How is Port Washington faring in the current economic climate? Watching stock prices plummet while house prices rocket can make it difficult to know just how well or badly we are doing. Some prominent Port Washington residents, with better local economic insight than most, gave us their views on our economy.
Dr. Irwin Kellner holds the Augustus B. Weller Distinguished Chair of Economics at Hofstra University and is chief economist for CBS MarketWatch and North Fork Bancorporation. Author of many articles dealing with economics, business and banking, Kellner regularly appears on Cablevision's News 12 Long Island, CBS radio and television as well as other programs in the US and overseas. He is chairman of Nassau County Executive Thomas Suozzi's council of economic advisors and in the Village of Port Washington North, he serves on the village planning board.
Kellner said, "Port Washington's economy, as with other economies on the North Shore, is doing fairly well considering the stock market is down for the third year in a row and the terrorist attacks of 9-11 that left us all feeling a little leery." He said a very positive sign is the almost fully occupied storefronts up and down Main Street indicating businesses are staying afloat despite the recession. He believes that much of the success of lower Main Street is directly linked to the expansion of Ayhan's business empire to include the Mediterranean Deli and Fish-Kebab, which attract pedestrians to this revitalized shopping area. Another sign that we in Port Washington are doing well is the recent influx of new banks because Kellner said, "they go where the money is." On the down side he believes shoppers are looking out of town for bargains on consumer products such as toys and electrical goods and he said that while there are several new restaurants in town and Port has a relatively affluent population, "there is still only so much money to go around and the success of the newer businesses has to be at the cost of someone else."
It is generally considered that a falling stock market has a major effect on consumer confidence but Kellner said the most important influence for Port Washington's residents is the value of our homes and our jobs. In Nassau he said that unemployment is very low, currently at 4 percent and that in Port Washington he suspects there is virtually 100 percent employment. Kellner said the government and its increased need for homeland security and the healthy housing market are responsible for creating new jobs. The property boom gives the economy an additional boost as people spend money on furnishing their new homes and existing homeowners gain more buying power with today's low interest home equity loans. Home sales and prices have continued to rise and Kellner believes the housing market is staying strong because suppliers are coming into the market, a suggestion that is corroborated by the large number of new homes being built all over town. He said this improved balance between supply and demand will avoid the unsustainable prices of the late '80s early '90s, which, when the over-inflated housing market finally collapsed, left some homeowners in the negative equity trap. On a similar note he does not believe financial institutions are acting irresponsibly by extending excessive credit to consumers, he said, "banks are being very careful since the recession and the local bankers know their customers and do fairly rigorous screening." He added that because interest rates are so low it is now more affordable for people to take out loans.
Kellner accurately predicted the latest cut in interest rates by the Federal Reserve but questions whether this cut will do any good, as the interest rates are already so low. Kellner suggests a better move would be "help from fiscal policy such as a tax cut that would send money back to us and give us all a lift." He does not believe we are likely to experience the devastation of the early '90s when Long Island in particular suffered as house prices fell, businesses downsized, management was flattened and the aerospace industry experienced major cutbacks. This time he said it's not the same; house prices have maintained; the aerospace industry is busy as America prepares for a possible war in Iraq and employment is high. Kellner believes Port Washington is not alone in this beneficial position but that the sister economies of Great Neck, Roslyn and Manhasset are also doing better than during the last recession and will continue to do so. He said, "We are fortunate to live in a great town like Port that is diversified yet financially comfortable and I believe this will enable us to weather any future difficulties that may arise."
Warren Schein, president of the Port Washington Chamber of Commerce, is less optimistic and believes a flat economy is creating difficulties for many local business owners. He said people are looking to the malls and discount outlets for better bargains and often shop by mail and online. This he believes is a false economy and people need to factor in the cost of shipping as well as the lost opportunity to try on or inspect the goods before paying for them. He said local shops offer excellent service and quality and most importantly by shopping locally we support our local economy. If we fail to do this, the quality of life in Port Washington will deteriorate as business owners are forced to close up and move out of town. He said the local businesses support our community not least through generous donations to many charitable organizations and these business owners deserve our support in return. He noted that the restaurant business is normally one of the first to be hit in times of recession as people make cutbacks but he said, "No business or person is immune to these tough financial times." Schein said the key for local businesses is to offer a high level of service and suggests offering to special order something for a customer or recommending someone else who can supply the product; the customer will remember this act of goodwill and be more likely to return. He said membership in the chamber of commerce has remained stable and he believes this is because it provides an excellent place to network, an important factor in good and bad times alike.
Roy Smitheimer, executive director of the Greater Port Washington Business Improvement District, acknowledges that the economy is not at its strongest but believes "from a vacancy rate, there are no more empty store fronts than we had before" and that indicates Port Washington is doing better now than in the last recession. He said, "When we formed BID 12 years ago there was a big problem and the vacancy rate was 25-30 percent." He noted that the type of businesses in Port has changed as retail outlets move to the malls and service industries such as restaurants, beauty salons and cellular service providers have moved in. However he said Port Washington is still a better bet for Mom and Pop Stores than some other nearby neighborhoods such as New Hyde Park and Mineola where the small stores are competing directly with malls and discount outlets. He said it is important to focus on areas where we can redevelop because space is at a premium. Unlike Suffolk, where there are plenty of green fields available, he said in Nassau we have to look to "brown fields", areas of previously developed space that can be reclaimed for new businesses. He said his aim is to encourage the shoppers back by making downtown Port Washington more pedestrian friendly. Steps that can help achieve this include cleaning up the sidewalks, providing more trash receptacles and benches and finding a solution to the ongoing problem of limited parking.
Bill Solomon has owned All Port Travel in Manorhaven for 14 years and is this year's recipient of the Port Washington Small Business Owner of the Year Award. When asked what he believes will help a small business survive in times of financial hardship he said, "Small business owners need to have a positive attitude and show appreciation for their customers patronage. There are too many business owners whose store side manner leaves a lot to be desired." Solomon directly links the current economic slow down to the terror attacks of 9-11 and continued threats to peace worldwide. Despite what he believes are the best efforts of the current administration to keep the economy stable he said, " I think until there is more stability socially and financially worldwide, the US economy will not get straightened out."
The travel industry was probably one of the worst affected by the terror attacks with people afraid to travel and major carriers forced to downsize dramatically. Added to this, traditional travel agents have recently been faced with new competition in the form of Internet sites selling airline tickets and vacation packages. Solomon acknowledges that there are fewer travelers and this may be a reflection of people cutting back on personal spending as well as their fear of flying but he does not believe the Internet has had a major impact on sales. He said, "travel agents still account for 70-75 percent of airline ticket sales, which is only down about five percent since the Internet became popular, so the Internet is being patronized by people who never bought from travel agents, there have always been some people who prefer to deal directly with the suppliers." He said the benefit of using a travel agent is personal service and this is most clearly seen when a traveler has a problem such as being stranded or delayed. In the days following September 11 travel agents worked hard to help thousands of stranded travelers around the world reach their destinations. Solomon said it would have been more chaotic and taken considerably longer if the airlines had had to do this alone. He said in the event of a canceled flight a travel agent can issue a replacement ticket in 10 minutes but the airlines often keep passengers waiting on line for hours. On a positive note Solomon believes that a diverse and resourceful community such as ours can weather these difficult times if we work together. His final words on the local economy were, "Shop in Port Washington for the holidays and make it a time of celebration for everyone."