Battle of the Giants – London versus New York

It sounds a bit like the start of a joke but: What happens when you put the Mayor of London Boris Johnson, the first ever winner of the Apprentice Tim Campbell, Robert Steel and Howard Wolfson - the two deputy mayors of New York - on a debating platform?

Well the punch line can be revealed following the LandAid annual debate sponsored by Cushman Wakefield, Helical Bar and Property Week held at City Hall 10 days ago.

With Sarah Montague from BBC’s Today Programme in the chair, it was a US presidential style debate with strict time keeping and a panel of interrogators.

Despite Boris’s experience as chair of the Oxford Union and his quick wit, I think even he might concede that the New Yorkers won the debate, if not the final vote: they were slick, had all the facts at their fingertips, were prompt and targeted in their responses and deployed effective and humorous one-liners.

But perhaps this is the least we should expect from Robert and Howard respectively given their experience amongst other things at Goldman Sachs and as the director of communications for Hilary Clinton presidential campaign.

London relied a little more on passion and to some extent on fasting moving claims and counterclaims. Boris’ opener attempted to phase his opponents as he revealed himself to be a New Yorker, having been born in the city.

The context of the battle of the giants was clear as the world’s economic focus shifts ever eastward, London and New York face global competition as the world’s premier business cities.

The geographically biased voters were only ever going vote one way in answer to the question: “Is London or New York best places to retain the crown of the world’s best business city for the 21st Century?”

The room packed with senior representatives from across the property industry voted in favour of London. But through the debate came some important statements and observations.

Neither city can rest on its laurels when it comes to internationally competitiveness. But even the statistics and latest Global Financial Centres Index from 2011, show that in terms of financial and business services they are out in front.

London is ahead with nearly 40,000 companies in financial services to New York’s 24,000 and Hong Kong is the only close competitor. But Robert Steel argued that the value of companies listed on the New York stock exchange was three to four times the size of the London Market.

London claimed victory with 189 international companies locating their headquarters in the city since 2003, compared to New York’s 33. But then New York have just landed Google. What is clear is that neither city can compete on the quality and effectiveness of their transport systems against those building new 21st century mass transit from scratch.

Worryingly there was no response to the claim that New York has a $9bn deficit in its transport system, while London is going through a “neo-Victorian revolution” with Crossrail increasing capacity by ten per cent and the tube system being extended by 30 per cent.

But in reality for London and New York, when compared to newer cities, its much more a case of ‘make do and mend’ with some notable major exceptions like Crossrail.

While New York’s subway carries 1.6 billion passengers annually and London carries 1.1 billion, Boris pointed out bus usage figures for London which New York cannot compete and that they are also now copying Boris with the introduction of Mike’s Bikes (after Michael Bloomberg the NYC Mayor).

Youth unemployment and the divergence of wealth and disadvantage were recognised as being a characteristic found in all global cities but one which neither London or New York are competing on.

Instead there is an opportunity to share ideas as to how to create opportunity and choices for disadvantaged communities and especially young people. Both cities have high unemployment levels at between 9-10% with youth unemployment figures in the UK and US also being comparable at 22% and 23% respectively.

The very current relevance of the work of LandAid and the property industry in supporting disadvantaged young people was underlined by the debaters. The diversity of both cities is one of their key strengths and their ability to attract immigrants, talent and entrepreneurial energy from across the globe.

Tim Campbell claimed that London was “a land of opportunity”, as borne out by his own experience and that of his enterprising mum who created her own business from modest beginnings sewing and selling cakes.

His work on enterprise and job creation for young Londoners in his role as the Mayor’s Advisor on Apprenticeships are worth watching out for. The debaters traded blows on the amount of new floorspace created in each city and the stunning major developers rising into the sky.

According to data from Cushman and Wakefield the stats show its a close call when looking at recent activity. Speculative space under construction at the end of 2001 was very similar for London - 7.6m sq ft in Q4 2011 down from 9.3 m sq ft in Q4 2007 - and New York - 6.3 m sq ft down from 9m sq ft.

New York is also cheaper with Grade A rents at the end of 2011 in the City, West End and Docklands ranging from £40-102 per sq ft compared to £28-46 per sq ft in Midtown and Downtown New York.

This and the fact that “New York has the largest real estate market in the world”, might explain the five-fold higher leasing activity in New York than London. Money and powers emerged as issues towards the end of the debate.

But what is clear is that as a global city the Mayor’s office in London is a poor cousin to New York. In terms of budget the Greater London Authority annual budget for its activities including policing and transport amounts of just over £3bn. For New York City its $65.7bn, or £41.3 bn.

But it’s not just a question of money, but also powers. It begs the question, if those who run a global city are in charge of its economic destiny and should be able to help it city compete and grow its economy; then perhaps New York has a better model, with for example oversight over education and schools in the city.

And finally, there is more and more talk about how cities compete on quality of life with London (38th) beating New York (47th) in the latest Mercers ranking. The debate ended on a note of passion on what makes London and New York “loveable”.

Howard Wolfson summed it up beautifully as “every day in New York is an adventure …its a place of endless possibilities.” while Boris said “the thing I love about London is our good natured, bogus self-depreciation”… enough said.

Joanna Averley is chief executive of LandAid