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When Jamie Dimon took over as CEO of JPMorgan Chase 15 years ago, he noticed something strange: Occupying the bank’s most expensive real estate, with prime Park Avenue views, was a floor full of computer servers.
Dimon, according to JPMorgan insiders, asked why couldn’t those same servers be located in, say, Columbus, Ohio, where the real estate costs are much lower?
I can’t tell you where JPMorgan eventually put those servers other than to say they aren’t located in the Big Apple anymore. And the same will soon be said of many other banks and financial businesses now seeking to move out of the once-friendly confines of New York City, which isn’t so friendly anymore.
The trend has been a slow burn over the past two decades, but now it has kicked into high gear thanks to COVID, spiraling costs and a feckless political class that runs this city and state.
As reported last week, Goldman Sachs, known for its Democratic-leaning and virtue-signaling leadership, is now looking to move a chunk of its workforce to some of the reddest states in the nation, including Texas and Florida. Brokers at several big firms tell me they are likewise heading south.
“Charlie, get down here fast,” one (former) NYC financial adviser who just moved to Florida told me. “I can walk down the street without worrying about getting mugged, and I had dinner at a restaurant.”
It used to be said that New York City’s talent pool was second to none. Now the banks are finding that smart people are in Texas, too, and a lot of their top producers have no problem relocating to an up-and-coming city like Nashville, Tenn., where the quality of life isn’t so bad, particularly compared to the now crime-ridden streets of Manhattan.
Dimon, I am told, vetoed a plan several years back to move a swath of the bank to south Florida because he didn’t think the schools were good enough. Now he appears to have changed his mind and is considering plenty of relocations outside New York City.
With a vaccine on the way, many big businesses are plotting a fuller return to their NYC headquarters in the New Year. But don’t expect the banks’ NYC footprint to ever match what it was. Banks are talking staggered workweeks with some personnel going to the office just two or three days a week, and office space is shared.
The out-of-state migration to cut costs will continue even with a vaccine, because it’s simply too expensive to be in Manhattan, and the banks have lost faith in the ruling political class to protect their employees and provide their kids with a quality education.
That means tax revenues will plummet and budgets in the city and surrounding areas will get worse, not to mention the massively underfunded pension plans for municipal workers.
New York City, of course, has seen some dark times with its brush with bankruptcy in the 1970s and high crime through the 1980s, and we survived. But then again, we had a Rudy Giuliani waiting in the wings to run things, which is why big business stayed.
Not anymore.
Power players’ outsider mayoral picks
Speaking of the next mayor, for NYC’s big businesses — think Wall Street and real estate — the reign of comrade Bill de Blasio can’t end fast enough. They see his inability to control crime, the bungling response to COVID and his mishandling of school reopenings as secular trends that won’t be reversed by the status-quo pols running to replace him next year.
That’s why they’re banking on a trio of outsiders to save the city: Former Citigroup banker Ray McGuire; Shaun Donovan, a housing official during the Bloomberg years and in the Obama administration; and to a lesser extent former Dem presidential contender Andrew Yang.
Top executives, I am told, will do what they can to raise money to get them elected. Both McGuire and Donovan have been in touch with their contacts at these firms in recent weeks to consult on strategy and fundraising.
As Fox Business’s Lydia Moynihan has reported, Yang is now telling people he’s moving toward assembling a campaign staff and has turned down a role in the Biden administration because he is highly likely to run.
Bankers tell me they are aware all three are long shots. Recall how outsiders Rudy Giuliani and Mike Bloomberg spent years laying the groundwork before officially entering the race through savvy PR and, in Bloomberg’s case, spreading around a ton of cash to interest groups.
Neither McGuire, Donovan nor Yang has done anything on the scale of Rudy or Mayor Mike. Meanwhile, they will be up against seasoned Democratic pols in City Comptroller Scott Stringer and Brooklyn Borough President Eric Adams with strong ties to the powerful city municipal unions.
As The Post reported, a recent poll showed that Yang matched up well against both Stringer and Adams, but it’s still early so polling can’t really be trusted. McGuire and Donovan barely registered in the poll, which gives you an idea of their low name recognition.
In other words, the chances of a competent, business-savvy (albeit progressive) mayor running the city following the 2021 election appear slim.
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