NYC badly needs a healthy Midtown
(Posted on Thursday, August 26, 2021)
By Ken Fisher and Winston Fisher
We are now celebrating “The Summer of NYC,” and in some ways, it feels like we’re back. Many New Yorkers have come out to rediscover restaurants, ballgames, open streets and parks, while some tourists have returned to experience the magic of New York City.
It’s not just anecdotal or fleeting: The census showed that our population has grown by an astonishing 600,000 people over the past decade. People love New York and want to be here. Our commitment to progressive values, diversity, arts and entertainment make this city unique in the world.
But there’s one very important part of town that is still way too quiet: the city’s economic engine, Midtown Manhattan, where we own office buildings.
What many people don’t realize is that offices in Midtown, New York’s central business district, haven’t achieved much higher than 20% physical occupancy during the pandemic. Walking around Midtown today, there’s a noticeable lack of people and energy which is unlikely to change anytime soon. Concerns about the delta variant have led companies planning big Labor Day comebacks to hit the brakes. While strong leasing activity and demand for building tours suggest people will come back eventually, we are fearful of the short- and long-term consequences each day Midtown stays largely empty.
A robust central business district is critical to an equitable recovery of the entire city. Bringing workers back to the office won’t undo the lasting effects of the past year and a half, but when they don’t come to the office every day, the impact is felt by thousands of small businesses and millions of working New Yorkers.
Midtown is a delicate ecosystem that only works if all the pieces are in place. Companies and office workers rely on restaurants, support services, public safety and good public transportation to make the office the most productive place to be. Empty offices threaten all that infrastructure, and it won’t come back overnight. Our favorite restaurants for lunch or our happy hour spots to catch up with colleagues can’t survive without office workers, and it won’t be long before the lack of MTA revenue from half-empty Metro-North and LIRR trains leads to cuts in service for commuter lines, subways and buses. And it is only a matter of time before empty offices impacts our buildings’ unionized workforce, not to mention our city’s property tax base.
With new leadership in Albany and another change coming to City Hall, we have an opportunity now to put smart policies in place that protect our central business districts today so that they’re still there for us when we need them in the future.
First and foremost, we must guarantee that people feel safe coming back to work. Perceptions around public safety and violence, fair or not, have painted New York as unsafe and undesirable. Our leaders need to recognize the harm this has on tourism, economic activity, and return to work.
We also need to allocate substantial resources and funding to make sure our public transit systems are reliable, clean and safe. That means investing in long-term improvements like the renovation of Penn Station, but also more urgent spending to address vital maintenance and ensure sufficient staffing to run the trains and buses on peak schedules. Without a functioning transit system, workers will be inclined to opt out of the commute and work from home, or drive into the office, clogging our already congested streets and releasing harmful emissions into the air.
It’s time for bold policy solutions like supporting public programming to reinvigorate business districts or allowing for creative uses for vacant storefronts. We should also take advantage of the current moment to advance more ambitious plans for engaging public and open spaces, like the reimagination of the Park Ave. malls that the city is currently pursuing.
Finally, in order to ensure that major employers don’t start thinking about leaving New York for good, we need to continue to develop and attract world-class talent. To stay competitive against up-and-coming markets like Nashville and Austin, New York needs to be pro-business and pro-worker to increase jobs and revenues and make the city a viable place to both live and work. This means improving social services, providing access to credit, affordable housing and childcare and prioritizing workforce development. This is the path to an equitable recovery.
The city is entering a new chapter under new leadership, and we are hopeful for the changes that are to come. It is imperative that current and incoming leaders across the city and sate recognize record-low office occupancy rates for what it is — a threat to the future of small businesses, infrastructure and the economic success in New York City.
The Fishers are partners at Fisher Brothers, which owns five commercial buildings in Midtown Manhattan.
