Andrew Cuomo’s Baggage May Curb Commercial Real Estate’s Enthusiasm

In trading Eric Adams for Andrew Cuomo — two scandal-ridden candidates for New York City mayor — the question of choosing one or the other as a net positive can be pretty subjective.

With Adams, it’s his still pending corruption charges and alleged quid pro quo with the Trump administration to get his criminal indictment tossed. With Cuomo, it’s baggage from when he was forced to resign as governor in 2021 amid sexual misconduct probes, and then later allegations that thousands of deaths resulted from his pandemic-era requirement that nursing homes in the state take in people with COVID-19. 

What you end up with is a question of whether a candidate with so many political enemies can govern considering the collaborative nature of any executive position. It’s an important question for New York’s commercial real estate industry, as in the past it has cheerfully supported both — and vice versa. 

“He will buffalo the City Council,” Jordan Barowitz, principal of consulting firm Barowitz Advisory, said of Cuomo. “The statutory power dynamic between the state legislature and the governor is pretty advantageous to the state legislature just in terms of the powers they have, constitutionally. … It’s not the same in the relationship between the City Council and the mayor. The mayor is an empowered executive, and the council has land use, budgetary — all that stuff. But the mayor, vis-a-vis the council, is much more powerful than the governor vis-a-vis the legislature.”

During Mayor Bill de Blasio’s time in office, there was a notable gulf between City Hall and the governor’s office under Cuomo, a situation that could be reprised if Cuomo took office once again. The governor would be his former No. 2: Kathy Hochul.

In August 2021, as Cuomo’s administration was on the skids, Hochul called his alleged misconduct as women came forward with their stories of abuse “repulsive” and “unlawful.” U.S. Sen. Kirsten Gillibrand also said the allegations, which Cuomo still denies, were “serious and deeply concerning.”

U.S. Rep. Ritchie Torres of the Bronx also called for Cuomo’s resignation at the time but is now endorsing him for mayor.

The Cuomo campaign — which launched officially at the start of March — did not respond to a request for comment.

The two candidates present a stark choice. On one hand you have Adams, who had his time in the sun as first choice of the real estate industry and pushed through the widely popular — if perhaps insufficient — City of Yes for Housing Opportunity. Calls for Adams to resign or for Hochul to remove him from office after a major exodus of top aides pertaining to the federal investigation have the incumbent against the ropes.

Meanwhile, polls show Cuomo is popular with voters, and several real estate leaders have told Commercial Observer that he is their first choice at the voting booth thanks to his record while governor of making major infrastructure projects a reality and his mostly business-friendly policies.

Scandals of misconduct aside, real estate leaders are taking a sober view of both candidates.

“[The] 2019 Housing Stability and Tenant Protection Act — aka the Housing Destruction Act — significantly restricted rent increases on regulated apartments, making it harder for landlords to remove units from rent control and reducing their leverage in lease negotiations,” Adelaide Polsinelli, vice chairperson of brokerage Compass, said of state legislation that Cuomo backed and signed. “While he was effective in crisis management and driving large policy changes, his tenant-friendly reforms were a major blow to landlords and developers.”

To Polsinelli, it’s simply a matter of whether voters will value tenant protections or a less hands-on approach to housing policy.

“Unlike Cuomo, Adams has not aggressively pursued strict rent regulations, making him more favorable to property owners,” Polsinelli added. “However, his struggles with crime reduction and budget cuts have hurt property values, especially in the retail and commercial sectors. Additionally, while he promotes growth-friendly policies, he has yet to execute large-scale real estate initiatives effectively.”

The damage may be irreversible for the most part regarding the 2019 housing law, which prevents landlords from raising rent to market value on recently vacated rent-regulated apartments, considering that property owners post-pandemic are already behind with depreciated buildings, insurance rates, higher labor costs, rising inflation and stubbornly high interest rates, according to a source familiar with the issue.

Can voters, specifically those in commercial real estate, overlook the damage done by the 2019 law? We’ll find out in June when the Democratic primary weeds out 11 other candidates running for mayor.

Kathryn Wylde, president and CEO of the nonprofit business group Partnership for New York City, said she believes Cuomo canfunction as mayor.

“Former Gov. Cuomo is good at building alliances with other political forces when he needs them,” Wylde said in a statement. “Whether it’s the carrot or the stick, he knows how to use both to his advantage. At a time when New York is facing serious challenges on many fronts, I have no doubt that he would figure out how to manage relationships with Washington, D.C., and Albany to the city’s advantage.”

Apart from Adams and Cuomo, other names on the ranked-choice mayoral ballot include New York City Comptroller Brad Lander; former city Comptroller Scott Stringer; state legislators Zohran Mamdani, Zellnor Myrie and Jessica Ramos; attorney Jim Walden; former hedge fund manager Whitney Tilson; and former Bronx Assemblymember Michael Blake.

Last week, New York City Council Speaker Adrienne Adams also threw her hat in the race.

As for the incumbent, Adams’s legal problems are severe and have spread to the national level. 

He was accused of engaging in a straw donor scheme with the Turkish government that helped him get an additional boost from the New York City Campaign Finance Board’s matching funds program as well as travel perks. In September, federal prosecutors indicted Adams and cited a monumental body of evidence against him that included text messages.

Prison time seemed possible for Adams, who became the first sitting mayor in history to be indicted on such charges.

Then Donald Trump won the White House in November.  Adams held multiple meetings with the once and current president, who soon ordered his Department of Justice to drop the charges. Trump’s order prompted three prominent resignations from the U.S. attorney’s office and the Justice Department, but a counsel for the Southern District of New York reviewing the case has recommended that the courts abide by the presidential directive to drop the charges.

Still, for all that, it might be Cuomo with the steeper road to political redemption.

“I doubt there’s been a candidate for mayor that has one-tenth the amount of scandal baggage that Andrew Cuomo has,” John Kaehny, executive director of Reinvent Albany, told CO. “To me, the most interesting thing happening is how do you reconcile that, and how does the press kind of process that?”

Cuomo has survived scandals before, including supposedly coming up with a controversial slogan for his father’s unsuccessful 1977 campaign for mayor against Ed Koch. The slogan utilized a slur against LGBTQ people, one that rhymed with “Cuomo.”.

In December, just weeks after Charlotte Bennett, Cuomo’s primary accuser in the sexual misconduct controversy, withdrew her legal claims against him, the former governor went on the offensive by filing a legal notice that in turn accused Bennett of defamation.

Cuomo is still dealing with a probe into his $5 million pandemic book deal, too, a memoir titled American Crisis: Leadership Lessons From the COVID-19 Pandemic, which he wrote as the state of emergency was still unfolding. The state Commission on Ethics and Lobbying in Government was attempting to reclaim the proceeds he gained in the book deal, claiming that he had been given permission to write the book on the condition that state resources were not used.

The commission sued Cuomo in New York State Supreme Court, claiming he breached that condition. In February, the s​​tate Court of Appeals ruled against him.

In the end, if Cuomo were to win, his biggest problem may not be his relationships with city officials, according to Kaehny. Instead, the real snags would come from Albany, considering the fact that any governor has the ability to remove mayors. New York City’s mayor also is unable to do things like raise taxes beyond the 2.5 percent limit, install speed cameras, or even change the speed limit without the state’s blessing, Kaehny said.

“If you look around at the attorney general, Tish James, or the governor, these are people who Cuomo has engaged in active hostilities with, they don’t like each other,” Kaehny said. “That, to me, is another problem for Cuomo as a candidate, because that ain’t ancient history, right? There’s a massive potential for disruption for him around the corner. So it’s hard to see him as being anointed.”

Mark Hallum can be reached at mhallum@commercialobserver.com.