Buffalo's tech scene reboots the city The city of "good neighbors" hopes to draw tech as part of economic makeover.

Jon Swartz | USA TODAY

BUFFALO — Larkinville once was a desolate patch of abandoned buildings and concrete, the very essence of the urban blight that beleaguered parts of Buffalo.

On a recent August night, however, the neighborhood — the heartbeat of this city in upstate New York now rediscovering its mojo — has a band playing to a packed outdoor bar populated with people of all ages, including several CEOs of tech start-ups.

"There was risk in taking on the area," Harry Zemsky, owner of the Hydraulic Hearth, a restaurant and brewery in the heart of Larkinville, says, surveying the scene.

And 10 years ago, Canalside, another Buffalo neighborhood, was a parking lot. Today, it's a thriving waterfront/naval park for tourists during the day and revelers at night for outdoor music shows.

Blue-collar Buffalo is undergoing a high-tech renaissance. From major expansion projects by Solar City and IBM to a myriad of start-ups, such as virtual dressing room triMirror and social-media app KeepUp, this western New York city of 261,000 is slowly transforming into an attractive destination for tech entrepreneurs.

Behind a major initiative by the state government, the city is dangling a more affordable cost of living than the San Francisco Bay Area and New York, reasonable real estate prices, a thriving university system and medical research facility pumping out talented graduates, and its proximity to New York and Toronto to draw young entrepreneurs.

Indeed, like its Rust Belt brethren — namely Pittsburgh and Baltimore — Buffalo is emerging from years of financial malaise and attempting to reinvent itself as a tech hotbed. And, like other tech hubs, it is angling for the economic windfall that comes with recruiting young, energetic, smart people.

“The unique dynamic in Buffalo right now — of incredible community support and pride, and a palpable energy in the air — has helped (us) work toward critical inflection points in technology and business development,” says Daniel Shani, the 28-year-old CEO of Energy Intelligence, which is developing an energy-harvesting system that turns the motion of vehicles into electricity.

What's happening in Buffalo is a departure from the stereotypical view of a city often associated with frigid winters, the Rust Belt and the site of a presidential assassination more than a century ago. But the city of "Good Neighbors" is shedding its decades-old image, and in the process is drawing comparisons to Austin on steroids, brimming with funky culture and Art Deco architecture that can leave visitors slack jawed.

"Great deals don't just come out of Silicon Valley or New York," says Fred Wilson, a managing partner at Union Square Ventures in New York. "I'm impressed by what I see in Buffalo's emerging start-up community. They're betting on tech start-ups to give their economy a boost."

The renaissance is giving Buffalo a Second Act as a city steeped in quirky history: President William McKinley was assassinated at the Pan-American Exposition here in 1901. Former President Millard Fillmore and funk star Rick James are buried at its Forest Lawn Cemetery. Frank Lloyd Wright's magisterial Martin House is the architectural legend's first major work outside of Chicago.

The city's comeback story has been long and indirect.

Buffalo was "frozen in time" economically the second half of the 20th century with the decline of the steel mill industry, says Peter Burakowski, a fourth-generation resident and local historian who is now director of marketing for 43North. The organization, part of New York Gov. Andrew Cuomo’s Buffalo Billion initiative, conceived to drive new economic opportunities in Buffalo and Western New York, doles out $5 million a year in cash prizes to bring tech talent to Buffalo.

As the city slowly emerged from its funk through growth in advanced manufacturing and medical research about 15 years ago, tech and other industries began to land here this year. Today, construction cranes scatter the skyline. There are sites for a 1 million-square-foot Solar City manufacturing center (valued at $1 billion), the addition of 500 IBM jobs and an extension to the University at Buffalo's medical research facilities.

"They are all in on Buffalo," says Jordan Levy, a Buffalo native who is managing partner at Softbank Capital NY and chairman of 43North.

Several start-ups occupy 43North, a 7,000-square-foot incubator where windshield-wiper maker Trico was once based. Co-working space DIG (Design Innovation Garage), next door, is 6,000 square feet.

Fashion-imaging software from start-up triMirror illustrates the region's eye-popping possibilities. It has created a virtual fitting room that lets consumers see how clothing fits on a 3-D avatar of them — standing, sitting, walking, jogging, jumping.

"Everyone knows each other and is eager to help with introductions," says Jenny Tcharnaia, co-founder and chief financial officer of triMirror, demonstrating the product on a big screen in front of a Microsoft Retail Store here. Buffalo's tightly-knit start-up community, she says, has been invaluable in fostering collaboration.

Another local entrepreneur, Lauren Washington, 32, of Staten Island, N.Y., co-founded KeepUp, a personal assistant app that monitor six social-media sites for important events for friends. She plans to launch the app publicly in the fall with an Android version.

“Buffalo is truly an American comeback story,” says Washington, whose grandmother was born here. “The momentum around entrepreneurship that is happening here is inspiring. To me, it's like I've come full circle to where my family started out.”

The generational shift is arduous but steady and inevitable, residents says. They insist Buffalo is back.

"My parents saw years of decline, but I've only seen upward movement," Burakowski says. "The last 10 years have been remarkable in Buffalo. It's a really cool moment to be here."

Follow USA TODAY's San Francisco Bureau Chief Jon Swartz on Twitter: @jswartz