Mayor Bloomberg has always had an unshakable faith in the power of the free market, entrepreneurship, and the nascent tech-industry. Perhaps that’s why he’s doubled the budget of a little known government body during the course of his administration, giving over $500 million in taxpayer dollars annually for capital projects. It's time to get familiar with the New York City Economic Development Corporation, an organization specifically designed to stimulate the economy of New York City, but one that is controversial insofar as it straddles the murky area between the public and private realm, making it powerful and inaccessable at the same time.
The EDC's obscurity is due at least in part to the fact that it functions much more autonomously that more bureaucratic government bodies; Bloomberg has given it free reign to enact projects around the city, projects which include the $2 billion tech campus on Roosevelt Island, the renewal of Coney Island, and the City Point Mall in Downtown Brooklyn. In total, the EDC has enacted 10 economic “incubators” in the past few years, projects designed to help new businesses and diversify the economy. Real estate observers should be happy about this, because the EDC has done much to help new condominium sales in Manhattan. Moreover, these projects embody how the fundamental mission of the EDC has changed and given city planners a new model to sustain economic growth.
When the EDC was founded 20 years ago, it’s goal was to stimulate growth by erecting buildings. While building up the physical infrastructure of the city is still a major part of its mission, the size and scope of its strategy has expanded drastically. Now, the EDC tries to stimulate growth by attracting schools and entrepreneurs to Manhattan, something that sets the stage for long-term job creation and diversifies the city’s economy, a trend which is more crucial than ever for the Manhattan apartment sales market. The overall goal of making New York City - and Manhattan in particular - more inviting to business will undoubtedly lift apartment sales around Manhattan, especially in areas like West Chelsea and Midtown West, Manhattan neighborhoods that will be transformed in the next 10 to 20 years.
EDC President Seth Pinsky told Crain’s New York that, “There's been a quantum shift under this mayor. We've turned EDC into an agency that works not just to get company X to locate in New York, but we think more strategically about what we can do to make New York a better place for all companies.” This more holistic approach bodes well for Manhattan’s economy and apartment sales, and the EDC deserves credit for Manhattan’s continued economic prosperity during the recent periods of recession and stagnation.
Not everyone is happy about how the EDC is going about its business however. John Liu, the City Comptroller, is highly critical of the unilateral power of the EDC and its top-down approach that has already alienated community members around New York City. “In the pursuit of economic development and job creation, EDC has been vested with far more power, authority and leverage than it ever has been, by a tremendous amount,” Mr. Liu said. In order to go about “limiting unchecked power,” Liu has voted against every public subsidy for the pseudo-governmental organization, plus he has issued audits critical of the agency. Nonetheless, as long as Bloomberg is in office, the EDC will continue to thrive and make deals that will effect Manhattan real estate for years to come.