Last month, it was front page news that UBS was considering moving its trading floor, the largest in the world, from Stamford to Manhattan. While some of the coverage was nuanced, much of it predictably fell into the suburb versus city story line, which in this case is not really accurate.
It may not be Manhattan, but Stamford, Connecticut, is far more than a bedroom community or suburban office park. Historically, Stamford was one of the industrial powerhouses and employment centers of southern New England. As industry declined in the mid-twentieth century, Stamford reinvented itself into a regional hub of the growing service economy.
While some office park campuses were built on the leafy hills north of downtown, the city's hallmark is its row of gleaming office towers within walking distance of one another and of the train station. The majority of the city's 70,000 plus jobs are concentrated in this area. Downtown Stamford is no suburb.
Functionally, Stamford is a city, even if its population of 123,000 seems small by New York standards. Each day, many more workers commute into Stamford from Fairfield and Westchester Counties and New York City than the number of Stamford residents who commute into Manhattan and other places. Over the last twenty years, thousands of units of housing, nearly 100 restaurants, and varied retail stores have sprung up around the downtown employment center. Cultural and entertainment venues draw from a region nearly as expansive as its commuter pool. Its parades include floats and school bands from throughout the tri-state region.
The premise that Stamford is a suburb is not just wrong; it can also lead to misguided public policies. In order to thrive in a competitive global economy, the New York region needs a dynamic economic engine in Manhattan that is linked to growing regional job centers. Not every high-value activity can fit in Downtown or Midtown Manhattan, and a variety of complementary downtown centers provide room for growth, differentiation, and innovation. Places like Stamford, Jersey City, and Downtown Brooklyn provide locations for businesses that benefit from an urban setting and easy access to the region's central business district.
Many firms find that certain activities need the density and centrality of Manhattan, while others are better suited to the regional centers that surround it. Factors that influence which activities should go where include costs, labor force needs and access to clients. Regional downtowns can also establish their own identities as research, university, medical or cultural centers that can help the region attract the talent that it needs to keep pace with other global metropolises.
There is no question that Stamford benefits from its proximity to New York City. UBS would never have located there without access to the city's pool of financial talent and clients. But New York City also benefits from having smaller cities like Stamford nearby. It is far better for New York City if firms locate within commuting distance of its residents than in London, Shanghai, or any number of world cities, many of which are reinventing themselves as polycentric regions. Of equal importance is the role that regional downtowns can play in concentrating jobs and housing around mass transit, thereby limiting suburban sprawl that consumes open space, increases auto-based air pollution, and limits job access for those who cannot afford a car or the gas required for a long commute.
So how should governments and citizens respond when a firm like UBS threatens to take its jobs and tax revenues from one city to another? It may be too much to ask a municipality or state to completely refrain from making any offers of new incentives. But we should keep our focus on what makes these places attractive to these firms in the first place — high quality of life, good transportation, urban amenities, and competitive costs. Regionally, we should maintain and take full advantage of the regional rail network that links these centers and gives us a unique economic edge. If we get those things right, then the next big employer will be right around the corner.