.  PEP members have invested approximately $3 billion in their Buffalo/Niagara region manufacturing facilities over the last 5 years, indicating total investment spending of approximately $1 billion annually by all EP/RP customers.

·         Contributions to local community groups and organizations.  Manufacturing companies that receive low-cost power from NYPA support a number of non-profit organizations through financial contributions and employee support.  These include the United Way, the Women’s and Children’s Hospital, the Roswell Park Cancer Institute, Niagara University, and the Niagara Police Athletic League, among many others.

2.3         Public Sector (Taxes and Services)

This section provides information on public sector taxes and expenditures on services for the relevant areas as well as data on taxes on businesses.

2.3.1        Taxes and Local Revenues

This section describes the taxes and other forms of public sector revenue for the Local and Host Communities between 1997 and 2001.  We report the taxes and other forms of revenue for Erie and Niagara Counties, the City of Niagara Falls, the Town of Niagara, the Town and Village of Lewiston, and the City of Buffalo.  We also report revenue figures for the three relevant school districts–Lewiston-Porter, Niagara-Wheatfield, and Niagara Falls.  The tables from Table 2.3.1-1 through Table 2.3.1-10 present the revenue for each of the ten communities in thousands of 2002 dollars.

As the tables show, total revenue increased over the period considered for seven of the nine communities listed.  (The Bureau of the Census only reports one year of data for the Village of Lewiston, making it impossible to calculate a trend.) The percentage increase in total revenue ranges from Erie County, which grew by 1.6 percent from 1997 to 2001, to the Niagara Falls City School District, which increased by 18.0 percent over the same period.  However, only three of these communities—the Town of Niagara, the Town of Lewiston, and Erie County—show an increase in revenues generated from its own source.  The growth in revenue in the other four communities is due to increases in state or other local funding.  Federal funding did not increase for any of the communities over this period.

2.3.2        Expenditures on Services

Here, we present information on public sector service expenditures for the Local and Host Communities between 1997 and 2001.  We report the expenditures on various government services for all of the Host and Local Communities.  Table 2.3.2-1 through Table 2.3.2-10 present the expenditures for each of the ten communities in thousands of 2002 dollars.

Total expenditures increased in this period for seven of the nine communities for which trends can be shown.  The percentage increase in total expenditures was the lowest for Niagara County government, where expenditures grew by 3.8 percent from 1997 to 2001, to the Niagara-Wheatfield School District, where expenditures increased by 19.5 percent.  Expenditures for the Town of Niagara and the City of Niagara Falls fell by 18.1 percent and 25.1 percent, respectively.

The tables show that, for both Erie and Niagara County, the largest category of expenditures was public welfare in 2001.  In Erie County, public welfare represented nearly 37 percent of total expenditures with hospitals and higher education, other large categories of expenditures, representing roughly 17 percent and 5 percent, respectively, of total expenditures.  In Niagara County, public welfare expenditures represented almost 32 percent of total expenditures, while other significant categories included higher education (12 percent) and health (6 percent).

Service expenditures in the other Host and Local communities vary significantly from community to community.  Elementary and secondary education is by far the largest category of expenditures in the City of Buffalo, making up more than half of the city’s budget.  Police (6 percent), housing and community development (6 percent), and fire (5 percent) also represent significant categories of community expenditures.  In the City of Niagara Falls, police is by far the largest expenditure, representing 13 percent of total non-school expenses.  The Niagara Falls School District, which budgets separately from the City, had roughly the same level of expenditures as the city government.  That is, the City spent roughly the same amount on education as on all other expenditure categories.

The Town of Lewiston, the Village of Lewiston, and the Town of Niagara all spent a significant portion of their budgets providing sewerage services.  Highway funding also represented significant line items for each of these locales, representing between twelve and 14 percent of total expenditures.

2.3.3        Taxes on Businesses and Other Business Costs

This section presents information affecting the competitive position of the Host and Local Communities relative to other regions in the country.  Figure 2.3.3-1 provides an overview of taxes in New York State compared to other regions, presenting total indirect business taxes as a percent of GDP.  Indirect business taxes include both taxes (e.g., sales and property taxes) that are chargeable to businesses as well as non-tax liabilities such as regulatory fees.  Thus, this indicator provides a sense of the relative cost of doing business in New York as opposed to other regions and the U.S. as a whole.  As the figure shows, indirect business taxes in New York State are slightly higher than the national average, representing 7.8 percent of GDP in New York, compared to 7.6 percent in the nation as a whole.  New York’s indirect business taxes are also higher than the East region, but lower than other regions such as the South and West.

Of course, the indirect business tax measure does not include direct taxes such as unemployment taxes and corporate taxes.  Thus, this represents only one measure of the cost of doing business in New York State, and should be considered in conjunction with information on direct taxes as well.  Table 2.3.3-1, Table 2.3.3-2, and Table 2.3.3-3 provide additional measures of the competitive position of the Host and Local Communities.  These tables report the findings of a recent study by KPMG 2004 that looks at the relative cost of doing business in various metropolitan areas.  The study provides statistics on taxes and other costs of doing business in Buffalo, compared to a national average.  Table 2.3.3-1 shows that it is about 0.3 percent more expensive to do business in the Buffalo area than the average U.S. city, though the Buffalo area has a slight advantage in manufacturing (0.2 percent).  Table 2.3.3-2 and Table 2.3.3-3 present data on corporate taxes, both as a percent of total costs and total revenues.  The tables show that taxes on companies in the Buffalo region represent a slightly lower proportion of costs and revenues in most categories, with the exception of the sales tax.

Figure 2.3.3.2 and Figure 2.3.3-3 provide additional data on tax rates in the Host and Local Communities.  Figure 2.3.3.2 shows that the state corporate income tax rate in New York State (7.5 percent) is higher than the national average (6.8 percent) and the average for most regions, though lower than the average rate in the East (8.4 percent).  Figure 2.3.3-3 indicates that total sales taxes in both Erie and Niagara Counties (both 8.25 percent) are higher than the average national rate (7.43 percent).

In addition to sales and income taxes, businesses face other costs such as unemployment taxes and workers’ compensation.  Table 2.3.3-4 provides data on unemployment taxes in New York State.  Minimum, maximum, and new employer unemployment tax rates in New York are higher than the U.S. average.  However, the taxable wage base to which these rates are applied is far lower, only the first $8,500 taxable in New York as opposed to a national average of $13,171.  Thus, the unemployment taxes paid per worker by companies in New York State do not differ significantly from the national average.  Figure 2.3.3-4 provides a comparison of worker compensation rates across the U.S. From the perspective of businesses, New York State appears to stack up well against the rest of the country, with a maximum weekly benefit of only $400, significantly lower than the U.S. average of $619.

Finally, businesses located in the Host and Local Communities are subject to local property tax rates.  The tax rates that businesses in these communities face are discussed in Section 3.4.1.3.

2.4         Electricity

This section reviews the trends in electricity prices and consumption at the national level and for New York State over the period since Project operations began in 1961.  The first subsection presents information on electricity prices.  The second section provides information on present and historical electricity consumption for both the U.S. and New York State.

2.4.1        Electricity Prices

Figure 2.4.1-1 presents data on the average prices paid (in 2002 cents/kWh) for electricity by the three major customer classes—commercial, industrial, and residential customers.  The figure shows trends in average prices paid by the three major customer classes in New York State (1990-2002) and in the nation as a whole (1961-2002).

As the figure shows, electricity prices in the U.S. have fluctuated over the period since 1961.  The figure shows that electricity prices declined relatively steadily (in real terms) from the early 1960s through the early 1970s, when the petroleum shortage drove prices back up, peaking close to 12 cents per kWh (in 2002 dollars) in the early 1980s.  Since that peak, prices have again followed a steady decline through the present.  Although data for New York State are only presented since 1990, the figure shows that New York State electricity prices have, like national-level prices, declined since the early 1990s.[23]

The figure also demonstrates the difference in average electricity rates paid by customer class.  (Note that these prices include the impacts of Project power, which result in average New York State electricity prices that are lower than they would be in the absence of Project power, particularly for industrial and residential customers.) The figure shows that rates for residential and commercial consumers are, on average, significantly higher than those paid by industrial consumers.  The figure also shows that prices in New York State have been consistently higher than the national average for all retail customers. 

Figure 2.4.1-2, Figure 2.4.1-3, and Figure 2.4.1.4 show residential, commercial, and industrial real electricity prices from 1990 to 2002 for states other than New York that receive Project power: Connecticut, Massachusetts, New Jersey, Ohio, Pennsylvania, Rhode Island, and Vermont.  As the figures show, these states, for the most part, have experienced varying degrees of decline in real electricity prices with the exception of commercial prices in Vermont, which increased by 3 percent during these years.    

2.4.2        Electricity Consumption

As Figure 2.4.2-1 demonstrates, electricity consumption in the U.S. has grown significantly since 1961 for all three major customer classes as well as the “other” consumption category.  Indeed, in 1961, U.S. electricity consumption was just over 700 million MWh.  By 2002, annual electricity consumption had grown nearly five times to almost 3.5 billion MWh.  As the figure shows, total electricity consumption has been divided relatively evenly among the three major customer classes.  Unlike the other sectors, however, growth in industrial sector consumption has leveled off since the early 1980s, while consumption by the other two major customer classes has continued to grow.

In 2002, New York State accounted for approximately 4.1 percent of national electricity consumption.  As Figure 2.4.2-2 shows, commercial customers are by far the largest consumers of electricity in New York State, consuming over 60 million MWh of electricity in 2002, compared with under 50 million MWh of consumption by residential consumers, and just over 25 million MWh consumed by industrial customers.  Since 1990, consumption by commercial and residential customers has grown steadily in New York, while industrial consumers have reduced their consumption.

Figure 2.4.2-3 shows total electricity consumption for states other than New York that receive Project power.  With a peak use of 165 million MWh of electricity in 2000, Ohio is the largest electricity consumer of these states.  The smallest consumer of electricity is Vermont, purchasing 5.7 million MWh of electricity in 2002.  All of the states saw increases in electricity consumption between 1990 and 2002 while experiencing varying degrees of fluctuation in the interim years.  

2.5         Real Estate

This section reviews present and historical real estate patterns in the study regions.  The first sub-section considers land uses, and the second discusses information on population density in the study region.  The third sub-section presents data on housing characteristics, and the final section provides data on commercial real estate values.

2.5.1        Land Use

This section provides information on land use in the Host and Local Communities, as well as the Preference Customer communities.  Table 2.5.1-1 and Table 2.5.1-2 present data on the land use by community, both in terms of proportion and in terms of total land use, while Figure 2.5.1-1 provides a graphical representation of land-use patterns.  In most of the communities presented here, residential land use represents the largest proportion of total land.  In Niagara County and the Lewiston-Porter School District, however, agriculture is the largest category of land use, with residential land the second largest.  The data indicate that the Town of Lewiston and the Niagara Wheatfield School Districts also have significant portions of land dedicated to agriculture.

In terms of land used for business purposes, the Village of Akron, the Town of Niagara and the City of Buffalo have the highest proportions of land devoted to commercial purposes, with 14.1, 10.9 and 12.8 percent, respectively.  The City of Niagara Falls has the largest proportion of land dedicated to industrial uses, with 7.4 percent (672 acres) zoned for that purpose.  Many of the communities also have significant portions of vacant land, ranging from as much as 20 percent vacant in the Town of Niagara to as little as 4.2 percent vacant in the Village of Lewiston.

It is also helpful, for contextual purposes, to consider the historical development of land use in the region.  Figure 2.5.1-2 provides some sense of how land use has evolved in the region, illustrating development during four time periods—pre 1900, 1900-1940, 1940-1960, and 1960-2000.  The map shows that development before 1900 was almost exclusively in the City of Buffalo and the City of Niagara Falls, with a few outposts in the surrounding countryside.  Over the first 40 years of the twentieth century, development expanded the borders of Buffalo but had little effect elsewhere in the region.  The map also shows that, in the last 40 years, development has spread across the region, connecting Niagara Falls and Buffalo through a developed corridor along the Niagara River.

2.5.2        Population Density

Figure 2.5.2-1 displays a map of population density in the Host and Local Communities.  The map shows that the Village of Kenmore (near Buffalo) has the highest population density in the region, with a density of greater than 7,000 people per square mile.  Buffalo and the City of Tonawanda also have high population densities, with the City of Niagara Falls, the Village of Lewiston and the Village of Youngstown having slightly lower densities.  Among the Host and Local Communities, the Town of Lewiston and the Town of Niagara have the lowest population densities, with both towns having fewer than 1,000 people per square mile.

2.5.3        Housing Characteristics

This section examines the housing market characteristics of the Buffalo-Niagara region.  Table 2.5.3-1 and Table 2.5.3-2 show the number of housing units in each market and the overall vacancy rate from 1950 through 2000.  The number of housing units has grown significantly in the nation over the last 50 years, nearly tripling since 1950, while housing units in New York State have increased from roughly 4.6 million in 1950 to nearly 7.7 million units in 2000.  Consistent with broader suburbanization trends, neither Buffalo nor Niagara Falls has seen significant growth in the number of housing units—indeed, Buffalo has experienced a slight decline over the period.  On the other hand, the number of housing units in the other, more suburban Host Communities has grown significantly over the period.

In contrast to New York State, Western New York had an overall vacancy rate that was above the U.S. rate by 1.4 percentage points in the year 2000.  Although slightly higher than the state, vacancy rates during the same time in Erie and Niagara Counties were lower than national and regional levels at 8.4 and 8.2 percent, respectively.  As expected, urban areas within these counties had overall vacancy rates that were significantly higher than suburban areas due to their higher proportion of rental units (see Table 2.5.3-3).  For example, in the year 2000, vacancy rates in Buffalo (15.4 percent) and Niagara Falls (13.4 percent) reached much higher levels than the single digit rates in the other Host and Local Communities.

 Median value of owner occupied housing (2002 dollars) in New York State was over $30,000 higher than the nation as seen in Table 2.5.3-4 for the year 2000.  Except for a decline between 1960 and 1970, real median value of owner-occupied housing in Erie and Niagara Counties rose consistently over the period.  However, in contrast to New York State, Erie and Niagara Counties recorded median values well below state and national levels.  Among the Host and Local Communities, Buffalo had the lowest median value of housing at $61,952, while the Town of Lewiston had the highest at $104,158 but was still far below state and national levels by almost $51,000 and $21,000, respectively.

Produced by the Office of Federal Housing Enterprise Oversight (OFHEO), the House Price Index (Figure 2.5.3-1) models the quarterly growth in price of single-family homes over the period from 1978 to 2003, for the Buffalo-Niagara MSA, New York State, and the U.S. state average.  Although housing values in New York State were only slightly above the U.S. average during the first quarter of 1978, they substantially outpaced the U.S. ending in 2003 with a value that was more than one and a half times higher.  Over the same time, the Buffalo-Niagara MSA remained consistently lower than both New York State and the U.S. state average with a 2003 value that was around 40 percent of the U.S. and only 25 percent of New York. 

Table 2.5.3-5 reports median rent in the Buffalo-Niagara area for renter occupied housing.  Although New York State as a whole had rental rates that were over $70 per month higher than the U.S., rents in Erie and Niagara Counties were $90 and $129 per month lower, respectively.  Similarly to median housing values rents consistently grew over the period 1950 to 2000 except for a decline between 1960 and 1970.  Rental rates in the cities of Buffalo and Niagara Falls were lower than the more suburban areas such as the Town of Lewiston and the Town of Niagara. 

Finally, Table 2.5.3-6 presents data on residential land transactions during 2003 in the Town of Lewiston (where the majority of the Project land is located).  This information was compiled from detailed books of transactions in the Town and reflects only arm’s-length transactions, which excludes sales to relatives, transfers to estates, and donations to charity.  These transaction data indicate that there were nearly 200 residential lots (totaling over 100 acres) sold in 2003, with one-family homes selling for a median value of around $110,000 per home and around $300,000/acre.  (Transactions are reported in table as median price per acre including the house itself.) In addition, there were 26 parcels of undeveloped residential land sold in Lewiston for a median value of roughly $50,000/acre.

2.5.4        Characteristics of Commercial Real Estate

Table 2.5.4-1 compares the national average rental and vacancy rates to the Buffalo-Niagara MSA among various commercial property types in 2003.  Generally, both square footage rent and vacancy rates were lower in the Buffalo-Niagara MSA than the nation in 2003, though there were a few exceptions.  The largest differences in rental rates appeared in the downtown markets.  Nationally, the downtown office market exhibited significantly higher rent of $31.95 per square foot and a vacancy rate that was about two percentage points higher than Buffalo-Niagara’s, while the average downtown retail rental rate nationally ($39.24) was nearly five times the rate in Buffalo-Niagara ($8.00 per square foot).  On the other hand, rent for suburban office space in Buffalo-Niagara was $0.90 higher than the national average, while vacancy rates were less than half the national rate at 8 percent.  In addition, power centers reported rents that were around $1.50 higher in Buffalo-Niagara than they were in the U.S. with a vacancy rate that was more than 2 percent higher.  Finally, industrial real estate in Buffalo-Niagara had consistently lower rents and vacancy rates than the national average.

Table 2.5.4-2 provides some additional information on the value of land in the Buffalo-Niagara region, focusing on development land rather than rental space.  The data show that land prices ranged from a low of $20,000 per acre of residential land to a high of $1.1 million per acre of retail/commercial land.  The table also presents US data for comparison purposes.

2.6         Tourism

This section provides background on the tourism industry in the Buffalo-Niagara region.  In addition, we provide a comparison to the tourism industry on the Canadian side of the Falls.

2.6.1        Tourist Activity and Expenditures

Straddling the U.S.-Canadian border—in New York and Canada’s Ontario Province—Niagara Falls is among the largest waterfalls in the world.  One-fifth of the fresh water of the world lies in the Upper Great Lakes—Michigan, Huron, Superior and Erie—and all of the outflow empties into the Niagara River and eventually over the Falls or through the U.S. and Canadian power generating stations.  Twenty-five miles from the Falls is the City of Buffalo, the fifty-eighth largest city in the U.S. and second in New York State.  Buffalo is home to two major league sports teams and has New York State’s largest concentration of cultural attractions outside of New York City.  Together, Niagara Falls (U.S. side) and the surrounding Buffalo region attract approximately 8.4 million individual visitors each year, according to the Buffalo-Niagara Convention and Visitors Bureau.[24] An estimated 23 percent, or 1.9 million, of total visitors come to the region for business purposes (Shifflet 2003), meaning that approximately 6.5 million visitors come each year for leisure. 

Table 2.6.1-1 through Table 2.6.1-3 present data on the tourism industry in the Buffalo-Niagara region in 2001 and 2002 from a recent survey by D.K. Shifflet & Associates (Shifflet 2003).  As Table 2.6.1-1 shows, approximately 46 percent of visitors to the region come on day trips, while the remaining 54 percent stay overnight.  Among overnight visitors, the study indicates that the average trip lasted 3.01 days in 2002 with the majority of overnight visitors staying between one and three nights, meaning that overnight visitors are responsible for roughly 13.7 million visitor days each year.  Daytrippers are assumed to stay for roughly 0.75 days and thus are responsible for approximately 2.9 million visitor days.

Table 2.6.1-1 also shows that visitors spent an average of $83.50 per day on trips to the Buffalo-Niagara region in 2002.  The table includes information on the categories in which these expenditures were made, including transport (25.3 percent), food (21.7 percent), room (18.5 percent), shopping (15.3 percent), entertainment (13.4 percent), and miscellaneous (5.8 percent).  Table 2.6.1-2 and Table 2.6.1-3 give further details about the characteristics of visitors to the region.  As discussed in Appendix A, the $83.50 spent per day includes all trip expenditures—not just expenditures in Buffalo-Niagara.  To adjust for this, we assumed that the majority of transportation spending—75 percent—was spent outside of the region.  This adjustment yields an estimate of $67.66 spent per day per visitor in the Buffalo-Niagara region.  Finally, we make the assumption that all lodging expenditures are made by overnight visitors.  Using this assumption, we calculated that overnight visitors spent an average of $80.81 and day visitors spent $52.22 per day.  Using these estimates, it can be calculated that visitors to the Niagara region spent roughly $1.3 billion in 2002.  See Appendix A for further details on these calculations.

Using the data presented in Table 2.6.1-1 and the estimate of the total number of visitors to the region, it is possible to develop rough estimates of the tourism industry’s economic impact on the Buffalo-Niagara Region.  (Appendix A describes the methodology for developing this analysis in more detail.) Table 2.6.1-4 presents estimates of the economic impact of the tourism industry on the Host and Local Communities, Western New York and New York State.  As the table shows, visitor spending in the Buffalo-Niagara region is responsible for over 30,000 jobs in Erie County and 5,000 in Niagara County, including approximately 7,000 jobs in the City of Buffalo and 1,200 in the City of Niagara Falls.  Tourism is also responsible for approximately $1.3 billion of Erie County’s gross regional product (“GRP”) and $181 million of Niagara County’s GRP.

Table 2.6.1-5 shows the impact of tourism on public revenue in the Buffalo-Niagara region and New York State as a whole.   The values represent the contributions of tourism (in thousands of 2002 dollars) to various sources of public revenue, including intergovernmental revenue, property tax, sales taxes, and utility and liquor store revenue.   The table indicates that the total public revenue attributable to tourism is approximately $39.0 million in Erie County, $13.7 million in the City of Buffalo, and $6.3 million in Niagara County.

Table 2.6.1-6 provides information on hotel occupancy rates and room rates in the Buffalo-Niagara region.  As the table shows, the average cost of a room in the Buffalo-Niagara region between January and October 2003 was $72.51 a night, with an average occupancy rate of 58.4 percent.  In contrast, the average cost of a room in the U.S. was $83.61 with an occupancy rate close to that of the Buffalo-Niagara region of 60.9 percent.  In the City of Niagara Falls, average occupancy rates were 46.8 percent and rates averaged $69.88 over the same period. 

Table 2.6.1-7 shows the number of workers employed in hotels—an industry closely linked to tourism—in the U.S., New York State, Western New York, Erie County, the City of Buffalo, Niagara County, and the City of Niagara Falls.  As the table shows, the City of Buffalo and Erie County have about half the proportion of employees in the hotel sector as the U.S. as a whole, while Niagara County has roughly the same proportion of people employed in the hotel sector as the nation.  The table also shows that the City of Niagara Falls has over three times the national average, with 3.8 percent of its workers employed in the hotel sector.

2.6.2        Tourist Promotion

There have been a variety of efforts in recent years to promote tourism in the Buffalo-Niagara region.  Perhaps the most significant recent addition to the area is the Seneca Niagara Casino, which opened in downtown Niagara Falls at the end of 2002 and draws an average of approximately 100,000 visits a week (Galarneau 2003).  The casino will soon be joined by another new addition to downtown Niagara Falls, with construction of a $17 million conference center in Niagara Falls.  The conference center, which opened in June 2004, is supported by state grants and has been promoted by the USA Niagara Development Corporation.  The area has been without a conference center since the previous Niagara Falls Convention Center was converted into the Seneca Niagara Casino in 2002 (Fink 2003). 

In addition to these large-profile development initiatives, regional planners have undertaken tourism initiatives on a number of other fronts.  The John R.  Oishei Foundation recently commissioned a report from the Institute for Local Governance and Regional Growth at University at Buffalo to develop a comprehensive plan for cultural tourism in the Buffalo-Niagara region (ILGRG 2002).  Among the contributions of this report is a detailed list of the ongoing planning efforts in the Buffalo-Niagara region.  This study lists various planning initiatives related to tourism and cultural tourism in the region.  These initiatives are listed in Appendix C of this report.

A coalition group, including The Urban Design Project, Foit-Albeit Associates, and The Waterfront Regeneration Trust, also developed a report in 2002 recommending a number of projects geared towards improving public access to the waterfront and increasing the number of visitors to the area.  These projects were considered the best ideas taken from a number of previous reports, plans, studies and proposals on Niagara’s future development strategies.  In particular, they recommend the following waterfront related projects:

·         construction of a waterfront trail system;

·         a reconfiguration of the Robert Moses Parkway designed to eliminate its effect as a barrier to the waterfront;

·         a waterfront naturalization program for the shoreline and gorge in which unnecessary pavement is removed and trees are planted; and

·         a plan for a Niagara Falls “Green Structure” which would redevelop unused industrial areas in a manner that would better connect the neighborhoods to the waterfront.

The report also recommends projects for improving the region’s cultural heritage attractions.  Specifically, the group proposes the creation of a “City of Niagara Falls Family Museum,” a “Heritage Fair,” and a program for researching the history of the Niagara region.  These projects and others recommended by this report are estimated to cost roughly $145 million and are described in detail in Appendix B.

2.6.3        Tourism in Niagara Falls, Canada

Like the Niagara Falls area in the U.S., the Canadian Niagara Falls region has taken considerable steps in fostering the tourism industry, attracting more visitors and increasing lengths of stay.  The Niagara Economic and Tourism Corporation (“NETC”) has conducted a number of studies on the tourism industry to provide potential investors in the region with information for the assessment of business opportunities in the area.  This section highlights the main efforts taken to promote the tourism industry.

The NETC has taken a number of steps to attract industry related to tourism in the region.  As an example, they have mailed an investment prospectus to 1,500 contacts, detailing potential investment opportunities totaling more than $476 million.[25] The organization also hosts tourism Investment Familiarization Tours to better acquaint investors with the region and business opportunities.  In addition, senior NETC staff attend a number of retail, entertainment and retail trade shows to promote opportunities in the region.

The 2003 Tourism Investment Update (Advantage Niagara 2003) released by NETC provides information on recently completed projects and potential future projects.  Major projects completed between 2000 and 2002 are listed in Table 2.6.3-1.  Developments under construction are shown in Table 2.6.3-2 and future developments being considered are listed in Table 2.6.3-3.

The NETC also periodically conducts studies on the economics of the tourism industry (Advantage Niagara 2003).  These studies provide information about the number of visitors, length of stays and total expenditures.  Impacts on employment from the tourism industry are estimated as well as 2007 projections of the industry and its effects on the local economy.  As shown in Table 2.6.3-4 and Table 2.6.3-6, the Canadian side of Niagara Falls was host to 14.2 million visitors in 2002 who spent $1.4 billion in the region (in U.S. dollars), about $0.2 billion more than the $1.2 billion spent by 8.4 million visitors to the Buffalo-Niagara region (U.S. side) in 2002.  The greater spending per visitor from tourists to the U.S. side can be explained at least partially by the fact that only 27.5 percent of visitors to the Canadian Niagara Falls stay overnight, while an estimated 54 percent of visitors to the U.S. side stay in the region overnight.

The Canadian expenditures are estimated to have generated 36,793 jobs[26] in the Niagara region of Canada and 45,192 jobs in all of Ontario.  These impacts are slightly greater than those from tourism and visitor expenditures in Buffalo-Niagara (see above), which generated 36,042 jobs in Western New York and 36,567 in all of New York State . 

2.7         Sociological/Cultural

In addition to the information provided in this section and in Section 3.8, several other ALP studies provide sociological and cultural background for the study region.  For a list of these other ALP studies—as well as relevant documents provided by ALP stakeholders, see Section 3.8. 

 

Table 2.1.1-1

Population, 1900-2000

Place

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

United States (000s)

74,607

91,641

105,273

122,288

130,963

151,326

179,323

203,302

226,542

248,718

281,422

New York State (000s)

7,269

9,117

10,385

12,588

13,469

14,830

16,782

18,237

17,558

17,990

18,976

Western NY

799,243

934,973

1,073,815

1,250,644

1,298,035

1,456,342

1,699,445

1,758,355

1,664,981

1,610,299

1,591,708

Local Communities

 

 

 

 

 

 

 

 

 

 

 

Erie County

433,686

528,985

634,688

762,408

798,377

899,238

1,064,688

1,113,365

1,015,416

968,532

950,265

Buffalo City

352,387

423,715

506,775

573,076

575,901

580,132

532,759

462,359

357,569

328,186

292,648

Host Communities

 

 

 

 

 

 

 

 

 

 

 

Niagara County

74,961

92,036

118,705

149,329

160,110

189,992

242,269

235,719

227,353

220,755

219,846

Lewiston Town

2,728

2,638

1,987

3,420

4,448

6,921

13,686

16,076

16,407

15,661

16,257

Lewiston Village

697

713

723

1,013

1,280

1,626

3,320

3,295

3,326

3,048

2,781

Lewiston-Porter SD

4,659

5,004

4,480

6,013

7,334

10,403

19,441

21,589

21,697

20,868

21,157

Niagara Falls City/SD

19,457

30,445

50,760

75,460

78,029

90,872

102,394

85,615

71,384

61,840

55,677

Niagara Town

405

349

360

865

2,618

4,729

7,503

8,288

9,648

9,880

8,894

Niagara-Wheatfield SD

2,635

2,430

2,433

3,438

6,170

10,243

17,065

19,926

21,218

22,896

25,000

Preference Customers

 

 

 

 

 

 

 

 

 

 

 

Akron Village

1,585

1,677

1,960

2,188

2,263

2,481

2,841

2,863

2,971

2,906

3,118

Arcade Village

887

1,294

1,609

1,643

1,683

1,818

1,930

1,972

2,052

2,081

2,020

Jamestown

22,892

31,297

38,917

45,155

42,638

43,354

41,818

39,795

35,775

34,681

31,730

Notes: Data from U.S. Census Bureau.  Population change also reflects changes in an area’s definition or boundaries (e.g., annexation).

 

Table 2.1.1-2

Migration, 1980-1999

Place

1980 to 1990

1990 to 1999

United States

 

 

Net International Migration

5,205,852

7,478,078

Net Internal Migration

N/R

N/R

Net (International + Internal) Migration

5,205,852

7,478,078

Percent Net Migration

2.3%

3.0%

New York State

 

 

Net International Migration

N/A

1,107,814

Net Internal Migration

N/A

(1,888,936)

Net (International + Internal) Migration

(471,274)

(781,122)

Percent Net Migration

-2.7%

-4.3%

Western NY

 

 

  Net International Migration

N/A

14,891

  Net Internal Migration

N/A

(115,540)

  Net (International + Internal) Migration

(114,862)

(100,649)

  Percent Net Migration

-6.9%

-6.3%

Local Communities

 

 

Erie County

 

 

  Net International Migration

N/A

8,431

  Net Internal Migration

N/A

(72,698)

  Net (International + Internal) Migration

(77,987)

(64,267)

  Percent Net Migration

-7.7%

-6.6%

 


Table 2.1.1-2 (Cont.)

Migration, 1980 - 1999

Place

1980 to 1990

1990 to 1999

Host Communities

 

 

Niagara County

 

 

  Net International Migration

N/A

717

  Net Internal Migration

N/A

(10,574)

  Net (International + Internal) Migration

(15,761)

(9,857)

  Percent Net Migration

-6.9%

-4.5%

Preference Customers

 

 

Akron Village (see Erie County above)

 

 

Wyoming County (includes Arcade Village)

 

 

  Net International Migration

N/A

19

  Net Internal Migration

N/A

440

  Net (International + Internal) Migration

177

459

  Percent Net Migration

0.4%

1.1%

Chautauqua County (includes Jamestown)

 

 

  Net International Migration

N/A

312

  Net Internal Migration

N/A

(6,844)

  Net (International + Internal) Migration

(9,785)

(6,532)

  Percent Net Migration

-6.7%

-4.6%

Notes: Data from U.S. Census Bureau.  Internal migration is defined as migration within the U.S.; thus, all U.S. migration is international, by definition.  Percent migration is calculated as net migration divided by the area’s total population.  Migration data are not compiled below the county level.  Niagara County includes all of the Host Communities.  Erie County includes the Local Community of the City of Buffalo and the Preference Customer of the Village of Akron, Wyoming County includes the Preference Customer of the Village of Arcade, and Chautauqua County includes the Preference Customer of the City of Jamestown.  (Note that this is the case for many tables, though this note is not repeated.)

 

Table 2.1.1-3

Population Projections, 2005-2035

Place

2005

2010

2015

2020

2025

2030

2035

United States

295,914,000

309,228,000

322,686,000

336,268,000

350,381,000

365,222,000

380,285,000

New York State

19,121,748

19,104,516

19,101,764

19,242,066

19,607,533

20,200,568

20,858,771

Western NY

1,546,209

1,519,293

1,511,907

1,535,643

1,584,400

1,643,523

1,706,608

Local Communities

 

 

 

 

 

 

 

Erie County

929,510

915,579

909,977

920,510

944,562

974,284

1,005,109

Host Communities

 

 

 

 

 

 

 

Niagara County

211,614

206,958

206,523

212,375

223,269

237,259

253,753

Preference Customers

 

 

 

 

 

 

 

Chautauqua County

136,823

136,656

138,947

144,078

150,757

157,875

165,395

Wyoming County

41,887

39,884

38,607

38,611

39,576

40,798

42,091

Notes:  Data from Regional Economic Models, Inc.

 

Table 2.1.1-4

Percent Change in Population Projections, 2005-2035

Place

2005-2010

2010-2015

2015-2020

2020-2025

2025-2030

2030-2035

United States

4.5

4.4

4.2

4.2

4.2

4.1

New York State

-0.1

0.0

0.7

1.9

3.0

3.3

Western NY

-1.7

-0.5

1.6

3.2

3.7

3.8

Local Communities

 

 

 

 

 

 

Erie County

-1.5

-0.6

1.2

2.6

3.1

3.2

Host Communities

 

 

 

 

 

 

Niagara County

-2.2

-0.2

2.8

5.1

6.3

7.0

Preference Customers

 

 

 

 

 

 

Chautauqua County

-0.1

1.7

3.7

4.6

4.7

4.8

Wyoming County

-4.8

-3.2

0.0

2.5

3.1

3.2

Notes:  Data from Regional Economic Models, Inc.

 

Table 2.1.1-5

Niagara University Enrollment, 1990-2003

Year

Enrollment

1990

 3,063

1991

 3,003

1992

 3,001

1993

 2,836

1994

 2,879

1995

 2,865

1996

 2,935

1997

 3,079

1998

 2,888

1999

2,940

2000

 3,146

2001

3,278

2002

3,446

2003

3,548

Notes: Data from Niagara University and the National Center for Education Statistics (NCES), IPEDS Peer Analysis System (see http://nces.ed.gov/ipedspas/index.asp).

 

Table 2.1.2-1

Population Under 20 (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

N/A

32.0

28.8

28.6

New York State

35.4

30.3

26.6

27.3

Western NY

38.2

31.3

27.5

27.4

Local Communities

 

 

 

 

Erie County

37.7

30.4

26.2

26.8

Buffalo City

34.6

29.0

27.5

29.3

Host Communities

 

 

 

 

Niagara County

39.2

31.7

27.8

27.5

Lewiston Town

43.9

35.3

29.6

28.7

Lewiston Village

38.1

27.1

21.8

20.4

Lewiston-Porter SD

42.7

33.9

28.5

27.2

Niagara Falls City / SD

36.4

29.0

26.4

27.3

Niagara Town

44.7

32.8

27.2

25.8

Niagara-Wheatfield SD

42.6

33.2

26.7

25.6

Preference Customers

 

 

 

 

Akron Village

36.2

30.4

24.9

24.1

Arcade Village

N/A

N/A

32.2

29.8

Jamestown City

N/A

29.6

28.6

28.3

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.2-2

Population Ages 20-34 (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

N/A

25.8

25.1

20.9

New York State

19.8

24.5

25.2

20.9

Western NY

18.2

23.9

23.7

18.3

Local Communities

 

 

 

 

Erie County

18.4

24.2

24.2

18.5

Buffalo City

19.2

26.3

27.7

22.4

Host Communities

 

 

 

 

Niagara County

17.5

23.8

22.9

17.3

Lewiston Town

17.7

20.8

20.2

16.0

Lewiston Village

17.8

20.1

18.5

14.7

Lewiston-Porter SD

17.6

20.8

19.7

15.0

Niagara Falls City / SD

16.7

24.3

23.3

18.2

Niagara Town

20.6

25.3

24.9

16.9

Niagara-Wheatfield SD

20.0

23.1

23.3

16.5

Preference Customers

 

 

 

 

Akron Village

17.6

23.8

22.1

18.2

Arcade Village

N/A

N/A

21.5

16.2

Jamestown City

N/A

23.5

24.0

19.6

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.2-3

Population Ages 35-64 (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

N/A

31.3

33.6

38.1

New York State

34.0

32.9

35.1

38.8

Western NY

33.3

32.3

33.9

38.8

Local Communities

 

 

 

 

Erie County

33.8

33.0

34.3

38.7

Buffalo City

33.0

29.7

29.8

34.8

Host Communities

 

 

 

 

Niagara County

34.0

32.5

34.1

39.7

Lewiston Town

32.7

35.4

37.7

39.9

Lewiston Village

34.8

36.7

35.8

38.7

Lewiston-Porter SD

32.6

35.2

37.3

41.2

Niagara Falls City / SD

36.1

32.0

31.2

36.0

Niagara Town

30.8

34.8

36.3

41.8

Niagara-Wheatfield SD

31.8

35.7

36.8

42.2

Preference Customers

 

 

 

 

Akron Village

34.2

31.4

31.8

39.0

Arcade Village

N/A

N/A

33.4

39.9

Jamestown City

N/A

28.9

30.2

36.2

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.2-4

Population Ages 65 and Over (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

N/A

11.3

12.5

12.4

New York State

10.8

12.3

13.1

12.9

Western NY

10.3

12.5

14.9

15.5

Local Communities

 

 

 

 

Erie County

10.1

12.4

15.2

16.0

Buffalo City

13.3

15.0

14.9

13.5

Host Communities

 

 

 

 

Niagara County

9.3

12.0

15.2

15.5

Lewiston Town

5.8

8.5

12.5

15.3

Lewiston Village

9.2

16.1

24.0

26.2

Lewiston-Porter SD

7.1

10.0

14.5

16.5

Niagara Falls City / SD

10.8

14.8

19.1

18.5

Niagara Town

3.9

7.1

11.7

15.4

Niagara-Wheatfield SD

5.6

8.0

13.1

15.6

Preference Customers

 

 

 

 

Akron Village

12.0

14.5

21.3

18.7

Arcade Village

N/A

N/A

13.0

14.0

Jamestown City

N/A

18.0

17.2

15.9

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.3-1

High School Drop Out Rate (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

12.2

12.0

10.1

10.9

New York State

13.9

10.6

9.9

8.7

Western NY

11.0

8.8

8.3

7.4

Local Communities

 

 

 

 

Erie County

10.6

8.7

8.0

7.0

Buffalo City

14.8

14.4

11.6

13.1

Host Communities

 

 

 

 

Niagara County

10.9

9.5

8.3

7.2

Lewiston Town

4.1

2.4

2.7

0.7

Lewiston Village

10.1

10.5

0.0

0.0

Lewiston-Porter SD

8.1

4.3

4.1

1.5

Niagara Falls City / SD

11.5

12.8

12.9

10.5

Niagara Town

8.6

9.2

10.3

7.9

Niagara-Wheatfield SD

6.9

6.5

6.7

4.5

Preference Customers

 

 

 

 

Akron Village

11.2

6.2

10.3

4.1

Arcade Village

N/A

N/A

3.9

3.4

Jamestown City

N/A

12.0

18.0

12.2

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.3-2

College Graduation Rate (Percent), 1970-2000

Place

1970

1980

1990

2000

United States

11.0

17.0

21.3

25.6

New York State

11.9

17.9

23.1

27.4

Western NY

9.2

13.7

17.4

21.2

Local Communities

 

 

 

 

Erie County

10.0

15.1

20.0

24.5

Buffalo City

6.7

11.1

16.0

18.3

Host Communities

 

 

 

 

Niagara County

7.6

11.5

13.6

17.4

Lewiston Town

20.4

24.3

26.5

29.7

Lewiston Village

19.8

24.8

24.5

24.4

Lewiston-Porter SD

19.2

23.0

25.0

27.8

Niagara Falls City / SD

5.8

9.1

9.7

12.5

Niagara Town

5.7

7.1

8.0

10.3

Niagara-Wheatfield SD

6.8

9.5

13.0

18.1

Preference Customers

 

 

 

 

Akron Village

7.5

12.1

13.6

16.7

Arcade Village

N/A

N/A

13.2

12.5

Jamestown City

N/A

10.3

13.4

14.8

Notes: Data from U.S. Census Bureau and Geolytics, Inc.

 

Table 2.1.4-1

Real Median Family Income, 1949-1999 (2002 Dollars)

Place

1949

1959

1969

1979

1989

1999

United States

19,797

34,991

43,769

49,354

51,105

54,041

New York State

23,092

33,427

52,044

50,005

57,656

55,818

Western NY

N/A

N/A

N/A

N/A

N/A

N/A

Local Communities

 

 

 

 

 

 

Erie County

24,234

39,535

51,382

51,321

50,867

53,441

Buffalo City

23,274

35,319

43,176

38,240

34,655

33,058

Host Communities

 

 

 

 

 

 

Niagara County

24,649

41,371

50,014

51,229

49,182

51,634

Lewiston Town

N/A

50,663

N/A

64,343

65,698

63,300

Lewiston Village

N/A

49,939

54,838

64,744

58,895

54,485

Lewiston-Porter SD

N/A

N/A

N/A

N/A

N/A

N/A

Niagara Falls City/SD

25,987

40,988

46,558

51,229

38,896

37,121

Niagara Town

N/A

43,528

47,808

51,048

44,936

47,177

Niagara-Wheatfield SD

N/A

N/A

N/A

N/A

N/A

N/A

Preference Customers

 

 

 

 

 

 

Akron Village

N/A

39,893

47,980

46,462

52,277

51,873

Arcade Village

N/A

N/A

N/A

N/A

44,657

46,096

Jamestown

23,553

34,663

42,274

39,580

37,897

36,363

Notes: Data from U.S. Census Bureau.  Income figures are presented in terms of 2002 dollars.  The CPI-U was used to adjust the figures.  Median Income estimates were not published for the Western NY Region, the Lewiston-Porter School District, or the Niagara-Wheatfield School District.  Estimates cannot be calculated for these composite areas without the raw data, which are unavailable.

 

Table 2.1.4-2

Median Family Income, by Race and Ethnicity, 1999 (2002 Dollars)

Place

All Races

White Alone

African American

American Indian, Alaska Native

Asian

United States

54,041

57,616

35,910

35,790

64,060

NY State

55,818

63,224

39,155

35,058

53,154

Western NY

N/A

N/A

N/A

N/A

N/A

Local Communities

 

 

 

 

 

Erie County

53,441

57,471

26,947

30,652

50,467

Buffalo City

33,058

41,277

25,351

25,930

26,202

Host Communities

 

 

 

 

 

Niagara County

51,634

53,459

24,834

27,875

46,193

Lewiston Town

63,300

17,555

62,897

44,543

215,967

Lewiston Village

54,485

54,650

-

-

-

Lewiston-Porter SD

N/A

N/A

N/A

N/A

N/A

Niagara Falls City/SD

37,121

41,135

21,806

23,206

13,866

Niagara Town

47,177

9,604

46,691

70,285

N/A

Niagara-Wheatfield SD

N/A

N/A

N/A

N/A

N/A

Preference Customers

 

 

 

 

 

Akron Village

51,873

54,054

17,547

22,946

-

Arcade Village

46,096

46,433

-

-

70,527

Jamestown

36,363

37,265

21,690

21,115

47,783

 


Table 2.1.4-2 (Cont.)

Median Family Income, by Race and Ethnicity, 1999 (2002 Dollars)

Place

Native Hawaiian or Other Pacific Islander

Other

Two or More Races

Hispanic or Latino

United States

49,580

34,984

42,580

37,143

NY State

39,819

31,022

38,808

33,996

Western NY

N/A

N/A

N/A

N/A

Local Communities

 

 

 

 

Erie County

36,444

18,040

30,385

25,031

Buffalo City

10,461

15,530

19,546

19,943

Host Communities

 

 

 

 

Niagara County

57,704

27,806

36,192

37,729

Lewiston Town

-

-

33,745

74,689

Lewiston Village

-

-

2,700

-

Lewiston-Porter SD

N/A

N/A

N/A

N/A

Niagara Falls City/SD

-

7,905

31,495

30,202

Niagara Town

-

-

-

48,368

Niagara-Wheatfield SD

N/A

N/A

N/A

N/A

Preference Customers