With the International Council of Shopping Centers’ RECon event around the corner, The Commercial Observer sat down with Cushman & Wakefield retail services executive vice president Gene Spiegelman to hear what keeps drawing him back to RECon year after year. Mr. Spiegelman, architect of complex and transformational deals that have earned him two REBNY Retail Deal of the Year awards, also tells us why taxing online retailers is an important way to level the cyber playing field and why zoning won’t protect mom-and-pop stores from what may be the inevitable.
The Commercial Observer: What does your business focus on and who are some of your key clients?
Mr. Spiegelman: As of this July I’ll be in the business 25 years. I started two days out of college—got in to New York City in 1992 and [almost immediately] went to work for the Edward S. Gordon Company in their retail services division. My first day on the job was, I think, May 17, 1993, and it was at the ICSC in Las Vegas.
This is like a homecoming for you.
It always is and I always enjoy that part of it. So this is an anniversary. I’ve been in the retail services industry 19 of the 25 years I’ve been in the business. I developed this focus—I would say 60 percent of my business is geared toward landlord representation and 40 percent is geared toward tenant representation—and in this cycle of my career right now I represent Crate & Barrel in their CB2 concept. They’re a long-term client of mine. I’ve also had a very heavy involvement with them in their warehousing and distribution work around the country. I also represent Trader Joe’s in Manhattan. I did two of their three stores. I did the store at 2075 Broadway, which is Broadway and 72nd Street, and their other store at 21st and Sixth Avenue, which is 675 Avenue of the Americas. Moving to the luxury side, I do the work for CH Carolina Herrera, which is a new client this year. We’re doing their work around the U.S. We also represent Lacoste, for about three years now around the U.S. And I have a new contract with Aerin Lauder, doing the work for what will be a retail expansion of her Aerin brand at retail probably sometime in 2013 in New York.
What do you hope to accomplish out at ICSC? Do you have any goals set?
Advance business and make new introductions for business. You always get to see a little more than you get to see right here, whether it’s sitting in this office or in this city. It just allows you to expand your thinking and give you some new opportunities. It’s like providence. Things happen that you don’t expect to happen. For me it’s the single most productive industry event that I participate in.
How have the space needs of your clients changed over the years—especially some of the larger ones?
Well, Trader Joe’s has expanded. Their first store in New York was about 11,000 or 12,000 square feet and they realized it’s too small for New York. And that has gone to a 22,000-square-foot requirement. Crate & Barrel, on the other hand, is a brand that is working to shrink its footprint. The nature of furnishing and table-top retailing is changing.
Everyone also asks, ‘Where is Best Buy going? What’s going to be the future of Best Buy? Are they going to evolve and be something different and change with the nature of retailing in their category, or are they going to go the way of Circuit City and Comp USA?’
And how have you seen Best Buy attacking that problem?
They’re shrinking their footprint. They’re changing their pricing model—those two things help them to compete. They’re looking at the product they sell. And whether it’s macro or on the local basis, you have politics and legislation as well. One of the big issues that I’m watching is the sales tax fairness legislation, which is being kicked around in Congress. This would basically tax online and Internet sales at some rate to level the playing field between the brick-and-mortar retailers. You go out to a store and you’re paying sales tax. Order something that’s not sold or manufactured in your state or headquartered here and you’re not paying sales tax online.
I assume you would be in favor of taxing online retailers?
I’m not in favor of taxation from the perspective of the political argument that you hear today about income taxes and taxing the rich and that type of taxation. This type of taxation is … if you’re paying tax on Product A here and Product A is the same there, why shouldn’t it be taxed at the same level? You’ve got to have parity. It’s more about parity as opposed to taxation.
I always have my view of politics and legislation from a local perspective and the thing that we’ve been watching is the Upper West Side rezoning proposals that look like they’re going to be approved in the next six weeks or so. The community on the Upper West Side has a viewpoint of how retail should be controlled on Amsterdam, Columbus and Broadway, and it’s that control issue. I think the market speaks better than legislation. Legislation will have both negative and positive consequences that cannot be predicted.
What keeps you excited about retail in the city? The changing nature of it?
We sit here wearing a suit and tie in Midtown Manhattan. You walk outside and it’s a bunch of other suits and ties. You go to another part of the city and you realize the vast difference of people in the city and the look, the feel and—as much as I try to stay on top of this in my business—how fast it all changes, the buzz … You just feel the buzz and you want to be part of the scene, you want to go out, you want to have fun. It’s just so dynamic. And that’s any city you go to. I just like cities. It keeps you really interested in doing it. But from a business perspective, we like what we do, we’re successful at it, we want to really do well by our clients, by ourselves, and it drives you. It’s just hard to not be driven by it. X amount of time is spent right here, and more and more time I want to be out there. And I mean out there in the world. I don’t care if it’s here, L.A., London, Hong Kong … I want to be out more. It goes back to ICSC. It allows more free thought because you don’t have all this going on. You’re not pressured with the phones, the computers, the papers. It’s a good opportunity to expand your thinking.