Encouraging growth in industries outside the financial services sector is one aspect of a three-part strategy the Bloomberg administration has pursued since taking office in 2002. That strategy has also encompassed fiscal prudence and infrastructure investment, and Shobowale said the city intends to avoid repeating the mistakes of the 1970s, when quality of life declined and both residents and businesses moved out as a result.
He said that even during the 2002-2006 boom years in financial services, that sector's share of total employment in the city was declining. Among the industries the city has been developing include film and television production, which doubled citywide between 2002 and 2007, and biotechnology. To that end, construction on phase one of the East River Science Park is expected to be completed this year.
Shobowale noted that the Bloomberg administration began to reduce spending even before the current downturn, to avoid having to make drastic cuts in city services as the downturn grows more severe. However, one financial commitment the city is not scaling back is a $10.4-billion investment in its infrastructure. "It's the glue that holds economic activity in the five boroughs together," he said.
The EDC is involved in a number of public-private projects citywide, and Shobowale charted the varying degrees of progress some of the major projects have achieved. A milestone on one of them was achieved in November with the rezoning of Willets Point and Hunter's Point South in Queens. The two neighborhoods will be redeveloped for mixed-use, including workforce housing and retail.
The timelines of two major Brooklyn EDC initiatives--revitalizing Coney Island and the Atlantic Yards project--are less clearly defined at the moment. Shobowale said the goal with Coney Island is to turn it into a 12-month tourist destination, but at present there are only a few acres of the arcades and rides that made the area famous. Forward movement on Atlantic Yards hinges on developer Forest City Ratner Cos. lining up financing, he said, pointing out that the renewed commitment of Barclays to the project is an encouraging sign.
Another large-scale development tied to the railyards--Hudson Yards on the Far West Side of Manhattan--is "a question of timing," said Shobowale. Related Cos., which won the rights to the project last May, is waiting to start construction until the leasing outlook improves, he said. Most nebulous of all is the redevelopment of Penn Station, a project Shobowale called "incredibly thorny."
Despite the downturn and the numerous challenges it presents, Shobowale cited a number of ways in which the city is on steadier ground than it was in the previous downturn. Its bond rating is the highest in 80 years, 2008 was a record-breaking year for tourism and unemployment is less severe than compared to the post-9/11 figures. He acknowledged that the jobless numbers are likely to increase this year as the full implications of the Wall Street meltdown become clear, but said the more diversified economy will lead to a faster rebound.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
