2001 looks okay, but what about post-Giuliani 2002?

We have reached the middle of 2001. It is trite, I know, but time does fly, whether one is having fun or not...

As I wrote before, this has not been the best of times nor the worst. It is apparent that the economy, although gradually improving, hasn't improved fast enough to accomplish the full recovery we expected earlier. The recent rate reductions by the Fed, along with the tax cut passed by Congress, should stimulate the economy by the fourth quarter at an accelerated rate.

Although the manufacturing sector and the dot-com area are still very sluggish, it is believed that they should start to improve by year-end. Unemployment, which has been growing in the recent period, shows signs of stabilizing. Service sectors have led by continuing to be moderately strong.

New York City has felt the pinch. However, certain segments of its economy have remained relatively sound, compared to the rest of the country.

Although the vacancy rate in commercial real estate nationwide has increased.

New York City, though declining slightly, has remained fairly steady.

The residential area shows signs of a hold up in inventory. This has resulted in more aggressive marketing by brokerage firms.

The very bright spot is retail leasing, which is holding its own.

At this point, the rest of the year looks fairly good. As stated above, things will gradually start to swing upward, and the country will be on its way again.

But the concern of New York City is not what happens the rest of this year -- barring major disasters -- but what comes after that: On January 1, 2002, the city is facing a major change:

On January first, New York will have a new Mayor, City Council Speaker, and thirty-five brand new members in the City Council.

All of this is due to a recent law, brought into effect by voters tired of politicians too long at the job and the corruption that often attends a lengthy tenure. The law limits terms of office. For example, Mayor Giuliani may only serve two terms as mayor consecutively. He can be re-elected as mayor in another four years and serve two more consecutive terms if the constituency so desires.

The state of Alabama has much the same law. The late Governor George Wallace solved the problem in 1966 by having his wife, Lurleen, run for office for the interim four years. Lurleen won and George was back in 1970.

This resolution is impossible for our Mayor, due to the Donna Hanover/Judith Nathan incident. Also, New York isn't Alabama. New Yorkers don't go for such stuff.

Therefore, Giuliani is out as mayor, whether we like it or not, as is Peter Vallone, long time City Council Speaker, and two-thirds of the Council itself.

Vallone has had great control over the Council since 1986. When he leaves, there will be what has been called, "a power vacuum." Some of the veteran Council members to be replaced have been serving since the Lindsay administration.

It is up to the Council and staff members to keep City Hall running smoothly. Many are asking how that will be done, if most of the City Council won't have a clue as to how to do it.

And as for the Mayor, how many of us remember how it was "Before Giuliani", say 10 years ago?

Ten years ago, Times Square was hardly "the crossroads of the World". It was a gritty, dangerous place to be at night or in the day. A friend of mine would quote

Dante about abandoning hope before entering every time she had to go to that area.

Today, the change in Times Square is not to be believed. Full of lights, it literally soars to the sky with all it new, fabulous skyscrapers. Tourists flock there, no longer afraid of what lurks in the corners.

Ten years ago, Fifth Avenue was a has-been. Today, the Avenue's Luxury Walk, from 60th Street to 46th is again the most pedestrian traveled boulevard in the world and elegance has returned.

Ten years ago, Madison Avenue was chic -- the gold coast. Today, it's even chic-er, if that's a word, and the gold coast has grown longer having become the address of most of the glamour fashion establishment extant.

Ten years ago, SoHo, saved from Robert Moses' wrecking ball, was a landmark neighborhood of cast iron buildings occupied for the most part by artists and art galleries. Today, it is Madison and Fifth Avenues moved south, with the same names, but with an exotic edge.

Ten years ago, there was no NoLIta, only a few quiet streets in the northern part of

Little Italy, with shops catering to the needs of the neighborhood. Today, NoLIta is a community of wonderful boutiques, filled with merchandise that is amusing, avant-garde, ultrachic. NoLIta has a magic all its own.

One could go on and also mention the exciting changes happening now -- and what things were like ten years ago -- in Chelsea, the Meat-Packing District, Union Square, Madison Square, the East Village, the Financial District, the new 34th Street, the new Garment District, even the Upper East Side. Today, all are growing: improving, building or re-building, attracting new business, new profitability.

The above was caused directly or indirectly by the Giuliani administration. The City became inspired; we believed we could do it and we did it. New York City rediscovered itself as the Capital of the World.

What will happen next? I hope that the City will continue on an upward path and not backslide. New Yorkers are great. Now that they have seen what can be done, I'm sure that they won't let it become un-done, but will go on improving the City and making it great. Always the Pollyanna.