- The Washington Times - Friday, September 4, 2009

In the blatantly self-reverential battle between New York and Washington for the title of “Most Important City in America,” New York has always claimed an easy victory.

Until now.

When financial markets on Wall Street melted down last fall, the federal government stepped in with billions of bailout dollars, and the tables began to turn. So did the zeitgeist.

In short, the Big Apple has been hurt in this economy while Washington has galloped to the rescue. The result: Washington is suddenly cool. Or, at least, cooler.

“Washington has so much energy and young talent,” said celebrity chef Jean-George Vongerichten, who recently opened his J&G; Steakhouse a stone’s throw from the White House — the biggest opening ever for the owner of 19 restaurants worldwide. “I was impressed and surprised.”

This from a New Yorker of 23 years.

The premiere of a world-class restaurant is merely one small indicator of Washington’s newfound trendiness. Economic factors also point the way.

New York City’s job losses are steep, while the Washington metropolitan area still boasts low unemployment, thanks in part to the big-spending federal government based there.

The nation’s capital has even seen an uptick on the cultural scene, which New York has always dominated. Washington now ranks as the No. 2 theater city in the country. And recently, fashion designers — including Jimmy Choo and Louis Vuitton — have opened shops in Washington.

“I guess you could say we’re catching up a little,” said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University in Fairfax County.

To be sure, Washington remains much smaller than New York. The projected value of the New York metropolitan area’s economy for 2010 is $1.272 trillion; the corresponding number for the Washington metropolitan area is estimated at only $428.8 billion.

But Washington is enjoying a much steeper economic ascent than its northern rival. Between 2010 and 2030, the Washington region’s value is expected to grow by 94 percent (for a total value of $832.7 billion). That isn’t as fast as, say, Dallas, which is projected to grow by 155 percent, but it’s twice as rapid as New York’s expected 42.5 percent increase, for a total value of $1.813 trillion, according to the Center for Regional Analysis.

On the tourism front, hotel rooms in the nation’s capital have increased in price by 3 percent, while they decreased by 22 percent in New York City at the end of last year, said Hotels.com spokeswoman Maureen Carrig.

Also, the National Park Service and the Smithsonian Institution have reported an 18 percent increase in Washington-area visitors, according to Destination DC.

International tour operators also are reporting significant increases in interest and bookings, according to the group.

Visits to New York also have increased, but not nearly as robustly as in Washington. In 2008, the city received about 47 million visitors (making it the top tourism city in the country), but that represented only 2 percent growth compared to the previous year, according to tourism site Nycgo.com.

In the real estate market, home prices are still down from last year for both regions, but Washington has seen an increase in sales while New York is still on the downslope.

“It’s indicative of the Wall Street collapse,” said Walter Molony, spokesman for the National Association of Realtors.

On the jobs front, the picture is more mixed. New York City’s unemployment rate in July was 9.6 percent, roughly equivalent to the national average, while joblessness in Washington was a full percentage point higher at 10.6 percent. But the D.C. metropolitan area’s unemployment rate was 6 percent, while the New York metro area unemployment rate was 8.8 percent.

Still, corporate chieftains and international banks aren’t flocking to the nation’s capital — yet.

“New York still has the best connections to the rest of the world,” said Gerald Hanweck, professor of finance at George Mason University. “Wall Street is still there.”

And many of the brightest minds on Wall Street — even if unemployed at the moment — simply won’t give up the prospect of another hedge-fund job (in which they might earn $3 million a year in bonuses alone) for a government job (at which 20 years on the job could earn them a total of less than $3 million), Mr. Hanweck said.

Still, with a huge chunk of the $787 billion in economic stimulus money landing in the greater Washington area and with a growing and newly activist federal government, the city’s importance clearly will grow, Mr. Fuller said.

A lot of businesses — domestic and international alike — have been, and will continue to be, compelled to open offices in the Washington area, even if they’re unlikely to move their headquarters from New York.

“Washington will get bigger, but not at New York’s expense,” said Mr. Fuller, adding that Washington will never achieve the perfect trifecta of power — cultural, financial and political — that most European capitals possess.

But, he added, in the past 50 years, we’ve “gone from a cow town to a power town.”

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