Catsimatidis at a crossroads

TRD New York /
Dec.December 17, 2007 02:12 PM

Billionaire businessman and potential mayoral candidate John Catsimatidis, in an interview with The Real Deal,
spoke about his plans to build as many as 5,000 housing units in the
city. On Myrtle Avenue in Downtown Brooklyn, his Red Apple Group is
building its first mixed-use development, which will have as many as
1,000 units of housing and about 270,000 feet of commercial space.
Catsimatidis, whose parents brought him to the U.S. from Greece when he
was 10 months old, is president and CEO of the privately-held Red Apple
Group, Inc., which includes Red Apple Real Estate, Gristede’s
supermarkets and United Refining (which operates Kwik Fill and Country
Fair gas stations and stores).

You are thinking about running for mayor?

I am giving it very serious consideration. I am very concerned for the
city, for the post-Bloomberg era. The city has come a long way in 10
years and it can go backwards.

Why did you change from a Democrat to a Republican?

I changed parties because I am pro-business and pro-people. In the near
future we plan to create an exploratory committee, maybe in January or
February.

What are some of the problems the next mayor will face?

Well, I believe New York City is the greatest city in the world. But
one of my concerns is that we are creating affordable housing for
working people, which is good, and we are creating housing in Manhattan
on the high end. But we need a program for creating housing for the
middle class. I don’t want to lose the middle class to Connecticut or
New Jersey.

How would you try to build middle-class housing?

Through transit-oriented development. We have trillions of dollars in
infrastructure near trains. We should upzone near them, and provide
special credits. We can’t have a city with just boutiques and banks. We
have to find a way to maintain our neighborhoods with essential
services.

Why have you made nearly $1 million in donations to local and
national political candidates, mostly Democrats, over the past 15 years.

I enjoy politics and I enjoy talking to politicians. I don’t know how
much I spent. It was my money and I felt it was an education in
politics.

What’s the size of your real estate holdings in New York City?
It is less than $500 million in the city.

What worries you the most about the turbulence in the real estate market?

We are working on a big development in Brooklyn now. My biggest concern
is that the real estate market stays up and the banks don’t get scared
and stop giving loans to consumers and lenders. An executive at a major
bank said to me recently, “our construction loan department is fully
open,” but he confided that “we haven’t made a commitment in three
months.”

Can you talk about what drew you to Downtown Brooklyn?
Downtown Brooklyn is exploding with development. As I was driving with my son he commented that it looked like Manhattan.

What are the advantages of developing there?
People will be able to buy an apartment for $800 to $900 per square
foot, as compared to Manhattan, where it is $1,200 to $1,500 per square
foot. People laughed when I bought that development 20 years ago.

Have you done any other mixed-use projects like the one in Downtown Brooklyn?
It is the first project of that size, about 1.3 to 1.4 million square
feet. But we are looking at another one in Coney Island and another in
uptown Manhattan. Over the next 10 years we expect to build 5,000 units
(of housing).

Why are you closing Gristede’s supermarkets?
We are closing some Gristede’s stores in the city that were no longer
(performing well). We sold seven to Duane Reade. That is it right now. Interview by Adam Pincus


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