Introduction

The most worn out photo in the Weiner family collection is of my great grandfather Woolf Weiner standing with my great grandmother, and namesake, Anna in front of a small business where he worked on the Lower East Side.

The name of the shop is obscured and entirely in Hebrew. It was a fur shop. Woolf — a fur cutter — was pretty big in the furrier’s union and a heavy in the Socialist movement. He was also just plain big and just plain heavy, and his work was tough. It was the kind of hard work that generations of people have committed themselves to so their children and grandchildren can have a better life. The kind we need to make sure is still rewarded in future generations.

I often look at that picture and ponder what a wondrous and limitless city we live in. How three generations of Weiners have managed to live up to America’s creed that anything is possible. Who would have thought I’d end up here.

Recently I’ve looked at the picture of Woolf, and been amazed at how much the city has changed and how much it has remained the same from the turn of the 20th century to the turn of the 21st.

The Senengalise record store owner in East New York has a lot in common with Woolf. As does the family in Jackson Heights who recently arrived from South Asia so the mother could staff Jamaica Hospital. In fact, the famous artist who came from London would even understand the yearning that Woolf felt in that photo.

The faces of New York have changed with the latest tide of immigration, but their aspirations continue to be part of the same unchanging DNA of New York. The decline of New York once again has been reversed. Not by politicians or social scientists but by those who continue to be drawn to our city by an unseen but understood sense that this is the place to be.

But that is not to say that politicians can’t help. Smart – and some not so smart – policy decisions of the past have shaped our present. I would hope that we begin with a couple of basics.

First, we need to remember that New York is five boroughs. To see our city as only the glorious skyscrapers of Manhattan is like seeing the beauty of the Sistine Chapel without looking at the ceiling.

Think I’m exaggerating? Well this morning a lot of people will be stirring milk into their coffee that was produced right here in Queens. In fact, 70% of all the independent stores in our city get their milk from Elmhurst Dairy in Jamaica.

Also, we in elected positions have to keep faith with the grit and determination of our constituents by always fighting to get what we need from Albany and Washington. Just as I have made a career of locking horns with the hostile Republicans that dominate Congress today, it is incumbent on our Republican Mayor to do the same. New Yorkers know that you have to break a bunch of eggs to make an omelet. Simply waiting for your butler to bring it is not an option for most of us.

So how do we keep our economy strong, so anyone who comes to New York always has a chance to succeed? What measures should we take to develop our economy to its maximum potential? These are the questions we need to ask ourselves now, as the city again faces radical demographic, economic and social change.

New York has traveled through three distinct economic phases – infrastructure creation, growth organization and advantage consolidation — that laid the foundation for where we are now – entering a new phase: global competition. These phases are linked by a common thread — New York City always led.

Phase I – Infrastructure Development

Our infrastructure development period was the most basic, and in many ways important, time in the history of New York City’s economy. When the city first began to expand in the 1800s, the squalor of urban life was unimaginable. The city’s leaders were faced with the challenges of simply making the city habitable, and then ensuring that it had the public services to allow meaningful economic expansion. Massive public investment was undertaken. For example, in 1849, the city first started to build a system of sewers following a series of deadly cholera outbreaks. By 1855, just 6 years later, 70 miles of sewers had been laid, and by the turn of the century, virtually the entire city was connected to the sewer system. Some tenement houses even offered private flush toilets. Additional infrastructure improvements built on this base over the years, including water tunnels from upstate aquifers, and the installation of the world’s largest underground electric system. The subway took over three decades to build; growing from a system of 28 Manhattan based stations in 1904 to today’s system of 468 stations across the five-boroughs. In the 1930s, Mayor LaGuardia built what I like to call “kid-fra-structure,” opening a massive system of schools, playgrounds and swimming pools that still serve New York today. As a result of these public works, residents had a cleaner, better quality of life, and the city entered the post-World War II period primed for commerce.

Phase II – Growth Management

The next step was to intelligently manage the growth of the city. Between 1900 and 1950, the city’s population more than doubled – from 3.4 Million to 7.9 Million. New York was bursting at the seams, and a new scheme was needed to deal with the pressures that resulted. Important groundwork had been laid with Manhattan’s move in the 1830s to map the city in a grid, setting a precedent for smart urban planning that the city continued to follow. Although it is worth noting that the first planned community in the United States wasn’t Manhattan. It was Gravesend in Brooklyn.

The 1916 Zoning Resolution was the first ordinance in the nation to separate industrial from residential neighborhoods and establish height and setback controls for tall buildings that had begun to literally crowd out sunlight on many city streets. The law became a model for urban areas across the country, and served the five boroughs well until 1961, when the current zoning law was enacted, notably encouraging public spaces and incorporating parking requirements for the first time.

Phase III – Advantage Consolidation

By the 1950s, with infrastructure in place and growth successfully managed, a number of unique economic advantages appeared, leading to the third phase in the city’s economic history – advantage consolidation. Entertainment thrived on Broadway as Manhattan’s unique commercial and residential mix encouraged young, creative workers. The restaurant and hotel industries grew to accommodate tourists and business travelers. Through World War II, the port on New York harbor was the busiest in the world. Boats would line up in the Hudson River from the harbor to beyond the George Washington Bridge. Eastern European immigrants created a manufacturing and retail powerhouse in the garment industry. And, most notably, the city reached its peak dominance of the financial sectors. For years, the city could rely on these industries for tax revenue and employment in good times and bad, through crime waves and fiscal crisis. But, while these industries remain strong in New York City today, our dominance has faded. For example, in 1980, New York City accounted for 37% of the nation’s securities jobs. Now it accounts for only 21%. While securities employment grew 309% between 1989 and 2004 in the rest of the country, it grew only 5% in New York City. Clearly, the era of advantage consolidation is over. We’ve entered a new phase: global competition.

Phase IV – Global Competition

We should approach this new phase realizing that our situation is different than it has ever been before. Many other cities have borrowed from our playbook, and technology has permitted smaller towns to be the beneficiary of the “outsourcing” of many of the back office jobs that made up the spine of the New York financial services economy. The way we should face down this challenge is to revisit our old strategies and implement some new ones.

Revisiting Infrastructure: Building New Transit Smart, Fast and Cheap

First we should have a second infrastructure boom on a faster and cheaper level, starting with our transportation system. Anyone who rides the subway, drives a car or sits in a bus to get to work every day knows the simple fact: the system is clogged. Everyday, 2.3 million cars drive in and out of New York City. The average New York driver spends 50 hours a year stuck in traffic.

Unfortunately, nowadays we cant just add another subway station to ease the congestion and invite an economic or residential boom in a new area. No longer is it “if you build it they will come” now it’s “hey we’re here, now help us grow.” Two neighborhoods are good examples of how we can help. Red Hook in Brooklyn and Rockaway in Queens. In both cases, these beautiful neighborhoods have had to struggle with the mind boggling bad decisions that built thousands of units of public housing without any real plan for how to get jobs to those neighborhoods, let alone get those residents around the city easily.

Despite these handicaps, these areas have made important gains. Now there is a housing boom in Rockaway as more and more New Yorkers discover our version of the Riviera. Red Hook has seen property values jump while some great new restaurants have opened. But now Red Hook and Rockaway like so many other neighborhoods need our help to maintain their momentum.

How? By renewing our commitment to transit using the only place we have the space – the waterways. Just as we created a subway system to help our whole city grow, we now need a comprehensive ferry system. Neighborhoods like Long Island City, Sheepshead Bay, Marine Park, Coney Island, Bayside and the areas around LaGuardia and JFK airports can all benefit. To start, we should install ferry landings along the coasts of New York. The City or State already owns the bulkheads in dozens of neighborhoods, all we need are relatively inexpensive ferry landings. I’ve already led the fight to fund the building of one in Rockaway. We should do more. Then, the city should purchase a fleet of small high speed ferries and begin to help commuters from and customers to these neighborhoods. In fact, ferries are not just for waterfront communities. While we wait (hopefully) for the Second Avenue subway to ease the crush on the East Side, why not have 5 or 6 East River ferry stops?

Another answer to our transit dilemma is to take the concept of light rail, and apply it to buses through a transportation system called “Bus Rapid Transit,” already in use in many cities throughout the world. Bus Rapid Transit lines create bus-only lanes on the major streets just like we do on the highways during rush hour.

It’s like creating light-rail corridors, but using buses and roads instead of rail cars and tracks. A 2002 study for NYPIRG’s Straphanger’s Campaign concluded that such systems could make serious improvements in region-wide mass transit, as Bus Rapid Transit systems in other cities have increased ridership by 15-150% and speed up to 40%. We’ve already funded studies and demonstration projects, now we should make the system a reality.

Revisiting Growth Management: The Zoning Text – Its Time

Just as we need to revisit the infrastructure of our city, we need to realize that our growth management plan, our zoning text, is ready for a retooling. No one is happy with the status quo. Residents of precious working class neighborhoods have seen development threaten the very fabric of communities from Maspeth to Throgs Neck. Who would ever imagine that that sometimes quaint and often beautiful homes would be razed to make room for a new New York phenomenon – the McMansion. The zoning text never envisioned that someone would build over their front lawn or so close to the property line that a swinging screen door would open into a lane of traffic.

On the other hand anyone trying to build or improve on a piece of property has had to encounter the very thing that the zoning text is meant to avoid – uncertainty. We have a Department of Buildings that is so dysfunctional that the expeditors should hire expeditors, and we have a City Planning Commission and Board of Standards and Appeals that neither seems to plan or listen to appeals.

It was 45 years after the first zoning text when we did a major overhaul. It’s been 45 years since the last one. It’s time to change. We should be guided by three principles: First, we need to protect our neighborhoods from the crush of ever growing homes and the traffic clog of the too broadly defined “community facilities” that always seem to come with stifling numbers of cars.

Second, the zoning text should protect the bastions of commercial activity from too many residential incursions. Discos and night clubs have settled nicely into the meat packing district of lower Manhattan. Why? Well a noisy dancehall isn’t gonna wake the cold meat. Now plans are to move large scale housing into the area. It’s a bad idea. We must protect areas for small manufacturing also. There are 245,000 industrial jobs in New York City. Manufacturing ranks third highest in number of employees among New York City’s export sectors. Sure we aren’t going to be brewing 48 different beers in Brooklyn alone like we were in the 19th century, but we have to be inviting to businesses like the Brooklyn Brewery who for too long had to brew Brooklyn Lager in Utica, New York.

Third, we must have a predictable and fair process for those who follow the zoning and a zero tolerance for those who flaunt it. We need to completely mechanize the Department of Buildings and allow architects to zap their plans over the internet, not toil on line with rolled up blueprints. And for those who illegally subdivide a residence, we should change the law to allow the city to seize the assets of the usually absent land owner.

Revisiting Advantage Consolidation: Help Small Business

We also need to revisit the things we did during our advantage consolidation period, because quite simply our advantage is slipping. Today, any financial firm can conduct its business from anywhere in the world. In response, New York City has struggled to match the cheap real estate and tax incentives lesser cities offer to businesses.

Instead, I think we should focus on what they they get anywhere outside of New York City: the innovation and talent that only New Yorkers possess. To me, that means, first and foremost, unlocking the potential of our homegrown entrepreneurs – specifically our small businesses.

There are more than 200,000 small businesses in New York City, representing 98% of all businesses. They dominate many industries and are the majority of businesses in every borough. Small businesses account for 50% of all New York City private-sector jobs and generate $4.5 billion in annual city tax revenues. Yet the way we treat small business in this town runs from benign neglect to outright contempt.

Spend an afternoon at 66 John Street if you want to see the contempt side of the spectrum. That is the address, as many of you may know, where the Environmental Control Board has its hearings for summonses on a wide range of violations. Shopkeepers are herded like cattle before a hearing officer who doesn’t see an employer in front of them, but more likely sees a dollar sign or a hash mark in their quota book. And recently there have been plenty of hearings.

More so than any time in recent memory, the city’s policy is to use the ticket book as the tax roll. The Mayor’s Management Report lays out an alarming increase in ticketing. In the past year alone, the city reported a 33% increase in the number of summonses for “quality-of-life offenses,” to 708,349. Parking tickets were up 20% to almost 10 million in one year. The repercussions of the ticket blitz are clear: in a recent survey of business owners, the Brooklyn Chamber of Commerce cited ticket violations as one of the top obstacles to business growth. And when you have a top ticket of $180, with a couple of violations the average New Yorker is paying more in tickets than they do in income taxes. $180 for a parking ticket? $1,000 for an oversize awning? It isn’t a deterrent, it’s a backdoor tax.

It is this hostile attitude that’s driving jobs to the suburbs.

We have to make things easier for small business. First, let’s adjust the fines downward as the city issues more of them. To ensure that an increase of tickets isn’t seen as a way to balance the books, take away the incentive. Here is how it would work. The city expects to gain $17 million in revenue from a new, computerized, system to increase the reliability of its ticketing. This newfound revenue should be exclusively dedicated to cut fines for small businesses, specifically for those that businesses cite as most onerous. This would reduce the incentive to try to use shopkeepers as a cash cow.

Second, I’m a little tired of hearing from the Mayor that if you have a beef you should call 311. I think that the Department of Business Services should have a team of ombudsmen on duty at 66 John to help keep the shop keepers from losing their minds and keep New Yorkers from losing their jobs.

We should also start giving small businesses the benefit of the doubt. For firms with fewer than 50 employees, ticketing violations related to their business that are correctable – things like the placement of signs – should be given a grace period to get it right. If you can show the hearing officer that it was a first time thing and it was promptly fixed, the business owner should get the presumption of correction.

These changes are necessary because the current administration seems to have an unmistakable zeal for regulatory overkill. The Department of Consumer Affairs has begun ticketing tow trucks from the suburbs that pick up a city resident outside the city and bring them home. The result? Now local mechanics and body shops are finding their customers stranded at the city border or worse their trucks seized by authorities of Nassau or Westchester who are enraged by this new action by New York. Or what about the City’s efforts to move the local hot dog vendor off the streets of Midtown – where their customers are – and forcing them to relocate? Now they are popping up on the narrower streets of the other boroughs. Regulation is necessary and enforcement is inevitable. But see how many times the word “siege” comes up when talking to a small business owner. That has to change.

Global Competition – Part I: Incentives for Manhattan – And the Rest of the City Too

But as I said at the beginning we need to do more than revisit our three phases of past growth and retool them. We need policies that recognize that we are in another tougher era when we face global competition on every front. I am a Queens Congressman who was raised in Brooklyn. But I know that Manhattan is the pump of the economic engine of New York. Yet, to face new challenges, we need to direct more attention to a five-borough strategy for job creation – we can’t neglect possible areas of growth when we’re fighting for every job.

In the past five years, the EDC reported that it dedicated twice as much funding to Manhattan in incentives as to the other four boroughs combined. While much of this funding was rightfully due to the rebuilding efforts after 9/11, much of it was a just a continuation of business as usual. In the past ten years, areas across the city have seen influxes of new population and immigrants, giving them new growth potential. It’s time to turn towards them.

We should recognize that many promising ventures in outer boroughs are left unfunded by the city because no one is forced to look. We have to shake this notion that the only place that tourists would want to come or conventions can be held is in Manhattan. Right here in Queens we have the opportunity to not only develop convention space in Willets Point, but I believe that that is the place we should build the new Jets stadium.

There are different views on where the Jets should call home. But I, for one, resent the way that Deputy Mayor Doctoroff has dismissed the notion that the borough of two airports and the most profitable sporting event in the nation – the US Open – could possibly be an attractive place for conventions.

Because we can’t count on EDC bureaucrats to do the right thing on their own, we need to build in a way to protect the outer boroughs. We should require that at least 25% of all EDC funds be distributed to the boroughs on an equitable basis, by jobs per borough, or population.

Global Competition – Part II: A Jumpstart for Underdog Business Districts

For businesses that do manage to make it in the outer boroughs – the underdogs of the city’s economy — we need to expand the success of the Business Improvement District program. If you poll shoppers of Queens about what they’d like to see on Astoria Boulevard or Woodhaven Boulevard they say some common things. They want less trash. Better lighting. Graffiti removed. And of course some help with parking.

Thanks to the BID program, businesses can self assess a fee and hire clean teams, design streetscapes and even help with the parking problem. A BID in Brooklyn even hired a guy with a bag of quarters to engage in a game of quick draw with ticket agents on behalf of shoppers.

But BID creation is still too difficult and complicated – there are 17 different steps you need to take towards approval. Even the most eager business owners often can’t get a BID started without practically shutting down their own stores. Finding absent landlords, organizing planning meetings and filing paperwork requires a full time staff – and that’s before the BID is even approved. Unlike the mega BIDs of Manhattan, the shopping strips can’t hire a grant writer or an organizer. So the city should do this work for them. If there is sufficient critical mass of activists, we should take the rest of the headaches away.

Global Competition — Part III: Giving Local Business Global Tools

We need to give businesses and workers the tools to compete with other cities and even other nations. We have to understand that an Indian food manufacturer in Queens isn’t just competing with other New York City based businesses, but with Indian food manufacturers back home in India. We must take steps to make our businesses better able to compete with counterparts across the world. We should make New York City an innovation friendly environment on par with any market in the world.

According to a 2002 ranking by the National Commission on Entrepreneurship New York was the least hospitable area for growing businesses of any of the 14 labor markets in the U.S. with populations of 3 million or more.

Clearly, we need to kick start investment in innovation. That’s why I’m proposing the dedication of $10 million to provide “seed” capital micro-loans to innovative businesses identified by private sector venture capitalists with a commitment to New York City. These loans of only $100,000-$200,000 would go to emerging businesses that do not yet qualify for large venture capital investments but are identified as unusually promising. If they prove successful, the private sector would pick up the funding, contingent on the businesses staying in the New York. It’s not a government venture to pick winners and losers, rather it’s a way for the city to leverage capital to give an incentive to the financial sector to invest here in the city, rather than across the globe.

For businesses that are already here, but are struggling to compete, the City should take a two pronged approach to help them get on the internet – a small, but important step in this day and age. It should revive its “Digital NYC” program that expired in June 2004 as a program to offer incentives to landlords to upgrade their buildings to include broadband in areas where it’s not widespread or affordable.

The city should also create a “ShopNYC.com” initiative to help small businesses get on the internet to better market their goods and services. If New Yorkers want to show their pride in the Big Apple or simply shop in cyberspace from a company they can reach in real space, we should help make shopping for New York goods easier.

Conclusion

This is part of my vision for the direction we should take the city’s economy: towards a future that values entrepreneurship, innovation and equity. I want to start a dialogue on how to achieve this. I, like you, will not be happy with just more of the same.

At the end of the day it is a sense that unifies all of us across this room and across this great city. It is the sense of dissatisfaction. It makes us work to make things a little bit better for each generation. I am not satisfied with my city. I know we can make it greater still.

It is that same sense that I’m sure Woolf Weiner had gazing out in that photo I mentioned. Boy am I glad he wasn’t satisfied.