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Leveraging Private Investment to Promote Small Business Growth and Creating New and Affordable Residential Neighborhoods are Part of the City’s Five Borough Economic Opportunity Plan
The following is the text of New York City Economic Development Corporation (NYCEDC) President Seth W. Pinsky’s remarks as prepared. Please check against delivery:
“It was a year ago this week that the collapse of Lehman Brothers ushered the world into a financial and economic crisis, the likes of which we had not witnessed in decades. As the crisis unfolded, predictions about how it would play out grew dimmer and dimmer. As the renowned NYU economist, Nouriel Roubini, put it in September of last year: ‘This is the worst financial crisis we’ve experienced in the United States since the Great Depression…there is no light at the end of the tunnel.’
“Indeed, the past year has been, in many ways, an incredibly grim one. Unemployment in New York City, for example, rose to 9.6% in July of this year, an increase of 4.2% from last July and the highest level since June of 1997. Wages in the City are expected to have declined $39 billion between fiscal year 2008 and our current fiscal year 2010. City revenues are expected to decline $5 billion during the same period.
“And yet, as the first “green shoots” of recovery begin to appear on what has felt like an otherwise bleak landscape, it is also important to recognize another side of the last year – a side where, even in the face of incredible challenges and adversity, we, as a City, managed to retain our optimism; managed to look past our short-term malaise toward a brighter future; managed to put shovels in the ground and make tangible strides toward improving and expanding this great metropolis.
“Just a few illustrations: In June, we opened the first section of the $145 million High Line project to critical acclaim, and we are currently working on construction of the second section as we speak. Also this summer, in July, we began implementation of the $165 million Sunset Park Vision Plan to revitalize the Brooklyn waterfront, where we have started infrastructure improvements at the South Brooklyn Marine Terminal and remediation at what will eventually become the Bush Terminal Piers Park. And we recently rezoned Coney Island to create a 27-acre entertainment and amusement district; 500,000 square feet of new retail; and 4,500 units of new housing, 20% of which are to be affordable.
“But even with these accomplishments – even with Federal Reserve Chairman Bernanke’s recent proclamation that the recession may be over – times remain difficult for many of us. We are not out of the woods yet.
“That is why the Mayor has used the downturn to launch a bold new plan, designed both to stabilize the City’s economy over the short-term and to expand and improve the City’s economy over the long-term. That plan, the Five Borough Economic Opportunity Plan is a three-part strategy to create jobs for New Yorkers today, invest in jobs tomorrow by diversifying our economy, and build affordable, attractive neighborhoods.
“Let me take a few moments to go through each part. The first aim of the Mayor’s plan is to create jobs for New Yorkers today. One way that we are striving to do this is by investing in infrastructure. There are two good reasons for this: it keeps people employed through the downturn and it positions the City to take advantage of recovery once the economy starts to move forward.
“To that end, in fiscal year 2010, the City expects to spend nearly $10 billion in its capital budget, which represents a 47% increase over the figure in 2001, the year before Mayor Bloomberg took office. Additionally, we are also using federal stimulus to supplement some of the City’s own spending. The Mayor’s office has estimated that the City will receive up to $4 billion in expense funding and $1 billion in direct capital funding over the next several years. Thus far, the City has already been allocated $261 million for shovel-ready infrastructure projects, which will go toward 25 projects, totaling $1.1 billion, and creating or preserving 32,000 jobs.
“We at NYCEDC used $6 million that we received toward completion of 20,000 square feet of retail space at the St. George Ferry Terminal. I am proud to announce, in addition to the two stores already located in the terminal, we have now negotiated leases with four new retailers, including the Island Soft Pretzel Shop, Statue of Liberty Deli, The Cobbler, and Fresh Juice & Ice Cream Delights. We expect stores to begin opening before the end of this year, and we expect to announce more deals in the coming weeks.
“While we work to help New Yorkers and businesses now, we are also focused on the future – which leads me to the second part of the Mayor’s recovery plan: creating jobs for tomorrow by ensuring a diversified economy.
“Certainly, we recognize the importance that financial services has played in the City’s economy – at the height of the market in 2007, financial services accounted for 34% of private sector payroll in New York City. That is why the Mayor released an 11-point plan in February designed to maintain the City’s position as the world financial capital.
“But we also recognize that we must develop countercyclical industries, so the City is better insulated from the booms and busts that are inevitable on Wall Street. So, for example, we have focused on expanding manufacturing and distribution. We are working to allow the expansion of the New York Container Terminal at Howland Hook, a facility that stands on City-owned property that is leased to the Port Authority and sub-leased to a private operator. The Terminal now accounts for some 15-20% of all container lifts in New York Harbor, and we are taking steps with the Port Authority to allow for expansion of this crucial facility, which is seeking to increase capacity by 75%, creating 200 new jobs and $50 million in incremental wages for Staten Islanders.
“We have also invested heavily in infrastructure, like the Arthur Kill Lift Bridge and the Staten Island Railroad. These transportation modes are now capable of handling containers bound for the Midwest and Canada, and, most importantly for a borough like Staten Island, which is grappling with intense traffic issues, it eliminates 100,000 truck trips per year from the roadways.
“In addition to manufacturing and distribution, we are also focused more generally in promoting entrepreneurship in New York City, because we know that companies with fewer than 100 employees account for 98% of all City businesses and employ roughly half the City’s private sector workforce.
“The assistance we are providing runs the gamut, including financial aid. We have successfully worked with Albany to reduce or eliminate the unincorporated business tax for some 17,000 small businesses across the City. We launched a program called Capital Access, where the City provides guarantees to private lenders in exchange for their agreement to offer $14 million in loans to businesses that otherwise fall below their lending criteria. We have also launched a new public-private angel partnership to increase seed funding for New York City businesses by 25%. And we are continuing to offer assistance through the City’s Industrial Development Agency, which has closed a dozen transactions on Staten Island in recent years, inducing $120 million in private investment.
“We are also working to provide entrepreneurs with low-cost space, including hundreds of discounted work stations at a wide variety of existing incubator facilities across the five boroughs. We are helping to create new incubators that range from university sponsors to facilities for technology and financial startups to a new kitchen facility for food-related businesses.
“Finally, we are providing entrepreneurs with training opportunities, including our JumpStart NYC and FastTrac programs. These programs are designed to teach recently laid-off individuals how to repurpose their skills for the startup world and entrepreneurs how to deal with the challenges of the downturn. I am proud to report that 250 students have already completed these courses, and we expect to help another 1,400 over the next two years.
“Outside of manufacturing and distribution and entrepreneurship, we have announced similar initiatives in media and technology, and we expect to announce initiatives in green technology, higher education, and the arts in coming weeks.
“This brings me to third prong of the Five Borough Economic Opportunity Plan, which involves building affordable and attractive neighborhoods. This is especially important, because we know that “quality of life” is not just a campaign slogan; it is good economic development policy. Only if the City is a desirable place in which to live will we be able to attract our most valuable resource: smart and talented people.
“As you know, of course, quality of life is a particularly important issue on Staten Island, the City’s most rapidly developing borough. Some examples of neighborhood development projects that we are undertaking to improve quality of life in Staten Island are the following:
“Yesterday, we announced alongside the Mayor, Borough President Molinaro, and other elected officials the New Stapleton Waterfront project. This is a 7-acre development at the long-dormant Homeport site. The project will activate the underutilized waterfront, invest in public infrastructure, and catalyze future investment in Stapleton and other North Shore communities. It includes 30,000 square feet of retail space, a new waterfront esplanade, and 800 residential units aimed at retaining young Staten Islanders. We estimate that the project will generate more than 1,000 construction jobs and 150 permanent jobs. The City is contributing $33 million in capital for infrastructure improvements, and we are hoping to catalyze $150 million in private investment from Ironstate Development. We are now working on infrastructure design and relocating City agencies on-site, and we expect to break ground in 2011.
‘There is also the Seaview project, a 15-acre senior housing development on the Willowbrook campus which will create more than 300 new assisted living and independent living units, including roughly 70 units for moderate-to-middle-income seniors. It addresses a pressing need in a borough where 12% of the population is over 65 and where the over-65 population grew by 15% between 2000 and 2008. The City is contributing $45 million for infrastructure to this project to catalyze tens of millions of dollars in private investment. This project was announced earlier this summer with Borough President Molinaro, Councilman Oddo, and the developers Metropolitan New York Coordinating Council on Jewish Poverty and Leewood Real Estate Group, and we expect to close on the land sale for this project by end of the year.
“So I started these remarks with a little bit of history, and I would like to end with a little bit of history. Let us look back again, this time to the Great Depression, a period which was far worse than anything that we are going through now. National unemployment hit 25 percent. 40 percent of national banks failed. The stock market lost nearly 90 percent of its value.
“But there were also those who had the courage to keep pushing forward – to keep building and investing – and the evidence of their forward thinking remains. Rockefeller Center. The Empire State Building. The Triborough Bridge. These icons that define our city today were all built during the Great Depression.
“This should be an inspiration to us, for as tough as times are – and they are tough – New York has been through worse. As long as we keep focused on the future, make the essential decisions and investments that need to be made, we will not only get through this downturn, but we will once again emerge a stronger and more vibrant City.”