Queens economy’s a model, city comptroller says

By Michael Morton

“Queens' success should serve as a model as we seek to diversify the economy,” Thompson said at Kennedy Airport's Terminal 4, addressing a conference presented by the TimesLedger Newspapers and the Queens Economic Development Corp. The event, known as the “Economic and Real Estate Forecast,” seeks to help borough companies prosper by providing them with a business outlook for the remainder of the new year. More than 200 people attended.While Thompson praised the structure of Queens' economy, the news delivered by the forum's speakers was not all rosy for residents and retailers. Jobs are expected to grow in the city by 1.5 percent, but Manhattan and Queens were the boroughs hardest hit in a city where economic recovery has lagged behind that of the rest if the nation, a state labor economist said. Continued immigration has helped create jobs, but the new workers often lack the skills necessary to develop into a potent workforce, the economist said. And the airline industry, a borough mainstay, has recovered since Sept. 11 but will still likely shed at least one carrier in the near future, the economist said. Thompson said the volatility of the market in the past few years revealed the tenuous nature of depending on Wall Street for tax revenues and noted that many financial firms have moved at least a part of their operations out of the city since Sept. 11, 2001. “Over the long run, I don't believe that that's sustainable,” the comptroller said of the city's reliance on the financial sector. Queens, by contrast, has a number of small businesses in fields-transportation, retail, construction, manufacturing, health care and others-that have rebounded or are expected to do so in 2005. “In order to grow, we have to tap into the resources that Queens and the other outer boroughs have to offer,” Thompson said, advocating for reducing the costs for small businesses and providing them with incentives. He noted, however, that community entrepreneurs still needed access to capital, something which their banks, limited in both number and deposits, are not always able to provide. Thompson said he is working to provide the banks with the necessary reserves and has created banking development districts where city funds can be deposited, including one in downtown Jamaica.While the city's economy grew 3.4 percent in the third quarter of 2004, Thompson said “the jobs picture, it still remains cloudy.” While Queens' 5.1 percent unemployment rate in December was lower than the city rate of 6.4 percent, the borough trails the other four in the creation of new jobs. Along with Manhattan Queens was one of the two hardest hit boroughs during the recession that in the city lasted from May 2001 until February 2004, as measured by job losses. Nationwide, the most recent recession lasted from the beginning to the end of 2001, as measured by consecutive quarters of economic decline.Part of the reason, said James Brown, a regional analyst with the state Department of Labor and a forum panelist, was the harmful effect that Sept. 11 and the economic downturn had on business at Kennedy and LaGuardia airports.During the recession, however, immigration helped to offset some of the job losses by creating more demand. However, more than 40 percent of the Queens population is foreign-born, and a recent analysis by the city Planning Department revealed an increasing number of immigrant workers who lack proficiency in English. The study also demonstrated that the areas which need English classes the most, such as Queens, have the least facilities.”We get into issues of do they have the right skills set,” Brown said. “It needs to be developed, it needs to be grown,” he said of the work force segment.With the airports vital to Queens, Brown assured the audience that the airline industry would continue to rebound, but said he thinks at least one of the major carriers will go out of business in the next five years and lay off workers. That loss will be tempered somewhat by the $100 million the Port Authority of New York and New Jersey will spend on projects in the borough through its airport lease deals.”There are too many airlines,” Brown said. But overall, “I'm really very positive about Queens.”Turning to real estate, demand for housing and retail space was expected to remain high, although those in the market thought getting high-end retailers would remain a challenge. As the Queens Center Mall in Elmhurst prepared to unveil a renovation last year, “it was tough getting those tenants to come to Queens,” said John Genovese, a panelist and vice president of the Macerich Company, which owns the shopping center. Meanwhile, Wal-Mart is considering moving into Rego Park and Pathmark was eying Fresh Meadows until it recently pulled out because of community opposition.The industry is starting to realize, however, that in places like Queens consumers want both high-end options and bargain shopping, Genovese said. Michael Mattone, chief financial officer and executive vice president of College Point's Mattone Group , said Suffolk and Nassau counties are now built out and developers and retailers are looking at the borough.”The new frontier is in the inner city,” the developer said.Reach reporter Michael Morton by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 154.

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