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The Power of Partnership

On September 11, New York's chief executives got a higher calling. With the city in crisis, the New York City Partnership, an alliance of A-list business leaders formed in the wake of the last fiscal crisis, is coming together to lead the counterattack.


Get the money now, Bill Clinton is chanting into a microphone, sermonizing before a parish of pin-striped suits. "Get the money now."

It's one of those strange-bedfellows moments that would have been impossible before September 11. Here is a Democratic politician of some distinction from Arkansas sharing the stage in Citigroup's packed Park Avenue auditorium with some of the city's top business leaders -- megadeveloper Jerry Speyer, billionaire financier Henry Kravis, real-estate baron and publisher Mort Zuckerman, AT&T chairman Mike Armstrong, Lehman Brothers chairman Dick Fuld -- and Clinton has turned the event into a gray-flannel revival meeting. Looking on from the audience like proud parents are Hillary Clinton and Chuck Schumer, along with George Pataki's economic czar, Charles Gargano, and union chieftains Brian McLaughlin and Randi Weingarten. It's a wildly disparate group, labor and capital, liberal and conservative, yet everyone seems to be following the same hymnal.

The New York City Partnership, a group of civic-minded business leaders that's hosting the meeting, is presenting an early peek at its economic survey of post?September 11 New York. It's a study the size of two phone books that recommends ways to support Wall Street right now, in its time of need, while building a more nimble and diverse economy for the future.

The Partnership is lobbying to ensure Congress signs over the $20 billion George Bush promised New York in the wake of the attack, plus a $5 billion package of tax breaks for lower Manhattan. Numbers like that can get most anyone on Wall Street excited, and Hillary's husband wastes no time pushing that button.

"Get the money now," Clinton repeats in his folksiest drawl. The terrorists aimed for the World Trade Center because they "think we're weak and selfish and greedy," he says, but that's no reason not to fight hard for that money. Clinton has been to the mountaintop in Washington, of course, and he knows there's less tax money there than meets the eye. Get it now, he says, because Congress won't save it for later. His eyes land on Bob Rubin in the first row, near Hillary, and his lip curls into a smile. "Ah see mah Treasury secretary sitting out there, nodding -- get the money now."

Nearly every speaker after Clinton takes this new mantra out for a spin. "To coin a phrase, we need to get the money now," says Jerry Speyer -- a past Partnership chairman who in his working life owns the Chrysler Building and a major interest in Rockefeller Center. The Partnership's current chairman, KeySpan chief Bob Catell, says it twice. Henry Kravis, who founded the Partnership's New York City Investment Fund, is more diplomatic but no less urgent: "If we don't have a public-private dialogue now, we're going to lose downtown forever."

For the first time in more than a generation, the city's business leadership seems united around something other than lowering taxes. "We need to think about the future of a city that's really been very good to us over the years," says the last speaker, Citigroup chairman Sandy Weill. "This terrible event really brought us all together."

During the fiscal crisis of the seventies, David Rockefeller, who was then chairman of Chase Manhattan Bank, marshaled business and labor forces to lobby Washington, fighting the ford to city: drop dead sentiment with one voice. It went so well that in 1979, he founded the New York City Partnership to keep the momentum going. The Partnership promoted economic development, education, and housing, but as the economy recovered, the labor presence diminished, fewer CEOs got involved, and its relevance seemed to fade.

Part of what changed over the past two decades was the kind of businesses that dominated New York. In Rockefeller's day, the city was the headquarters for 140 Fortune 500 companies; today there are only about 40. Over the years, New York?based bank presidents and industrialists decreased in number, and in their place came men and women from internationally owned financial-services companies. These revolving-door CEOs and global capitalists have fewer ties to the city, though their employees' salaries still fund a quarter of the city's tax rolls.

Even before the current crisis, the Partnership was redefining itself. But the trick was convincing a new generation of executives to think about New York. Rockefeller had founded the Partnership after the first fiscal crisis because "there was a feeling that the business world had been asleep at the switch," says Kathy Wylde, president and CEO of the Partnership. By last spring, that old feeling seemed to be creeping back. "Some of these new business leaders," she told me then, "are too focused on business."

"I think it has become increasingly difficult, as people do business all around the globe, to really be a good citizen," observes Jerry Speyer. "When I was starting out, I was always very impressed with the commitment that the heads of major companies made to the community. My God, the hours that people like that spent were phenomenal. These people are so darn busy now that they have less time than people had in the past. And because they have less time, they're willing to give less time."

Speyer launched a search for more activist partners to rekindle the organization. Among those he called on was Henry Kravis, who was looking for a more meaningful way to help the city. "I knew the Partnership, I was on the board, but I told Jerry I was disenchanted with it," remembers Kravis, founding partner of the leveraged-buyout firm Kohlberg Kravis Roberts (the majority owner of Primedia, New York's parent company). "They were doing all this lobbying in Albany, but I was looking for tangible evidence of where the Partnership had really made a difference."

Kravis's idea was to form a civic-minded venture-capital group to nurture businesses that create jobs in the city, particularly in nascent industries and emerging neighborhoods. The goal was to focus on correcting the city's overreliance on Wall Street by creating new industries, like biotechnology.

But the events of September 11 created a whole new set of challenges for the Partnership. The Monday after the attack, the group called an emergency breakfast meeting at the Regency Hotel -- the birthplace of the famous fiscal-crisis Power Breakfasts that Felix Rohatyn, Lew Rudin, Bob Tisch, and Victor Gotbaum inaugurated in the seventies. (Tisch and his nephew James, the Regency's owners, were there this time, too, and they picked up the check.) Senators Clinton and Schumer spoke to more than 300 executives about the importance of securing aid from Washington, saying that even with Bush's support, New York was competing with other interests in Congress. Through Bob Catell, the Partnership had already set up a phone bank at KeySpan for displaced businesses and employees. At this meeting, principals from Skidmore, Owings & Merrill, and Parsons Brinkerhoff started a working group to study infrastructure problems downtown.

The next step was to persuade seven of the nation's top consulting companies to deliver, free of charge, a damage report for the attack. Kravis was the magnet that attracted pro bono help from such consulting companies as Booz Allen Hamilton, McKinsey & Company, and PricewaterhouseCoopers. "That's symbolic in so many ways of what the private sector is doing, coming together to make New York City great again," he says. "These guys'll probably go back to killing each other when it's over."

The report, shepherded by Kravis, puts the price tag of September 11 at $83 billion, assuming the city's economy rebounds at the same rate as the country's. The consultants include a plan for saving the financial jobs that remain while slowly weaning the city away from its Wall Street addiction. But the recommendations -- a swift rebuilding of downtown's infrastructure, incentives for corporate retention, bailouts for small businesses, a life raft for retail during the holiday season -- aren't as new or startling as the forces the Partnership has lined up to push them. "I think that we've all sort of rallied round the Partnership," says Dick Grasso, the New York Stock Exchange chairman.

"This is the first time you've seen the businesses and unions together like that since the seventies," Wylde tells me now. "In this kind of crisis, that's what they're looking for -- what the Partnership was supposed to be. It was Rockefeller's vision. Now if anything, the crisis is deeper and more compelling."

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