Two Entrepreneurs Running to Fill Bloomberg’s Shoes
When it comes to running one of the world’s largest economies, two super-rich entrepreneurs are betting that New Yorkers want another business tycoon in Gracie Mansion after Mayor Bloomberg’s final term comes to an end.
Of the two, the more well-known to most New Yorkers is John Catsimatidis, the self-made billionaire behind the supermarket chain Gristedes and the refinery United Refining. Though a former Democrat and Clinton donor, Catsimatidis is running for the Republican ticket; he’ll go head to head with former MTA chairman Joe Lhota in the September primary.
Newer to the race is Jack Hidary, the tech tycoon behind career site Dice.com and solar energy firm Samba Energy. Hidary announced his candidacy in July on his own Jobs and Education party line.
While both Catsimatidis and Hidary say voters are looking for a candidate with a strong business background, Kevin Brennan, the senior analyst at National Journal’s Hotline, says both contenders are currently an extra-long shot to become the city’s next mayor.
“It’s becoming increasingly difficult for someone outside the Democratic Party to win a mayoral election in NYC,” says Brennan.
Marist Poll director Lee Miringoff agrees.
“It’s a tall order for both of them. It’s not insurmountable – but it’s not insignificant,” he says.
But while huge odds are against them, either could potentially make the hike.
“If either of them win, it’s because they’re selling their business credentials,” says Larry Sabato, Director of Crystal Ball at the University of Virginia Center of Politics. “If New Yorkers want more of a Bloomberg approach, at least in theory, to governing the Big Apple – that’s their only shot, obviously.”
Both Catsimatidis and Hidary court comparisons to Mayor Bloomberg, generally praising the administration of the often-controversial politician.
“I want to take what Michael Bloomberg did and make it better,” says Catsimatidis, who credits Bloomberg with leading New York through a recession relatively unscathed. “We’ve got tens of billions of capital flowing into the city. I say to everybody that the rest of the country went into a depression and a recession, and New York City went through a hiccough.”
While Catsimatidis and Bloomberg both appear on the Forbes’ billionaires list (Catsimatidis is ranked at No. 458 with an estimated net worth of $3 billion, while Bloomberg’s $27 billion places him at No. 13), the media, including The New York Times, has more readily bestowed the title of “Bloomberg 2.0” on the less-wealthy Hidary, who shares a similar background in technology with the current mayor.
Hidary, whose tech-jobs career site Dice.com was acquired by private equity firms General Atlantic and Quadrangle Group in 2005 for an estimated $200 million, also praises Bloomberg’s economic leadership, citing his guidance through the financial crisis and Superstorm Sandy.
Both candidates, however, argue that Bloomberg’s focus on building wealth for Manhattan-ites has left residents in other boroughs behind.
“There’s been a focus by the administration on a few corridors in Manhattan and downtown Brooklyn. Coming from the outer part of the outer borough, bringing opportunity platforms out to the outer boroughs is core,” says Hidary.
Hidary frequently cites his childhood in the Ocean Parkway section of Brooklyn, near Coney Island, to emphasize his focus on creating jobs and small businesses in the four outer boroughs.
Similarly, Catsimatidis harks back to his childhood growing up in Harlem, where he lived after immigrating to New York City from Greece as an infant.
“I grew up on 135th street – I never lost that,” Catsimatidis says. “I will assign a deputy mayor to every borough that will be reporting to me, and every time the outer boroughs here that, they love me even more.”
The Republican candidate also takes issue with some of the more controversial policies promoted by the mayor.
“I disagree with him on the manner of [banning] 32-ounce sodas,” says Catsimatidis. “In addition, they did that whole bicycle system where they dropped down those monstrosity concrete traffic blockers.”
This sentiment is welcomed by Mike Durant, who runs the National Federation of Independent Business’ New York chapter.
“In recent years, there’s been this nanny state idea coming from Mayor Bloomberg, which has hurt small business, like with the soda ban. So we hope there will be a drastic change that will embrace small business,” says Durant.
Building Up Silicon Alley
With New York City facing an 8.4% unemployment rate in July, both Hidary and Catsimatidis argue that their backgrounds in business make them the candidate most capable of bringing jobs to the Big Apple.
“Catsimatidis is obviously framing his campaign around business successes, which makes sense in light of Bloomberg’s three wins based off a similar resume,” says Hotline’s Brennan.
While Catsimatidis’ fortune has been built on the backs of more traditional industries like supermarkets, oil and real estate, he argues that he’s well-prepared to bring more technology and biotech companies to New York City.
“I know how to create value – I’m not a maintenance guy,” says Catsimatidis. “It takes a more innovative person to create value and create a situation where the taxpayers win.”
Both he and Hidary point to Google as the brightest star in the growing New York tech space; the latter saying he intends to bring “the next 50 Googles” to Silicon Alley.
Hidary’s strategy for attracting investment in technology companies and growing businesses is to reduce taxes on investments.
“In New York City, there’s a 4% flat tax on salary income, consulting income or capital gains. For capital gains in the first three years, we could make any investment in a small or growing business, and any time you harvest that investment, that capital gains tax will be at half rate,” says Hidary.
“That will be a signal to the marketplace to come and invest in micro-entrepreneurs, to angel invest in companies,” he adds, saying that the mayor’s role should include the title of “chief attractor of capital.”
While Hidary has said repeatedly that he’s the only candidate in the crowded field with the background to attract companies in a growth economy, given his technology experience, Catsimatidis argues his higher profile and 40+ years running major companies puts him ahead of the pack.
“Nobody knows who he is,” says Catsimatidis, referring to Hidary.
He also took a shot at Hidary heading to crowdfunding site Crowdtilt to raise $50,000 to open his campaign office (a goal he surpassed).
“If he had confidence in himself, he would spend his money himself on name recognition,” says Catsimatidis.
But the digital-friendly Hidary, who keeps his own Typepad blog and has written for The Huffington Post, says he turned to crowdfunding to demonstrate the “wide support” he’s received from voters.
“We hit 1,000-donor mark very, very quickly – probably in record time,” says Hidary. “We have a tremendously broad base supporting us.”
A Long Shot to Win
With no runaway favorites and a campaign season dominated by Anthony Weiner’s sexting scandals, Hidary says he decided to enter the race late in the game due to a lack of viable candidates. But political experts say his late entry is a high hurdle to overcome.
“With all the attention being paid to Anthony Weiner and his scandals, it’s going to be hard for Hidary to gain traction, because there’s so much coverage on the other candidates who have been running for months and have been in the public eye in New York City for years,” says Brennan.
Brennan says Catsimatidis’ background also poses a problem.
“It makes it much more difficult for Hidary to make his message, if you already have another prominent businessman in the race,” he explains.
Running on his own ticket also puts Hidary at a disadvantage, says Miringoff.
“He’s running around on a track by himself. He’s got to get well-known, and he’s got some money to spend, but not Bloombergian money,” he says.
While Catsimatidis has said he’s willing to spend $20 million of his own money, Miringoff says his GOP-primary rival Lhota seems to have a leg up ahead of the primary.
“You just don’t have enough Republicans when doing a citywide survey to get beyond a very wide error margin, but you’ve got the general sense that Lhota has the edge,” says Miringoff.
According to the latest Quinnipiac poll, among likely Republican primary voters, Lhota indeed does have an edge at 43%, with Catsimatidis next in line at 37%.
But Sabato says there’s still time yet.
“Maybe Catsimatidis will buy a victory, given the small number of people who vote,” says Sabato, emphasizing that pollsters are expecting a very low voter turnout. “It’s a crazy race, so you really shouldn’t rule anyone out.”