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Long Island Is Losing Another

Jun 6, 2014

Sbarro, which sells New York-style pizza, has announced it is moving its headquarters from Melville to Columbus, Ohio.  Sbarro just exited Chapter 11 bankruptcy after entering it in March for the second time in two years.  The restaurant still has about 800 locations, after recently closing almost 200 stores.  Almost half of the remaining restaurants are in North America, and many are housed in shopping malls, airports and highway rest stops.  The relocation was a way for Sbarro to move its headquarters closer to its new Pizza Cucinova restaurants, which opened in Ohio last year.  In addition, the move will cut costs and expenses. 

While not yet disclosed, you can bet that tax breaks and incentives will be given by the state of Ohio for the creation of new jobs.  The new Sbarro pictures itself as an artisanal fast food eatery similar to Panera Bread or Chipotle.   However, no matter how Sbarro pictures itself, its departure from the Long Island business landscape is another blow to the local economy, whether it now fancies itself as a landlord or not.  Let’s not forget that Adecco, which announced earlier in the year that it was moving to Jacksonville, Florida from Melville, will receive economic incentives of $2 million from various state and local authorities in connection with its move.  The 130,000 feet of office building that Adecco used to house its employees now joins a market already crowded with empty space and still reeling from other major regional losses such as Arrow Electronics, Gentiva Health Services and American Home Mortgage, all well-known Long Island companies which either moved or went out of business.  While Arrow’s move, for example, did not have a major impact on local jobs, it is planning to create over 1,200 new jobs in Colorado, the state of its new headquarters.  The price of creating those jobs in Colorado includes tax credits of up to $11.4 million over five years.  Although the new jobs in Colorado do not count as lost jobs in this region, I think Long Island’s elected officials should be required to explain to their constituents why those jobs are not being created in our region.  The factors that went into the decision processes of Cannon USA, Hain Celestial and Leviton, major Long Island-based companies who decided to stay on Long Island, need to be understood, replicated, and acted on quickly and aggressively by local government.  The businessman in me believes that our elected officials spent a lot of energy in talks with Sbarro.  The cynic in me thinks that most of that energy was spent threatening to make them change their product description from New York-style to Ohio-style. 

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