Q&A: Matt Enstice of the downtown medical campus

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Matt Enstice is chief operating officer of the Buffalo Niagara Medical Campus. He’s been involved with the project since its inception 10 years ago and has used an unassuming, innovative management style to lead the effort to transform 120 acres on the northern edge of downtown into a world class medical campus.

A native of Western New York, Enstice earned an undergraduate degree in English from Hobart College and a master of business administration from Canisius College. He left Buffalo after school to work in the entertainment industry and spent five years in the 1990s working at Saturday Night Live under Lorne Michaels. He started as an intern and worked his way up to associate producer during an era when SNL’s stars included Will Farrell, Adam Sandler, Mike Myers, Norm Macdonald, David Spade and Chris Farley. The show employed Tina Fey as a writer during this period.

Enstice, 39, returned to WNY to work on a development project in Niagara Falls and was hired as part of the initial team to develop the medical campus. He is active in a number of community organizations, among them  the Amherst Chamber of Commerce and Elmwood Franklin School, on whose boards he serves. 

Investigative Post Editor Jim Heaney interviewed Enstice on Nov. 26. A 4 minute, 26 second video clip including interview highlights is posted above. The full 20 minute, 41 second interview is posted deeper in the transcript, which has been edited lightly for clarity.

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Heaney: The medical campus is regarded as one of the success stories of local economic development – maybe one of the few success stories of local economic development. Talk to me a little bit about the campus itself. When did it get started? What’s there now in terms of jobs, in terms of investment, in terms of major facilities?  

Enstice: The Buffalo Niagara Medical Campus is located in downtown Buffalo, just off of Goodell Street and Main Street, in that area. You’ve got Roswell Park, Kaleida Health, the University at Buffalo and nine institutions located down there.

But one of the things when we started this idea in 2002 was to have the institutions in our surrounding neighborhoods work together. The thought there was that as the medical campus hopefully starts to grow and prosper, so will the neighborhoods in and around us. We try to look at it as holistically as possible —  that from the standpoint of the campus, we’re seeing mutual benefit not just happen to the growth of the institutions and the companies that are there, but also to the surrounding neighborhoods.

Heaney: Let me ask you about the surrounding neighborhoods because the Fruit Belt is still in pretty rough shape.

Enstice: When we first started working in the Fruit Belt, or myself, I didn’t know a lot. I just moved back from New York City to Buffalo and started working at the medical campus. And I went in and one of the biggest things I learned early on was that you have to go in, you have to listen, you have to understand things that happened in the past – whether I was there then or not is irrelevant – because decisions of the past had an effect on people. A lot of it was listening, never promising what we couldn’t deliver on, and continuing an open dialogue with the Fruit Belt neighborhood.

When we first started this, no local developers or even national developers really wanted to invest in and around the campus, but we’re starting to see that now.

Heaney: Has it borne fruit yet? No pun intended. My kids went to City Honors so I was in the neighborhood a lot of years and it still looks pretty rough. McCarley Gardens is a nice enclave but that could be slated for the wrecker’s ball. Has it gotten traction in the neighborhoods the way you want?

Enstice: I think it’s starting to get traction. One of the things that I learned early on was when you talk to people in the neighborhoods, they just want their streets fixed, their trees trimmed, new lights, new sidewalks, all that stuff. But Rev. Michael Chapman and St. John the Baptist Church have started to redevelop it a bit and the community input is starting to get out there. So I’m seeing the traction. I’m hoping it takes off more. We need to continue to invest in the public infrastructure over there, so it is a place that people do want to live.

Over the next three years we’re going to get it up to 17,000 employees in downtown Buffalo, of which it’s about 1,000 new jobs to our community.

Heaney: The medical campus  has been around about 10 years, involves about $1 billion between public and private investment. When does it max out? When does it mature?

Enstice: I think one of the things we’ve done – I hope it never matures. I hope it keeps growing and growing and growing.

But one of the things we’ve done today is we’ve taken the idea in 2002 we had 7,000 jobs. There’s 12,000 jobs there now. A lot of those jobs, as we like to say to each other, is we’ve done the easy stuff. We’ve built a critical mass down on the campus. Those aren’t all new jobs. They’re jobs that were creating the critical mass and hopefully we’ll see the flowering of new opportunities. Our goal that we’re seeing right now is that over the next three years, we’re going to get it up to 17,000 employees in downtown Buffalo, of which it’s about 1,000 new jobs to our community.

But that consolidation is really offering the opportunities for spinoff. When we first started this, no local developers or even national developers really wanted to invest in and around the campus, but we’re starting to see that now. Local developers are coming in; they’re buying properties; they’re making investments. And a lot of that has to do with the critical mass that is in the downtown corridor.

Heaney: I take it the business opportunity is taking research and development and turning it into commercial products, be they pharmaceuticals or medical devices? What is the economic upside?

Enstice: I think that’s one of the aspects, that the pharmaceuticals, the medical devices – spinning that off out of the university. But I think when you really look at it, down at the medical campus right now you’ve got Ulrich’s and you’ve got Le Metro. You’ve got two restaurants that are right adjacent to the campus. The rest of them filter off into Allentown and when you get to downtown.

So I think the small businesses to service the campus – when you go to most other cities in academic environments, there’s small retail, there’s small restaurants, you have all of that. And I think once we get this student population from the University at Buffalo down there – the medical school is moving down there along with the Children’s Hospital – you have that critical mass that can hopefully integrate the opportunities for those small businesses to take off.

Heaney: You mentioned Children’s Hospital, UB Medical School, kind of the flip side to the medical campuses. You noted about 12,000 new jobs. There’s only about 1,000 net new jobs. There’s a lot of relocation of existing businesses. While I started the interview saying it’s regarded as a big economic development success, if you were to judge it by a standard measure of economic development success, and we did some math before we got on the air, $1 billion divided by half a billion in public – what is the mix between public and private?

Enstice: I think over the years when you bring the university in who’s 100 percent public, you’re talking 50 – 50.

Heaney: So there’s been $500 million in private sector investment?

Enstice: In that range, yeah.

Heaney: OK, so $500 million divided by 1,000 jobs – that’s half a million dollars a job, which is not regarded as a good ROI in terms of traditional economic development standards. It’s awfully , awfully expensive. So what is the benefit to the community of making that kind of investment for basically shuffling jobs within the metro area?

Enstice: I think there’s a couple of things. The shuffling is that it’s in the core of the city. By being in the core of the city, what it’s allowed to do, and by having that critical mass, we’ve seen companies look to invest. So private-sector companies have started to invest in and around the campus. When I talk about the private sector jobs, the majority of those private sector jobs have been over the last four to five years. So we’re starting to see the build up of private sector. If you ask me, “What is the most important thing this community can focus on?” It’s how to get private sector jobs here.

 I really believe that housing is going to take off in and around the campus and along the Main Street spine where the NFTA subway is.

Heaney: So how many private sector jobs are we looking at in, say, another five years? That thousand would be what?

Enstice: I think you’d hopefully double that if we made the type of investment that I’m thinking about in and around the technology and the spinoffs that are happening in the campus. I think the other thing that we don’t count for are the majority of people that are starting small businesses in and around the campus to capitalize on that critical mass.

But I think the other big, big part that I’m very cautiously optimistic about is the housing aspect. I really believe that housing is going to take off in and around the campus and along the Main Street spine where the NFTA subway is.

Heaney: So we’ll see more student housing? Housing for professionals?

Enstice: I think it’s going to be all of the above. We have to have that.

Heaney: How big is the medical school, student body-wise?

Enstice: I don’t know the answer to that. We can get that for you.

Heaney: There’s probably a lot of them.

Enstice: Yeah. My big thing there is that we are making a commitment to smart growth down on the campus and we are trying to build out parking  to service the customers, the patients, and the visitors. And the employee base is going to have some parking, but what we’re really going to try to figure out how to do is get more of the employee base to live in and around the City of Buffalo. So we can bring them in via the subway, via the transit, however we look at that.

Heaney: What’s it going to take in terms of the transit element to make things work with the NFTA? Because right now the subway is not exactly a roaring success when it comes to ridership. You’re talking about doing something that hasn’t really succeeded with other businesses.

Enstice: I think you’re going to start to see. When the subway system was thought about and started to be developed in the 1970s, the concept was to have transit-oriented development. I’m not an urban planner, I just hear those words a lot. And you’re getting it with the University at Buffalo building its medical school right over the subway system. So when you go into most other cities, there’s development that happened over subways. That was the goal back in the 1970s.

What we’re hoping for is that the housing I’m talking about happens in and along the subway line up and down Main Street. Two things that are there – if you were to go rebuild that asset we have here, you’re talking $4 or $5 billion. So it’s an asset our community has. It’s up to us now to leverage that and utilize it.

What’s it going to take? I think it’s going to take a culture change on our behalf as the Buffalo Niagara Medical Campus, to change the way we think about accessing our campus. But I also think we’re going to have to continuously work to help the NFTA to meet the needs of where the future of transit is.

Heaney: So you’re going to be asking them to do things differently then?

Enstice: Our goal would be we’ll do things differently and hopefully the NFTA will do things differently so we can all win and get a mutual benefit out of it.

 We want to continue the dialogue around (Trico) and hopefully we can come to a compromise.

Heaney: Another business question for you: What opportunity is there to either attract Canadian patients or Canadian investors or businesses to the medical campus, and to what degree is the campus seizing the opportunity?

Enstice I think on the Canadian patients, it’s a real opportunity. But again, that’s up to us to deliver the best quality care and that’s what our institutions are working toward.

Heaney: How much headway?

Enstice: I don’t work directly on it, but I know that the institutions and some of the specialists that are in the neurosurgery department, they’re working very strongly at it. I know Roswell Park is working very strongly at it and getting some successes there.

On the recruitment side of companies, that is something that we’re absolutely starting to get focused on. We as the Buffalo Niagara Medical Campus never used to do that. We’re now putting our strategy in place that we will bring those companies in to be strategic partners. From an investment standpoint, I never had Canadian investors call me to say, “Can I sit down and talk about the development center here?” And we’re getting that now. I’ve had meetings with a couple of the investors to ask me about it because they are looking at it as an opportunity for redevelopment.

Heaney: Let’s shift gears and talk about Trico. You’ve unveiled plans in the past couple weeks. There are five buildings in the Trico complex. Your proposal would leave one standing, redevelop it at a cost of about $52 million. The preservation community isn’t terribly happy with the plan. As a matter of fact, the State Office of Parks, Recreation and Historic Preservation came out last week and pretty much threw cold water on it and they’re pretty much the ones who will determine whether or not the project is eligible for tax credits, which is really important to making the finances of the project work.

Enstice: I think it could, so I think what’s important here is back about a year ago, we were planning on working toward a demolition and keeping about 10 percent of the building. And what ended up happening was the preservation community reached out to us. We had a conversation and they said, “Would you hold up on that?” So we did. We pulled back. We went through a thoughtful process with them, and what that process really led to was, “You should do another process. You should do more studies and get your hands around the facts and figures, both from historic preservation and a market standpoint.”

And so over the last four months, a group of consultants that the preservation roundtable and ourselves put together – and what that group came back with was a study. So what I think is really important here and why we as the Buffalo Niagara Medical Campus engaged in this was, besides coming up with an outcome for the Trico facility, what was more important was they asked us by leading a new process it could become a new way for our community to look at historic preservation and development at the same time. Because one of the things that’s been a struggle is how do you bring the two of them together?

I don’t want to say that it’s been a perfect process, but it’s been a different process and the biggest thing I can say and our board is saying is, “By going through this process and by the preservationists bringing this to the table, we’ve got a better outcome.”

Heaney: Although it’s an outcome that a lot of preservationists are still pretty unhappy with.

Enstice: I don’t know the answer with that yet.

Heaney: I’ve talked to a number of them and there’s the newspaper coverage. And again, the state folks who have to bless it if you’re going to get the tax credits already made it pretty clear that they’re not with it.

Enstice: I think the important part of that is on the historic preservation tax credits, until we authorize and actually file for what the exact plan is, you can’t really have a “This is what it’s going to be.” So we want to have a conversation. We want to continue the dialogue around it and hopefully we can come to a compromise.

Heaney: What would go in building that you would be keeping?

Enstice: When all this happened and we went through the process, the modeling that was done by the consultants was that there’d be a little more office to serve the needs that are happening in and around the area. They believe that there’s some market there for apartments. And some people have talked about putting some sort of retail, possibly hotel aspect to that.

We’re trying to do new things and sometimes that brings bumps along the way with it.

Heaney: Every project in Buffalo has a hotel.

Enstice: What the important part from ours is that we, the Buffalo Niagara Medical Campus, won’t be the entity that actually does that development.

Heaney: The demo plan, or the redevelopment plan, however you want to term it, would keep about 42 percent of the structure?

Enstice: It’s 270,000 square feet.

Heaney: It’s roughly 60 percent demo, 40 percent redevelopment if I understand correctly. If you’re not close to that ratio, what happens then? Because again, it seems like this is an awfully iffy project coming out the gate. Suppose you were to keep a lot more of the structures standing. Is it from your perspective an economically feasible project to do then?

Enstice: When we looked at the study and had the consultants come back and put all the data on the table, economically we didn’t see how this could be a possibility.

Heaney: What kind of gap?

Enstice: You’re talking about a $50 million, $60 million gap to redo the whole project.

Heaney: So it’s about half the development cost.

Enstice: It’s pretty significant.

Heaney: Your option to redevelop the Trico complex is good for a couple years?

Enstice: A couple more years, yep.

Heaney: McCarley Gardens – a lot of controversy around that prospect of the UB Foundation buying what’s considered to be a very stable neighborhood within a neighborhood and relocating those residents elsewhere. Where does that stand?

Enstice: I think what’s important about McCarley Gardens is a few years back, Rev. Chapman, who is with St. John Baptist Church, are the owners of the property, approached us and said, “Would you be interested in purchasing this?”

Heaney: Which didn’t go over really well with his tenants.

Enstice: So we agreed to sit down and have that conversation. And we started to have that conversation and the University Foundation, as you mentioned, has been working on this to find a solution. And I know they’re getting close to trying to figure out what to do there. But I think the most important thing for anybody interested in this is that it will be done in a responsible, very conscientious way, if the deal even gets done.

Heaney: Is this a front burner or a back burner project?

Enstice: It’s a back-burner project.  You’ve got to remember, we have the medical school; Roswell Park has an expansion; you’ve got the University at Buffalo moving down; there’s a private-sector medical office building that’s coming up. There’s a whole development here that is front and center for us. McCarley Gardens is a project that is for the future of the campus and of the surrounding neighborhoods.

Heaney: One final project, the linear park along Ellicott Street through the medical campus, which Investigative Post did an expose on about a month, month-and-a-half ago. Long story short, Ellicott Street is supposed to be redeveloped in a linear park and a two-way street. It’s taken way, way too long to get done. It’s still not done. You had crews out there actually doing some of the work that the city was paying other people to do to in order to expedite things.Where do things stand?

Enstice: I think the positive. I always like to end on a positive note and the positive note is it has been bid.

Heaney: The work that’s been bid is the final phase …

Enstice: Final phase, the entire street redone, the completion of a $6.5 million investment that will go on there, and I’m very optimistic that Public Works Commissioner Steve Stepniak, who’s been a very good partner to work with, will deliver on that and the work will be done by the end of fall – by the beginning of the fourth quarter, end of third quarter.

Heaney: So by this time next year it will be done?

Enstice: It will be done. We’ll take you for a walk.

Heaney: In a nutshell, what has been the problem?

Enstice: I think there’s a combination of all these things. We wanted to try something unique. The contractor that we had was definitely not used to the uniqueness that we put out there. And that’s one of the things that we try to do on the medical campus is not just do it the old way how we used to do things. We’re trying to do new things and sometimes that brings bumps along the way with it.

Heaney: In this case, rather large bumps.