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Here’s What the Westchester Economy Should Look Like in 2020

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By Joe Cesarano and Kevin Zawacki 

We spoke with local experts in a range of industries — from healthcare and higher education to retail and banking, among others — about their forecasts, telling trends, and whether 2020 will be a bullish or bearish year. “In the aggregate, Westchester is well-positioned,” says Maggie Peters, senior vice president of economic development at the Business Council of Westchester. “The industries that are growing nationwide reflect our workforce here in Westchester: professional and technical services, finance, insurance, real estate, healthcare, life sciences, biotech. I expect we’re going to be bullish going forward.”

Already, there are new developments happening across Westchester, from the planned expansion of Empire City Casino to Lionsgate studios opening a space in Yonkers to New Rochelle continuing to revitalize its downtown. Hospitals in White Plains and Cortlandt are investing in new buildings and spaces, and malls are welcoming a spate of new tenants.

“People are comfortable spending money,” observes a discernibly relieved Sal D’Errico, who co-owns D’Errico Jewelry in Scarsdale and Mount Kisco. The 2008 recession may seem long ago to some, but to many Westchester merchants, we are only now emerging from its wake.

Still, there are challenges: Peters notes that the region’s natural-gas moratorium could impact development. Higher-education institutions in the county are already feeling the pinch, with fewer international students enrolling. (A challenge that’s compounded by decreasing enrollment overall.) And a small cluster of Westchester industries, like local farmers and solar energy companies, are dealing with negative repercussions from the Trump administration’s tariffs.

Of course, it’s not just about how much people spend — it’s how. Technology is continuing to revolutionize Westchester’s economy, the experts say. Local lenders are offering more and more tools for online banking. And local retailers — feeling the heat from Amazon — are working to stay relevant. “There’s a lot of ‘buy online, pick up in store,’” explains one retail expert from Ridge Hill in Yonkers. “Or, using the inventory in a brick-and-mortar store to fulfill online orders.”

Whether you’re a Westchester consumer, business owner, or industry executive, here’s what’s on the horizon in 2020.

Photo courtesy of Ridge Hill

– Retail –

Shopping for Experiences
Westchester’s retail sector is leaning into the ‘experiential’ trend.

Change is afoot in Westchester’s retail sector, and it’s not how much shoppers are buying. It’s what they’re buying — experiences rather than tangible goods.

Meghann Hongach, marketing director at Ridge Hill in Yonkers, says the shopping center “is becoming more of a place to spend time rather than run errands. What we’re seeing right now at Ridge Hill — and it’s indicative of the sector in Westchester more broadly — is getting away from the traditional mall and becoming more of a town center.”

Hongach notes that recent lessees at Ridge Hall have been “experiential” — less about products you put in a bag and more about entertainment. In recent years, Ridge Hill has welcomed businesses like iFly, an indoor-skydiving experience, and a Legoland Discovery Center. In 2020 and beyond, Hongach expects more of the same: Arriving soon are Monster Mini Golf and Public Pizza, an Italian restaurant by Westchester restaurateur John Racanelli. Ridge Hill is also planning more events, like concerts and outdoor movies.

Just a few miles south, on I-87, the Cross County Shopping Center expects more experience-oriented shoppers, too. “The biggest buzzword is ‘experiences,’ and we are delivering in every way,” explains Liz Pollack, the center’s senior manager of marketing, citing art installations and pop-up stores.

“In-store pick-up, free ship to store, home delivery, and other services will continue to grow and change to meet the needs of the market.”

-Liz Pollack, Senior Manager of Marketing, Cross County Shopping Center

Meanwhile, as the Internet continues to revolutionize shopping, Westchester’s retail sector is doing its best to keep pace. “One thing we’ve noticed is a shift in the way that retailers use their brick-and-mortar locations,” Hongach explains. “There’s a lot of buy online, pick up in store. Or, using the inventory in a brick-and-mortar store to fulfill online orders.”

“In-store pick-up, free ship to store, home delivery, and other services will continue to grow and change to meet the needs of the market,” Pollack adds.

At Cross County, technology is also creeping into places you might not expect, like department stores. “Macy’s recently introduced self-checkout stations on the lower level,” Pollack explains. “Additionally, in the beauty department, touch-screen monitors allow you to walk through selections of different fragrance products, making your search interactive.”

The county’s retailers are also keeping a close eye on broader trends, like tariff implications or the shuttering of national chains. But, Westchester’s population and wealth can often provide a buffer: “When you see a major brand or national chain closing down business, with its Westchester stores closing only toward the end, its likely because of the relative strength of the market here,” Hongach says. 

What are Westchester’s smaller retailers expecting in 2020? Sal D’Errico, co-owner of D’Errico Jewelry in Scarsdale and Mount Kisco, sees sunny skies. He recalls the years after the 2008 recession, when “people were almost scared to give over their credit cards.” Finally, those days are past. “Now, people are comfortable spending money again,” he says.

Photo courtesy of Transform

– Manufacturing –

Feeling a Bit Uneasy
Job losses, plus uncertainty over the impact of Trump administration tariffs cloud 2020 manufacturing predictions.

The year 2019 was a tough one for manufacturing companies across New York. Westchester’s specialized manufacturers weathered the storm, despite a statewide slowdown and challenges posed by the effect of policies both home and abroad.

According to the New York State Department of Labor, manufacturing firms recorded the most job losses of any economic sector between November 2018 and November 2019, with 4,300 industry jobs lost during that period. But Westchester was left largely unscathed, and manufacturers here represent only a small slice of the county’s economic engine.

“[Last year] was a very good year for us,” explains Don Vibbert, CEO of Elmsford-based ImageWorks, which produces imaging solutions for dental professionals. “But it was tumultuous.”

Vibbert says the tumult was due to one factor that impacted many manufacturing firms across the country: market uncertainty due to tariffs imposed on imports by the Trump administration. “But the uncertainty wasn’t as bad as we thought it might be and didn’t affect us as much as we feared,” he notes.

Photo courtesy of Transform

“[Tariffs] are not affecting us, but it affects our customers and trickles down a bit. It’s leaving things feeling a bit uneasy.”

-Chris DiPaolo, Sales and Marketing Manager, Metallized Carbon Corporation

Ossining-based Metallized Carbon Corporation (Metcar) also reported a great 2019. The firm, which has produced carbon and graphite solutions for 75 years, experienced 8% growth over the past year. But sales-and-marketing manager Chris DiPaolo believes tariff uncertainty will influence the outlook for 2020. Tariffs, he says, “are not affecting us, but it affects our customers and trickles down a bit,” DiPaolo says. “It’s leaving things feeling a bit uneasy.”

Firms whose customers were local fared better. transFORM, a custom-storage and furniture manufacturer based in New Rochelle, experienced growth due to increasing and changing consumer demands. Marketing strategist Shari Baldie reports that the company’s average sales increased by roughly 20% over the past year. One factor, she says, is customer demand for custom furniture because of the trend of moving into smaller spaces. For instance, transFORM now offers wall beds, “since spaces are smaller and kids are moving back home.”

Photo courtesy of White Plains Hospital

– Healthcare –

Westchester Healthcare Isn’t Immune to Industry Woes
The region, home to top hospitals, still has to contend with issues like affordability.

One of the major challenges facing the U.S. right now is the affordability — or, rather, unaffordability — of healthcare. And Westchester isn’t exempt.

“The industry continues to be challenged with the best way of providing quality healthcare at an affordable price,” says Susan Fox, president and CEO of White Plains Hospital.

Compounding the problem of price is an aging population. “The need for high-quality, individualized services will continue to grow to keep up with the demand of the aging baby-boomer population,” says Anthony Viceroy, CEO of Westmed Medical Group, which has offices across the county.

Gary Brudnicki — senior executive vice president, COO, and CFO at Westchester Medical Center Health Network — elaborates: “There will be a larger subset of older people living longer with greater occurrences of certain issues, disorders, and diseases.”

 

“The industry continues to be challenged with the best way of providing quality healthcare at an affordable price.”

-Susan Fox, President and CEO White Plains Hospital

And despite these obstacles, Westchester Millennials will want the same efficiency in healthcare that has transformed other sectors, like online shopping. “In an era of online availability, the next generation will expect access to healthcare that is quick and convenient,” Fox says. “Patient expectations are changing relative to communication, coordination, and convenience.”

To meet all these challenges, Fox says it’s essential that Westchester providers step up and not only provide care but also help coordinate it: “We need to take the burden off patients to coordinate their own care and move from episodic care to focusing on the continuum of care,” she explains.

Viceroy feels that the region’s healthcare providers might manage costs by collaborating with one another and leveraging partnerships and mergers. “Healthcare organizations will seek to develop strategic relationships within the industry,” he predicts. “This could mean among medical groups and hospitals or medical groups and innovation partners.”

Photo courtesy of WestMed

Also in 2020, technology is expected to become further entwined with healthcare. Viceroy predicts more patients using health-tracking tools (think: Fitbit or Motiv). One of the more novel developments lately is the use of smart speakers as ad hoc healthcare assistants. Voice-enabled healthcare management — through devices like Amazon Alexa — “will help improve patient engagement and experience at home, allowing patients to use voice-enabled technology to book appointments and access health tips from their doctors,” Viceroy says.

In this vein, telemedicine is also likely to become more common in 2020. “Organizations are expanding offerings to include telemedicine services, allowing them to meet patients where they are — which, to some, may mean outside of the doctor’s office,” Viceroy notes.

New brick-and-mortar facilities are also on the horizon. In 2020, White Plains Hospital will continue work on its Center for Advanced Medicine & Surgery, which is slated to open in 2021. The facility will feature “state-of-the-art operating rooms, endoscopy suites, advanced imaging technology, and numerous specialty physician practices,” Fox says.

Meanwhile, in Cortlandt, “NewYork-Presbyterian Hudson Valley Hospital will focus on three major projects in 2020,” explains president Stacey Petrower. The projects include a new maternity unit, MRI procedure room, and two cardiac catheterization labs.

Photo courtesy of KeyBank

– Banking –

Local Banks Faring Well
Despite trade wars coming out of the nation’s capital, experts are optimistic about local lending in 2020.

With headlines daily about trade wars and punishing tariffs, it’s easy to grow pessimistic about the economy — both nationally and here in Westchester.

But that anxiety may be unfounded, at least locally. In 2020, Westchester’s economic outlook is bright, says David Lewing, a market president at KeyBank, who points to “strong economic data, historically low interest rates, high levels of liquidity in the financial markets and an attractive lending environment.”

John Tolomer, president and CEO of The Westchester Bank, agrees: “The Westchester market will continue to be very competitive.”

Lewing notes that 2019 was very good for KeyBank’s lending and capital markets, and he expects that to continue into the new decade. “Bank lending to Hudson Valley-based middle market companies is very competitive, which is good news for the commercial companies looking to invest in growing their business this year.  KeyBank has plenty of excess liquidity available to meet the need for big and small companies alike,” he says. 

Photo courtesy of KeyBank

“Bank lending to Hudson Valley middle-market companies is very competitive…”

-David Lewing, Market President, KeyBank

That lending can in turn galvanize other parts of the economy: continued loan growth means more residents and workers will be borrowing money to open new businesses, expand existing ones, and purchase homes across the county. (Indeed, a long list of businesses that we interviewed — from hospitals to malls — are planning ambitious expansions in the coming months.)

Lewing also notes that more sophisticated online-banking tools — for personal banking, estate planning, investing, and other purposes — can “help economic activity in the region by allowing customers efficient direct online access to financial products.”

Still, Lewing isn’t without some apprehensions. “Headwinds from trade negotiations, high-priced equity markets, and political dealings such as the Presidential impeachment process may lead to volatility on the margins.” (Plus, the impact of the just-signed-at-press-time “phase one” trade deal with China remains to be seen.)

Photo courtesy of The Westchester Bank

Overall though, Lewing says, “market trends for businesses are fundamentally sound, creating the opportunity for another good year of growth in the Hudson Valley.”

Interest rates also continue to be at all-time lows. According to a December report by MarketWatch, “the Federal Reserve [has] offered a more upbeat view on the economy and indicated it doesn’t expect to raise interest rates again for at least another year.”

Despite these positive signs, Tolomer says it’s best to temper optimism with caution and pay close attention: “The Fed’s guidance on inflation and GDP growth is what everyone will be watching,” he says.

Photo courtesy of Westchester Community College

– Higher Education –

Westchester Campuses Adapt to a New Landscape
Changing demographics, along with a rising interest in health and technology programs, has local schools evolving.

As Westchester enters a new decade, its college campuses are adapting to changing patterns in enrollment and areas
of study.

At Pace University, which has locations both in Westchester and New York City, “our enrollment is growing in the graduate arena,” explains Marvin Krislov, the school’s president. But that same growth doesn’t apply at the college level: “Undergraduate growth will be a little more steady,” Krislov says.

Seamus Carey, the new president of New Rochelle’s Iona College agrees: “Enrollment will be a challenge for Westchester colleges and universities next year and beyond, especially for private schools,” he says. “Demographic trends in the Northeast show a decline in college-bound students.”

That gap might be filled by adult learners, however: “Over the next five to 10 years, more people will be going back to school,” Krislov explains. To accommodate this influx, Pace recently launched a flexible JD program at its law school in White Plains that’s designed for people who work full-time or part-time.

Photo courtesy of Westchester Community College

“There is strong and growing demand for middle-skill jobs, in health-information management, tech support, and hospitality management.”

– Belinda Miles, President, WCC

At Westchester Community College (WCC) in Valhalla, administrators are seeing the same pattern: “While enrollment at some colleges has shown a downward trend, the demand for higher learning has not,” says Belinda Miles, WCC’s president. “We are seeing growth in workforce-training programs, especially those connected with industry-recognized certifications.” 

The programs that attract students are changing, too. Krislov says that Pace’s health curricula — from nursing and nutrition to adult care — are  expanding. At Manhattanville College in Harrison, administrators are experiencing something similar. “Health disciplines are very popular. Our biology department is growing by leaps and bounds, and nursing will continue to be a strong option, due to the career opportunities and salaries,” explains Manhattanville president Michael Geisler. Manhattanville is planning to launch a new nursing school
in 2020.

Technology programs are also growing in popularity. “In the next few years, we think there will be great growth in information systems and artificial intelligence,” Krislov adds, and Geisler says more and more students at Manhattanville are interested in computer science.

Photo courtesy of Pace University

“We see particularly high demand for high-tech fields, like cybersecurity,” Miles adds. WCC students are also seeking programs that don’t require a four-year investment, she continues: “There is strong and growing demand for middle-skill jobs, in health-information management, tech support, and hospitality management.”

As for programs attracting fewer students, Krislov says that two-year residential MBA programs are declining nationwide. Increasingly, students are drawn to one-year MS programs or MBA programs that are online.

Immigration is an especially hot-button issue these days, compelling many educators to look for correlations between the heated debates and policies emanating from Washington, DC, and a reduction of international-student enrollment here in Westchester. “There are anecdotal concerns we hear about international students having visa challenges,” Krislov says. “I was just in India, and there is concern on the international level about whether the U.S. will be welcoming.”

Manhattanville has noticed an impact, too. “International student enrollments are feeling the pressure of uncertainty,” Geisler says. “Even proposed changes to VISA and OPT policies have an impact.”

Photo courtesy of Rand Commercial

– Commercial Real Estate –

A Market Steady and Strong
The county’s flourishing corporate sector is driving strong demand for office space.

As the county continued to adjust to demographic shifts that have impacted businesses nationwide, Westchester’s commercial real estate market remained steady and strong throughout 2019. And with companies looking to accommodate the preferences of a new generation, the sector looks well-positioned heading into 2020.

According to CBRE, the availability of commercial properties and average asking rent stayed flat in the third quarter. But quarterly leases were up 1.5% from 2018. Local experts attributed the steadiness to long-term planning that is meeting a generational demand.

“The development community is making infrastructure improvements,” says Paul Adler, chief strategy officer at Rand Commercial. He noted that as a result of investments made by developers and the county government, Westchester is no longer simply a bedroom community. “Years ago, you never saw people coming from the city and into White Plains or Yonkers to work. And now you do,” he explains.

Adler adds that the county has made investments in their downtown business areas that are attracting companies — largely because the Millennial workforce prefers to be there. “They’re giving Millennials what they want: a suburban lifestyle in an urban setting.”

“Bucolic office campuses are not necessarily where [Millennials] want to be located. They want to be able to walk to the train, walk to a bar, and have everything close by.”

– Jim Fagan, Senior Managing Director, Cushman & Wakefield

Jim Fagan, senior managing director at Cushman & Wakefield, agrees. “Millennials want more amenities, and they want to be close to things,” Fagan says. “Bucolic office campuses are not necessarily where they want to be located. They want to be able to walk to the train, walk to a bar, and have everything close by.”

Fagan also says that the desire for greater amenities has changed the way companies look at property leases. “People are starting to ask, ‘How do I get a company like SoulCycle on the bottom floor of my building, and how can I offer that to my employees for free?’ In the past, they would have just checked the box by putting in a fitness center.”

Teresa Marziano, a licensed agent at Houlihan Lawrence Commercial, noted the types of businesses filling retail spaces is also changing. Healthcare and wellness service providers, ranging from ophthalmologists to yoga studios, are now filling more vacancies.

Marziano adds that the repurposing of larger retail spaces is also a major trend that will likely continue into 2020 and beyond. “We’ve seen a number of retailers with very large footprints being replaced by businesses like banks,” she says, citing a recent example of a Dress Barn store being replaced by an HSBC bank on Central Avenue in Scarsdale.

Photo courtesy of Stratus on Hudson

– Residential Real Estate –

Slow Start, Strong Finish
The 2019 housing market was rocky at first but regained a momentum that’s expected to continue this year.

The residential real estate market may have wobbled in Westchester in 2019, but it did not fall down. Factors such as uncertainty surrounding the SALT tax deduction caused the market to slow down in the first few months of the year. But home sales — and especially condo sales — rebounded in the summer and fall months, resulting in the market stabilizing and finishing strong heading into 2020.

As of October 2019, closed sales on single-family homes in Westchester were down 2% compared with 2018. But pending sales were up 4% compared with the previous year, showing that many buyers entered the market in the middle and later months.

“The first two quarters were very quiet, as we think buyers were sitting on the sidelines trying to get their head around the tax laws,” explains Debbie Doern, regional vice president at Houlihan Lawrence, referring to the federal income tax provisions that eliminated many local property-tax deductions. “But the third quarter was busy.”

“Today, a lot of people don’t know how long they’re going to be in a particular location, and they want that [rental] flexibility.”

-Randy Salvatore, CEO, RMS Companies

Westchester condos seemed to fuel a great deal of the real estate comeback. Listings as of October were up 7.4% compared with 2018, with sales up 2.3%. The median condo sales price jumped 3.9%, to $389,500, while the average sales price for Westchester condos increased 5.6% — or nearly $30,000 to $461,185.

“The cheaper entry points are moving quicker than some of the higher points,” says Scott Elwell, regional vice president of sales in Westchester and New England at Douglas Elliman Real Estate. “Being closer to the train station and closer to the city are absolutely important. [Buyers] are not necessarily buying small. They’re just buying smaller than historical numbers.”

The rental market in Westchester also stayed red-hot in 2019, cutting across socioeconomic and demographic groups ranging from Millennials to empty nesters. “The residential rental side is very strong,” says Randy Salvatore, CEO of RMS Companies, which erected the luxury Stratus on Hudson rental development in Yonkers in 2019. “Today, a lot of people don’t know how long they’re going to be in a particular location, and they want that [rental] flexibility.”

The strong finish was expected to continue well into 2020, provided economic factors remain unchanged. According to Jason Wilson, senior managing director at Compass Real Estate, “If interest rates stay where they are, if the economy stays good, if people are good with their jobs, then they’re going to look to make that move to purchase a home.”

Photo by Jessica Norman

– Travel & Tourism –

Westchester: A Hot Destination
Tourism has become a major economic engine for the county.

Westchester’s tourism business continued to show strong growth in 2019. And with new properties and a national sports championship thrusting Westchester in the spotlight, the sector is on track to continue its strong growth well into 2020. According to statistics provided by Westchester County Tourism & Film, as of 2018, travel and tourism represent a $2 billion industry, and the county ranks third in the state in visitor spending, behind only New York City and Long Island.

“We continue to hold our rank in visitor spending, which is a very big marker for us,” says Natasha Caputo, director of tourism and film for the county, adding that the sector currently supports more than 24,000 jobs countywide. “We’re definitely a major economic engine.”

Terry McAneney, general manager of the Westchester Marriott in Tarrytown, reports that his property relies on a steady flow of corporate travelers during the week and leisure travelers in town for events on the weekends. “Businesses here in Westchester are bringing in business for us,” McAneney notes.

The main ballroom at the Marriott underwent a facelift in 2019, and McAneney hopes the changes may bring in more brides seeking a wedding destination in the area. Seasonal events such as the Great Jack O’Lantern Blaze also help drive business.

“We continue to hold our rank in visitor spending, which is a very big marker for us.” 

-Natasha Caputo, Director, Westchester County Tourism and Film

But visitors to Westchester won’t be limited to meetings, weddings, and seasonal events this year. Caramoor in Katonah launched a major campus-revitalization plan in preparation for its 75th anniversary in 2020, enhancing the overall experience for visitors. The county will gain even more visitors and exposure in June, when the top professional golfers in the world will converge at Mamaroneck’s Winged Foot Golf Club for the U.S. Open championships.

Tourism growth wasn’t limited to one kind of traveler, however. SpringHill Suites will open a new mid-scale hotel in Tuckahoe this year, while visitors seeking high-end dining experiences will see some of Westchester’s top restaurants now being featured in the elite Michelin Guide for the first time. The Abbey Inn and Spa, scheduled to open in Peekskill in February, transformed a former convent built in 1902 into a luxury boutique destination.

“We are located on 62 acres of land, and by next spring, we will have marked trails for walking and hiking,” says Gilbert Baeriswil, the general manager at The Abbey Inn. “We’re only five minutes from the train station. And the beauty of the former convent makes it a very unique destination.”