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New York Economic Recovery: A Huge Job - 2001-12-26


The September 11 terrorist attack in lower Manhattan caused massive damage to the New York economy. The job of recovery is huge. But city business leaders say they are confident the "Big Apple" will continue to be a magnet for world finance and culture.

The World Trade Center attack cost New York City an estimated $83 billion. The hardest hit sector was financial services, which were concentrated in lower Manhattan near Wall Street.

One hundred thousand jobs left the city in the wake of September 11, and the remaining 270,000 jobs are at risk. Investment firms and related businesses were forced to find new offices, many relocating outside the city.

But New York's business community is determined to get everybody back, to reaffirm, even strengthen, the city's global position. Sanford Weill is the chairman of Citigroup, the world's largest financial services company and the largest employer in New York.

"It's a city of the world and that's how it has grown," he said. "I think there's no question that the financial industry will be committed to this city. The intellectual capital, the real brain-power of this business, really doesn't have any place to go but here."

Financial services account for more than 25 percent of New York City's economy. About $47 billion in gross wages came out of lower Manhattan in the year 2000. That is about 15 percent of the gross wages of the entire state of New York.

New York's economy was slowing down even before September 11, diluted by the recession that was gripping the rest of the country. But the terrorist attack made the situation much worse, pushing the city toward a financial crisis.

Larry Silverstein is the landlord of the former World Trade Center. He concedes the "twin towers" that collapsed in the attack might not be rebuilt in exactly the same way. But Mr. Silverstein believes all that vital office space has to be restored almost immediately.

"Right now, we are suffering," he said. "What we need to do [is] get those 100,000 jobs back as quickly as possible. Regenerate the $47 billion of gross wages, as quickly as possible. Get the buildings back. It's 12 million feet of office space. Put it back. Put back the retail as quickly as possible."

Wall Street was back in business one week after the terror attack. Dick Grasso, the chairman of the New York Stock Exchange, called it the patriotic thing to do.

Today, he is just as convinced that getting back to normalcy in lower Manhattan is an expression of patriotism. He says New York's recovery will spur growth in the national economy.

"We've got to stimulate the rebuilding of the economy, starting right here," he said. "That 16-acre plot has got to become the point of origin for economic re-development in New York and in the country."

Americans generally are shopping less. They are also traveling less. Tourism in New York is way down since September 11. The city needs tourists. Retailers depend on them. So do New York's hotels and entertainment industry.

International tourists, apparently the biggest spenders, are considered vital to the prosperity of New York's many boutiques and small businesses. Experts project a loss of several billion dollars over the next 12 months, if foreign visitors are not lured back.

New York is expecting a big boost early in 2002. The World Economic Forum, which normally meets in Davos, Switzerland, holds its annual session in mid-town Manhattan in February. The city will be host to thousands of economists, financiers and political figures, who will be accompanied by the usual legions of international media.

The new year finds New York promotional groups re-polishing the image of the "Big Apple" as a safe and fun place to be. New York has a lot at stake. Even after insurance payments and federal aid for clean-up operations in lower Manhattan, a recent study shows the city may still have a net loss of $16 billion. And experts warn the gap could widen, every day New York's recovery is delayed.

Part of VOA's Year End Series for 2001

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