Ready for Rebirth (cover)
Philly on the Move
Turbines and Trains
Canon Deal May Provide Coda to a Long Island Career
Numbers in Island's Favor
NORTHEAST REGIONAL REVIEW
Numbers in Island's Favor
Long Island business expansion activity might even get busier in the tony area of the Hamptons, where there is study of a Hamptons Business and Technology Park concept in a development district surrounding Gabreski Airport. A study prepared for that effort in May 2006 noted that "more than half of respondents (55 percent) to the 2005- 2006 Long Island Economic Survey and Opinion Poll conducted by Dowling College and the Certified Public Accounting firm of Albrecht, Viggiano, Zureck & Company, P.C. plan some type of facility expansion during 2006. "This is a continuation of a trend that has continued for several years and the 55 percent is the highest percentage of respondents indicating a facility expansion strategy in the 12 years that the survey has been conducted," read the report, prepared by economist, planning and economic development consultant Martin R. Cantor.
But the Canon move is the one quickening heartbeats.
"This is a major coup for the Long Island economy," said County Executive Levy of the Canon deal. Approximately 1,260 people currently work at the Lake Success headquarters, at an average salary of $70,000, but growth plans for the western hemisphere subsidiary call for an increase to 2,110 headquarters staff by 2020. Other than a 2003 customer support center expansion in Chesapeake, Va., and a medical diagnostics instrumentation project in Rockville, Md., in 2004, most of Canon's recent manufacturing projects have been located in Japan, China and Vietnam.
"I was there yesterday to help kick off the negotiations and I am glad to see that the spirit of cooperation that we began the session with carried through to this positive conclusion," said Supervisor Frank Petrone at the December announcement. "Our Route 110 business corridor is already the pride of the Town of Huntington and Canon's new headquarters will be the crown jewel."
Mike DiMeo with Canon USA in early February said there were no details yet available about the pending move. But there are plenty of figures available on the pending relocation's economic impact. Using an input- output model, Pearl Kamer, chief economist for the Long Island Association, has run the numbers on both the construction and permanent phases of the headquarters project.
"What I found was it will result in an earnings increase on Long Island totaling $252.2 million," she says of the construction phase. "There will be additional earnings caused by workers salaries. The county is giving a sales tax abatement equivalent to almost $16.7 million during construction. When you divide the earnings by the $16.7 million, it's a benefit- cost ratio of 15 to 1."
The property tax abatement will extend from 2009 through 2019, during which time Canon projects total payroll spending of $1.95 billion. Kamer says the multiplier effect of that payroll will be on the order of more than $3.2 billion. Meanwhile, the county is giving up approximately $19 million in tax revenue. "Divide the $3.2 billion by the $19 million and your ratio is 170 to 1," says Kamer. "It is clearly a win- win for the county and for the local economy because they are injecting large numbers of high- paying jobs into the area." That contrasts with what she says has been a pattern of low- wage service job creation on the island. The new jobs figure to be anything but:
"As of January 22, 2007, they had 1,260 employees at Lake Success at an average salary of $75,000," says Kamer. "By 2019, they project 2,060 jobs, at an average salary of $119,272. You're talking a very big addition to the local economy – more jobs, more restaurants, more professional services. It's going to be a big boost."
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