The Hard Truth About New York

This is New York's next major problem. Businesses that want to hold on to their most talented and dedicated employees will have to start accommodating them by offering the option of working in an office park in the Jersey suburbs, or in a Stamford or Greenwich, Connecticut or White Plains, New York office. Commercial real estate in Connecticut towns like Danbury and Norwalk can be had for one-third of what it will soon cost in downtown Manhattan (when the new, post-September 11 insurance rates kick in). If you're Merrill Lynch, saving tens of millions of dollars on real estate and related costs and making most of your workforce feel better about coming to work is a package deal that will be hard to pass up. Before September 11, most of the New York workforce would never have tolerated being transferred to a place like Norwalk. Now vast numbers of them want to be transferred.

That's what September 11 did to New York. It broke the virtuous circle where money and talent fed off of each other, attracting ever more money and talent. And it revealed a simple fact of corporate risk management: Concentrating all of your assets in one place doesn't make sense. The story of Cantor Fitzgerald -- on September 10, the company had 1,000 people working in New York, and by noon the next day, 700 were gone -- was the lesson learned at the corporate-leadership level. Risk management requires reconfiguration, a new allocation of resources, a new strategy to safeguard your scarcest resource: people. It is logic -- not negativity -- to suggest that New York's share of those scarce resources can and will be diminished.

So there are hard times ahead. It's considered bad manners to say that. The official line is that the city has never been safer, that we're "coming back" stronger than ever. But it does not feel that way, especially when the subway stops for no reason, or when the sirens wail as police cars go hurtling down the avenues. It doesn't feel that way at all.

What will bring New York back? It won't be something engineered by the elite. The governmental elite are, post-Giuliani, a mishmash of second-rate minds and third-rate hacks. The business elite can't engineer a rebound; as noted earlier, prudence requires that they at least partially bail out. The media elite can't jump-start themselves, much less a city -- and it's not really their function to do that anyway. The universities and hospitals can't get it done, because they don't have the juice necessary to be dynamic.

The people at the grassroots level will be the ones to bring the city back. Great cities hold together after catastrophes in large measure because the people who live there make that choice: They simply refuse to give up. This was true of Berlin, London, and Tokyo after World War II. It will likely be true of New York after September 11.

The idea of New York is fundamentally life affirming. It states that we can live and work together in relative harmony and go as far as our talents allow. The idea of New York is about hope, promise, and aspiration. Those are powerful forces that, over time, will not be denied. New York will come back after a swoon, because the people who choose to live there will simply refuse to give up or give in. They will hold fast to the idea of New York and, in so doing, ensure its survival -- and eventually its renaissance.

John Ellis (jellis@fastcompany.com) is a writer and consultant based in New York.