Troubled Times for Hizzoner

By BONNIE ANGELO/NEW YORK

"How'm I doin'?" he used to shout, cocksure that the crowds would reply on cue with the adulation he felt he deserved. Ed Koch was more than merely the mayor of New York City; he was the embodiment of the shining Big Apple: volatile and voluble, fast with a quip or a put-down, an ebullient practitioner of dukes-up chutzpah who liked to march at the head of every parade.

Koch rarely asks that question anymore. Midway through the third term he won in 1985 with a 76% landslide, the mayor appears battered and snappish as he struggles to maintain his uncertain hold on a turbulent and troubled city. Like Ronald Reagan, Koch is a master showman who finds that he can no longer dazzle his audience. His woes are such that when he was asked to lead a delegation this month to observe progress toward peace in Nicaragua, it offered a pleasant change from New York City.

Until recently New York was a showpiece of urban success, and Koch was credited with leading the city back from the brink of bankruptcy in the mid- 1970s to new heights of prosperity. The jobs created during his ten years as mayor led to a record 3.6 million workers in the city. Manhattan reasserted itself as the dazzling hub of finance and the arts. Even Pope John Paul II gee-whizzed that New York was the "capital of the world."

So what if critics complained that the city was increasingly crowded, dirty, overbuilt and unworkable? Koch could ignore them -- until two years ago, when disclosures of widespread corruption revealed that his administration was beset by the same complacency and cronyism that the mayor had denounced in his predecessors. Other problems festered. Black residents grew outraged at the New York City police, accusing them of the unwarranted shooting of blacks, including a 66-year-old woman killed as she was being evicted from her apartment. When three blacks were brutally assaulted by a gang of whites in Howard Beach, Queens, last December, the case became a symbol of New York's mounting racial troubles.

Then on Oct. 19 came the worst blow of all. The stock market collapsed, threatening to turn the city's golden economy to dross. Koch's miracle recovery had been built on the financial and business-service industries. Samuel Ehrenhalt, regional commissioner of labor statistics, puts the number of new jobs in the Koch era at 400,000. Openings on Wall Street more than doubled, while New York's traditional manufacturing base was allowed to fade. Now if Wall Street has caught cold, the city may come down with pneumonia. Economist Matthew Drennan of New York University's Graduate School of Public Administration projects that without a market turnaround, 28,000 jobs will be lost in the securities industry and 7,000 in banking, wiping out an equal number, 35,000, in restaurants, retailing, real estate, hotels and support services.

Koch reacted instantly to the crash by freezing the planned hiring of 5,200 new workers and postponing raises for 4,000 management jobs. As a result of his reassuring actions, the city's bond rating was upgraded last week to its highest level since the 1975 financial crisis. Investment Banker Felix Rohatyn, head of the Municipal Assistance Corporation, which oversees the city's finances, praised the belt tightening as a "good first step," but warned that "New York faces the potential of a very difficult period."

The gathering gloom may not be apparent to the expected 17.5 million visitors to New York this year. The city's jangling geometry is still energizing, the shops tantalizing, the street life mesmerizing. But New York is like the wedding cake in a bakery window: an exquisite excess of spun sugar covering a cardboard core. Beneath Manhattan's sheen is the New York of endemic corruption, failing schools, and racial tensions, a polarized city of 7.3 million where the megarich in stretch limousines look away from the 1.8 million living in poverty, more than 50,000 of them homeless. The city that prides itself on being the cutting edge of the future watches as corporations, promising artists and middle-class families flee its staggering costs and the country's highest taxes, while developers stack ever taller luxury condominiums in already overcrowded neighborhoods.

Koch has been accused of basking in the spotlight while ignoring what goes on in the city's darker corners. He has been wounded most of all by unending investigations and indictments of members of his administration for bribery, perjury, extortion, skimming and conspiracy. City workers from top leaders down to parking-meter attendants and sewer inspectors, along with judges, Congressmen and state legislators, have been found guilty. U.S. Attorney Rudolph Giuliani, the Republicans' white knight, claims more than 150 convictions by his office alone. Some targets were Koch's closest friends -- notably Donald Manes, president of the borough of Queens, who killed himself last year as the net tightened around him, and Cultural Affairs Commissioner Bess Myerson, Koch's ever present companion during his first race for mayor in 1977. The former Miss America faces trial for bribing a judge to reduce the divorce settlement of her lover Carl Capasso, a rich sewer contractor now serving four years in prison for income tax evasion.

Koch has declared himself "chagrined and mortified that this kind of corruption could exist and I did not know of it." His ignorance may have been willful: during his first campaign for mayor, Koch, running as a reformer, secretly solicited the support of Meade Esposito, Brooklyn's powerful Democratic boss. Then, as mayor, Koch appointed Esposito's pal Anthony Ameruso as transportation commissioner, even though an advisory board had declared Ameruso unqualified. The transportation department went on to become the source of major scandals. Ameruso has been convicted of perjury, Esposito of corruption in a separate case. The mayor, says a critical politician, "can no longer claim that he didn't know what was going on. Ed Koch cannot run again."

Critics accuse Koch of giving away the government to political bosses and giving away Manhattan to developers. Koch has coddled builders with tax breaks while their towering, ego-driven projects block out the sun, overload already groaning services and paralyze traffic. Celebrities like Jacqueline Onassis, Henry Kissinger and Paul Newman have joined hundreds of West Side residents in protests against skyscrapers proposed by Builders Donald Trump and Mortimer Zuckerman. Bowing to public pressure, Zuckerman has offered to scale down his 68-story tower, which would cast shadows across Central Park. NBC has backed away from Trump's proposed Television City, probably killing his dream for the world's tallest building: 150 stories that would throw morning gloom across the Hudson River into New Jersey.

Author Robert A. Caro, whose book on the legendary city planner Robert Moses was a Pulitzer-prizewinning study of the exercise of urban power, decries Koch's lack of vision. "The physical transformation of a city changes it for generations, for centuries. I see a city being cemented into place against the sky -- a city of monstrous buildings, with a disregard for human scale, human values. Koch is building a big city, not a great one. The Koch administration, I fear, will go down in history surrounded by shadows, the shadow of corruption and the shadows cast by enormous buildings."

While developers have been eager to build upscale offices renting for as much as $50 per sq. ft., the city suffers from a brutal shortage of moderate and low-cost housing. "The big weakness -- and real danger -- to the city is the failure to provide housing," says George Sternlieb, founder of the Center for Urban Policy Research at Rutgers University. Families are forced by costs to move out of New York. Ultimately, says Sternlieb, "they take their jobs with them. Eventually the boss says, 'Why pay premium wages to people to commute? I can put together a better work force in the suburbs.' "

Astronomical real estate costs have already led to an exodus from Manhattan by the "back offices" of financial-service companies, as well as some corporation headquarters. So many companies have been lured across the Hudson to New Jersey that Koch, with characteristic moxie, posed for an ad showing him sealing off the Lincoln Tunnel. "The rats are leaving," he growled recently, unwittingly casting his city in the role of sinking ship.

The exodus will accelerate as companies realize they cannot resupply their work force with the products of city schools. While corporations are demanding more literate, computer-sophisticated workers, New York's 940,000 public school students are afflicted by a one-third dropout rate. The blue-ribbon Commission on the Year 2000, which studied New York's needs, has called the public schools a "deteriorated system that fails to equip a shockingly large proportion of the students who enter it for the world in which they will live."

The failure of the schools augurs a worsening of the present statistics: a quarter of the city's population lives below the poverty line ($10,989 for a family of four), and 14% are on welfare (compared with 6.2% nationally). Jobs are going begging -- but the jobless lack even rudimentary skills. "It is the grimness of poverty that troubles us more than any other problem," declared the commission.

Demographically, the city grows ever more polarized as the middle-class buffer is driven out. Raymond Horton, a Columbia University professor of business who heads the watchdog Citizens Budget Commission, fears outright conflict between rich and poor. "This city is a densely conglomerated group of people living on top of each other. If 25% are poor and x% are rich and getting richer, that's potentially a very bad thing."

The city's population is projected to be 60% nonwhite and Hispanic by the year 2000, and neither group sees Mayor Koch as its champion. Every week for 92 weeks the city's leading black newspaper, the Amsterdam News, has front- paged a demand for Koch's resignation. The mayor alienated the black community when he closed a Harlem hospital in 1980 and cut back services to the poor. Minorities have not forgiven him for calling some black and Hispanic welfare workers "poverty pimps." Dean Robert Curvin of the Graduate School of Management at the New School for Social Research faults Koch for failing even to have a black adviser involved in day-to-day policy decisions. "Koch," says Sternlieb, "is a polarizer instead of a unifying force, sometimes going out of his way to flex his muscles." The atmosphere makes it certain that if Koch runs in 1989, he will be challenged by a black politician, possibly Manhattan Borough President David Dinkins.

Koch's high visibility makes him a natural target for blame. But with New York's array of problems, could any other mayor have done better? Most urban experts give Koch good marks for his first two terms, but suggest he is suffering from "third-term syndrome." Horton observes that "third terms have never been very kind to New York City mayors -- even Fiorello La Guardia. The city wears men down and the press eventually turns. Mayors get a one-term honeymoon. Koch kept it for two terms." Those who were Koch supporters for three elections have turned ornery, with special-interest groups battling his every proposal, whether to get the mentally unstable homeless off the streets for professional care or to revitalize tawdry Times Square. Sympathizes Martin | Steadman, until recently a senior aide to Governor Mario Cuomo: "Koch has done a good job, given the problems. New York is a monster headache for anybody who would be mayor."

After suffering a minor stroke in August, Koch seemed to lose heart under his physical and political burdens. Subdued, he planned his own funeral: at a large synagogue (to accommodate the crowd) with a eulogy by his friend John Cardinal O'Connor (with whom he is writing a book on their often conflicting views of current issues). His gravestone is to read: "He was fiercely proud of his Jewish faith. He fiercely defended the City of New York. He fiercely loved the people of the City of New York."

Koch is not only fierce, he is also resilient. He used to half joke that his goal was to be mayor for life. Although that now seems too much a joke to be funny, on Dec. 10 he will celebrate his 63rd birthday at a fund-raising dinner where 550 guests will ante up the perfect gift: $1,000 a plate -- $2,000 for best seats -- for a man with his eye on a fourth term and on history.