Robert Schork, 914INC.: Let’s kick things off with a little scenario: Carlos is contemplating relocating his widget company to Westchester. His company employs approximately 70 people—a handful of senior executives, a dozen or so highly skilled technology staffers, a few dozen mid-level sales/marketing and managerial positions, and a few dozen junior/entry-level staffers. If Carlos were to come to you for advice on whether to relocate to Westchester, how would you advise him?
Judith Huntington: I would advise him to strongly consider Westchester County. What’s unique here is close proximity to New York City, great healthcare and opportunities for education, wonderful diversity, affordable housing in various locations, and affordable commercial real estate. I think businesses have many areas in Westchester where they can find a location that fits multiple needs.
William Mooney: I would tell Carlos that over the past year, we’ve been reaching out to various business sectors in the community to find out why people should come and do business in Westchester. And businesses tell us three things are most important: (1) Access to talent—we have a highly educated workforce. Even people who put property taxes as high on their list of concerns still list ‘access to talent’ as one of the premier reasons why they come here. (2) Access to transit—we have three rail lines, an airport, easy access to New York City, and tremendous transportation corridors. (3) Quality of life—people come for the amenities. We have tremendous nonprofits, 18,000 acres of parkland and open space, tremendous schools, and very competitive office rent. We have twice the space at half the price [of New York City].
James Segura Bernardo
CEO & Founder, Candela Systems
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President, The College of New Rochelle
Co-Founder, Yonkers Brewing Company
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William M. Mooney III
Director, Office of Economic
Cathie Schaffer: We [First Niagara Bank] just went through a relocation process, and a big part of [the decision] is, obviously, the dollars and cents, and I think landlords are extremely welcoming right now. They are very anxious to sop up all of that unused space. So I think they are welcoming of new corporate users of various types of space.
Laura Forese: One of the things I would emphasize is that Westchester is a county that is continuing to reinvent itself. Carlos is concerned as a business owner: Is this going to be a ‘work/live/play’ kind of setting for the people who he is going to attract? There are terrific people already in Westchester who he can attract, but he is going to bring in people from elsewhere, too. That’s what is interesting about Westchester right now—it is not standing still. Look at not only all of the industries that are represented around this table, but all the others [in Westchester]. That is very attractive to all of us and I would think certainly to Carlos.
Ayall Schanzer: There are several economic drivers changing the economy that are reflected here in Westchester as well: There is globalization, where we are becoming more of a ‘click vs. brick,’ ‘widget vs. digit’ economy. Millennials are changing the way we do things; we see that manifested everywhere from the Arab Spring to the economy. There is virtualization—everything is becoming virtual. Knowledge is becoming ubiquitous everywhere we go; we have access to everything at our palms. Westchester is in a good position because of its access to talent—we have one of the most educated populations—and we rate near the top in income levels. So all of that manifests itself into an environment that is conducive to building a company.
CEO, Friedland Realty Advisors
Tri-State Regional President, First Niagara Bank
Laura Forese, MD
Mooney: A quick note: 45 percent of Westchester residents above the age of 25 hold a bachelor’s degree or higher. That compares to about 32 percent statewide, and 27 percent nationally. So that is extraordinarily high.
Huntington: And it becomes a virtuous cycle—you attract talent, and they raise their families here, and the talent stays here.
John Rubbo: From Carlos’ perspective, he is moving 70 people to Westchester; he is moving his home, his business, everything he has built, to someplace new. When we were opening our business, the county and the City of Yonkers were so open to helping us. We had folks who guided us in real estate to make sure that we had the right location that was perfect for us. I think for Carlos, these are the things that are so important. He has in his hands the lives of 70 people and their families; these are big decisions.
James Segura Bernardo: I would echo that with my own company. You can find great support from the Westchester County Office of Economic Development, the Business Council of Westchester, and all the other organizations here. When I first started reaching out to them I was hesitant, but they made the process smooth and easy. This is a place that cares about its people and businesses.
Schork: Sounds like you’ve made a very convincing case for Carlos to move here. But no place is perfect. So if you were to fully advise him, you would have to discuss the challenges too…
Mooney: Of course; we have issues too, everybody knows that. We are expensive: Housing is expensive, taxes are expensive, and we have to be honest about that. Also, we are complex. I don’t need to tell any of you about the complex regulatory process, the overwhelming number of municipalities. We as a county government have to figure out a way to assist—when asked, and when applicable, because we have to be conscientious of the local jurisdictions—whether it be with government regulatory processes or inter-municipal issues, with transportation corridors or otherwise. Also, we have a bit of an identity issue here. It’s hard to put Westchester in one box. We are an incredibly diverse community—from Port Chester to Peekskill to Yonkers to Bronxville to Bedford—and the diversity is increasing in the county as well, so we struggle a little bit with who we are. Finally, another thing we often hear [that Westchester businesses have to compete with] is economic incentives from neighboring states or municipalities. I would tell Carlos those are things that we can try and help him with.
Forese: I think one of the biggest things to grapple with here in Westchester is transportation. That is going to be an important issue for the future for everyone as you think about moving people around the county and moving people into the county, whether it is people coming in to work or people who are living here who are going to go somewhere else. I think that is going to be critically important and has to be put right out there for Carlos.
“We are expensive: Housing is expensive, taxes are expensive, and we have to be honest about that.”
—William M. Mooney III
Schanzer: Some of these challenges are not unique to the county; they are unique to New York as a state. The duplication of services, of counties, makes it very difficult for companies to come to New York State. To defend Westchester, I think Westchester is doing its best to eliminate, or at least minimize, the amount of hassle that companies have. But building on what was said before, if you look at thriving communities, they all have ‘clusters.’ We have an expanded cluster because of our proximity to New York City; we are close to the financial capital of the world, some of the best universities in the world, best medical facilities in the world, and insurance companies, too. So sometimes having access to all that is worth the extra dollars you have to pay in taxes. Cost is only an issue in the absence of value. If there is value in having access to the talent, the capital, the universities, the medical facilities, then I think we become a very attractive focal point for many different industries.
Huntington: Let’s talk a little bit more about the cost part, because I don’t think you can underestimate the impact of bringing in a workforce—especially if it includes low-wage earners—and their ability to find affordable, acceptable housing and transportation. I think the challenge for local governments is to bring their finances and expenses under control but at the same time continue to invest in infrastructure. And until that happens, will local governments really be able to grow and thrive and innovate and get into economic development?
Mooney: Well the access to transportation here is one of the advantages that people cite as a positive, but also one of the opportunities that businesspeople tell us about—improvement of mass transit and transportation opportunities ranks No. 2. That is a challenge that we need to address.
Schaffer: That ties into the whole question of Millennials because they want it to be easy to get to work. They are not going to drive an hour to get to the office.
Huntington: And I think the county has certain areas where public safety could be a concern as you are looking for affordable places to live. Carlos would have to look into areas where that is a particular challenge.
Rubbo: And the importance of affordable housing—or a better word is workforce housing—to keep young professionals here and to attract young professionals to Westchester cannot be stressed enough. Westchester can be everything that Millennials are looking for, but access to jobs in terms of transportation and housing is key.
Schanzer: If you think in terms of supply and demand and look at the real estate market in the surrounding areas, it is only logical that the increased cost of living and doing business in New York City is going to bring people to Westchester County. The pricing of the surrounding areas is forcing people to look elsewhere, and so Westchester really should be the beneficiary.
Rubbo: And as Millennials begin to have families, and they look to get out of the City for a little more land or parks or better schools, now is the time to look forward as to what we can offer them over the next 10 to 15 years.
”The way that the younger generation organizes its time is different than the way we did. They put a premium on that whole well-rounded experience as opposed to ‘I work, I drive, I come home.’”
— Ayall Schanzer
Mooney: That’s why one of the economic engines that is critical for us is Transit-Oriented Development (TOD). The talented young people everyone around the table wants to employ, they want young and hip neighborhoods [centered around easy access to transportation]. Look at Yonkers: the live-work lofts, the cool restaurants, art galleries, et cetera. And White Plains is undergoing a $1 million study of their transit center; Mamaroneck is undertaking a TOD analysis; Tarrytown, too. Young people want that access; they want to be able to go into the City, walk to restaurants, maybe walk to their job. So that TOD is going to be key in attracting them.
Forese: We have to make sure that Westchester is attractive to people like Carlos who will think carefully about where to locate. It is going to be a great opportunity going forward to think about what is next in the global economy. So people aren’t even going to be going to work in the future at the same rate, they are going to be working from home, in a whole different set of jobs (some that we cannot even conceive of), so part of what Westchester has to do is think down the road on what [work] is going to look like 20, 30, 50 years into the future.
Rubbo: That is a great point because we are not just competing against Brooklyn or Jersey City, we are also competing against places like Raleigh, North Carolina, and so many other parts of the country.
Bernardo: And other parts of the world. The world is flat today, so people are very mobile, and the talent will pick up and go wherever they feel they can get the best value, and there are other things that Carlos would have to be concerned about depending on what his business model is. In my industry, for instance—we are more of a service industry—my competitors come from Florida, Texas, Michigan, et cetera, and here, they don’t always follow licensing requirements or permitting requirements. My competitor will come in for a project and leave, and if he is caught there is small fine or a slap on the hand. If I do something wrong it goes against my license, and it can really affect my business. So there are some inconsistencies there that Carlos would have to take into consideration, where his competition really comes from and how it can affect his business.
Schanzer: So much of this transcends just Westchester. The concept of the licensure that James just mentioned is not just in Westchester County or in New York State—we as a nation need to think about over-regulation. If you want to be an interior designer you have to get three different licenses. And what are the consequences? You put the wrong color on the wall? So we really need to think about removing some of the barriers that are constraining our growth and our entrepreneurial spirit. We have this opportunity to start changing the paradigm of the way we do things; that ‘work, live, play’ paradigm—how do we build for that? How do we start thinking of the world differently? How do we create jobs and how do we start preparing for the next generation? They think of the world very differently; much more in a non-linear way because of the technologies they grew up with. So we have this unique opportunity to make Westchester the vanguard of this new way of doing things.
Schork: Do you feel, from your various perspectives, that Westchester has been a beneficiary of the fact that people and businesses are being priced out of New York City?
Schanzer: I know from a commercial real estate perspective, there are distributors and warehouses that cannot afford to be in Brooklyn anymore and they need to be in close proximity to New York City, so they are making their way up north. Certainly the Bronx is picking some of that up, but because of the constraints of land in the Bronx, Westchester is in a position to capitalize on that. If Westchester is looking to attract industry, there are things we can do to make it more hospitable because we do have available land.
Huntington: I think the ability to draw talent to Westchester is pretty easy and it is a distinct advantage of doing business here, but you have to be creative in how you compensate that individual because it is expensive to live here. I just recruited a senior level executive from Missouri; she is great talent, but I had to provide her housing. As a college, we can do that.
Schanzer: I think a lot of the urban centers of Westchester, like New Rochelle and Yonkers, will be the beneficiaries of people moving out of the City and moving in, for living, working, and playing.
Forese: There are a lot of opportunities in Westchester to think about growth industries. Obviously I can speak to healthcare; institutions like mine are bringing healthcare and partnering with local institutions, but there are other things that can now happen [that may lead to] synergies. You can think about: ‘Are there educational opportunities in healthcare? Are there going to be back-office opportunities? Are there different technology companies that will relate to that?’ All of that provides great opportunity now to find ways to start to develop Westchester as its own sort of ‘incubator.’ There are a limited number of industries across the United States [that are growth industries]… we have an opportunity to make Westchester attractive to those industries.
Huntington: I think that raises a great question: What does Westchester want to be known for? What will distinguish Westchester from other counties, other places? I think Westchester needs to brand itself.
Mooney: We’ve been trying. Take biotech—that is clearly an area where we have been trying to move forward. New York Medical College just launched the BioInc@NYMC incubator; we have Regeneron expanding by 300,000 square feet, we are actively working on the development of ‘North 60’ [a proposed research and development complex] on the Grasslands Reservation in Valhalla—this is where we are going to go, and that is exciting. Also, we are branding in healthcare: The introduction of the largest hospital players in the world—New York-Presbyterian; Montefiore; Memorial Sloan-Kettering, et cetera—is transformative. These organizations are going to invest billions of dollars in our communities and that is not only construction, that is jobs, that is that intellectual capital we are trying to attract.
Bernardo: And if all of that is true, then it will have the concomitant effect of reducing our tax base because we will now have a bigger population, more industry, more people sharing the tax burden. Also, Judith [Huntington] commented that we have to find out what our brand is, and I think we already established what our brand is: It’s diversity. We have the medical industry; the food and beverage industry; the service industry; the farming industry. [And on the lifestyle side], here I can go to a beach; I can find a river; I can go into the mountains; I can go to a city without leaving Westchester; yesterday I was standing on an 800-acre property that had horses.
Huntington: But I think we compete with Fairfield and Bergen and other nearby counties that offer some of those same things. So we have to look at what is going to make Westchester unique.
Schork: So, right now Carlos is focused on the present but what are some of the positive trends you would cite to Carlos as reasons to stay here and make it a long-term destination? What are the bright spots on the county horizon?
Mooney: We have talked about a number of them: the resources that we have here, the amenities, the access to talent. We have recognized the complexity and our efforts to try and ease that regulatory burden. And Westchester is actually growing: We have a slight increase from a demographic standpoint in the 34- to 44-year-old cohort; the 45 and above group is growing much larger; we are losing the 24- to 34-year-olds but I think that the TOD is going to bring those businesses and those people in, create an excitement and that mixed urban feel that will help. Most of the advantages we’ve been talking about are continuing to trend upwards: the introduction of premier healthcare, technology and education…
Bernardo: I would argue that if you solve the net migration of the 24- to 34-year-old demographic, then you solve Westchester’s brand issue; you have addressed all the issues that were articulated around this table. That is the demographic that is going to be the engine behind our local economy.
Mooney: True, but I don’t want to underestimate that 34 to 45 cohort; they are coming back to Westchester to buy a house, and we want to keep that senior cohort as well. We don’t want to lose them—and they might want to sell their big house in the north part of the county for a condo or co-op where they can jump on the train, go into the City or walk to that restaurant in White Plains or New Rochelle. So I agree with you, but we have to touch them all.
Schaffer: I think we are at the fulcrum right now. We have seen the decline of manufacturing in Westchester. As a banker I have seen that firsthand—my manufacturing clients have moved out. But to Bill’s [Mooney] earlier point about 45 percent of folks having college degrees—I think that number will increase, as we add biotech companies, tech companies, healthcare companies. We will be attracting very educated people.
Forese: One of the things that Westchester has and will have going into the future is space—that is such a luxury. You cannot create more land, so that is a huge asset for the future. The fact that Westchester has that land is a tremendous essence of what we have been talking about in terms of putting it all together in the right way: Make it affordable, make it attractive for people to come in, connect it…
Mooney: You are right, and another driver in that world is the repurposing of space. Westchester has approximately 30 to 35 million square feet of Class A and B office space; since 2001, about 5 million square feet of it has been repurposed. In these old corporate parks, we see applications before local municipal zoning and planning boards to establish housing units in there; we see banks, financial services, hospitals moving into them. Our data indicates that the vast majority of new development will be the repurposing of existing space. There is opportunity there for the willing.
Rubbo: Another prime example is Mindspark in Yonkers. It has taken a building from 75 years ago and it is now just a gorgeous, gorgeous building. It’s an open space that is inviting to a new workforce.
Schork: But the demographic that we are losing, the younger demographic, how do we attract them? How do we keep them here? And how do we get them to come back after they have already left?
Mooney: It is kind of circular in the respect that if we create those jobs [for the younger demo], we need to create the housing opportunities, which is happening in the repurposing and the TOD. People are still trying to escape the cost-prohibitive nature of real estate in New York City, so if we can create those urban-mixed centers and places for small incubator companies, I feel we are going to be able to get those people back.
Schanzer: The way that the younger generation organizes its time is different than the way we did. They put a premium on that whole well-rounded experience as opposed to ‘I work, I drive, I come home.’ So it’s not just about finding a job for them in the area, it is also about catering to their other requirements—going back to Laura’s [Forese] live/work/play, right? So creating an environment where they can do all three comfortably and affordably is key.
Rubbo: That’s right and in Westchester and the Hudson Valley, we have spectacular restaurants and plenty of boutique shops that offer everything they would find in an area that they are moving out of like Brooklyn or Jersey City.
Amy R. Partridge, 914INC.: What about Carlos’ entry-level employees; those making minimum wage or just slightly above that—do they have a place in Westchester now? And is that a concern for economic development?
Huntington: That’s a tough one.
Rubbo: I think there are several communities in Westchester—Yonkers is a prime example—where it is extremely affordable to shop and eat and live and be entertained; that is what is so diverse about Westchester.
Mooney: Yes, it is a concern. Most of our businesses will be employing people on all ends of the spectrum. Not everyone can be a biotech engineer, and there are a lot of issues here [for low-wage earners]. The County Office of Economic Development has programs for minority- and women-owned businesses; small business programs; programs to help these companies gain the ability to contract with federal, state, and local governments. Those programs aren’t going to solve all the issues but again, we have to be out there. Also, this is where our education system, the businesses that are growing here, and the government—to the extent we are asked, because we want to help, but not intrude—we can all assist to collaborate in making sure that workforce training is in place and to make sure that [lower-wage earners] have opportunities.
Bernardo: I think it will be difficult for those with lower-skill projects and jobs because there are a lot of taxes in Westchester. When I take a drive over from Westchester to New Jersey, for the same gas, I pay twenty cents less per gallon—[that cost difference] is the tax portion. Also our rents are high because we are paying such a high real estate tax… I think it comes back to that ‘you live to work or work to live,’ and a lot of times in Westchester we end up having to work to live because of the cost of living here.
Schaffer: This takes us back to the point about transportation: Transportation is key for folks who are at the lower end of the wage scale; it has to be affordable and convenient. If it takes an employee two hours to get to work one way, that is going to be an impediment. And if you cannot get those employees to your office, you are not going to get the employees.
Forese: Transportation has got to be something that the county and the state continue to invest in. It is likely that Westchester will be this premier and fabulous county and will attract people at the higher ends of the wage spectrum, but it will be a tremendous disservice if it doesn’t also keep up with some of the affordability issues we have talked about, like housing and transportation. That is what will continue to make Westchester interesting and diverse, and a place that people want to come to.
Partridge: We’ve talked a lot, obviously, about the healthcare sector, but what other sectors do you see as economic growth engines over the next 10 years?
Huntington: Higher education has always been a source for job growth. We constantly bring in new faculty, and as we expand our campuses and our programs, it offers great opportunity for new jobs at all levels. We also offer opportunity to continue to educate the workforce because all colleges offer tuition as a form of a benefit. Higher education is a big industry: 22 institutions in the lower Hudson Valley. And we spend a lot! We are constantly into capital improvement.
Schanzer: We are also right now in the ‘knowledge revolution,’ right? So having an educated workforce helps allow us to compete in that knowledge industry. Being an engine of innovation in that knowledge industry depends on good education. So I see the ‘digit vs. widget,’ ‘click vs. brick’ revolution continuing with Westchester being at the forefront.
Schaffer: I think we will see modest growth from the financial services sector, too.
Mooney: That is what we see as well. Biotech, healthcare, financial services have continued to grow as well as education. And I’ll throw in the hospitality industry, too—the food and beverage/hospitality industry is quite hot throughout the Hudson Valley.
Schork: Any final thoughts?
Mooney: I just want to point out that our industrial development agency (IDA), which was created in 2013 and also applies to nonprofits, does provide sales tax exemptions on furniture/fixture equipment, on any construction or new construction. Just in 2014, Westchester County IDA has “induced”—that means we have accepted applications and agreed to induce these projects—over $284 million in projects, to the tune of $75 million in low-rate, tax-exempt financing (usually about two to three points below market), with about $7.5 million in sales tax exemptions (that is for everything you use to create your business: lights, sheet rock, et cetera), and about $2 million to $2.5 million dollars in mortgage tax recording (those are real dollars for people who are on the margin). And the IDA has done $429 million in inducements for nonprofits. So there are economic incentives here; when you add that to the quality of life, transportation, talent decisions we all talked about today, those can make a difference. We like to think that those are things that can help tip the balance toward Westchester when you look at all that we have compared to other counties like Bergen and Fairfield.