“The Governor Is On the Line…” Andrew Cuomo and the Real Estate Industry

“The governor is on the line,” a top real estate executive recalled his wife telling him early one morning in his suburban home several weeks ago.

He remembered feeling a small spasm of panic as he cursed aloud—without realizing his wife was on the other side of the door holding the receiver out.

The man put the phone to his ear. “That’s what you say when I call?” Gov. Andrew Cuomo said in jest.

124496798  The Governor Is On the Line... Andrew Cuomo and the Real Estate Industry

Andrew Cuomo, No. 3.

It seems like ages since New York elected a governor who, simply by dialing a phone, provoked panic attacks in the hearts of real estate executives. For three years, during the sturm und sleaze of the Eliot Spitzer administration, followed by David Paterson’s aimless turn as a stopgap, state government seemed defined by dysfunction without even a shimmer of civic or fiscal aptitude.

“There was the growing feeling the state was ungovernable,” a real estate industry lobbyist said.

Enter Mr. Cuomo, son of former Gov. Mario Cuomo and a veritable first son of New York, who in two consecutive years has passed budgets (on time) that kept taxes at bay, unveiled a bold slate of infrastructure projects, and introduced a new system for how developmental money will be distributed throughout the state.

His accomplishments, almost unprecedented in the state’s recent political history, paint a picture of a man who doesn’t wait around to feel pressure—he applies it.

“It’s much more important to him to lead the state than to be popular in the state,” said Steve Cohen, former secretary to Governor Cuomo and his chief of staff when he was the New York State attorney general.
While Mr. Spitzer, a hard charger himself, tried to tame Albany with a straight right to the chin, Mr. Cuomo has taken a more crafty approach, aligning stubborn interests through leverage and transparency.

When Mr. Cuomo first took office in 2011, for instance, he quickly sided himself with the Committee to Save New York, a pro-business lobbying group that he brandished as a handy counterpunch should the health care and education unions—two of the state’s biggest spending areas—decide to pounce on his reformist agenda. In the end, he slashed billions from the budget without nary a negative advertising campaign, which those unions had used as weapons to crush Mr. Paterson’s attempt at spending cuts.

Then there was the formation of 10 Regional Economic Development Councils, which created an effective and fair forum for counties—“Mohawk Valley,” “Capital Region,” etc.—to compete openly for public funding. The method broke away from the tradition in Albany in which backroom dealings, not merit, kickstarted a project.
“The councils brought everyone to the table,” said Kathryn Wilde, president and chief executive of the Partnership for New York City, a nonprofit business interest group. “In New York City, we made the priority the Hunts Point food market, and that plan has been connected to the Hudson River Valley and upstate agricultural industry as a way for the market to support those regions,” she added.
“It’s the reverse of the pork barrel approach.”

The governor has also helped resolve other funding issues, like the MTA’s deficit-ridden capital program.
In March, he reached an agreement with legislative leaders to bankroll the Metropolitan Transportation Authority’s capital budget plan, committing $13.1 billion to help the city agency complete projects like the Second Avenue subway and the Fulton Street Transit Center.

The state had originally pledged $9.1 billion for the first two years of the project.

He has brought the fate of the Tappan Zee Bridge to the fore, a project too gargantuan for many of his predecessors to effectively push forward, insisting that a new bridge (at an estimated cost of $5.2 billion) be built. The federal Department of Transportation nixed a $2 billion loan request for the project last week, but Mr. Cuomo remains undaunted. Besides, the Tappan Zee project stands for more than just linking the Westchester and Rockland counties.

As he put it, it’s “going to be about making the statement that government can work, and society can work and we can still do big things.”

“The thing that makes Andrew very effective is he’s very operational,” said a former colleague of Mr. Cuomo’s. “He makes a list of what needs to get done to achieve a goal and he assiduously makes sure everything on his list is done in order to achieve that goal.”

One big goal on that list is the Javits Convention Center. During his State of the State speech at the start of the year, the governor made the relocation of the Javits Center to Queens his marquee economic development project in the city, a plan at once brilliant and fraught with challenges.

Under the proposal, Javits would be moved to the Aqueduct Race Track in Ozone Park to create a 3.8-million-square-foot convention center, the largest in the country. Proponents say the new development would allow the city to finally capture the biggest trade shows and events that the current facility is too small to host. Though he has spelled out few details, Mr. Cuomo’s idea has the potential to connect to a huge casino gaming hub that would be built at Aqueduct, probably by its operator, the international gaming consortium Genting.

Attractive in all this is the fact that the state would have to expend little if any capital to effect the plan; Genting would foot the bill.

Yet countervailing questions have surfaced too, including the wisdom of relocating a facility that is currently one of the best-performing conference facilities in the country to the nether regions of Queens. Such concerns are premature, said a person close to the governor.

“We are going to develop a master plan for the whole [18] acres, and really try to transform that section so that it blends in with Hudson Yards, it blends in with Times Square, and really utilize that property in an effective way,” that person added.

Few have spoken out vehemently against the project, but many sources say that it is sure to have its critics behind the scenes, including the powerful Hotel Association of New York City, whose members paid for the current renovations with a $1.50 surcharge per night on their room rates.

“My feeling is the ink is not dry on a Javits deal,” said George Artz, a public relations and lobbying executive. “I don’t think people expect the governor to try to be unilateral. He’ll probably offer a smaller facility in Manhattan.”

For Mr. Cuomo, development and real estate play vital roles in the economic development of New York State. Such was the lesson he learned during previous stints heading Housing Enterprise for the Less Privileged (HELP) and the Department of Housing and Urban Development.

He’s also not afraid to go after real estate, either, as he proved during his time in the attorney general’s office. He went after Extell Development’s Rushmore condominiums, ordering Gary Barnett’s firm to release 41 buyers from their disputed contracts. He also went after Vantage Properties, reaching a $1 million settlement with Neil Rubler’s company after accusing the firm of putting its tenants through unnecessary housing court proceedings.
This is not to say that there’s lingering resentment on the part of the real estate community. As Governor Cuomo’s campaign to legalize same sex marriage was taking steam, several prominent members in the real estate community, including Adam Rose of Rose Associates and Donald Capoccia of Great Jones Realty, lent their support to the governor.

“The theory has always been to do the job properly, call things straight, exhibit leadership, and that in the end, people will respect what you did,” said Mr. Cohen. “I think that’s where we ended up with the real estate community.”

drosen@observer.com and dgeiger@observer.com

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