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Gotham Gazette -- A Mistake In The First Place

A Recovery Package From Bloomberg

Gotham Gazette

The Place for New York Policy and politics

Citizens Union
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Trumpeting, both literally and metaphorically, New Yorkers' ability to get through tough times, Mayor Michael Bloomberg revealed a nine-part "recovery package" during his annual State of the City address Thursday, confirming to many attendees that the 2009 campaign season has started.

Meticulously orchestrated and equipped with its own theme ("New Yorkers. Together."), the mayor's address featured a small marching band brandishing the Brooklyn Dodgers label, a chorus from a Brooklyn elementary school and a documentary short courtesy of Ric Burns, which retold stories of triumph against tragedy in New York City.

The address, which the mayor usually uses to lay out his policy agenda for the coming year, focused primarily on getting the city through the current recession, including jump-starting a proposal to bring in 400,000 jobs. The mayor also focused on quality of life crimes, in an attempt to keep the city from reverting back to the 1970s, when core city services were cut amid an economic downturn.

"Our job is to help all those who are struggling -- help them improve their chances for a job, for keeping their homes, for making ends meet and to do it all without new funding -- because the city just doesn't have the money," the mayor said to a crowd of about 2,300.

Creating Jobs

In what could be his most ambitious proposal, Bloomberg suggested rescinding the unincorporated business tax -- a change that would need state approval -- and creating jobs through capital programs, including the construction of the recently approved Willets Point development in Queens. As of 2005, according to the city's Independent Budget Office, 22,900 sole-proprietor businesses were subject to the unincorporated business tax. The mayor's plan would rescind the tax for about 17,000 businesses at an estimated savings of $3,400 each.

Bloomberg also hopes to create thousands of "green" jobs by requiring private buildings to become more energy efficient. He intends on expanding job creation programs to accommodate 20,000 individuals instead of the usual 17,000 and hopes to make doing business with the city more accessible by putting certain permits online.

Many of the capital projects that Bloomberg attributed to future job growth in the city are nothing new, such as the expansion of the number 7 subway line and development of Hunter's Point South in Queens.

"If the speech only had those, it would have been fair to fault it for not having new, new jobs," said Council Speaker Christine Quinn. "But it had more than that."

Many of the mayor's proposals to spur job growth would need either approval from Albany or funding from the federal government, including his call for Washington to pay for new air traffic control systems at the city's airports.

Quality of Life

In addition to job creation, the mayor hopes to keep city streets safe and clean despite the lack of city resources. He wants to identify a dozen habitual quality of life offenders in each borough for "special attention" from law enforcement. He will call them "the dirty dozen."

Bloomberg will also ask the state legislature to approve a proposal making a seventh quality of life conviction in a year a felony. To combat the worst city crime, the mayor proposed to deploy cameras in the three neighborhoods with the highest murder rates.

Keeping in line with his development and education agenda, the mayor said the city would continue to landmark and rezone land in the outer boroughs and would urge the State Legislature to re-approve mayoral control of schools -- set to expire this year. Bloomberg also plans on launching a pilot 311 program, aimed specifically at getting information from the Department of Education to parents.

Cutting Costs

To address the city's skyrocketing pension costs, Bloomberg reiterated his call for pension reform, specifically creating a new tier that would save $5.4 billion over two decades. That proposal sparked applause from some fiscal advocates.

"It’s a very smart approach in our situation to try to do more with less, to try to get the most out of what we have," said Carol Kellermann, the president of the Citizens Budget Commission. "I was very, very happy to see pension reform."

DĂ©jĂ  Vu?

Some saw the mayor's address, held at Brooklyn College, as a kickoff to the mayoral campaign, when Bloomberg will be seeking a third term after winning a change in the city's term-limit law last year.

Welcoming the audience to his borough, Brooklyn Borough President Marty Markowitz said, "Now that term limits have been extended, so many in the city are looking forward to the mayor's massive job creation program -- by the way, it's also known as the Bloomberg re-election campaign."

The comment was met with laughter and applause.

While some attendees and city officials praised the mayor's address, others said the proposals were stale. Comptroller William Thompson, who is a declared candidate for mayor and is stepping up his criticism of the administration, said he has been working on many of the mayor's ideas for some time.

"There were a few things that you wanted to stand up and go, 'Uh wasn't that my idea?'" said Thompson. "I thought a lot of the vision the mayor put forward are things that I've recommended and suggested."

Thompson referred to his support of small businesses and attempting to increase the number of self-employed.

Others said the mayor's address provided evidence that he is equipped, ready and the right person to lead the city for the next four years.

"He reassured New Yorkers that we are going to have a positive approach to dealing with the economy, and we're not going to sit around and wait for the federal government to take charge," said New York University Professor Mitchell Moss.

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Gotham Gazette

The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

A Mistake In The First Place

By Robert Fitch

What value is history after September 11? Very little if it is true, as we hear so often now, that nothing for us will ever be the same again. Of course, it is true that no New Yorker alive today will ever forget the bravery of those $30,000-a-year police officers and firefighters who never flinched or gave a thought to their own safety. These working people of New York City raced into the tower to save those who earned 10, 20, and 100 times what they earned. Some acts are sanctifying, forever transforming the Earth we stand on.

And yet, on the day after the tragedy, September 12, Donald Trump said he stood ready to build the world's tallest tower on that same ground, on the site of the World Trade Center. Some things, we can safely assume, will remain the same.

We also heard for a while that because of the crisis following September 11, the present occupant had to be allowed to continue in office. Until recently, the most cited poet of September 11 has been W.H. Auden. His "September 1st, 1939" seems to contain uncanny premonitions of our disaster: "The unmentionable odor of death/Offends the September night." Perhaps, though, it might be useful to recall his equally prescient contemporary Bertolt Brecht, who wrote, "Those who lead the country into the abyss call ruling too difficult for ordinary men."

If the tragedy of September 11 can be exploited politically, to promote a sense of total rupture with our history, it can also be abused by economic interests to stimulate the need for a false continuity with the past. The aim of the terrorists, we are told, was to destroy New York's position as the Global Capital. In this, naturally, they must not succeed. To defeat them, we must rebuild downtown in a way that is greater and better than ever before. Says the mayor, the new towers must be "very large." Globalization now more than ever.

But how are these authorities able to interpret exactly what the terrorists mean? How can they be so sure of their own interpretive powers?

Ultimately, what ought to determine our civic response is not what the terrorists mean, but what we mean; not their motivations and intentions but our common interests and needs. And our understanding of the origins of the World Trade Center may help us figure out what those are, and what to do now.

DEMISE DOWNTOWN

Again and again it is said that New York has become the "nerve center of global capitalism." Is this true? If so, how did we get there? Is downtown, and particularly the creation of the World Trade Center, a response in concrete and travertine to the city's increasing dependence on world trade?

The truth is, postwar downtown development has been hugely subsidized by the government, relying chiefly on state power and eminent domain in order to overcome market forces.

Prior to World War I, downtown had all three elements of a Central Business District: mass transit, so that employees could get to office buildings; an upper-class residential neighborhood to provide consumers for luxury shops; and private risk capital in office buildings. After World War II, it had none of them.

The location in midtown of two great railroad terminals isolated the downtown district and threatened its survival. In 1910, the Pennsylvania Railroad built a terminal at 34th Street and Seventh Avenue. Between 1903 and 1913, the New York Central developed Grand Central Station at 42nd Street and Lexington Avenue. After having made a trip to midtown, commuters did not feel like making another one downtown. When leases expired, corporations and financial institutions began to move uptown. Downtown construction stopped dead. No major towers would be built there for almost half a century.

The city's real estate establishment expressed its concern in the 1920s. Their dilemma was obvious: Land owners could not move their land uptown to where the buildings and tenants had gone. How could they staunch the flow northward and get people and investment moving back downtown?

As early as 1921, the New York Times suggested moving the port of New York to Newark. Why? The port and its traffic created a clutter that depressed real estate values. So did manufacturing linked to the port.

The port had to go. More people had to come. In the 1920s, the Second Avenue Subway was planned to get more of the right people downtown. But while the Depression brought an unprecedented volume of federal funds, none came down for a Second Avenue subway. In 1941, it looked as if New York State would come through. Legislation was passed to move the port to New Jersey, create a downtown World Trade Center and establish a World Trade Center corporation headed by Winthrop Aldrich of Chase Manhattan Bank. Executive action, however, was stymied by Pearl Harbor and then World War II. National defense priorities precluded moving the nation's most vital port in wartime.

A TALE OF TWO BROTHERS

It was not until the 1950s that the political movement ripened. This time, Aldrich's nephew, Nelson Rockefeller, was governor. From Albany, he controlled appointments to the Port Authority of New York and New Jersey, which had jurisdiction over port location. Under Nelson, the Port Authority would remove the port and build the towers, becoming the city's largest landlord. Nelson's brother, David, was chairman of the Chase Manhattan Bank and chair of the Downtown-Lower Manhattan Association.

Together, the two Rockefeller brothers led the downtown urban renewal effort. Neither gave even a fleeting thought to relying on market forces or private capital to shape this second downtown. More relevant was the power of eminent domain that cleared the old Radio Row, the retail electrical district of 30,000 workers and small business people.

Beside more publicly financed office towers to irrigate parched downtown portfolios, what was the ultimate point? It was clearly expressed by the city's 1969 plan which expressed the higher real estate consciousness: "In the long run, New York does not want to retain the low skill, low wage segment of its industrial mix. The displacement of manufacturing activity in the Central Business District is the complement to the expansion of office construction which results in more intensive land use, higher investment and more jobs than the manufacturing activities they replaced."

1969 marked the city's all-time jobs peak: 3.9 million. Between 1960 and the present, the city would lose nearly three quarters of a million manufacturing jobs. It would never gain enough relatively higher-end jobs to prevent New York City from leading in income inequality, urban poverty and the number of citizens without health insurance.

Meanwhile, public subsidies sustained private real estate enterprise downtown. Billions in subsidies for the PATH train that brought commuters; billion in subsidies for rich residents who lived in Battery Park City and consumed in Tribeca. Hundreds of millions to the New York Stock Exchange and the Comex which extorted tax benefits in exchange for not moving across the river to New Jersey. Of course the deficits exacted a cost: Despite the 1990s boom, the only U.S. cities now more indebted on a per capita basis than New York are Philadelphia, which just emerged from bankruptcy, and Detroit, where grass and tree grow on tops of tall buildings.

HIGH TECH TO THE RESCUE

And yet, despite globalization, despite the growing debt and rising subsidies, as late as 1993, it still looked as if the renewal of downtown had failed. The Downtown Alliance, the successor to the Downtown-Lower Manhattan Association, seemed finally to recognize the futility of 40 years of state planning designed to return downtown to its pre World War I glory. The next new idea: a plan based on public subsidies to convert the office core to residential space.

But then came the great Wall Street technobubble. The old megalomania quickly returned. Far from being a second-rate artificial central business district, downtown touted itself as the nerve center of world capitalism. The capital of the global economy. Still, while Wall Street bonuses broke all records, employment in finance, insurance and real estate during the bubble years of the 1990s never even came close to reaching the peak of the Koch era boom in the 1980s.

The first years of the third millennium are turning into a decade of lost illusion. The image of American invulnerability, the End of History, the New Economy and of Wall Street as the cornucopia of wealth and security for all have been shattered.

Another illusion that we could well shed is the notion of Gotham as a natural adaptation to the global ecology. If we decide to rebuild New York's economic foundations directly on the faulty fault line created by financial speculation, at least let us not pretend that history tells us we have no alternative.

Robert Fitch is a journalist and the author of The Assassination of New York

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Read Rosemary Scanlon's article - The Symbol and Reality of Finance

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Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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