New York Gets to Work
New York City is witnessing a remarkable economic resurgence. Last week, the New York State Department of Labor announced that the city’s unemployment rate has fallen to its lowest level in 30-plus years, to 4.1 percent. Over 47,000 jobs have been added to the work force since last autumn. As an economist with the Federal Reserve Bank of New York commented, “At the moment, everything’s pointing in the same direction, and that is strength.”
It’s all too easy to forget that after 9/11, many wondered if New York City would survive as an attractive place to live and work. Yet just six years after enduring the worst terrorist attack in world history, a subsequent recession and several years of active neglect by the Bush and Pataki administrations, the city has shown a resilience that is nothing short of astonishing. A lion’s share of the credit must go to Mayor Michael Bloomberg and his team, who have consistently made prudent choices when it comes to managing the city’s money.
For example, last summer, when the city reported a whopping $3.7 billion surplus for fiscal 2006, the Mayor ignored the clamorings of City Council members who wanted to spend the bounty on pet projects and voter-pleasing tax cuts, and instead emphasized the importance of setting aside the money to reduce debt and offset future pension and health-care costs. And when the city learned this month that tax revenues for fiscal 2007 would be $1.9 billion higher than anticipated, one could trust that the Bloomberg administration wasn’t going to rush out and go on a spending spree. Indeed, with expected annual budget deficits between 2008 and 2010 of $510 million, $4.1 billion and $3.6 billion, the Mayor has made it clear that shoring up the city’s long-term economic health is more important to him than spending the surplus to create an overly rosy picture of prosperity.
The low unemployment rate also reflects a renewed enthusiasm among New Yorkers to go out and find work; the promise of opportunity is in the air in all five boroughs. New construction in neighborhoods once written off as beyond repair, assertive development of the city’s waterfront, and a sense that crime and corruption are the exception rather than the rule—such factors breed optimism and a shared sense of purpose.
One must keep in mind, however, that even with the new unemployment numbers, the city has still not replaced all the jobs lost after the downturn of 2001. And while the budget surplus is welcome news, revenue streams that rely so heavily on Wall Street are highly unreliable. Moreover, census figures indicate that the city will be gaining 200,000 people in the next five years—at the same time that ballooning Medicaid and pension plans for current city workers will cost billions. It’s not time to pop the champagne just yet.
The Speyers: A Class Act For Stuy Town
The largest real-estate deal in American history was completed last week, right here on the banks of the East River, as Tishman Speyer Properties purchased Stuyvesant Town and Peter Cooper Village from Metropolitan Life for $5.4 billion. This massive property—with over 11,000 apartments spread between 110 buildings—is in good hands.
Tishman Speyer is building an impressive track record of taking important New York City properties and bringing new energy and vitality to them. Just look at the terrific job they did with Rockefeller Center. After that legendary limestone complex was neglected by the Rockefeller family and allowed to age gracelessly, Tishman Speyer revitalized its retail spaces and invested in the plaza as a major tourist attraction.
The Stuyvesant deal closed in a remarkably short period of time: 30 days. Tishman Speyer’s president and chief executive, Jerry Speyer, and his son, senior managing director Rob Speyer, are to be congratulated for their adroit and graceful handling of a transaction which had the potential to become a drawn-out tangle of special interests and public bellyaching. Indeed, the impending sale stirred up the housing market’s professional activists, who seem to regard subsidized housing as a basic human right. A group of tenants of dubious motives are still hoping to upend the sale by asking the City Comptroller to step in. But they ignore the fact that Peter Cooper Village and Stuyvesant Town have long been moving toward market-rate rents. Any developer who purchased the complex would be continuing that trend. The good news for tenants is that the Speyers bring decency, good taste, bold vision and a solid record to the table.
The $800,000 Librarian
When you want big-time help in New York City, you have to be willing to spring for big-time bucks. Talent isn’t cheap, especially in the rarefied world of New York power and influence.
That said, recent revelations about the high salaries earned by top officials of the New York Public Library raise more than just eyebrows. The library, one of the gems of Western civilization, has had some financial difficulties lately. Nevertheless, the library’s president and chief executive, Paul LeClerc, saw his total compensation jump by $221,000—to more than $800,000—over the last year.
Even in New York, that’s a pretty nice raise.
Other officials have been similarly rewarded. David Ferriero, the chief executive of the library’s research facilities, is earning nearly $350,000—about $118,000 more than his predecessor. Two other, newly hired top officials at the library are earning substantially more than their predecessors.
It bears repeating that talented people are going to make a lot more money in New York than they are in Philadelphia, Chicago or Seattle. The people who head New York’s great library are bound to make a lot more money than the people who head, say, the admirable Boston Public Library.
But it is curious to note that members of the library’s board act like they’re hiding something. When a reporter from The New York Times tried to question board members about the compensation packages, they were struck mute or, in the case of board member David Remnick, editor of The New Yorker, commented only to deliver a no-comment.
This is quite extraordinary. Mr. Remnick, as a journalist, ought to know better than to clam up in the face of a reporter’s inquiry. If he feels uncomfortable about the issue, or about simply taking questions from a fellow journalist, he ought to consider resigning from the board.
The library should handle this kind of scrutiny with a greater degree of openness. Surely somebody could have explained to the library’s customers, the ordinary men and women—rubes like us—who use the facilities, why these salaries are what they are. Only a handful of presidents of public universities make more money than Mr. LeClerc, and they have sprawling responsibilities involving faculty, administration, fund-raising and thousands of students.
The library recently had to sell off some of its artwork to pick up spare change. This may not have been the moment to hand out six-figure raises without explanation. Nobody doubts that the library wants and deserves top-level talent. But the board missed an opportunity to graciously explain to the public the complexity of running this wonderful institution.