UPDATED, 5:30 p.m., January 20: The Real Estate Board of New York’s annual gala logged its best turnout in years on January 16 and the crowd’s mood, often seen as a barometer for the health of the industry, was giddy, coming off a strong year for the residential and commercial markets.
The event, held at Hilton Hotel in Midtown, is the industry’s opportunity to don their tuxedos and designer gowns and to schmooze with each other and with high-powered elected officials.
There were, however, concerns tempering the crowd’s euphoria, the most pressing being the agenda of New York City’s new mayor, Bill de Blasio, especially in connection with real estate taxes.
As brokers, developers and other industry players mingled at REBNY’s 118th annual banquet, conversations quickly turned to property tax assessment rolls, which are due to rise an average of 8 percent in July, according to preliminary figures released by the city earlier this week.
Property owners said they were worried that further tax increases would make for a hostile environment for development.
“We knew there was going to be a substantial tax hike,” said Justin Elghanayan, president of Rockrose Development. “People look at developers and think ‘look how much money they’re making.’ But there’s only so much money can take from property taxes before it discourages development. You can swing too far the other way. It’s hard to get the cocktail right.”
Elghanayan said key legislative items this year include renewing the 421a tax abatement. In 2008, the program was amended to provide that only developers building projects with 20 percent or more affordable units could receive the abatement.
“It is the backbone of the rental housing market,” he said, adding that the permanent abolishment of 421a would lead to a “preponderance of condos,” because many rental projects would no longer pencil out.
Despite their concerns, real estate pros did not use last night’s annual gala to aggressively press de Blasio and the other elected officials who were on hand.
“This is a make-love-not-war event,” quipped Jordan Barowitz, director of external affairs for the Durst Organization.
In addition to de Blasio, Governor Andrew Cuomo was there as was the newly appointed City Council Speaker Melissa Mark-Viverito, a left-leaning Democrat whose views are not likely to align with the real industry.
“She was very pleasant to chat with,” said Massey Knakal Realty Services Chairman Bob Knakal of his brief conversation with the speaker at the event. “I would enjoy having a more substantive conversation with her.”
Stephen Meringoff, founder of commercial landlord Himmel + Meringoff Properties, said he would be relieved when de Blasio’s policies relating to real estate were finally outlined in detail.
“When [the real estate industry has] a clear set of rules then life is good, even when the rules might not please everyone” he said.
Bruce Mosler, chair of global brokerage at Cushman & Wakefield, said he was encouraged by de Blasio’s key appointments to date, especially Bill Bratton as the city’s new police chief and Kyle Kimball as president of the city’s Economic Development Corporation.
“The mayor is exceptionally tuned in,” Mosler said.
REBNY President Steven Spinola said his priority for this year is to “create a real partnership with the City of New York,” which would spur the creation of more jobs and more affordable housing.
Overall, the mood of the crowd seemed upbeat. Developer Bill Rudin, who joked that this was his 117th appearance at the gala, predicted that 2014 would be just as strong for the market as 2013.
And Eastern Consolidated broker David Schechtman said the current pipeline of building sales deals was so deep, that “even if the music were to stop, 2014 would be a good year.”
“A lot of brokers call this [the] ‘liar’s ball,’” he said, referring to the sometimes unjustified upbeat mood at the event. “But in the past couple of years, things have been so good no one’s needed to lie.”
Attendees appeared hungrier than ever for opportunities to make deals and connections.
“If you’re a pure animal, This Place is amazing,” a guest observed as the frenzied crowd made their way to the banquet.
Joseph Harbert, president of the eastern region of commercial brokerage Colliers International, said that his 27 years attending the gala had taught him one golden rule. “You never sit down,” he said, “and if you sit down, it’s only at someone else’s table.”
Indeed, as the awards ceremony got underway, the crowd, as usual, refused to mute its conversations. SL Green Realty founder Stephen Green, one of the night’s honorees, repeatedly attempted to bring some quiet to the room when he took to the podium, to no avail. Other honorees included the Gotham Organization’s Joel Picket, Ken Fisher of Fisher Brothers, Robin Abrams of Lansco, Thomas Hill of Boston Properties and Robert Fink of the Winter Organization.
Other industry bigwigs spotted at the event included Larry Silverstein of Silverstein Properties, Douglas Durst of the Durst Organization, SL Green’s Marc Holliday, Brookfield Properties’ Mitch Rudin, L&L’s Robert Lapidus, power attorney Jonathan Mechanic, CBRE Group’s Mary Ann Tighe, Douglaston Development’s Jeff Levine, Durst Fetner’s Hal Fetner and Newmark Grubb Knight Frank’s Jimmy Kuhn. Residential pros included Diane Ramirez of Halstead Property and Corcoran’s Tamir Shemesh.
On the lighter fashion front, some of the younger male executives wore casual suits instead of tuxedos, which has been industry tradition.
“You compare them against the movers and shakers and they look very [junior varsity],” said Jeff Escobar, an attorney at Proskauer Rose.
Meanwhile, retail broker Faith Hope Consolo, chair of Douglas Elliman’s retail division, showed off her Dior-designed white dress, which she matched with a padded gold Dior clutch. “I went with white like a snow angel,” she said.
Additional reporting provided by Hiten Samtani and Guelda Voien