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Top 10 Long Island business stories of the decade

Thousands of apartments have been built in Long

Thousands of apartments have been built in Long Island downtowns and areas around train stations in the last 10 years. Above, New Village at Patchogue apartments in 2015. Credit: Daniel Brennan

Technology and affordability were the driving forces behind most of the top business stories of the decade on Long Island.

The 10-year period that comes to a close Tuesday saw the rise of smartphone apps such as Uber, Lyft and Grubhub that have changed how consumers purchase transportation, food and other services — and have created flexible employment opportunities for thousands of local residents. The apps provided a second job or alternative employment for many people as the cost of living on Long Island increased faster than wages.

More young workers, with college degrees and student loan debt, bypassed living in Nassau and Suffolk counties for the Midwest, the South and other regions with lower costs. For many of those who stayed, finding an affordable apartment or purchasing a home was out of reach, leading 4 in 10 to live with relatives.

Developers sought to meet the demand for rental housing by building apartments near Long Island Rail Road stations that come with gyms, social activities and other amenities — but with rents too high for some to afford.

The rise of online shopping led to the shuttering of hundreds of brick-and-mortar stores across the Island and pink slips for thousands of retail employees, while the demise of A&P opened the door for low-price grocery competitors Aldi and Lidl.

“Technology is involved in all of this and seems to be speeding up,” said Herman Berliner, an economist and Hofstra University provost. “Technology can lead to an enhanced quality of life, but it also can have serious ramifications because there are jobs that are becoming obsolete. If we don’t create new job opportunities, we’re going to have problems down the road.”

 James T. Madore

The rise of the gig economy

A growing number of Long Islanders became part of an on-demand workforce that makes consumer convenience a priority while limiting corporate overhead.

Workers in the gig economy, an ecosystem of app-based services like Uber, Lyft, Grubhub and DoorDash, have turned to these companies as a way to pad bank accounts. But the jobs offered do not provide the benefits or overall security that traditional employment provides.  

“The overall impact has been the acceleration of the casualization of labor and what we call the great risk shift,” said Gregory DeFreitas, professor of economics at Hofstra University. These new employers continue to shift health insurance costs and social security taxes “onto their employees,” he said. — Victor Ocasio

Health care mergers 

Two of the biggest health care systems in Manhattan cracked the Long Island market by taking over large hospitals in Nassau County. NYU-Langone in 2019 completed its merger of Winthrop Hospital in Mineola, while Mount Sinai later in the year officially brought on board the former South Nassau Communities Hospital.

Meanwhile, the largest health system in the state became too big for its name. In a process that took nearly a decade, the former North Shore-LIJ in 2016 rebranded itself Northwell Health. New name, same growth. Since it adopted the Northwell moniker, it has added another 10,000 employees — and now has more than 70,000 overall. Included in that expansion: the addition of John T. Mather Hospital in Port Jefferson and Peconic Bay Medical Center in Riverhead to Northwell's roster of 23 hospitals and some 750 outpatient facilities.. — David Reich-Hale

The student debt crisis

Thousands of current and former college students remain mired in debt. Outstanding student debt nationwide stands at more than $1.6 trillion and more than 38% of students who first borrowed in 2004 are projected to default by 2023, according to the Department of Education.

Rising tuition is one reason. On Long Island, the average tuition rate across 11 public and private colleges and universities increased by more than 51 percent in the past 10 years to $21,960 in the 2018-2019 academic year.

Long Island's average student loan balance stood at $32,400 in 2016, higher than the national average of $29,900, according to data from the Federal Reserve Bank of New York.

Some Democratic presidential candidates are proposing forms of loan forgiveness, while the Department of Education is considering a plan to spin off its federal student loan portfolio into an entity designed to simplify repayment plans. Ken Schachter

Minimum wage hike

The fight for a higher minimum wage, led by labor activists and political candidates, highlighted the growing wealth disparity between executives and lower level employees.  

State lawmakers voted in 2016 to raise New York's minimum wage to $15 an hour by 2021. On Long Island, the minimum is now $12 per hour and will increase to $13 on Dec. 31, reaching $15 in December 2021.

The federal minimum wage stands at $7.25 per hour.

Nationally, “the fight for $15 is one of the most significant labor achievements of the last 10 years but it’s still fighting serious headwinds that are going to be strengthened or weakened depending on next year’s elections,” said Gregory DeFreitas, professor of economics at Hofstra University. — Victor Ocasio

Superstorm Sandy

Companies and homeowners, primarily on the South Shore and East End, spent much of the decade rebuilding after superstorm Sandy.

Flood waters swamped about 95,000 businesses and homes on Oct. 29, 2012 , according to data from the Federal Reserve Bank of New York. Some were never repaired while others are better off than before. More than 7,000 jobs were lost, the bank estimated.

Federal aid and private insurance settlements helped many rebuild but experts said there wasn’t a windfall because consumers moved up purchases they would’ve made anyway.  The storm slowed Long Island’s recovery from the recession by a couple of years, economists estimate.

“The economy recovered, jobs were regained, and repairs were made, but I think there is a net loss,” John A. Rizzo, chief economist of the Long Island Association business group, said two years ago. “If Sandy never happened, the economy would have been better.” — James T. Madore

The Internet of Things

The decade saw a proliferation of products that can talk to each other. 

The Internet of Things connects devices — from thermostats to cars to vacuums to wristwatches — to the internet and lets them exchange information. There will be about 18 billion IoT devices worldwide by 2022, Swedish telecommunications firm Ericsson forecasts. 

Long Islanders are incorporating IoT into their lives, and Long Island businesses are seeing IoT momentum.

Vengo Labs in Bethpage and ViaTouch Media in Farmingdale are rolling out smart vending machines.

Stop & Shop stores use robots to point out spills and Walmart uses cameras at its Levittown location to alert employees when  produce goes bad.

Commack-based Vehicle Tracking Solutions streams data from trucks to manage the efficiency of fleets.

The introduction of faster 5G mobile phone networks is only expected to accelerate IoT adoption. — Ken Schachter

Housing affordability squeeze

Long Island’s rising home prices and comparatively stagnant wages over the past 10 years created an affordability crunch for homebuyers.

In Nassau County, residents earning the county’s average annual wage of about $63,300 would need to spend two-thirds of their income to afford a median-priced $537,500 home, the most recent report from California-based ATTOM Data Solutions shows. In Suffolk County, residents earning the average wage of nearly $61,200 would spend more than 56% of their income for a median-priced $412,250 home, ATTOM said in its fourth-quarter report. 

However, low interest rates have eased the pain of first-time homebuyers. Rates averaged 3.73% in mid-December, compared with about 5% in 2010, according to mortgage giant Freddie Mac.

“The interest rates going down have helped tremendously,” said Paul Dyckes, a Huntington-based real estate appraiser. “Affordability has increased in that respect.” — Maura McDermott

Downtown development

New, high-end apartment buildings rising in Long Island's downtowns gave a boost to communities such as Patchogue, Farmingdale, Mineola and Rockville Centre.

Thousands of apartments have been built in downtowns and areas around train stations in the last 10 years, said Mitchell Pally, chief executive of the Long Island Builders Institute. “More and more communities on Long Island are understanding that transit-oriented development is a benefit to the community,” he said.

The new developments “have brought life back to dozens of our aging downtowns, helped small businesses, offered housing choices, enhanced walkability and increased public events and festivals, bringing back a true sense of place,” said Eric Alexander, director of the Northport-based planning group Vision Long Island.

Many affluent young professionals and retirees welcome the new amenities, such as pools, gyms and social events. Others, though, find the prices too high. Long Island apartments built since 2010 command average monthly rents of $3,072, according to RealPage, a Texas-based software and data company. Overall, average rents on the Island have risen by nearly 28% over the past 10 years, to $2,367. — Maura McDermott

 

Changing grocery landscape

The demise of A&P ushered in an era of change in the Long Island grocery market.

New Jersey-based Great Atlantic & Pacific Tea Co.'s 2015 chapter 11 bankruptcy filing — and the resulting closure of 32 Waldbaum’s and 19 Pathmarks on the Island — provided growth opportunities for competitors, said Jeff Metzger, publisher of Maryland-based Food Trade News.

Some of those stores were bought by other grocers, including Bethpage-based Best Market, which bought nine Waldbaum’s and Pathmark locations on Long Island.

In January, discount grocer Lidl US, a division of Germany-based Lidl, in turn bought Best Market's 24 Long Island stores. Discounter Aldi entered the market in 2011 and plans to open its seventh Long Island store this spring.

This year, Quincy, Massachusetts-based Stop & Shop announced it was buying King Kullen's 32 King Kullen supermarkets and five Wild by Nature natural foods stores. The deal has not been finalized yet as the companies await “regulatory approvals,” Stop & Shop said. — Tory N. Parrish

Stores battling to survive

Brick-and-mortar shopping was turned on its head over the last decade.

Retailers battled online competitors, bankruptcies and crippling debt, and quite a few lost the fight.

Toys R Us, Payless, Sports Authority and Radio Shack bankruptcies over the last decade contributed to high numbers of store closings, which reached record numbers in some years.

In addition to the loss of those chains, the last two years alone on Long Island have seen the closings of three Sears, four Kmarts, 11 Avenue women’s plus-size clothing stores, Kohl’s in Valley Stream, Target in Commack, Modell’s Sporting Goods in Farmingdale and Catherines, a women’s plus-size clothing store, in Carle Place.

Long Island’s number of stores declined by 216 locations to 12,179 between 2010 and 2018, the most recent year for which data is available from the U.S. Bureau of Labor Statistics. — Tory N. Parrish

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