(2005-04-27) Nyc Borough Econ Development

Transcript of Apr6 panel discussing Urban Development especially in Outer Borough-s. Panel members include Joel Kotkin and Fred Siegel.

• Joel Kotkin: When Jonathan and I were working on "Engine Failure," we found over and over again the biggest problem for Manhattan-based businesses was Real Estate, that it cost so much to locate in Manhattan that it made it very hard to start up... Maintaining that Middle Class base is really what the outer boroughs offer New York, and I think without it, New York would be in serious trouble... The hour, hour and a half Commute - the New York area has the longest commutes in the country. That is very family-unfriendly, and ultimately becomes a reason why the New York region has by far the largest out-migration of any part of the United States... I do think that by helping the boroughs, you are providing an engine for immigrants. Because, many immigrants, they have a much higher percentage of people with families, they need more space, they can't necessarily either afford the Manhattan Life Style or can live in that restricted space, and so the outer boroughs are really critical. And this is something that's true in other cities, as well, but peculiarly for New York. Because here's the danger - if you don't provide for the outer boroughs to be the seedbed for Entrepreneur-s, let's say among immigrants, they will go to the suburbs... In "Engine Failure," we found that New York had a reasonably high rate of immigrant entrepreneurship but that the businesses didn't tend to grow into larger businesses, as they have in, let's say, we compared it with Houston Tx and Los Angeles. You want these businesses not to just be family businesses, but to be generators of jobs in the entire Neighborhood... There were a million manufacturing jobs in New York in 1950, and there has been, I would say, an ideology which reached really its maturation, if you want to use that term, during the Lindsay years, and which was basically that manufacturing was doomed, and New York could do better things and higher-value things. All I would say about this is that manufacturing, there are certain areas, I think, particularly in the food processing area, servicing ethnic markets. We want to think about it, not so much as saving manufacturing, but keeping a more diversified economy, servicing more of the needs of New Yorkers, the New York restaurants, the New York retailers, with local production.

• Fred Siegel: A major - actually, the largest developer in the tri-state region said to me he now feels he can build anywhere in New York, without having to take special risks, because of the drop in Crime Rate... It's very difficult because of this hyper-centralization (of city political power) for local merchants to get help when they need it. Very hard. If they have a problem with construction, with city construction, Parking, whatever, excessive regulations, misunderstood regulations, they can lose an enormous amount of time and an enormous amount of business... I want to pick up something the councilman mentioned about the area west of the Flushing River, because I'm not quite sure I agree with him. He described it as junkyards. It is junkyards. It's also urban Entrepreneur-s - there's all these body shops. The question is - there's energy there, you want to clean it up, I understand that. But you don't want to clean it up in such a way to displace it all... Infrastructure was central to the life of the city until the 1960s, and, essentially, ever since then, infrastructure spending has been displaced by, first social service spending and now by social service spending and debt... Peter Vallone looked at the Transportation issue, and he said: why is there an MTA? Until 1969, until John Lindsay so mismanaged things that Nelson Rockefeller took over the subways and bus lines, the city was master of its own fate. The history of the city, after World War II, is a history of the city giving away control of its Infrastructure projects, one after the other, the 1947 agreement to hand over the airports to the Port Authority being the most significant. And Vallone asked the question, because he had this question of Queens transportation in mind: why is there an MTA? And if you think everything connects to the West Side Stadium, it does. Part of the reason the stadium issue is so resonant, it's got to do with this agency, the MTA, which can't get out of its own way, which is heavily in debt, which has mismanaged the commuter lines, and Vallone said: if we're the ones who are concerned with the subways, we should be running the subways. Why is Albany?... But the problem of non-responsiveness will not go away, and all I'm trying to suggest is it operates on many levels, from the need for BID-s to the need to look at the MTA and the Port Authority again... We have Big Retail by default. Think about the IKEA location in Red Hook - it's a natural manufacturing location. It's on the water, for God's sakes. So, why - well, there's no manufacturing because of things we talked about. The Gowanus - no truck can get on, the Gowanus is a parking lot most of the day. You can't have manufacturing there. That's one, and two, a subject we haven't mentioned all day - taxes. What manufacturer is going to locate in New York? The cost of operating in New York is simply too high. So, big box retail is the default use for that kind of space, in order to bring in more taxes and more revenue.

(Lots of other people wanting "the City" to spend money to increase Tourism and business migration to the outer boroughs, when they should be focusing on growing their own.)