In our last newsletter, we suggested that office employees follow Mayor Adams’ advice and take the subway to work. In light of the recent tragedy in which a Goldman Sachs employee was killed on the Q train, I’d like to supplement my thoughts.
Obviously, in this city of 8 million people there will be terrible stories and situations. However, New York can not afford the steady drumbeat of bad news which is discouraging office employees from coming to work, let alone the damage to the city’s international reputation. The subway is the lifeblood of the city, and it is at risk of being choked off unless bold action is taken immediately to ensure rider safety.
Accordingly, now is the time for business to step up and help the city in a public-private partnership for the benefit of all. If employers want their employees to work onsite, they’re going to have to pitch in with time and resources to help solve this crisis. It is also important to bear in mind that this is not political. While the homeless and crime situations were always with us, pre-Covid crime statistics were at an all-time low in New York City. Rather than playing political games and casting blame, it’s time to do something. Government alone can’t solve every problem. The major companies that have benefited enormously from the City’s vast talent pool have to step up and contribute with their expertise – and they can make money doing it as I explain below.
Some of our readers may remember the city’s Municipal Assistance Corporation (MAC), a public-private partnership which was formed in 1975 by the state of New York that sold approximately $10 billion worth of bonds to help NYC stave off default when it faced bankruptcy. While the city and state are in far better financial condition today, we need a modern-day MAC that will provide additional funds for police, homeless relocation and social care, sanitation, education and housing.
Bonds can be underwritten to jumpstart the program. Business can’t sit on the sidelines. The likes of Goldman Sachs, JP Morgan Chase, SL Green and other major companies have benefited enormously from the access to the city’s talent and now is the time for them to be part of the solution instead of just carping from the sidelines. So here’s what these companies can do to help – they can underwrite the “Save Our Subways (SOS) Bonds” needed to help fund New York’s revival.
While we’re at it, who better than New York’s great real estate companies to contribute their expertise to renovating the city’s subway stations. They can help with such items as improved lighting, paint, fixture updates and regular clean-up throughout the vast system.
Of course, we know that some will say that these companies already are being taxed too much relative to other jurisdictions and there is some merit to that argument. But I am not calling for higher taxes. Moreover Florida, Texas and other locations competing with NYC for top businesses and employees are not perfect either. In fact, the Commercial Observer (which is no one’s idea of The People’s Daily) has just pointed out in two recent articles that the major social issues that are brewing in those states may make new offices in those locations less attractive to some businesses looking to expand or move – despite the low taxes there. And it’s not as if they don’t have crime in their major cities, and South Florida’s housing costs are now among the most expensive in the country.
We’ll leave it to the policy makers and municipal bond mavens to hammer out the specific details. But as a businessperson I know that just as the MAC was formed to avoid New York’s bankruptcy, there is currently a looming bankruptcy of the city’s brand. Dramatic action is needed, and fast. If big business wants to preserve the value of its franchise here, it is going to have to play a major part in New York’s recovery. This is all doable, but some creative thinking and capitalist self-interest are desperately needed. We’re sending out an SOS – for a Save Our Subways bond issuance that clearly demonstrates that NYC is tackling its problems with creative cooperation between the public and private sectors. It’s been done before.