Annual Report 1999

Building for Growth

Throughout most of its 100 year history, greater New York City has invested in its future. When confronted with challenges concerning its physical environment, leaders of the design, construction and real estate industry along with their public sector partners sought creative solutions. Their creativity was matched by a determination to succeed.

In doing so, they helped create a city which today houses such monuments of business, the arts and transportation as the World Trade Center, the Metropolitan Museum of Art and the Triborough Bridge. Such forward-looking investments have transformed New York into the world's foremost center for commerce, culture, communications and tourism.

But what should we be doing today to serve New Yorkers, businesses and visitors a decade or a century from now? New York is not the same city it was just a few decades ago. Changing demographics, a labor force working in new industries and an aging population all pose new challenges for the City's physical environment -- challenges that require today's leaders to think long-term.

Problems of Success
Recent years have been good for New York's economy. Record drops in crime, a boom on Wall Street, and an influx of tourists, businesses and jobs to the region have resulted in higher tax revenues and greater private sector development. With success, however, comes a new set of problems, especially when the City's capacity to transport, educate and house residents and to efficiently move goods and people is stretched to the limit.

Examples of under-capacity abound:

• New York's sidewalks and subways are teeming with people as more and more tourists and commuters travel into, out of and around Manhattan each day;
• Accommodating new households while replacing obsolete dwelling units requires the addition of 20,000 housing units each year, or at least twice as many as are created each year;
• A $28.5 billion, ten-year investment in the City's public schools is the estimated price to accommodate the recent and future influx of students and to keep existing seats in use;
• Hotel room availability is rare as creation of new rooms is not keeping up with rising demand.

Creating Conditions for Investment
Addressing current and projected capacity shortfalls is just part of the equation. New York must create the right conditions for further private investment by improving and expanding existing assets.

Similarly, the combined ports of New York and New Jersey generate an estimated $9 billion in direct and indirect wages, business income and taxes each year. To sustain this vital economic engine, the region must recreate its ports in response to changing maritime technologies.

While dredging the region's harbors to allow for larger ships and improving rail and truck access will require large capital outlays, the long-term benefits will do more than sustain the region's maritime trade. It will further add to the City's economy, tax revenues and job base by ensuring that New York and New Jersey strengthens its position as the Atlantic Coast's dominant port.

Another investment which promises long-term dividends is expansion of the Jacob K. Javits Convention Center, which will allow the City to better compete for major conventions. A new Javits Center, when combined with record decreases in crime, the new Times Square and other tourist attractions and amenities, will make New York a front runner for the nation's largest conventions and trade shows, and the revenues such events generate.

Expanding the Economic Base
New York must always expand its economic base. Potential public/private partnerships and investment throughout New York City are needed more than ever, especially in the outer boroughs.

Investment in Coney Island, for example, should be geared to reviving its recreational and entertainment focus, while former manufacturing zones in Queens should be targeted for large-scale retail outlets. The Bronx offers numerous opportunities for housing while Staten Island's port activity should be maximized.

"Building for Growth” requires the development of sensible capital priorities and the enactment of multi-year construction programs. It requires cooperation and coordination among City, State and Federal public officials as well as the adoption of dedicated sources of long-term financing.

Building for the 21st Century requires the vision and determination of men and women who can devise creative solutions to New York's many challenges. The stakes couldn't be greater. To set a sound economic course for the next 100 years, New York City must be proactive or risk losing its historic role in the world economy.

Recent activity at John F. Kennedy Airport serves as a perfect illustration. JFK was considered on the verge of obsolescence just a few years ago and was losing passengers to nearby airports and competing cities. Since that time, the Port Authority has committed nearly $3 billion to improve and modernize terminals, parking, transportation and other infrastructure. These investments have spurred additional billions of dollars in private investment, such as American Airline's commitment of $1 billion to build a new terminal -- an investment the airline would not have even considered had not the Port Authority demonstrated its commitment to turning the troubled airport around.