What should Bill de Blasio’s real estate/land use priorities be?
We asked industry leaders to give us their two cents on issues facing the mayor-elect, whom many regard as hostile to their interests. Here are their condensed responses.
Anthony Malkin, chairman, CEO and president, Empire State Realty Trust:
It is important for our mayor-elect to realize that capital, both human and currency, are portable. Although no one can argue with some of the objectives of his campaign, he needs to recognize that people have options. And if New York City is inhospitable, human and currency capital will go elsewhere.
Capital has no guilt. A lot of [his] campaign rhetoric ascribed guilt. It was less about what we should be doing for people, and more about [the idea that] people who are successful had done something wrong.
Adam R. Rose, co-president, Rose Associates:
East Midtown rezoning is extremely important to the future of the city. I have nothing to gain from it and don’t build or own office buildings. But the age of the office stock, much of it physically and functionally obsolete, is a real brake on growth.
Douglas Durst, chairman, Durst Organization:
While New York’s land-use regulatory scheme has more than its share of inefficiencies and anachronisms, the property tax is the most dysfunctional. It punishes renters and discourages new housing construction and capital improvements in office buildings.
Homeowners’ property-tax bills often have more to do with where they live and what type of house they live in than the value of their home. The property-tax system must be made more rational and fair.
Donald Trump, chairman and president, The Trump Organization:
It’s very important for a new mayor to understand this is no longer just a local market. Developers operate worldwide. If New York’s developers aren’t treated properly, we won’t be in New York. It’s no longer a hard trip to other countries such as China. I’m a prime example. I’m doing jobs all over the world and not so much in Manhattan.
Mary Ann Tighe, Tri-state region CEO, CBRE:
There is no choosing between the World Trade Center, Hudson Yards and Atlantic Yards. Those ships have already been launched, and the de Blasio administration will benefit mightily from each.
One of the great opportunities he has is to conceive real-estate policy holistically.
If, for example, the creation of a new historic district was considered in the context of its impact on tax revenue and of development in that district, there would be fewer unintended consequences, and that, in turn, would benefit the city as a whole.
Barry Gosin, CEO, Newmark Grubb Knight Frank:
The number one focus should be jobs, jobs, jobs.
With respect to housing, he should reintroduce 421a or the J-51 program, and extend those that expire. He should expand affordable housing both through programs like 80-20 or air rights transfers. He also needs to balance out the taxing of city residences to be fair to all.
Stephen B. Siegel, chairman of global brokerage, CBRE:
I hope Mayor de Blasio will view and govern the city in a unified manner rather than in his divided “Tale of Two Cities” way. I respect completely his focus on the outer boroughs, but not at Manhattan’s expense.
The economic well-being of the city would be boosted greatly by continued development and tenant occupation of the World Trade Center along with Hudson Yards and Manhattan West.
Michael Colacino, president, Studley:
While increasing our uniquely high taxes on users of space directly would be politically difficult, I’d be just as concerned about taxing them indirectly through increases in property taxes on commercial space.
The cost of such a tax on an owner is passed through to tenants in most leases. Not everyone understands this, so in the past, raising these rates has been a popular way to raise revenues. I urge him to consider its impact, particularly on start-ups and tech firms that are the future of our economy.
Peter Riguardi, New York president, Jones Lang LaSalle:
The most important issue is doing everything possible to maintain the high quality of life to which we have become accustomed. If quality of life declines, rental rates will drop, the tax bases will drop, and we’ll spiral into a city that many New Yorkers don’t even remember.
Also, with both the financial-service industry and the square footage utilized per person shrinking, I suggest he prioritize to ensure that high-tech and new media firms have everything they need to grow and expand here.
Robert Alexander, co-chairman, CBRE Tri-state region:
Both the WTC and Hudson Yards are big-money projects with work still to be done on both. Don’t you want to get them finished before you start other projects?
At both the WTC and Hudson Yards, the mayor should work hand-in-glove with Larry Silverstein, the Port Authority and Durst, and Related to get them finished. If a tenant needs a special deal, instead of screaming “corporate welfare,” help them find a way to afford construction costing $1,000 a square foot.
Kenneth Zakin, senior managing director, Newmark Grubb Knight Frank Capital Group:
The tech and new-media industry continues to shape the world. We can be at the center of this, but we need to provide a proper workplace environment including reasonably affordable housing. I don’t necessarily mean his definition of “affordable,” a separate problem which will be very difficult to achieve given the high price of Manhattan real estate.
Faith Hope Consolo, chairman, Douglas Elliman Retail Group:
Regarding Mr. de Blasio’s pledge to increase taxes on those earning more than $500,000 to create pre-kindergarten programs, as a former City Council member he knows that funds are not so easily earmarked. Once the Office of Management and Budget and the Department of Education weigh in, there’s no guarantee where those funds will be spent.
If he restricts developers’ tax benefits and incentive programs, he will discourage development and we will have a tale of no city.