NEW YORK (
)--Minutes before Citigroup announced 11,000 job cuts on Wednesday, one of New York's biggest office landlords was discussing the resilience of the city's office market.
"I think we have been just a little bit isolated from the massive downturn that we had here, and it never quite got as bad as the rest of the country," Jeff Blau, CEO of Related Companies, developer of the Time Warner Center and the Hudson Yards, a 26 acre, 13 million square foot site on New York's West Side,
Related is ready to announce a major new tenant for the development--a multi-national company that will make it the site of its U.S. headquarters. After a few years of consolidating, companies are starting to expand again, Blau said. They just aren't financial services companies.
"When we started this we thought we would have a lot of financial services interest. The surprise has been its not that," Blau continued. "The interest has really been from media, fashion-- but not necessarily financial services, which has really been terrific for us."
The financial service industry's expansion in New York has been so immense during the past couple of decades that many people believe the city has essentially become a company town. As the financial services industry has cut back, some believed New York would suffer, but it hasn't worked out that way.
Some of the credit for New York's resilience should go to Mayor Michael Bloomberg, a finance and media mogul who hasn't been afraid of making unpopular decisions, such as banning smoking and restricting automobile use, that have only increased the city's popularity.
But another explanation is that New York, like other important capitals around the world, will always attract successful businesses in every industry.
Even the financial services cuts in many instances don't focus on New York. For example, many of Citigroup's cuts will hit places far further down the world's economic hierarchy. The bank said it will "sell or significantly scale back" in Pakistan, Paraguay, Romania, Turkey and Uruguay in order to focus on 150 cities around the world "that have the highest growth potential in consumer banking."
There is something troubling about the fact that failures originating out of cities like New York and London have an impact which is felt much harder in other places. In the U.S., it creates divisions that were highlighted by the recent election, and are still being felt as Congress tries to strike a deal to avoid pushing the country over the fiscal cliff. Around the world, it accentuates poverty and lawlessness in places that have had more than their share as New York continues to prosper.
Much of the discussion of haves and have nots in the wake of the crisis has focused on income brackets and professions, but there are geographic and cultural implications as well which are still playing out.
Written by Dan Freed in New York
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