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Taking a Look at Westchester’s Economic Forecast in 2023

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Courtesy of stock.adobe.com

Local industry leaders are celebrating numerous signs of a true economic recovery over the past year…and looking forward to an even better 2023.

By Bill Cary and Elaine Pofeldt

Manufacturing

While pandemic-related supply-chain issues have mostly resolved themselves in many industries, some local manufacturers continue to be hit hard by difficulties in getting the materials they need.

“The supply chain has become an exorbitant part of our business,” says Oliver Stauffer, CEO of Hawthorne-based PTI (Packaging Technologies & Inspection), which has 70 employees who focus on package integrity and seal-quality assurance for the healthcare industry. “A year ago, we were ahead of it, and we had lots of inventory.”

Westchester Economic Forecast 2023

Courtesy of stock.adobe.com

Today, what PTI produces may have 40 or 50 unique parts. “If one of those is missing, we can’t ship the product,” Stauffer notes. “All it takes is one part to be missing. Getting electronic components is really problematic. We manufacture leak-detection systems for the healthcare industry and develop sensory technologies.”

Price gouging has also become a problem, he says. “It may take eight months to get a product, and then at double the price. It’s a unique, scary environment, and it hasn’t gotten better.”

For Don Vibbert, CEO of Elmsford-based Image-Works, supply-chain issues have definitely gotten better. “We got hit hard on the microchip front, and now we’ve gotten a lot smarter about how to manage it so that our customers don’t feel it as much,” says Vibbert, whose company provides imaging devices and solutions for dental and medical offices. “We have global manufacturers we partner with. We have our own software platforms, and then we configure them for the North American market.”

Ball Chain Manufacturing

Courtesy of Ball Chain Manufacturing

Vibbert adds that the past couple of years have not been easy ones. “It’s definitely been a wild ride, to say the least. First COVID hit, then the world shut down. Yes, 2021 was our best year ever, but then Russia invaded Ukraine and the stock market crashed. Many of our clients are dental professionals who own their businesses, and most of them have stock portfolios. When the market tanks, they definitely get more conservative about spending money.”

But despite these global challenges, things are looking up for Vibbert. “We’re optimistic for 2023,” he adds. “We’re seeing signs that our customer base has gotten more optimistic as well.”

Bill Taubner, president of Ball Chain Manufacturing in Mount Vernon, the world’s largest manufacturer of ball-chain and related accessories, has also seen some lingering supply-chain issues. “At times, it has been difficult to secure flat metal stock from suppliers, and prices are skyrocketing due to inflation,” Taubner says. “We keep inventory levels high to help ensure production remains constant and that our customers have the products they need.”

“At times, it has been difficult to secure flat metal stock from suppliers, and prices are skyrocketing due to inflation. We keep inventory levels high to help ensure production remains constant and that our customers have the products they need.”
—Bill Taubner, President, Ball Chain Manufacturing

The family-owned company was founded in 1938 and now employs more than 80 people. Its many products are used in ceiling fans, toilets, handbags, keychains, curtains, and U.S. military dog-tag IDs.

Chain Manufacturing economic

Courtesy of Ball Chain Manufacturing

“The COVID-19 pandemic was a true challenge,” Taubner says. “During the crisis, at the request of Michael Romita, president of the Westchester County Association, we pivoted our business to help address the critical shortage of PPE by launching Bona Fide Masks, which makes and distributes KN95 masks and related products.”

And like many manufacturers who were forced to pivot, Ball Chain remains committed to staying in the county. “My father and grandfather made a decision years ago to keep our operation local,” notes Taubner “My brothers, Val and Jim, and I feel fortunate that as of today, we’ve been able to honor that commitment.”

Commercial Real Estate

After two very strong years, local real estate experts say we are poised for another one. “I’m very optimistic,” says Paul Adler, chief strategy officer at Rand Commercial. “We expect business to increase quarter over quarter in 2023. The Westchester market is still the most desirable market outside of New York City and in the state of New York.”

A lot of growth can be traced back to the residential sector. “Commercial always follows residential growth, and the residential market in Westchester is hotter than the sun,” Adler says. “That’s why we’ve just had such a great year in 2022 and why we believe 2023 will be a great year. We’re still in the wake of that hot residential market, which will come roaring back when interest rates stabilize.”

“The pipeline is healthy going into the first quarter of 2023, but it’s hard to say beyond that. The interest-rate environment obviously is a big deal now, and we’re seeing some developers pumping their brakes a little bit.”
—Tom LaPerch, Director, Houlihan Lawrence Commercial

Compared to pre-pandemic days, pricing in the retail market is down slightly, but there is still strong demand and limited inventory, he says. “It’s not like anybody is going to build a new shopping center.” Interestingly, some of the former mall and big-box spaces are seeing new tenants, including nonprofits, medical facilities, and what he described as “experiential retail, things like fitness and indoor sports and the like.”

Director, Houlihan Lawrence Commercial economic

Courtesy of Tom Laperch

Tom LaPerch, director of Houlihan Lawrence Commercial in Rye Brook, agrees. “Retail has rebounded very nicely, and rental rates have stabilized,” he says. “People are tired of buying stuff online. It’s a touchy-feely thing.”

Restaurants and the hospitality sector are also “coming back in a big way,” LaPerch adds. “The restaurant market is a very healthy sector now.”

“I thought hospitality would be the last sector to make a comeback, but it is back with a vengeance,” notes Adler. “Restaurateurs are capitalizing on the fact that people want to go out and be with other people and have that dining experience.”

They are no longer just setting up tables with white tablecloths and leaving it at that, he says. “Today’s hospitality provider is much more savvy, and everything is fashioned to being multidimensional.”

RPW Group

Courtesy of RPW Group

Overall, LaPerch is more cautious about commercial real estate in the coming year. “The pipeline is healthy going into the first quarter of 2023, but it’s hard to say beyond that,” he says. “The interest-rate environment obviously is a big deal now, and we’re seeing some developers pumping their brakes a little bit.”

The numbers of new developments have changed drastically based on the cost of capital, he says. “We’ve lost a couple of deals already. When they got their approvals, money was cheap. We’re not sure what their Plan B will be, so there are definitely some challenges ahead.”

“Overall, office is back,” LaPerch says, especially Class A office. During the pandemic, building owners took the opportunity to “freshen things up” and “put money into their buildings to get people to come back in. We’re seeing parking lots full again.”

For Westchester to remain a dynamic market, there needs to be a “sophisticated zoning regimen that reflects the mix people want,” adds LaPerch. People want rentals, and they want walkability near a transportation hub. “Our downtowns are being reimagined, and our older buildings are being reimagined.”

The county’s industrial sector is also performing well, particularly “that last-mile e-commerce market,” Adler says. Buyers want modern and green spaces, with solar panels, LED lighting, heat-pump systems, easy access to transportation, a loading dock and high ceilings being prominent desired features. “There is a big difference between a 13-foot ceiling and a 35-foot one,” he adds.

Higher Education

Coming on the heels of its remarkable success at reaching new audiences with its wide array of remote and online courses during the pandemic, SUNY Westchester Community College (WCC) is increasing its outreach to adult learners, many of whom are pursuing training and certifications that lead to higher-paying, middle-skill jobs, according to college president Dr. Belinda Miles. “Online courses allowed us to reach new markets, including adult learners who might be juggling busy work schedules and childcare needs and cannot easily spend the time commuting to campus.”

In order to help address the needs of the business community and support the region’s economic growth, WCC has developed or revised programs in Advanced Manufacturing, Information Technology, Health Studies, and more. The Valhalla-based community college recently partnered with Port Chester, Ossining, and Peekskill high schools to provide automatic admission for qualified seniors and the college is looking to expand the program with additional school districts in the county in 2023. WCC also recently opened a new state-of-the-art facility at the Cross County Center in Yonkers that is triple the size of its previous Extension Center, with computer and science labs and a full array of student services.

Over the past three years the graduation rate of WCC students has increased by 45%, Miles says. “This trend is due to several factors, including programs designed to assist students who require increased support in their post-secondary education.”

In January, the newly named Iona University will officially open the flagship building of the NewYork-Presbyterian Iona School of Health Sciences at its 28-acre Bronxville campus (formerly Concordia College), as the Kelly Center for Health Sciences, named after benefactors Alfred F. Kelly Jr. and Peggy Kelly. The nearly 32,000-square-foot building spans three floors and features state-of-the-art equipment, spaces, and amenities, according to Dr. Seamus Carey, president of the New Rochelle university. Notably, the entire top floor is dedicated to recreating a hospital setting, with simulation labs, exam rooms and training equipment.

“We also will utilize the new campus for athletics, club sports, performing arts, and other student activities as we grow into the new space,” Carey says. Currently, the most sought-after Health Science program is Iona’s Bachelor of Science degree in nursing, which offers both a traditional four-year bachelor’s degree as well as an accelerated degree for those who already have a bachelor’s in another field but want to make a career change. Outside of the classroom, Iona is adding women’s acrobatics and tumbling and men’s lacrosse as the school’s 22nd and 23rd intercollegiate sports.

Pace University is adding new undergraduate and graduate programs in such areas as information technology, healthcare, business, and law that respond to market demands, and the university is providing more flexibility in how coursework is delivered, according to Pace president Marvin Krislov.

Pace University

Courtesy of Pace University

Enrollment is up across Pace campuses, with a 17% increase in graduate students, an 18% increase in international students, and 7% growth at the Elisabeth Haub School of Law, which once again was named by U.S. News & World Report as the No. 1 environmental law program in the country.

“Across our campuses, and at Pleasantville in particular, we are making significant investments in our science labs and our healthcare simulation labs … to help address a critical need in the region for more clinical lab technicians and nurses,” Krislov says.

Also in 2023, Pace expects to complete its Pace University Cyber Range, a controlled, interactive technology environment for cybersecurity education. In the fall, the university will open a new, 26-story residence hall and academic building in New York City.

Following the retirement of college president Dr. Michael Geisler, Manhattanville College will be seeking a new leader this year. The Purchase-based college began its fall 2022 semester with one of the largest increases in new student enrollment in its recent history, according to interim president Louise Feroe. College enrollment for new first-year students is up 40%.

Pace University education economic

Courtesy of Pace University

“Across our campuses, and at Pleasantville in particular, we are making significant investments in our science labs and our healthcare simulation labs.”
—Marvin Krislov, President, Pace University

Manhattanville will renovate its main athletics center, Kennedy Gymnasium, to include additional gym space for a growing program in physical education this year. The college will also add new meeting space in the library for commuter students to study and gather, and it will continue to expand its School of Nursing and Health Sciences, which opened in 2020.

Manhattanville, like many colleges nationwide, is at an inflection point, Feroe says. “Our world has been profoundly affected by the pandemic, and, not unexpectedly, there has been financial and interpersonal fallout for higher-education institutions.” Like many liberal-arts schools, the college has seen a shift in the type of student it is attracting, resulting in fewer international students and a decline in traditional residential students. “But the college has been able to increase enrollment by offering more career-oriented programs and programs for nontraditional students, as well as launching online offerings,” concludes Feroe.

Healthcare

The aftereffects of the pandemic have had a big impact on healthcare planning in Westchester. Patients who are finally seeking postponed medical treatment are now coping with problems that didn’t get caught early and turning to locally based providers for increasingly advanced care and outpatient services.

Across the Westchester Medical Center Health Network (WMCHealth), Josh Ratner, executive vice president and chief strategy officer, says the patient population includes a rising number of patients who have arrived there sicker than before the pandemic, with the average patient stay increasing by 10% between 2019 and 2021. “It could be that they were avoiding preventive care, or they waited,” Ratner says. “They were scared to go to the doctor. As things progressed, they got more severe.”

healthcare economic

By Ben Hider

Many of these patients are moving from inpatient to outpatient care after discharge, so they can get ongoing follow-up. “Sicker patients require higher levels of care,” says Ratner.

The number of patients being transferred by ambulance or helicopter to WMCHealth is also up, by 40% since 2017, Ratner adds. To address the needs of this new surge of patients, WMC established a new critical care tower, with private rooms for patients. WMCHealth is preparing for 5.5% growth in the patient population through 2027, driven in part by migration to the suburbs. It is expecting growth of more than 25% in patients ages 65 and up and a 7.3% uptick in patients ages 18 to 34, Ratner says.

White Plains Hospital continues to expand access to high-quality care close to home, according to its executive vice president and chief medical officer, Dr. Michael Palumbo. One example is the cardiac surgery program it launched in late 2021 with Montefiore Einstein. “Cardiac surgery can be stressful not only for patients but for their loved ones too,” says Palumbo. “Being able to have this world-class program in Westchester County has been remarkable for our patients, and our clinical outcomes in 2022 far exceeded national quality and performance metrics.”

Beyond this, the hospital opened a state-of-the-art intensive care unit (ICU) in August 2022 and will soon be launching a neurointerventional surgery program that will offer the most advanced stroke treatment procedures currently available. The hospital is also investing in the WPH Cares program, which offers patients support after discharge, so they can recover effectively or manage their chronic diseases at home. WPH Cares offers remote patient monitoring, access to a clinical pharmacist, and, if needed, home visits by a paramedic to provide patients with necessary treatments.

“In the past few years, this care model has proven successful for patients with complex needs, such as those with COPD, and we are working to expand these services to more patients in 2023,” says Palumbo.

Meanwhile, New York Presbyterian-Lawrence Hospital has been renamed New York Presbyterian-Westchester, to reflect its commitment to community care. “As we’re coming through COVID, it’s a way for us to renew our commitment to exceptional care,” says Paul Dunphey, senior vice president and chief operating officer.

The hospital system purchased the WestPark office complex for $83.5 million in March, with plans to establish a new ambulatory care outpatient facility that will bring access to clinical teams from ColumbiaDoctors. The location will offer Centers of Excellence in areas such as women’s health, cancer care, and neuroscience. It has also expanded its spine program, known as a national leader in the space, and opened a new 6,045-square-foot facility at the site of the former Pier 1 store in Larchmont, at 1329 West Boston Post Road.

Healthcare economic

Courtesy of WMCHealth

“It could be that they were avoiding preventive care, or they waited. They were scared to go to the doctor. As things progressed, they got more severe.”
—Josh Ratner, Executive Vice president and Chief Strategy Officer, WMCHealth

Amid industry-wide staffing shortages, all three healthcare systems have prioritized talent recruiting and retention, with NewYork-Presbyterian partnering with Iona University School of Health Sciences; WMCHealth teaming up with Pace University and New York Medical College; and White Plains Hospital partnering with Mercy College to develop their talent pipelines. White Plains Hospital offers an “Earn While You Learn” program, in which full-time hospital employees can return to school to earn certifications for hard-to-fill positions. “Our greatest asset is our staff, and we work continually to find ways to invest in their growth and development,” says Palumbo.

Banking

Westchester County’s banking sector is bracing for a slowing economy. “I would say to people for 2023 to be prepared for some difficult economic times,” says John Tolomer, market vice president and executive vice president at Valley Bank, which acquired The Westchester Bank in 2021. “Avoid taking undue risk. The slowdown is here.”

With higher borrowing costs for commercial mortgages, Tolomer is recommending that local businesses reduce any unnecessary costs. The county is home to 27,684 job-creating firms and 104,393 non-employer establishments, according to data from the U.S. Census Bureau.

Valley Bank

Courtesy of Carlucci & Associates, Inc.

“When you see Meta and Amazon reducing their workforces, you know there is going to be some difficulty ahead. Small and midsize businesses should prepare for that.”
—John Tolomer, Market Vice President and Executive Vice President, Valley Bank

“When you see Meta and Amazon reducing their workforces, you know there is going to be some difficulty ahead. Small and midsize businesses should prepare for that,” Tolomer says. “I think for small-business owners that have been able to navigate the last couple of years, what is in front of us won’t pose any more challenge than they’ve come through already. If they’ve been strong enough to survive the last few years, they will be just fine.”

As a result of their merger with The Westchester Bank, Valley Bank is now a $55 billion institution. “We are always looking to build our business,” says Tolomer. “We have a very strong balance sheet. We have been prudently aggressive in terms of loans from a consumer standpoint and an SMB perspective. We believe we are well positioned to assist the consumer in Westchester, as well as the business community. Since our merger with Valley, we’ve been able to increase our ability to help businesses get the financing they need and will continue to do that.”

Valley national bank economic

Courtesy of Valley National Bank

Despite the challenges, there are some positive developments that will influence the economic environment in which banks operate. County Executive George Latimer recently unveiled a $2.3 billion budget that will not increase the county’s tax levy. Because of high inflation, the county is seeing sales-tax revenue that is at a record high.

Beyond that, jobs in the county are plentiful, at least for now. “Overall, our unemployment rate is 2.3 percent, lower than it was before COVID,” notes Bridget Gibbons, director of the county’s Office of Economic Development. “We have strong growth across almost all of our sectors. We are very optimistic about the county’s ability to weather a recession.”

Retail

Westchester’s malls and downtowns are seeing the effects of pent-up demand, and new stores have been springing up around the county.

“In-person shopping is definitely the trend for 2023 and beyond, says Bridget Gibbons, director of the county’s Office of Economic Development. “During the pandemic, we all shopped online, and even local businesses added online ordering to their websites. Westchester County offered free services to help companies that didn’t have an e-commerce component on their websites to add one. Now we’re seeing people are finally comfortable going back to boutiques and restaurants.”

The Westchester

Courtesy of The Westchester

Retail occupancy has nearly returned to pre-pandemic levels, with the availability rate at 6% to 6.5%, according to Sarah Jones-Maturo, president of the commercial real estate firm RM Friedland. “Availability is now at a healthy spot,” says Jones-Maturo. The lowest availability is in Southern Westchester.

However, pricing has not yet returned to pre-pandemic levels. “We think that was lack of confidence on the side of ownership rather than a true indicator of where the market is today,” says Jones-Maturo. The average asking price is $35.66 [per square foot].

Off-price retailers, such as TJ Maxx and Target, have been very active in Westchester, says Jones-Maturo. “They didn’t have much of a downturn. They continue to be strong and active.”

As a result, spaces suitable for big-box retail have been in demand. Port Chester has the highest availability rate, and demand has been high for the largest blocks of space in the Waterfront Shopping Center, according to RM Friedland’s research.

“There is tremendous demand for some of the larger blocks of space that came on the market recently, some of which was left behind by Bed, Bath & Beyond, which closed locations,” says Jones-Maturo. “We expect they will be leased in the coming months.”

Westchester Count Office of Economic Development

Courtesy of Bridget Gibbons

“In-person shopping is definitely the trend for 2023 and beyond.”
—Bridget Gibbons, Director, Westchester County Office of Economic Development

Some of the most significant transactions for Q3 included Wren Kitchens’ lease at the Yonkers Gateway Center, in the former location of Pier 1 Imports, and the Genesis Auto Dealership, which took over what was once the Lazy Boy shop on Central Avenue in Scarsdale, according to RM Friedland’s market report.

Experiential retail — including trampoline parks, boutique fitness, and pickleball — are making a comeback, the firm found. “Those users are active in the market again,” says Jones-Maturo. However, there is still room for growth. Restaurants, for example, were far more active than in the pandemic but have now been weighed down by high food prices and the labor shortage.

The Arts

“I’m cautiously optimistic about 2023,” says Janet Langsam, longtime CEO of ArtsWestchester in White Plains. “I think things have eased, and we’ve turned a corner. The arts had a difficult time with COVID, but we’ve seen some sold-out events recently, and that gives me a lot of hope. Arts organizations are trying really hard to ease the concerns of the public.” Timed tickets, reservations, markings on floors to separate people, and new air-quality systems are legacies of the pandemic. “People are being really selective about what they go to, but they’re going,” she says.

The Jacob Burns Film Center (JBFC), which recently announced the hiring of film industry veteran Ryan Harrington as its new programming director, was planning on launching an overhaul of its three original ground-floor auditoriums in February. Look forward to new seats, layouts and flooring, more legroom, and better access and comfort. The third-floor gallery of the Pleasantville film center will get new bar space and casual seating.

museum economic

Courtesy of the Hudson River Museum

“Our goal for 2023 is to reach our average audience engagement at the pre-pandemic level,” says JBFC executive director Mary Jo Ziesel. The theater’s masked matinees at select screenings will continue. “The pandemic taught us the importance of watching, discussing, laughing, crying, and celebrating with loved ones and strangers — together.”

Early this year, the Hudson River Museum in Yonkers will celebrate the opening of its new 12,000-square-foot west wing with inaugural exhibitions on “humanity’s interconnectedness and our relationship to the river,” says director and CEO Masha Turchinsky. Along with new exhibition galleries with great river views and a dedicated sculpture court, the wing will include a new Community and Partnership Gallery for emerging artists and community collaborations. The museum is also completing construction of a new 100-seat ADA-compliant auditorium.

While the pandemic has still kept visitorship rates below 2019 levels, “we not only increased our digital footprint to meet audiences where they were when they needed it; we also grasped that our communities rely on us as a convener and catalyst for many important topics,” Turchinsky says.

To protect its actors and theatergoers, the White Plains Performing Arts Center (WPPAC) has installed a brand-new air purification system into all five of its HVAC units. Using state-of-the-art technology from Global Plasma Solutions, the system filters out not only harmful pathogens but also adds ionization purifiers to clean the air before it re-enters the venue, says WPPAC general manager Kathleen Davisson. “GPS ionization permanently reduces or eliminates the indoor air of particulates, pathogens, mold spores, and viruses,” Davisson notes.

Hudson River Museum real estate

By Toshi Tasaki

“We not only increased our digital footprint to meet audiences where they were when they needed it; we also grasped that our communities rely on us as a convener and catalyst for many important topics.”
—Masha Turchinsky, Director and CEO, Hudson River Museum

As far as any lingering pandemic issues, “sponsorships have been difficult to secure, but other than that we have recovered pretty well,” she says. “Attendance has been great.”

During the pandemic, ArtsWestchester got $1 million from the state legislature, Langsam says. “We got that money out quickly to affiliates in grants between $5,000 and $25,000. It was very needed, very necessary. We’re thrilled to get another $1 million for 2023,” she says. “This time, we’re trying to get it out to some of the more local groups.”

Every five years, ArtsWestchester does an economic development study; the next is set for 2023. The previous one reported a $172 million economic impact from the arts annually and that the arts are responsible for 5,000 jobs in the county, Langsam says. “I would be thrilled if we do as well as the last one; I’d be ecstatic if we did better.”

Residential Real Estate

Prices for residential homes in Westchester County are holding steady, even in an atmosphere of higher interest rates — and that trend is likely to shape 2023.

“Even though our supply is down, and the buyer’s demand is down, we are still in a market that is supporting price,” says broker Mary Stetson, founder of Stetson Real Estate in Mamaroneck. “Even with the interest-rate changes, the supply has been constrained and will be constrained. There will be fewer people who will choose to move and give up their low interest rates. Most people who want to refinance, already have.”

Stetson Real Estate

By Susan Nagib/ Susa Designs

“Whatever town was perceived to have high test scores has been sought-after more. Now, we’re seeing the demand spread out. People are going to where they can afford.”
—Mary Stetson, Founder, Stetson Real Estate

Data shows the market is slowing a bit. As of October, there were 1,200 homes on the market in the county, down from 1,348 last year, according to Stetson. The median listed price in October was $795,000, down .5% since September. Listings spent eight days more on the market in October 2022 than in September 2022, and October 2022 saw the sale of 477 homes, down from 567 in October 2021.

However, the median sale price for homes in Westchester over the last 12 months was $645,312 as of October 2022, up 1.6% since last year, according to Rocket Homes.

Stetson says that with interest rates higher, purchasers’ buying power is down, so they are looking at houses in lower price points than before. “People who might have been prequalified before at $1.2 million might be looking at $800,000 now,” she says.

Against this backdrop, demand for houses in every community in the county has been high, according to Stetson. “Traditionally, Rye was really sought-after, or Larchmont, or Chappaqua,” says Stetson. “Whatever town was perceived to have high test scores has been sought-after more. Now, we’re seeing the demand spread out. People are going to where they can afford.”

Regardless of the community where they are shopping, many potential buyers are looking for single-family and larger homes, Stetson says. “Places with their own front doors will be dramatically more popular than places within buildings,” she says. “That’s a holdover from COVID.”

Also popular are houses with backyard amenities, such as pools, and home offices. “With people working from home, they want two home offices,” she says. “They want a door and some Sheetrock between two people’s conversations.”

Related: Westchester’s Economic Forecast in 2022: Forging Ahead

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