By Konrad Putzier
When the 119th Annual REBNY Gala takes place tomorrow night, board president Steven Spinola will be honored with the Harry B. Helmsley Distinguished New Yorker award.
The event will mark the culmination of a 30-year career with REBNY that has seen him help guide the industry through one of the worst terrorist attacks on US soil, a Great Recession and a devastating hurricane.
As he prepares to step down from the presidency later this year, Spinola spoke with Real Estate Weekly about his experiences dealing with five different mayors, the role of corporate and private money in U.S. politics and what it’s been like working with his wife for 18 years ….
REW: Have you set any goals for your final year at REBNY?
Spinola: The goal, as every year, is to make sure that nothing happens that takes away the opportunity for more growth in the city and the state of New York.
This year we have some specific goals. One is we’d like to see a realistic housing plan pass Albany. We haven’t seen the Mayor’s plan yet, but we are having input on it and at the moment we are optimistic.
We have a goal of getting an extension of the Brownfield program, which would encourage people to remediate the toxic situations of sites around New York and generate more jobs.
And rent regulation expires in 2015. We expect that it will be extended. We would like to see a bill that is rational, recognizes some of the shortfall of the current law, but that the program would continue in a reasonable manner. That’s Albany.
In the city, we are looking at continued improvements to the process of landmarking. We think this administration cares a little bit more about transparency in the process of landmarking. We are also hopeful for continued reforms on the real estate tax assessment process. That’s a big goal and would likely take a number of years.
REW: What kind of a tax system do you envision?
Spinola: I just think a fairer one. We have properties in the city that are very similar in value, but the strange law that exists does not allow the city to assess them at the same price. It’s an unfair system. There’s a much greater burden on income-producing properties.
Office buildings account for about 22 percent of the value of real estate in the city of New York, but they pay around 39 to 40 percent of the total taxes in real estate. I do believe they should pay more, but I worry when it starts to get to double what their share is.
And there are very expensive condos and co-ops that are taxed as if they are rent-regulated apartment buildings. In fact, there are buildings where a single unit is sold for more than the entire building is assessed at.
REW: REBNY invested heavily in the past State election. Are you happy with the results?
Spinola: When you win a hundred percent you can’t be much happier. Is that braggy? (laughs) Fortunately the membership was willing to make significant contributions. We played in five races where we actually ran individual campaigns. We contributed to other campaigns. I can’t say every campaign we contributed to won, but it was pretty damn close.
We think that we’re now going to see a legislature that is going to have to talk to each other — the Democrats that control the Assembly and the Republicans that control the Senate. I think the state is being run better over the last four years than previously.
There’s been a recognition that raising taxes isn’t the solution to everything and I expect that now, with Republicans controlling an absolute majority of the State Senate, that this direction will continue.
REW: Speaking of State politics, your name frequently got mentioned in reports on the Moreland Commission. Do you think the public criticism directed against Andrew Cuomo over his handling of the commission was justified?
Spinola: The Governor did what he did, and I don’t think he was hiding from what his objectives were as to why he created the Moreland Commission. All I know is, we were asked to co-operate and we provided the information that was asked of us. When you’re the Real Estate Board of New York and you’re asked a question, it is frequently highlighted because you’re the real estate board. Even the New York Times, when they recently did their report, wrote that we co-operated fully.
REW: There’s an important debate going on about the role of corporate and private money in U.S. politics. As head of REBNY, you are naturally a very big part of the issue. Do you think the influence of private and corporate money on politics is beneficial to the country as a whole?
Spinola: The answer is yes. Do I think it’s important for tenants or unions to have influence? The answer is also yes. Businesses don’t have the manpower that unions have. The real estate industry is responsible for generating 38 percent of all of the locally-generated revenue in the city of New York. So our real estate taxes and related taxes pay for every cop, fireman, teacher and sanitation worker.
So should we be silent about what we think — which is our legal right — the direction of the city and the state should be? I don’t think so.
We get pieces of legislation passed in the council that say ‘we don’t want their money’, but exclude unions. If they don’t want our money involved in certain things, why is it okay for unions? Why is it okay for a special interest group to go in and say: ‘unless you introduce this bill, my members are not going to vote for you?’ Let’s not pretend that money is the evil here. Officials have to get out their message. I believe we are an important part of this city, this state and this country. To suggest our voice should be lowered or silenced is pretty inappropriate and unfair.
REW: Do you remember the first time you met Bill de Blasio?
Spinola: That’s a tough one. I probably do not, he probably was a City Council member. I’ve known the mayor since he was a Council member. When he decided to run for mayor, we had discussions. I always thought that he is a bright and very good politician and somebody who cares about the city of New York.
REW: Has your relationship with de Blasio changed since he became mayor?
Spinola: I have to say somewhat, yes. There was some concern over the themes in the campaign. We have spent the last 12 months with him – and probably more – and we have found the administration to be an open door. Not only do they allow us to make a phone call and say ‘can we come in and talk’, but they have called us.
For example, when the Mayor came out with his sustainability statement, they called us and said ‘we have these ideas, can you take a look at them and see whether or not they make sense?’
They are doing that somewhat on the housing proposal. We have sat down and talked about landmarks reform. When they are talking to us about housing, frequently I’ve been in a room with a bunch of people who hated my guts — or at least they talked that way. So this mayor has tried to bring people into a room to build consensus. I have even more respect for him than I had before.
REW: Do you think the Mayor’s affordable housing plan is heading in the right direction?
Spinola: Yeah, I do. The problem is, I worry that there may be some detours as we get to the end, so we need to see the final product before we can say we like it. I think we are going to like more than we don’t like. And if that’s true, we are going to argue that maybe there should be some changes, but that we are able to support it.
I think they’re looking to be flexible. There will be a menu of different options for people. And I think they realize it has to be geographically different – that programs in Manhattan are clearly going to be different that programs in East New York.
REW: You have worked under a handful of Mayors. Is there anyone you can say you had the best relationship with?
Spinola: Always the current one. I worked for Ed Koch (as head of Economic Development), so clearly there was a closer relationship because I had been one of his commissioners. They all had their different styles and different priorities, and the truth is, it’s my job to adjust to who they are.
Whatever the mayor’s priorities are, have to become our priorities. We have to figure out how to help them accomplish it while still making it realistic for our members. That’s what I’ve been doing for 30 years.
REW: Looking back at 30 years at REBNY, what were your biggest challenges?
Spinola: It’s a long time, so the challenge was, in part, keeping the industry focused and keeping everyone functioning as one. I think we’ve accomplished that.
In an industry filled with significant players, from the small sales agent to the largest building owners, they have different priorities. So how do we run an organization that provides the services that are important to them and also speaks with almost one voice? I think we’ve done that more often than not.
I felt honored that Giuliani invited me and Burt Resnick, who was chairman at the time, the day after 9/11 to the police academy and asking ‘what do we do now’, recognizing the role of REBNY in curing Lower Manhattan’s devastation, and we played a role from there.
After Sandy, we helped the city identify what could be done for the future. Before 9/11, Lower Manhattan had a vacancy rate of 25 percent and we proposed a plan that Rudy Giuliani modified and accepted. It resulted in significant change, including the conversion of 3 million s/f of office space into residential.
REW: What do you consider the biggest challenges to the real estate industry today?
Spinola: Everybody is happy right now, except they worry about land prices. Cost is significant. On the residential side, is there enough affordable product? Two thirds of New Yorkers rent their apartments and one third buy – that’s the opposite of the rest of the country. But (rental developers) are having trouble competing on prices. So there’s a conflict there.
We want to keep condos being built, but we also don’t want to lose out on the rentals.
And one of the biggest issues facing real estate in the city New York is its current and future transportation network. All of this affects real estate, along with the perception of where the city is going, including crime.
REW: What kinds of transportation projects are needed?
Spinola: The 7-line extension (to Secaucus), we need to finish East Side Access, the Second Avenue Subway is only partially done. We probably need to improve the airports. They’re terrible, especially LaGuardia. It would be great if we could get some kind of transportation system to LaGuardia. And we would love to see a one-seat ride from Lower Manhattan to Newark.
REW: Do you take the subway to work?
Spinola: I do not. I drive to work from Long Island. I used to say I’d start taking the Long Island Railroad when they open up East Side Access, but I couldn’t wait.
REW: How much of your day do you spend on the phone?
Spinola: Probably half of it. I happen to like to look people in the eye when I’m talking, so I prefer meetings. One of the great things about New York is that you can have four or five meetings in one day without ever having to get into a car or subway. When I’m in Midtown, I walk.
REW: What is it like to work with your wife?
Spinola: It’s great. We are married 43 years, working with her now for 18. This probably means I’ve been married for the equivalent of 80 years in terms of how much time we have spent together.
She may have the hardest job here, because she handles all of the brokers’ educational programs and that is a complicated task. She used to be a teacher. When she decided to stop teaching, I said ‘Eileen, do you want to do it?’ and called a few of my leaders here and asked if there was a problem. I remember one saying ‘I don’t have a problem with nepotism’ – of course it was the Rudin family.
REW: Will she stay on after you leave?
Spinola: You’ll have to ask her. She doesn’t tell me what her plans are.
REW: How well do you know your successor, John Banks?
Spinola: I’ve known him for a long time. I knew him when he was at the City Council. We’ve worked with him when he was at ConEd. He is a classy, smart person. I think his temperament is similar to mine. He understands politics and I think he knows who he needs to know, so this is going to be an easy transition.
We will spend a number of months running REBNY together, and then I’ll continue to be available to him to help whenever he needs it.
REW: What are your plans for life after REBNY?
Spinola: I want to get through this legislative session and help REBNY where I can. Then I’m going to spend time with my grandchildren and decide what I like and don’t like doing. Maybe I’ll be happy just playing golf. And if not, I’ll figure out something else.
REW: It’s rare enough for someone to stay in one job for 30 years. Do you ever regret not having tried something else?
Spinola: No. When I left Ed Koch and Economic Development, I said to Eileen: ‘I am going to take this job. It’s a little bit more money, but I know I’ll never have the same sense of accomplishment that I had under Ed.’ I was wrong.
I was wrong because I didn’t understand that the leadership here expected REBNY to be a partner of the city of New York.
Yeah, we would fight and argue. But in the end — and this is a famous Lew Rudin line — 98 percent of the time, if it’s good for the city, it’s good for the real estate industry.
I feel I’ve still been working for the city and state of New York these past 30 years. And I think if you talk to some of the deputy-mayors and commissioners we’ve worked with, they’d say the same thing —that REBNY has been a partner on so many of the issues.
That’s been a phenomenal sense of accomplishment for me. It’s been the job of a lifetime.