The Many Lives of Michael Bloomberg

by Eleanor Randolph

  But Bloomberg’s focus when it came to taxis was not on the company or the driver. It was on the person hailing the cab or looking for a ride to outer Queens. Other politicians in the city and state had too easily bowed to the demands of the Yellow Cab owners who too often abused the overworked drivers who, in turn, often refused to take fares outside the city’s hot zones. If you tried to hail a cab from downtown Manhattan to, say, upper Harlem, good luck. Bloomberg wanted something that hadn’t happened in the taxi business for years—competition.

  David Yassky, a former member of the City Council who became the chairman of the New York City Taxi and Limousine Commission in 2010, was a Princeton graduate with a law degree from Yale. He promised to add competition and fairness to the hired-car business in the city. Yassky would push for more taxis and other hired cars like Uber and then Lyft (a company he later joined as a consultant).

  When the politically powerful taxi fleet owners began to protest and flex their considerable muscle, Bloomberg prepared to go to war, if necessary, to support his commissioner. When Yassky introduced a new taxi—the Nissan NV200—fleet owners hated it. So did many customers, and finally the fleet owners sued the city. After the taxi crowd won the first round, Bloomberg was so furious that when he encountered Gene Freidman, then the owner of the largest fleet of yellow taxis in the city, the mayor threatened to “destroy your fucking industry” once he left office. He later denied the outburst when it was reported in the New York Post, but the encounter came at a New York Knicks game at Madison Square Garden, and there were witnesses.34

  The mayor and Yassky also wanted people to have access to hired cars—another revolutionary idea that infuriated the Yellow Cab operators. There were 13,300 yellow taxis, designated as such with the valuable “medallions” then owned by just a few companies. Most cruised downtown Manhattan or waited for a nice fare at the airports.

  So Bloomberg and Yassky created licenses for the apple-green taxis. These cars were designed to pick up stranded commuters who needed a ride outside of the city center or the airports. But Bloomberg also encouraged Uber to begin its work in the big city to take people where yellow cabs didn’t want to go.

  By the time Bloomberg left city hall, the green cars, like the yellow taxis, were beginning to lose ground to Uber and Lyft. The bright green cabs35 were earning $386,965 a day for about 3,500 cabs in 2018, compared to $862,099 a day three years earlier. But Bloomberg could find success in a better array of choices for the customer. Finally, it was easier for somebody outside of the Manhattan airport corridors to hail a ride.

  * * *

  If there was one big setback in Bloomberg’s transportation goals during his time as mayor, it was the effort to limit traffic coming into central Manhattan by charging more during rush hours. Congestion pricing, as it was known, would be tough, he knew, when his administration proposed a three-year pilot project. (Some of his advisers wanted to change the name, arguing, not entirely facetiously, that it sounded more like the remedy for a sinus condition than a traffic problem.)

  Bloomberg’s data showed that the average New Yorker spent forty-nine hours stuck in traffic every year in 2007, up from eighteen hours a year in 1982.36 And it could only get worse. The problem, he knew, was Albany—New York’s state legislature, often referred to as the place where good ideas in New York go to die.

  Indeed, Bloomberg’s “congestion pricing” plan in 2008 turned out to be too futuristic for the state politicians who could not see beyond the car culture in their own neighborhoods. Some called it a tax on people who lived outside Manhattan. The word “elitist” was used frequently by opponents in Albany. Even with a few changes to relieve costs for lower-income commuters, the proposal drew noisy criticism from noisemakers outside the city’s central zone.

  With the deadline looming for a federal grant, Bloomberg worked hard to convince state lawmakers to just give his plan a try. Just three years. But Bloomberg also made matters worse for some in the Albany crowd. State Senator Liz Krueger of Manhattan remembered when an exasperated Bloomberg came to argue privately for congestion pricing. The meeting with Democrats quickly grew “unproductive,” as senators kept reminding Bloomberg that he gave campaign contributions to their Republican opponents.

  Bloomberg grew more perturbed by the minute, Krueger remembered, in part because New York would lose $350 million in federal matching funds if Albany didn’t agree to his plan. Finally, he said, “ ‘Okay if we lose that federal money, you guys have to come up with it, $350 million among you,’ ” she recalled. “Then he says, ‘Oh, wait, I’m the only one in the room who has $350 million.’ ”

  The Democrats did not take it well, and after Bloomberg stormed out, Krueger saw him in the hall of the state capitol. “I said something like, ‘Mr. Billionaire . . . did you really think that was an effective model? I think this was a wasted trip for you.’ ”

  A few minutes later, he found Krueger and said, “ ‘My staff says I owe you an apology.’ ” When Krueger agreed, she said they laughed and worked together fairly well for years afterward.37 “He likes people who are blunt, who tell him exactly what they think,” she concluded.38

  Congestion pricing died formally that year when the Assembly Democrats decided not to bring it to the floor for a vote. Not even a vote. The mayor was understandably furious. “If that wasn’t shameful enough,” Bloomberg said of the loss in the assembly, “it takes a special type of cowardice for elected officials to refuse to stand up and vote their conscience . . .”39 And shortly afterward, a federal grant of $364.5 million for traffic “calming” that could have gone to New York City went instead to Chicago and Los Angeles.40

  In a few years, the Bloomberg congestion plan would be back, and by 2019, state officials looking for ways to fund the century-old subway system agreed to charge fees and tolls for anyone driving into the busiest streets of Manhattan starting in 2021.41 Bloomberg wasn’t wrong to push for congestion pricing, as it turned out. He was just early.

  22

  SILICON ISLAND

  “The world is about to end tomorrow.”

  —Bloomberg on the eve of the financial meltdown, 2008

  Michael Bloomberg was scheduled to board his plane for the West Coast for a major event with the then California governor Arnold Schwarzenegger, when he suddenly contacted his top political organizer, Kevin Sheekey. “I think we have to cancel our trip,” Bloomberg said. “The world is about to end tomorrow.”1

  Treasury secretary Hank Paulson had called that evening of September 14, 2008, to alert the Mayor of Wall Street that the mighty Lehman Brothers was going down and taking much of the economy with it. A few hours later, the Lehman Brothers investment bank with more than $600 billion in assets filed for bankruptcy. It would be the largest bankruptcy filing in U.S. history, the stunning failure of a firm that had survived nearly 150 years of financial turmoil including the Great Depression.2

  All day and into the evening of September 15, the sidewalks near Lehman Brothers’ headquarters in Times Square were overrun with gawkers, journalists, and dozens of bewildered Lehman workers holding boxes overstuffed with personal files, family photos, and mementos. A Wall Street recruiter handed out cards beneath what was once Lehman’s three-story-high electronic television crawl. A street artist nearby had crafted a scowling caricature of Lehman chief executive Dick Fuld. Across the bottom, one ex-worker had scratched a bitter goodbye note: “I hope his villa is safe.”3

  For all the agony in Times Square and Wall Street, the Lehman implosion was not a local problem. It was another powerful signal that the whole world was sliding into the worst financial crisis since the 1930s. And Michael Bloomberg’s city, with so much of its wealth tied to the financial industry, was about to fall into another of its slumps that seemed to come and go with alarming regularity. This time, the city would lose roughly 150,000 jobs and suffer from an unemployment rate rising to 10.2 percent.4

  Bloomberg would be forced to trim his city budget and try to hold
on to commercial real estate taxes set to expire. Even more dramatically, the man who had stepped in to save the city after the financial effects of the World Trade Center attacks on 9/11 would use the sudden downturn in 2008 as another reason that he should stay in charge and run the city for a third term a year later (see chapter 24).

  But perhaps Bloomberg’s most important response to what became known as the Great Recession would not be fully recognized for nearly a decade.

  * * *

  Like other Wall Street veterans, Bloomberg knew only too well how New York City suffered from the bears of the marketplace. Sometimes, looking at the government balance sheets, this city of over eight million people could seem like a one-industry town, with Wall Street and its lavish bonuses funding the gaps in city and state budgets. When those bonuses withered, so did New York.

  Bloomberg’s answer was to expand the kinds of businesses in the city, to provide more of a buffer against the dreaded Wall Street cycles. He was not the first mayor or public official or concerned New Yorker pushing for diversification of the city’s businesses (and its tax base), but Bloomberg pursued it in a particularly intense way. He wanted more culture, more entertainment, more tourists, of course, but even tourists could be fickle, and Bloomberg wanted some of his smartest and most intense young aides to find a solution.

  To do that, Bloomberg and his top advisers created a group that would soon call themselves the “game changers.” They were led by Seth Pinsky, a graduate of Columbia College in ancient history and then Harvard Law School. Bright, intense, and straightforward, Pinsky had become a real estate lawyer, then joined the city government in 2003 as vice president of the NYC Economic Development Corporation, the city authority that managed or encouraged many of the city’s top real estate ventures. By 2008 and still in his midthirties, he was president of the development corporation and just the kind of intense leader Bloomberg wanted for this task.

  To help out, the mayor offered Pinsky and the game changers his star-studded address book. Armed with numbers and emails for about 350 of the city’s biggest names in business, academia, media, government, politics, and community affairs, the small group of interviewers soon focused on one main question: “If there is one thing about NYC that you could change that would have the greatest impact on the city’s economy, what would it be?”5

  The idea was to get people to think big. This was not about a zoning change or tax break. Nothing from Albany. The game changers wanted something that would establish a new economic foundation to help New York City thrive for the next hundred years. Think grandchildren, they suggested. Great-grandchildren.

  The response was dramatic. While the city was indeed a mecca for the high school soprano or the fashion designer or TV journalist or business kid who wanted to make it big, another kind of talent was in short supply. Corporations needed super-savvy engineering graduates including the “quants” or math whizzes who would know about quantitative analysis and applied sciences, people who had the technical expertise, the engineering know-how, to start or save companies stuck in the complicated, computerized world of the twenty-first century.

  What New York City needed was a new university, some ventured. New York had some excellent universities, they agreed, but the city needed its own MIT. New York was attracting high-tech business, but it lacked the city’s own Stanford University, which had helped feed many of the big winners in Silicon Valley.

  A new science and technology university was indeed a big thought, so big that it sounded almost whimsical, like another futuristic proposal from a think-tank seminar. But creating the future out of thin air was exactly what Bloomberg wanted the game changers to do.

  Pinsky remembered the evening at city hall when he and then deputy mayor Bob Lieber nervously took their findings to the mayor. They laid out the proposal for a brand-new academic center, somewhere in the city. It could be an arm of an established university, they ventured—a New York City branch of Stanford or Cornell.

  As Pinsky and Lieber made their pitch for a project that could take years, Bloomberg sat quietly through the presentation. He did not interrupt, but he also did not fidget or sigh or send any signal of how he felt, up or down. Finally, when the presentation was finished, Bloomberg said it was a great idea with one glaring flaw. “Your time line is not aggressive enough,” he said. “And if we’re going to do this, we’re really going to have to be aggressive.” As he left for his next evening appointment, it was hard for some in that room to resist doing cartwheels.6

  Then the project stalled. Pinsky and his colleagues had reached out to a few universities and quietly asked whether they might be interested in some kind of deal—land from the city in exchange for building a tech graduate center.7 The response was encouraging, much better than inside city hall. The budget office worried about how you could give away city land. Others simply thought it was too far-fetched, even for a mayor who promised to pursue big ideas.

  Then in June 2010, the mayor hired Robert Steel to replace Lieber as deputy mayor. Like Bloomberg, Steel knew the inner workings of modern business. He had been at Goldman Sachs for almost thirty years, served as undersecretary of the Treasury for President George W. Bush and orchestrated the sale of Wachovia Bank to Wells Fargo in 2008. Perhaps more important for Pinsky and the game changers, Steel was a dynamo whose abrupt and sometimes-abrasive manner could offend almost as easily as he could inspire. He was not enchanted with the city’s social scene or its prying media. He once told a New York Daily News reporter that he lived mostly in Connecticut because he had dogs, and “where would you rather live if you were a dog?”8 But Steel moved at Bloomberg’s preferred high speed, and the mayor clearly admired him.

  When Pinsky took the plan to Steel, the new deputy rushed over to Bloomberg’s desk to confirm that the mayor really wanted this new university. Steel had been chairman of the board of trustees for Duke University, and this was the perfect task for him. A competition to create an entirely new university? Once the mayor told Steel he had already approved it and it was a great idea, “that was basically the moment when the whole thing was unleashed,” Pinsky said.

  Four very short months later, a whisker in government time, Bloomberg announced that the city was “seeking responses from a university, applied science organization facility or related institution” to create a new branch in New York City. He wanted the new facility to focus on the science and research that “particularly . . . lend themselves to commercialization.”

  The city was willing to do its part, the mayor announced.9 There would be land available, he said, overruling some in his budget department. And he suggested four sites—the Brooklyn Navy Yard, Roosevelt Island, Governors Island, and the Farm Colony, a former poorhouse on Staten Island.

  A few weeks later, Bloomberg explained in a letter to dozens of select “members of the higher education community” that the city was offering “full-throated support” in order to be “not just a leader but the leader” in the academic fields of “science, technology, engineering and mathematics,” often known by simple shorthand as STEM. The letter was cosigned by twenty-three New York leaders including U.S. Senator Charles Schumer, former mayor Ed Koch, former CEO of AOL Tim Armstrong, several real estate and other business executives, British editor Sir Harold Evans, and fashion designer Diane von Furstenberg.

  Bloomberg was now in top gear on the project. He met with presidents of universities. He took university representatives to breakfast at Gracie Mansion and arranged for tours of the New York Stock Exchange. This was a “once-in-a-generation” opportunity he told them. This was free land. Free land!! In New York City!! And grants, even some it would turn out, from his own vast supply of funds. The salesman Bloomberg was on full-throttle. How could they resist?

  Within two months, Bloomberg announced that the city had received eighteen expressions of interest from top universities. They came from Finland, Korea, India, and in America, included Carnegie Mellon, NYU, Columbia, Cornell, Cooper Union, Purdue, St
anford, and the University of Chicago.10

  There was grousing, of course. This was New York, and Bloomberg had already irritated many in the city’s large academic community by suggesting that New York City lacked a top-flight engineering school. City Councilman Ydanis Rodriguez was miffed that incentives were being offered to outsiders when the city budget still had gaps from the economic crisis. Money should go to city schools, he argued. “We have great programs here.”11

  In the next few months, the contestants narrowed to two—Stanford and Cornell. And they were competing for one spot—Roosevelt Island, the stretch of twelve acres in the city’s East River. The island once housed a decrepit New York City Lunatic Asylum that was exposed as a “human rat-trap” by the intrepid journalist Nellie Bly in 1887 and was later used as a facility for smallpox victims.12 By 2011, however, there were rows of apartment buildings, some of them offering high-end places with stunning views of Manhattan. And for commuters, there was also a cable car over the river and a subway for those nervous about heights.

  The word among city leaders in those days was that nobody could beat Stanford. Perhaps most important, Stanford’s representatives in New York City seemed to believe that nobody could beat Stanford. As Steel said at one point of Stanford’s competitors, “They’re a bit like lining up against the Yankees.”13 Cornell, the early underdog, dismissed such talk and simply fought harder. The officials in Ithaca, New York, where Cornell has its main campus, saw this contest the same way Bloomberg was selling it. This was indeed the opportunity of a lifetime. Despite having a medical school and other facilities in New York City, Cornell’s academic center was about 250 miles away from Manhatttan, a distant, Ivy League gem often underrated by New York’s Harvard-Yale-Princeton crowd.