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An Appealing City

Grand Central Station in New York City, mostly empty.
Grand Central Terminal, New York City, June 11, 2020. Photo by Billie Grace Ward.

When more than 160 top New York City business leaders appealed to Mayor Bill de Blasio to save the city before it is too late, I noticed that a couple of interesting names were not among them.

One glaring omission was Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co., the nation’s largest bank. The other was comedian Jerry Seinfeld. While these two absences were notable, neither was really much of a shock. Most people would not have thought of putting Seinfeld on that list of executives in the first place. But both he and Dimon, in different ways, have taken a public stance that the city does not need saving.

On Thursday, JPMorgan Chase told leaders of its sales and trading operation that they must all return to work at the bank’s Manhattan offices on Sept. 21. The bank will make exceptions for those with child-care obligations or underlying medical conditions that make them more susceptible to COVID-19. This announcement came just as the ad hoc coalition of business leaders released their letter to de Blasio calling for “immediate action to restore essential services as a necessary precursor for solving the city’s longer term, complex, economic challenges.”

Most companies run by the letter’s signers still permit nearly all their employees to work from home. The notable exception? The city’s leading real estate firms. Proprietors of office buildings that are still almost empty, months after shutdown orders ended, have a vested interest in demonstrating the safety and necessity of putting on office clothes and makeup, climbing aboard mass transit and lining up to ride in socially distanced elevators.

A point of interest: JPMorgan Chase is in the process of building a new skyscraper headquarters in midtown Manhattan. This gives the bank more in common with those other real estate firms than might be obvious at first glance.

For the most part, employers who are not in the real estate business are letting workers who can telecommute continue to do so. Many of those workers are in no hurry to return to the city. There is ample evidence that some may choose not to come back at all. The city can afford to lose some of them – but not too many.

“Despite New York’s success in containing the coronavirus, unprecedented numbers of New Yorkers are unemployed, facing homelessness, or otherwise at risk,” the executives wrote to de Blasio. “There is widespread anxiety over public safety, cleanliness and other quality of life issues that are contributing to deteriorating conditions in commercial districts and neighborhoods across the five boroughs.

“We need to send a strong, consistent message that our employees, customers, clients and visitors will be coming back to a safe and healthy work environment. People will be slow to return unless their concerns about security and the livability of our communities are addressed quickly and with respect and fairness for our city’s diverse populations.”

De Blasio wasted no time in missing the letter’s point. In a statement reported by The Wall Street Journal, he called on business leaders to support his demands that the city receive more money from Washington and more borrowing power from Albany. “Let’s be clear: To restore city services and save jobs, we need long term borrowing and a federal stimulus—we need these leaders to join the fight to move the city forward.”

But the city’s current conditions have little to do with its deteriorating finances. De Blasio has said the city might lay off 22,000 employees if more money is not forthcoming, but to date it has trimmed $2 billion from an $87 billion budget with minimal layoffs. Along the way, it shifted $1 billion out of a $6 billion police budget – as shootings and other violent crime surged this year.

On the other hand, writing to de Blasio was a pretty pointless exercise in the first place. He is a lame duck who must leave office after 2021 due to term limits. He is also responsible for the budget bloat that has added more than 33,000, or 10%, to the city’s workforce under his tenure. Power has steadily shifted to a City Council that afflicts New York’s businesses with a regulatory torture by a thousand cuts. This bleeding mainly burdens the city’s countless small businesses, not the large enterprises whose leaders voiced their concerns to the mayor.

It is those small businesses and their workers, largely in the outer boroughs, who are most likely to leave for the suburbs – or more distant locations – out of economic necessity. The big companies, with their skilled labor force, face a different problem. Their employees are realizing that many of them could live or work almost anywhere. Jamie Dimon may be able to bludgeon his Wall Street staff to come back to the city, at least for a while. But those who don’t want to be there may find other opportunities in due course.

The city’s advocates note that there is nowhere in America like New York. They are correct. I can’t think of any developed country that does not have one city that stands out as its cultural capital. Many are also the centers of commercial and political power for their societies: London, Paris, Berlin, Tokyo, Beijing and many others. Even though American political and economic power is more widely dispersed than in many of those places, New York City does not have a near rival. Seinfeld was correct when he observed this in an acerbic response to an acquaintance’s LinkedIn post headlined “NYC Is Dead Forever. Here’s Why.

But Seinfeld, like de Blasio and the CEOs who wrote to him, missed the point. Seinfeld recalled his own move to a dirty, crime-ridden Manhattan to launch his career in 1976. New York City was not dead even then; I don’t expect it will “die” now. But that does not mean it can’t become a miserable, hollowed-out shell of its former self. It has happened before, and it may be happening right now.

The suburban-raised Seinfeld just can’t see it. He moved from Long Island to Manhattan. He wrote about the East Village – not University Heights in the Bronx, where I grew up amid burning tenements. He didn’t write about Co-op City, where muggings in elevators and parking garages were ordinary features of daily life in the years before I moved across the country for college. Seinfeld did not write about Bedford-Stuyvesant, whose crime was such that Billy Joel put it in a song lyric to illustrate reckless behavior (“I walked through Bedford-Stuy alone”). He did not write about suburbs like White Plains, New York and Stamford, Connecticut, that transformed from bedroom communities to corporate centers in their own right as businesses fled the city. And they did so before remote working was even a possibility.

Yes, the city bounced back. But its recovery was not preordained. It required a fiscal control board and the financial wizardry of an investment banker named Felix Rohatyn. It required a stubborn and resourceful three-term mayor (before term limits) named Ed Koch. And it required a national economic resurgence that powered a Wall Street boom under a president named Ronald Reagan. The city’s fate might have been different absent any of them. It almost was different anyway, as the crack epidemic spread and crime surged late in the 1980s and into the ’90s. The city only turned around for good under Mayor Rudolph Giuliani and his first police commissioner, William Bratton. Theirs was the New York City, notably the Manhattan, viewers of Seinfeld’s television series saw.

Can New York do it again? Probably. Will it? The political environment today is hardly the same as three or four decades ago. The economic possibilities for its residents are different too. New York did not become the great city it has been in recent years simply by declaring itself so. It won’t recover that greatness if it embraces its own decline while labeling anyone who points it out as a putz.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

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