Views On Economic Outlook Run From Grim To Optimistic
BY THOMAS COGAN

Shown (l. to r.): Thomas Iadanza, Metro NY-NJ Commercial Division Executive, Sovereign Bank; Queens Chamber of Commerce President Albert F. Pennisi; Assemblymember Mark S. Weprin; Brendan Dugan, Metro NY-NJ Division Chairman, Sovereign Bank.

At the end of January there was still time to look forward to 2008, as the Queens Chamber of Commerce and Sovereign Bank did in their breakfast meeting at the Sheraton La Guardia East Hotel in Flushing. Thomas P. DiNapoli, comptroller of the state of New York, delivered the keynote address and the list of other speakers and commentators included an economist, a real estate developer, a regional planner, a Sovereign Bank official and Assemblymember Mark Weprin, head of the Assembly Small Business Committee. In stating their outlook for the year ahead the speakers expressed optimism, cautious optimism and pessimism, providing listeners with a full choice.

Maria Fiorini Ramirez, president of her own economic and financial consulting firm, Maria Fiorini Ramirez Inc., at 675 Third Ave. in Manhattan, led off by saying that the fourth quarter numbers of the gross domestic product (GDP) are "really not that bad" and that she does not fear a recession is imminent. "Everybody's feeling the pinch," she admitted, and WalMart is lowering prices, but over time the Federal Reserve Bank's rate cuts will allay "this little malaise" the country is going through. Since that GDP is $11.7 trillion, we can consider ourselves strong, she said. The day before there had been another prime rate cut that she described as "pretty much in the cards". Lower job growth was another lamentable revelation, and she advised her listeners to monitor its effect on Queens, where small business is paramount. The current unemployment rate, at 5 percent, is not considered high, she said. She showed an economic chart going back about 30 years and pointed out that the high points on it between then and now have been more numerous than the low ones. At present, negative growth is likely to last several consecutive quarters at worst. The mortgage disaster, she said, came about because, "We were in a period of excess and now we have had to go into a period of 'retrenchment'." Still, she said, half the private residences in the United States are at full ownership, with no more mortgages to pay. Consumer debt is still too high, she allowed, but credit has tightened in the past month and may force it downward. Business is booming abroad and driving the value of the dollar down, which she said was both bad and good- the latter because it encourages exports. She concluded that poor economic conditions at present would not long continue.

When QCC President Al Pennisi introduced DiNapoli, he noted that DiNapoli's career as an elected official began in 1972 when he won a seat on the board of education in Mineola at the age of 18. When he was elected to the comptroller's office by the legislature in February 2007, in the wake of Alan Hevesi's resignation, he had represented the 16th Assembly District, in Northwest Nassau County, for 20 years. At the beginning of his address he said that in Queens, basic banking is broadly established, but not completely, with several underdeveloped neighborhoods having to rely on check cashing operations. These neighborhoods were acutely into subprime mortgages, and now home foreclosures are rife there. The comptroller said that foreclosed homes poison neighborhoods by bringing down the value of good homes that are sitting in the midst of the foreclosed ones. Though Fiorini Ramirez could look at the business losses owing to the mortgage crisis and say they are small by comparison to a sound GDP, DiNapoli could only be appalled by losses in the range of $250 to 400 billion.

He distributed a two-page information sheet called "Queens: An Economic Snapshot" that contained several facts he brought into his address from time to time; for instance: employment in the borough was at 484,000 in 2006, the latest year measured, a record; in 2007, the average unemployment rate in Queens was 4.5 percent, below that 5 percent rate mentioned elsewhere; wages in 2006 were up by 4.3 percent, which was better than the rate of inflation. By 2006, 47 percent of homes in Queens were owned by their residents, an increase of more than 4 percent since 2000, putting the borough second in percentage to Staten Island; and between 2000 and 2007, the average market value of homes in Queens was up by more than 182 percent. Into this garden came the snake of subprime mortgages, which accounted for three-eighths of all homes purchased in Queens in 2006, a threefold increase in just two years. DiNapoli said the subprime problem is even worse in parts of the state outside New York City.

He concluded with a statewide survey that wasn't pretty. There is a budget gap of $4.4 billion, perhaps even greater, and the out-year forecast is for further budget gap widening. He said the recent history of legislative planning has been abominable, with debt management being largely a matter of short-term budget balancing. He called for a comprehensive inventory of items and the establishment of what he called "long-term fiscal health, not short-term fixes".

Jeff Carstens of Sovereign Bank went over an economic survey that included a poll concerned with what the leading strengths and challenges are in Queens. Those responding to the poll overwhelmingly found the overall quality of life and the low crime rate to be what was favorable to them; the cost of energy and general cost of living were by far their greatest concerns, though traffic congestion showed up strong, too. The questions of health care and educational quality were actually answered somewhat more positively than negatively. As for housing, well over twice as many respondents viewed the picture favorably.

Carstens said there are 14 major construction projects going on in Queens at the moment. He cited five, beginning with Citi Field, the baseball stadium going up beside Shea Stadium. When it opens a year from now, he said, it will generate 1,000 new and full-time jobs. Second, the Silvercup housing project south of the Queensboro Bridge is due to begin this year. It is intended to produce 1,000 apartments and eight sound studios at the movie and television production center by its completion date in 2010. Third, just a little south of it, the Queens West project proceeds, producing additional thousands of apartments. Fourth, the $3 billion Willets Point project is expected to produce a little of just about everything, including a 400,000 square foot convention center. Sky View Park is a project on view (or audible) to anyone coming to or going from Main Street on the No. 7 line. The housing and commercial facilities anticipated there are being built on what was once a brownfield site of industrial pollution.

The panel discussion that concluded the meeting brought Maria Fiorini Ramirez back to the dais, where she was joined by Joseph Mattone of The Mattone Group; Weprin; and Christopher Jones, research director of the Regional Plan Association. Weprin was first to speak, projecting a "Queens is Cool!" theme and describing the projects that Carstens delineated as a uniting force. He was enthusiastic about Queens as a tourist attraction, inevitably rejoicing as he proclaimed, "especially now that the Mets have [Johan] Santana". The next speaker had a considerably darker outlook: " Optimism is great if there's a basis for it," Joseph Mattone, lawyer and real estate developer, said. However, the cost of building has risen distressingly, and Mattone said there are many refusing to acknowledge that there's a problem here. He said there's "no retrenchment on course" in development, but there should be.