Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSC and indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism. Right here, right now at the NYSC and at ICE's exchanges and clearing houses around the world. And now welcome inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
In the middle of a blistering heat of a summer heat wave, New York City is beginning to thaw and take stock of the impact of the economic winter of the COVID-19 shutdown. The region is entering phase four of reopening, following a full frontal attack on the spreading virus. The five boroughs and their surrounding neighbors have moved from being the epicenter of the global pandemic to serving as a largely successful example of how to effectively thwart it. I know from personal experience that there's still a long way back to normal. I walk through my neighborhood in the west village and pass old haunts now boarded up, before sitting down with my mask at some of the restaurants still standing, modified now with seating sections that used to be parking spaces in the narrow warren of streets of lower Manhattan.
Josh King:
Even without a resurgence in New York City, the economic conditions here will get worse before they get better. That's according to a July report from the Partnership for New York City, with the assistance of no less than a dozen consulting firms. The report, which is titled A Call for Action and Collaboration, predicts New York City will see a 7% drop in GDP in 2020 and 14% through 2023. The Partnership for New York City's ranks are comprised of the most influential business leaders in the city whose combined workforce includes over 1.5 million employees. The nonprofit's purpose, to quote its credo, is dedicated to mobilizing private sector resource and expertise to advanced New York City's standing as a global epicenter of commerce, innovation and economic opportunity.
Josh King:
Needless to say, this is a group of doers. So the focus of the report is not what has and will happen, but what to do about it. It's a sober but inspiring study of what new normal New York will look like and how to best prepare the city for the day difficulties of today and tomorrow. Our guest is Kathryn Wylde, the president and CEO of the Partnership for New York City and has served in a leadership role there since its founder, David Rockefeller, tapped her to run the partnership's newly formed housing arm in 1991.
Josh King:
She joins the podcast today to chart the path to our city's reopening and recovery. Our conversation with Kathy Wylde on the economic reality facing the city, how private enterprise and innovation will be central to its recovery and how the partnership per New York City will ensure that Gotham remains the city in the world. That's all right after this.
Speaker 1:
In our time of greatest need, we want to thank the true heroes around the world for stepping up, for taking care of us and keeping us safe. With your expertise, your commitment, your sacrifice, and your selflessness, we'll work together to create a brighter future. And we thank you for reminding us what really matters. From all of us, thank you.
Josh King:
Our guest today, Kathryn Wylde is the president and CEO of the Partnership for New York City, a position she is held for over two decades. Kathy joined the partnership shortly after its founding and served as the founding president and CEO of its major two affiliates, the New York City Investment Fund and the Housing Partnership Development Corporation. She serves in a number of boards and advisor groups, including the Federal Reserve Bank of New York and the NYC Economic Development Corporation. Welcome Kathy, inside the ICE house.
Kathy:
Thank you, Josh.
Josh King:
So I looked through the report, read it very closely. Sort of sandwiched in the middle is this paraphrase of the quote that a lot of people attribute to Ram Emanuel. I don't know where Ram got it, but it says, "To restate the obvious, COVID-19 is a crisis we cannot afford to waste in terms of finally addressing the needs for more affordable housing, reducing the high costs of doing business, modernizing infrastructure and ensuring equitable access to education, entrepreneurial and employment opportunities." Kathy, there must have been huge mobilization at effort to crank out the 67 page report replete with as much data and statistics as you could imagine for something that could have been a couple years in the making.
Josh King:
This appears even before probably phase two starts or in the middle of phase two, as we transitioned to phase three. What prompted you and the leaders of the Partnership for New York City and the consultants that you work with to say, we got to throw the whole kitchen sink into a document and lay it all out, a master plan for new New York?
Kathy:
Well, number one is the crisis of the COVID-19 hit New York first. So March 1st we had our first case, but within a matter of a couple weeks, we were 25% of the international cases in the world. So the city was just really whacked with the pandemic. As a result, we felt that the comeback, we had to be strong because the image of New York City was really tarnished in the process, as to whether or not we would be a city that was well prepared to deal with crisis, and whether we would be resilient enough to come back. So the key issue was for us to begin the comeback quickly, which means you had to have an agreement on what damage we had suffered, which is the first element of the report. And then what's the spirit in which we're going to go forward and rebuild our economy.
Kathy:
As we say in the report, the health crisis has peaked, and we seem to have done a better job than any other state in containing it at this point. So we have showed ourselves well in that respect, but the economic damage is just getting started. That's what we're concerned about now is we have more than a million people unemployed by the COVID. We've got a crisis of perhaps a third of our small businesses, 230,000 small businesses will not reopen. We have a huge hole in our city, fiscal and state fiscal situation, about 37 billion in losses and direct expenses due to the COVID, lost tax revenues. In general, we've got a big challenge ahead. So the idea is, when you're facing a crisis, get in there early, document what happened and make a plan for what you're going to do to recover.
Josh King:
So to give our listeners a sense of a person who got in there early, documented what happened and made a plan for how to recover. I've known you now for a couple years. I am one of your Rockefeller fellows. This class that had its one year program interrupted by this. So I've got to see you in action a little bit, but help our listeners understand the perspective that you bring to this. You split your time I think between Brooklyn and Puerto Rico, where your husband and a herd of dogs reside full time. As you were putting this plan together, where were you, how did you mobilize? How have you been spending your time?
Kathy:
Well, I've been for the last five I'm in New York City in Brooklyn, and for the last three weeks in the office. I flew to Puerto Rico on Friday so my husband would remember who I am. So I'm here right now, talking to you from Puerto Rico. But I have been in the city throughout this and largely at home obeying all the orders and wearing my mask. For the last three weeks, we have been in the office, but we're pretty lonely. The lower Manhattan is quite empty. As a result, we don't feel like we've reopened.
Josh King:
Yeah.
Kathy:
Even though we're at phase three.
Josh King:
We're at the stock exchange and I feel the same way. I was there last week. The floor is about 25 to 30% occupied, but the office building where 900 people usually come and go to work, I was there alone. I had a whole floor to myself and Ian Wolf, one of our producers, is holding down the Fort as well. But did it at least feel good to step into the building and to sit back at your real desk, as opposed to some second rate office chair that you might have had in your apartment?
Kathy:
Well, I was very happy to be back in the office, yes. There were about 10 of us that came back to the office for the last three weeks, in terms of my staff out of a staff of about 50. So we got a group there, but many people are still particularly concerned about using mass transit. That's been the big issue is, are the subways safe? Are the buses safe? The MTA, our transportation system has done a great job. They have closed the subways for the first time ever, We have a 24/7 economy and our subways have always run all night. They close them between 1:00 and 5:00 AM so they could thoroughly clean and sanitize them and disinfect them, move the homeless who were hanging out there out of the subways, and just clean it up so that people would feel comfortable going back in.
Kathy:
But it's still a problem. For one thing, not everybody wears their masks. Maybe 80% do, but it still makes you nervous. So we've got to make sure that our fellow New Yorkers are following the rules, keeping themselves and other people safe. We've got the office buildings very well cleaned up. We've got 1.2 million office workers, but fewer than 10% of them will be back this summer. According to our studies, maybe 40% by the end of the year. With the recurrence of the pandemic, with the outbreaks that are going on in Florida, California and other states, even though we haven't had a recurrent outbreak yet, people are still very nervous about going back into crowds, and that's what we are. We're a crowded city.
Josh King:
We are a crowded city and it's becoming progressively more so, Kathy, but this is not your first crisis. Your arrival to New York coincided with David Rockefeller's founding of the Partnership for New York City. When you came here in the late 1960s from Wisconsin, what was New York like in that period in what precipitated at the organization's founding?
Kathy:
Well, actually the organization was founded a bit later after the municipal crisis in the seventies. I came in the 60s, at which point we were seeing the loss of our industrial base across America. But in New York City, the waterfront was an industrial waterfront. We had a lot of companies there, American Machine and Foundry, American Can Company, Bethlehem Steel. Within a matter of five years, they had all moved out. A million people had moved out and this city went into fiscal crisis and economic crisis. David Rockefeller organized the Partnership at the end of the 70s, and the idea was business had to be prepared to avoid a new crisis, another crisis from coming, and business had to be organized to support the city through the challenges. So we worked with city and state government to rebuild the neighborhoods. The funding came largely from banks, about 80% of it.
Kathy:
The city gave their vacant land and we put together a partnership effort, public private partnership effort, which rebuilt the communities of the city and then gradually rebuilt the economy and attracted people back. So over the years, the partnership has tried to deal with every challenge that came along. After 9/11, when we had severe damage in lower Manhattan and to the city economy, many people said that. A big issue was the stock exchange to the time. Will the stock exchange move out? Will we be able to still attract people to lower Manhattan?
Kathy:
Well, thanks to the fast action and planning, lower Manhattan became the fastest growing community in the city. As people moved back in, some of the commercial buildings were converted to residential, but the World Trade Center was rebuilt with more than 12 million square feet of new commercial space. That has been a very successful rebound. However, I would point out that probably the economic impact of the pandemic, of the COVID-19, is about seven times the impact in New York City of what it was on 9/11. So this is a much deeper, longer crisis than we experienced then. So it's going to be that much harder.
Josh King:
But talking about federal funding in particular, secretary Minuchin said last week, and I'm going to quote him, "On the state issue, the president is not going to bail out check Chicago and New York and other states that, prior to the coronavirus, were mismanaged." And President Trump has implied the same, albeit in his own colorful phrasing. What does New York City need specifically out of the stimulus package being discussed right now in Washington?
Kathy:
Well, specifically we're looking for a few things. One is to reimburse the city for the lost tax revenues that they have experienced this year. We've got a budget deficit of nine billion, between this year and next year of nine billion dollars for the city. So that's one thing so that we can keep operating, but also we've got the need for education aid. That's a big challenge, this transition. We had 300,000 of our 1.2 million city school children who had no computer in their home. So how are they going to get online education? So, that's one area.
Kathy:
Housing aid is a second area because, prior to the pandemic, affordable housing was a huge issue and almost half our residents were paying more than 30% of their income and rent. Well, today that number is much higher. There's at least 100,000 additional deficit in affordable housing units in the city. Probably much more than that. So housing aid, rental aid is another important area, and then small business where we've certainly gotten some support out of the federal loan programs that have helped small businesses stay afloat for the first three months of the crisis. But the crisis is continuing. They're still not able to open, particularly some of those small businesses like restaurants and gymnasiums and consumer facing businesses. So we need additional support there from the federal government as well.
Josh King:
When employees do start to return to the office, Kathy, there is going to be the need for safe, efficient mass transit. I took the subway last week, largely empty, very clean, but certainly the city losing, I think, about $200 million a week due to low ridership and increase safety cost. Is this going to fall on private enterprise to preserve the city's population's mobility?
Kathy:
Yes. This is a huge issue. The MTA did receive, in the second stimulus package, 3.9 billion to help make up for their initial losses and to keep them going so they could take essential workers, hospital workers, and others, get them to and from work. They depended it on mass transit. So they were shepherding about a million people a day, but their usual number is between eight and nine million. So this is a complete drop off in revenues for the MTA.
Kathy:
They're looking out of the next stimulus package for another 3.9 billion, which they need to be able to keep their system functioning. We certainly, in New York City, we're totally dependent on mass transit on the subways. This also includes commuter rail that brings people into the city from the suburbs. Very important to have that. So that's the other piece, yes, that we are looking for the federal government to support us with.
Josh King:
Japan recently kicked off its $1.5 trillion got to travel initiative to encourage domestic tourism, which it hopes will help food and other hospitality businesses begin to recover. It's still early, Kathy, but there's been intense criticism to the plan and an overwhelming majority of Japanese citizens have chosen to pass on the opportunity. This suggests that it'll take more than just free money to unlock the economy. How do you change the minds and hearts of a frightened population? Get them to go back into the subway, get them to come back to the restaurants, get them to go into your building at Battery Park Place.
Kathy:
Well, vaccines would help. So we are hoping couple of our companies, Pfizer and Johnson and Johnson, pharmaceutical companies are both working on vaccine solutions. That's certainly critical to being able to restore confidence in being in crowded places. But in the meantime, we've got a number of efforts going on to try and, number one, make sure our buildings are as clean and certified clean as possible, and all protocols are being followed so that people aren't jamming into elevators or in a situation where they're at risk. So, that is a big effort going on that the private sector is leading.
Kathy:
In addition, we're now talking to a company called Clear that does biometric passes that helps people get through the lines in the airports quickly when they're traveling. They have a pass, a biometric pass where you can get through because your identity is secure. We're looking with them. They have a technology that says we also could have a health pass, that signals green when your health condition is secure. This would allow people to move around the city to various buildings, to restaurants, hopefully get back to the Broadway theaters, knowing that everybody in the theater has been cleared.
Kathy:
I think that's the kind of effort that's going to restore confidence. Testing and tracing is also helpful so that people know that, if in fact they're in a situation where they've had contact with someone with the virus, they're going to know a it and be able to get themselves checked out and taken care of quickly. So those are the kind of things we're doing. The worst thing that could happen would be a recurrence. If everybody had to close down again, after going through all the costs and difficulty of reopening. So, that's what we have to avoid at all costs.
Josh King:
A lot of the exhibits in your report show some of the industries most tragically affected by the coronavirus. At the bottom of that table is hospitality, entertainment, and tourism. Hotel occupancy down 82%. How large is the economic and tax impact from not having the tourists in this city?
Kathy:
The loss of tourism is a huge issue. 60 million plus tourists came to New York last year, and 20% of them work overseas tourists who are the big spenders when they come to the city. So our retail sector, luxury goods depend on them, the Broadway theater and all our other entertainment venues and the restaurants as well. So we've got a huge dependence, and our cultural institutions, our museums, art museums and historic museums. These are a big part of New York City and what draws the tourists. So the impact is substantial in terms of those losses. We have to figure out how to get them back, but it's going to be ... again, we're looking at a vaccine right now. There's a lot of concern about anybody coming into the city from other states, for example, because of the contagion and the fact that there's so much spread in other states.
Kathy:
So we are relatively under control in New York, but we get a lot of visitors from states that are not. So that's a big concern right now. So the tourism campaign is going to have to wait. One of the sad things is Broadway actors are out of work. Well, I don't know if everybody knows it, but Broadway actors support themselves between acting gigs as restaurant waiters.
Josh King:
Yep.
Kathy:
So it is a double whammy for them, and we've spoken to the group, The Actors Fund, which is to support them and figure out how are they going to survive, because they certainly can't afford to pay their rent, because they've lost both their day job and their side job.
Josh King:
After the break, Kathryn Wylde president and CEO of the Partnership for New York City, and I will discuss how the economic impact of the pandemic put an unequal burden on small and minority owned business. Plus, how COVID is accelerating trends that we're already affecting New York City. That's right after this.
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Josh King:
Welcome back. Before the break, Kathryn Wylde, president and CEO of the Partnership for New York City, and I were discussing the partnership's new report on how COVID-19 impacted New York and some of the actions to help the economic recovery of the city. Kathy, Governor Cuomo announced that all non businesses would close on March 22nd. That's about the date that I left the city and left the New York Stock Exchange, only to return when he came back and reopened the exchange back on May 26th. But for New York City, that meant that most small businesses were closed for longer than three months. Your report states, I'm going to quote it, "That means that funds to restart payback rent by inventory are exhausted, leaving tens of thousands of entrepreneurs at risk, particularly business owners of color." What's the scope of the small business problem and why were female and minority owned businesses particularly impacted?
Kathy:
Well, we've got 230,000 small businesses with fewer than 50 employees in New York City. About half of them are owned by first generation immigrants who may or may not have a bank relationship, be English speaking. The same is true of the businesses, the most of the minority owned businesses. Black and Hispanic owned businesses are in Black and Hispanic communities, and they are heavily dependent on direct customer interface. They're mostly brick and mortar businesses offering services and retail goods, except for those that are grocery stores. They were considered essential and they were allowed to operate throughout the pandemic. But other than the deli's and the bodegas that were able to stay open, all these businesses were closed and most of those businesses have a month or two of spare cash, but no more than that. Those that were eligible and could get a bank to originate a loan, a federal loan for them.
Kathy:
Those loans that the federal government provided were extremely important, but they only covered keeping your employees employed and then a small amount toward your rent. But that was it. So they were coming out of pocket for the rent and, with the end of that loan, even if it's forgiven, which hopefully it will be in most cases, they are still stuck with no cash and probably a very limited bank relationship at that point. So the question is capital access. Many of them, as I said, were not online. In order to come back, they really need an online presence and a reach to their customers. That's going to be a big challenge for them. They need support with accounting and other issues to how do they figure out ...
Kathy:
Admittedly, we have a large underground economy in the city. Many small businesses were probably not entirely on the books. They did not get federal loans and they're now stuck with ... and they probably don't have a bank relationship, and they are concentrated in low income communities. Low income, low wage workers were the first to lose their job. Just in the retail section 540,000 in the small business section. 540,000, mostly retail workers lost their job due to the COVID and are out of work. They tend to be minorities. They tend to be concentrated in certain neighborhoods. So there's a double whammy. People don't have money to spend, your normal customers are broke, and the small businesses as a result have no basis to reopen.
Josh King:
To help rebuild the entrepreneurial base, Kathy, you propose a one stop shop for entrepreneurs. What will that look like, and who are you working with to bring small businesses the support that they need?
Kathy:
So we're partnering with New York City Government, the city's Economic Development Corporation and Small Business Services Corporation, as well as with the banks and with the chambers of commerce and local business improvement districts to try and set up a system where we can get information out to those small businesses most in need and collect resources. So this is such a giant problem. As I said, hundreds of thousands of business and employees, that you can't just treat it with philanthropy and one shots. You've got to figure out sort of how can we bring together expertise.
Kathy:
So for example, Fiserv is working with the Brooklyn Chamber of Commerce to go out and visit these businesses and find out how technology can help them get started again. Similarly, MasterCard is working with the small businesses, figuring out how to get funds and resources to black small businesses and support their efforts. So we're making those marriages, but again, it can't be one-offs. It's got to be organized in a system that we're rolling out, hopefully in the next two weeks with New York City, to be able to say, let's bring all our resources together. Let's bring the volunteers. These are lawyers, accountants, as well as technology experts. Let's get these small businesses every kind of support they need.
Josh King:
Do some of the difficulties facing entrepreneurs in New York stem from structural problems that, while exacerbated by the pandemic, were already a growing issue in our city?
Kathy:
Absolutely. The transportation system was already aging, crumbling, needed major investment and repair. That still is the case. We had a $51 billion program to modernize the MTA that was approved this year. We were introducing congestion pricing to help pay for it in the central business district. That plan has gone up in smoke now in terms of not having the resources to be able to do it. Similarly, affordable housing. We have a huge shortage when it comes to affordable housing of probably 650,000 units. Well, that's now are 760,000. These numbers have grown because of the pandemic, but they were problems before.
Kathy:
Here's where the difference is. We had a very divided community. Development growth, the city in 2019 was at its all time high in terms of numbers of jobs, in terms of economic output, close to a trillion dollars, in terms of all good things happening, the innovation economy growing, the technology sector growing. Good things were happening. But the growth came at an expense where real estate became more valuable and people that were of lower income, people who are service workers, felt left out, felt afraid, felt gentrified. So we had a huge problem with the population, a growing number of people. You remember just a year ago, February, we basically rejected Amazon's offer to build a new headquarters in Long Island City and bring 24,000 jobs, which certainly we in the business community strongly supported.
Kathy:
Well, the politics of division basically drove Amazon out of New York City and cost us that major investment. That was happening more and more. We lost a half dozen major residential rezonings that were designed to up zone neighborhoods so that more affordable housing could be built there. The neighborhoods and their elected representatives said no. So we were facing a crisis of fear, of people feeling left out, of people feeling the city was no longer their city. They couldn't afford to be here anymore.
Kathy:
So we are hoping that a silver lining of this pandemic is that we all come together and say, look, we have to make this a city that is more affordable and then job opportunities and prepares and educates kids for the jobs of the future. We have to make this that city again, and that's business, that's labor unions, that's government working together. So I am hopeful that the politics of division, which we've seen on a national level in our country, and we've certainly experienced in New York City in the last five years, where we have been our own worst enemy in terms of getting anything done. So, that's what I'm hoping.
Kathy:
Certainly the stock exchange reopening in May with the governor was a terrific example of commitment to New York City. It was something that they didn't need to do at that moment, but it was a signal that business is going to be in the lead. So we thank you for that. That was a really important gesture. Stacy Cunningham worked hard to make that happen with the whole team., so we really appreciate that. Business in general is stepping up with philanthropy, with commitments. The difficulty is that we don't have an infrastructure, not a physical infrastructure. We haven't got the relationships anymore.
Kathy:
In the 70s and 80s, we built a community development movement that the neighborhoods really had a way to sit down at the table and work on real solutions, not just protest against the wealthy, protest against development. Back in the day in the 80s, we were able to work together to solve problems and say, what would be good development for this community, how we can finance it with mostly private funds at the time, and how we can go forward together. We have to see that happen again now, and I'm very hopeful that it will, and that the tone, the political tone will change to one that is far more positive.
Josh King:
My two kids are both students in the New York City Public Schools, and I watched them, Kathy, in their bedrooms struggle every day during the spring to match the kind of learning and interaction that they had in class. Technology companies and internet providers have both stepped up to assist the Department of Education. You talked in your report how they used days, not months to come up with a new curriculum and new approach to technology to get kids back in the classroom after the one week closure. But now that we're facing at least one more semester of remote learning, how do you transition from an emergency reaction to a long term solution in the New York City Public Schools?
Kathy:
Well, the school system called it blended learning, which means that it includes time in the classroom, face to face time for half the time, and then time in front of the computer and working on online learning. I think it's going to be a big challenge. It's something that we are organizing the ed tech community in the city to help with. Google classroom stepped up at the beginning of the pandemic and provided a platform to get this started. Other companies like Imagine Learning and others have come forward and provided the emergency tools that we needed. But a lot more is going to have to be done, both in terms of the professional development of teachers, because parents ended up finding that they were spending a lot of time educating their kids. We really didn't have the systems in place for remote learning in terms of having the teaching facilities and the support that the kids needed.
Kathy:
So it ended up being the parents. That can't continue forever, especially if the parents have a job. So the next challenge is going to be how do we work the private sector and both the city school system, but also this is true in the universities as well. They're going to be doing a lot of their work by remote learning. So New York is a university town. We're very dependent on the talent that the universities attract here and on their contributions to the city, to many of our industries, whether it's life sciences or the whole tech sector. We're going to have to work to make sure that we have the best blended learning experience in the world. I think New York is very capable of accomplishing that, and that's something that certainly is a top priority.
Josh King:
So speaking of talent, Kathy, the Partnership for New York City has already had a longstanding initiative to bring together businesses and educators to make sure that companies can find the right employees now and in the future. How are you working to make sure that New Yorkers, regardless of race, gender, income, are provided with all the opportunity that the city has to offer?
Kathy:
Well, that's a good point. Certainly we have tried. We've started some projects to get companies working together, but I think they're ... I can't steal the thunder, but there's going to be a major announcement in August of a job skilling program that's directed and bringing together workforce development and education, which we've kept in separate silos in our country for many, many years, where you either were a vocational student going one direction, or you were headed to college and profession in the other direction. We haven't done a good job of integrating those activities.
Kathy:
So where a credential in the computer science area doesn't have to be a bachelor in liberal arts to get that and it's a very good job. So we've had little bits and pieces of that starting to happen in the last 10 years, but now we've got to make a full court press and the critical element here, because the economy and job requirements are changing so fast every day, there's new equipment, new technologies that people have to learn in these kind of lifetime learning. Employers must be major contributors to this effort and a program that is going to put employers front and center in that effort is being launched in August.
Kathy:
We're very excited about supporting that effort. I can't give it away because I would be up staging one of our key members. So I don't want to do that, but you're absolutely right. It's a top priority, and New Yorkers have to feel that the innovation economy has a job for them. We have been too slow to making that clear. That was one of the reasons we lost Amazon is people said 24,000 jobs, but they're not for my kids. Well, that's not going to be true any longer.
Josh King:
Well, when the new announcement comes out, we will have your partner on the show and have them inside the ICE House. Kathy, as we wrap up, we've covered a lot of ground and there's still so much more ground than we could cover. Everything that we've talked about though takes dollars. We've discussed some of the budget issues facing the city due to expenditure and tax shortfalls. This has led to calls for billionaires tax and a worker bailout fund. Why do we agree with governor Cuomo in opposing such measures?
Kathy:
Because right now we have to be thinking about the big picture of how do we keep to taxpayers in New York state. So an estimated half a million people who could afford to left the city, and many left the state during the COVID. They've been gone for five months. We need them back. Just like you mentioned earlier, we need the tourists back. We have to think of a message that's welcoming to bring people back. We are the highest taxed state in the country on both business and individuals. We already have a millionaires tax. It was interesting because the pickets that were out supporting, advocating for a billionaires tax, they were picketing an apartment that Jeff Bezos bought in the city. Of course, Jeff Bezos is not a New York taxpayer. So he doesn't live here.
Kathy:
We want billionaires to live in New York. We want a rich diversity of people to live in New York so that we don't lose our tax base. So our challenge right now is hanging on to the tax base that we have and rebuilding it. That's not going to happen by putting punitive taxes on certain groups who are highly mobile and may not come back. So that's what we are arguing. Now that doesn't say that we'll necessarily get through the next two or three years without having to have revenue increases for the city and state. But those should be worked on together.
Kathy:
You mentioned congestion pricing of automobiles coming into the city. We'd still like to see that happen. There are other possibilities that could be put in place. God forbid, a marijuana tax if we can pass a marijuana law. There are ways that we can be entrepreneurial in the city and state and not discourage a competitive tax environment. We want to bring billionaires back to the city.
Josh King:
I think you mentioned at the first half of the show that the economic impact from COVID maybe seven X what it was over 9/11. We came across a report from November, 2001 that wrote on the potential economic impact of the attack on the World Trade Center. It not only outlined the scope of the crisis, but also provided a list of priorities for public and private sectors. The transformation of the exchange district that came out of those suggestions is highlighted in your current report, A Call for Action and Collaboration as an example of successful teaming of federal incentives, business investment, and community development. Do you think the playbook can be repeated on a grander scale this time?
Kathy:
We certainly think it has to be if New York is going to come back in a relatively short period of time. We are confident in the long range recovery of the city, but what's important for the people who are here, who are suffering the economic impact, the million plus unemployed, the small business entrepreneurs, it's important this happen quickly. That's what we're striving to do is to help this happen quickly for the public and private sectors, business and labor, communities all to work together to bring back the city that we know and love.
Kathy:
It will be different. We'll have to have health concerns at the top of the agenda, community health in particular. That's for sure. So everything is going to be the same, but we are confident that people, one, we love the city. Two, the city offers a tremendous opportunity for everybody. There's no place where you've got more variety of jobs, of opportunity, of educational, of arts and culture. It's all here. It's been on pause for five months, but it can all come back.
Josh King:
Sinatra sings that if I can make it here, I can make it anywhere, or some version of that. We've been concentrating this conversation on New York City, but is your report easily transferable to some of the other urban centers that are also in the news every night, some of the issues that they're facing?
Kathy:
Absolutely. I think the issues are very similar. We didn't talk today about security and crime issues, which crime was down when everybody was in their home, required to be home during the first part of the COVID. But since we've started to reopen, obviously crime has gone up. Shootings are up. We had a period of looting, which fortunately has largely ceased, but we have similar problems, whether it's Chicago or Los Angeles, Miami. We all have similar challenges to face across the country.
Kathy:
The COVID has been hardest on Black and Brown populations. It's been hardest on low wage workers who are the first to be laid off, and I think it's been an important lesson to all of us, that we have to care about these issues in good times when we have the resources to deal with them and we have to care about them now, if we're going to rebuild, and we have to figure out how to put together those resources. It's going to have to take a lot from the private sector, and I think they've shown to their initial philanthropy and the investment they've made in making their buildings healthy, in setting up remote work. The financial industry, professional services, the media industry, they have all kept going through this crisis. They've done that because they, one, were prepared and understood that a disaster was coming. Many of them experienced it in Asia and Europe before it got here.
Kathy:
So they were in the lead in terms of responding to the challenge, and they are very committed to the future of cities, not just New York, but to cities around the country and the world. Because as David Rockefeller said, cities are the essential platform for business in a globalizing economy where everyone that you need to meet, you want to meet, they can be in the city and you can be together there.
Josh King:
We began our conversation talking about the backdrop against which David Rockefeller started the Partnership for New York City. As we end, Kathy, why will NYC overcome this crisis like it has every obstacle that the city's faced for the past, not only 40, but 400 years?
Kathy:
Because we're tough and we're pragmatists. It's a mercantile society. I don't know if you've ever read Russell Shorto's book Island at the Center of the World, about how the Dutch business people founded New York City. He contrasts our culture to Boston's Pilgrim founding and says, the mercantile class are pragmatic above all things. We're not ideological. We want to get stuff done. That is the New York spirit. So I'm confident we will rebound.
Josh King:
As a Bostonian, I take no umbrage at that attack at my Pilgrim heritage.
Kathy:
Oh, I'm sorry.
Josh King:
Not really. I'm an immigrant like everybody else. Thanks Kathy so much for joining us inside the ICE House.
Kathy:
Thank you, Josh.
Josh King:
That's our conversation for this week. Our guest was Kathryn Wylde, president and CEO of the Partnership for New York City. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @icehousepodcast. Our show is produced by Pete Asch and Ian Wolf. I'm Josh King, your host signing off from the remote library of the New York Stock Exchange here in the Catskills of upstate New York. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE, nor is affiliates, make any representations or warranties express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing here and constitute offer to sell. A solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
