New York City cannot count on financial assistance from Washington to help it recover from the coronavirus pandemic, RXR Realty CEO Scott Rechler told CNBC on Friday. Instead, the real estate executive said the city’s leadership needs to be proactive in charting a path forward despite its budgetary challenges.
“The answer can’t be, simply, that we’re waiting for the federal government to give us funding because it’s not just about money, it’s about management,” Rechler said on “Squawk Box.” “If our city was being managed better and things weren’t wasteful, people like me, who have the benefits of the city, have no problem paying more taxes to have a more vibrant, more equal city for everyone. But the concern right now is we don’t have leadership that’s managing the city effectively.”
Rechler was among a group of more than 150 business leaders — from Goldman Sachs‘ David Solomon to Robin Hayes of JetBlue — who sent a letter to Democratic New York City Mayor Bill de Blasio expressing concerns about the current condition of the country’s biggest city.
Published Thursday, the letter said there is “widespread anxiety over public safety, cleanliness and other quality of life issues that are contributing to deteriorating conditions in commercial districts and neighborhoods across the five boroughs.” It also read, “people will be slow to return unless their concerns about security and the livability of our communities are addressed quickly and with respect and fairness for our city’s diverse populations.”
De Blasio’s office, in a statement to the New York Daily News, urged the business leaders to work with the mayor to lobby Albany for borrowing authorization to cover operating costs. New York City has seen steep declines in tax revenues related to the pandemic and it has led to billions of dollars in budget cuts, including a more than $100 million cut to the city’s sanitation department, according to the Daily News.
Rechler — whose real estate firm has numerous properties across New York City, particularly in Manhattan — told CNBC he was concerned about the lack of direction from de Blasio’s administration over what it will do to address the challenges. “We don’t have a plan to build a better, brighter future for our city like we did post-9/11 and it’s eerily scary.”
Republican Rudy Giuliani was mayor of New York City in the immediate aftermath of 9/11. Billionaire businessman Mike Bloomberg succeeded Giuliani and was mayor from 2002 to 2013. Bloomberg, a lifelong Democrat, won City Hall as a Republican and later switched to be an independent. Bloomberg unsuccessfully ran for the 2020 Democratic presidential nomination.
People wearing masks walk past a large face mask sign in front of a Best Buy near Columbus Circle that as the city enters Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus in New York City.
Alexi Rosenfeld | Getty Images
New York City was once the epicenter of the nation’s Covid-19 outbreak. According to the city’s health department, there are 232,710 confirmed cases as of Friday. There are 19,099 confirmed deaths linked to the virus, with an additional 4,642 probable deaths, according to the city’s data.
The health toll inflicted by the virus came alongside economic damage that stems from business closures and other restrictions implemented by de Blasio and Democratic New York Gov. Andrew Cuomo that were meant to slow transmission of the virus. In July, the city had a seasonally adjusted unemployment rate of nearly 20%.
In addition, New York City has seen an uptick of violence this summer, with the number of murders between May and August up over 51% compared to last year, according to The New York Times. The increase has set off safety concerns, as has the property destruction that has, at times, occurred during a summer filled with mostly peaceful racial injustice protests.
Rechler said he believes that New York City officials did an effective job at bringing the Covid-19 outbreak under control, but were not properly planned to lead the recovery.
“If you’re Mayor de Blasio and City Hall really coming out of this pandemic where we worked so hard to flatten the curve, they should have been figuring out how to have the welcome mat out for people to come back to New York. They should have been making sure that our streets were clean, that our streets were safe,” he said.
Rechler said if he were de Blasio, “I would be taking the subway every day with another group of business leaders and essential workers to show people that it’s safe to take public transit and reopen our city. It only happens when leaders demonstrate a sense of confidence and we’ve had, unfortunately, the inverse of that in this circumstance right now.”
Rechler noted his remarks Friday came 19 years after the Sept. 11, 2001 terrorist attacks, which killed 2,753 people in New York City. Then, as now, there were questions about how the city would recover from the damage inflicted by the tragedy.
He said the city’s response to 9/11 is an example of what he believes should be transpiring following the height of the pandemic. “At that time, we had extraordinary leadership that led us the way to rebuild our city so that we [weren’t] going to be to a point where we were going to flee the city of fear. We were going to come back and build a better, brighter city.”
Robert Reffkin, CEO of New York City-based real estate brokerage Compass, was not among the people who signed the letter to de Blasio. Earlier on “Squawk Box,” Reffkin said he was “glad” it was sent but indicated he did not believe some of its premise, particularly on safety.
“I do believe that when we look at the actual data, the issues around safety are more in the headlines versus the trend lines. The trend lines are positive,” he said. “If you look in the Upper West Side, yes it did feel a little different in New York City over the probably July period, but it’s been getting better week over week.”
