1992: year for commitment/year for action.

1992: Year for commitment/Year for action

We all know the market statistics. They are terrible. Office rentals are being discounted at alarming rates and net effective rents are being further reduced by excessive free rent periods and landlord's work. The result of this extreme downward pressure on New York City real estate, in certain instances, is a major discounting of values by as much as 50 or more of those values of just two or three years ago. The workforce is frightened over the possibility of job loss, or terrified if they are already out of work. The banks have either initiated extremely stringent underwriting standards or shut their doors altogether because of excessively large, non-performing loan portfolios.

As a result, there is no confidence in our society today - in our banking and other financial systems and business structures. And, there is no confidence in the leadership of our local, state and federal governments. Today every sector of business has tightened its belt in what appears to be one more round of this overextended recessionary cycle.

Almost daily, articles appear about how the despair and loss of confidence are affecting consumer buying power, the main element many of our economists hope will turn the economy upward. If this is true, then the problem is ours and the solution is within ourselves.

In order to discover the proper solution to the problem, we should draw upon the lessons of the 1932 Depression and the 1972 Recession - periods when public assistance programs and federal and municipal aid were used to turn the economy upward. Conversely, we should look to the age of confidence between 1870 and 1914, when the Brooklyn and London Bridges were built, and when the Panama and Suez Canals were dug, linking oceans and nations. That was a time of renewed frontierism, following closely on the winning of the western frontier in this country. Today we live in a time of restriction and constriction. For the first time in decades, we have lost our confidence and have no new frontier to conquer. Or do we?

I believe we do? This next decade our new frontier is right here in our own great city and country. This decade is the critical one when we must make concrete plans in "do-able" terms for our future.

We cannot let New York be eclipsed as a world capital city and as the financial capital of the world. No city - Los Angeles, Chicago, Atlanta, Dallas - can even begin to compete as a global capital city within the world community. As members of the real estate profession, where our livelihoods depend on the value of the City, we must work harder than ever to maintain New York's position - no one else can do it for us! How can we be part of this great new cause?

We must insist on strong leadership in all sectors of our society, and undertake common, co-operative goals between our leaders in government, labor and business, to do whatever is necessary and fair for all involved. In that way we can once again create the confidence that we are taking charge of the economy and putting it - and our City - back on its feet. To be specific, our infrastructure in New York is in desperate need of repair. Public repair programs would create many needed new jobs in the construction industry which faces a lingering 50 percent unemployment rate, to say nothing of related industries such as parts manufacturers, material fabricators, service industries and others.

However, the unions must be able to understand that they must co-operate - they must hold their wage increases in line so that the Municipal Assistance Corporation can come forward with funds to close the budget gap and loosen up funds for the public assistance programs, such as infrastructure repair. Also, the banks must open their doors, once again to good qualified borrowers. The day of the character loan is once again at hand. These loans were built on the confidence between the lender and the borrower and have always been instrumental in the growth in any city, region or nation. The money must be put back in circulation, albeit more conservatively, but the banks should not close the doors on the very people that can make the difference and be the solution to the economic upturn.

Right now New York seems mired in its own pessimism. To those who see no way out, we would do well to remember the words spoken in another great global capital, London, which also suffered greatly with the partial destruction of its entire city during World War II. In 1955, Sir Winston Churchill, on the occasion of his retirement from Parliament drawing on the lessons learned during some of the darkest hours in modern history said to his constituents, "Meanwhile, never flinch, never weary, never despair."

It is now time to commit ourselves to the solution and not the problem, to work as hard as we possibly can for this city, that has done so much for us and has so much to offer.

This may yet be one of New York City's and this population's "finest hours."