The features that made the city’s economy distinctive — Broadway, restaurants and museums — were hard hit and will take the longest to come back.
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I Don’t Think the New York That We Left Will Be Back for Some Years’
The features that made the city’s economy distinctive — Broadway, restaurants and museums — were hard hit and will take the longest to come back.
It took just a matter of days to shut down New York City, once the coronavirus took hold. Restarting it will take much, much longer.
The economic impact in the city from the global pandemic has been striking: Hundreds of thousands are already out of work; at least $7.4 billion in tax revenue is projected to be lost by the middle of next year.
And the changes will be felt long after New York begins to reopen its economy.
How New York City, the epicenter of the country’s outbreak, begins to recapture its vibrancy is a question consuming political, business and cultural leaders.
The very features that make New York attractive to businesses, workers and tourists —
Broadway, the subway system, world-class restaurants and innumerable cultural institutions — were among the hardest-hit in the pandemic. And they will take the longest to come back.
Half of the hotels in the city are not operating, and with no reliable forecast for when tourists might return, many may stay shut. Nearly the same portion of the city’s smallest businesses — some 186,000 shops employing fewer than 10 people — could fail, city officials fear. Replacing them could take years.
The city’s real estate and construction industries, major drivers of the local economy, have all but stopped. Millions of renters are struggling to make monthly payments, fueling concern over a cascading crisis in the housing market if rent goes unpaid.
White-collar business and financial services companies, whose workers were mostly spared immediate layoffs in the shutdown,
are forecast to see declining profits next year, and even losses. Some law firms have
already pared down pay.
And with social distancing guidelines likely to be necessary for the foreseeable future, all facets of New York’s work life will take on new rules, routines and costs.
“I don’t think the New York that we left will be back for some years,” said Gregg Bishop, the commissioner of the city’s small businesses agency. “I don’t know if we’ll ever get it back.”
New York is not the only metropolis in the world struggling with how to safely reopen businesses and cultural centers in a dense urban settings, but no city has been more devastated by the pandemic.
The virus has claimed more than 13,000 lives in New York City, a figure that includes roughly 4,400 victims who had never tested positive for the virus but were
presumed to have died of it.
President Trump has sought swift reopenings across the United States. And on Monday, three Southern states moved toward doing so: South Carolina allowed retail shops to open with social distancing guidelines, and the governors of Georgia and Tennessee announced plans to soon ease restrictions on businesses.
But in New York City, interviews with more than two dozen business executives, city and state officials and industry groups revealed the depths of the difficulties in doing the same, especially when the coronavirus is still filling hospitals and hundreds are still dying each day.
The city’s Independent Budget Office forecast that
475,000 people would lose their jobs over the next year; other economists have put the job loss far higher:
1.2 million by the end of April, mostly in low-wage jobs in restaurants, retail or transportation.
And whole industries, gone overnight, do not as quickly return.
In the late 1970s, “It took four or five years for a lot of the city to empty out,” said Kathryn Wylde, the president of the Partnership for New York City, a nonprofit business group. “It took three or four decades to bring them back.”
New York City has been the center of calamity before — the Sept. 11 terror attacks, the 2008 banking crisis, the 1970s fiscal crisis — and each time, economic life bounced back, stronger but also scarred.
“The obituary of New York City has been written more than once,” said James Whelan, the head of the Real Estate Board of New York, an industry group. “And it’s always been proven incorrect.”
But no other crisis saw the city shut down as profoundly, or for as long. Nothing before has caused public life to simply halt, everywhere, at once, nor called into question the very thing that distinguishes New York City: its concentration of people and its street life.
Large and midsize companies are beginning to plan for a return to the workplace, in phases. Some are thinking about how to use their existing office space when workers cannot be packed together as tightly, and questioning how much they should be expected to pay for it.
“Because of the need for social distancing, that space is far less valuable,” said Neil Blumenthal, one of the co-chief executives at Warby Parker, the glasses company headquartered in SoHo. “We’re all going to need more space, or use it less.”
City officials and business leaders privately expressed concern that, with executives seeing just how well their companies could operate remotely, some might decide to downsize, or move out of New York City altogether.
Others worried that workers from around the country and the world would think twice about relocating to the city — for at least for a few years — and that those already here
might move out.
Gov Andrew Cuomo said that once the state allows people to gather in places like the subway or retail stores, “you’re going to see more infections.”Credit...Victor J. Blue for The New York Times
“Nobody wants to get the economy going more than me,” Gov. Andrew M. Cuomo said on Saturday.
“The tension is when you start to open business, you start to have gatherings, you put people on a bus, you put people on the subway, you put people in a retail store,” he said. “Then you’re going to see more infections. You see that infection rate rise and then you’re going to be back to where we were.”
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The economic pressure on the city’s finances is stark: Last week, Mayor Bill de Blasio released a gloomy $89.3 billion executive budget that
slashed $2 billion in municipal services; the Independent Budget Office suggested that the loss in tax revenue may be even worse than the city was predicting.
Because the city’s economy is densely interwoven, reviving it is likely to be a halting process.
Swiftly shutting down the city’s more than 25,000 restaurants and bars was one thing. But getting customers back may not be a matter of simply allowing them to reopen, even with servers in masks and gloves and diners ordering from an app on their phones.
“When are companies going to start hosting events at restaurants and bars again?” said Andrew Rigie, executive director of the New York City Hospitality Alliance, a nonprofit association for the restaurant and nightlife industry. “When are the tourists going to start coming back?”
That is a question that has been haunting Broadway and the rest of the city’s entertainment sector as well.
Broadway leaders say that even if theaters require attendees to wear protective devices like masks, it seems likely that producers will stage fewer shows.Credit...Erin Schaff/The New York Times
As recently as February, New York City’s tourism promotion arm, NYC & Company, had been predicting a record number of annual visitors in 2020. That forecast has since been scrapped, and no new projections offered.