It may be time for businesses to move out of New York City for the benefit of their corporate cohesion. I have worked in New York City and while the good old boy network there has roots that run deep, the current Chinese Plague that is infecting the city is once again illustrating a fatal weakness in the place. It’s congested, it’s unhealthy, it’s ruinously expensive and there is little need to site yourself there in this day and age of virtual environments.
In the near future, New York City will begin to become still less relevant than it is today.
9/11 had people raising the question of why we had all of our financial eggs in one basket. Today it’s not just the financial hub, but the corporate hubs currently sited in New York City. They could operate just as effectively in the Carolinas, in Arizona, or Utah, or Nebraska, at much less risk and at vastly less cost.
The population density of New York City during the daytime (before people take trains out of the Apple to their homes in White Plains, Connecticut or New Jersey) is concentrated to an unhealthy degree. The contagion ran rampant through a part of America that requires public transportation to function.
The Greater Los Angeles Area, which sits on the Pacific Rim, is every bit the trade hub that New York City is, by comparison, has less than one tenth the COVID-19 infection. And if you step back to the Orange and Ventura County Suburbs, the numbers drop radically. I’m not advocating for corporate hubs in Los Angeles, for what it’s worth. The traffic and the distances involved combine to make it a challenging environment in its own right. I know, I worked there for many years.
I predict that the virus will cause a lot of people to rethink corporate headquarters locations, virtual workplaces and that it will cause profound changes in New York City.
That sword cuts both ways. Would the New Yorkers become more like the heartland, or will they arrive as an infestation?
I'm sure that they'd arrive as a plague (maybe with the plague). However in time they'd either assimilate, be assimilated, or move back to the fetid inner city. The money that corporations would bring would revitalize some areas.
Might be good to see, if it happens.
A SO California company established in 1936 moved to Grand Prairie, TX in 2014. The President told me, even with all the costs of moving, they saved $800,000 the first year. Imagine how much more their overhead would have been in NYC.
My NYC (Brooklyn) experience is limited to my last two weeks in the US Army, 1966, spent at Ft Hamilton, NY, on permanent charge of quarters duty. Off duty it was onto the subway and Manhattan. Fun time.
Side note. The Verrazzano Narrows bridge was under construction in 1963 and the good ship General Maurice Rose passed under it as we held lifeboat drills. I was bused over it in 1966 to receive my discharge at Ft Wadsworth on the other side (Staten Island).
Too much of a hick, I guess. Really large cities repel me.
And now de Blasio is emptying the jails.
That's conducive to a business environment.
Yep, NYC and LA have the highest taxes anywhere… Middle of nowhere Kansas is looking better and better… LOL
I've always enjoyed the Island, I really have, but I fear those days are numbered.
If they aren't smart enough to see the validity of moving to a more cost effective environment…
I worked in NYC in the mid-1990's mainly, but did some work there as late as 2015 and am familiar with the place and the levers of power that exist there. Those who call the place home (like Bloomberg) will want to keep the nexus there. And that's fine. But I think that it will all shift with virtual offices and the networking options available. A smart company can put its employees anywhere.
I used BBVA Bank for the construction loan at the White Wolf Mine and was dealing with loan officers and the banks construction oversight people during the process. They were in Bullhead City, AZ; Oklahoma; and Tennessee, respectively. All of them worked from home offices. I think that will be the pattern increasingly.
There are so many problems with living and working in NYC. Crime is clearly one of them. Most of them are unnecessary. For example, I was just e-mailing (midnight in Arizona, 3 pm in China) two people in California and a colleague in China on a deal that we're trying to knock out, and on the phone with China. It really doesn't matter where you are on the planet. Siting companies physically in NYC is largely unnecessary and as WSF points out, above, it's really expensive.
If I was to re-locate myself to NYC, it would cost more than 3X what it costs to live in a place in AZ, that was expensive to build, and the daily costs would be about 4X as well just to live there. I realize that everyone isn't me, but the point is that NYC will become less relevant for that reason moving forward.
All the overhead costs are many times more and one could argue that the quality of life is less. Some people enjoy the New York vibe, or the LA vibe. I get it. However companies pay a lot to have their people located there in taxes and overhead costs. Driving from Orange County to Santa Monica or Pasadena, for example (either destination) is about 3 hours in morning traffic. Roughly 30 miles. Getting around in NYC is just as insane except that instead of sitting in your car, you are packed tightly in public transportation with everyone else and their germs.
Don't get me wrong, NYC is a fun place to visit. There is an energy to NYC. I just don't see why a company would pay $500K per year to keep somebody there when they can pay a quarter of that to keep them in Council Bluffs, Flagstaff, Provo, or Twin Falls, with the same networking situation.
I think that the employees will end up revolting. Spokane or Oklahoma City are a lot more healthy than Manhattan
I don't think that there is any doubt. The trend has been in place with people and companies leaving. This will only accelerate it. You don't have to cast runes to forecast that. I'm only stating the obvious here on the blog.
i lived on the upper West Side on two different occasions, 1979-1983 and 2002-2013. During the Koch years muggings and robberies were part of the cocktail talk at parties.
I wasn’t there during the Dinkins years but when I would visit the place looked more like Tijuana every time. Most cars had “No Radio” signs begging thieves to not break into it.
Rudy cleaned it up amazingly and by the time I moved back that rock ribbed Republican, Mike Bloomberg, was actually continuing Rudy’s quality of life policies. Since he was no longer a Republican by the end of his second term the city council allowed him to run for a third term. Had he attempted a third term as a Republican he would have been a fascist.
I don’t use the term “hate” lightly but I do use it passionately in reference to one Warren Wilhelm. Also his Education Chancellor, Richard Carranza.
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