Midtown, 2025? (Photo composite: Ed Johnson/NYO; Photos: Getty)

It was but one line in Mayor Michael Bloomberg’s State of the City address in January, but it could prove to be one of the biggest of his dozen years in office.

“In the area around Grand Central, we’ll work with the City Council on a package of regulatory changes and incentives that will attract new investment, new companies and new jobs,” the mayor said from the stage inside Morris High School in the Bronx.

Hizzoner spent more time talking about Cornell’s Roosevelt Island tech campus, keeping the Hunt’s Point Produce Market from moving across the Hudson to Jersey and efforts to further expand the blue-collar workforce on the waterfront. Even the redevelopment of nearby East Fordham Road and Webster Avenue got equal billing with these vague pronouncements about “the area around Grand Central.”

Despite the scant mention, it turns out that for an administration that has never shied away from big plans, this may be one of the biggest projects yet.

In what is likely to be the latest, greatest and last of the grand Bloomberg rezonings, City Hall has turned its focus to Midtown East. Under the direction of City Planning Commissioner Amanda Burden, the administration has undertaken 115 rezonings in almost every corner of the city, remaking nearly a quarter of its landmass.

Now, it is time to remake the middle of Manhattan, to redevelop one of the most developed swathes of land in the world.

Midtown, 2000. (Getty)

It was not the first time Robert Steel, the deputy mayor for economic development, had considered the plight of Midtown East, but he recalled it as the moment everything came into focus. Around this time last year, the former Goldman exec and Wachovia chief was standing on the roof of the Hearst Tower two blocks south of Columbus Circle, gazing out at the city surrounding him.

The Hearst building itself is an apt metaphor for the plans the city is currently contemplating. Originally built by William Randolph Hearst in 1928, the Art Deco dandy rose to six stories, with plans for a tower to rise above. Those were waylaid, for nearly eight decades, courtesy the Great Depression. But it would take another great boom to see the project through, and in 2006, the new Hearst Tower opened, with its faceted obsidian exterior, a gem of modern office life.

It was created by the high-tech practitioner and Pritzker Prize-winner Sir Norman Foster and received a LEED Gold rating for sustainability, the first office tower in the city to do so. The base of the tower remains, a nod to history, but it was gutted to make way for a soaring lobby, complete with a waterfall that recycles rainwater, helping to cool the space and cut down on A/C costs.

This is precisely the sort of building that Mr. Steel wants to see more of in Midtown, still the heart of the city’s commercial core.

“Think about what Midtown was historically, the Pantheon for corporate America,” he said during a recent phone interview. “It was lots of jobs, but also a symbol for all the Fortune 500 companies.”

But it was not so much the Hearst Tower as the ones surrounding it that got Mr. Steel concerned. A few blocks south, Mort Zuckerman was getting underway on 250 West 55th Street. In the distance stood the new Times headquarters, and across the street the still mostly-empty 11 Times Square. To the north was the Time Warner Center, and most telling of all, 3 Columbus Circle--another 1920s beauty built for General Motors, shoddily reclad in glass during the last boom by Joe Moinian, an effort to modernize the building.

Were Mr. Steel standing on the other side of Midtown, say atop the Bloomberg Building, he could point to almost no new development whatsoever besides the tower his boss and Vornado’s Steve Ross had built in 2004. And even then, the top half of that building, like the Time Warner Center, is filled with apartments for the likes of Jay-Z (Time Warner) and his wife Beyonce (Bloomberg). What new development there might be is much closer to 3 Columbus, buildings that have been “refreshed,” than anything built new, from the ground up.

The city wishes this were not the case, but given the vagaries of Manhattan development, from the challenges of clearing out tenants to the cost of construction, the status quo is often the easiest choice for a landlord to make. Developers argue that they need incentives, namely air rights, to do anything more. The number of new buildings could be counted on one hand.

“While new windows and HVAC systems can be installed, the fundamentals of ceiling heights and column configurations are fixed,” Mr. Zucckerman, chairman of Boston Properties and owner of a number of buildings in the area, including the iconic Citicorp Tower, said in an email. “To incentivize owners to empty leased office buildings and replace them simply requires that a much higher density be allowed.”

When the city began to look at solutions, the administration was struck by just how severe the situation in Midtown east had gotten. “We did an audit, and we found that 80 percent of buildings were more than 50 years old,” Mr. Steel said of Midtown East, roughly 39th Street to 57th Street, east of Fifth Avenue. “Basically it feels like the 1940s in a lot of places. We just think this should be a showcase place for the city, especially around Grand Central.”

But the city is focusing on much more than just Grand Central, based on a preliminary presentation it gave to community boards earlier this month, with the potential upzoning of the entire area. Still, there is a special focus on the blocks around the train station, as well as along Park Avenue, seen as especially valuable as well as especially outdated.

The entire rezoning might not cover the largest footprint of any the administration has undertaken, but it could well have the largest impact. Stretching to Second Avenue in the 40s and Third Avenue in the 50s, the current study area measures 85 square blocks, roughly 250 acres of the most densely developed property on earth. It is equivalent to about 10 Hudson Yards.

Yet compared to a place like Hong Kong or Singapore, the densities are piddling. “On a macro level, we have to remain competitive on a global basis in terms of creating modern office space,” real estate scion and Association of Better New York chairman Bill Rudin told The Observer. “Back in the ’80s, they shifted the zoning from the East Side to the West Side, and it kept going out to Hudson Yards. But Park Avenue is still very desirous.”

Steven Spinola, executive director of the Real Estate Board of New York, put it in even more stark terms. “Right now, our buildings top out around 50 stories,” he said. “Why shouldn’t they top out around 80 stories? They do in a lot of other great cities.” According to one much-discussed proposal, they could, with air rights jumping as much as 50 percent in certain areas.

An initial proposal is to be released on July 11, and the city hopes to begin the arduous public review process by the first quarter of next year—just before the notorious countdown clock at City Hall blinks off.

It all starts with Grand Central. (Getty)

There are those who fear that the city is putting the cart before the conductor. One of the big arguments for rezoning Midtown East is the arrival of East Side Access, which will usher the Long Island Railroad into Grand Central by the end of the decade (assuming no further delays). The Second Avenue subway might someday reach the area as well. But at the same time, the city has made massive infrastructure investments in areas like Hudson Yards and the World Trade Center site, where the Related Companies and Silverstein Properties struggle to find tenants. These expenditures, for expanding the 7 train and rebuilding ground zero, were partly based on the argument that Midtown had seen its day.

The case for reviving it is good, but not at the cost of these other areas, the thinking goes.

“The public is spending billions of dollars at Hudson Yards and ground zero, and for good reason,” Raju Mann, a former city planner and member of Community Board 5, said a recent meeting of the board. “We haven’t even seen what these projects have produced yet, so how can we be sure what’s appropriate for Midtown East?”

And yet developers outside of Midtown East areas are not worried, pointing out that the city’s proposal could take years, if not decades, to come to fruition.

“My first reaction was to be concerned about it, but the more I thought about it, it’s a really long-term proposition,” Jay Cross, president of Related Hudson Yards, told The Observer. He said the proposal could even be self-defeating. “It will also make these buildings more valuable, just perceptually, which will drive up the building cost,” he said. “That means they cost more to trade and assemble the sites, and by the time you’ve done all that, you may not be able to afford to replace the buildings.

Larry Silverstein shared this sentiment at the topping out of 4 World Trade Center on Monday, his shiny new office building that remains half empty. “My hunch is, we’re going to do fine,” he said, pointing to the drift of New Yorkers to both live and work in Downtown and Brooklyn.

There are other demographic shifts afoot, as well, though, that could undermine the success of the city’s plan. If one area has flourished during the past few years it is not Midtown East or Hudson Yards but Midtown South. As financial firms, with their love of shiny buildings and vast trading floors, have retrenched, the city’s tech sector has flourished, and it largely prefers old buildings to new. Even those firms moving to Midtown, like Facebook and Twitter, are setting up shop on Madison Avenue, filling spaces that are more Mad Men than Blade Runner. “We don’t know what the office of the future will look like yet,” Mr. Mann said.

Mr. Rudin pointed out that the two do not have to be mutually exclusive. “We need office space of all types for all types of tenants,” he said. “The important thing is that we plan for the future.”

The past is an issue, as well, as some preservationists worry about taking a full accounting of Midtown’s historic fabric before we begin bulldozing it. “I’ll be the first to admit that just because a building is X years old doesn’t mean it’s worth saving and reusing,” said Peg Breen, president of the Landmarks Conservancy. “But we can’t just plow it all under and build Midtown anew. Why bulldoze the place without seeing what’s there first.”

Vishaan Chakrabarti, director of Columbia University's real estate development program and former head of the Department of City Planning's Manhattan office, warned against knee-jerk preservation in the heart of Midtown. "This is the engine for the entire city," he said. "We cannot freeze it in amber. If we do, we'll end up like Paris, a museum and nothing else." Pro-development types love invoking Paris. It is the bête noire of businessmen the world over, apparently.

Still, the city argues that it is not obsessing over Midtown but instead finally giving it the attention it was used to in the past after a fair amount of neglect. “Really, this is a response to the five borough economic plan, which has focused outside of Midtown more than any administration ever has, I think,” Mr. Steel said.

This could be the case in more ways than one, as some traditional Midtown heavyweights, like SL Green, have felt neglected amidst the city’s westward expansion. Earlier this month, The Journal revealed that the city’s largest commercial landlord had teamed up with Hines, another player who has mostly developed along Third and Lex, to replace a clutch of turn-of-the-century buildings immediately west of Grand Central, on 42^nd Street between Madison and Vanderbuilt avenues. The city freely admits that it is working with local stakeholders to craft its plan but denies that they are the ones sketching it out.

"We will listen to what our partners in the private sector have to say, as well as the community, but this is definitely the mayor and his team's plan," Mr. Steel said. One City Hall source even called it "Bob Steel's baby," the marquee project of the deputy mayor since he joined the administration two years ago.

425 Park, in its prime. (Eral Soto)

One need look no further than 425 Park Avenue for proof of the problems with Midtown’s current zoning. One of those bland mid-century grandees, all flat glass planes, it was completed in 1958 and spans an entire block on Park. David Levinson, a partner at L&L Holdings, would tear down the 32-story behemoth if he could and replace it with something better. He is in the rare position of owning a building that will be empty of tenants coming 2015—normally a bad thing, were L&L not set on ridding itself of the low ceilings and column-choked spaces that fill the space.

“It’s an entire block-front on Park Avenue, and that opportunity hasn’t existed in my lifetime,” Mr. Levinson said with relish.

But he is confronted with the challenge of the zoning having changed three years after his tower was built, and were he to replace it, he would be left with a much smaller building. It is a problem faced by landlords all across Midtown East.

His clever real estate attorneys have determined that he could demolish all but the bottom quarter of the building and build up from there, getting as close to a new building as one could hope for. He has convened a private competition between 10 of the world’s top architects to solve this vexing problem.

Naturally, his fingers are also crossed that the city might solve this problem for him. “The zoning does not make this easy, but that’s the way it is, and we’re going to comply with that,” Mr Levinson said, “unless something changes.”

It might, and it might not. According to city planning sources, the proposal could get downsized to include only the immediate blocks surrounding Grand Central. There are almost 2 million square feet in development rights that once belonged to the Penn Central Railroad, currently owned by a little-known firm called Argent Ventures.

The city would add to that pot by a few million square feet, selling off the extra air rights, which would go to fund improvements to the surrounding streets and the spaces within Grand Central, particularly the local, and long-neglected, subway stations. This would benefit but a few developers owning surrounding properties. City Hall denied it has shrunk its scheme, but also admitted that it has yet to finalize the boundaries.

The administration is stuck between what it wants to build and what it has time to build. With thousands of constituents in Midtown, many with money to make and lose, it would be difficult to realize a sweeping plan within the next 18 months—public review alone takes seven. “I’m not even sure if there is unanimity at City Hall on what to do,” as one top land-use attorney put it. “I hope they can move quickly and not settle for the lowest common denominator.”

Even those critical or wary of the plan want to see it succeed, they just want to see it done right. The Municipal Art Society has long been a champion of Grand Central Terminal, helping to save it decades ago with Jacklyn Kennedy Onassis, and they have taken a keen interest in this project as well. Vin Cipolla, the group's president, hopes the mayor will take time in coming up with a plan, while realizing that if the administration puts it off, the next one might not take it up, either.

"Any plan for this area needs to be carefully balanced and worthy of Grand Central, the Chrysler Building and the Seagrams building," Mr. Cipolla said. "It’s a part of the city where the bar has to be very high."

And so do the buildings.

BluePRint pulls back the curtain on development. (Getty)

One of the more onerous aspect's of developing in New York City is the public review process, known as ULURP, a seven-month gauntlet of meetings and votes and editorializing about one's baby. But just as troublesome can be the act of getting to ULURP, a pre-certification process at the Department of City Planning that can take months, and sometimes even years, as city officials and planners get a project into the shape they want it and running environmental and economic analysis on the project.

The city just popped an aspirin on this development headache, or rather an Aleve, for a new program known as BluePRint, the Business Process Reform. It is meant to streamline the pre-certification process, Deputy Mayor Robert Steel announced at an ABNY breakfast this morning.

"These improvements will save applicants up to $100 million per year in soft costs and carrying costs," Mr. Steel said. "More development means more jobs for New Yorkers, and BluePRint simplifies the way applications are reviewed so those jobs can be created as soon as possible."

Since pre-certification takes place largely behind doors, with many moving parts, there is no set timeline for it, unlike ULURP, which has a seven-month clock for all the parties to act. This has much to do with the size of the projects and how much attention they need, the complexity of a site (over transit or a brownfield and so forth), and other factors.

Still, the Department of City Planning predicts certification will happen up to 50 percent faster for projects and provide a level of certainty for developers by codifying the steps in the process. “The pre-ULURP process has been the most problematic aspect of the public review process for real estate development," Real Estate Board president Mary Anne Tighe said in a statement. "It has been time-consuming, costly and unpredictable."

No longer. An entirely new per-certification review process has been created, which will launch in July. It has fewer steps with published templates and materials meant to help developers and their associates put together their applications. There will also be a new electronic system to increase coordination within the Department of City Planning as well as with outside agencies, a system that will also help developers track their projects.

The program will also aid the city in executing public projects, as well.

Many planners and developers believe that the ULURP process itself needs an overhaul, either because the community group has too little or too much power, but this first step should have developers in a better mood to proceed on these projects. They might even accede to some community demands if so.

5:45 The 116th annual REBNY banquet is just getting started at the New York Hilton. Chicago Title is having an invitation-only party on the building’s second floor.

5:46 As usual, the night’s official festivities begin with a cocktail party in the room adjacent to the Hilton’s main ballroom, where the dinner is held. Jason Muss, a principal at Muss Development, stands near the entrance to the room with Jared Kushner (owner of The Commercial Observer), Jared’s wife, Ivanka, and Fried Frank chief Jon Mechanic. “I love this party. It’s a great place to catch up with people,” Mr. Muss says.

5:50 The cocktail reception is quickly filling up. Simon Ziff, a principal at the financing company Ackman Ziff, stands near the open bar with his wife. “It’s overwhelming,” Mr. Ziff says. “Think of all the people here. A few seconds to say hi to each. That’s a lot of seconds.”

6:00  Hal Fetner, a developer who is building two prominent residential buildings with partner the Durst Organization, steps over to the bar. “The feeling in the room is always tied to the health of the market,” he says. So what’s the vibe? “Ask me later. It’s too early to tell. But I think things are good.”

6:01 John Santora, an executive at the real estate services firm who recently helped negotiate an agreement between landlords and the union that represents building employees, 32BJ, is chatting with C&W appraisal expert Brian Corcoran. “A lot of people worked on that deal,” Mr. Santora says of the negotiations. “I can’t take the credit for it.”

Steve Spinola, REBNY’s president, greets guests in the main room of the cocktail space. “We had to put a few tables upstairs,” Mr. Spinola says, indicating that attendance at the banquet has picked up from last year. “We got a lot of last-minute calls from people who wanted to come.”

6:17  Alan Weiner, the group head of Wells Fargo Multifamily Capital, one of the biggest lenders in the city, is chatting busily with Rob Speyer, one of the chief executives of the real estate firm Tishman Speyer.

Eric Deutsch, the former head of the Downtown Alliance who now is an executive at Montparnasse 56, a builder of observation decks, surveys the crowd. “My first job out of college in the early 1990s was with REBNY,” he says. “The market was terrible then and they barely had anyone at the banquet. They made me sit up front during the dinner to make it seem like people were here.”

6:30  Congresswoman Carolyn Maloney strides in. “I just secured us $300 million, a high-speed-rail grant to develop a line between Boston and New York. It’s very exciting,” she says, taking a crab leg. After she’s done with the morsel of meat, she holds the shell and looks for the waiter. “Where do I put this thing?”

6:32 The room’s cocktail banquet is about 75 percent full.

6:45 Robert Lapidus, an executive at the real estate investment company L&L Holding Company, becomes enraged when The Commercial Observer asks him if he is bidding on a leasehold interest in the Flatiron office building 114 Fifth Avenue, as is rumored. “We’re not here to talk about fucking business!” he yells, grabbing The CO’s notepad and tossing it.

Gary Green, head of the building services company Alliance, briskly and very politely retrieves the notebook while Mr. Lapidus hurls epithets at The CO. Acting like a true gentleman—and also looking the part in a finely cut tuxedo—Mr. Green apologizes for his friend. “You can’t do that! Knucklehead!” The CO overhears him say to Mr. Lapidus.

6:46  Kenneth Fisher, a partner at the real estate investment company Fisher Brothers, tells The CO that this is the first REBNY banquet he has been to in five years. “Every time this year, I’ve been playing golf in the desert [at the Bob Hope Classic].”7:00

Jeff Roseman, a retail leasing executive at Newmark Knight Frank, squeezes through the crowd. “It’s a great place to see old friends.” He greets Steve Green, the founder of the city’s biggest landlord, the REIT SL Green.

7:05 “This is my childhood,” Helena Durst, looking elegant in a flowing dress, says of the banquet. “Do you like Christmas? Do you like Sunday dinner? That’s what this is for me. I have so many memories of coming to this party.”

7:09 Deputy Mayor Robert Steel and Councilwoman Jessica Lapin walk through the room together, busy in conversation.

7:15 Guests are being pushed out of the cocktail reception into the main dining room. The dinner is about to begin.

7:16 “Do I like this party? It’s OK,” Kathryn Wylde, head of the Partnership for New York City, says. “I go to a lot of parties.”

7:25 The CO bumps into Woody Heller in the men’s room and mentions to him a rumor that Will Silverman, Mr. Heller’s colleague at Studley, doesn’t sit at a desk but stands. “It’s true,” Mr. Heller says. “He has a swivel desk that can be lifted and he stands at it rather than sits. He says it’s more comfortable.”

Does Mr. Heller do the same thing? “I pace,” Mr. Heller says.

7:40 The crowd, now dense, is heading into the main ballroom.

7:41 Bruce Mosler, a top leasing executive at Cushman & Wakefield, chats with friends outside the ballroom. “A lot of my good friends are in real estate, so this is a fun night for me, I get to see them all,” Mr. Mosler says.

7:42 Paul Pariser, a chief executive of the real estate investment company Taconic, stands nearby. Known as an avid skier, The CO asks him if he’s been to Colorado yet this season. “There’s no snow!” Mr. Pariser replies.

7:50 Howard Michaels, of the financing firm Carlton, is making his way into the ballroom. “If you’re in the real estate business and you’re not at this party, you have to have your head examined,” Mr. Michaels says. “Want to know something? I almost didn’t come. That was the pep talk I gave myself.”

8:00 Already murmurs are going around about where the after-parties are going to be. “I’m not going to an after-party,” says Bob Knakal, chairman of the brokerage firm Massey Knakal, which during the boom years threw epic REBNY parties. “I have dinner plans with my wife.”

8:05 Steve Berliner, an executive at the brokerage company Studley, flashes The CO a stack of his business cards, which he plans to hand out. “Tonight is the best recruiting night of the year,” he says. “I started getting recruited to Studley six years ago at this party.”

8:20 The CO tells Amira Yunis, a retail leasing executive at CBRE, that she looks stunning in her black dress. It’s true, the former model does. Asked what her plans for the year are, she jokingly grabs The CO by the shoulders and shakes, “Make millions and millions and millions of dollars!”

9:00 The ballroom is full. But few people are eating. In the center of the room, Mitch Arkin, an executive at C&W, is chatting. “I haven’t eaten yet,” Mr. Arkin says. “I’m not going to eat.” What is he using for fuel, a hungry CO asks. “Adrenaline.”

9:10 “After-party is at Nobu,” Matt Astrachan, an executive at Jones Lang LaSalle, tells his colleague Mitch Konsker and C&W retail executive Brad Mendelson. “JLL party at 10!” Mr. Mendelson booms.

9:15 Dessert is being served. Some kind of chocolate-coated-ball concoction. The CO is still looking for dinner, finds a steak and eats it. It’s not as rubbery as rumored, though it’s certainly overdone.

9:45  Steve Durels, SL Green leasing chief, and Paul Glickman, an agency leasing specialist at JLL, walk out chatting. The banquet is winding down.

10:00 Kent Swig, with a closely cropped beard and carrying a few extra pounds, makes his way out. “I’m having a beer,” he says.

dgeiger@observer.com

• Wall Street, long known for its adoration of Barack Obama, has gotten over its presidential crush, thanks mainly to the commander in chief's insistence on strict regulation of financial services. [NYT] 

• A section of the Dodd-Frank financial reform bill will force companies to say by how many orders of magnitude their executives' pay dwarfs that of the typical workaday grunt. CEOs have concluded that this law will create a "logistical nightmare." Long division is difficult! [Financial Times] 

• On a related note, a recent survey indicates companies are planning on granting meager pay increases to employees in 2011. Those plans, however, depend on whether the economy emerges from the sinkhole in which it currently resides. [MarketWatch] 

• Ben Bernanke, Dick Fuld, Sheila Bair and Robert Steel will gather this week for a two-day Panic of 2008 Reunion Concert hosted by Congress' Financial Crisis Inquiry Commission. They'll play renditions of such classics hits as "Too Big to Fail," "Financial Meltdown," and "So Long, Lehman Brothers." [Reuters]

• "Robo-tripping," also known as "skittling" -- the practice of teenagers getting high on Robitussin -- is the latest moral panic, and so regulators may place additional controls on cough medicine. Pfizer and Johnson & Johnson, two of America's leading dextromethorphan dealers, think additional regulation would place an unnecessary burden on law-abiding syrup swillers. [Bloomberg]

Just what this will mean for the administration, its economic development agenda and its treatment of real estate and housing issues remains a question mark, as the former banker and top Treasury official in the Bush administration has yet to offer any real clues about where he wants to take the city.

To oversimplify things a bit, much of the economic development agenda for the past few years has essentially taken two major tracks. Principally, the city has been putting much effort toward moving forward on major long-term development projects that were conceived during the boom (Willets Point in Queens; the redevelopment of Coney Island), along with putting some resources toward smaller-scale projects (the first phase of the Hunter's Point South middle-income housing development is moving along). Secondly, the city has been trying to do a few low-cost incubators for various sectors of the economy, such as media and finance, in the name of spurring job creation amid the bust.

Mr. Steel, while he's lived in New York before, is not a well-known figure in the governmental and real estate worlds—at least not yet. He met with staff in a quick multi-day visit earlier this month, but generally has yet to make the rounds with developers and business leaders. 

His predecessor, Bob Lieber, is off working with real estate investor Andrew Farkas. Mr. Lieber's chief of staff, Tokumbo Shobowale, will stay in the same position for Mr. Steel. 

ebrown@observer.com

So Mr. Steel, who helped the city with a 2007 report that called for different and looser financial regulation, came down to the west wing of City Hall to chat. Then he met with the mayor.

And by Tuesday, everything was square away. The mayor announced the hire in City Hall's Blue Room, as Mr. Steel stood by, examining the room as the mayor spoke.

To many politicians, now is not the most opportune time to bring in someone whose roots are deep in the financial world. The public has an aversion to any talk of banker profits, and the reputation of Goldman Sachs-where Mr. Steel was a vice chairman-polls at a fraction of that of an unpopular Congress.

Mayor Bloomberg, by contrast, has shown no inhibitions about embracing the financial industry with open arms, and his tapping Wall Street for a top deputy from is only his latest move.

In the of spring 2009, when the economy hit its nadir-just as the banks were dipping to their all-time lows and even those within the financial industry were predicting a neutered recovery on Wall Street-Bloomberg administration officials took to preaching the sector's rosy return.

("I'm very bullish about financial services." Mr. Lieber told construction executives in April 2009, sounding at the time like he was talking about a different economy.)

And in the ongoing financial regulatory reform talks, the mayor has taken an upfront public position lambasting the industry's critics in Congress in an attempt to stave off injurious regulation.

(While the mayor is simply trying to play hometown hero, it should be noted that his personal net worth depends on the success of Wall Street, since it is in large part tied to his financial information services company).

Politically, Mr. Steel's hiring marks the arrival of another in a string of outside faces who will work close by the mayor. At the end of April, longtime aide Ed Skyler was replaced by Stephen Goldsmith, a former mayor of Indianapolis who won plaudits for innovative market-driven municipal governing practices and was a main policy mind behind the compassionate conservatism in George W. Bush's 2000 presidential campaign.

With Mr. Steel joining Mr. Goldsmith, there are now two officials under Mayor Bloomberg who worked in the Bush administration, and, a corresponding new Republican tint to City Hall.

Then again, the mayor went the other way with the other deputy mayor he recently hired. Howard Wolfson has been a longtime Democratic operative, working for many of the more prominent Democrats in the city.

In his brief appearance before reporters Tuesday afternoon, Mr. Steel did not touch much on the financial industry. Delivering his remarks with a subtle Southern accent-he hails from North Carolina-he instead took time to call for an economic development strategy that would "strengthen the city's historically strong industries, while also finding new ways to attract the kinds of businesses and industries that will be so important as the economy continues to change and evolve as we continue to move into the 21st century.

"A big part of that work will be finding new ways to support and encourage small businesses," he added, "and help them create good, middle class jobs, and we're going to do that in every borough and every neighborhood in the city."