January 13, 2012 Dear Friend,

95 Perry Street, Suite 500 Buffalo, NY 14203-3030 P: (716) 846-8200 F: (716) 846-8260 www.eriecanalharbor.com

I want to share some news with you about the exciting changes that are taking place on Buffalo s waterfront. Thanks to the momentum that we achieved this summer, with more than 300 events and 400,000 visitors, we have reached a tipping point that will result in unprecedented improvements to our region s greatest natural resource. Earlier this week, our board approved a $23 million contract for the construction of a system of historically aligned public canals on the site of the former Memorial Auditorium. Just across Main Street, Benderson Development has begun its $30 million rehab of the former Donovan Office Building. In addition, ECHDC will begin work on five additional construction projects on the waterfront in 2012, including a permanent extension of the Central Wharf, more docks, our first efforts on the Outer Harbor, and the Liberty Hound - the new bistro at the Naval and Serviceman s Museum. Culture continues to be a vital component of the Canalside project. ECHDC Board member Maureen Hurley spearheaded the creation of the Canalside Cultural Steering Group in 2007, drawing together leaders from Western New York s major cultural institutions, including Donna Fernandes of the Buffalo Zoo and Melissa Brown from the Buffalo and Erie County Historical Society, our major foundations, such as Catherine Schweitzer from the Baird Foundation and noted educator Peter Dow. The group focused on ways to tell The Story of Buffalo throughout the site. Internationally recognized consultants were hired to review local conditions, conduct interviews with nearly 130 community members during a visioning workshop, and to solicit and review proposals for long-term projects. The group worked for a year and a half, issuing their final report, located here, in November 2011. The report, which will form the basis for integrating cultural experiences into Canalside, found that in addition to the site programming that is currently offered, the most sustainable initial project for cultural investment would be a children s experience given that it will fill a gap in the family attractions available in Western New York and will provide mass market appeal on a year-round basis. A recent review of the top ten most popular links on the website for the Convention and Visitor s Bureau reveals Explore-N-More at number seven and the Central Wharf at number eight. The report also found that a children s experience has reasonable capital costs and a high likelihood for sustainability. A children s experience that integrates our rich history has the potential to become a regional attraction, and places an emphasis on the future, as well as our past. Based on these findings, ECHDC has issued a Request for Proposals for the operator of a children s experience. Proposals are due on March 8, 2012 and we expect to announce a selection by this summer. As a part of the process, ECHDC will perform due diligence on the selected operator s ability to complete the children s experience by requiring both a Museum Master Plan that is specific to Canalside, as well as a Capital Campaign Feasibility Study. A public Participation Plan is also a requirement of this phase. In addition to the children s experience, the Cultural Master Plan considers the possible development of a Story of Buffalo Center, which would provide a place to tell Buffalo s unique story and detail the role that our city

played in the development of the United States. At this point, this is a concept in the early stages of development, and will require more research and review before we consider moving forward with it. I have attached some recent articles from the Buffalo News, Buffalo Rising and Buffalo Business First that provide additional information on the strides that we are taking to make our waterfront the true destination that we know it can be. Please feel free to share this letter and these articles with your friends and family, and if you would like to keep up to date on the latest news on Canalside, I encourage you to become a fan of ECHDC on Facebook, and to follow us on Twitter. 2012 is going to be a great year for Western New York. Respectfully, Thomas P. Dee President, Erie Canal Harbor Development Corporation

The Buffalo News Exciting times on the waterfront After years of nothing but talk, progress being made at Canalside News Editorial Board January 11, 2012 http://www.buffalonews.com/editorial-page/buffalo-news-editorials/article704933.ece Full steam ahead: That appears to be the operating philosophy of the Erie Canal Harbor Development Corp. as it lets contracts and otherwise moves briskly forward on sweeping plans for Buffalo s long-neglected waterfront. This is an exciting time in Buffalo for a number of reasons developments at the Buffalo Niagara Medical Campus, the arrival of Say Yes to Education, revival of the downtown housing market but none is longer sought or more critical to Buffalo s prospects than turning the city s waterfront into a destination for residents and visitors alike. Buffalo s lakefront has been a squandered resource for decades. It s an obvious location for recreation, housing and retail business, yet it has lain dormant, unused for lack of plans, lack of funds and lack of will. That changed when Rep. Brian Higgins, D-Buffalo, wrestled $100 million from the New York State Power Authority during its 2007 relicensing. Although the city spent years fruitlessly pursuing Bass Pro Shops as a waterfront anchor, the union was never consummated. Higgins finally pulled the plug by issuing Bass Pro an ultimatum and, with that, the company was given the exit it seemed to crave. Under the circumstances, it was the best thing that could have happened. Once the decks were clear of the sporting goods super store, planning turned to a lighter, quicker, cheaper philosophy. It was like lighting a fuse. Enough work was completed by last year that the free Thursday at the Square concert series was moved to the waterfront. Dozens of brightly colored Adirondack chairs dubbed Buffalo sunset chairs were stationed at the Central Wharf. Clinton s Dish, a small eatery, opened at Canalside. The area became a magnet for people.

Now, waterfront officials have approved a contract to build historically aligned canals on the site of the old Memo-rial Auditorium. The project is to be complete this year, by which time another contract should have been bid to extend those canals to Washington Street. Further down the road, plans are being laid for a children s experience museum with a solar-powered carousel, a Buffalo Fed America theme for a public market and a Buffalo Story Center, a visitor centerpiece at Canalside. Also: the permanent extension of the Central Wharf, establishment of the Liberty Hound restaurant inside the naval museum, development of a parcel on the outer harbor and the return of cars to lower Main Street. With other nearby construction, said Thomas P. Dee, the waterfront agency s president, the waterfront has reached the tipping point the accumulation of events that will change the region for good and stands a good chance of altering Buffalo s own view of itself. It has been a sudden whirlwind of productivity after years of nothing. We have today what we didn t have before plans, money and will. In the end, success will depend on the ability to draw private investment, but this makes for an exciting time on the waterfront and with more excitement to come. The Harbor Development Corp. deserves Buffalo s thanks.

Buffalo Rising Canal Contract Let and Cultural Attractions Picked for Canalside January 9, 2011 http://www.buffalorising.com/2012/01/canal-contract-let-and-cultural-attractions-picked-for-canalside.html The Board of Directors of the Erie Canal Harbor Development Corporation (ECHDC) today voted to enter into a contract with DiPizio Construction Company, Inc., for the construction of historically aligned public canals at Canalside. The board also took action based on the findings of the Canalside Cultural Master Plan, issuing a Request for Proposals (RFP) for the selection of a museum operator for a children's museum experience at Canalside. "This is a historic day for Western New York," said ECHDC Chair Jordan Levy. "We are done with talking and planning and we are moving forward with construction and development, which will generate jobs and tax revenue for our region. I have a simple message for our community: This is real, the work begins now, and by this time next year, we will have radically improved the waterfront, transforming it into a destination that honors our past, while laying the groundwork for our place in the 21st Century." The public canals will be installed on the Aud Block and will interpret the alignment of the Erie Canal and Commercial Slip, which once crossed the site. The canals are designed to evoke the character and vibrancy of the historic Canal District, and to emphasize downtown Buffalo's connection to the waterfront. Hundreds of jobs will be generated by the construction of the canals, with permanent positions evolving once the work is completed. A total of six submissions were received on December 22, 2011 for the construction of the canals. DiPizio Construction Company, Inc., of Cheektowaga was found to be the lowest responsible bidder. The contract amount will not exceed $19,784,000 plus a 20 percent construction contingency for a total contract amount of

$23,740,800. The canals are approximately 37,000 square feet and will include all the necessary equipment to maintain ice during the winter. Three bridges and 22,000 square feet of towpaths lining the canals will reinforce the pedestrian experience and allow for future development as Canalside grows. The new public space will provide a unique setting for four seasons programming, including ice skating during the winter, and special events and activities during spring, summer and fall The ECHDC board also took action today on the Canalside Cultural Master Plan, which was finalized under the direction of Maureen Hurley, who has chaired the Canalside Cultural Steering Group since 2007. Lord Cultural Resources and Ralph Applebaum Associates worked with the public volunteers who make up the steering group to develop a comprehensive plan based on the "Story of Buffalo." The plan provides a set of core principles for integrating cultural projects into Canalside, and identifies short-term and long-term opportunities for cultural attractions and events programming that will maximize the use of public spaces and attract visitors and commercial investment to Canalside. The Final Report was approved by the ECHDC board in November. "The Cultural Master Plan is the culmination of years of hard work and collaboration between Western New York's leading cultural institutions," said Ms. Hurley. "With the completion of this plan, we are ready to take the next steps towards telling the 'Story of Buffalo' at Canalside, in the very place where Buffalo began." The next phase includes opportunities for cultural organizations to become tenants in the shovel-ready Erie Canal Harbor blocks and/or former Aud Block. This past September, in order to determine viable projects, ECHDC sent out an RFP for organizations, institutions and/or individuals with an interest in a long-term presence at Canalside. The Corporation received proposals from 25 groups, and the consultant team interviewed each as part of the Master Plan process. The Master Plan recommends a children's experience museum, a "Buffalo Fed America" theme for a public market, and a "Story of Buffalo Center" as the cultural attractions at Canalside. A copy of the final report is available here and a copy of Maureen Hurley's presentation to the ECHDC board is available here.

Buffalo Business First Replica Waterways a Tipping Point for Canalside James Fink January 9, 2011 http://www.bizjournals.com/buffalo/news/2012/01/09/replica-waterway-a-tipping-point-at.html?page=all With construction on the first phase of a series of replica Erie Canal waterways set to begin, the Erie Canal Harbor Development Corp. directors are now looking what could be the next in a series of transformative projects inside downtown Buffalo s Canalside footprint. As expected, the board approved a $23.74 million contract with Cheektowaga s DiPizio Construction Co. Inc. to build a series of canals beginning at Marine Drive through a portion of the former Memorial Auditorium block to Main Street. DiPizio, whose main bid was for $19.78 million plus a standard 20 percent construction contingency, was the lowest six bids submitted last month to the agency.

The canals are set to open by the end of this year. The project includes 37,000-square-feet of waterways, three pedestrian bridges and 22,000-square-feet of towpaths. A second phase that will bring the canals from Main Street east to Washington Street will be bid later this year. This is a tipping point, said Tom Dee, Erie Canal Harbor Development Corp. president. We are moving forward in a very positive way. The canals are one of seven construction projects the agency has underway this year that collectively represent more than $75 million worth of work. These are game changers, added Rep. Brian Higgins, D-Buffalo, who helped secure significant funding for Canalside. At the same time, the harbor development agency, is also focusing on new cultural additions to Canalside, including constructing a children s museum on a portion of the Aud block, creating a Buffalo Fed America theme for a proposed indoor public market also set for the Aud site and a Story of Buffalo Center inside the Canalside footprint. Bidding for the museum and a museum operator are going out to the public on Jan. 10, with bids due back on Feb. 10 for the operator contract and March 8 for the museum project, said Maureen Hurley, an ECHDC board member overseeing the cultural development aspects of Canalside. We want something with mass market appeal, Hurley said. Not only in summer, but also something that will bring people down on a weekday in February when the winds are blowing off of the lake. Last summer, Canalside hosted more than 300 events and attracted an estimated 400,000 visitors. The goal is turn the 20-acre downtown site into a year-round destination that attracts interest from visitors as well as investment from the private sector. We want some things that bring people back again and again, Hurley said.