The Eds & Meds Boom
SMPS NY-WHV teamed up this month with the Construction Institute of CT to bring a full panel and interactive discussion on the economic development and projects taking place within Westchester, Hudson Valley and Fairfield County. Among the panelists were Moderator Joseph McGee (VP of the Business Council of Fairfield County) and panelists, Martin Berger (Saber Real Estate Advisors), Peter Cordeau (President of Norwalk Hospital), Ken Kearny (Kearny Realty & Development Group), Thomas Madden (Director of Economic Development for the City of Stamford, and Mike Oates (Hudson Valley Economic Development Corporation).
The prevalent driving forces for economic growth discussed, which seemed to be unanimous, were Education and Medicine, fashionably coined “Eds and Meds.” Cordeau started off the discussion with the trend in hospital group mergers leading the expansion of territory, combining New York and Connecticut, and increasing competition throughout the I-95 corridor. The current focus of hospitals is on creating the most state of the art facilities, and the increased growth in facility development and upgrades is bringing higher demand for nearby housing to accommodate the influx of employees.
Berger has seen, first-hand, the increase in residential development within the Hudson Valley, especially in Dutchess County along the Route 9 corridor as a result of the Eds and Meds push. Saber Realty’s approach was to work with Marist, Vassar and incoming Med groups prior to development, to find out what they needed, and then develop the Hudson Heritage Project – an adaptive-reuse and new construction mixed-use development project currently underway at the former Hudson Valley Psychiatric Center in Poughkeepsie. This need for mixed-use residential buildings, he explained, “…is driven by a lack of supply for housing that is within a reasonable distance of work, shopping, and entertainment.” This ‘campus-style’ redevelopment is a trend that is not only specific to millennials, as the current mentality of renting is becoming more popular than buying, but also appeals to seniors looking to retire in vibrant communities with all amenities close by and within reasonable walking distance.
The move towards this type of cluster development was also discussed by Mike Oates, who explained that sales and development of single-family residences are not growing. “It’s easier to build than attract,” Oates stated, referring to the HVEDC’s eagerness to helping established companies to stay and expand, rather than trying to attract new companies into the area. Case in point, Regeneron’s rapid growth in Westchester and Vassar, Marist and the Culinary Institute of America where $1.2 billion is being spent overall, with $500 million in commercial, residential and community building for the CIA alone. The main challenges are partnering housing and hospitality to keep employees close to these areas of employment.
As these areas continue to grow, so does the impact on existing infrastructure and improving transit to decrease commuter time becomes integral, as the City of Stamford has seen with $3.5 billion in development currently ongoing. City Director of Economic Development, Thomas Madden discussed Stamford’s continued efforts to improve both their roadways and public transit. Their current task is to reduce the Hartford to New Haven to Stamford to New York City commuter rail time down to 30 minutes each stop.
Despite so much growth and development, there are still areas wedged in between these hotspots that are struggling to find their place and to bring in private investors. Kearney is no stranger having led successful redevelopment efforts in both Beacon and the City of Poughkeepsie. “People want a lifestyle – live, work, and play – but they also need walkability and a sense of safety,” discussing the challenges of location and stigma. He contends that creating a destination location within a “dead zone” area, such as a rooftop garden like the one added to a local Poughkeepsie brewery, Zeus, “brings in small investors and helps to grow and reconnect outside areas.” He also attributes the success of these efforts to targeting artists, who he describes as the pioneers, and creating affordable spaces for them.
There is no dispute that impact of the Eds and Meds development boom on our area has been vast, both within new construction and redevelopment. Time will tell on the continued momentum of this growth with speculation of an impending recession. However, as noted by Berger, a recession could help decrease the rising costs of construction (approximately 15-20% per year) and make it more affordable to continue with these projects.