Steven Fulop, the Partnership for New York City’s CEO, On Mamdani and CRE

It seems weirdly appropriate that, at a time when New York City welcomes a mayor who brings more advocate energy to the role than we’ve seen in a generation, one of the top advocates he’ll be facing just transferred over from the world of mayoral politics.

The Partnership for New York City represents over 300 of the city’s top corporations, which have around 800,000 employees in total. The nonprofit organization’s official mission, according to its website, is “working to advance the city’s standing as a global center of economic opportunity, upward mobility and innovation.”

SEE ALSO: Mamdani Stacks Rent Guidelines Board After Series of Resignations

The Partnership’s head for the past 25 years, Kathryn Wylde, became a regular presence on every “New York’s Most Powerful People” list, the kind of person who has Jamie Dimon on speed dial and about whom Gov. Kathy Hochul recently said, according to The Profile, that “when I became governor, people told me that if I wanted to understand New York City, I needed to know Kathy Wylde.”

So it might have surprised some that when Wylde retired in January, her replacement was a mayor from … New Jersey?

Steven Fulop spent three terms as the mayor of Jersey City, where he presided over a $1.4 billion increase in the city’s tax rolls. (He also ran unsuccessfully for New Jersey governor last year.) Fulop waited all of one week after his third term ended in mid-January to begin his new job as the Partnership’s president and CEO, and is already in the process of moving his family into Manhattan.

“I thought it was important to get in here, because there’s a new administration, too,” Fulop told Commercial Observer at his new office in the Financial District in late January. “If you’re going to find ways to work together on policies where there are differences, it would be hard to insert yourself two months in. It makes things that much more difficult. Plus, I was excited about the job.”

Taking on his new role at the same time as the city’s idealistic young mayor, Fulop makes the transition from elected official to corporate advocate sound like a natural evolution.     

This interview has been edited for length and clarity.

Commercial Observer: Why did you take this job?

Steven Fulop: I made a deliberate decision that I wasn’t going to run for re-election after three terms. I thought that after 12 years, it was healthy for the city to move in a different direction. Also, I ran for governor, and I didn’t think the city should be a fallback position.

To me, this is a capstone-type job. It blends all the things I like about public service and policy, and eliminates the things I didn’t like as much. 

I like the ability to effectuate change, and the opportunity to change policy in this seat is pretty significant. The things I didn’t like included always being a target of the press, and how polarizing it is to be an elected official now. I’ve had stalkers. I’ve had people break into my house because I was the mayor. Those aspects, I didn’t really care for. 

Also, doing constituent services and being really engaged for 12 years wears on you. Like with the recent snowstorm, it was nice to go sledding with my kids and not have to do the performative stuff that an elected official has to do with regard to snowstorms and emergency management.

What did you think of Mayor Mamdani grabbing a shovel for the press? 

He’s very savvy in communications. I think he did a good job in the snowstorm. He’s very conscious of the narrative around him, and that’s what people want to see. They’re very visually oriented, and he recognizes that. I don’t know if shoveling out one person changes the face of the city, but it sends a message that he’s a hands-on guy, and that’s what I think he was looking to convey. 

Have you had a chance to meet with Mamdani yet? 

I met him at the end of the transition, in December. I haven’t met him since I started in this position. We’re going back and forth on dates for a meeting. He comes across as a very good person who cares a lot about New York City’s well-being. He listens, in the sense that he’s had a lot of questions for CEOs he’s met. He takes notes and asks follow-up questions. I think he’s smart, hardworking, active and visible, which is important from a constituency standpoint, to see the mayor being engaged. He has all the DNA to be a great mayor. 

But the CEO community is definitely anxious, because we’re in uncharted territory. We want to see how it plays out. 

You and the mayor are on exact opposite trajectories: one from advocate to elected official, the other from elected official to advocate.

I know. I am sympathetic to some of the things he’s experiencing, because I was a mayor, too, at 36 years old — a very similar dynamic. [Mamdani is 34.] I was elected in a race nobody thought I was going to win, as an outsider, and I had big plans for changing the city. I think in many ways I did, and I made a lot of mistakes along the way too, particularly in the first four years. The first year is when I made the most mistakes. 

To people who’ve said that some of Mamdani’s appointments have been slow, or we still don’t have a person in this position or that position, I say that I think that’s a good thing in many ways. It’s a sign of maturity, and the fact that he’s being thoughtful and deliberate. He’s trying to think through who’s the right fit, which is a good thing. 

When I first got elected, I filled those seats pretty quickly, and sometimes made more political decisions than what was probably best as a governing decision. It seems to me like he’s trying to be careful with whom he surrounds himself with, so that’s a good thing. 

Is there any other advice you have for our new mayor in how to be effective?

The nature of the job is that you are never going to make everybody happy, and you’ve got to recognize that. 

If your approval rating is 70 percent after a year, it means you probably haven’t pushed hard enough for change. Part of the reason he was elected is that people are looking for change. Being a good executive and leader means you’re willing to convey a vision — not always the most popular vision with your base, but something you believe is right — and are willing to push people into an uncomfortable place with regard to what that vision is and how you communicate it. If you’re effective at that, you get re-elected. 

What did Kathy Wylde advise you about things to look out for in this job, and things you’d want to be aggressive on?

Kathy advised me to be cognizant of where power structures come from in New York City — that it’s ground up. She recognizes that part of the strength of the Partnership is the ability to get people together. That’s a particular skill set of Kathy’s, I think.

What did she mean in describing the power structures as ground up?

I think that grassroots activism matters a lot more than the typical power structure of someone’s title when it comes to moving people. We have 800,000 employees [in the Partnership’s member companies], and I don’t think we’ve done a good enough job in energizing them and communicating with them and talking to them about the issues that the business community is facing. 

One of the goals for the next few years is to really build out an apparatus for communicating about issues with those 800,000 employees.

What are some of your other immediate goals for the Partnership? Which issues will have the most immediacy for you?

Child care is a conversation that the governor and mayor are both having. I would argue that there are few organizations in the city that have as much familiarity with the child care conversation as the Partnership does. We have 350 employers. The overwhelming majority of them provide some sort of child care to their employees. They have a great deal of familiarity with what works and what doesn’t. There’s no one-size-fits-all model, but we have all these different case studies on how to navigate this with regard to tax credits, bureaucracy and legislation. 

As far as near-term objectives, tax policy is very important to us because it deals with competitiveness. The affordability conversation is important to us as well, because if our employees can’t live here, it obviously impacts the work environment in a meaningful way. 

Then there are issues specific to the city, like public safety, quality of life, and homeless encampments. Because if people don’t feel good about the city and don’t feel safe — and this is what I hear from CEOs — then those are things that can make people leave. 

Also, the antisemitic rhetoric continues to escalate. Those things can have a detrimental effect on people staying.

As a three-term mayor, you have extensive experience dealing with Jersey City real estate developers. How personally familiar are you with some of the bigger names in New York City commercial real estate? 

I’m familiar with the players here. We’re all in the same ecosystem. A lot of the growth in Jersey City was due to policies we implemented to create clarity and certainty around the investment environment, and also due to things that weren’t happening in New York City that forced people to look at other markets. So I’m familiar with the market here. Most of the players here I’ve known in some way.

How do you envision your dealings with the industry here will evolve?

There’s a lot of real estate presence in the Partnership, and they care about issues around housing growth, because the supply conversation around market-rate housing is crucial to the affordability crisis. If you are not building, you are not going to solve the affordability crisis. The sign of a healthy city is a city that is growing, and New York City needs to be leading on that. 

The pressure in the entire region around affordability — including Long Island, Northern New Jersey and Connecticut — is a direct byproduct of New York City not building enough over the last decade. You’ve implemented City of Yes. You probably need more zoning changes and upzoning around transit. You obviously need to expedite some of the permitting process. We could probably help with technology around that. But you need to continue to grow, and being that I have a background in this from a mayoral standpoint, I’m hopeful that we could be helpful in setting an agenda for the administration. 

One of the first meetings I had when I got here was with Jim Whelan at the Real Estate Board of New York. They’re going to drive a lot of the real estate conversation. I view my role with regard to that as being supportive. They have a more in-depth policy team. The Scaffold Law is a big priority. That’s longer term. Near term, we’ll work on permit expediting, reassessing tax rates including property taxes, and zoning around transit.

What’s your take on the 485x development tax incentive?

I’ll defer to Jim Whelan on that. 

Mayor Mamdani is talking about increasing taxes on corporations and the wealthy. What are your thoughts on that?

I think it’s a mistake. He’s in a tough spot, balancing a political base that at times wants to raise taxes to be punitive, versus him being fair, reasonable, and wanting to succeed based on what the math shows him. That balance is a tough thing that he’s going to have to navigate. 

I look at it like this. The $12 billion gap the city points to is projections. It’s based on the absolute worst-case scenario. [Mamdani said in late January that former Mayor Eric Adams left the city with a $12 billion budget shortfall.] 

So in reality, it’s probably not $12 billion. I would also say, as a former mayor, that there isn’t a new mayor anywhere in this country that comes to office and doesn’t blame their predecessor. That’s normal. I blamed my predecessor when I came in, because that’s what you do.

I’m sure there is a budget gap of some sort, and I’m sure it’s solvable without being punitive. When it comes to raising taxes, we can argue all day about whether people are going to relocate. The far left would say they’re not, and somebody in the business community would say that they will. I’m going to point out a couple things, though. 

You don’t need thousands of people to relocate in the wealthiest part of New York City to have a huge impact on the budget. Ten people, 15 people, 20 people will have a massive impact on the budget. When David Tepper, one person, who runs Appaloosa, a big hedge fund, left New Jersey, it was a $200 million hit to the state budget. One person. So, when you think about a mass exodus, you don’t need a mass exodus. You need a handful of people to do it. 

I would also point out that raising the corporate tax rate to match New Jersey, as the mayor says, would effectively be raising the tax rate in New York City, which is already the highest tax environment in the country, from 17 percent to 22 percent. That’s from the Citizens Budget Commission (CBC). They’re calling balls and strikes — not partisan. The New Jersey rate is 11 percent today. When you layer in the city tax, the state tax, Metropolitan Transportation Authority fees and all of that in the city, you’re at 17 percent today. 

If you raise the corporate tax rate to match New Jersey, you’re going to be at roughly 22 percent, according to the CBC. That’s 100 percent more than the New Jersey tax rate of 11 percent. You can have a marginally higher tax rate than New Jersey and people will say, “I’m still going to live and work in New York City, because New York City is New York City.” 

When you get to a point of 50 percent more, or 80 percent more, that delta will trigger people to make a decision. Even if you don’t believe a company is going to move, they are not going to scale up, and new entrepreneurs are not going to choose to open in New York. Because why would you open if a quarter of your dollars go to the government without them doing a quarter of the work? I think these are things that you need to consider about competitiveness, and sometimes it gets lost because we’re in this political talking point environment. 

What is your take, then, on the Massachusetts example, where they raised taxes on the wealthy, setting a 4 percent surcharge, and then two years later, had more millionaires and a larger budget than they had before?

How does somebody define millionaires in those things? Because — if you are a teacher with a home valued at $900,000, or even $700,000, because your home value has appreciated over time — that is defined as a millionaire in some of these surveys. So a millionaire defined 20 years ago is not a millionaire defined today. 

Also, people who say we have more millionaires today don’t highlight that they’ve lost the share of millionaires relative to other states, because there’s more millionaires overall in this country. Every state will probably have marginally more millionaires than they did five years ago. But your percentage of millionaires is really what’s important, because it’s telling you that you have a smaller share of the overall pie because people are moving out who are of high net worth overall, and New York City has had that trend for quite some time. 

I think it’s fair to say that, if you were a new entrepreneur, you would never open up in a super high-tax environment. And you don’t have to move to Florida anymore. The disparity between New Jersey and New York is going to be so extreme that you’ll just have to move two miles. You could have the same workforce, and you will have a massive amount of savings. New York would just not be competitive. That’s the real risk there.

Homelessness in New York City is at its highest level in almost a century. What are some steps you think we need to take to deal with this? 

I think you need more supportive housing and wraparound services, and we have to make the existing shelter system safe. From being a mayor, I don’t think the policy of allowing homeless encampments is productive. I think it impacts quality of life. There’s division on this between our view in the business community and the mayor’s view. We’re going to be vocal on this, because Mamdani is strident on making sure those homeless encampments can stay. 

You have to encourage people not to stay in those encampments, and you have to invest more in a homeless shelter system that has wraparound services, and both of those things have to happen simultaneously. You just can’t allow the homeless encampments to exist. They grow very rapidly, and they often bring heavy drug use and other quality of life issues. It’s unsafe for everybody. 

If you are going to see an exodus from New York, it’s not only taxes that would trigger a CEO to move out of the city. It’s quality of life issues, public safety issues. That would be part of that homeless encampment conversation. Also, antisemitic issues that feel like they’ve hit a boiling point. Those are the types of things that would also force people to leave the city. 

Work on the Gateway project could stop very soon … 

I’ve been communicating with Sen. Schumer’s office on that. We’ve had several CEOs with close relationships with the president make phone calls to convey the importance of Gateway to the regional economy, and hopefully funding will continue.

Larry Getlen can be reached at lgetlen@commercialobserver.com.