Gotham Gazette https://www.gothamgazette.com/component/tags/tag/963 Fri, 22 Nov 2019 00:23:55 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) What's the [Data] Point? 6/15, Crunch Time in Albany as Rent Regulations Expire https://www.gothamgazette.com/state/8578-what-s-the-data-point-6-15-crunch-time-in-albany-as-rent-regulations-expire https://www.gothamgazette.com/state/8578-what-s-the-data-point-6-15-crunch-time-in-albany-as-rent-regulations-expire whats the data point


What's The [Data] Point? Episode 75 -- 6/15, Crunch Time in Albany as Rent Regulations Expire, with REBNY's John Banks and Assemblymember Harvey Epstein [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

faceoffRent regulations impacting about 1 million New York City apartments home to 2 million people are set to expire June 15. State lawmakers and Governor Cuomo have been negotiating how far to go in strengthening those laws in tenants' favor and whether to extend regulations beyond where they currently apply, both in terms of geography and a proposal that would effectively regulate rent increases for all apartments outside the traditional rent-regulated stock.

John Banks, president of the Real Estate Board of New York (REBNY), and Assemblymember Harvey Epstein, a Manhattan Democrat and longtime tenant advocate, joined the show to discuss the future of rent laws in New York.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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What's the [Data] Point? 6/15, Crunch Time in Albany as Rent Regulations Expire Fri, 07 Jun 2019 04:00:00 +0000
Real Estate Invests in Ruben Diaz Jr. https://www.gothamgazette.com/city/8573-real-estate-industry-invests-in-ruben-diaz-jr https://www.gothamgazette.com/city/8573-real-estate-industry-invests-in-ruben-diaz-jr rubendiazjr comm

Ruben Diaz Jr., third from the right (photo: Office of Ruben Diaz Jr. )


Just as development has defined the Bronx borough presidency of Ruben Diaz Jr., money from the real estate industry has buttressed his political career. Though he has faced virtually no competition in three campaigns for borough president, the real estate donations have flowed in, helping Diaz Jr. prepare for an already-simmering run for mayor.

Over the course of his three campaigns for Bronx borough president, 37.7% of donations to Diaz Jr.’s campaign accounts at the $1,000-level or higher come from individuals or groups associated with the real estate industry, according to an analysis by Gotham Gazette using data from the New York City Campaign Finance Board.

Diaz Jr. has touted his record of what he's deemed progressive development, releasing celebratory reports of new development in the Bronx each year. Many of the developers listed on these reports have also donated to Diaz Jr.’s campaigns.

“Campaign finance considerations have no influence on the work of the borough president and his office,” said Diaz Jr.’s spokesperson, John DeSio.

During his three borough president campaigns, contributions for the office were limited to as much as $3,850. The average contribution for his first campaign in 2009 was $581; that number jumped in subsequent campaigns to $943 in 2013 and $934 in 2017, according to the city Campaign Finance Board. It’s worth noting that Diaz Jr. has faced little competition in his borough president campaigns, but also that real estate interests are well-known for contributing widely and generously to politicians. Diaz Jr. came to the borough presidency from the state Assembly in a 2009 special election. He is all-but-certain to run for mayor in the upcoming city election cycle, with the all-important Democratic primary in June 2021.

As borough president, Diaz Jr. has few formal responsibilities, but one is to weigh in on significant land use matters, which often include zoning changes related to real estate development, including major residential or commercial projects. Diaz Jr. has prided himself on development that he says he’s significantly helped bring the Bronx over the past decade, including projects of all types, from affordable to luxury housing, a FreshDirect distribution center, and more.

Many of Diaz Jr.’s highest-dollar donors have consistently been from the real estate industry. In more recent campaigns, the number of donations he received, across industries, jumped from 307 in 2009 to 1,758 in 2013 and 1,846 in 2017, according to the city campaign finance board.

Diaz Jr. touts his pro-development stance as key to jumpstarting the Bronx economy, which has taken off in the past ten years coming out of the Great Recession that rocked the nation. Under his borough presidency, there’s been 96.8 million square feet of development in the borough, 65% of which has been for residential use, 18% for commercial use, and 17% for institutional use, according to his office’s most recent annual development report.

Land use is at the crux of the job of a borough president. Input into planning and zoning issues are important, though not binding. “They are in contact with a lot of developers, and a lot of developers are in contact with them for their support,” said Bob Kappstatter, a political and media consultant, and longtime former Bronx bureau chief for the New York Daily News.

Maddd Equities and Joy Construction are a powerful alliance behind much of the city’s development and major financiers of Diaz Jr.’s campaigns. Of donations of $1,000 or more across his three borough president campaigns, individuals affiliated with Maddd Equities and Joy Construction have given Diaz Jr. a total of $1.86 million. The Hudson Yards builders have worked on at least three major projects in the Bronx.

Few other groups have contributed sums in that range to Diaz Jr., and many who have donated much less to the borough president have developed more projects. Donations at the $1,000 or more level from Touria Weissman from the Jackson Development Group, for example, totaled $11,700 over the course of Diaz Jr.’s three campaigns, while the group has developed seven major projects in the Bronx.

Executives from the Stagg Group’s donations to Diaz Jr. at the $1,000 or more level total $10,700. They’ve developed two major projects. Adolfo Carrión Jr., the former Bronx borough president, is a consultant for the group.

Keith and Inga Rubenstein, the controversial developers from Somerset Partners who recently sold a development on the Harlem River Waterfront in Mott Haven to Brookfield, have donated a total of $9,100 to Diaz Jr.

And high-dollar contributions from Sabino and Martha Fogliano of JF Everlasting Contracting, the Bronx-based construction contractors, total $13,300.

Other groups have given Diaz Jr. little to nothing despite developing several major projects, including L+M Development Partners, an associate of which gave Diaz Jr. $1,000 in 2017, and Signature Urban Properties, which has developed a dozen major projects in the Bronx but is not affiliated with any of his high-dollar contributors.

Meanwhile, Diaz Jr.’s top two high-dollar individual donors are not directly affiliated with the development industry. Andrea Squitieri’s donations at $1,000 or above total $21,980, and Stephen Jerome’s contributions at that level total $13,800.

Jerome is president emeritus and chairman of the board of Monroe College, a Bronx-based university. Squitieri is married to Stephen Squitieri, of Sanitation Salvage––the now defunct garbage disposal group with dismal business practices that have led to some workers deaths, as reported by ProPublica in 2018, and eventually shut down by the city.

Diaz Jr. also receives considerable money from the healthcare and hospital industry, which is the biggest job creator in the borough, according to an economic report from state Comptroller Tom DiNapoli. Many of Diaz Jr.’s high-dollar donors are physicians or hospital executives.

Other contributions to Diaz Jr. span other industries housed in the Bronx. Many high-dollar donors are local business owners, from Bronx-based jewelers to restaurant owners.

Diaz Jr. has made no secret of his plans to run for mayor in 2021, and already has $767,476.50 stored in his war chest from 649 contributions, according to the city campaign finance board. So far, all patterns appear to be carrying over.

[READ: For Diaz Jr., A Booming Bronx and Plan to Run on Development]

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Real Estate Invests in Ruben Diaz Jr. Thu, 06 Jun 2019 04:00:00 +0000
The Fuzzy Fine Print of Amazon’s Queens Real Estate Deal https://www.gothamgazette.com/130-opinion/8132-the-fuzzy-fine-print-of-amazon-s-queens-real-estate-deal https://www.gothamgazette.com/130-opinion/8132-the-fuzzy-fine-print-of-amazon-s-queens-real-estate-deal lic via edc

(image via NYC EDC)


The first of several New York City Council public oversight hearings on the deal to bring an Amazon campus to Long Island City will be held Wednesday at City Hall. Titled by the Council as “Exposing the Closed-Door Process,” the questions should concern not just the big-picture issues but also some fine print regarding the company’s acquisition of city-owned real estate.

Of course, the estimated $3 billion in tax breaks and subsidies in the deal made among Amazon, the state, and the city deserve scrutiny, though, except for a state capital grant that could reach $505 million, those questions -- as Gotham Gazette previously reported -- mostly concern revising existing policy.

For example, the Citizens Budget Commission warns that "offering Amazon benefits that go well above the current cap and expiration date" of the Excelsior Jobs Program -- up to $1.2 billion in state tax credits -- "sets a concerning precedent.”

National subsidy watchdog Good Jobs First points out that the city's decision to have Amazon contribute PILOTs, or payments in lieu of taxes, into a local infrastructure fund, would "further enhanc[e] Amazon’s property value," a benefit worth quantifying.

But Council members also should look at two maddeningly complicated passages in the non-binding Memorandum of Understanding (MOU) Amazon signed with Empire State Development (ESD), Gov. Andrew Cuomo's economic development authority, and the New York City Economic Development Corporation (NYCEDC), Mayor Bill de Blasio’s economic development entity.

They rather cryptically describe some contemplated transactions that deserve far more sunlight, both now and if/when they move toward fruition.

First, look at the proposed map (below), which shows two private development sites, two public development sites, and one city-owned building, known as DOE (Department of Education) Premises.

image1

Let's put aside the private development sites, which are owned by a company called Plaxall, and were intended to be part of a large project called Anable Basin.

Instead, let's focus on the two public development sites, which were previously part of a planned project called the Long Island City Innovation Center, involving developer TF Cornerstone and other partners. (The DOE site was not to be part of that project.)

An $850,000 lease
The agreement contains a major parenthetical: Empire State Development will lease the public development sites "for a total agreed base rent payment, exclusive of PILOT, of $850,000 per annum (such price being consistent with the competitively procured terms of NYCEDC's prior agreement with the Company's development partner and reflective of the costs to be assumed by the Company that include but are not limited to City agency relocations... and the Specific Infrastructure and Community Commitments...)"

That’s a lot to unpack.

First, $850,000 won't buy much in New York's rental market: that sum is the same asked of a child care center in the Upper West Side (in a former Duane Reade) or that which drove a bookstore out of SoHo. (I earlier mentioned this issue in an essay for the Brooklyn Daily Eagle.)

And if that $850,000 reflects "the costs to be assumed by the Company that include but are not limited to City agency relocations," how are those presumably considerable costs calculated?

If those costs are absorbed in the first years of the Amazon lease, wouldn't the deal get better for them over time?

How exactly was that sum "consistent with the competitively procured terms" of the prior agreement? Why should that prior agreement apply to the Amazon project, given the latter’s scope and the suite of subsidies?

image3

Also, unlike other tenants in Long Island City, Amazon will not be at the mercy of a landlord aiming to raise rent after an initial lease period. The rent, according to the document, "will escalate in accordance with an agreed upon schedule based on the Consumer Price Index" or CPI.

Note that, while that verbiage suggests that the rent increases will correlate with the CPI, that doesn't mean direct correlation. In other words, an "agreed upon schedule" could be a percentage of the CPI. That's worth asking about. And, of course, this non-binding document only presages future negotiations.

The DOE building
Now consider the DOE Premises, a hulking former city warehouse -- approximately 672,000 square feet -- on Vernon Boulevard. According to the city/state memo, Amazon's initial base rent shall not exceed "the value of $500 per built gross square foot multiplied by 6.25%."

Why make that calculation so convoluted? It's hard to believe that was not presented as a way of obscuring the math that leads to $31.25 per square foot.

image2

Note that the base rent "shall equal the fair market rental value as determined by an Appraisal," but...the parties have already stipulated a ceiling of $31.25. That seems like a sweet deal.

How would that appraisal work? It might not happen until 90 days before the lease closes, but it will take "into account sales of, and income generated at, comparable commercial use properties exclusively for the period prior to the date of the MOU," as well as capital investments made by New York City.

Though an appraisal seems meaningless, the comps could use more attention. Consider the Falchi Building, a former factory building recently spiffed up in another section of Long Island City, below Sunnyside Yard. In 2016, the Commercial Observer reported asking rents "in the $40s" and also $55 per square foot.

Of course, asking rent is not contract rent, and these relatively small deals don't compare to leasing a full building. Still, it's hardly clear that $31.25 is the market rent in the area. Nor do we know how to value the "capital investments" factor cited in the MOU. (Update: However, according to the city's just-released response to Amazon's RFP, that site was presented as having a net illustrative rent between $24 and $49.)

image4

Note that the base rent will increase by the lesser of either 3% or the area CPI. Is such a cap on inflation standard operating procedure? 

Maybe city and state officials often come to such seemingly generous agreements. (If so, maybe reconsider those practices, too.) Or perhaps they can defend them as tougher than they seem. But the fuzzy fine print should provoke reason for skepticism—and some hard questions from our elected officials.

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Norman Oder is a Brooklyn journalist who writes the watchdog blog Atlantic Yards/Pacific Park Report. On Twitter @AYReport.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The Fuzzy Fine Print of Amazon’s Queens Real Estate Deal Mon, 10 Dec 2018 05:00:00 +0000
As Affordability Crisis Becomes More Acute, Real Estate Donations Emerge as Litmus Test for Some Democrats https://www.gothamgazette.com/state/8112-as-affordability-crisis-becomes-more-acute-real-estate-donations-emerge-as-litmus-test-for-some-democrats https://www.gothamgazette.com/state/8112-as-affordability-crisis-becomes-more-acute-real-estate-donations-emerge-as-litmus-test-for-some-democrats  Ocasio-Cortez Teachout

Alexandria Ocasio-Cortez & Zephyr Teachout (photo: Gotham Gazette)


This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Queens City Council Member Jimmy Van Bramer has said he will refuse donations from wealthy landlords and the real estate industry as he runs for borough president. Julia Salazar, a democratic socialist in Brooklyn, defeated an eight-term incumbent state senator using her rejection of real estate donors as a rallying cry. Alexandria Ocasio-Cortez did the same when she toppled Democratic Rep. Joe Crowley and became the youngest woman elected to the United States House of Representatives. Zephyr Teachout sought the Democratic nomination for attorney general while eschewing real estate contributions and making it a core plank of her campaign. Nomiki Konst, an investigative reporter, recently launched her campaign for New York City public advocate with the same promise.

New York’s real estate industry, most of it concentrated in the dense confines of New York City,  has long played a significant role in funding candidates for elected office up and down the ballot across the state and beyond, a role that candidates of both major parties and political insiders have always recognized. But as voters, particularly energized, activist Democrats, focus on the affordable housing crisis and take heed of the state’s broken campaign finance laws, including loopholes that donors, especially those in real estate, have exploited to pad the coffers of legislators and executives, some progressive Democrats have begun to reject campaign contributions from the real estate industry.

Affordable housing policy, including the already-begun debate over rent regulations decided in Albany that will be a significant issue in 2019, is at or toward the top of many activists’ lists, and housing justice advocates increasingly see campaign finance pledges as a litmus test for candidates. Increasing numbers of Democrats eschewing real estate money, or at least any given through the so-called LLC loophole, has given those activists and advocates cause for optimism that real estate’s role in state elections may be on the decline and that their elected representatives will heed the clarion call to protect tenants and listen to small donors over wealthy special interests.

“I think that it’s clearly a concern amongst a growing number of voters,” Van Bramer told Gotham Gazette. “I think it’s increasingly one of those issues that people want a response on from their elected officials and candidates. And I think that they’re right to be concerned about the influence of big money, generally speaking.”

“Money still plays a huge role in our elections and real estate is a good way to raise money in New York City and New York State,” said Celia Weaver, research and policy director at New York Communities for Change, a leading housing and economic justice advocacy group pushing campaign finance reform, strengthened rent regulations, and deeper affordable housing development. “It’s like oil in Texas.”

Though questions about the influence of real estate money have swirled for decades, Weaver traced the budding trend of declarations against taking any of it to Diana Richardson’s election to the state Assembly in 2015, in a district that includes rapidly gentrifying Crown Heights and at a time when state rent regulation laws were up for renewal in the state Legislature. “Her decision to refuse real estate money in that election turned what would ordinarily be a pretty boring special election where the Democratic machine just gets to anoint the person who’s going to run and take the line to a widely covered exciting race that was really a referendum on the real estate industry and its role in politics,” Weaver said. “That became a huge touchstone for voters in the district.”

It’s common knowledge that the real estate industry has been a staple in electoral politics for decades and its members’ donations have been part of the picture across the political spectrum. Democrats and Republicans have benefited from them, none more so than Governor Andrew Cuomo, a Democrat recently re-elected to a third term. But the recent election cycle, the first since Donald Trump was elected president, saw greater awareness among voters about the power of state government and the special interests that fund campaigns. Actor and education activist Cynthia Nixon also used that backdrop to run a competitive primary challenge against Cuomo. She refused donations from real estate and issued a scathing indictment of the governor’s reliance on big donors in the industry, while calling for sweeping housing justice reforms.

Weaver also pointed to the high-profile corruption convictions of former State Assembly Speaker Sheldon Silver, a Democrat, and former Senate Majority Leader Dean Skelos, a Republican, in trials that exposed how a real estate firm, Glenwood Management, attempted to wield influence over legislation. Glenwood, an enormous donor to Cuomo and many legislators, recently made massive contributions to Senate Democratic candidates ahead of the November election where it appeared likely they would become part of a new majority in the chamber.

The primary mechanism for real estate donations has been the gaping loophole in state campaign finance law that allows limited liability companies with opaque ownership -- a common instrument in the real estate business -- to circumvent contribution limits. City Limits reported in September that LLCs had been used to donate more than $188 million to political campaigns since the late 1990s, with about $31 million given to gubernatorial candidates alone, including Cuomo. “Combining his campaign for attorney general in 2006 and his three runs for governor, Cuomo has received roughly one of every eight dollars donated by LLCs,” City Limits found. Those donations are largely dominated by the real estate industry.

Mayor Bill de Blasio has also come under scrutiny for accepting significant real estate donations, especially to a political nonprofit he established to push his agenda that became the subject of law enforcement investigations related to whether City Hall did favors for its donors.

A collaborative report in 2016 by ProPublica, The Real Deal and the National Institute on Money in State Politics tracked how real estate developers who benefitted from a prominent tax incentive called the 421-a program gave about $21 million to party committees and candidates since 2000, out of $83 million that the real estate industry donated in the same time.

“I think people are very much aware that rich donors including real estate developers and landlords are distorting our election system,” said Michael McKee, treasurer of Tenants PAC, a political action committee dedicated to affordable housing. “I think that’s the growing awareness. There’s no question about it.”

It was in that context that a slew of progressive Democrats ousted their more moderate and real estate-tied partymates from office with the support of smaller donors and by rejecting corporate backers. “The housing crisis in this city is out of control and going into a year when candidates are going to be debating rent regulations in Albany, voters wanted candidates that are gonna act with integrity and widely believed that candidates who work for the real estate industry won’t,” said Weaver.

Besides Salazar, Zellnor Myrie and Alessandra Biaggi similarly ran for and won Democratic primaries in the state Senate in opposition to wealthy real estate interests. Each of the three represents a district, much like a lot of the city, grappling with a deep affordability crisis and pockets of gentrification displacing low-income residents of color. Their opponents all received significant contributions from real estate.

The decision to reject real estate seems based in both principle and pragmatism. Biaggi made housing justice a prominent campaign issue as she successfully dethroned Senator Jeff Klein, once the powerful leader of the Independent Democratic Conference, a breakaway faction of eight senators that propped up Republican control of the Senate. Democratic voters rejected six of the IDC members, blaming them for preventing the passage of many bills, including stronger rent regulations, and replaced them with progressive Democrats, including Biaggi and Myrie.

“It’s not necessarily that taking real estate money makes you a bad legislator or a bad person...but for me, it’s very clear that it’s a slippery slope,” Biaggi said in a phone interview.

Even as she acknowledged how difficult it can be to run for office without wealthy donors, Biaggi said it was important to her to retain her independence and answer to everyday constituents, not just those who can write big checks. “The winning can’t take precedence over the fact that, once you’ve won, the people who have helped get you there are the people who are going to come knocking on the door and that’s really a very challenging thing to come to terms with,” she said. Biaggi spent about $330,000 on her campaign and won with 53.1 percent of the vote, while Klein disbursed more than $3 million to try to keep his seat and got 44.5 percent.

Salazar said her commitment, and Myrie’s and Biaggi’s, to refuse real estate donations proved that it’s possible to run a viable campaign with small donors, and build grassroots support and trust in communities by doing so.

“I think advocates have long recognized the correlation between the amount of real estate money that many electeds have taken and their failure to advocate vigorously for tenants,” she said. “When other candidates see those campaigns being successful and they see this growing and increasingly loud demand from advocates, I think that is what is translating to them paying more attention.”

Those in the real estate industry push back against being made the boogeymen of state politics. Real estate is, without a doubt, central to New York City’s fortunes and the industry comprises a large part of the city’s tax base. The sector is scapegoated more so than other industries and groups, like those in health care, finance, or education, that also employ somewhat similar tactics in state elections. And of course, many candidates regularly pursue real estate donors when running for office.

“There are people who are willing to accept our contributions because our philosophies or the ideas that we are espousing are aligned with their philosophies,” said John Banks, president of the Real Estate Board of New York, in an interview. “There are people who don’t want to accept real estate money because their philosophies don’t align with the work that the real estate industry does and there are people who move back and forth across that continuum.”

Banks pushed back against any notion that his industry has used the LLC loophole to improperly sway the political landscape to its benefit. “The real estate industry respects and follows both the letter and the intent of the law and to say that someone who follows the letter of the law is in someway undermining the legitimacy of the political process is a naive statement,” he said.

And, he noted, the real estate industry is intrinsically a part of New York’s landscape, more than any other, even finance, or technology. “Unlike some of the other industries, mobility is not something that is an option for us,” he said.

There are also Democrats, even those who call themselves progressives, for whom real estate donations are far from an insurmountable liability, even if they are unpopular with the party’s left wing. Cuomo sailed to reelection, in part by taking millions combined from LLCs and the real estate industry that he then used to overwhelm his less-funded primary and general election opponents over the airwaves. New York City Public Advocate Letitia James, not a close friend to real estate, accepted similar donations and was resoundingly elected the next attorney general of New York State. In the attorney general primary, for instance, James ran on a platform that included criticism of bad landlords and yet received $10,000 from an LLC linked to the Durst Organization, one of the largest real estate developers in the city. That LLC and seven others under the Durst umbrella also gave a combined $150,000 to one of James’ opponents, Rep. Sean Patrick Maloney, which became a line of attack from Teachout.

“The real estate industry is pretty broad and diverse,” said Jordan Barowitz, spokesperson for the Durst Organization. “I work in it, as do members of 32BJ and the super in your building and the residential broker who leased you your apartment.” He said “painting all these people with a pretty broad brush” is problematic. “Unfortunately there’s a lot of blaming in politics these days and it’s easy to point to one group or person or industry and say they’re responsible for everything that’s bad in this world and that’s pretty simplistic and wrong.”

“Honest politicians don’t take bribes and reputable donors don’t request quid pro quos,” he added.

There is a distance between bribes and quid pro quos on one hand, of course, and donations having some influence on policy-making, even if simply by virtue of how donations help candidates get elected.

McKee of Tenants PAC noted, for instance, that REBNY had begun donating larger sums in this election cycle to Democratic candidates once it seemed apparent that the party was going to regain control of the state Senate and, by result, the entire Legislature.

“REBNY saw the handwriting on the wall. They’re equal-opportunity opportunists. They don’t care who’s in the majority. They’ll try to buy influence with them by giving them money,” McKee said. “I’m not suggesting in any way that the mere fact that REBNY has started giving money to Democratic senators means that those Democratic senators are going to sell tenants out. That’s not my point. My point is that this is how they try to win friends and influence people, with big money.”

The influence of such donations can come down to seemingly small changes in policy, like the exact threshold at which an apartment leaves rent regulation, not necessarily major new legislation that would raise flags as donor-favors.

Gotham Gazette: Myrie wanted to avoid even the perception of corruption when he took his pledge, he said. “The number one reason that I did it was because...when we were gonna be facing the fight in Albany on whether or not we’re gonna protect tenants, I wanted there to be no confusion about which side I was on,” he said.

It would be hard to argue, he said, that real estate hasn’t had a corrupting influence on politics. “Albany for the longest time has passed watered down legislation,” Myrie added. “We have not protected tenants the way that we’ve needed to and that, you can draw the direct correlation to the increase in the amount of real estate donations to the Legislature. I think anyone looking at that objectively could say that it has had a corrosive effect on how we pass policy affecting our tenants.”

“Once you take that money, of course it influences how you legislate,” Biaggi said. “Now I think there are ways to protect against that, and that goes into campaign finance reform.”

Biaggi asserted that the path to stronger rent regulations runs directly through reforming the state’s campaign finance system, primarily through closing the LLC loophole, but also through lowering individual donation limits, where New York has some of the highest in the country. Closing the LLC loophole alone, advocates say, would take away real estate’s biggest weapon of political influence, and they insist it should be accompanied by a public campaign financing program, like the one currently used in New York City, to boost the voices of ordinary New Yorkers who only give $25 or $100 to a candidate.

Democrats in the Assembly have repeatedly attempted to reform campaign finance law but have been roadblocked for years by Republicans in the Senate, who have been major beneficiaries of real estate donations. Many, Cuomo included, have emphasized that ending the LLC loophole is among their priorities in the upcoming legislative session in January.

“If you had these kinds of reforms, candidates wouldn’t have to spend so much time cultivating rich people to make big donations,” McKee said.

On the other hand, Republicans have long-argued that labor unions often use campaign contributions to support and influence Democrats, and that any LLC reform should also institute limits on how local chapters of unions are classified in campaign finance law.

Weaver, from Communities for Change, said, “Not only are rent laws coming up in 2019 but I think there’s gonna be a big referendum on the role of money in politics generally…and the campaign finance stuff is also gonna be a referendum on tenant issues and real estate money in politics specifically.”

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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As Affordability Crisis Becomes More Acute, Real Estate Donations Emerge as Litmus Test for Some Democrats Thu, 29 Nov 2018 05:00:00 +0000
In Crowded Office Market, Amenities are a Must https://www.gothamgazette.com/130-opinion/7789-in-crowded-office-market-amenities-are-a-must https://www.gothamgazette.com/130-opinion/7789-in-crowded-office-market-amenities-are-a-must dock 72 rendering Brooklyn Navy Yard

Dock 72 rendering


As New York’s economy continues to thrive, the city’s construction and real estate industries are enjoying a sustained building boom that is creating more than 2.5 million square feet of new office space each year. Even with this unprecedented growth, there is still an insatiable demand for new commercial space from companies new and old. To stand out in such a market, developers must create innovative offices filled with cutting-edge amenities – and this trend is reshaping commercial real estate in the five boroughs and beyond.

Amenities like roof decks and fitness centers have long been staples of luxury residential buildings. But more recently, developers and property owners have begun incorporating these perks into commercial office space as a way to attract new and younger tenants. This movement has only intensified in recent months as more and more young professionals and creative companies are drawn to New York City.

Ironically, the apex of this new trend in commercial real estate can be found at one of the City’s oldest facilities: the Brooklyn Navy Yard. Thanks to almost $1 billion of public and private investment, the Navy Yard is in the midst of its largest expansion since the Second World War. The Navy Yard is poised to add 10,000 jobs across two million square feet of new space, in part because that space is optimized to attract the types of companies and talent driven by innovation.

A centerpiece of the Navy Yard’s expansion is the new high performance office building, Dock 72, on which our firms, Boston Properties and Rudin Development, and our anchor tenant, WeWork, have partnered to provide commercial tenants with world-class amenities, sustainable design, and state-of-the-art technology.

Our vision for Dock 72 has been to create a next generation waterfront workplace, where tenants and their employees can collaborate and connect with their coworkers and neighbors. That is why our team is collaborating with WeWork to create a truly unforgettable workplace environment, generated with the well-being of tenants in mind.

When completed later this year, Dock 72 will offer tenants multiple organic food, beverage, and coffee options; an outdoor basketball court and a full-service fitness complex; and a rooftop conference center, event space, an open lawn, and terraces with breathtaking views of the surrounding Navy Yard, the East River, and Manhattan. These amenities were curated by WeWork, based on the best practices they’ve developed while attracting innovative companies in cities around the world. They’re just a few of the reasons why tenants of Dock 72 will enjoy one of the best work experiences in New York City.

Landlords and developers know that it isn’t enough to just offer modern office space – the recent boom in commercial construction means that potential tenants have a wide-variety of options to choose from. That’s why companies like ours will continue pushing the boundaries and coming up with new, state-of-the-art amenities.

This is good for New York City. Businesses that locate in innovative new spaces like Dock 72 will have happier and healthier employees, which will in-turn make them more productive. This creates a virtuous cycle that will keep our city a vibrant and prosperous economic hub for decades to come.

***
Michael Rudin is a Senior Vice President at Rudin Management Company and Andrew Levin is Senior Vice President of Leasing-New York of Boston Properties.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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In Crowded Office Market, Amenities are a Must Thu, 05 Jul 2018 04:00:00 +0000
Raising the Bar for New York Real Estate https://www.gothamgazette.com/130-opinion/6585-raising-the-bar-for-new-york-real-estate https://www.gothamgazette.com/130-opinion/6585-raising-the-bar-for-new-york-real-estate  hunters point south1

Hunter's Point South Living (image)


From iconic architecture to imposing size, there is no denying that real estate has defined New York for generations. But even the most forward-thinking developers of 50 to 100 years ago might not recognize the dizzying pace, shifting policies, and growing demands that dominate today’s industry.

Here is the hard truth facing developers these days: achieving excellence in one area does not always lead to success. In fact, it rarely does. It is no longer enough to just design a beautiful building, imagine a new public space, or revitalize an older structure. We are so often urged — and just as often expected — to accomplish all those things, or others, in a single project.

The Urban Land Institute’s mission to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide should remind us that these development challenges are not just results of market or zoning pressures. Meeting these challenges is just as much about thoughtful planning and building a dialogue with the neighborhood leaders and planning officials who play roles in advancing new development. Perhaps most importantly – as ULI has made clear – it is about providing added value through new transit access, sustainable design, environmental resilience, or other aspects. In its simplest form, it is smart city building.

For years, ULI has helped set the bar for responsible land use with its Global Awards for Excellence, which crowns winners in cities worldwide. But the changing face of New York real estate has made it clear that we also need a local competition — one focused solely on raising the industry bar across our state.

That is why we at ULI New York launched our own Awards for Excellence in Development — a statewide contest open to private, public and non-profit developers, whether or not they are ULI members. More than anywhere else, it is vital for New York’s real estate industry to meet and even surpass the responsible land use principles laid out by ULI and our members worldwide.  By recognizing and elevating leaders who take a truly holistic approach, we believe we can help increase the quality of development across the state for generations to come. 

At our inaugural awards gala this past March, the first class of winners showed just how far our industry can go to meet diverse needs in New York City and upstate.

In Queens, Hunter’s Point South Living created a mixed-use, affordable housing development that established a benchmark for a new workforce housing experience. In East Harlem, the Center for Living and Learning seamlessly combined affordable apartments, a charter school, and non-profit office space to create a true community hub. In Buffalo, Conventus brought together clinical, educational, and research components in a center for collaborative medicine on the Buffalo Niagara Medical Campus. In Lower Manhattan, the National 9/11 Museum and Pavilion site carries with it both the power of its history and hope for the future in commemorating those who lost their lives on September 11, 2001. These were just a few of the projects that inspire us all to reach greater heights.

On September 12, ULI New York opened the nomination period for our Second Annual Awards for Excellence in Development — and we hope to see even more submissions than we did last year. With two new award categories, we are now taking project submissions in a total of eight categories: office, housing, mixed-use, repositioning or redevelopment, hotel, retail, institutional, and civic space. Developers interested in submitting a project should visit our website for details on applying. Our Awards Committee will accept submissions until November 4, after which the finalists in each category will be announced in January. 

Our team is committed to finding the most outstanding developments in New York and helping our industry meet every challenge. But we can only do that if developers in every corner of the state are willing to participate and put their best new projects up for consideration. We know our next winners are out there — and we are excited to see what the future of real estate looks like.

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Marty Burger is CEO of Silverstein Properties and Chairman of ULI New York. On Twitter @ULINewYork.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Raising the Bar for New York Real Estate Sun, 23 Oct 2016 04:00:00 +0000
Four Decades of Dedication: City Limits’ Story https://www.gothamgazette.com/government/6136-four-decades-of-dedication-city-limits-story https://www.gothamgazette.com/government/6136-four-decades-of-dedication-city-limits-story fourdecades-citylimits-600

Tom Robbins and Annette Fuentes, City Limits' editing team in the early 1980s, in the magazine's offices. (photo courtesy of City Limits/Brian Patrick O'Donohue)


Since its start 40 years ago this month, City Limits has published millions of words about hundreds of topics and survived thanks to the smarts and sacrifice of dozens of journalists. The history below, combining an essay my predecessor Alyssa Katz wrote on the occasion of our 30th anniversary with my own update on the past 10 years, doesn't pretend to capture all the people and projects that made City Limits what it is. Hopefully, however, it does give a sense of where City Limits came from, the changes it has seen and the values that continue to drive our journalism four decades in. –Jarrett Murphy.

1976-1979: A Mission Begins

The Saving of 414 West 48th Street

What is Redlining? (Answer: Redlining is a white collar crime.)

South Bronx Snubbed on Redevelopment Plan

The headlines were forceful, printed in capital letters. They came from a publication that spoke to its times.

In 1976, New York City's neighborhoods were facing crushing challenges unlike any they had seen before. The city's fiscal crisis had left New York with few resources and a growing sense of doom. In many neighborhoods, arson and abandonment of apartment buildings were becoming everyday occurrences, as some property owners determined that their real estate was worth more in insurance proceeds than it was for its rental income. By the summer of 1977, more than 20,000 buildings in New York would be abandoned. At the end of that year the city owned 6,000 buildings and was poised to foreclose on 25,000 more.

Read more about this era and several others leading to present day and the future, at City Limits

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Four Decades of Dedication: City Limits’ Story Tue, 02 Feb 2016 19:00:48 +0000
Tenant Advocates Seize on Scandal in Push for Stronger Rent Laws https://www.gothamgazette.com/government/5716-tenant-advocates-seize-on-scandal-in-push-for-stronger-rent-laws https://www.gothamgazette.com/government/5716-tenant-advocates-seize-on-scandal-in-push-for-stronger-rent-laws make the road activists

Make the Road activists (photo: @Met_Council)


Tenant advocates, angered by Gov. Andrew Cuomo's recent comments that they see as favoring landlords and the real estate industry, protested outside his Manhattan office on Wednesday afternoon.

The action, which featured members of Metropolitan Council on Housing, Tenants and Neighbors, and Make the Road New York, is the first in what will be an onslaught targeting Cuomo and bringing up his close ties to the real estate industry, especially the fact that his biggest donor is Glenwood Management, the group tied to the federal complaints against former Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos.

As legislative session continues in Albany and key housing-related legislation is set to expire, advocates want to see an end to the 421-A tax break for developers and strengthening of rent regulations.

Cuomo told The Association for a Better New York on April 24 that dysfunction in Albany could lead to a straight extension of the rent laws and the controversial 421-A program that has also been at issue in the Silver and Skelos investigations. Tenant activists have taken Cuomo's comments and the possibility of his prediction coming true as an assault on their goals.

"The governor's comments were unacceptable," Javier Valdes, co-executive director of Make The Road New York, told Gotham Gazette. "It shows a real disconnect about the crisis that is going on for tenants in New York and the suburbs."

Jonathan Westin of New York Communities for Change said that his organization hopes to pressure Skelos, a Republican, and Cuomo, a Democrat, on rent laws so that there isn't simply a straight extension. "The governor supports the status quo and make no mistake about it, the status quo is a victory for real estate interests. The status quo means thousands more affordable apartments lost," Westin told Gotham Gazette.

Thomas Waters, housing policy analyst for The Community Service Society of New York, told Gotham Gazette he simply doesn't believe dysfunction is going to get in the way of negotiating the issue. "We saw how quickly the Assembly moved on from Silver's indictment," he said.

The protesters circulated a letter to Cuomo on Monday that read in part, "We write to express our outrage over your recent comments that displayed, at best, indifference to New Yorkers who are struggling to pay their rent in rent-regulated apartments. Low- and moderate-income tenants who live in more than 1 million rent-regulated apartments are at a breaking point because of the failure of leadership in Albany."

Tenant advocates are increasingly unnerved by Cuomo's comments about the rent laws, 421-A, and Skelos. On Wednesday Cuomo said he would negotiate with Skelos because he couldn't pick who runs the Senate and that 421-A must be extended. He also was asked to explain his relationship with Glenwood Management. "They are a donor of mine. They are a donor of many elected officials across the state, and that's basically the interaction," Cuomo said. "I've had nothing to do [with them], except they've been political supporters of mine."

Valdes said his group plans to convey to Cuomo that recent scandals have changed the playing field because they've exposed how things work in the backroom.

"The governor made comments in Syracuse that 421-A has to be renewed and yet it is in the complaint against Senator Skelos where he is getting kickbacks from the real estate industry," said Valdes. "There is a major disconnect here. The governor is supporting the status quo and the status quo just won't cut it anymore. We won't stand for tax breaks that favor millionaire developers while our members are driven out of their apartments.

The complaint against Skelos alleges that Glenwood, Cuomo's largest campaign donor, provided Skelos' son with $20,000 for doing no work after Skelos pressured Glenwood reps to provide his son with business.

It appears one of Glenwood's higher-ups is now serving as a witness and informant for federal investigators. Cuomo defended Glenwood during an appearance in Syracuse on Wednesday, saying he would not return donations from the company and its main players because there was no proof of "wrongdoing."

"The difference this year is that it is all out in the open," said Westin. "We see how the billionaire developers influence policy with campaign donations and illegal bribes and we aren't going to let it stand."

Advocates plan a two-headed strategy with tenant advocates tying Cuomo to major real estate donors and legislators and union members pushing Assembly Speaker Carl Heastie to play hardball when it comes time to negotiate the rent laws.

"Carl can't just go in there with Cuomo and Skelos to negotiate," said Michael McKee, treasurer of Tenants PAC. "He has to take hostages. If they want to get anything they want, Carl has to get stronger rent laws. It's up to him."

Last Friday, legislators, union heads, and Mayor Bill de Blasio came together for a strategy meeting on rent law lobbying. According to numerous sources, the meeting convened by 1199 SEIU was designed to involve more unions in the effort and convince union heads that the issue is critical to their members.

On Tuesday, de Blasio issued a statement supporting stronger rent laws and advocating a number of specific policy points like reducing how much landlords can raise rent for repairs, ending high-rent vacancy decontrol, and eliminating landlord's ability to raise the rent of rent controlled apartments by 20 percent after it is vacated. He did, however, also argue for the extension of 421-A, as long as it is tied to more clear mandates for the affordable housing that is supposed to come with the tax benefits. "No more tax breaks without building affordable housing in return," de Blasio said in a statement to the New York Times.

"The biggest thing that has changed this time around is that we have the mayor on our side for the first time," said Waters, who said de Blasio is backing the choice measures out of the slate of policy reforms his organization supports. Getting over the hurdles of a Republican-controlled Senate and a real-estate friendly governor will not be easy, of course. Plus, many Democrats at all levels of government receive large donations from real estate interests.

Landlord groups like the Rent Stabilization Association insist that a number of the measures in the rent laws that de Blasio and tenant advocates want eliminated are critical in allowing landlords to afford the costly maintenance of apartments. The RSA is currently running a television spot that laments the plight of landlords and Albany's inability to come up with a solution to help landlords maintain the housing stock.

Valdes and Make the Road will be in Albany every Tuesday for the rest of session, they've said. Session is scheduled to go until mid-June, and advocates plan a large rally during the first week that month. Other rallies are expected across the city and in Albany, with major one in Manhattan's Foley Square on Thursday, May 14.

Valdes said that his group sees an "affordability crisis" building across the city and the suburbs. "People used to think of this as a Manhattan problem but I can tell you it is an outerborough problem now."

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Tenant Advocates Seize on Scandal in Push for Stronger Rent Laws Fri, 08 May 2015 01:59:45 +0000