Mayor Bloomberg unveils plan to retool Wall Street
During these down times, the mayor sees an opportunity for businesses to start up right here in the city.
Mayor Michael Bloomberg unveiled yesterday the citys response to the collapse of the financial sector a rescue plan five months in the making and it includes fostering new businesses, retraining Wall Street refugees, luring foreign companies and retaining the title of Financial Capital of the World.
"It is going to be tough times. We are going to downsize. But so is everybody else," Bloomberg said at a news conference alongside city officials and business leaders. "Our objective has to be, in a relative sense, making sure that we stay No. 1."One of the biggest initiatives announced yesterday was to try to transform the city into an entrepreneurial hotbed, where new companies can start up and venture capital flows.
The city will offer workstations to new businesses for $200 a month. There will be about 1,000 desks available at a few sites around the city, including the incubator unveiled yesterday at 160 Varick St.
The New York City Economic Development Corp. helped devise the 11-point initiative to retool the financial sector, which the city has relied on for one-third of private-sector income.
The sector will shed about 65,000 jobs, and officials hope the new initiatives will create 12,000 jobs in five years and 25,000 in 10, according to Seth Pinsky, executive director of the citys Economic Development Corp.
The citys biggest players have deliberated on this rescue plan since the collapse of Lehman Brothers in September, when crisis mode set in, Pinsky said.
We wanted to study the problem so that whatever solution we came up with addressed the actual problem, and not just what we thought the problem was, he said.
What they came up with was an approach to keep New York the financial heart of America and the world despite having lost its storied investment banks.
They identified three threats: the corroded financial eco-system here, the implosion of the capital markets and the brain drain of Wall Street workers.
The new plan tries to address these issues by reforesting the financial sector with new markets such as exchanges to trade carbon credits and other creative instruments; encouraging entrepreneurship; and retraining laid-off Wall Streeters so that they stay here rather than relocate.
One of the initiatives is to encourage more venture capital and angel investors to spread wealth in the city. The city's development corporation will start the spending by offering $3 million to start-ups and hopes the private sector contributes double that.
In all, the mayor's plan will spend more than $50 million $30 million in federal money and the rest from the city and private sector.
There is a big opportunity here to create a bit of a hub of entrepreneurial activity here in Manhattan, said Barry Silbert, the CEO of SecondMarket, a firm that in many ways embodies what the new initiative represents. Silbert attended the mayors news conference.
SecondMarket, a marketplace for illiquid assets, was both a start-up and an innovator in the financial sector.
Silbert and others noted that with the city in a rut the cost of living is coming down, thats actually what helped the city find the office space for the incubators, and new companies may find it more affordable to set up shop.
There is no reason why in this environment the city cant be successful, Silbert said.