Weisbrod touts NYC to foreign investors - president of New York City Economic Development Corp., Carl Weisbrod

Real Estate Weekly, July 1, 1992 by Therese Fitzgerald

Bertelsman AG, the German-based communications giant, may have hit the real estate market at "the very best time" when it purchased 1540 Broadway, according to Carl Weisbrod, president of the New York City Economic Development Corporation.

Weisbrod made this assessment before a meeting of the Association of Foreign Investors in U.S. Real Estate, an association of representing investors from all over the globe and investment advisors.

The 42-story Time Square office tower, formerly owned by Developer Ian Bruce Eichner, was purchased for $119 million from a consortium of lenders that held a $240 million mortgage on the property. The building will serve as the new U.S. headquarters for the foreign corporation and will be a consolidation site for all their offices and subsidiaries in New York. In addition, Weisbrod said, they will reserve 25,000 square feet for new foreign businesses.

According to Weisbrod's estimation's the recession may be ending or be over for New York City.

"If you're thinking of buying, now may be a particularly opportune time to do so," Weisbrod said.

In addition to bargain real estate deals, Weisbrod said, crime complaints are down in every category in New York City. In the subway's - "the city's arteries", he beamed, crime is down 20 percent in the first six months of this year. The trouble over the Rodney King verdict had few reverberations here. "Comparatively, New York City is starting to look actually good," he said.

And, he said, while the city has been able to curb tax hikes and cut back on the labor force, they have managed to increase resources to the police department.

According to Weisbrod, the city spends much of the revenues it raises on infrastructure. The city, he said, has an extensive 10-year capital plan, and they spend two to three times more on infrastructure than Los Angeles. In 1993, he said, they will spend $765 million on schools, $241 million on bridges and $192 million on streets and highways.

And while individuals and corporations have left the city for the "greener pastures" of the suburbs, Weisbrod said the low tax base disables these areas in meeting infrastructure needs.

Weisbrod said he is not worried about companies moving out of the city, and many of the news stories about these departures have been exaggerations or "fabrications."

As we become more of an information-based business culture, he said, the need for quality information intensifies and it is important to be near the source.

A study by Sociologist Holly White, he said, showed that of the companies that left the city during the 60's and 70's one-half went out of business or lost their corporate identity and stock prices and profits were lower. In many moves, he said, the cost often exceeds the expectation.

Wall Street is beginning to hire again and "it is quite likely", he said that all the investment banks that are talking moving out of the city will decide to stay. New York-based institutions today, he said, hold 40 percent of the country's wealth.

New York, Weisbrod said, has more foreign businesses, more foreign offices of government, and more translators than any other city. Its "breadth and depth" of support agencies - law firms, accounting firms, advertising agencies and others - is unmatched.

Weisbrod was originally scheduled to speak on the topic "Is New York doomed?", a question posed by the group's speaker last year who also suggested that the New York Stock Exchange might move to Washington, D.C. Some days before the meeting he asked that the title be scrapped and in regards to the possibility that the stock exchange would flee the city, Weisbrod said it was ridiculous because, for one reason, they couldn't call themselves the New York Stock Exchange.