It has everything to do with people -- NYC has an amazing talent pool. The problem has always been the high cost of living and the fact that in the past most of the tech talent would be absorbed by Wall Street. It has taken over 20 years but I've slowly have watched this change through the hard work of many folks who don't just include VCs but event organizers, academics and yes even art school grads. But this shouldn't come as a surprise to anyone, NYC was the birthplace from quite a bit of tech in the past from Morse Code to the television industry.

Signed a Silicon Alley Vet who got his start back in the 90s

PS The road to this was paved with quite a bit of failure, especially after the dot.com bomb and 9/11 meltdown