Kathy Hochul’s Campaign Rolls Up Strong Real Estate Support

Why the New York governor seems increasingly like a lock for the Democratic nomination — and the general election

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In real estate, cash is king — so, too, in politics.

Kathy Hochul, the little-known lieutenant who took over after a disgraced Andrew Cuomo resigned last August, has quickly become a political powerhouse — thanks in part to the large sums of money she’s gotten from New York City’s real estate ruling class.

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It’s this formidable pot of cash plus the New York governor’s general popularity with both the public and the donor class that makes her the odds-on favorite in the November election. A January Siena College poll shows Hochul dominating among Democrats, holding the support of 46 percent of party voters while her opponents, city Public Advocate Jumaane Williams and U.S. Rep Tom Suozzi of Long Island, N.Y., had 11 percent and 6 percent, respectively.

Hochul amassed a record-setting $21.7 million from some of the biggest names in the Big Apple, and even in Hollywood, as of mid-January, the last reporting period. It seems like everyone in the city’s wealthy elite, from the owner of the New York Mets, to the interim CEO of AMC Theatres, to even fourth-generation descendants of the Rockefeller family have given tens of thousands of dollars to Hochul’s bid for New York governor — and real estate, too, has rallied behind her.

The list of real estate executives that have given Hochul money reads like a roster of power players: GFP Real Estate’s Jeff Gural contributed $35,000, RXR’s Scott Rechler handed over $25,000, Atlantic Development Group’s Peter Fine tossed Hochul $68,000 and Rudin Management’s William Rudin donated $16,000. Rudin Management also donated to Hochul’s campaign through company subsidiaries, including $47,100 through 345 Park Avenue LP and $50,000 through 845 Third L.P. Rudin declined to comment on the donations.

Hochul also snagged just under $70,000 each from Vornado Realty Trust’s Steven Roth, Related Companies’ Stephen Ross, (both of whom, it might be noted, have been prominent Republican Party backers when it comes to national politics), Fisher Brothers’ Winston Fisher, Tishman Speyer CEO Robert Speyer, and RFR Realty’s Aby Rosen and Michael Fuchs. And that’s only a handful of her wealthiest donors.

Hochul has raised $11.2 million from those who donated $20,000 or more in one pop — more than half of her total war chest, according to public campaign disclosures. But her Democratic opponents — Williams and Suozzi — have only raised $222,000 and $5.5 million, respectively. Williams has focused on recruiting small donors rather than large corporations, while Suozzi has used $2.1 million from his congressional campaign account to bolster the $3.3 million he had already raised in the race. Queens-based attorney Paul Nichols is also running on the Democratic side, though he’s raised less than $25,000.

Hochul’s popularity — and fundraising prowess — is in part due to the unique circumstances she inherited when Cuomo resigned amid a sexual harassment scandal followed by her own political maneuvering, said political consultant Dan Gerstein, who previously worked for Suozzi, but is not involved in his current campaign. While Cuomo was a “vacuum of affability,” as one real estate executive put it, Hochul is his opposite.

“After Gov.Cuomo, who was a very polarizing figure, she has been in many ways a perfect antidote,” Gerstein said. “She has the experience and the trust of people in Albany on both sides of the aisle, the business community, but also the typical Democratic constituencies.”

The Cuomo administration was engulfed in controversy when the state attorney general found that he had created a toxic workplace by sexually harassing multiple women, but Hochul was not tainted by the scandal — despite being the lieutenant governor at the time.

“I don’t think Gov. Hochul would ever say this, but to some degree, she benefited from the fact that Gov. Cuomo marginalized her and she was not very active or seemed to be active with the Cuomo administration,” Gerstein said. “She was not seen in the public eye standing next to him … and that combined with being a woman made it easier for her to just pretend like that had never happened. It’s this really unusual circumstance — which I don’t think you could find a close parallel in modern politics — where the running mate or the lieutenant governor of someone who was embroiled in a terrible scandal completely got off scot-free [and] has suffered no political damage from it.”

Hochul called Cuomo’s behavior “repulsive and unlawful” when the attorney general report detailing sexual harassment claims against him was released, but did not comment further at the time, given that she was next in line for the throne. When she took charge of the state, Hochul called for state employee sexual harassment training to be done live, rather than through an online class, and committed to requiring ethics training for every state government employee. (That call came after CNBC reported that Hochul’s daughter-in-law is a lobbyist for a pharmaceutical company that has tried to influence state lawmakers. Hochul’s husband is an executive at a Buffalo-based gambling and hospitality company as well.)

Both GFP’s Gural, who has known Hochul since she served as a congressional representative for New York’s 26th district, and Fisher Brothers’ Fisher called Hochul a breath of fresh air compared to Cuomo. Gural, who said he’d spoken with Hochul twice since she became governor, has always been a fan of Hochul, calling her a down-to-earth politician who cares both about businesses and people. Fisher, who worked with Hochul for several years while serving as co-chair of the New York City Regional Economic Development Council, said Hochul always listens and engages in good faith with the real estate community.

“I feel that [she is] somebody that will listen to you — that doesn’t mean she’ll always agree with you but you will get a fair hearing. That means a lot,” Fisher said. “She understands that we need to get people back in the office and working.”

As lieutenant governor, Hochul traveled the state and met with constituents as well as labor and business leaders, building relationships. She attended union meetings and curried favor with the real estate community without allying herself so closely with one group that she alienated the other.

“She’s a very shrewd operator,” Fisher said. “She understands how to make things happen, the levers of government and how to make them function and at the same time, she was a prolific networker as lieutenant governor.”

While the governorship may not have been her ultimate goal, retired State University of New York political science professor Gerald Benjamin said he didn’t think anybody would become lieutenant governor without the desire to be in the top job.

One real estate executive, who spoke to Commercial Observer on the condition of anonymity, said they spoke to Hochul once or twice a year when she was lieutenant governor and it was clear at the time that she had higher political ambitions.

“There was no ribbon too small to cut,” they said. “She understood the constraints of her job and got the most out of it.”

Hochul, a moderate Democrat who has supported gun ownership and opposed giving driver’s licenses to undocumented immigrants, has garnered support from the political right and left alike. Hochul snagged at least $20,000 from the Police Benevolent Association of New York State — the 1,200-member law enforcement union endorsed her in November 2021 — and has drawn support from some of the city’s most powerful labor unions. Branches of the New York State Building & Trades Council, whose state umbrella organization endorsed Hochul this January, donated $72,000 in total.

“We have always had a very positive relationship with her,” Gary LaBarbera, president of the Building & Construction Trades Council ​​of Greater New York, said in a late January interview with CO. “She has always supported the building trades initiatives. … She has not only told us, but she is clearly delivering on what she has said in terms of creating opportunities for our members by pushing a very aggressive infrastructure plan within the state.”

LaBarbera has worked with Hochul for nearly a decade on various projects and initiatives. Her support of rebuilding Penn Station, the $9.5 billion redevelopment of John F. Kennedy Airport’s Terminal One, and connecting Brooklyn and Queens through a new Interborough Express rail line — which could create up to 20,000 new union jobs — are all reasons LaBarbera said his organization backs her candidacy.

With such labor support, Hochul has left little room for a challenger from the left, such as  Williams, Gerstein said (Hochul beat Williams in the 2018 Democratic primary for lieutenant governor). As one real estate executive put it, “It is hard to paint Kathy Hochul as a boogeyman.”

“You can be pro-worker and pro-business at the same time,” Fisher said. “For me, it’s nice to see somebody who’s demonstrating that you can be both.”

Hochul is also a unique kind of incumbent candidate, Gerstein said. Incumbents are normally more likely to win because they have proven they can do the job, have better name recognition among voters, and have political power over those who could endorse them. An opponent also has to make a dual argument: that a sitting elected official has done a poor job, and that they could do it better. But Hochul, who only took charge of the state at the end of August 2021, hasn’t been in the position long enough to be blamed for policy decisions.

“One of the benefits of her being in the right place at the right time is that she is not going to have to bear the brunt of anger over mask mandates or supply chain issues,” Gerstein said. “That’s one of the crazy things about her situation — she has the power of incumbency but not the baggage that comes with it.”

Hochul is also swimming in money, in more ways than just her political donations. Thanks to $18 billion in federal aid sent to the state in the last year and a half, New York has more than enough money for significant spending increases — eliminating budgetary constraints as a potential criticism ahead of the Democratic primary and election, said Benjamin, the retired SUNY political science professor. He also praised her handling of the pandemic, and the controversy around mask mandates — which Hochul lifted for the state on Feb. 9.

Hochul will certainly face other challenges, like infrastructure, taxes and reforming the city’s affordable housing incentive program known as 421a, Fisher said. And crime in the city is another big issue that could pose an obstacle in the Democratic primary and governor’s election on Nov. 8, Gural said.

Due to a recent high-profile killing on the city’s subway system and the murder of a New York City woman in her home, crime is in the headlines and on the minds of New Yorkers. The city’s crime rate rose in January this year compared to 2021 by 38.5 percent, with an increase in every category of crime except murder, which fell by 15 percent, according to the New York City Police Department. The debate over rising crime poses a challenge for Democrats, which are often accused of being soft on crime by their Republican opponents and more conservative party members, Benjamin said. But, if Hochul can solve public safety in the city, she’ll be a shoo-in for the spot and a hero among real estate, Gural said.

“I think she’ll be elected provided that she addresses the crime issue,” he said. “If people don’t feel safe they’re not going to come back to the office. Right now, the biggest problem we are facing as an industry is getting people to come back to the office.”

Celia Young can be reached at cyoung@commercialobserver.com