On March 2, John Banks will officially become the president-elect of the Real Estate Board of New York (assuming the presidency by the end of 2015), relieving Steven Spinola of his responsibilities as REBNY’s president, a post he will have held for the past 29 years and has called “the opportunity of a lifetime.” Mr. Spinola, 65, began his tenure in 1986 during the Koch administration and has since been the public face of the influential city real estate trade association.
Prior to serving as REBNY’s president, Mr. Spinola was the president of the New York City Public Development Corporation, which is now the New York City Economic Development Corporation.
In one of his last interviews as sitting president, Mr. Spinola sat down with Commercial Observer to reflect on his nearly three decades with the organization, which has quadrupled in size on his watch, and what life after REBNY holds for him.
You’ve been at REBNY for a very long time. How has New York City real estate changed over the last 28 years?
It’s been a dramatic change in the city. We’ve gone through some very difficult times. Not just acts of terrorism and hurricanes and so forth. But we had a period of time when there was concern whether New York City would be able to continue to manage itself and keep itself safe.
I give [former Mayor] Rudy Giuliani a great deal of credit; he proved that New York City could be managed, and [our last mayor] Mike Bloomberg came in and proved it wasn’t a fluke. And for the next 12 years, [Mr. Bloomberg] proved [the progress] could continue. [Over the] 20-year period in which the city changed, people regained their confidence that New York was not only a great place to invest, but a great place to live and work and play. And it just built up. I worked for Ed Koch [and] ran economic development for Ed; it was a difficult time but it was the beginning of the rebirth of Times Square and the beginning of the rebirth of the South Street Seaport.
The city is no longer totally dependent upon Wall Street firms. We’ve diversified the kind of jobs that are in the City of New York. We like Wall Street firms. We like the high-paying salaries that they make, but it was a concern that we were too much tied to the financial world. And that’s no longer the case. We’re bringing in entertainment. We’re bringing in high-tech. All of a sudden, we’re a different kind of city.
Think of the neighborhoods that people are now living in that, 30 years ago, people would have said, “wait a minute, where are you living?” You can no longer use the term “outer borough.” It used to be that when you referred to Brooklyn, Queens, the Bronx, you would call it the outer boroughs. It’s not relevant anymore. People live and work in Brooklyn. You’re seeing so much activity going on. Look at Long Island City and the waterfront. I wouldn’t have imagined that 10 years ago, 15 years ago.
Why did you decide to stay at this post for so long?
I stayed because the job was a continuation of, in many ways, continuing to work for government. I know that may sound strange, but I think that REBNY is an ongoing partner with the city of New York and the state of New York. We do some stuff on the federal level, but I wouldn’t call it a partnership. But we recognize that what’s good for the city of New York is, 98 percent of the time, good for the real estate industry. And my leadership understood that, and continues to understand that. And the issues continued to change.
REBNY has grown tremendously under your tenure.
It’s about 16,000 members now. It was about 4,000 members when we started.
Now that it’s a much bigger organization, has its scope changed?
The scope has changed.[With] brokers, the numbers have gone up dramatically. There are an awful lot of them. We now provide [the REBNY Listing Service] for them to share their listings. When I first came here, if I raised the issue of doing that, one or two people would get up out of their seats and walk out of the room. Back then you didn’t share listings in Manhattan. It was something you held onto. Today, that industry has come into the 21st century and shares their listings. We have a terrific computer program that does this.
There are much more developers today than there were before and they are members of the board. [And] the board has changed in that I think we used to be more reactive. And now we’re more proactive.
Can you expand on how the organization’s become more proactive?[An example is] in the late ’80s/early ’90s, Lower Manhattan had a 20 percent vacancy rate on its office space. That meant 25 million square feet of empty space. So, we drafted a program on how to deal with that and we presented it to the mayor. [Mr.] Giuliani came into office right at the right time. And after some discussion with his deputy mayor, [Mr.] Giuliani adopted the program. It was modified a bit and it wasn’t everything we had asked for, but it was close. We did the same thing, by the way, after 9/11.
What do you think your biggest accomplishment has been over your tenure?
I think for nearly 30 years, the industry has been brought together to almost function as one voice. And I think that has done more for the industry than anything else.
Can you talk about how real estate contributes to New York City’s well-being?
We looked this year at how real estate contributes to the City of New York. And if you take just the income-producing properties, and by income-producing properties I mean office buildings, rental apartment buildings, hotels. [The properties are] not just taxed but they generate income [as opposed to condos, co-ops, single-family homes, etc.]. Thirty-eight percent of all of the locally generated revenue comes from income-producing properties through real estate taxes and other taxes. Well that’s over $15 billion. It pays for every cop, fireman, sanitation worker, teacher and correction officer [in the city] and leaves about $2.5 billion left over for libraries and other stuff. And then if you throw in the real estate taxes from the co-ops, the condos, it’s 54 percent. That’s why lately I say this is not a Wall Street town. This is a real estate town. We are the vehicle for providing the money for the services that the city needs. So we can pay for the cops and so forth.
That’s why we should be building more. We want to pay more taxes. Not higher taxes but more taxes as a result of the investments we’re making and let us build new office buildings. No one knows the exact amount of square feet, but there’s about 500 million square feet of office space in New York City. It’s more than—you take out Chicago—it’s more than the next 10 cities combined. And Chicago is about 110 million square feet. Chicago is about equal to Lower Manhattan. So, [buildings are] part of the infrastructure of New York City. It’s as important as the transportation system and the sewer system. You name it.
And, [the real estate market offers tremendous variety]. You can pay $200 per square foot in some of the very nice buildings. And you can pay $15, $20 a foot. It gives you a tremendous variety.
You’ve been on our list of 100 Most Powerful People in Real Estate consistently. What is it going to be like for you personally, to leave that seat of power?
Well, it’s been great being listed by the Observer. Recently, the last one you gave me—listed in the City State: Albany’s Top 40—I was the highest non-elected official on the list. It’s nice to be on the list anywhere. It’s nice to be recognized. It’s great in part because of the organization itself and the support the membership provides.
I also think the effectiveness and whatever it is, is great in part because we do work with the people in Albany, the people at City Hall, and not go in and make demands on things. I have never gone in and made demands on things. I have never gone in and threatened anyone in 30 years. I knew I wouldn’t take it [from others] when I was working for Ed Koch. I would have thrown the person out. So why would I take the chance of being thrown out?
You have to know what elected officials are capable of doing. You can’t ask them to hurt themselves politically. You can’t ask them to do something that they fundamentally disagree with. But you can ask them to understand your concerns and then make the case for either amendments, modifications [or] compromise. Extremes on both ends are usually bad.
What do you think the most pressing deadline is in this Albany session?
I think the mayor’s housing plan and rent regulations are going to be the key issues, at least as it relates to us. There is always the budget deadline of April 1, and the governor tends to put a lot of stuff in that budget bill. But, I think that the clear issues are what will be the housing programs. The mayor needs to formally announce the details of it.
What is there to do in Albany when you go up there?
Other than eat lunch? [Laughs] There’s nothing to eat in the Capitol, by the way.
I’m impressed at how much Albany has improved. I used to work in Albany for the New York State Assembly in the Education Committee for a Democrat early on, including when I was going through school, and there used to be nothing up there [and nowhere to go] to eat or shop. But now, Albany—my daughter went to Siena College, she’s now working—but I remember going up there and asking, “Where are we going to go to eat?” and she said, “We’re going to go to downtown Albany,” and I told her, “There’s nothing in downtown Albany.” So we were down there and we were driving past a few places and I’m seeing a bunch of young people outside. [I thought], “When did this happen?” Albany has improved.
What do I do when I go up there? Normally, it’s tied to the bills that are going on and I go and see the people that either have sponsored the bills [or] the leadership. I have gone up and seen the governor or his staff, but more often, it’s the State Senate and the Assembly that you have to work with. If the governor is putting forth a bill or a package, you tend to work with their staffs. They draft things and then they reach out to all the interested parties and they look for comments. You work on that over the phone. But when you think about going up to Albany and making the rounds, it will hopefully include, subject to their schedules, the speaker of the Assembly, the majority leader of the Senate, the committee chairs that are important, and if there are people we haven’t met [yet who are important]. Other than the appointments, you [often] stand outside the Assembly or the State Senate and you wait to see people. That’s what the day is like.
Do you think REBNY is in a better position following Jobs For New York’s successful campaign season?
REBNY has always played what we’re legally allowed to do in the political game. And that basically means making contributions or, as we’ve done in the past two years, doing an independent expenditure. We’ve been criticized for that. And yet, the same people don’t criticize unions for providing manpower for free for making dramatic contributions or tenant associations that walk into an elected official and say, “Unless you vote this way, my tenants will not vote for you and we’ll come out against you.” [In the five state Senate races we spent about $4 million on], we won all five of them. They are [candidates] we thought would be helpful to our pro-growth agenda. We think [our involvement] made a difference.
How do you think Mayor de Blasio is doing after a year in office?
John Lindsay … ran for president under the argument that he had the second toughest job in the United States as mayor of the City of New York. The first being the president. And maybe some days, that’s not true. But most days, that is true. The president’s job is clearly the toughest. And being mayor of the city is probably the second toughest.
You’ve got a new mayor who took office and I think people had great concerns over No. 1—what were his themes in the campaign, what was his experience. I can say that [during the time] that we’ve worked with him and the couple of months before he became mayor, has been a pleasure in that I’m impressed with the people he’s appointed. [Tony Shorris, Carl Weisbrod, Alicia Glen and Vicki Been], these are all people that we as an industry have to work with. They’re all terrific.
Did you have doubts about the mayor prior to the election?
I’ve known the mayor a long time. He’s very bright. What I didn’t know was how he would run the city and who he was going to appoint. There’s no question that I always knew that Bill de Blasio had the ability to make decisions as mayor of the city of New York. Would he appoint people who had the experience and the knowledge and the ability to look at all sides? In my opinion, at least in areas that we care about, he’s done just that. So we’ve had a good relationship with him. We’ve had a good relationship with the new City Council leadership.
What are the big differences in working with Mayor de Blasio, Mayor Bloomberg and Mayor Giuliani?
There are differences and the truth is, as a lobbyist and as an interest group, we have to adjust to how they want to function. I can’t ask them to all be the same. They each have different personalities. They have different priorities. And we have to understand it. Non-members say to me, “How are we going to build a project?” I tell them, “You have to know that this mayor wants there to be affordable housing.”
So if you’re going to go in and make a pitch about your project … the first thing you need to figure out is what can you do that will interest this mayor? One of the things is you can say you’re going to build some affordable housing. How much affordable housing? What [are] the income levels? And so forth. [Mr. Bloomberg] cared about jobs, I think, or high-tech stuff. [Mr.] Giuliani had a deputy mayor who told him, “Don’t worry about housing, just create the jobs and the housing will come.” I still disagree with that, but that’s what John Dyson, who was the deputy mayor, said to [Mr.] Giuliani. And I think that was a mistake, but that’s what we had to deal with. And housing wasn’t the most critical issue for Rudy Giuliani.
Do you think Mayor de Blasio’s housing plan, which aims to develop and preserve 200,000 units of affordable housing, is feasible?
Well, we haven’t seen it yet. We’ve seen a scope and we’ve seen some ideas. I believe it’s going to be a long menu of options and I’m hopeful that as people use those items on those menus, the mayor will modify them so the ones that work, he’ll build up, and the ones that don’t work, he’ll let sit there on the side or change them.[But] we have no choice [on building more affordable housing]. We’ve had a housing crisis since the end of World War II. We used to build 50,000 units of housing a year during the ’50s and ’60s. [In 2014], we had, for the first time in a number of years, exceeded 20,000 [building] permits issued, which is nice. But it’s not the days of the ’50s and the ’60s.
What is your relationship with incoming REBNY President John Banks?
I’ve known John for a lot of years. I knew him when he was chief of staff for the City Council, so we worked with him then. John is a talented, classy guy who knows the people that he needs to know for this job. And we’ve worked together on a couple of issues with him and ConEd.
My members have problems with ConEd so we’ve spoken about solving those problems and he’s called me on a couple of issues that affected ConEd’s real estate. John is just a talented guy and I’m going to spend a great deal of time with him, as much time as he needs to help him feel comfortable. I don’t think [his adjustment is] going to take very long.
What is your plan to stay on at REBNY in an advisory role?
I will continue for a number of years to be available technically as president emeritus but whatever. My members will be calling me. I told John he could call me forever if he needs me. As the days goes by and the months go by, I’ll be a little bit more out of touch.
What is your retirement going to look like?
I haven’t thought about it. I decided two years ago [when I extended my contract] that this would be the year. And I’ve got two grandchildren. I’ll spend a little more time with them. For a while I’m just going to take it easy. And my grandchildren are in Maryland, so it’s a trip [to travel down there]. If I get bored, I’ll do something else.