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Economic pain from LIRR woes could ripple through Long Island

The economic pain from Penn Station's crumbling infrastructure and the Long Island Rail Road's service disruptions could last years, rippling beyond train riders and the businesses where they work.  Newsday talked to two commuters from Bethpage and how the LIRR has affected their lives. (Credit: Newsday / Raychel Brightman)

The economic pain from Penn Station’s crumbling infrastructure and the Long Island Rail Road’s service disruptions could last years, rippling beyond train riders and the businesses where they work.

Commuters with jobs in New York City are the financial lifeblood of Long Island, providing one dollar out of every four earned by residents of Nassau and Suffolk counties, U.S. Census data show.

And the LIRR is a crucial artery in that economic network. As that artery narrows or is blocked, the effects spread to the local economy, experts said. And the longer the service disruptions last, the greater the impact.

“Everything that we do to make working, traveling, and life in general, harder has an impact on the region’s economy,” said Christopher Jones, chief planner at the Regional Plan Association, a Manhattan-based think tank that studies economic and transit issues in the metropolitan area.

“Productivity will be affected because workers will be stuck on trains or inside Penn Station or in their cars on the LIE,” Jones said. “And some will lose income because they are late to work or missed an appointment.”

The near-term effects are most visible in lost wages, lower worker productivity, unforeseen expenses such as for child care and taxis or ride-sharing services, canceled orders and even some firings.

Motorists will also be affected as LIRR riders ditch the train for their cars, increasing congestion on the Long Island Expressway and other clogged thoroughfares, the experts said.

The additional hassle to get to and from work, whether the job is in Manhattan or Melville, could serve as an impetus for individuals and companies to leave Long Island for regions with less stress and lower costs.

“This will be the last straw for some people . . . They will look to work elsewhere or they won’t expand their business here as much as they might have,” Jones said.

The average wage earned by Island commuters to Manhattan is 34 percent higher than those working here: $118,223 versus $88,083, according to census data from 2011 to 2013.

The LIRR serves one third of local residents who work in Manhattan and the city’s other four boroughs.

LIRR riders bring home about $30 billion in salaries each year, the Regional Plan Association found. That income supports restaurants, dry cleaners and other service businesses in local downtowns, and sustains high home values.

Forty-five percent of riders work in either financial services, law, accounting, architecture or other professional services, according to the office of state Comptroller Thomas DiNapoli. Health care, media and construction each account for about 7 percent of riders.

Estimates of the economic fallout from the repairs weren’t available.

However, more than $60 million in worker productivity was lost last year when 17,951 LIRR trains were late, canceled or terminated during the morning and evening rush hours, according to the state comptroller. The figure is based on the average salary of the 7.5 million riders who were affected.

Worker productivity wasn’t all that was lost. LIRR riders also were robbed of time for family activities and recreation.

The LIRR said that it hopes repairs to the Penn Station tracks are completed by Sept. 1. The work is being done by Amtrak, which owns Penn Station.

Still to come are repairs to the signal system, and taking two of four East River tunnels out of service for about one year each to fix damage caused by 2012 saltwater flooding in superstorm Sandy. The tunnels are also owned by Amtrak.

Business executives and economists are worried the fixes will take longer than forecast, causing frustrated riders to decamp to other locales.

“If it’s something that drags on for five years” and the Metropolitan Transportation Authority doesn’t communicate effectively, “you could see people saying, ‘I’m going to move up to Westchester or a place closer to the city,’ ” said Scott Rechler, CEO of Uniondale-based RXR Realty LLC, which has residential and commercial properties throughout the metropolitan area.

Developer Michael Polimeni, CEO of Polimeni International in Garden City, is weighing whether to move his residence to Westchester.

He once lived in Locust Valley but now lives in Manhattan and commutes on the LIRR to his office. He manages more than 4 million square feet of offices and retail stores on Long Island and in New Jersey and Poland.

Polimeni, 36, said the Island’s high cost of living and traffic congestion are burdensome. “The idea of living on an island with failing infrastructure is definitely a component in my thought process,” he said. “I don’t understand how Long Island has retained the amount of people it has over the years.”

Nassau and Suffolk are in competition with other suburban counties for residents, said Jonathan Miller, CEO of the Manhattan-based appraisal company Miller Samuel.

“If a [train] line to Nassau County is longer or more inconsistent for multiple years that puts Nassau at a disadvantage to Westchester or Fairfield” in Connecticut, Miller said. “New home sales could be dampened or diverted as consumers look at the competition.” Once the repairs are complete, however, “it will end up being beneficial for the housing market,” he said.

Employers, acknowledging the potential for lost worker productivity and disruption of customer service, are taking steps to minimize the effects of the repairs.

Northwell Health, the state’s largest private-sector employer, is examining worker schedules and helping to arrange carpools for 378 employees who live on Long Island and work at its Manhattan hospitals, which have a total workforce of 3,995, according to Barbara Osborn, a spokeswoman for Northwell, which is based in New Hyde Park.

Workplaces on the Island are also preparing.

The Hain Celestial Group Inc., a natural foods seller, will change the schedule of the shuttle it provides to its Lake Success headquarters from the LIRR station in Great Neck. About 30 of the office’s 350 workers live in New York City.

The company also plans to have employees “work remotely in the event of disruptions in transportation,” spokeswoman Mary Celeste Anthes said.

The LIRR is part of what makes Long Island “inextricably” tied to New York City, said Kevin Law, president of the Long Island Association, the region’s largest business group.

Beyond commuters to the city, small businesses in Nassau and Suffolk benefit by fulfilling orders from city customers, Island employers have access to young, skilled workers who reverse commute, and some local companies have satellite offices in the city.

Eventually, workers and businesses could leave the Island because of transportation problems, warned Law, who is a member of the state task force charged with devising transit alternatives to lessen the impact of LIRR repairs.

“People are much more mobile than they were in the past,” he said, “and given the high cost of living here, the high cost of trying to do business here, and you add in an infrastructure system that is not accommodating — and it does become death by a thousand cuts.”

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