De Blasio finds few friends in business as New York City economy free falls

NEW YORK — Marketing New York City’s tourist attractions for “staycations.” Suspending enforcement of open-container laws near outdoor restaurants and bars. Merging struggling yellow taxis and for-hire vehicles into a new industry.

At a time of profound crisis, a panel of well-connected New Yorkers, convened by City Hall, mapped out a 24-page blueprint to jumpstart a local economy flattened by the coronavirus pandemic. From arts and culture to municipal contracting regulations, the proposals — which have never been made public and were obtained by POLITICO — chart a path for industries struggling to regain their footing.

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Instead of serving as a game plan for the city’s recovery, the report was shelved in April — the latest casualty of Mayor Bill de Blasio’s long-held antipathy toward well-heeled private sector interests. The change in direction followed concerns raised by City Hall officials that the panel was “terrifyingly monolithic” — too white and too pro-business, according to an administration official familiar with the matter. So de Blasio established a more diverse recovery task force, which has yet to produce any formal recommendations.

Now with no end in sight to the pandemic, de Blasio’s lack of leadership and goodwill is jeopardizing an already uncertain economic recovery in the largest U.S. city.

Past mayors turned to New York’s finance, real estate and cultural sectors to help steer the city through turmoil. Scores of companies partnered with the Bloomberg administration to raise money for Lower Manhattan’s recovery after Sept. 11. A public-private collaboration formed during the economic malaise in 2011 led to a new graduate university on Roosevelt Island. And Wall Street financier Felix Rohatyn crafted the city’s bailout plan during the 1970s fiscal crisis.

But the episode is emblematic of de Blasio’s distrust in the business community. Where his predecessors either embraced or accepted the fortunes of the city’s private sector, de Blasio has distanced himself from what he regards as an elite class of New Yorkers whose self-interest exacerbated the economic divide he vowed to bridge. He has skipped their galas, shunned their grand openings and vilified them in public speeches.

He has some allies in the world of real estate and finance, to be sure, but the mayor believes an expanded government can better solve society’s problems, to which his ballooning city budget would attest.

In the age of Covid-19, the mayor’s standoff with the business community is proving to be a missed opportunity, according to more than a dozen interviews with private-sector executives and current and former city officials, including Democrats who share de Blasio’s big-government preference.

“Those mayors all had to rely on public-private partnerships to get stuff done. But the city has been so flush in recent years, through growth and development, that they basically didn’t need the private sector for much,” Kathy Wylde, president of the business consortium Partnership for New York City, said in a recent interview. “But times have changed and the city’s going to have to depend on businesses to get things done.”

Wylde’s organization released a grim report this week of the myriad problems vexing the city’s recovery, from unpaid commercial rent to soaring unemployment. The report concluded the city must work more closely with private institutions on resolutions.

One former administration official who worked closely with the private sector acknowledged de Blasio’s general disdain was an impediment to forging partnerships.

“The question is perpetually how much was left on the table because of the attitudes and because of the posturing and because of the approach that the mayor had towards the individuals in those groups?” the person, who would only speak on the condition of anonymity, said in a recent interview.

“One of the biggest powers of being the mayor is convening power — getting people into a room and getting people to do things,” said another former high-ranking adviser, who requested anonymity to speak freely about the mayor. “But if you basically demonize everybody and at the same time don’t invest in creating a civic infrastructure, then there isn’t one.”

“This is the first mayor in modern time that doesn’t have business leaders on speed dial,” the former aide added.

The mayor doesn’t see it that way.

He’s privately indicated to business executives that his brand of politics shouldn’t interfere with a productive working relationship, several of them said. And while he may not proactively hobnob, he convened a group of private-sector players in City Hall at the start of the pandemic.

Since then he set up a host of advisory boards, including some devoted to business and real estate, and has participated in their virtual meetings. Deputy Mayor Vicki Been, who oversees housing and economic development, and James Patchett, head of the Economic Development Corporation, are in regular contact with executives. The Mayor’s Fund to Advance New York City, chaired by de Blasio’s wife Chirlane McCray, recently reported raising $54 million for Covid-19 recovery.

And de Blasio hosted Steven Swartz, co-chair of the Partnership for New York City and president of the Hearst media company, at Gracie Mansion last week.

In these interactions one request trumps all: Help persuade Albany and Republicans in Washington to provide more funding to the city. (Several people he sought out for help lamented the timing of his decision to paint Black Lives Matter in front of Trump Tower.)

“The private sector cannot thrive without the stimulus either,” de Blasio said at a press conference earlier this week. “It has to be there for cities and states, or we won’t be able to provide the basic services and business will not be able to come back.”

Many former City Hall advisers say that approach is not enough.

“At the moment there is no coherent vision for the city or the future of the city and the fate of the city is at stake,” consultant George Arzt, who worked in the Koch administration, said on NY1’s Inside City Hall this week.

Some people in the private sector have been so put off by de Blasio’s public criticisms — sentiments that served him well in his elections — that they have distanced themselves from him as well.

Ed Skyler, a deputy mayor under Mike Bloomberg and now executive vice president at Citi, left his seat on the board of the Mayor’s Fund after de Blasio repeatedly attacked Bloomberg’s record during his presidential bid earlier this year, according to a source familiar with Skyler’s decision.

Others said privately they are bypassing the city and instead working with Gov. Andrew Cuomo, who was featured in Covid-related public service announcements funded by the Partnership for New York City.

Asked about this story on Friday de Blasio quoted the father of communism in defense of his stance against business.

“I am tempted to borrow a quote from Karl Marx here … ‘The state is the executive committee of the bourgeoisie,’ and I use it openly,” de Blasio said during an interview on WNYC’s The Brian Lehrer Show. “Mayors should not be too cozy with the business community. Governors should not be too cozy with the business community.”

The recovery panel convened by Been sought to address many issues beyond City Hall’s bandwidth. It was co-chaired by two former de Blasio aides — Been’s predecessor, Alicia Glen, and former City Planning Director Carl Weisbrod. Its report was submitted to Been in April with a formal set of recommendations expected in May.

Instead, Been emailed members of the group a few days later to thank them for their input and inform them the administration would be setting up a separate recovery task force, effectively ending theirs.

“It became clear after the date on which we submitted these recommendations that that was it,” Carol Kellermann, a municipal budget expert, told POLITICO in a recent interview. “There was no follow up with us. Nothing.”

Kellermann was appointed to focus on solutions for cash-strapped nonprofits. To that end, she advised a suite of regulatory changes, including suspension of rebidding requirements for long-term city contracts with social service organizations.

“They were things to make it easier for the nonprofit sector to survive and thrive,” she said. As for the outcome, she added, “It was exasperating and perplexing.”

Her concerns were echoed by several other people on the committee, who would only speak on background to freely discuss frustrations with the de Blasio administration.

Other proposals included live-streaming Broadway shows, setting up art installations in empty ground-floor stores, creating a public-works program for unemployed maintenance crews and converting unused hotel rooms into affordable housing.

At least one idea was adopted by City Hall — a push to expand broadband in the city’s housing authority.

“The mayor is working extensively with leaders from businesses large and small to help get our economy back on track,” de Blasio spokesperson Jane Meyer said. “This is an unprecedented crisis, and the mayor is meeting that challenge by bringing all New Yorkers together, championing this city, and laying out the path forward every day.”

Several former city officials who are now in the private sector said the mayor has not embodied the role of a cheerleader for a city in crisis.

“This mayor may be able to borrow his way out of this massive hole and get through his [remaining] year and a half,” said one former city official from a previous administration. “But his failure to have the relationships in business communities to help navigate through this with him will make it even more painful for all of us.”