NEW YORK, NY September 03, 2004 — When New York City bid for the Republican Convention more than two years ago, September 11th still cast a shadow over the city's economy and its image. Both would get a shot in the arm from the RNC, Mayor Bloomberg and others said. WNYC's Fred Mogul tried to find out if they did.

FM: It's Thursday morning at Century 21, the Lower Manhattan discount store, and customers are starting to filter in. Retailers throughout the city have reported slow-downs this week, but not this one. There has been a steady stream of bargain-hunters clearly connected to the RNC. But the store's Executive Director, Jeffrey Jasner, doesn't think they've made a big difference.

JJ: We have back-to-school season this is really just getting into gear. No-tax-week has been very, very good for us. I don't think the RNC has impacted our business in a huge way.

FM: Century 21 is one of the best known stores of its kind in the city, and it's located across the street from the World Trade Center site - perhaps tourists' top Manhattan destination. Large operations typically stand a better chance of riding out economic turbulence and even making the most of it. Century 21 is paying sales tax for customers on all items this week, extending the state's tax holiday for clothing and shoes to the store's entire inventory. Shore store manager Antoine Bengahmen can't do that.

AB: It's getting slow, because of the convention, I think people are scared or something

FM: Bengahmen manages Medici shoes on the Upper West Side, and he hopes No-Sales-Tax week will help blow away the RNC doldrums.

AB: It will always help. It makes a difference. Every little thing helps. Hopefully it will help bring some people in, make business.

FM: Every large event will have its winners and losers. Mayor Bloomberg has relentlessly declared that the upsides will outweigh the downsides. Speaking on WNYC's Brian Lehrer show, Bloomberg brushed aside reports of sluggish business.

MB: Look, Number 1, it's a very big city. This is a tiny slice of the city. So the question is what about businesses throughout the city. Number 2: I'm not sure those facts are correct. People in stores along the march said they all did very well, when people went into their stores who on a Sunday in the summer normally wouldn't. Remember: The quietest week of the year. Very small section. Let's take a look at the numbers later. But this is a very big economic boom for this city. Short term all this money's being spent. Long-term it helps our tourism.

FM: Actually, the end of August is not the slowest week of the year, according to economist John Tepper Marlin, from the city comptroller's office. That would occur in the depths of winter. And, Yes. It is a very big city, and much of it was unaffected by the RNC. But Manhattan accounts for about three-fourths of the city's economy, and many different sectors were adversely affected, not just retail stores in midtown. Marlin calculated before the convention that it would cost more than it would earn. After three days, he says, things seemed to be worse than expected.

JTM: Our estimate of the downside is, was fairly conservative. In other words, the loss of business of a large convention in midtown Manhattan that requires a lot of security is something that has a downside.

FM: Marlin projected the cost in lost business and un-reimbursed security expenses would exceed 300-million dollars, well more than the mayor's original estimate of 265-million dollars in RNC-related revenue. Yet he says even if the spread is wider, and the losses greater, it still might have been worthwhile for its publicity value. That would depend on whether the publicity is good or bad, according to Ronnie Lowenstein, Director of the Independent Budget Office. She's not sure how the city looks from the hinterlands, but is willing to assume for a moment it's positive

RL: There's a lot to be said for doing publicity, whether it's bringing people in through conventions or running ads nation-wide in the hopes that that will spur additional tourism and additional visits to the city that do help bolster the city's economy.

FM: Marlin, Lowenstein and others give Bloomberg high marks for trying to limit the disruption to the city by shutting down only a relatively small quadrant of midtown - in contrast with a much larger zone around the Fleet Center in Boston, a month ago. In the long run, they say, the city would do well to court events that occur more regularly and cause less disruption - a gastroenterologists' convention instead of a quadrennial political one, as a New Yorker magazine columnist recently put it. Driving away fewer city residents would reduce the gap between the RNC's winners, such as hotels, and its losers, such as cab driver Fazal Khan. He was giving up early one night this week, only about half-way to his break-even point.

FK: If it's a good night, you can have 25-30 fares in one night. But now my friends, aren't not working too much, because if you come out and work, you get only two, there, five fares, and there's too much police security and traffic. They can't handle it, and they're sitting home. So I'm going home, too.

FM: Khan is only in his second week driving a cab, and he's been making far less than he needs to break even. He's learned his lesson, though. Next time, he says, he'll follow the lead of other New Yorkers. Instead of leasing his car for the week, he'll either get out of town or head to the beach.