David Belt of development firm Macro Sea was struggling last year to put together a deal for an 84,000-square-foot high-tech manufacturing center at the Brooklyn Navy Yard. Belt needed to take advantage of a historic tax credit in order to make the project, dubbed the New Lab, pencil out financially.
After repeatedly hitting roadblocks, he approached one of his several partners on the deal, Goldman Sachs’ Urban Investment Group, headed at the time by Alicia Glen — the city’s new deputy mayor for housing and economic development.
Goldman “helped me create a structure that would allow the tax credits to flow into my projects and allow me to complete my capital stack,” Belt said.
They “rolled up their sleeves and did it,” he said.
Now, Glen is tasked with what many say could be her biggest challenge yet: Executing Mayor Bill de Blasio’s goal of creating 200,000 units of affordable housing over the next decade — a cornerstone of his campaign promise to address inequality.
“Someone is going to go back and find a tablet from Moses saying there was a more ambitious plan out there,” Glen said with characteristic wit during an interview with The Real Deal at City Hall last month. “But this is certainly the most ambitious plan by a city ever.”
The administration’s 200,000-unit target is 35,000 units more than what Mayor Michael Bloomberg achieved. It calls for preserving 120,000 affordable units and building 80,000 new ones at a cost of $41 billion, which will be paid for partly with $8.2 billion of city funds and about $30 billion in private capital.
“The challenge for us whenever we’re spending a dollar of the city’s money is to make sure we are appropriately filling the gap,” she said. “We feel pretty strongly that given where equity and debt markets are, we should be able to leverage our dollars significantly more than at other points in history.”
Developers, she said, will also be asked to “put a little more skin in the game,” noting that the private funds will include equity investments from developers and commercial debt from the lenders.
In her role as deputy mayor, Glen is overseeing 26 city agencies, boards and authorities and will have a key say on issues ranging from rezonings to deciding which megaprojects the city takes on.
And there’s certainly precedent for playing an outsized role. Daniel Doctoroff, Bloomberg’s longest-serving deputy mayor for economic development, oversaw the creation of 130 million square feet of real estate, and became something of a household name for his spirited — though ultimately unsuccessful — push for a football stadium on Manhattan’s Far West Side.
Second City Hall dance
Glen, 47, was born in Manhattan into a family entrenched in the public sector. Her father, Jeffrey Glen, was a special assistant corporation counsel at the Law Department under Mayor Ed Koch and her mother, Kristin Booth Glen, was a state Supreme Court judge. Her stepmother, Rosina Abramson, led both the Roosevelt Island Operating Corp. and the Department of City Planning.
“All of those formative experiences bubble up and make me an unusual person, but that’s why being in the public sector feels pretty homey to me,” said Glen.
And while she may be best known now for her work at Goldman Sachs, her first brush with the real estate industry came during a post-college stint in the public sector.
After graduating magna cum laude from Amherst College in 1988, Glen worked as an aide to then-Manhattan Borough President David Dinkins. In 1993, after earning her law degree at Columbia University, she worked as an attorney at Brooklyn Legal Services, which provides free legal assistance to low-income families, before joining the law firm Fulbright & Jaworski as an associate.
But she didn’t stay in the private sector long. After three years at Fulbright, she left to serve as the assistant commissioner for housing finance at the Department of Housing Preservation & Development under Mayor Rudolph Giuliani. Speaking about Glen, Richard Roberts, who was HPD commissioner at the time, said “there are some lawyers, who when they work on deals kind of understand everything about them — the legal, the zoning, the land use, the finance. I think she was particularly good.”
Goldman Sachs noticed the same. In 2002, Glen was picked to head the firm’s Urban Investment Group, a unique division within the bank that invests in urban development projects and other initiatives that have a “social impact.” Under her leadership, the group arranged and financed more than $5 billion in low and middle-income development, primarily in New York City and northern New Jersey.
It invested more than $80 million in the restoration and expansion of the historic 83,000-square-foot Loew’s Kings Theatre in Flatbush, which will be the largest indoor theater in Brooklyn. It’s also a partner in 1000 Dean Street, a 150,000-square-foot Crown Heights office-and-retail project developed by Brownstoner publisher Jonathan Butler and BFC Partners and geared toward Brooklyn’s emerging technology and media tenants.
But the group’s investments outside real estate also shed light on how Glen might get creative when it comes to funding the mayor’s housing plan, sources said. It pumped nearly $10 million, for example, into a program to reduce recidivism among young men at Rikers Island jail. Goldman will recoup its entire investment if the program reduces the reincarceration rate by 10 percent. If rates fall further, Goldman stands to make over $2 million in profit.
It also invested $42 million in the bike-sharing program Citi Bike, a sum it aims to recover through naming rights payments from Citibank as well as through usage fees.
“You think of Citi Bike really as a transportation play, but it’s also a huge economic development and job creator,” Glen said. “So one of the things we worked very hard on at Goldman and at the city was to make sure the people who were being employed at Citi Bike were going to be coming out of the [city’s] workforce development programs.” The program will create 170 new jobs and generate $36 million in economic activity during its first year, according to the city’s Economic Development Corp. But it’s been struggling to make a profit and is seeking city approval to raise rates.
Deborah VanAmerongen, a policy advisor on affordable housing at the law firm Nixon Peabody who frequently collaborated with the Urban Investment Group, said that while at Goldman, Glen “was willing to look at some deals that perhaps other investors were more squeamish about.”
VanAmerongen recalled a project involving the conversion of an industrial building in Rochester, N.Y., into a 71-unit supportive housing project. As the team was getting close to closing, an investor pulled out. Glen’s team stepped in as a white knight and rescued the project, VanAmerongen said.
Glen said her transition into City Hall was helped by her years of straddling the private and public sectors. “Being able to really see every side of this and understand all the different stakeholders, because I’ve sat in each one of those chairs, has been an unbelievable blessing.”
Though several sources spoke highly of her credentials, some expressed concern that Glen’s hard-charging management style might cause friction within City Hall.
“At Goldman there were some pretty mixed reviews about how she fit in culturally,” said a source who served on the board of an affordable housing nonprofit with Glen. “I’m not sure they were totally heartbroken [by her leaving].”
City Hall spokesman, Wiley Norvell, rebutted: “It takes someone tough to drive hard bargains and move the mountains needed to build and preserve 200,000 affordable units.”
Industry street cred
De Blasio, however, seems thrilled to have her on board. The chemistry between the duo was on display at an April breakfast hosted by the Association for a Better New York, a pro-business group. The pair’s exchanges sat well with the crowd, according to two real estate players who were present.
“It was a strong initial performance for the business community,” said Richard Anderson, president of the New York Building Congress, which represents the city’s construction industry. “She handled herself well, and bringing the mayor as a surprise was a nice twist.”
Sources said Glen’s Goldman Sachs credentials are already helping allay fears that the new mayor is unsympathetic to business interests.
Glen said that like other New York business leaders, she faced some of the public backlash against big business during the financial crisis, when Goldman Sachs became the poster child for everything wicked about Wall Street.
“There were some dark days,” she said, “when you come home and the doorman looks at you like you’re an evil squid.”
But Glen’s kinship with the business world and her relationships with several top real estate leaders will allow her to put together deals and raise money to meet the administration’s development agenda, sources said. Before moving to City Hall, Glen was a trustee of Citizens Budget Commission, a nonprofit group that focuses on the city and state budget, along with a list of industry heavyweights including Larry Silverstein, Related Companies’ Bruce Beal Jr., and Brookfield Office Properties’ Dennis Friedrich, according to information services platform RelSci. Vornado Realty Trust’s David Greenbaum is a member of the commission’s executive committee. And Glen and Boston Properties’ chairman Mort Zuckerman both serve on the board of directors of the nonprofit Fund for Public Schools.
Those who have worked with Glen said she was a skilled problem solver who would be able to deal with the constraints of working in the public sector.
“She looks at how to tackle some of these problems with limited public funds,” said Rick Lazio, a former congressman who now heads the affordable housing practice at law firm Jones Walker and served with Glen as a trustee at Enterprise Community Partners, a nonprofit housing finance organization. “She is an assertive person, so she won’t hesitate when she needs something from the private sector.”
For his part, de Blasio told the ABNY crowd that Glen “set the pace already with extraordinary energy.”
“Imagine being the person,” he continued, “who every day walks into City Hall and greets the smiling mayor who says, ‘How are you doing on the 200,000 units of affordable housing?’ That’s Alicia’s job, but she rises to the challenge — never seen her sweat, I can tell you that much.”
It’s unclear who else was on the mayor’s short list for the deputy mayor position. On the flip side, de Blasio may not have been Glen’s first choice for mayor. In December 2012, she donated $1,000 to Bill Thompson’s mayoral campaign, campaign finance records show. Six months later, Glen coughed up just $250 for de Blasio.
“I didn’t officially support anybody,” Glen said. “I know a lot of people who knew Billy, and I know a lot of people who knew the mayor. I’ve been in Democratic politics my whole life.”
She’s also been a staunch supporter of city comptroller Scott Stringer, with over $7,700 in donations to him over the last 25 years. Glen is now in talks with Stringer, she said, to figure out how the city’s pension funds, which the comptroller oversees, can be useful to the mayor’s housing agenda.
She said her decision to take the new job was made easier by her previous experience in the public sector. “I knew what I was getting into,” she said.
Managing industry pushback
A central component of the administration’s affordable housing plan is, of course, mandatory inclusionary zoning, a proposal that many in the development community are concerned about because it requires new residential developments in rezoned areas to include some affordable housing.
For example, Real Estate Board of New York president Steven Spinola has suggested that the policy could stymie development. “It is unreasonable to assume builders will continue to build regardless of growing costs and difficulties,” Spinola wrote in a December op-ed in Real Estate Weekly.
In addition, affordable housing developer Jonathan Rose, a Glen supporter, said, “The problem with relying on mandatory inclusionary zoning is that only the hottest neighborhoods get affordable housing.”
He suggested that developers pay into a fund in lieu of building affordable units, a system similar to the one used during the development of Battery Park City. That fund, Rose said, allowed for a large amount of affordable housing development in the outer boroughs.
While that policy isn’t up for negotiation, Glen has been trying to make clear her intent to work with the industry.
In March, she invited several top developers to City Hall, including Extell Development’s Gary Barnett, Durst Organization’s Douglas Durst and Tishman Speyer’s Rob Speyer to discuss the implications of the new housing plan on their business. And in April, Glen met with Forest City Ratner CEO MaryAnne Gilmartin to discuss the possibility of additional housing subsidies for affordable units at Atlantic Yards, according to the New York Times.
Glen also said the City Planning Department launched a study early last month to determine which areas are ripe for rezoning, and is expected to report back in three months.
Glen’s agency portfolio includes the City Planning Commission, the New York City Housing Authority, the EDC, the Landmarks Preservation Commission and the Office of Media and Entertainment.
“It’s helpful for those at each of these agencies to speak to someone who can marry the holistic view with getting things done,” said EDC president Kyle Kimball. While at Goldman, Glen was “central in getting many of our projects across the finish line,” he said. “She is a razor-sharp transactor, but she can also see the big-picture policy agenda.”
Kimball said that since landing at City Hall, Glen had been “instrumental” in getting the EDC $100 million from the city’s budget to build 500,000 square feet of industrial manufacturing space at the Brooklyn Army Terminal in Sunset Park.
Shortly after taking office, Glen and her team — her chief of staff is Goldman alum James Patchett — also initiated talks with Two Trees Management over their redevelopment of the Domino Sugar Factory in Williamsburg. The new administration cut an 11th-hour deal with the developer to include 40 more permanently affordable housing units.
Glen’s latest challenge is trying to broker a deal between lenders and tenants at Stuyvesant Town–Peter Cooper Village, which has thousands of rent-stabilized apartments. CWCapital, which represents a series of trusts that hold a $3 billion first mortgage on the property, appears to be gearing up for the sale of the complex to a new owner, although the tenants’ association has been vying to buy it and thus maintain its affordability.
Meanwhile, of the top executives under Glen’s jurisdiction, Kimball is one of the few that survived the transition from the Bloomberg administration. The ouster of Marc Jahr, the former president of the Housing Development Corp., was particularly contentious, according to a recent report by political website City & State. Jahr was widely thought of as both smart and easy to get along with, sources told TRD. Despite protests from several members of de Blasio’s transition team, Glen made the decision to remove him, City & State reported. Jahr was replaced by Gary Rodney of affordable housing developer Omni New York.
But Glen insisted that there was “nothing unusual about turnover at the top of an agency,” noting new hires such as Vicki Been at HPD and Carl Weisbrod at the City Planning Commission.
“As the mayor likes to say, ‘there was an election,’ ” she said.
A 10025 lifer
Glen lives in a 1910 prewar building on West End Avenue with her husband, attorney Daniel Rayner, and her two children.
“I wonder sometimes if this is going to make me seem really uncool,” a grinning Glen said. “But I was born in 10025, and I live in 10025.”
“I lived in Tribeca before anybody lived in Tribeca, so I’m not a complete nerd,” she added, noting that she lived in the neighborhood for a year after college.
While she said she can’t see herself leaving the Upper West Side, she is “jealous of new construction and central air.”
But if she did want to move to Tribeca, say, the very real estate forces that she’s working on in City Hall would come into play. Many of the neighborhood’s new condos are going for north of $3,000 per square foot, partly due to the skyrocketing price of land across the city and especially in Manhattan, where dirt can cost up to $800 a foot.
These prices force developers looking for a decent return to eschew rentals and instead build condos, which are trickier to subsidize as affordable housing units. But Glen said that from the administration’s point of view, spiking land prices aren’t a bad thing, and can even help it meet its housing goals.
“We want markets to stay hot,” Glen said. “That’s good for us. The more people want to build, the more there is to talk about the percentage of affordable housing, and the more the industry is happy to engage in these conversations. Right now, what appears to be the insatiable appetite for New York real estate is something we completely embrace.”