Adams Victory in NYC Is Chance for ‘Reset’ With State, S&P Says
(Bloomberg) -- The election of Eric Adams as New York’s mayor provides an opportunity to “reset” the relationship between the city and state, which was beset by acrimony between current Mayor Bill de Blasio and former Governor Andrew Cuomo, S&P Global Ratings said.
Adams, a 61 year-old Democrat and Brooklyn Borough president, won in a landslide Tuesday to become the city’s second Black mayor. The former state senator could leverage his network in Albany for additional aid and, with a new governor, provide a “clean slate” for city governance, according to a report from the ratings company.
The strained relationship between de Blasio and Cuomo sometimes overshadowed what was best for the residents and economy of the nation’s biggest city, S&P said. For example, inconsistent messaging at the onset of the pandemic hampered planning by residents and businesses.
Kathy Hochul succeeded Cuomo as governor in August after he resigned because of a pattern of alleged harassment against female state employees. Adams’s victory promises a “new era of cooperation,” said Hochul, a Democrat who is running for governor next year.
“New leaders at the helm of New York state and the city have an opportunity to reset relations and collaboratively oversee initiatives that ensure the state’s economic engine remains a global business and tourist destination,” S&P analyst Nora Wittstruck said in a note.
While Adams has promised to address the city’s 9.8% unemployment rate, curb violent crime and reduce homelessness, S&P expects only “modest” changes to the city’s financial operations under his leadership. However, as a former police captain, he may have better relationship with police and labor groups.
Labor contracts for three of the largest unions representing police officers, firefighters and civilians have expired, and the teachers’ contract expires next year. The outcome of the next round of bargaining will have a big impact on city finances. S&P rates New York City’s debt AA, its third-highest investment-grade rating.
“His background and prior advocacy for police reform could reset the narrative on policing practices and contract negotiations and potentially strengthen the city’s risk management culture,” Wittstruck wrote.
New York City’s most urgent challenge is recovering from the pandemic. Its economy has been slower to mend than the rest of the U.S. overall. New York has recovered less than half of the 900,000 private-sector jobs lost at the start of the pandemic, with hotel, restaurant and retail employees hit hardest, according to the city comptroller.
Although the city received more than $15 billion in federal aid, Adams will have to balance future budgets after the stimulus funds are exhausted and motivate reluctant employees to get vaccinated, S&P said. He will also face a commercial real estate market that’s been hammered by the pandemic.
To restore the city’s tax base, Adams will have to support businesses in getting workers back into offices, bolstering demand for vacant office space.
©2021 Bloomberg L.P.