Since 1986, Steven Spinola has served as president of the Real Estate Board of New York. With his organization’s annual gala approaching next week, Mr. Spinola is saying goodbye to outgoing chair Mary Ann Tighe and welcoming Rob Speyer, president and co-chief executive officer of Tishman Speyer, while also guiding REBNY’s agenda for 2013. The Commercial Observer spoke with Mr. Spinola last week about the transformative rezoning of Midtown East, the battles that lie ahead in city and state politics, and the gala’s potential as a greenhouse for burgeoning deals.
The Commercial Observer: Looking back on 2012, what are your impressions?
Mr. Spinola: Obviously, this year there was a bit of hope that we were moving out of the recession and, amazingly, we did in New York City. We now have more people working in New York City than ever in our history, which is an amazing statistic, after going through some difficult times.
We also had a year in which there were major concerns over where Washington was going and what the impact would be, and then we ended the year with a tremendous impact that will alter a great deal of how we make decisions in building and maintaining buildings—meaning Hurricane Sandy. It was a year where there was clearly some hope; the office market did very well in the beginning—it seemed to slow down in the second half, but it’s holding its own.
Rental apartment buildings were doing extremely well throughout the year, and we saw, at the end of 2012, the beginnings of constructions of some new condos which were kind of in limbo for a while because of the economy.
One of the issues that took hold in 2012 was the rezoning of Midtown East. Are you happy with the progress?
This will allow New York City to continue to be competitive on a worldwide basis, to offer brand new, state-of-the-art buildings, green buildings, buildings that are healthy for the tenants as well as the city of New York. Over the next 20, 30 years, we will have new buildings being built in areas where the average age is 73 years old for an office building.
This is a major move by the Bloomberg administration, and it’s something that we’ve been working on, coming up with data and working with the city for almost two years to identify the needs. After we did that and worked together, they went their way and studied it, came back to us and said, ‘We agree that something has to be done.’
We may have some suggestions for modifications to what they’re proposing, but overall this is a wonderful step toward keeping New York competitive as an office market.
What are some other issues REBNY will be focusing on in 2013?
We’re looking at where the city is going on the issue of taxes. I think the good news is that nobody is planning to raise real estate tax rates. However, the city has been very aggressive in assessing properties, and as a result, taxes are significant. If you want to build a new office building in the city of New York, you have to assume that, Day 1, your taxes are going to be somewhere between $20 and $30 a foot. That’s an exceptionally high number when you compare it to the rest of the country, and it’s a number that mandates that unless you can expect to get in excess of $100 a foot, the economics of building a building are rather difficult.
In Albany, we’re looking for a quick, early-year approval of a bill that is called “Anonymous Housing Bill” that deals with a number of issues, including extension of the co-op condo rebate program. It includes extension of the J-51 program, which encourages significant investment in housing throughout the five boroughs—primarily in the boroughs, not in Manhattan—and as a result generates jobs.
The state and the city let that law expire last year. There was an agreement to extend it, but it happened too late in the legislative session. We are hoping to see action on this bill early in the year, and by that I’m talking about January.
And we have raised the issue of a very important program, which is a tax incentive program for brownfields—properties that have had contamination. It takes years in order to plan for your involvement in a brownfield, so we would like to see a longer extension of the program so developers and investors that are thinking about making such decisions will know that the program will continue to be in existence when they actually start doing the work.
What do you think of the potential mayoral candidates? Is there a candidate that REBNY members are coalescing around, or perhaps are worried about?
I don’t think so. Of the Democrats running, we’ve had a long relationship with all of them. Christine Quinn has been not only speaker but council member. We’ve had a very good relationship with her. Bill Thompson, many of my members have a personal relationship with as comptroller. There’s no question that he’s somebody that we can work with.
Bill de Blasio—although sometimes we will, as with the others, argue over issues—is an exceptionally bright individual. Clearly, all three are capable of being mayor of the city of New York.
I do have members who prefer one over the others, and they are doing whatever they are legally allowed to do to help. Some others will say, “Look, all three of them are fine,” or “I like two out of the three.” It’s unlikely that REBNY would say, “Okay, we have one candidate.” The truth is we’ve never done that. We’ve always left the door open for anybody that wants to run for office.
As an organization, we don’t endorse. We give opportunities for people to articulate their positions and, clearly, my members have strong feelings. Some of them are very active in this area and some are not. Our job at REBNY is to communicate with the candidates and talk about the issues, and that is something we are going to do even more strongly in 2013 than we’ve done in the past.
What is the annual REBNY Gala like for you?
It’s an opportunity for us to honor a few individuals, and this year is no exception. From Donald Zucker to Woody Heller and Dottie Herman and Dick Concannon—I’m leaving out people because I don’t have the names in front of me.
Mike Fishman is getting an award from us—the New Yorker Award—and that’s unusual for us, because Mike is not a member of REBNY. He has run the [SEIU Local] 32BJ for the past 13 years and has made a decision to move up in the union to work out of Washington at the national office. Even though we argue and fight and yell at each other over labor negotiations, we have a lot of things in common. His members are the members that operate our buildings.
Mike has, I think, dramatically changed 32BJ from where it was when he took over as president. We recognize each other as partners in the area of office buildings and residential buildings. We wanted to recognize Mike for that leadership and recognize his members for the wonderful things they do every day to maintain our 500 million square feet of office space and the million units of housing.
What’s your favorite part of the gala evening?
When it’s over.
So, the after-party?[Laughs] I’m too tired! The truth is, the evening is wonderful. We have a great cocktail party for the governors with some of the VIPs. I have to constantly look around, see who’s coming in, make sure that they get treated properly, make sure they get introduced. Then we go through a program, when we move into the ballroom, and nobody wants to listen, so I have to shush every two minutes in order to get them to be somewhat quiet. And then we go through a 25-minute program, and then it’s over.
I’m telling you, I then sit down in a chair on the dais and I try to just relax and eat the food—that’s probably cold. But that’s when I say to myself, ‘Okay, I can now enjoy the rest of the evening.’ I’ll hang around the ballroom for a little while, and it’s not likely that I’ll go to the after-parties. They’re full, I’m exhausted—not from working so hard but just the tension. If we’ve got Christine Quinn coming—and I think she is—to make sure that everybody sees her that needs to see her, and things like that.
Do deals get started during the gala?
Everybody swears to me that they use this to negotiate and make introductions and to propose ideas, as well as to talk about critical issues that are affecting the industry.
It’s an opportunity for somebody who’s in the business not very long—whether it’s a broker, whether it’s a smaller owner—to walk up to somebody who’s been in the industry for 25, 30 years and say, “You know what? I’ve got an idea.”
It’s amazing to me. I not only see the younger crowd making the rounds—going around the tables—but I see the men and women who’ve been around for a long time going around and saying hello to people and making their contacts.
What has outgoing chair Mary Ann Tighe brought to REBNY?
Number one, it was her idea about Midtown East. She came to me when she first became chair, and she said, “Steve, we have to do something.” She worked very hard on that issue and spent a great deal of time on articulating and walking city planning people through some buildings to demonstrate what’s old and why it doesn’t work and what’s new.
She also brought a sense that this is not an old boys’ club—that the industry and REBNY is open to anybody that is creative, that is willing to work hard. She also was one of the people with me that fought very hard against having the terrorist trial in lower Manhattan. Mary Ann and I both spoke to representatives of the Obama administration on that issue, and we’re pleased that they ultimately made the decision not to put lower Manhattan through another reminder of what happened on 9/11.
And now Rob Speyer will be taking on the chairman’s mantle.
Rob coming on is a natural next step. He is a third-generation chairman—his grandfather, his father and now him—but at 43 years old he represents the youngest chair in REBNY’s history. It’s another message that REBNY isn’t an old boys’ club—it is an organization committed to professional betterment within the industry, to do what is in the best interest of the city of New York and, ultimately, to generate jobs and revenue for the city and the state.
Rob’s appointment not only recognizes his accomplishments but it sends the message out that it doesn’t matter how old you are or how long you’ve been in the business—although Rob’s been in the business all of his adult life, basically—it’s a message that this industry is open for creative people to take a leadership role.