Hmm....I don't know about this one. The New York Times reports that Mayor Bloomberg plans to spend $45 million to retrain out-of-work investment bankers and attract foreign financial firms to the county. According to the NY Times: Just as Michigan is scrambling to retrain laid-off auto workers, New York City officials have come up with a plan to find new work for the unemployed of its core industry: investment banking.
Under a program Mayor Michael R. Bloomberg unveiled on Wednesday, the city wants to invest $45 million in government money to retrain investment bankers, traders and others who have lost jobs on Wall Street, as well as provide seed capital and office space for new businesses those laid-off bankers might create.
The plan is intended to stem the exodus of talent from the rapidly collapsing financial services industry, which has been the city’s economic engine for decades, and speed the industry’s recovery, which may take years, officials said.
City officials also plan to try to lure big banks and financial companies from Asia and other parts of the world to set up operations in New York, filling some of the void created by the implosion of large American firms like Lehman Brothers and Bear Stearns. They hope to receive permission from the federal and state governments to use $30 million in federal money to attract those companies and other financial firms to Lower Manhattan.
Mr. Bloomberg said in a statement that he could not predict how the financial services sector would bounce back, but he said he was confident that it would (read the rest here). Rebecca here. Mayor Bloomberg faces a contracting industry - finance - and a sharply declining tax revenue base. According to the BEA, in 2007 New York county claimed a total compensation base of $294.6 billion (cross-sectional comparison of total compensation in article here). And furthermore, offices are emptying at record rates in Manhattan. From the New York Times:
Just as office towers appreciated in value faster in Manhattan than elsewhere during the boom years, now their decline is outpacing the rest of the nation, brokers and analysts say.
Building values are dropping as unemployment worsens, offices empty, rents decline, credit remains tight and buyers expect higher rewards for taking on more risk.
“The outlook for New York is much worse than what we see outside New York,” said Sam Chandan, the president of Real Estate Economics, a research company in New York. Some people estimate that values in some cases have fallen as much as 50 percent (read the rest here).
It will be interesting to see what New York looks like when it emerges from this one.