Looking back
Jobs were a bright spot, as were expansions throughout region
2018’s news was a story of economic ups and downs.
The Capital Region economy performed well in 2018, although some national retailers continued to struggle.
The number of jobs hit an alltime high, while unemployment rates remained near historic lows.
Here are some of the more noteworthy business and economic stories of the year.
Albany misses out
Albany’s hopes to land Amazon’s second corporate headquarters, or HQ2, were quickly dashed in January when the Seattle online behemoth revealed its list of 20 finalists.
Amazon late in the year would pick two sites, one in Queens and the other in a Virginia suburb of Washington, splitting the 50,000 expected jobs between the two.
By year’s end, Amazon was still planning to build a distribution center in Schodack, with wages far lower than those being promised in the headquarters cities.
Tank car tussle
When financially struggling Iowa Pacific Holdings, the Chicago-based parent of the Saratoga and North Creek Rail Road, decided to make money by storing surplus crude oil tank cars on its tracks in Essex County, it drew a firestorm of opposition.
The tracks in the pristine Adirondack wilderness were no place for the graffiti-laden tank cars.
The railroad eventually moved the tank cars out, and terminated its scenic rail operations between Saratoga Springs and North Creek. At year-end, it was in talks with another company to sell its tracks.
Sears, Bon-ton bankrupt
Bon-ton filed for Chapter 11 bankruptcy in early February, and said it would close its store at Aviation Mall in Queensbury.
Its remaining Capital Region store, at Wilton Mall, would survive until the end of August, when the rest of the nationwide chain shut down.
In October, Sears Holdings would also file for Chapter 11, although most of the Kmart and Sears stores in the Capital Region had already closed.
The final area Kmart, in Greenwich, Washington County, will close by March 2019, Sears Holdings announced Friday. By then, all Sears in the area also will be gone, although some independent appliance and outlet stores continue to use the Sears name.
Tariffs and trade tensions
New York’s economic ties with Canada took a blow after President Donald J. Trump imposed tariffs on steel and aluminum imports from that country in March as part of his pressure on Canada and Mexico to change the North American Free Trade Agreement (NAFTA).
Upstate ports handled about $8.3 billion in imported steel and aluminum from 2017 to mid-2018, of which $5.5 billion would been slapped with tariffs, according to a Times Union analysis of Associated Press data. During that same period, those ports handled about $5.4 billion in exports of U.S. steel and aluminum to Canada, of which $2.6 billion would have hit by corresponding Canadian tariffs imposed in response to
Trump.
Business connections between New York and its northern neighbor slowed over the summer as President Trump criticized Canadian leaders. But after the president reached a NAFTA agreement in November, activity picked up quickly, according to regional economic officials upstate. And Canadians, an important force in upstate tourism, kept visiting the state even during the trade dispute, according to tourism officials.
Closer to home, the Trump administration’s trade war, which also placed tariffs on imported Chinese goods, has not yet hampered business at the
Port of Albany, the port’s private management company reported. Imported Chinese-made subway cars, bound for the Boston transit system, started arriving this fall and should continue unabated through 2021 under contracts signed before the tariffs were imposed.
Location, location
The Cuomo administration’s plans for a new Wadsworth Center, the state Health Department’s laboratory, had Albany and Rensselaer counties jockeying to land the $750 million project.
The University at Albany was touting its Health Sciences Campus in East Greenbush, Rensselaer County, while some Albany officials, including Assemblywoman Patricia Fahy, were pushing to have the project remain in Albany County, where the current Wadsworth facilities are located.
“This is a future Globalfoundries if done right,” Fahy said, referring to the massive semiconductor plant that employs more than 3,000 people in Saratoga County.
At year end, no location decision had yet been announced.
I-787’s future
The nearly half-century-old Interstate 787, an expressway along the west bank of the Hudson
River from Albany to Watervliet, will cost $330 million to keep in a “state of good repair” over the next 20 years, the Capital District Transportation Committee said in a March draft report.
The road has turned into a critical link bringing 88,000 vehicles a day from around the Capital Region to downtown Albany, a job it has done “very well,” said Michael Franchini, executive director of the CDTC.
Replacing I-787 is expected to cost $900 million, the current value of the road, according to the report.
The committee will issue its final report in early January.
Updating the airport
State officials in August announced more than $40 million in improvements at Albany International Airport, including a new 1,000-vehicle parking garage, new technology that will help travelers find their way, and new escalators, improved seating and upgraded facilities.
The airport during the year also saw the start of service by ultra-low fare carriers Frontier and Allegiant airlines.
Meanwhile, work on a $50 million project to rebuild Exit 4 and improve connections between the Adirondack Northway and the airport were under way at year-end.
Chip fab job cuts
Globalfoundries, the semiconductor factory in Saratoga County, said in August it would cut 455 jobs as it ended efforts to move manufacturing of microprocessors, or chips, to the sevennanometer level.
The company continues to employ more than 3,000 people at its plant at the Luther Forest Technology Campus in Malta.
Troy hospital upgrades
St. Peter’s Health Partners completed a $105 million, multiyear project in September at St. Mary’s and Samaritan hospitals in Troy. Projects included a new five-story patient pavilion at Samaritan, named in honor of the late Heinrich Medicus, a Rensselaer Polytechnic Institute physics professor whose $10 million gift had give the Troy Master Facilities Plan fundraising campaign a major boost. Meanwhile, a new cancer center at St. Mary’s was named in honor of his late wife, Hildegard.
Other projects included a parking garage, moving the Samaritan Hospital School of Nursing to St. Mary’s, and new intensive care, progessive care and medical/surgical units at Samaritan.
On Jan. 1, the two facilities will be merged into one legal entity under the Samaritan name. The merger will have no impact on services, according to a hospital spokesman.
Recycling gets expensive
Local governments and homeowners in the Capital Region got shock this summer after the region’s largest trash hauler started charging to accept recyclable paper, metal and plastic. The fee imposed in July by County Waste reflected sudden changes in China, the world’s largest buyer of recyclables, to accept much less from overseas, a move that rocked recycling programs across the U.S.
In response, County Waste announced that it was charging $120 a ton to accept recyclables at its massive recycling center on South Pearl Street near the Port of Albany. Albany city officials estimated the move would cost the city, which has been providing free residential trash pickup for decades, about $400,000. The measure also impacted other localities in the Capital Region that are part of a recycling partnership.
County Waste handles waste from abou1 180,000 residential and commercial customers in Albany, Rensselaer, Saratoga, Schenectady, Fulton, Montgomery and Schoharie counties., and had been selling about 40 percent of its recyclables to China.
When the company opened its $12 million recyclable sorting facility seven years ago, it expected to make up to $1 million a month by selling paper, metal and plastic. But the value of recyclables plummeted after China decided to restrict imports, leaving would-be sellers facing bills instead. Recycling officials said this could spell the end of singlestream recycling, in which all materials are placed in a single bin for pickup, and lead to the return of homeowners and businesses sorting out paper, metal and plastic beforehand, which saves time and expense for recycling firms as they search for new markets to accept the materials.
Regeneron expands
Tarrytown-based drugmaker Regeneron Pharmaceuticals announced plans for an $800 million expansion that will add 1,500 jobs at a second campus in East Greenbush — it already employs 2,600 elsewhere in Rensselaer County — over a five-year period.
The company, which announced the project in September, has undergone rapid expansion thanks to several blockbuster drugs, which it produces at its existing East Greenbush plant. The state is offering Regeneron $140 million in incentives and tax breaks.
Unprotected pensions
In October, more than 1,100 former workers of St. Clare’s Hospital in Schenectady learned that they would see their pensions either slashed or eliminated. Short tens of millions of dollars needed to provide full pensions, the fund was not backed by federal pension insurance after hospital officials decided in the mid-1990s to seek an exemption from federal pension rules available to religious institutions.
The announcement left workers shocked and looking for answers. When the hospital closed in 2008 as part of a state-mandated merger with Ellis Hospital, the state had provided $28.5 million to sustain the pension fund, but hospital officials said the fund was fatally weakened by the economic downtown that started that year.
While the hospital was long affiliated with the Albany Roman Catholic Diocese, Bishop Edward Scharfenberger said the diocese was not obligated to address the shortfall, and did not have the money to do so regardless. The bishop met with about 100 pensioners in December to offer support, but so far no solutions have been found as Schenectady County and state lawmakers express support for the workers’ plight.
New York vs. Charter
While regulators sparred with Charter Communications over the progress it was, or wasn’t, making in bringing high-speed Internet access to rural areas of the state, Attorney General Barbara Underwood was negotiating a $62.5 million deal to provide direct refunds to 700,000 customers of its Spectrum internet service who had inadequate modems or routers for the internet speeds originally promisted by Time Warner Cable. Chater acquire Time Warner’s upstate network in 2016.
The state Public Service Commission, meanwhile, had put conditions on its approval of the Charter acquisition of Time Warner, but revoked that approval in July. At year end, the two sides continued to negotiate, with the PSC ordering Charter to come up with a plan to seel the Spectrum system to another provider.
SUNY Poly’s material boost
Applied Materials in November announced a seven-year, $880 million research partnership with SUNY Polytechnic Institute that will focus on developing materials for next-generation chips for artificial intelligence, cloud computing, optical sensors and quantum computing.
New York state will provide $250 million in support, and Applied Materials will rent more than a half acre of space at the Nanofabx building on the Albany campus, paying $100 million over seven years.