The New Company Town

How Rochester, New York, Is Angling to Be a Remote Work Hub

 

The day Peter Landers and his partners closed on the historic Aqueduct Building in Rochester, New York, was supposed to mark a new beginning. The building, named for the 19th century structure that brought the Erie Canal over the Genesee River, was to be the centerpiece of a $500 million downtown development featuring offices, retail space, and apartments.

But it was March 2020, and that was the day New York State shut down to help stop the spread of COVID-19. As the months wore on and millions of Americans settled into working from home and largely avoiding stores and restaurants, the vision for that downtown development—a mixed-use project comprising seven buildings and a riverfront park called the Aqueduct District that was to serve as a center of jobs and commerce—began to get a little cloudy.

“It gave us pause,” said Landers, who purchased the building for $4.7 million with local developers Rob Sands and Jim Costanza. “We had to pivot and rethink what was the best approach for this development. The pandemic is accelerating remote work, so we shifted our model to a more innovative approach that we believe addresses the growing need for living and working within a campus environment.”

Rochester hopes to become one of America’s first “Zoom Towns,” the nickname for cities looking to lure the growing class of remote workers with amenities and incentives designed especially for them. The Aqueduct District is now one of five finalists in a national competition hosted by the co-living company Common to become a “remote work hub.” Common manages communal living spaces (also called “adult dorms”) in nine U.S. cities and wants to capitalize on the workforce’s newfound flexibility by promoting that concept in smaller cities. The other finalist projects are located in New Orleans; Bentonville, Arkansas; Ogden, Utah; and Rocky Mount, North Carolina. All five are receiving design and marketing support from the Common team.

For legacy cities like Rochester, remote work is a chance to recapture that old company town concept—but with a modern twist. Once thriving centers of industry that fueled the growth of the American middle class, these postindustrial cities have struggled with population loss and vacancies as the national economy has transitioned away from manufacturing. In the 1980s, more than half the area workforce in Rochester was employed by corporate heavyweights with local headquarters or manufacturing divisions, including Kodak, Xerox, Bausch & Lomb, and General Motors. But those giants either downsized or moved headquarters in the earlier part of this century, and the city has been seeking new ways to boost its economy ever since.

The Aqueduct District is a microcosm of that effort. Its centerpiece, the aqueduct itself, has played its own colorful role in the city’s transformation. In the 20th century, the vacated canal bed was home to a subway line for a time, then was converted to a road and became today’s Broad Street Bridge. The 21st century vision for the aqueduct incorporates this history by closing off the bridge to cars and converting it to a terrace with green space that could include a partial segment of the canal, smaller water features, or designs reflecting the subway history. Post-COVID, Landers and his partners have revamped their nearby real estate plans to include micro-units: one-bedroom apartments and efficiencies with an office incorporated into the unit. Offices now also include cowork spaces. The development, which broke ground this year, will also have a riverfront walk, cycling paths, and community gathering spaces. The goal is to create a downtown hub that will attract entrepreneurs, artisans, and other workers and offer them a variety of choices for living and working together.

ROC2025, the region’s economic development alliance, is planning to support the effort to attract new workers to the city by offering cash and other amenities as relocation incentives. Barbara Egenhofer, director of talent strategy for the Greater Rochester Chamber, said the alliance is looking at a program similar to one in Tulsa, Oklahoma, which offers a $10,000 relocation incentive, and is also looking at concepts like offering neighborhood tours and down payment assistance. The remote work program ultimately hopes to lure as many as 600 remote workers in three years, as part of the ROC2025 initiative’s larger goal of adding 30,000 net new jobs in Rochester.

The prospect of fostering growth without having to create all the jobs that traditionally would have supported it is enticing for Rochester and cities across the country. While targeting the remote workforce is not a “catchall” for economic growth, said Jessie Grogan, associate director for Reduced Poverty and Spatial Inequality at the Lincoln Institute, it does make sense to incorporate it into an existing economic development strategy.

“I think it’s an interesting thing to seize upon,” she said, noting that the effects of climate change and extreme weather plus the higher cost of living in coastal cities could also be factors that help drive population toward Rust Belt cities like Rochester in the coming decades. Still, she warns, economic development should also be built around supporting existing businesses and helping them grow.

And betting on an emerging trend is a gamble. It’s still not clear how much of the current remote workforce will operate that way permanently, though research by the University of Chicago last year concluded that 34 percent of U.S. jobs can be done remotely; those jobs tend to require college or advanced degrees. Companies like Facebook and Twitter have announced that employees can work from home permanently, and a recent FlexJobs survey found that most people working remotely want to keep doing so.

But if workers can be easily lured to one city, what’s to stop them from taking advantage of incentives to move elsewhere after a few years? “I’m not sure that we have a great answer for that,” said Dana Miller, deputy commissioner of Rochester Neighborhood & Business Development. But Miller believes getting people to Rochester in the first place will help move the needle. Projects like the Aqueduct District, he says, are part of “creating this infrastructure that, whether you’re looking to start a business or you work remotely, you look at us and say, ‘Hey, I could accomplish that there.’”

Rochester may have an advantage over other mid-sized cities competing for remote workers. It has several colleges and universities in the area, including the University of Rochester and Rochester Institute of Technology, that regularly churn out highly skilled college graduates. The problem has been keeping them in Rochester—but city advocates hope that will change, too, as the city reinvents itself as a new kind of company town.

“There’s a historical image of Rochester being comprised of three big organizations—Kodak, Xerox, and Bausch & Lomb—but these companies haven’t been dominant for years,” said Egenhofer, noting that most Rochester businesses employ 100 people or fewer. “That’s not who we are anymore, and we haven’t been that for a long time. We’re changing the narrative.”

 


 

Liz Farmer is a fiscal policy expert and journalist whose areas of expertise include budgets, fiscal distress, and tax policy. She is currently a research fellow at the Rockefeller Institute’s Future of Labor Research Center. 

Photograph: The Aqueduct District in Rochester, New York, is part of an effort to boost the local economy by attracting remote workers and other new residents. Credit: Courtesy of CBRE|Rochester (listing agent).

 


 

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