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20 As discussed in the previous chapter, the city’s attempt to build sports venues reflects a commitment to promoting economic growth across the city, even though there is frequently disagreement over the ways in which economic growth is being pursued. The city’s intent to promote economic growth and the diverse strategies it employs to do so have become institutionalized over the last two decades. This chapter will discuss several of the methods employed by the city to promote economic growth. The Economic Development Imperative and Governance New York City, similar to all political systems, needs revenue to fund the delivery of goods and services, a major component of governance. Through the creation of new employment and the enhancement of land to more productive uses, the city expands its taxable assets. The proposed conversion of the Hudson Rail Yards to an Olympic/football stadium and the conversion of Brooklyn’s Atlantic Yards to a professional basketball arena and office/residential complex were supported by governing elites because they were viewed as economic development projects that would benefit the city’s tax base as well as creating jobs and wealth for the citizens of the city. Economic development, however, also affects the governance of the city through its relationship to the other governance functions of democratic accountability and, less directly, civil harmony. As the Hudson Rail Yards and Atlantic Yards projects illustrate, large economic development projects are controversial for a number of reasons. First, they have an impact on the community where they are located. Some will view the impact positively and will support the project. As in the case of the Olympic Stadium and the Nets Arena, however, some will view the impact negatively and will oppose the project. Second, given 2 The Economic Development Imperative Chap-02.qxd 8/16/07 1:50 PM Page 20 THE ECONOMIC DEVELOPMENT IMPERATIVE 21 the investment of public resources to subsidize the development, some will oppose the project, arguing that it is a bad risk for the city, a poor investment of public resources. Third, as in the case of Madison Square Garden’s opposition to the proposed Olympic Stadium, some will oppose a project because they believe it compromises their own competitive advantage. The existence of opponents and proponents to economic development projects , together with the fact that such projects include an investment of the political system’s resources, necessitates that decisions regarding such projects take place through a process that is democratically accountable. The lack of such a process in making decisions regarding political system support of the project will result in some calling the legitimacy of the decision into question. New York City’s Changing Economy Over the past several decades, those governing the city have had to promote economic development amid a changing economy. Since the s, the city has gone through three major economic changes. First, between 1 and , manufacturing employment in New York City declined from almost  percent of its employment base to  percent, today representing approximately , jobs (United States Department of Commerce ). The manufacturing job losses experienced by New York were similar to losses experienced by other Northeastern and Midwestern cities, as jobs left urban areas, the region, and the country. Some jobs simply disappeared as firms went out of business because they could not compete with businesses in other parts of the region, country, or world with lower production costs. Despite this national, if not global trend, there are still officials and groups in the city who advocate economic development programs that will retain and attract manufacturing employment. The role of the federal government in the decline of manufacturing jobs in the city should not be understated. The growth of the interstate highway system, a federal program, made the cost of moving goods far less expensive than it once had been. This negatively affected the relative advantage of locating factories in the city. Due to the ability to move goods fast and for little cost, the necessity of keeping manufacturing centers close to consumer markets decreased. Goods could be delivered to people living in New York City without locating the factory there. In addition, new manufacturing technologies favored one-story facilities with loading docks and ample parking facilities instead of renovating old multistory urban factory buildings. These new factories required a great deal of land. Land quantity and cost considerations influenced manufacturing movement out of the city to the suburbs, on many occasions out of the region, and...

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