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‘Uncertainty Factor’ Hangs Over Brooklyn Businesses

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While Brooklyn businesses face a number of obstacles heading into 2006, one of their biggest fears is fear itself. “There’s a sense that everything’s sort of a sugar rush,” said Matt Yates, director of the port operations company American Stevedoring Inc. and a member of the Community Board 6 Economic/Waterfront Development Committee, at a February 6 committee meeting. Speaking about the degree of instability and “factors of no control” that businesses have reported to him, Yates said the “uncertainty factor” topped all other concerns, including those about real estate that are so prevalent in Brooklyn. “And I’m not sure how you fix that,” he added. During an annual presentation that night about business expectations for 2006, Kenneth Adams, president of the Brooklyn Chamber of Commerce, said Chamber members reported insurance costs as the top obstacle to growth in an annual survey. Although “members reported good news in ’05,” Adams said, such as increased sales and hiring, “Our Chamber members approached ’06 with caution,” which he associated with rising fuel costs in anticipation of a cold winter that has yet to materialize, and anxiety about insurance costs. In the Chamber’s annual Members Issues Survey, released in November, 80 percent of companies that responded said they did as well or better in 2005 as in 2004, but only 31 percent said they expected revenues to increase in 2006. According to the 177 respondents of the Chamber’s 1,200 members, fuel and energy costs were rated the third most significant obstacle to growth in 2005, up from seventh in 2004. The first and second obstacles were the cost of health insurance and the cost of general liability insurance. “They really feel threatened by it, small businesses in particular,” Adams said about insurance costs. “Raw construction costs have gone sky-high,” noted Waterfront Development Committee chair Greg O’Connell, citing the cost of steel, studs, wood, and fuel as another obstacle. Additional factors generating uncertainty are the retirement of Federal Reserve chairman Alan Greenspan, “the unbelievable federal deficit,” and wage inflation, which causes instability by enabling employees to work elsewhere, Adams said. “It’s not surprising that people are edgy about what’s coming down the road,” commented Richard Bashner, the new co-chair of the Economic Development Committee, after listening to all the factors. To counteract uncertainty, the Chamber offers several programs and services to help Brooklyn businesses improve stability, regardless of whether they are Chamber members. To help quell anxieties over health insurance, the Chamber has improved its Brooklyn Health Works insurance plan, which is now offered to small businesses for $160/month per person, although it is restricted to employees who have gone without insurance for a full year prior, and to businesses with at least one-third of its workers in the low-wage category. If the government increased currently limited subsidies to provide health insurance to a greater number of Brooklyn employees, taxpayers would save money in the long run, Adams said from a Long Island College Hospital conference room at Hicks Street and Atlantic Avenue. “All the studies will tell you it is far less likely {employees} will end up around the corner at Henry Street in the emergency room…with a terrible acute situation,” if they have preventive care, he said in reference to the Chamber’s attempts to obtain more health insurance funding. In addition to offering health insurance, the Chamber has a Business Solutions Center at 9 Bond Street that helps businesses obtain loans from outside sources, which it did for 40 companies last year, for a total of more than $2.5 million in loans. There are also plans for on-the-job English language classes through the Chamber’s partnership with the National Puerto Rican Forum, which Anthony Pugliese, an organizer for the New York City District Council of Carpenters and a member of the committee, expressed support for, noting that language training can mean the difference between life and death for construction workers who are more likely to have fatal accidents if they cannot understand their employers’ directions. Pugliese reiterated his support for construction projects such as the Atlantic Yards project – which is supported by most Chamber members who responded to the survey – in which developers pledge to use all union construction labor. “When Forest City Ratner develops, whoever works for them is going to get trained, is going to get proper medical coverage and won’t have to go to the emergency room” as their first form of treatment, Pugliese said. Pugliese also suggested the Chamber create a code of ethics and require all of its potential members to meet specific criteria prior to joining, but the Chamber has no plans to do so. “If you did have some form of code of conduct it would be a carrot for {companies} like Wal-Mart” to publicly support policies that protect employees, said Bashner, citing the repeated attempts of the company opposed by most Chamber members to open shop in Brooklyn. But Adams said the Chamber is better off using its power in other ways. “Our leverage comes into play when they need us to testify in favor of a project,” he said. “The trick is when a business or a developer needs something from government” to impose its criteria before offering support. For more information on the Chamber of Commerce visit www.ibrooklyn.com.

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