Battle of the Steves: Roth, Ross trade jabs at REBNY quarterly luncheon

New York /
Apr.April 05, 2011 06:34 PM
From left: Stephen Ross and Steve Roth

No one heeded his advice last year, but Steve Roth still wants the city
to upzone Park Avenue.

The Vornado Realty Trust chairman, who traded lighthearted jabs
at the Real Estate Board of New York’s quarterly luncheon this
afternoon with his decidedly more staid development rival, Related
Companies boss Stephen Ross, paused mid-sentence, momentarily
holding his tongue so as not to offend what was likely a room full of
Park Avenue landlords, brokers and investors.

“Oh, I don’t give a shit,” he ultimately decided, to roars of laughter.
Most Park Avenue office buildings are currently “hanging on by
their fingernails to being technologically obsolete,” Roth continued,
proposing that the city council rezone the thoroughfare so that older,
existing buildings could be torn down and replaced with larger, newer

It’s not a novel idea for Roth, who wrote in his annual letter to
investors last year
that such a policy has been implemented in London “quite

“Nobody listened,” he said of that letter today.

An entertainingly candid Roth unequivocally stole what REBNY had
dubbed the “Steve and Steve” show, with quips like “my 30-year-
old son lives at [pricey Related condominium] Superior Ink — that’s a
shonda” (Yiddish for “a pity”), and “I’m loaded, but he has a football
team,” in response to how Vornado’s REIT model stacks up next to
the private development model of Ross’ Related.

Ross wasn’t without edge himself, sarcastically referencing
the “terrific decision by the [Bronx] borough president who thought
no jobs were better than low-paying jobs” at the Kingsbridge Armory,
when it came his turn to speak. The City Council voted down Related’s $310 million retail
redevelopment project there in late 2009, and a still-bitter Ross
characterized the incident as evidence of “seeds planted that don’t
bode well for New York in the future.”

The duo got serious when it came time to discuss the industry’s
issues of the day: real estate tax assessments and infrastructure.

“The city recognizes that the existing tax assessment system
is inequitable but hasn’t given us a solution,” Ross said, adding
his personal lobby for the renewal of the tax abatement program
known as 421-a, which encourages multi-family construction in the
city. “Without 421-a, you can’t build any rental housing at all in New
York,” he said.

Roth, meanwhile, slammed New Jersey Governor Chris Christie for
cancelling the planned Hudson River Rail Tunnel between New York
and New Jersey. (Vornado owns Penn Station.)

“The principal purpose of governing is to provide infrastructure, and
I hate to say it, but in this scenario, the Governor is flunking,” Roth
said. “We need to augment the amount of traffic that can come in by
rail from New Jersey… somehow or other I hope it happens.”

After the panel, REBNY President Steven Spinola told The Real Deal
that he expects the city to conclude its study on extending the No. 7
subway line to Secaucus within the next few months.

Ross stressed, though, that the No. 7 subway would at least be
extended to Manhattan’s Far West Side by the time his massive
Hudson Yards project
debuts. He said Related is planning to begin
construction on the platform that will cover the site by 2012 (the same
year the company hopes to break ground at Hunters Point South
in Queens), and ink 3.5 million square feet worth of deals there this
year. The company is offering the space up for sale or lease, and
while Ross wouldn’t say how low he’d go in terms of pricing, he said
Hudson Yards is “very competitive” with other new office buildings in
the city.

As for Vornado’s upcoming projects, 15 Penn Plaza, or as Roth
referred to it, “the most famous unbuilt building in America,”
is “trolling for a tenant,” while the company’s planned, 1.5 million-
square-foot tower
atop the Port Authority Bus Terminal may now
be able to proceed on spec, thanks to a new capital partner, Roth

Toward the end of the event, Roth extolled the benefits of investing in
New York City retail — “the single best business — it’s fun, it’s great.”
He began to tell the story of how he bought the retail portfolio of
Virgin Megastores in 2007.

“Oh, we did this together,” he said, turning to Ross. “I forgot that.”

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