Zohran Mamdani defeats Andrew Cuomo in NYC mayoral primary shake-up

Even Zohran Mamdani’s detractors recognise that the vibes are with the 33-year-old democratic socialist.

“It’s officially hot commie summer,” hedge fund billionaire Dan Loeb said on X, after Mr Mamdani shocked the Democratic establishment by crushing Andrew Cuomo in the party’s primary for the New York City mayoral race.

It’s a quip that masks the deep anxiety among the city’s elite that a Mamdani win in the general election in November would lead to higher taxes and a subsequent exodus of wealthy residents from the five boroughs.

Kathy Wylde, a New York power broker who’s connected business titans from across finance, real estate and media with city leaders for decades, said while Mr Mamdani is inspiring to young people, his ideological approach “terrifies taxpayers and employers.”

But enough voters across racially and economically diverse neighbourhoods embraced Mr Mamdani.

In a speech early Wednesday, he reiterated that “a life of dignity should not be reserved for a fortunate few.”

“I cannot promise that you will always agree with me,” Mr Mamdani said.

“But I will never hide from you.”

At the heart of his success was a social media campaign - populist economic proposals and progressive cultural ideas packaged in slick videos designed to go viral.

Just on Tuesday, he appeared in an Instagram video with Emily Ratajkowski, who has over 29 million followers on the platform. The model and actress wore a “Hot Girls for Zohran” t-shirt and urged voters to go to the polls.

It was typical of the savvy and hustle that helped Mr Mamdani amass an army of tens of thousands of volunteers, who relentlessly knocked on doors, stood on street corners and posted on social media to exhort voters.

They evangelised his policies: Free childcare, cheaper groceries at government-owned stores, free bus rides, a rent freeze, and more - much of it paid for with tax hikes on the rich.

Not mentioned: Those tax increases would need approval from New York State Governor Kathy Hochul, who has said she is opposed to the idea.

Mr Mamdani also wants to raise $70 billion ($A107 billion) in debt, another effort that has little chance of succeeding.

Still, in the moneyed corridors of Manhattan, wild forecasts of doom are taking hold.

Wall Street headhunter Michael Nelson said the mood is grim among clients who typically make more than $1 million a year.

“This will be the end of New York City as we know it” is how his deep-pocketed clients are reacting to the prospect of Mr Mamdani winning in November, he said.

Already, stocks of companies tied to New York City real estate are getting hit. Flagstar Financial Inc., a lender to apartment buildings, dropped as much as 6.7 per cent on Wednesday before paring its decline to 5 per cent.

Corporate landlords Empire State Realty Trust, SL Green Realty and Vornado Realty Trust all fell.

Cuomo’s Backers

The city’s elite had backed Mr Cuomo, a member of the Democratic old guard who was considered the favourite in the race even in its final days.

At 67, he was the oldest candidate in the race and pitched himself as a seasoned moderate who could manage New York’s problems - from crime in the subways to a universally acknowledged affordability crisis.

Billionaires, including Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, as well as Bill Ackman, Loeb and Vornado’s Steven Roth, supported his campaign. Mr Cuomo’s PAC, Fix the City, raised nearly $25 million - an unheard-of sum in a primary race for mayor.

But many of the ads backing him focused on painting Mr Mamdani as a bad choice for the city, rather than laying out Mr Cuomo’s own vision for governance.

The former New York governor, who stepped down from that job following a string of sexual harassment allegations that he denies, didn’t just have money on his side. Stalwart figures of the Democratic establishment, such as former President Bill Clinton, endorsed him.

Mr Mamdani, meanwhile, was backed by progressive stars like Democratic Congresswoman Alexandria Ocasio-Cortez and Senator Bernie Sanders.

There are signs that at least some on Wall Street might be warming to the democratic socialist candidate.

“While we might disagree on certain issues, we should always be hopeful that Mr Mamdani - if he ends up being elected mayor - can unite the city to address its critical education, public safety, housing and economic development needs,” said Ralph Schlosstein, former head of Evercore Inc. and a longtime Democrat.

But so far, that sentiment is limited. Ackman, another longtime Democrat before he became one of President Donald Trump’s most vocal supporters, blasted Mr Mamdani by claiming that his policies would bankrupt New York.

The investor didn’t respond to a request for comment on the results of the election.

Rich Farley, a veteran Wall Street lawyer, said many of the city’s wealthy are likely to see the November general election as a make-or-break moment.

Should Mr Mamdani prevail, “the folks who can easily unplug and move elsewhere are going to think very seriously about plans to do that.”

Ahead of that race, ultra-wealthy donors have to decide if and how they will oppose Mr Mamdani. Mr Cuomo, who has signalled he may run as an independent, has to persuade backers that he is a more viable candidate outside of the closed Democratic primary system.

If he stays in the race, he will compete against the Republican candidate Curtis Sliwa and current mayor Eric Adams, who is also running as an independent and didn’t take part in the primary after a corruption scandal.

But others on Wall Street may choose a more radical option.

“I’ve already talked to hedge fund guys who have told me they have got a foot out the door,” said Eric Rosen, a former senior JPMorgan trader and hedge fund executive.

“I left New York City 8 years ago because I didn’t like the way the city was being run,” he said.

“I sold my Park Ave. co-op and it’s now down 25 per cent, and my house in Florida is up 250 per cent. The market has spoken.”