Just before 11:30 a.m. Tuesday, Hawk Cam viewers were regaled with a familiar, but increasingly rare scene: a bird on the nest. Bobby the red-tailed hawk, father of Pip, landed on the circular pile of branches and detritus on the 12th-floor window ledge of Bobst Library and proceeded to do a little housekeeping (which, given the activities, more closely resembled yard work): plucking twigs here and there, picking up what appeared to be a piece of cardboard in his beak and shimmying in the center of the nest over a crumpled piece of plastic. Several minutes later and without ceremony, he spread his wings and was off again.
Despite the beleaguered stock market, Duane Reade is turning to Wall Street to make a profit.
On Wednesday, the chain will open a roughly 22,000-square-foot pharmacy in the Trump Building at 40 Wall Street. Joe Magnacca, president of Duane Reade and Everyday Living Solutions at the Walgreen Company, which owns Duane Reade, said it is the largest Duane Reade ever built.
The drugstore occupies 40 Wall Street’s cavernous old bank space, with vaulted ceilings rising two stories above the marble floor. It includes opulent amenities like a hair salon for shampoos, blow dries and blowouts; a nail bar for manicures and massages; a pharmacy with a doctor on hand for consultation during the week; and a grocery market featuring sushi and smoothie bars. There is also a stock ticker.
The Wall Street store’s extensive services are an attempt to rethink the American pharmacy model, which Mr. Magnacca said “hasn’t changed much since the removal of soda fountains 50 years ago.”
“We believe it’s the most exciting drugstore in the world,” he said in an interview last week.
Mr. Magnacca said this Duane Reade cost around 20 percent more than usual to build. It is the company’s latest effort to custom-fit a store to the surrounding neighborhood, a strategy that has touched off controversy in the past. One that opened last year on Bedford Avenue in Williamsburg, Brooklyn, drew threats of a boycott from residents who feared it would force out independent pharmacies and homogenize the neighborhood.
But the Williamsburg store, which features a bar that sells 64-ounce bottles of beer called growlers, proved so popular that Duane Reade adopted the growler bar at a second pharmacy on the Upper West Side.
Mr. Magnacca said the new store was designed to preserve relics like black marble columns and gilded escalators from 40 Wall Street’s former life as the Bank of Manhattan Trust Building. He said he did not think financial district customers would see this Duane Reade as an encroachment; after all, there are already 14 locations around the neighborhood.
Michael Fram and Tom McDonnell, who work at 40 Wall Street, were chatting outside the building Thursday afternoon. Both men said they were unaware that the store was opening, despite the gigantic banners that flapped directly overhead. Told of its arrival, they said they thought the store would be convenient, but they were not sure they would go there for lunch.
“I don’t know about the sushi,” Mr. Fram said. “I’d have to smell it first. But I’ll try anything once.”
When we started the Delaware Small Business Development Center (SBDC) at the University of Delaware, Bill Wyer was the president of the Delaware State Chamber of Commerce (DSCC). Bill was a junk yard dog for business in Delaware. Under his leadership the DSCC fought against any tax increases and invasive regulations, and the encroachment of government into the marketplace. With Bill at the helm, the DSCC was skeptical that a government subsidized service such as the SBDC would do much good.
Times have changed. A few years ago the DSCC acquiesced to a 25% increase in Delaware’s gross receipt tax rate. The DSCC is a proponent of alternative energy in Delaware, mandating utilities to shift to less market competitive sources of energy that will add billions of dollars to the already less competitive electricity costs in the state. This disadvantages Delaware businesses, especially manufacturing. While supporting the implementation of Vision 2015 for improving public education, the DSCC has no specific alternative to the monstrous Affordable Care Act put forward by President Obama.
The DSCC is still an advocate for Delaware business, recently opposing a New Castle County surcharge on building permits for fire service and an increase in the “voluntary” school assessment fee cap to be paid by developers. But, the DSCC seems less committed to market solutions today and more likely to recommend “public-private” partnerships. What has happened?
The answer is simple and is not unique to Delaware: exclusive of regulations, government is a larger player in the economy than ever. Between 1984, the midpoint of Bill Wyer’s tenure, and 2009 private industry’s share of Delaware’s output dropped from 71% to 61%.
Government’s share of the action in Delaware’s economy has risen over six fold while private industry’s portion has barely risen three fold. Government’s economic impact on Delaware includes: operating spending by Federal, state and local government, state and local government construction spending (i.e., the capital budget), Federal government transfer payments (e.g., Social Security, Medicaid, Medicare), Federal grants to individuals and organizations, Federal procurement contracts (e.g., from the Department of Defense), and Federal aid to state and local government under a wide range of programs.
Private companies are attracted to the growing resources of government. Irving Shapiro was the first lawyer appointed CEO of the DuPont company following stints in the U.S. Office of Price Administration and the Department of Justice. A current example is Jeffrey Immelt, CEO of General Electric, who seems to be a fixture in the White House economic team. Yet these “partnerships” appeared to have more to do with the redistribution of wealth (what economists call “rent seeking”), than with the creation of wealth in a competitive market environment.
As demonstrated again and again in analysis by the Caesar Rodney Institute, in the long haul state and local government tax revenue in Delaware will only grow if the private economy grows. Today, in order to understand the complete picture, one must not just focus on the operating budgets of government in order to understand the full impact of government on the economy of Delaware and the nation.
Dr. John E. Stapleford, Director
Center for Economic Policy and Analysis
Baba Ly, 8, prepared to play the president during the Independence Day parade in Ridgewood, N.J., on a float from his school, Travell Elementary. He was assisted by his mother, Aisha Ly, who made sure his tie was straight and his shirt was tucked in.