NYC Partnership economic impact analysis update, February 2002

NYC 9/11 Public Portal Document

infi-astructure repair as well as the multiplier effect of these actions, the city’s economy would sustain a net loss of at least $16 billion. Now, five months after the attack on New York, the seven management consulting firms the Partnership commissioned to conduct the study have updated their findings. The firms - A. T. Kearney, Bain & Co., the Boston Consulting Group, Booz-Allen & Hamilton, KPMG, McKinsey & Co. and PricewaterhouseCoopers - identified the following salient observations and developments:

• Larger Financial Services Firms Are Adopting a “Two-Track” Strategy. Financial services firms are reconsidering their concentration of talent and facilities in Manhattan, and are moving quickly to diversify the location of their business units. The impact of the attack on the entire industry - not just firms displaced from Lower Manhattan - is resulting in a greater shift of jobs out of the city than originally anticipated. > American Express plans to return 3,200 of its 5,000 workers to 3 World Financial Center by June. The only employees who will remain in New Jersey are those who were based there before September 11*. > Morgan Stanley, which had 3,500 employees in the World Trade Center towers, plans to buy a Westchester County property and move 2,000 jobs there. Most of Morgan Stanley’s 14,000 employees will remain in its current locations in Midtown and Brooklyn. Morgan Stanley recently signed a lease for 150,000 square feet near the World Trade Center site. > Goldman Sachs, long based in Lower Manhattan, announced plans to move its equity trading division to the Jersey waterfront in Hudson County.

• Implications of These Diversification Moves for New York. OTtoe 129,1322 financial services jobsleftinLowerManhattanafter thejXtack^3 L000of them were classified as “at risk” of leaving in the Partnership study. Corporations’ heightened interest in dispersing their business units underscores the urgency of a five-borough strategy for developing satellite business districts in downtown Brooklyn, Long Island City and other areas beyond the two central business districts (Midtown and Lower Manhattan). These satellite districts can offer businesses another power grid and other alternate systems that can avoid or minimize business disruptions fi-om natural and manmade disasters. • Signs of Major Business Commitment to Lower Manhattan and New York City Abound. Many of the financial services companies displaced by the events of September 11th have committed to returning all or most of their employees to Lower Manhattan or Midtown. > Merrill Lynch has already returned 6,000 employees to the World Financial Center fi'om spaces in Midtown and New Jersey. > Bank of New York returned to One Wall Street, has leased 800,000 square feet at 15 Broad Street and expects to return to other Lower Manhattan buildings as they become available for its 2,200 employees. New York City Partnership and Chamber of Commerce 2

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