Hudson Valley, 'tethered' to NYC's economy, has big stake in mayoral race
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New York City's mayoral election is eight months away, and the field remains as crowded as midtown Manhattan at rush hour, but Hudson Valley movers and shakers are already buzzing about how the new leader of their giant neighbor to the south might help or hinder their own fortunes next year.
Much of the chatter is about the city's influence on the business climate, but other issues in play in the mayoral election -- notably City Hall's attitudes toward labor unions, crime and state government in Albany -- could have a major impact on the Hudson Valley, local leaders say.
"Clearly Westchester County and New York City are tethered," said Larry Gottlieb, the county's director of economic development. "It's always been known that if New York City gets the flu, Westchester gets the flu, too. Or the sniffles, at least."
Many in the Hudson Valley see the city as the driver of growth in the regional economy. They hope that the city's next mayor will continue the business-friendly policies of Mayor Michael Bloomberg as they make plans to capitalize on the slow but steady economic recovery now under way.
"We want businesses to continue to see New York City as a destination because there is a correlation of growth here in Westchester County," said John Ravitz, executive vice president of the Business Council of Westchester. "If businesses aren't looking at New York City, they might just pass us by completely."
A CHAMPION OF MANDATE RELIEF
Robust political leadership in defense of the state's cities and towns is another item high on the Hudson Valley's wish list for Gotham's next mayor. Nicole Gelinas, a senior fellow at the right-leaning Manhattan Institute for Policy Research, said the next mayor could become a champion for municipalities seeking relief from the state-mandated spending that perennially drives up the cost of local government throughout New York State.
Westchester County Executive Rob Astorino and Rockland County Executive C. Scott Vanderhoef -- both Republicans -- repeatedly have accused Democratic Gov. Andrew M. Cuomo of not aggressively pursuing mandate relief.
"Is there going to be a mayoral candidate that takes a look at the city budget and says, 'Wait a minute: A lot of spending comes from Albany mandates, and Albany has not fixed this problem?'" Gelinas asked. "A candidate could really say, 'We need reform in Albany. We need to push the governor and lawmakers.' Something like that would help counties outside the city."
A LAW AND ORDER LEADER
Preferring to speak anonymously, some leaders in the Hudson Valley business community voiced the fear that a new Democratic administration in the city might turn back the clock to the troubled tenure of ex-Mayor David Dinkins, whose perceived mishandling of race relations and crime led to Republican Rudy Giuliani's victory in 1993. An uptick in New York City crime, many contend, would stunt growth throughout the region.
Dinkins was the last Democrat to occupy Gracie Mansion, though New York City remains overwhelmingly Democratic. Giuliani and his successor, Republican-turned-independent Bloomberg, have taken credit for ridding the streets of crime, expanding parks and improving the city's overall quality of life.
Fear of reckless liberalism has been a factor in rallying Hudson Valley GOP to the cause of Republican Joe Lhota, the former chairman of the Metropolitan Transportation Authority. Conservatives in the Hudson Valley credit Lhota with unique insight into regional issues -- from his experience with commuter trains -- and a pragmatic approach to problem solving, based on extensive experience both at the MTA and as a top aide to Giuliani, who made a name for himself as a no-nonsense mayor.
Among Democrats, pragmatists look to Bill Thompson, a former city comptroller, as the most business-friendly of the candidates now in the field. In the Hudson Valley, moderates have written off Public Advocate Bill de Blasio, City Comptroller John Liu and City Council Speaker Christine Quinn as extreme liberals who would cave in to the demands of unions and promote stifling regulations, hurting growth in the region.
Democratic political strategist Evan Stavisky said those fears -- all voiced anonymously -- are not well-founded. Stavisky noted that New York City Police Commissioner Ray Kelly, a hero among pragmatic Democrats, was first appointed by Dinkins, then reappointed by Bloomberg.
"It's at best a false narrative to say the Democratic agenda isn't about economic growth. All of them are about jobs for the middle class that drive growth in the region," Stavisky said.
KEEPING UNIONS IN CHECK
Hudson Valley officials are concerned that a mayor receptive to union demands might make it tougher for them to negotiate contracts in an era in which tax revenues are stagnant, at best, and costs are rising.
Gelinas dismissed the notion that New York City's next mayor might not be tough enough to take on the unions.
She pointed out that neither Giuliani nor Bloomberg ever seriously confronted the unions -- a badge of honor among conservatives -- in part because they neither wanted to get bogged down in labor disputes. In fact, Bloomberg did the opposite: He hiked teachers' salaries in a bid to keep them from leaving the city. Gelinas conceded that New York City can exert a powerful influence on labor relations in the suburbs.
"He gave teachers big raises back 10 years ago, specifically because he has to compete with Nassau County," she said.
NYC DRIVES ECONOMY
Regardless of political persuasion, experts believe the next mayor will have the keys to the region's prosperity in his or her hands. They believe that the suburbs -- especially those in the Hudson Valley -- cannot depend on corporate giants such as IBM and PepsiCo to drive job growth and instead must depend on economic spillover from a vibrant city.
"To the degree that New York City remains a magnet, the magnet can have concentric circles," said Jonathan Drapkin, president of Hudson Valley Pattern for Progress, a Newburgh think tank. "It's a matter of how much the city can absorb in residents and other businesses before it makes sense to site projects outside the city."
Westchester County is especially well-positioned to benefit from robust growth in New York City because the county is a gateway, explained Wiley Harrison, president of Business of Your Business, a White Plains consulting company.
That dynamic is especially important in real estate.
Jim Fagan, an executive at the real estate company Cushman and Wakefield, said the dynamics of the market have changed in recent years. During the 1970s and '80s, real estate agents in the Hudson Valley believed that what was bad for Manhattan was good for the Hudson Valley, Fagan said.
"Then what happened was, there was a distinct turnaround," he said, "where the suburbs became a submarket of Manhattan. So what's great for Manhattan is great for the suburbs."
Fagan noted that Westchester County has about 5.5 million square feet of vacant commercial space, about 20 percent of its total stock, in a market where space rents for $30 a square foot on average -- less than half the cost of commercial space in Manhattan.
Westchester-based experts suggest that entrepreneurs won't find those rates compelling until the market for space in New York City heats up to the point where it would be foolish not to look north to save money. Today, many new businesses interested in the metro region look first to New York City, hoping to find suitable space for a relatively low rate, in the range of $50 per square foot, the experts say.
"People will gravitate to New York City because it's cool to move to New York City," Fagan noted. "What we need to do is create an economically viable job engine that grows jobs throughout the whole New York tristate region."
Dan Conte, general manager of the Marriott Hotel in Tarrytown, agreed. A weak New York City economy is a drag on the entire region, he said.
"Let's say the economy in New York City is starving and they are lowering rates," he said "Then people say, 'Why should I go to Westchester County when I can spend less in Manhattan?'"
What's more, observers say, any downturn in the city's economy encourages businesses to look for opportunities outside its borders, competition that Hudson Valley entrepreneurs don't relish.
"There are definitely companies that are from New York City that only in the past couple of years have moved up to do work in Westchester," said James Bernardo, president of Candela Systems Corp., a Somers business that specializes in energy-efficient lighting.
Bernando is trying to reverse the situation. He talks about a move by Bloomberg that might benefit him directly. In January, the mayor signed legislation that eliminated a $1 million cap on city contracts designated for minority-owned companies. As a Latino, Bernando might be able to take advantage.
"That has broken the ceiling, so we can potentially go after larger projects," Bernando said. "That's a plus. In the energy conservation market, New York City is huge."