Real Estate Races For Mayoral Graces
New York Observer
January 22, 2008
by Eliot Brown
At the midtown Hilton last Thursday, an absolute who’s who of New York City real estate descended upon the building’s grand ballroom to nibble on crab cakes, rub elbows with competitors and chow down a big hunk of steak at the Real Estate Board of New York’s annual awards gala. Milling among the tuxedo-clad crowdwith seats alongside REBNY’s executive board, no less were three individuals who have been getting to know the real estate industry rather well recently, the leading potential Democratic mayoral candidates, City Comptroller William Thompson Jr., U.S. Representative Anthony Weiner and City Council Speaker Christine Quinn.
For the first time in over a decade, the real estate industry is flexing its muscle in the early stages of a mayoral race, with developers and landlords dumping dollars into the campaigns of the three leading contenders.
Mr. Weiner, Ms. Quinn and Mr. Thompson have together raised at least $2 million from the real estate industry, more than one-fifth of the total $8.76 million raised this cycle by the trio as of Jan. 15, according to campaign finance records examined by The Observer. (Ms. Quinn and Mr. Thompson have not officially filed to run for mayor in the 2009 election.) This is about twice the amount raised by the three leading Democratic candidates at the same point in the 2001 race, the last time when there was no incumbent running and the leading Republican candidate, Michael Bloomberg, was self-financed.
The dollars seem to speak to the industry’s desire to have its voice heard in the corridors of City Hall at the very time when a confluence of forces that could work against real estate appears to be descending upon the city. The crisis in the credit markets is crimping the ability of would-be buyers and developers to find the needed cash to make deals; a possible national recession could lead to cuts in the financial services sector, decreasing the demand for office space; and a fatigue of large-scale development seems to be gripping many neighborhoods in the city, especially outside of Manhattan. It’s probably safe to assume that any political obstacles, such as added zoning restrictions or new regulations on landlords, for instance, would be especially unwelcome today.
And so it goes that developers, landlords, brokers and contractors have found a desire to donate, hoping that maybe when they phone over to City Hall in two years, the call might just be returned. If not, perhaps in the least the mayor will understand and look sympathetically upon the wants and needs of the mighty real estate industry.
A candidate could indeed win without the support of the industry, said former Mayor Ed Koch, citing his successful bid in 1977 as a prime example; but it’s not unusual that those in the industry offer large donations to all viable candidates.
“They don’t really care who wins so long as they think that they will have access,” Mr. Koch said.
With the city having a billionaire mayor the past six years, it’s been quite some time since real estate has had a chance to gain mayoral friends through donations.
“This is really the first time in a while that there’s been an opportunity for real estate to weigh in,” said Kenneth Fisher, a former Brooklyn city councilman and now a real estate attorney.
Mr. Bloomberg, whose views are often in line with those of the industry, did not accept any contributions in either of his campaigns; and the more pro-development Democratic candidates in 2001, Alan Hevesi and Peter Vallone, were seen as less viable, Mr. Fisher said. The industry gave less to the third leading Democratic candidate and eventual nominee Mark Green.
Now the industry seems ready to jump at the opening, lest candidates form antidevelopment platforms based on citywide woes about affordable housing and overdevelopment.
“You’ve got a different dynamic than New York has had at any time since parts of the 80’s, where there is a pushback against development,” Mr. Fisher said. “I think that’s what’s causing the real estate industry to mobilize.”
Furthermore, a change in the city’s campaign finance law has led those who do any business with the city to rush in with contributions, as starting next month their donations to mayoral candidates would be capped at $400, a pittance compared with the $4,950 allowed now. The law, which was pushed through the Council last year by the mayor and Ms. Quinn, applies to lobbyists and those that have pending zoning changes and other contracts with the city.
Surely aware of the coming restrictions, many developers poured money into campaigns citywide in the past six months, bringing their total donated to all campaigns far past the same point in previous elections.
“I think it’s the pressure of the campaign financing law, and the candidates, not just for mayor, are asking for money earlier than before,” the president of REBNY, Steven Spinola, said. “The dollars are going earlier because the candidates are pushing for it earlier.”
Employees of the Related Companies, for example, one of the city’s most active developers, led by REBNY’s chairman, Stephen Ross, donated more than $60,000 total to Ms. Quinn and Mr. Weiner, part of the $143,000 they gave to candidates citywide. Eight years earlier, in the 2001 election, Related employees contributed almost one-third of that, $53,950, to all citywide candidates.
But grabbing the crown for the most in contributions was Rudin Management, the longtime family-run firm led by Association for a Better New York chairman William Rudin. The firm, which gave $84,150 total to all three potential mayoral candidates and $194,000 citywide, is vying to build a 650,000-square-foot residential development as part of a new medical building at St. Vincent Medical Center in the Village (part of Ms. Quinn’s district).
Whatever the reasons, candidates are raising a tremendous amount from the real estate industry, with Ms. Quinn and Mr. Weiner each taking in about one-fourth of their donations from those in the real estate and construction industries. A tally of their donations, which lists donors’ employers, shows that Ms. Quinn raised at least $680,000 of her total $2.47 million from the industry; Mr. Weiner took in at least $915,000 of his $3.6 million. Mr. Thompson, who’s looked more to the financial industry than his potential rivals have, took in at least $400,000 from the real estate industry, about 14 percent of his total raised this cycle. (Brooklyn Borough President Marty Markowitz, exploring a mayoral candidacy, also has relied heavily on the real estate industry for the $850,000 he’s raised.)
And in raising such money, old feuds seem to be put to rest. Listed as an intermediary - or bundler - for Ms. Quinn was Jay Kriegel, the executive director of NYC2012. Now at Related, the onetime booster of the city’s failed Olympics bid brought in $27,595 for the onetime opponent of the West Side stadium that was central to the bid. Related is vying for numerous projects that would go before the City Council and mayor, including the redevelopment of Pier 40 and the West Side rail yards, both in Ms. Quinn’s district. Ms. Quinn has rejected money from lobbyists, though she accepts donations from those who do business with the city.
In a statement, Stefan Friedman, a consultant for Ms. Quinn, said they were proud that “nearly 2,000 donors support Chris from all industries and all walks of life.”
Messrs. Thompson and Weiner did not respond to requests for comment.