Wall Street Got Drunk, Will Harlem Get The Hangover?

Last week we explored some of the pain Wall Street’s woes were inflicting on the art world. Today we’re looking at the damage in Harlem.

Yesterday’s New York Times makes clear how much Harlem’s resurgence in recent years was dependent not only on the banking and mortgage boom but also on the charity birthed by the growth of Wall Street wealth. Years ago banks, along with plently of other businesses, were refusing to open in the neighbourhood. But in recent years so many banks opened along 125th Street that the city passed zoning laws to limit new branch openings.

“But the collapse of financial institutions like Washington Mutual Savings Bank, Bear Stearns and Lehman Brothers has left Harlem facing a double loss: The disappearance of companies that helped propel the resurgence will not only make it immediately more difficult for business people to get loans and mortgages or for developers to build large commercial projects, but will also lead to the loss of millions of dollars in charitable contributions from those same companies. That will affect everything from children’s health and adult literacy to the Apollo theatre‘s famed amateur night.”

Some specifics:

  • The Apollo theatre: Washington Mutual had its name on the marquee of the Apollo as the primary sponsor of amateur night. Merrill Lynch sponsored tours of the theatre for school children. Lehman had pledged $1 million to its outreach programs.
  • The Harlem centre: An $85 million retail and office complex, funded by Bear Stearns and containing a WaMu branch.
  • Harlem Children’s Zone: Lehman and AIG were major contributors to one of the neighbourhood’s largest private, nonprofit groups.

At least in the immediate future, it is likely that some of this economic support will continue. Much of Wall Street’s largesse was sponsored not directly by the firms but through charitable foundations they set up. Those tended to be thinly funded however, meaning that without their corporate parents they’ll quickly run out of the means to keep up their charitable work.


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