S2,E14 - Rob Simpson

This is Talk CNY, presented by NBT Bank, a semi-monthly podcast by CenterState CEO, Central New York's premier leadership and economic development organization. Join us as we meet the people and explore the projects driving the regional economy forward.

This is Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, your host for Talk CNY and director of communications at CenterState CEO. We've said it before and we'll probably say it again. This is a really exciting time to be in Central New York. In this summer alone, we had a visit from Taiwanese business representatives, a multimillion dollar award from the federal government through the tech hubs program and the release of the community priorities document. And that is only a portion of what's going on in the region right now. So today to talk to me about all that's going on in the region and how it'll impact us, CenterState CEO's president Rob Simpson joins me again on Talk CNY. Rob, welcome back. Thanks for being here today.

Thanks for having me back.

So last time you were on the podcast back in April-ish. You had recently returned from a trip to Taiwan. Yeah. We're here again on the podcast few months later. You recently were a part of a group that hosted a delegation of leaders from Taiwan to explore potential business opportunities here in the Central New York region. So can you tell me how that all came about and some of the big things discussed during that visit?

Yeah, I mean it's pretty great, right? You think about it, the mayor, the county exec, myself, the head of the Onondaga County IDA, Bob Petrovich, we all went over to Taiwan back in February. I think it was end of May, early June of this year, we had a chance to welcome a return visit, which is pretty quick in the span of relationship building. We were really fortunate, a group that was hosted by the American Institute of Taiwan, which is a major U.S. institution that works with a lot of Taiwanese businesses to try to help support foreign directive investment here in the United States. And they brought a coalition of about 25 or so partners, some semiconductor supply chain partners, some academic research partners, some people who were involved in their tech and innovation ecosystem. So think similar to The Tech Garden, people who run their incubators.

And those folks came over and spent a day and a half with us here in Syracuse, went down to Rochester, spent a day in Rochester really exploring this budding upstate New York semiconductor ecosystem. And they're clearly hearing about it, which is great news. It means some of our messaging is getting across the ocean to the island of Taiwan. They're aware of Micron's investment obviously, but they're also very aware of the fact that at the end of last year, we were designated as one of 31 federally selected tech hubs in the country. That very prestigious program we applied for, won a designation for - that was one of the reasons they wanted to come visit. Like, hey, the federal government is saying that upstate New York is a place where the government wants to see semiconductor manufacturing take root. And I think one thing for our listeners to understand is that in Taiwan, a huge amount of the development activity is very government driven.

And so these companies are used to being told by the government, Hey, this is where we want you to build. Here's a business park, here's a goal, here's an objective. This is where we want you to plug in and participate. And so I think they're taking some cues from our federal government and following the Tech Hub's announcements and designations. And that plays to our advantage. It's part of the reason why we wanted to apply for that tech hub designation, and it's part of the reason why we are so thrilled just a couple of months after that visit to be able to celebrate the fact that we were actually one of only 12 tech hubs around the country that received an award. So really wonderful visit, great conversation. I think building on some of the same companies that we met with when we were over in February, came back to Central New York and have continued to engage in dialogue and we met some new companies as well, which is really exciting and got to showcase our academic assets, our workforce development assets, some of our innovation assets.

We had a round table with other business leaders here in Central New York talking about what it's like to do business in this place and answering some of their questions about what it's like to do business in the U.S., fundamental things that we might otherwise take for granted when you're working with foreign companies. So it was a great visit. I'm just so proud of the fact that this region, Upstate New York, Central New York, Syracuse, Onondaga County, we are now a stop along that semiconductor super highway that companies from all over the world are going to be spending more and more time here and exploring opportunities to invest here and create jobs here for one reason and one reason only. And that is that if you're a business that supports the semiconductor industry, this Syracuse, Onondaga County, Central New York, Upstate New York is as good a place to do business as any other part of the country, we have more manufacturing of semiconductor chips that'll be happening within 350 miles of where we sit today by 2030 than any other part of the country, 25%, one in every four U.S. domestic-made chips is going to be manufactured in a pretty small geography around here.

And so if you're a supply chain company that wants to supply Micron and Global Foundries and Wolfspeed and Menlo Microsystems, this is a great place to be. And I can tell you one thing for as awesome as this visit was, it will not be the last foreign trade mission or delegation that we welcome to Central New York in the coming years, there will be a lot more of them.

Like you said, more and more interest in the region by global companies. And obviously we have a lot to offer to those companies, but how are we kind of changing and adapting our practices to make sure that they're comfortable and it's easy for them to enter our market too because economic development changes from town to town, state to state, so from country to country, I'm sure there's a lot to pick up there too.

Well, I think the first and most important thing for us to recognize is that because it does change from country to country, town to town, the most important skill that I think we can demonstrate as we're building relationships with new potential partners is just a genuine curiosity and an ability to listen to what their business needs are. And I think that curiosity was something that we really demonstrated when we went over to Taiwan. Not only did we sort of showed with the fact that we were willing to travel 30 hours across to the other side of the country, that we were genuinely curious and interested in building partnerships, but more importantly, listening to the things that companies told us were important to their success. I'll give you one or two examples. One, some of these companies from Asia have a real trepidation about investments in the U.S.

They perceive the United States as being a higher cost place for new business, and there's some evidence to document that. So being able to hear that, know that that's a gating concern for them, and think about how we as a community can respond with discussions around pilot incentives at the local level, tax incentives at the state and federal level, federal investments like Tech Hubs that can alleviate some costs and create some certainty and predictability in the long run for these companies, those become really important. Two, some of the companies that we met with in Taiwan have previously attempted to build here in the U.S. about five years ago. TSMC made a big commitment to the Phoenix area over in Arizona and TSMC, Taiwan Semiconductor said to their supply chain, Hey, come with us. Some of those companies tried. And what has been relayed to us is that their experience wasn't universally great.

Some had a good experience. Some felt as if they got competing messages from different levels of government. Some felt like they didn't get the full story. Some felt as if they were sold a bill of goods, varying degrees of angst and consternation that were shared with us. But I think it drives home to me a message that I've been saying and reinforcing forever, which is like when we work together, we win. And I know it sounds so simple and trite and basic, but when we're dealing with these companies that have concerns about how coordinated we are locally, they want the process of coming to the U.S. and building a new facility to be the simplest and the easiest process it can possibly be. So our job, our local partners, our state partners, our federal partners has to be, to show up together in a way that reinforces that this is the place that Micron chose because it was easy to do business here.

This is the place that they are going to choose because it's easy to do business here. And then whoever they're talking to, CenterState CEO, the (Onondaga) County Executive, Empire State Development, Senator Schumer's team, they're going to get the same level of service. They're going to get a continuum of service. Other partners are going to be looped in. And I just think it's really important for us to continually address the feedback that we're getting from these companies. One of the other things that they shared with us that was incredibly important to them is they are used to developing business parks in Taiwan. So the government identifies hundreds or thousands of acres and they say this is going to be the semiconductor business park. It hasn't really worked that way here with a handful of exceptions, although I think the county obviously has done a great job with White Pine and sort of building out that model. But beyond the White Pine Business Park, there are other acreage that the county's assembled and that private developers have assembled and that we can designate specifically for these purposes. So I think our ability to hear what they're used to, what they're looking for and adapt our practices to make sure that we're meeting them where they are, I think is going to be a really important piece of our success.

I want to hit on something that you've mentioned a few times here, a really big deal for us in this building, but the Federal Tech Hub award announcement for us we're just one of 12 tech hubs that were designated that got an award in this first round of funding from the federal government. The only semiconductor focused one. I think in this building, maybe we are all very excited about it, know about the importance of it because there's been a lot of work and labor from our team here. But for the general public, I mean, how can you put it into words to express what this means? That the federal government is dedicating millions of dollars to Upstate New York's semiconductor industry?

To be perfectly clear, $40 million from the federal government, $8 million from the states. So almost $50 million is being put in as an initial investment to ensure that we are building out a world-class, semiconductor research development, innovation and manufacturing ecosystem across Upstate New York. How cool is that? And let me just reflect from, I love data and numbers. So there were 400 communities around the country that applied for the Tech Hubs program. There were 31 designated. There were only 12 that received funding, which means that only 3% of the applicants ultimately got funding to implement their vision. And Syracuse, Rochester, Buffalo, our Smart I-90 Corridor was one of that very elite group of partners that has a chance to implement their vision. That's pretty remarkable. And I just this long narrative arc of Syracuse sort of punching its way up, constantly finding ways to out maneuver and outwork and out hustle the competition here in the U.S. and around the world.

I'm immensely proud of the work. I'm proud of Ben Sio and Kelly Fumarola on our team who helped lead that effort. I'm proud of our partners in Rochester and Buffalo, Joe Stefko and Dottie Gallagher. I'm proud of our partners at Cornell, over a hundred partners who worked with us on that. Maybe the most important takeaway for our listeners and our viewers is that this region, Upstate New York is the only federally funded tech hub focused on semiconductors. So there are a lot of key technology areas that the tech hubs program focuses on, but all of the national discussion over the course of the last two years about a new industrial policy, it's all been focused around semiconductors as being the critical enabler to our future economic competitiveness and the critical enabler to our national security. And right now, we, this region, our region, the place we call home is the only place in America that the federal government has said, has their stamp of approval to be a semiconductor research development, innovation and manufacturing hub.

Which is amazing! This is just such a remarkable amount of validation for the strategy we've been pursuing. And we know already as we were talking about with our friends from Taiwan, the people around the world are watching. They're making decisions about where they consider locating based on what our federal government is doing. And not only do we have this designation, the stamp of approval, but now we've got $50 million to start implementing. And I can guarantee you there's going to be a lot more than 50 million to get spent in this effort over the course of the next couple of years. We're going to leverage that 10 times over, I'm sure, and we're going to bring in more private sector funding and we're going to find more federal and state funding and we'll probably find some philanthropic funding. But the core takeaway is we have arrived at our moment, right? We've been fighting for it, we've been working for it, we've been working together to get there, and now we are here and it's time to capitalize.

I mean maybe even more evidence for us arriving at this moment, SEMICON West recently we had our partners at Empire State Development deliver a keynote presentation during the country's largest semiconductor trade show. During that presentation, they highlighted this region. So what is it like to have this region be a part of the lineup at a conference that maybe even just a few years back we couldn't imagine being mentioned at? It's funny, I do think back to my own experience at SEMICON. I've gone on and off for many, many years, and there were times pre-Micron in particular where you'd walk around, people would ask you where you're from and you're like, oh, Syracuse, New York. And they're scratching their head being like, what is that all about? And now the conversations are very different. You tell someone you're from Syracuse and we've got Micron, we've got tech hubs, we've got all these exciting other things that are happening here and the conversations are much easier to have. But I was looking through my LinkedIn feed not too long ago, and I see this picture of my friend Kevin Younis, Empire State Development, and behind him is a slide says from Rust Belt to Tech Hub, right? Upstate New York's Journey or transformation or something like that. That was the title of his presentation.

And honestly, it made me emotional just seeing that slide there for the world to see that the story that we've all been writing together, we've all been working to craft this narrative and craft this strategy, that story being told to the leaders in this industry where we're sort of betting our future on. And maybe as importantly, the feedback, the real-time feedback that I and other members of our team, I'm sure other members of the New York delegation are getting from partners of ours across the country and around the world who are like, oh man, Kevin's killing it up there. This is our story. This is so exciting.

It's great. There's no other way to describe the feeling of having reached a moment where people are paying attention to our region. Again, for good reasons, right? They're paying attention to what's happening here because what is happening here matters to the country and matters to the world. And man, it's a big difference from where we were even five years ago, 10, forget 20 or 30 years. This region has come a long way. And while I know there's still skepticism and I know that there's still work to do, we can all acknowledge all those things. Can we just stop for a moment and just be excited about the fact that we are featuring our community to critical decision makers in the most important industry that's driving the modern economy. And they're not only listening, but they're following up in conversation with us and wanting to talk further. Just let that sink in for a minute.

And we will, we will be back more with Rob here just shortly. But first a word from our presenting sponsor, NBT Bank.

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Welcome back to Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, director of communications at CenterState CEO, and your host for Talk CNY. Today I'm here with CenterState CEO President Rob Simpson. Rob, thanks for being here. Thank you. So before the break, we are talking about semiconductors, all the great things happening in the region. Can't talk about all that without mentioning Micron. And they as a company recently, well not so recently, but late spring reached a pretty big milestone being awarded over 6 billion through the Chips and Science Act. So now that that milestone is reached, what are the things that can be done and are being done in the next stage of this project?

Yeah, it's a really important milestone. I think it's a last critical piece of the funding stack for the development of the project here. And I will just say from my perspective, from the very first day, very first time we interacted with Micron, even before we knew that they were Micron, they were working through a site selector. They were very clear with us that absent the signing of the Federal Chips Act and absent the awards under the CHIPS Act, which has equated to more than 6 billion for Micron, that they would not be investing not only in Syracuse but in the United States of America. So they've been very clear with us how critical of a path this was, and we're very grateful to the administration, to the Department of Commerce, certainly to Micron for all their hard work in negotiating that agreement.

I would just say for those who maybe were starting to hold now, like, oh, I don't know. Is this going to happen? All the funding is there. There's really no, there's no further impediment to the development of this project, but there is still a lot of work to do and I think it is important to sort of talk about it and understand, I know people want to see shovels in the ground. They want to know, Hey, why isn't Microns so serious? Why aren't they building? Well, there's a very complex environmental review process that takes place for a hundred billion investment that's going to create up to 50,000 jobs. That environmental review process happens at the state level. It happens at the federal level. Those two processes are running concurrently. The amount of information that needs to be collected, analyzed, and shared with various regulatory agencies in this process, whether it's the EPA or the DEC or the Army Corps of Engineers, Department of Transportation.

It's just if I showed our viewers a physical to-do list, like if I showed you the physical, literal tracking sheet of all the different chapters that all have to be reviewed in concurrence and parallel, some one after the other with 40 different agencies that all have to provide their input, and it all has to happen with each chapter in two or three weeks so that we can meet certain deadlines. People wouldn't believe how complex of an undertaking that is. So what does that mean for when shovels will be in the ground? What it means that Micron has been, I think, pretty transparent shovels in the ground early next year, 2025, they'll be able to start clearing trees on the site. It'll be the first thing people see, and then they'll start digging the hole for the foundation, and pretty shortly after that, there'll be 3,500, 4,000 construction workers on site up in Clay building the first fab.

And I think one of the things that got a little bit buried in the headline when the president came to town the last time, isn't that funny When the president came town the last time, like it's an everyday thing now. One of the things that got buried I think in the lead is that Micron is accelerating their overall build schedule, right? They're not slowing down. They're actually speeding up. And so now we're going to have two fabs online by 2029, 4 years earlier than expected, which means the construction worker impact is going to happen sooner, it means the permanent worker impact is going to happen sooner, means a lot of the spend with our small businesses locally and our construction companies and our concrete companies is going to happen sooner. And that's great news for the Central New York economy. I think it is.

It's a little bit intimidating for the Central New York community because some of the impacts that we know we can expect from Micron are going to have to be mitigated more quickly. It's going to take more money and we're going to have to move faster. I know we're up for that challenge as a community, not just CenterState, but all of our partners. Everybody's working exceptionally hard on trying to push all these elements through, but we do have to be open and honest with people about the fact that housing's already a problem here in Central New York, and it's going to get to be a bigger problem sooner as Micron accelerates their build timeline. It places the onus back on organizations like CenterState and our public sector partners to bring solutions to the table sooner as well. Listen, we're up for that challenge. If we can take a community that had sort of lost its stride and put it back in the global conversation about economic relevance, we can build enough housing to accommodate our population, but we've got to get going. We've got to get going soon.

And we need all partners to participate in order to do that, right?

Yeah, we do. I mean, listen, this is no time for egos or parochialism or for thinking that any one of us can do this on our own. We can't. We need the private sector to step up from a development standpoint. So we often talk about what we need our public sector partners to do, but let me sort of turn the lens for a second. We need our financial institutions to step up. We need our banks to provide more lending so that we can build more housing. We need our developers to step up and take on more projects. We do need our public sector partners to loosen some of their restrictions on zoning, what can be built where so that we can build more multifamily units in villages and towns, all hands on deck, I guess is the message.

Another big milestone for Micron, the release of the community priorities document, and I should say it's also a really big milestone for the Central New York community as a whole. It is. Can you talk a little bit about why this document is so monumental for both our community and for modeling best practices in economic development?

Well, I think I'm really proud of the fact that our community engagement committee that was appointed by the governor as part of this massive community investment framework that was put together between New York State and Micron, this community engagement committee of local leaders led a public engagement process that solicited more than 13,000 pieces of input, right? Talks had hundreds of public meetings, lots of open surveys. I mean, literally got out for months and months and months and months on Tuesday nights, on Wednesday mornings on Saturday afternoons to listen to what people were telling us about their hopes and their fears post-Micron, and listening to their desires for what they want to see in a Cventral New York that is growing again. And as you can imagine, the feedback and the input is a little bit all over the map, but it slots pretty easily into a handful of key categories.

One - education, right? If we're going to have all these new jobs in a modern economy in Central New York, we need to make sure that our children, not just our college students, but our children, those who are starting pre-K, those who are in third grade, those who might be in ninth grade today in a city school, that those children are being prepared for the jobs of the future. Similarly, workforce development. How do we help people who might be in jobs today that they can't support their families in, or they have to work two or three or four jobs? How do we help them prepare to level up and go to work for a Micron or another high-tech manufacturer? Workforce development is a key piece of the equation as well. Our healthcare system, our transportation system, our childcare system, these are all some of the major themes that we've heard come out of the community priorities document.

And I think what I'm excited about, what I'm excited about personally from Center State's perspective, is that this document is a reflection of the desires of our community. And it's written and articulated in a way that's very clear, which means that we, our team here at CenterState can walk into any funder, whether it's a private foundation, a private bank, one of our national philanthropic partners, a federal agency, a state agency. We can walk in with a clear, concise, articulated definition of what our community wants, what our community needs, what our community expects, and we can put that on the table in front of a funder and we can ask them to come and be a part of the exciting things that are happening here, and we can explain to them the ROI that their investment in our region could have for them and for the residents of Central New York. That's a really powerful thing, and it's something that I'm immensely proud of the role that CenterState played behind the scenes in supporting that community engagement committee in New York State in helping to pull this document together.

Rob, thank you so much for your time today. Thank you, Katie. CenterState CEO's podcast Talk CNY, presented by NBT Bank, is available on clickcny.com, and all major podcast platforms. After each episode, you can join us on Click, where we'll continue to talk about this topic and provide additional resources and links. In Click, you can listen to or watch every episode of Talk CNY. Click is CenterState CEO's digital chamber platform where our members connect, learn, and receive support from our staff. For new episode reminders, be sure to subscribe in your favorite podcast listening app. If you're enjoying Talk CNY, consider leaving a quick review or a five-star rating.