Buffalo Makes Way for Rust Belt Localism

Residents and proprietors have embraced Buffalo First’s localism initiative for a host of reasons, the most compelling of which has been economic.

Sarah Bishop

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At the turn of the twentieth century Buffalo, New York was one of the largest cities in the country and one of the strongest industrial metros in the world. But by the century’s end the city collapsed: it experienced massive factory closures, lost half of its population and became the third-poorest city in the nation behind Cleveland and Detroit— once two of its greatest economic rivals. One factor behind this fall was the city’s loss of locally-owned businesses and the simultaneous rise of multinational firms. Today, one organization is attempting to reverse this trend and drive community economic development by encouraging the city to “Think Local First”.

The Local Business Link to Urban Decline and Rebirth

The introduction of new trade routes, new raw material suppliers, and changes in business practices are several among the many factors that led to Buffalo’s downfall. The loss of Buffalo’s independently-owned businesses proved to compound the city’s fracture. This particular downward trend began to manifest itself as early as 1920 when leaders of Buffalo’s banking and utilities sectors began investing elsewhere. Local banks, steel manufacturers and automobile companies were acquired by multinational firms or experienced mergers.1 Businesses that once helped diversify and stabilize the economy such as local lumber and soap producers, tanneries, and breweries also vanished.2

By 1986 three-quarters of Buffalo’s regional economy was controlled by absentee-owned firms.3 This economic shift from local to non-local ownership of commerce generated record profits in the earlier part of the century, but precipitated long-term social and economic losses in the latter because multinational businesses simply were not as dedicated to the area. For instance, one study revealed that between 1965 and 1980, companies headquartered outside of the Buffalo-Niagara region were twice as likely to close as locally-based ones.4 When these local firms closed, and the influential families that ran them left town, they also abandoned their philanthropic responsibilities to the area.5 Independent business leaders were also engaged in local political and economic issues but when multinational representatives replaced them, the local political and economic discourse no longer revolved around Buffalo’s best interest.6 Economically, the city lost its import-substituting businesses. Socially, it lost its community pillars.

Unfortunately Buffalo’s leaders have done little to recognize the importance of, let alone revive, the local sector. The best example of the city’s allegiance to top-down development is Canal Side, a massive waterfront redevelopment plan, which was to be anchored by mega-retailer, Bass Pro. The city and county took the greater part of a decade to plan this single project and earmarked $14 million for it.

But while elected leaders set aside millions for this waterfront strip mall, they gave nearly nothing to entire blocks of existing local retailers.7 Too often the community bears the burden of any substantive Main Street development. One example is Grant Street, a two-mile long, distressed retail strip populated by dozens of local shops (including grocery, hardware and home supply stores). For decades these shop owners have tightened their belts to continue serving their neighborhood and yet, between 2006 and 2009 received an appalling $21,000 in business grants from the city.8 Ironically, after nine years of negotiations, Bass Pro (having no real ties to the city) declined Buffalo’s multi-million dollar offer effectively stunting the area’s greatest silver-bullet development.9

Of course Buffalo is not alone. Nationally, practices such as top-down development and policy making, globalization, suburbanization, mega-retail marketing and internet commerce caused local businesses to close at unprecedented rates within the past decade10 The economy has shifted so drastically that some experts hold the opinion that the only place for Main Street businesses is in the past. Few would have anticipated that hundreds of small, community-driven localism initiatives would push to revive Main Street.11

A New Way to Do Business in Buffalo

When the cause of a city’s decline is economic, its solutions must be as well. This is happening in a few significant ways in Buffalo mostly driven from the ground-up by Buffalo’s creative class. One of these initiatives was started by Buffalo First, a not-for-profit organization I established in 2006 with the assistance of the national Business Alliance for Local Living Economies (BALLE), the University at Buffalo Law School’s Community Economic Development Clinic, and local community leaders.

Buffalo First began a localism campaign, which focused on generating greater grassroots support for local independent retailers, producers and service providers. The goal of the campaign was to boost the local economy and build a healthy community. Residents helped Buffalo First achieve this mission by supporting local retailers and purchasing locally and responsibly-made goods. They helped build community capital by investing in community credit unions, and small banks. Buffalonians also supported sustainable agriculture by eating and growing local food and by patronizing farmers’ markets and food co-ops.12

I directed Buffalo First for four years, simultaneously treating it as an opportunity for field observation for my PhD dissertation. I examined the ways in which local proprietors connected to and sustained the neighborhoods around them. In 2010, I left the field, moved out of state and have been writing about my findings.

Why Focus on Local Independent Businesses?

Generally, Think Local First campaigns tend to focus on local independent businesses because they represent the core of local communities. Neighborhoods grow around Main Street arteries and local businesses are beating hearts attached to them. Fortunately mega retailers have overlooked Buffalo for more lucrative markets, leaving many of its Main Streets intact.

By definition, local independent businesses are privately held and are legally headquartered in the area; their owners very frequently live in the immediate vicinity and independently make all business decisions. This ensures that power resides locally and tends to make businesses more engaged in, concerned about and responsible to the surrounding neighborhood. Proprietors weigh the environmental, economic and social consequences of their decisions differently because they are part of the impacted community.

Buffalo First’s members are concerned citizens, nonprofit leaders and an eclectic and exemplary class of these local business owners. Some are beloved fixtures of the neighborhood—the old Italian grocery store that witnessed the outmigration of its Italian-American patrons and now counts Somali, Sudanese and Burmese immigrants among its customers. Other businesses, such as the Lexington Cooperative Market, are relatively new.

The organization sought businesses that were some of the most well-known, rooted anchors of the community—old book stores, pharmacies, cafes and taverns. Buffalo First also looked for area change-makers like Mark Goldman, the local historian and bar owner known for transforming a blighted red light district into a thriving nightlife attraction called the Chippewa Strip. Every time Goldman opens a new restaurant or bar he seems to create a street-wide renaissance (and he is currently working on his third project). Finally, the organization recruited socially responsible businesses: the tire shop that ran on wind energy and built one of Buffalo’s first green rooftops; the community credit union that is one of the city’s only certified CDFIs (community development financial institutions) and a fair trade boutique carrying goods crafted by Central, South American, and Caribbean artisans. The values of these business owners shaped Buffalo First’s values.

How Localism Jumpstarts Local Economies

Residents and proprietors have embraced Buffalo First’s localism initiative for a host of reasons, the most compelling of which has been economic. According to research firm Civic Economics, when a person patronizes local independent businesses, over three times more of their money is re-spent in the local community than had they made their purchase at a national chain. This is critical to a struggling metro like Buffalo because it helps to root the few dollars generated by the city, in the city. Localism makes sense because it makes cents.

Sometimes the local economic multiplier effect is far greater when businesses commit to maximize local procurement. For example, Buffalo’s largest community-owned natural foods store, the Lexington Cooperative Market, has pledged to source locally whenever possible. Because of this, it boasts that roughly 51 cents of each dollar spent there is re-spent in the local economy. This happens when the Co-op uses the money that shoppers spend to pay local producers, suppliers, farmers, service providers, and the Co-op’s 70 employees.

The Co-op’s economic impact is greater not just because it is a local business but because it is mission driven—not profit-driven. Its shareholder-driven corporate competitors are bound, by law, to put profits ahead of ethical business interests. But Lexington’s written mission statement, which hangs in its entrance, dedicates it to nurturing the local economy and environment, supporting the community and educating it about healthy lifestyle choices.

In addition to boosting economic multipliers, businesses like the Co-op perform another key function that national businesses cannot—they create community wealth. Larger employers may boast that they create “jobs” (even if they are low-wage) but local businesses create wealth because someone who lives in the area owns it. Income is measured by one’s hourly wage or salary but wealth is measured by one’s assets, valuable items a person owns (such as a home, business, art or equipment) that can be converted to cash and can be passed on from one generation to the next or from one neighbor to the next. While income helps to pay the bills, assets give people the power to put down roots, to create and to grow. Every local proprietor in Buffalo has this advantage.

Moreover, businesses like Lexington create shared community wealth, because it is cooperatively owned. The Co-op has over 7,000 patrons who are member-owners of it. This not only produces dividends for member-owners, it also gives them a democratic vote in how the store operates, further ensuring that the grocery store transparently fulfills its mission and serves the community’s best interests.

More and more, studies are showing that small locally-owned firms have a positive impact on local economies. One study of rural and urban U.S. counties in the Economic Development Quarterly has found a positive relationship between the density of small, locally-owned firms (10-99 employees) and per capita income growth. Alternatively, the presence of larger, distantly-owned firms (over 500 employees) has a negative effect.13 Another national study, in which Buffalo participated, was conducted by pro-localism Institute for Local Self-Reliance. It found that in 2007, at the onset of the Great Recession, when chain stores were reporting uniquely low holiday sales, independent business owners in cities with strong “buy local” initiatives experienced a 2% boost in sales. Similar retailers in cities with no such initiative saw less than a .5% gain.

While more research is needed to demonstrate a direct connection between Buffalo First’s work its effects, studies suggest that something is indeed reviving Buffalo’s local economy. For example, between 2007 and 2008, Buffalo was one of only nine metros out of 100 nation-wide that posted increases in small businesses. In April of 2011, Business Journals reported that Buffalo was ranked 29th out of 100 metros in small business vitality, which is based on whether markets have prosperous economies, are expanding rapidly, and are densely packed with small businesses. Although Buffalo lost 2.9 percent of its jobs between 2005 and 2010, two-thirds of the nation’s major metros suffered sharper declines.14 To be sure, more independent research is needed to gauge localism’s true impact and potential, but the few studies available suggest it is premature to wed local economic development to global interests.

How Local Businesses Grow Community

Beyond the bottom line, investing in an area’s local economy also creates a healthier, more vibrant community. Urban scholars like Jane Jacobs knew this. In her pivotal 1961 book, The Death and Life of Great American Cities, Jacobs observed how proprietors of New York’s Greenwich Village maintained the public good by keeping “eyes on the street,” watching and insuring the safety of residents and strangers.15 She detailed how the owners of coffee shops, candy stores, dry cleaners, florists, luncheonettes, butcher shops, bookshops, bodegas, bakeries and barber shops provided trust, shelter, credit, advice, public order and countless other social commodities in the process of transacting goods and services.16

Some research suggests that the merchants of smaller cities like Buffalo do this best. In Bowling Alone, Robert Putnam notes that all forms of altruism are demonstrably more common in small towns—including the work of small businesses. Store clerks are more likely to return overpayment and car dealers perform far fewer unnecessary repairs than those of larger cities.17

Indeed the local proprietors I observed in Buffalo were even more enmeshed in the welfare of their communities than those described by Jacobs. These merchants developed deep neighborhood relationships and contributed to the sustained resurgence of Buffalo. They helped save other merchant’s failing stores, or redeveloped whole city streets. Through their own sweat-equity they supported local art projects, beautified city streets, and created enduring community festivals. To them, social responsibility is a hands-on practice where “goods and services” has a dual definition: it can mean doing good and engaging in a community service.

Making Way for Rust Belt Localism

When Buffalo First started back in 2006, localism was largely a gentrified, exclusive ideal. There were no high-profile localism initiatives in poor, post-industrial cities like Buffalo and no guaranty that such an initiative would work.

Ironically, localism was the province of more marginalized groups. One of the best examples of this is Booker T. Washington’s National Negro Business League, which organized “buy black” campaigns and provided counseling to small business owners to encourage black wealth accumulation.18 Indeed, the very roots of the community economic development movement are traced to the iconic discourse between W.E.B. DuBois and Washington. Though the tactics of these leaders notably differed, they found common ground in their economic nationalism—they understood the vital importance of self-determined communities.19

Over the past decade though, a different trend in localism has emerged. Contemporay localism initiatives, prompted by organizations like BALLE and the American Independent Business Association (AMIBA) sprouted in attractive metros, already ripe with the cultural and economic resources to make them successful—cities like Austin, Philadelphia, Bellingham, and Andersonville. What this socio-cultural shift suggests about the health of America’s economy, even before the Recession, is instructive.

When I first proposed this project and its beneficiaries to an academic mentor, he leaned forward, grinned and dismissively replied, “You must be talking about the Volvo crowd.” But there was, indeed, a place for Rust Belt localism. Luckily, Buffalo is an old labor town and the idea of the community taking care of its own caught on fast. Just three months after Buffalo First launched, it attracted over 100 dues-paying members. One year later in 2007, when the Oxford American Dictionary declared “locavore” the word of the year, localism was catching on in Buffalo and the organization’s support base doubled. Since then, similar organizations have started in New York State. Today Buffalo First is one of hundreds of organizations of an entire North American movement whose base is growing more diverse and more powerful.

Amy Kedron has studied at Columbia University and the University at Buffalo. She has a law degree and is finishing her PhD dissertation on the role Main Street businesses play in sustainable community economic development. She lives in Florida.

  1. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 28-29.

  2. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 28-29.

  3. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 33-34.

  4. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 34 citing David Perry et. al., “Ending Regional Economic Dependency: Economic Development Policy for Distressed Regions,” rev. ed. (Buffalo: State University of New York, Department of Environmental Design and Planning, 1986); 5.
  5. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 34 citing John Logan and Harvey Molotch, Urban Fordunes: The Political Economy of Place (Los Angeles: University of California Press, 1987); 205.
  6. Diana Dillaway, Power Failure: Politics, Patronage and the Economic Future of Buffalo, New York (New York: Promethius Books, 2006); 33-34 citing David C. Perry and Alfred J. Watkins, “Uneven Development in the USA,” in City, Class and Capital, ed. Michael Harloe and Elizabeth Lebas (London: Edward Arnold, 1981); 118 and Roger Friedland, Power and Crisis in the City (New York: Schocken Books, 1983); 34-36.

  7. Patrick Lakamp, “Making the Most of Grant: Grant Street businesses, In One of the Poorest Areas of Buffalo, have Seen but a ‘Negligible’ Effect” Buffalo News 7 Dec 2009, A1.

  8. Patrick Lakamp, “Making the Most of Grant: Grant Street businesses, In One of the Poorest Areas of Buffalo, have Seen but a ‘Negligible’ Effect” Buffalo News 7 Dec 2009, A1.
    Stats based on an account given by Bob Franke, the executive director of the Grant-Ferry Business Association. The City of Buffalo allocated these funds though its Buffalo Economic Renaissance Corporation and were eventually investigated to unethical practices.

  9. Mark Sommer, “Bass Pro Drops Out as Waterfront Anchor: Nine-Year Courtship Ends; “Unresolved” Issues Cited,” Buffalo News 31 July 2010.

  10. Stacy Mitchell, Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses (Boston: Beacon Press, 2006), xii.

  11. Ann Satterthwaite, Going Shopping: Consumer Choices and Community Consequences (New Haven: Yale University Press, 2001), 67. “The small, independent store, the type pictured in the mythic Main Street, belongs to the past.”

  12. For a comprehensive list of ways municipalities can “localize” see Michael Shuman’s The Small-Mart Revolution; for an extensive analysis of localism as an alternative to globalization see David Hess’s Localist Movements in a Global Economy.

  13. G. Scott Thomas “Buffalo Shoots Up in National Small-Business Rankings” Buffalo Business First April 11, 2011.

  14. Jane Jacobs, The Death and Life of Great American Cities (New York: Random House, 1961), 35.

  15. Jane Jacobs, The Death and Life of Great American Cities (New York: Random House, 1961), 60.

  16. Paul Blumberg, The Predatory Society: Deception in the American Marketplace (New York: Oxford University Press, 1989), 163 quoted in Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); 138.

  17. Scott L. Cummings, “Community Economic Development as Progressive Politics: Toward a Grassroots Movement for Economic Justice” Stanford Law Review, Vol. 54, No. 3 (Dec 2001); 411.

  18. Scott L. Cummings, “Community Economic Development as Progressive Politics: Toward a Grassroots Movement for Economic Justice” Stanford Law Review, Vol. 54, No. 3 (Dec 2001); 411.

  19. Scott L. Cummings, “Community Economic Development as Progressive Politics: Toward a Grassroots Movement for Economic Justice” Stanford Law Review, Vol. 54, No. 3 (Dec 2001); 411.

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Tags: economic developmentgovernancebuffalo

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