Last year, Randy Peers moved the Brooklyn Chamber of Commerce from the 27th floor of an office tower in Downtown Brooklyn, where it had been located for 100 years, to the sprawling Industry City complex on the Sunset Park waterfront.
Greg David, The City
He knew that in the post-COVID world, a traditional office high up in a skyscraper wouldn’t help him attract the talent he needed to make the Chamber thrive. But Industry City offered an electric mix of small manufacturers, creative companies, the Brooklyn Nets’ practice gym, and a wide variety of unique retailers, food purveyors and cultural outlets.
“Seven thousand people come to work at Industry City,” he said. “I wanted some place that was unique and different and something interesting is always happening here and that’s a draw especially for younger people.”
As a result, he’s been able to mandate that Chamber employees come to the office three days a week.
In some ways, New York City is progressing toward a recovery from pandemic shocks. Most sectors of the city’s economy either plowed through the recession or have mostly recovered. Even the tourists are beginning to return in large numbers.
But the business districts at the heart of its city and its tax base are still ailing. Only a fraction of the city’s commercial office space — which totals nearly 500 million square feet in Manhattan alone — is occupied on any weekday. The lack of activity has meant jobs have not rebounded and, according to the city comptroller, within a year could cost the city as much as $600 million a year in property taxes.
Mayor Eric Adams and Gov. Kathy Hochul have punted the quest for solutions to a commission they call the “New” New York Panel, headed by two former deputy mayors — Dan Doctoroff, who served under Michael Bloomberg, and Richard Buery, who worked with Bill de Blasio.
A slide presentation from the panel this week highlights some sweeping objectives: the joint city-state panel will reimagine how people work, figure out how to return vibrancy to business districts, bolster the tax base and aim to engineer an “equitable recovery.”
While the panel has yet to provide specifics to accompany those lofty goals, the available options are clear to others who have studied the problem and talked to THE CITY in recent weeks.
Restoring a sense of safety, cleanliness and excitement in battered business districts is one often-discussed way to lure office workers back. The panel could decide many workers will never return and call for a transformation of areas like Midtown Manhattan into a mixed-use community where residential buildings are interspersed with office towers, where people can live, work, learn and play. They can also promote live-work neighborhoods by developing commercial hubs outside Manhattan.
Despite scores of pleas from the mayor and governor for workers to return to their offices. occupancy in the city topped 40% only earlier this month after languishing in the high 30s for most of the spring, according to data from the office systems company Kastle. While Kastle does not track government buildings, where occupancy is likely higher, it is a barometer of the trendline and of the risks the city faces.
“New York is a precious resource that is not an inevitability,” said Seth Pinsky, a key economic development official in the Bloomberg Administration who now runs the 92nd Street Y cultural and recreation center. “It would be a real loss if New York would be diminished and, if we don’t want that, it’s going to take work.”
The problem can be distilled to two measures: jobs and unemployment.
While the nation as a whole has regained nearly all the jobs lost in the pandemic recession, New York City has recovered only 77%.
The gap of 226,000 translates into an unemployment rate of 6.2%, compared with 3.6% in the U.S. as a whole.
“The problem is straightforward,” Buery told THE CITY. “How do we have a city including business districts that can be vibrant?”
Doctoroff spearheaded the economic development efforts of the Bloomberg administration, which centered on spurring developments in former industrial areas of the city, including seeding the residential boom in Williamsburg and Greenpoint in Brooklyn, and creating the new office, shopping and residential complex at Hudson Yards on a platform atop train storage tracks on Manhattan’s West Side.
Buery, who oversaw the successful launch of the city’s universal pre-K program as well as his de Blasio’s community schools and men’s initiative, now runs the Robin Hood Foundation.
They were recruited by current Deputy Mayor Maria Torres-Springer, though both insist the Hochul administration is in full support. They are in charge of an unwieldy group of 56 members, although their track records suggest they will be able to forge a consensus.
Doctoroff said they aim to come up with recommendations by October. He hopes to model his report on PlaNYC, the ambitious effort he led in 2007 for the city to confront climate change. The result was an agenda of specific actions undertaken by the Bloomberg administration, including the initial push for congestion pricing.
“The goal is to come up with very specific initiatives with a timeline and funding needs,” he said.
Buery and Doctoroff both insist the group’s plans will focus on equity, making sure that any recovery does not bypass underserved communities as so many previous economic rebounds have. One way to do that would be to give priority not to the central business districts, but to other areas in the city.
“COVID showed us we can’t be dependent on centralizing business in one main area,” said Emerita Torres, who heads the policy unit at the anti-poverty group Community Service Society. “To better develop local communities and bounce back better we need a rethink on local economic development.”
In a similar vein, Buery noted one strategy would be to consider new industries that support people working from home. Doctoroff said another key was mobility and access to employment as rents rise. “We know people are being pushed farther and farther away from better opportunities for employment,” he added.
Transforming Midtown into a mixed-use district has been talked about for most of this year with people pointing to how downtown was transformed, especially after the Sept. 11 terrorist attacks, by converting office buildings into residential.
During COVID, Brooklyn proved itself more resilient, losing slightly fewer jobs than the city as a whole during the pandemic and recovering them as recovered at a faster pace than the rest of the city.
“Our economy was not overly dependent on office workers,” Peers noted. “And if you were an office worker who worked in Manhattan but lived in Brooklyn, working from home benefited our commercial communities as those workers shopped in the neighborhoods.”
Even downtown Brooklyn fared better, with a significant residential population and retailers like Target and Trader Joe’s, which remained open in the pandemic.
“Downtown Brooklyn provides the lesson,” he added. “Mixed use, live-work communities matter and thrive through crisis and beyond.”
Midtown wasn’t that inviting even before the pandemic, notes Kate Wittels, an urban planner with the consulting firm HR&A Advisors, who paints this picture: “Commuters coming up the subway stairs, walking in line to their offices, rushing out at lunch to get in line for salad or soup, people rushing by not making contact.”
The solution, she argues, is to improve workers’ lives by offering more cultural attractions, professional development opportunities and a wider variety of services, and especially continuing investment in the urban experience.
Earlier this year, real estate interests began advocating for converting older Midtown office buildings that aren’t as attractive to companies anymore to residential use. But the effort faces enormous challenges, including changes to state laws allowing more density and relaxation of codes involving setbacks, open space and light.
More immediately, crime and quality-of-life perceptions are crucial.
Some 94% of employees surveyed by the Partnership for New York City in May said that not enough is being done to address homelessness and mental illness in the city, as well as assaults and gun violence. More than eight out of 10 said conditions in the city have worsened in the past two years, and 40% say they are considering moving out of New York City.
Sanitation is also crucial, added Pinsky, who remarked he frequently sees overflowing trash bins and more graffiti. Shuttered stores send a similar message. Like Wittels, he urges the city and business improvement districts to add events that will return a buzz to their streets.
Many business leaders are speculating that a recession would solve the back-to-the-office problem no matter what other problems it would cause. Stephen Ross, the chairman of Related Cos., which built Hudson Yards and owns other real estate in the city, suggested a downturn would end the work-from-home trend.
“Employers have been somewhat hesitant because they didn’t want to lose their employees, but I think as you go into a recession and people fear that they might not have a job, that will bring people back to the office,” Ross told Bloomberg.
To be sure, some progress is being made. Google mandated that its workers return to the office three days a week in April, boosting the fortunes of the area of Chelsea where it houses some 10,000 workers. Pedestrian traffic at Eighth Avenue and West 15th jumped from 60,000 weekly to about 80,000 according to the Meatpacking Business Improvement District.
But three days a week clearly isn’t sufficient to get the city back to pre-pandemic levels of employment and economic activity. Since the pleas of Adams and Hochul to fill offices have had so little impact, Pinsky offers another strategy:
“Both companies and employees need to have more of a civic bent. Think about the time after 9/11 when we said we are not going to let the terrorists win. It’s time for businesses and individuals to do that again.”
THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.
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