Category Archives: Economy

Benefits of Running a Business in NYC

While Silicon Valley has for many years been the preferred choice of location for business development and operation, it seems that New York City is now being propelled as a great alternative.  According to a recent article in Business Insider by Zoë Bernard, here are some of the reasons why:

  1. One of the world centers for fashion and finance
  2. Fantastic pool of talent
  3. Venture capital environment with the likes of Hercules Capital, Insight Venture Partners and BetaWorks.
  4. Startup scene there has a real sense of community spirit with mentorship programs such as Oceans.
  5. Female founders have traditionally done well in NYC.
  6. Quite simply, because it is anywhere but Silicon Valley and that alone gives it an edge.

In addition, just looking at real estate transactions in the area over the last few years one can see the improvement in living and working conditions in NYC.  For example, a decade ago, it was not at all easy to get financing for mortgages due to the fiscal crisis.  But now, according to 3 World Trade Center developer Larry Silverstein, that has all changed.  With 40 percent occupancy already, he pointed out that “these buildings never stay empty for long.” And corporations will want to go there since they “need technology and you can only get technology in brand-new buildings.”

Furthermore, as Alexandros Washburn said, every time there’s a crisis with New York, it bounces back, concluding that: “Every time it’s comes back with a better balance, more richness in the types of buildings that are here, the types of open spaces.”

New York State, Taxes, Money

New York’s Environmental Protection Fund has made $350,000 available to supplement protection Hudson River’s natural resources.  This money – delegated by the DEC Hudson River Estuary Program – will be used to enhance water quality; counter flooding; conserve wildlife habitat.

in an effort to protect annual tax levy increases, the New York property-tax cap (that was implemented 7 years ago) puts a 2 percent cap/rate of inflation (whichever is lower) on taxes.  How does this impact us now?  For the 2018-19 academic year, average school districts cap is around 2.9 percent thanks to the exemptions with around 98 percent of districts being compliant.

According to NY Association of School Business Officials Executive Director Michael Borges:

“Although school districts have a higher cap this year than last, higher health and pension costs, coupled with economic instability due to federal policy changes, create an uncertain fiscal picture for school districts. Stable, adequate and equitable state funding is more important than ever.”

WeWork is Working!

WeWork in Manhattan is today, Manhattan’s “second-biggest private office tenant.” This comes less than a decade after opening its first co-working space in NYC (in the SoHo region).

According to data from Cushman & Wakefield,  today WeWork boasts almost 50 locations in NYC, opening 10 new locations last year.  This spans 2.9 million square feet in the region. A further five are set to open in 2018. The company has received much support, in particular, from SoftBank’s Vision Fund ($4.4 billion). SoHo has five WeWorks.

Each of these WeWorks features: beer and microbrew coffee on tap; large open common spaces and more.  some have special things like photo studios/indoor garden/workout equipment.

https://www.recode.net/2018/3/22/17119012/wework-massive-growth-second-biggest-office-tenant-new-york-city-manhattan-cowork-space-real-estate

Thriving Minorities

Thanks to the generosity of the city, New York’s women and minority sector business (MWBE’s)  owners could be the recipient of part of the city contracts that have been pigeonholed for these groups from the City.

In an unprecedented move, a staggering $1 billion+ is being given over to these groups.  That figure is over double of what was allocated for the entire 2017 fiscal year (which was $400 million in 2015 and $700 million last year).

According to a recent report compiled by the New York City Bar Association, NYC law firms have a large presence of women and those from racial/ethnic minorities in key positions too.  There has been a steady increase since 2015 of those who hold positions on management committees in law firms.

Furthermore, NYC has established its $10 million contract financing loan fund with a focus on MWBEs. Those who apply to borrow the money have to have already secured (or are pursuing) a contract/subcontractor on a city-funded project and be a for-profit company. The industry of the MWBE does not impact eligibility as long as their product/service is purchased by the city.  The contract is the loan’s collateral.

De Blasio’s Tale of Two Cities

How much has de Blasio done to tackle New York’s age-old issue of being a “tale of two cities”?  Some would say quite a bit; others would say it’s just the economy that has fueled the impact of change.   But given that he ran on a platform of tackling this as it was the “defining issue of the day,” the question we must ask is, has he?  And if so, how much?

Still, when it comes to wages (increasing) and unemployment (decreasing) during his time, people are quick to see him in a positive light.  And the President.  And the government.  Or at least, the previous government which enjoyed “the longest economic expansion in the city [of New York’s] history.”

As Samar Khurshid recently noted, due to the economic climate though, de Blasio has worked toward putting policies in place that reduce inequality, in large part by developing the size and scope of city government.  But bear in mind that de Blasio has not (yet) had to encounter any crazy economic crisis or even stressors which would impact his progressive policies on the slashing of large government expenditures.

De Blasio is however, currently exercising caution with a partial hiring freeze on city agencies while focusing on the stimulation of private sector job growth via city government levers.

Over the years what he has done is this: put “progressivism” as an economic strategy as a top priority.  Right now he seems pretty undefeatable in a re-election.

NY: Escalating Wineries

While New York today boasts 140 wineries, 35 years ago there were around 10!  According to a prior head of the New York Wine and Grape Foundation, Jim Trezise (who now leads a national association advocating for the entire wine industry in America), the wine industry has significantly expanded its economic presence in Finger Lakes. Given that it is today commonplace to find good restaurants at wineries and the region is often regarded as one of the world’s “top wine country destinations,” things really are changing.

Indeed, it has been estimated by the 2017 Economic Impact Report on the American Wine Industry that wine country regions will generate around 43 million tourist visits and $17.7 b in annual tourism expenditures.

And New York is definitely doing its part.  Indeed, the total number jumped from $9.4b in 2012 to $13.8b this year – an increase of over 45% in just five years – with New York ranking number 2 in the country’s wine industry list (California holding the first spot).

According to New York Wine and Grape Foundation President Sam Filler:

“New York continues to expand its impact and growth as a leading wine producing state. Gov. (Andrew) Cuomo and our state Legislature deserve credit for their work on improving New York’s business climate by modernizing the state’s alcohol beverage laws and reducing regulatory burdens. Their continued partnership and support will ensure that the New York wine and grape industry continues its national leadership role.”

 

NYC ATM Fees

Fees seem to be disproportionately high for New York’s ATM users.  Indeed, New Yorkers are encountering the second highest average out-of-network fees in a recent Bankrate.com survey conducted among 25 major metropolitan regions.  In 2016 they ranked number 6; and now it has worsened, given that per transaction the fee has elevated to an average of $5.14 (from $4.86).

One explanation of this came from CEO and President of the Cooperate Credit Union Association, Paul Gentile who said:

“No offense, but the big banks dominate the New York City footprint — and they have some of the biggest fees. New York is also one of the most expensive cities in the country, so some people are more willing to pay ATM fees there, compared to other locations, like the Midwest.”

New York is not alone in over-exorbitant ATM machine fees though.  The same survey found that they have increased over 50% in the last decade, nationwide.  The average has increased $3.03 per transaction since 2007.

In Brief: What the US Dollar is Up To

The dollar jumped against a slew of currencies that measure its broader strength earlier this month.  A four month peak was reached against the yen on the back of the numbers at the beginning of the month’s 25 basis-point rise in 10 year US government bond yields.  According to co-head of Millennium Global, Richard Benson: “The real story at the moment is the rise in U.S. real yields.  That does look like being the theme for the moment. Dollar yen is properly supported, and I don’t think there is even that much participation yet (in that trade).”

It has also been speculated that the US dollar could advance against the pound, following the Fed’s Labour Market Conditions Report, expecting to indicate an enhancement of market conditions that may spark some appreciation in the US dollar.

Other impacts on markets at the moment are central bank events, with anticipated raised interest rates imposed from the Bank of Canada and data indicates the economy in Britain looks gloomy suggesting an interest rate hike there later this year.