The Iron Lady
Jotham Sederstrom Jan. 18, 2012, 9:30 a.m.
Two years ago this month, CBRE tristate chief executive Mary Ann Tighe rattled cages when the Real Estate Board of New York named her its first female chairwoman in the 116-year-old organization’s history. During those 24 months, the former TV executive—yes, she helped launch cable channel A&E—helped renew the 421-a tax exemption program, oversaw passage of the Foreign Investment in Real Property Tax Act, and shepherded a series of projects meant to fuel construction across New York. Throughout those lobbying efforts, she managed to tally what she described as the second-most successful year of leasing in her career. Last week, REBNY’s first lady spoke to The Commercial Observer about her achievements thus far as chairwoman, the complications behind her deals for Condé Nast, Coach and Young & Rubicam, and what to expect at this year’s gala.
The Commercial Observer: Two years ago, you were named chair of the Real Estate Board of New York. Around the same time, you told me that, among other goals, you hoped to increase what was then a membership of 12,000. Have you achieved that goal?
Ms. Tighe: Well, actually, we’re over. I know we’re, right now, at the highest level we’ve ever been in its history. It’s over 12,000, but I don’t know the exact number. I can tell you that we’ve brought in, for example, a number of additional Class A members.
What have you learned from the experience? Has being chairwoman posed challenges?
Well, I think that I did not have a full appreciation of the complexity of REBNY’s portfolio—the diversity, the complexity of it, and the abundance of issues with which REBNY deals. And I now have an appreciation for how encyclopedic Steve Spinola’s knowledge of New York City real estate is. I also have great pride in the reshaping of the staff that happened under my chairmanship.
Besides bringing in new staff members, you also created a political director position, to which you appointed James Whalen. Why hadn’t REBNY already thought of that idea?
Mr. Spinola had done everything, and with a great staff. He has really fine people. But the idea of bringing somebody in to whom Steve could offload hadn’t occurred. We deal with the feds. And that was another important point of emphasis for me. I wanted to make sure we were playing on all fields because, increasingly, federal regulation and the state were as impactful, or potentially as impactful on the city, as New York City was. And so to cover all three playing fields, with the manpower that existed, that was impossible.
And so how is bringing in someone like Jim Whalen helpful?
Just, again, taking a look at, for example, the work that we were able to do in Albany. Jim has engaged the Committee to Save New York. They were critical in the period when we were dealing with the issues of rent stabilization and the legislation connected to that. And we were very concerned about how that was all going to shake out. We were very concerned about some of the regulations that had to do with Fannie and Freddie that said you couldn’t use financing from these entities if you had a flip tax on your property. Now, you know that’s a standard feature in many of the co-ops in the city. So we would have cut off all kinds of funding. Again, that’s a federal-level issue. So it’s in issues like that where they jumped in and were able to have an impact.
Besides playing defense, which is probably a large part of what people like Jim do at REBNY, have you been able to inject fresh thinking into the 116-year-old organization?
When I became chairman I wanted the board not only to play defense, but to also be the generator of big ideas that would help move the city forward. And there are a variety of things we’ve been focused on that are big ideas that will take many years to play out. And that’s another reason why people don’t engage the big ideas—because everybody wants to have something that’s instant gratification.
But I can tell you that I am very proud that the board has engaged the subjects of, for example, the No. 7 line. That’s Example 1. But Example 2 is relooking at Midtown zoning, raising the question with our city planning commission. Have we inadvertently frozen one of the most—in fact, not one of but the most—important business district in the city? As I phrased it when I spoke with Amanda Burden, “Are we in danger of becoming a very romantic 20th-century city because we have made it impossible to build in the 21st century in some of the key locations in the city?’
Last year, you worked on at least three of the city’s biggest and most remarkable office deals: Condé Nast, Coach and Young & Rubicam. All said, was 2011 good for you?
Yeah, 2011 was a very, very good year for our firm. It was a very, very good year for me, personally. And all is well on the personal front. So all in all, fine.
At the beginning of 2011, did you have any inkling that it would end so successfully?
I felt pretty certain we were going to do the Condé Nast deal. Let me say it slightly differently: If we were doing a Condé Nast deal, we were well underway. I had actually thought, since we signed a term sheet in August of 2010, that we would close on the deal by very late in the fourth quarter 2010.
And yet the deal at 1 World Trade Center wasn’t finalized until May. What happened?
We didn’t sign until the third or last week in May. So what happened after we signed the term sheet in August is that we had two quarters of what I call “problem identification.”
What does “problem identification” mean, exactly?
It’s just, basically, not negotiating. You’d start to negotiate, and then, “Whoa, I didn’t know we had that problem.” And, “Whoa, where did that come from?” Because remember, the World Trade Center is a unique site. And I think I had been naive about the fact that because Beijing Vantone Industrial had signed a lease there, I had some expectation that all the questions had been answered. Here’s the simplest example of the first harbinger—which came in September—that questions weren’t answered: Condé Nast asked the question, “Where do we vent out our kitchen? We don’t see vents on the facade.”
You must be referring to Condé Nast’s legendary cafeteria at 4 Times Square, which its rumored to be replicating at 1 World Trade Center. There were problems, you say?
Yes, and they said, “We don’t see any vents on the plans.” Now, how’s that for a straightforward question? So, just showing where our heads were, I’m like, “Oh, we must have some early-stage plan,” because a big part of selling Vantone was that they’re going to have true Chinese food dining on their premises, so that when you headquarter there, you’re going to be able to eat food that tastes like the mother country.
So, I’m like, “Oh, they must know the answer to this.” P.S., the answer came back, “Oh, no. There are no vents.” And so, obviously, Condé asked the next question: “Well, then, how might we exhaust from the kitchen?” And the answer was, “We’re going to run black iron up the shaft”—truly, an enormously expensive thing to do, and also the longest black iron run in history, probably. So we now have a conversation. That’s when the bell sounded. And all of a sudden, we’re like, “Geez!” And we said, “What did you tell Vantone? What was their solution?” By the way, after we asked that two or three times, we began to realize Vantone never asked the question. So there were no solutions.
Considering that the Condé Nast deal was, in fact, signed, I assume the problem got solved?
It was because we had a tremendously gifted team leader from Condé, Bob Bennis, who is a master of design construction, and has been at Condé for many, many years. Bob walks in, and he says, “I can tell you how many deliveries a week Condé Nast gets. I can tell you how many come by messenger, how many come by tractor-trailer, how many come by van. How many people come for lunch.” This is a company that has been operational for years—for decades—and Bob is the master of this data.
Meanwhile, the deal with luxury handbag designer Coach was announced in November, but as I understand it there’s still a ways to go before it’s finalized. What’s left to do?
Everything—all the documentation and all the operational questions: How do we get in? How do we get up? What do we control? What does our signage look like? Who pays for this? Who pays for that? All of it. We have a very detailed term sheet. But now we’re in the nitty gritty phase. And we’ll see whether Coach gets done.
With both of those deals, you paint a tumultuous picture. What about Young & Rubicam?
The big surprise of 2011 was Young & Rubicam—or Y&R, as they call themselves today. Because we’ve been working on Y&R for many years, and we didn’t know whether or not we were going to solve the problem. So fortunately, the problem got solved.
What did the problem surface, and when did it get solved?
Seven weeks before it signed, because we walked into the year thinking that we had a shot to make a deal for Y&R at 1107 Broadway. And around June we discovered that the building was not going to go commercial. It had been bought out of bankruptcy and was going to be converted into a residential building. So that blew up. But the Y&R deal was used as a stalking horse, with the understanding that there was what they call a “kill fee.” If the deal didn’t happen there was a certain sum of money the bankruptcy court gave out. No one wanted the money. Everybody wanted the building and the deal. But, as it turned out, Witkoff triumphed in the auction process, which took place on one day in June. It was just one day in the judge’s chambers.
How many times have you attended the annual REBNY gala?
Oh, gosh. I’ve been, easily, more than 25 times—easy.
Is there one gala that stands out, either because of something great that happened, something embarrassing that happened, or something memorable that happened?
That’s easy. It was the January gala that came immediately after 9/11.
Remember that our business was frozen for many, many months after 9/11. There was a general sense of, was the model of how we were built—our great vertical city—going to vanish because no one would ever want to be in a skyscraper again? These thoughts seem inconceivable today. But they were absolutely on everybody’s mind back then. And to feel the commitment of the members and the recognition that everybody felt such a connection to the city, and a desire to see its citizens and its skyline restored to health, was inspiring. The energy was about those emotions. That’s the banquet that jumps out.
Without knowing for sure, how would you summarize this week’s REBNY gala?
Brandl Frey, the chairman of the Young Men’s/Young Women’s Real Estate Association, said to me at the banquet last year, “Oh, this is so amazing. This is the first time I’ve ever been.” And so I’m like, “What are you talking about, Brandl?” So I said, “Here’s what I want you to do: Young Men, Young Women, I want you to organize. You pick the number of young people who would not be able to get in through their firms. And let’s get tickets so that we have, for the first time at this one coming up, 2012, a whole slew of people who are the next generation of leaders. And YMREA should be the ones to select them and make them our guests at this event.” So that’s what’s going to happen this year.