The Company Man: Seth Pinsky Reflects on EDC and Looks Ahead at RXR
Gus Delaporte Oct. 8, 2013, 10 a.m.
In July, Seth Pinsky, then the president of the New York City Economic Development Corporation, announced he would soon shift from the public sector to the private sector. In his decade-long stint at the EDC, Mr. Pinsky boosted his reputation citywide by helping to secure a number of high-profile development projects, including Atlantic Yards, Hudson Yards and the Cornell Tech campus, and by initiating the response to areas of the city hit hardest by Hurricane Sandy. In his next chapter, Mr. Pinsky will spearhead RXR Realty’s Emerging Markets platform, which aims to identify growth opportunities in New York City and the surrounding metropolitan area. Mr. Pinsky, who joined RXR last month as executive vice president, spoke with The Commercial Observer last week at the developer’s Midtown offices and spent time discussing his tenure at the EDC and his new role.
What motivated your decision to move to RXR from the EDC, and what about the RXR opportunity in particular intrigued you?
My position at the EDC was for all intents and purposes a mayoral appointment, and, after 10 years of having been there and having a really phenomenal experience, it became clear that I would likely have to move on anyway.
It was with great sadness that I began to search for the next phase, but the good news was that once I started talking to people I saw there were many great opportunities outside of the EDC. I immediately hit it off with Scott Rechler and felt that the opportunity that we were discussing here was something that would build off the work I had done and the approach that I had taken during my time in the Bloomberg administration but would also allow me to both broaden the scope of what I was thinking about geographically and to learn from a great group of people. It became an easy decision once it became a real option.
Did you evaluate opportunities in different sectors, or was real estate an area you pinpointed?
I’ve always been interested in real estate, and, before working at EDC, I had worked for a number of years as a real estate lawyer and obviously did a lot of real estate work at the EDC. I certainly thought about other opportunities—and, in fact, pursued a couple of other opportunities—but real estate was always high on my list. What I wanted was something that would be a logical continuation of what I had been doing but would also be a new challenge.
Looking back at your time at the EDC, is there one accomplishment you’re most proud of?
There’s a long list of projects that I think will have—that I hope will have—a significant impact on the city, and certainly those projects are things of which I am proud, whether it’s the Cornell Technion Campus or the other applied sciences campuses around the city or the work around the World Trade Center or the development projects that we spearheaded from Staten Island to Coney Island to Willets Point. All of those things are things of which I am proud.
What I think I am most proud of is what we as an administration did in rethinking the model of economic development in New York and taking it from something that had previously been focused almost exclusively on tax incentives or business retention and real estate development and broadening it well beyond that—thinking more strategically and adding a certain analytical rigor to the process. I hope that is something that will be carried on in the next administration even if the tactics they adopt are different.
Is there anything you look back on that you would have done differently?
I would be arrogant if I said that there was nothing that I could do better. In retrospect, when you look at projects, especially those that have been completed, there are always things about them that you wish could have been different or bigger or smaller or somehow improved upon. Getting things done in New York is a huge challenge, and, if you want to be successful, you have to be pragmatic, and being pragmatic means you have to make compromises. One of the things that I think the Bloomberg administration did well was not letting the perfect become the enemy of the good. I believe that for the most part what we accomplished was the best that could be accomplished given the host of other factors with which we had to deal.
Now that you have moved on and the Bloomberg administration is coming to its conclusion, do you feel that you have left the EDC in good hands and with a good platform for the next administration?
I would answer that in a few ways. First of all, I believe the city’s Economic Development Corporation is a really precious resource that I didn’t fully appreciate when I first came to work there, and I certainly hope that whoever the next mayor is—even if that mayor determines to change tactics—that he continues to nurture the institution. On a certain level, the success of the EDC is something that is based on factors that certainly predated me and will very likely continue to exist going forward.
You’ve been at RXR for about a month now and were brought on to spearhead an emerging markets initiative. Can you explain the project and your role?
The emerging markets platform really grew out of a conversation that Scott Rechler and I began about a year ago, where I brought to him thoughts that I had about development in a particular part of the city based on insights that I had had getting to know that area through my work at EDC. One of the things that really attracted me to RXR was that in response to that he challenged me to think more broadly—that really what I was describing was not a specific neighborhood but a type of neighborhood and a type of market in the New York area, of which there are many. He felt, and I very much agree, that those types of markets offer both tremendous opportunity for successful investment by private investors but are also likely to be an important part of the engine of growth for the region.
The way I would characterize the markets we are looking at are along two axes. One is geographic. We are thinking about parts of the city and parts of the region that have suffered from underinvestment or have a negative market perception about them but that we feel have good underlying fundamentals—strong infrastructure, things like that—and looking at investment in those areas.
In addition to that, we are also looking at emerging asset classes. Those are asset classes that either have fallen out of favor with the market or simply do not exist in New York and investing in those asset classes.
Can you give any examples of potential areas of investment you have looked at in your first month on the job?
Something that I focused on while I was at the EDC was the emerging creative economy and the important role that the technology sector and other related sectors are playing in the New York City marketplace. Traditionally, those types of businesses were mostly concentrated in Midtown South, and, in fact, RXR has a significant investment in Midtown South that is populated with exactly those types of businesses.
Over the past several years, that industry has expanded, some further downtown, some to the West Side, some to places like Dumbo, but I believe very strongly—and RXR believes very strongly—that there is an opportunity to expand that universe significantly. We’ve been looking at different parts of the city where we feel that kind of inventory could be very successful and where it could help to spur the economy of not only those areas but of the broader region.
What areas in particular do you see opportunity?
We are looking very broadly. Certainly, given the concentration of the creative work force in places along the Brooklyn waterfront and also in neighborhoods in Queens, those two boroughs are areas we are looking at. There is something happening in New York City’s economy that is going to really transform that economy on a much broader basis that I think people appreciate. Something that I said a lot while I was at the EDC that I believe very strongly is that, whereas in the past the technology sector was a segment of the economy, increasingly the economy and the technology sector will become one—everything will be the technology sector, because technology is going to underlie traditional segments of the economy. I believe the opportunities and the needs of the industry are going to reach into neighborhoods far and wide, and we as a city need to make sure we have the real estate stock ready to accommodate that growth.
Do you think New York presently has adequate infrastructure and is prepared to harness the growth of the technology sector?
It’s not perfect infrastructure, it’s not predesigned, but the industry is thriving. However, as the industry grows and as it matures, I think it is going to require a type of real estate that doesn’t exist in the city in some cases and, even in the case it does exist, does not exist on sufficient scale, and we as a city need to invest in that infrastructure in order to keep that industry here.
You mentioned different parts of the city—Brooklyn, Queens—as potential areas of opportunity. Are there other areas in New York or in the larger metropolitan region that are perhaps underserved?
I think within the city there is significant institutional money that has been seeking opportunities in Brooklyn and parts of Queens. There are large areas of Queens and Brooklyn, however, that haven’t been touched by that investment. Two boroughs that have lagged even further behind in terms of attracting that type of institutional money are Staten Island and the Bronx, as well as Upper Manhattan. I think there are real opportunities in every one of the five boroughs.
In addition to that, if you look in some of the suburban areas, we believe there are real opportunities for thoughtful development around transit nodes in many parts of the region, and that is another area we are looking at very closely.
You’ve had to wear a different hat here at RXR. How have you found these early days?
I’m fortunate in that I had worked in the private sector for a number of years before going into government, so the different perspective that comes from working in the private sector is not entirely alien to me. I have also come to a place with an incredibly strong team that has been very willing to take me by the hand and make sure any skills that I currently lack are developed.
It is certainly different than working in the public sector. There are things about working in the public sector that I miss and I imagine I’ll continue to miss, but there are things about working in the public sector that I likely won’t miss. In some ways, that makes the transition easy too.
You’ve joined RXR at the tail end of the third quarter. What’s your outlook for the market going forward?
I think that the fundamentals for the New York City region are incredible strong. We are just finishing a mayoralty where there was significant investment in our infrastructure where significant parts of the city were rezoned, giving us the potential to spread development beyond the traditional central business districts. The economy is continuing to diversify. We are growing employment that is much faster than the rest of the country. People are continuing to move to the city.
At the same time, on the supply side, there is increasing new development occurring but it has not kept pace with the demand, and so I believe that there are likely to be real opportunities going forward to build into the demand.