Espada, an ally of the real estate industry, mourned in defeat

By C. J. Hughes | September 16, 2010 07:30PM

From left: Gustavo Rivera, Pedro Espada, Robert Knakal and Jeffrey Levine
In the city’s Democratic primary Tuesday, voters resoundingly rejected Sentor Pedro Espada, who represents the northwest Bronx in the New York State Senate. He lost by a more than 2-1 margin to Gustavo Rivera, a political science professor, who now will run in November for the seat, which represents the 33rd district.
Much of that unhappiness with Espada likely had to do with his legal woes, which involve charges he stole $14 million from a non-profit health clinic. Espada may have suffered another fatal blow to his reputation in Summer 2009, when he temporarily defected to the Republican Party.
But many developers and landlords had hoped those problems would be overlooked, as Espada, who chaired the Senate’s housing committee, was a sympathetic lawmaker.
“Regardless of what you thought of Espada personally, his defeat was not good for the real estate industry,” said Robert Knakal, chairman of Massey Knakal Realty Services. “Typically he was very pro-business and very moderate with regard to housing issues.”
Frank Ricci, a lobbyist for the Rent Stabilization Association, whose 25,000 members include many single-building property owners, was more circumspect, but agreed. 
“I think Senator Espada was a very good listener when it came to real estate issues,” he said. “He weighed every issue on the merits despite what many people will say [now].” 
Among those issues that Ricci supported was Espada’s call last year to freeze rents for struggling tenants and have landlords cover the difference through a complicated process in which they would return rents they had illegally charged over the years. 
While that may have sounded helpful to tenants, opponents cried foul because the landlords would essentially be let off the hook for the bulk of those illegal charges, which were technically violations of J-51 tax exemptions. 
J-51 exemptions are given to landlords to encourage them to renovate their buildings in exchange for not raising rents.
Espada was clearly supported by New York’s development community. A look at state financial disclosure forms from recent months turns up names like Stellar Management, which donated $5,000; Brookfield Properties ($2,500); Jack Rudin ($2,500); and Greenberg Traurig, the real estate law firm ($1,750). A call to Espada’s Bronx office was not returned by press time.
In contrast, Rivera’s backers over the past year include mainly individuals, unions and tenant groups, but no real estate groups.
For his part, Rivera doesn’t dispute that he will bring a decidedly pro-tenant slant to Albany, if he can win the general election in November.
“I am a tenant, and I will go and be a defender of tenants,” said Rivera, who’s lived in a rent-stabilized Bronx apartment for the past decade. “That does not mean I will be an enemy of landlords, but we must defend laws that support an affordable-housing stock.”
Specifically, Rivera wants a non-vacancy-decontrol law passed, which would stop landlords from charging market rents for units after rents clear a $2,000 a month threshold.  

He also seeks a repeal of the 1970s Urstadt Law’s provision that took away New York City’s right to regulate its own rents and handed it to the state, because most of New York’s rent-regulated units are in the city, he explained.

“With all due respect to my upstate colleagues, I don’t think we should be in the business of setting housing policy in the city unless we live in the city,” Rivera said.
Not all landlords say they are mourning Espada’s defeat. Some suggest that they will support whomever heads the Senate’s housing committee, since they will continue to have business before it. 
“We will try to make ourselves familiar to the next chair, because we’re in the housing business, and we would like to be known,” said Jeffrey Levine, chairman of Douglaston Development, who gave $2,500 to Espada in October. “I have supported elected officials many times. It’s good on a business level to do that.”