The State (and Fate) of Doing Business on Long Island Today

Looking Up

So much for the glass-is-half-empty crowd. Now for the glass is half full. Compared to November 2010, year-to-date sales tax receipts are up in both counties: 4.3 percent in Suffolk, 3.1 percent (excluding the energy tax) in Nassau. And there’s been an encouraging sign on the Long Island Rail Road.

“This October marked the second consecutive month that we saw ridership growth on the LIRR,” says Helena E. Williams, LIRR president, in a statement. “While two months does not make a trend, hopefully, we may be starting to rebound ever so slightly. Only time will tell.”

In September, the Brookhaven Rail Terminal officially began operations on a 28-acre site near the LIE in Yaphank. The $40-million private investment, a partnership of LI and upstate businessmen, marked LI’s first inter-modal freight facility. Rep. Tim Bishop (D-Southampton), who sits on the House Transportation Committee, is credited with getting federal authorization for the project from the Surface Transportation Board.

It also took cooperation from the towns of Brookhaven and Islip, whose supervisors Mark Lesko and Phil Nolan joined forces to propose improvements to the Ronkonkoma hub by the train station as well. Now that Nolan lost his re-election, there’s some concern that this promising partnership may unravel, but so far Tom Croci, the Republican supervisor-elect, is still on board. Clearly, the new terminal is an example of the towns’ smart teamwork.

“We’re very bullish on it,” says Andrew Kaufman, BRT’s managing director. His group has moved up their expansion schedule in light of the response from area businesses looking to cut their transportation costs. He mentioned a consortium of bakers in Islip near the BRT that may contract soon with ConAgra to bring them flour by rail instead of by truck.

“One baker thought they were going to save $33,000 a month in freight alone,” Kaufman says. Other businesses may soon climb aboard, which could help the region rebound.

According to the Long Island Association’s 2011 annual business fact book, Nassau-Suffolk’s Gross Metropolitan Product, the measure of its output of goods and services, was almost $122.5 billion last year, or “equivalent to two-thirds of the combined output of New York State’s upstate metropolitan areas.” The Island’s exports, primarily to Canada, Israel, the United Kingdom, Hong Kong and Germany, totaled about $7.5 billion in 2009. And, at just under 3 million people according to the 2010 Census, Nassau and Suffolk counties have a population that surpasses more than a dozen states. Last month, the Island’s unemployment rate fell to 6.6 percent from 7 percent in October, 2010—less than the 9 percent national figure. Still, there were 11,300 fewer jobs than it had a year ago.

Easily overlooked with all that’s going on in this bleak business climate is that OSI Pharmaceuticals, which hatched in a special state incubator program at Farmingdale State College, did not leave for Westchester or Illinois, despite initial reports to the contrary. The innovative biotech company was acquired by a Japanese-based firm, Astellas Pharma Inc., for $4 billion last year and was itching to move from Farmingdale because it had growing pains.

In the last legislative session in Albany, a bill was passed specifically allowing Farmingdale State College to alter its lease arrangement with OSI so it can expand its facilities on the campus, enabling it to retain its 113 employees and soon add 24 more. But it took special action to avert the pending “debacle” of its departure, as an insider with ties to the state’s economic development community described it.