NYC Will Take $300Million Hit to Economy Due to RN

Republican Mayor Bloomberg of New York City said that the RNC having it’s convention there would be an economic boon to the city. And since New York has had economic problems since 9/11, this was to be a “godsend”.

Too bad that instead of a boon, it’s going to be a bust, and a big one at that!

The NYC Comptroller is now saying, six days before the convention starts,
that the city stands to lose about $309 Million because the convention’s in town. Streets are shut, shops are already shutting down. And don’t forget the thousands of New Yorkers who are fleeing the city, wanting to escape the madness.

Article archived here.NYC Could Lose $309 Million from Republican Convention
Tue Aug 24, 2004 05:40 PM ET

By Linda Prospero

NEW YORK (Reuters) – New York City stands to lose about $309 million as a result of the Republican National Convention, the city comptroller’s office reported on Tuesday, contrary to the city’s claim of a $265 million economic gain.

Mayor Michael Bloomberg has touted the four-day event that starts on Aug. 30 as an economic boom, bringing in about 50,000 visitors to the city, including 14,000 delegates.

Many of the streets surrounding Madison Square Garden, the site of the convention, will be closed to traffic, and businesses in the area have been bracing for what they lament could be a financially draining week.

Eli Rios, who owns Aurora Gallery as well as a fine art restoration business just two blocks from the convention site, is trying to rent his space for parties and art shows during the political fest, rather than use it for restoration jobs.

“It’s not that I won’t have work for the restorers to do. I have plenty of work. But with the streets closed off, the entrance to our block is closed. The problem is getting the work in and out,” he said.

In reaching its $265 million economic gain estimate, the city has factored in local business concerns and a potential flight of New York City residents during the week, said Michael Sherman, a spokesman for the city’s Economic Development Corporation.

That figure includes direct and indirect spending by the city, the host committee, the national Republican Party and the roughly 50,000 visitors, Sherman said.

“We have looked at all those issues and we still think that there will be a very positive overall benefit,” he said.

However, an unofficial analysis by City Comptroller William Thompson estimated the potential $309 million blow to the city using a calculation that assumes a $70.3 million daily loss of the city’s gross city product, or $281.2 million over the four days.

Added to that is $28 million from security costs that will not be reimbursed, he said. The total security tab for New York City’s Police Department is forecast at $78 million, Thompson said, with about $50 million in federal funding. That’s the same amount of federal funding received by Boston, site of last month’s Democratic National Convention.

Marsha Van Wagner, an economist with the Citizens Budget Commission, a fiscal watchdog group, said residents’ exiting the city for less congested climes may have a negative impact for the week, but in the aggregate it will not really drain the city of revenue.

“Most people who are leaving aren’t going to take extra vacation time, they’re just moving vacation time around,” she said.

A major unknown is how much the visitors will really spend in the city, because many are getting freebies and discounts on hotel rooms and attractions, and the tight security may deter them from venturing too far, she said.

Judging from the lack of reservations received at the Tribeca Grill, Nobu and Montrachet, some of the city’s best-known restaurants, they do not appear to be lining up to spend in lower Manhattan.

Nobu, which usually is fully booked a month in advance, still has dinner seating available and lunch is wide open, said Tracy Nieporent of the Myriad Restaurant Group, owner of the restaurants.

“The way it’s playing out right now, the convention isn’t doing much for business,” he said. (Additional reporting by Leslie Gevirtz.)

Reuters 2004. All Rights Reserved.

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