CRE Gets Its Ducks And Dollars In A Row For Crucial Mayoral Run
New York City real estate players are sharpening their focus on the crowded mayoral race, looking where to throw their support — and their money — in a year when the industry is facing unprecedented threats.
“This is a critical moment for real leadership,” said RXR CEO Scott Rechler, who is also chairman of the Regional Plan Association. “There's no superman out there, but we want someone that's capable, someone that's well-intentioned, someone that is not tied down by ideology — and someone that reaches out to the broader New York community to come together to rebuild the city.”
More than 30 people have thrown their hat in the ring, including Brooklyn Borough President Eric Adams and city Comptroller Scott Stringer, both of whom lead in fundraising, with $7.3M and $6.5M, respectively, per the New York City Campaign Finance Board. Ray Maguire, who is leaving his job as vice chairman at Citigroup to enter the race, now has $4.8M of private funds in his coffers.
Brooklyn Council Member Carlos Menchaca is also running, alongside former Democratic presidential candidate Andrew Yang; Kathryn Garcia, who served as Mayor Bill de Blasio’s sanitation chief; civil rights lawyer and de Blasio adviser Maya Wiley; former federal housing secretary Shaun Donovan; and nonprofit executive Dianne Morales.
“Part of what’s really challenging this year is that it was going to be a bit of a circus because you have an open seat,” said Alicia Glen, de Blasio's former New York City deputy mayor of housing and economic development, who is founder of a new real estate development and investment firm, MSquared. "Then you layer on the pandemic and what I would call increasingly toxic politics about issues of real estate and development."
Multiple candidates have sworn off real estate donations — a popular move by elected officials in recent years — but there is no shortage of industry money flowing to mayoral hopeful’s coffers.
While Stringer was said to be refusing real estate dollars, he has received more than $10K from the industry so far, The Real Deal reported this week. A representative for the Stringer campaign told the publication it is only developer cash he is skipping. More than $300K of industry money has gone to Adams, McGuire and Donovan collectively so far, per TRD analysis.
Ditmas Management Corp. and Sequoia Development Group have backed Adams with cash, while Larry Silverstein gave $5,100 to Donovan. CBRE’s Mary Ann Tighe, who leases the World Trade Center for Silverstein Properties, gave $2K to Donovan. Compass CEO Robert Reffkin has given $5,100 to McGuire, as has iStar CEO Jay Sugarman.
Garcia, meanwhile, has locked down $16K in real estate funds, Crain’s New York Real Estate reports, and Loree Sutton — a retired brigadier general and a former commissioner of New York City’s Department of Veterans’ Services — has scored $6K from industry sources.
Morales locked down $2,200 and Menchaca $660, but both told the publication they would give the money back in keeping with their no-real-estate-funds policy. Back in December, Related Cos. handed $1M to an expenditure committee called Common Sense NYC, according to The New York Times, and Midtown Equities Jack Cayre donated $100K to the cause.
Related CEO Jeff Blau is now running a push to encourage New York Republicans to register as Democrats in order to vote in the primary. Because of the city's left-leaning politics, the future mayor is widely expected to be decided during the Democratic Party’s primary in June.
“We have gone out on a campaign to register as many Democrats, not because of ideology — you can register back the next day — but because we want everyone to have a say in the election, to vote and have their vote count,” Blau said at a Bloomberg conference on Thursday.
"At the end of the day, it’s really important the person who is mayor has open channels and an understanding of and a relationship with the real estate community, the banking community and also has strong roots in advocacy," Glen said. "And that’s not easy to find.”
Right now, the real estate community is reeling from declining residential rents, sluggish office leasing and investment sales, and a city that appears to be closed for business when compared to other hubs around the country.
Plus, the state is facing a $15B budget deficit, while the city’s 2022 budget expects property tax revenue to be $2.5B less than it had once projected. The Real Estate Board of New York estimates that the city lost more than $1.6B in revenue from lost real estate transactions as a result of the coronavirus pandemic in 2020.
“Real estate is part of the solution for New York City. Investment in infrastructure, in high-quality buildings, in market-rate and affordable and workforce housing, all of these things are essential elements of keeping New York competitive,” Schack Institute of Real Estate Dean Sam Chandan said. “Across the board, there is a strong recognition of the important role that real estate plays, and I see that as a separate issue to the considerations around how campaigns are funded.”
Still, many sectors of communities have begun to see real estate as the problem in recent years. Amazon’s plan for a second headquarters was killed because of community backlash stemming from fear about displacement and rising rents — and though it was two years ago, the business community continues to mourn the loss.
The rent reform legislation, a state policy, was viewed as political antagonism toward real estate and development. In September, Industry City's developers pulled their application to rezone Sunset Park, a move welcomed by Menchaca, who in his capacity as council member has opposed the move over concerns about gentrification. Business leaders claimed it had cost the city the chance to generate jobs amid an economic crisis.
“We need someone who is thick-skinned, smart and aggressive like Bloomberg,” said JRT Realty Group Executive Managing Director Ellen Israel, who said she is concerned about policies driving businesses and high-earners from the city and is interested in hearing more from people from outside the political sphere.
“We certainly know what Scott Stringer is about, we know what Eric Adams is about, they’ve been around,” she said. “The people who we don’t know — and there are many of them — we want to hear what they have to say. We don’t want to [just] hear what a number of the politicians are saying, 'Tax the billionaires, tax the millionaires,' there needs to be Plan B in raising revenue.”
Ultimately, there may have to be compromises when it comes to policies, said Seth Pinsky, a former executive at RXR Realty who worked for former Mayor Michael Bloomberg.
“The politics of New York have been trending left over the last few years, but the experience of the last 12 months could potentially push the electorate in a different direction, Pinsky said. "Ideology may be less important, pragmatism may be more highly valued.
“There is an understanding that the city and state will need additional resources, and likely those with means will be asked to provide a portion of that," he continued. "I think there is a recognition that if those revenue demands are thoughtful and reasonable and time-limited — especially if they are paired with real efforts to make the government more efficient — that it might be possible for the wealthy to bite the bullet.”