Schwartzberg: Keep companies on LI

Commentary
Published: September 16, 2010

By Jeff Schwartzberg, CIBS president

Much attention has been paid of late to the exodus of young people from Long Island, far less to the outflow of businesses.

Too bad, because they’re truly connected.

This spring two important Long Island corporate relocation stories played out to dramatically different results, both involving the 110 Corridor, and both affecting the future of the next generation.

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In Melville, OSI Pharmaceuticals evolved from a small research outfit into a $4 billion biotech powerhouse, a poster child for the region’s high-tech future. At Broadhollow Bioscience Park nearby at SUNY Farmingdale, OSI employees mentored students and young professionals, made connections and built community.

OSI was ambitious, international and high-profile. Listed on the Nasdaq Biotech Index, the company employed some 500 people and reached $430 million sales before becoming a takeover target of Astellas Pharma, the Japanese biotech giant.

A funny thing happens to Long Island companies when they get acquired: They disappear. Almost immediately Astellas sought to move OSI to Westchester, where scores of tech companies cluster around shared resources such as waste disposal services, consultants, investors and a specialized local work force. (Now those Westchester plans too are in limbo.) Lack of cluster is isolating. OSI’s chief, Colin Goddard, has linked the absence of such a cluster here to the company’s decision to relocate.

Regional business leaders have pressed for years for incentives and infrastructure to attract more tech firms to Route 110. What happened next is classic Catch-22: Companies wait for other companies to move in, so they can follow.

In other words: Call us when there’s a cluster.

The state, meanwhile, pushed tax dollars into building R&D infrastructure. Up went sprawling technology incubators and entrepreneurial centers in Farmingdale and Stony Brook. These facilities provide space for small companies and self-employed entrepreneurs, something the private sector has been slow to do. That’s good. Unfortunately, government buildings don’t create community. Employees, senior and junior alike, gravitate to the kind of living environment that doesn’t truly exist yet on Long Island in any meaningful way - vibrant, mixed-use communities with restaurants, galleries, rental apartments, condos, bike-to-work situations and lively stay-open-late downtowns.

Important business and operational services are not in place either.

So while company chiefs may commit to Long Island, global investors don’t. New owners see only the high cost of doing business. Their reaction: relocate.

Canon USA reversed the picture. The global imaging company opened its Americas headquarters in Lake Success in 1971 with 80 employees. Now there are about 1,200. To keep Canon on the Island, state, county and town officials created an innovative ”floating” economic incentive zone, transferring development rights and incentives from a qualified property in Riverhead to Melville, in order to welcome Canon to the corridor with a large economic incentive package. Projections call for the company to generate an additional 750 jobs. Kudos to the town, state and local officials who had the insight and motivation to make this a reality.

Two scenarios, two different outcomes. What do we learn?

The OSI “lesson” - Long Island needs to think “cluster” if we are to attract and retain high-tech employers. We need to fix the zoning issues and sewage processes to be more rational and transparent - in other words, more like California.

The Canon “lesson” - Long Island needs to streamline the multigovernment approval process, respond with speed and transparency, plan regionally and think creatively - and be ready to horse trade.

The public, too, needs to be reasonable. Let’s recognize that while no one expects a corporate headquarters on every street corner, the region can’t survive without big companies. Employers need space to make products, develop services and house employees.

Long Island is a fine place for a corporate headquarters. Let’s help the cause by communicating the positives. This fall, invite a newcomer to a networking meeting or professional event. Treat an out of town colleague to lunch, a vendor to dinner. Spread the word. Let them know Long Island welcomes corporations.

Attitudes don’t change overnight. But they do change when people care enough to challenge false perceptions with accurate facts.