Someone snatched The Real Deal managing web editor Hiten Samtani’s moderator notes just minutes before the beginning of the TRD Forum’s panel on how the Trump administration is impacting real estate. But this was a group that needed hardly any prompting to get the conversation going.
The panel began with what sounded like a strong defense of the Trump administration’s tax plan from developer Don Peebles, who was until recently the chair of the Congressional Black Caucus Foundation and who has flirted with the idea of challenging Mayor de Blasio in this year’s election.
According to Peebles, the White House’s new plan to cut the tax rate to 15 percent for pass-throughs like LLCs “will stimulate far greater development” in the condominium space. “I think we’re going to see this policy create more activity,” he said. “He can be transformational for real estate,” Peebles said of Trump, “and I want to say, for real estate.”
Eliot Spitzer, the developer and former Democratic governor of New York, was quick to rebut.
“This is not a tax plan, folks, I hate to say it,” he said. “What they put out was a press release. … It simply makes no sense. The numbers don’t add up, it is bad policy, it will never happen and that is why his Republican Congress isn’t even paying attention.”
Trump’s tax plan, like his other policies, are “chaos built on chaos, built on chaos,” Spitzer proclaimed, generating considerable applause.
Peebles maintained that Congress will pass some form of tax reform that will benefit the industry as early as this year.
Toby Moskovits, CEO of Brooklyn-centric developer Heritage Equity Partners, talked about her family’s immigrant heritage and said a big piece of the growth of the Brooklyn market is “the immigrant story.”
“I think not continuing to recognize the economic transformation of New York that was built on the backs of immigrants. … I think it’s very concerning to listen to that,” she said in reference to the Trump administration’s hard-line immigration stance. “We want to be a welcoming place.”
The conversation briefly swung to local politics, with Spitzer, who is developing 857 residential units on the Williamsburg waterfront, suggesting that much of the tension that exists between Gov. Cuomo and de Blasio has to do with an intra-party competition. He further said the city should demand that the state put more funding into the maintenance of the city subway system and joked “group therapy” might help the two leaders come to terms.
But John Catsimatidis, the Red Apple Group CEO who decided earlier this month not to run for mayor again, took the conversation back to President Trump. The Obama administration, Catsimatidis claimed, made banks and business people enemies of the state.
“The people clapping for the old Washington, you couldn’t borrow as much as you want because the banks weren’t lending. The business people were considered enemies,” Catsimatidis said.
Peebles took the conversation back to immigration, saying everyone had the responsibility to hold the president accountable for his immigration policies.
“I am an immigrant!” Catsimatidis, who was born in Greece, shouted, a statement that also got a positive response out of many in the audience. At that moment, the event transformed into a bit of a one-upping match between two men who for the past year grabbed headlines for vacillating over announcing a run for mayor.
From then on, the panel members focused more on business, with Magnum Real Estate Group’s Ben Shaoul — who scored a $195 million loan last year from SL Green Realty for his Lower East Side condo project at 196 Orchard Street — commenting on how his condo and rental business has adapted to a less certain finance environment.
“We are accepting a higher cost of money,” Shaoul said. “Our concern is not only finding lenders, but finding the right lenders for the right project.”
Moskovits and Spitzer, who each have a lot at stake on Williamsburg’s Kent Avenue, said that the already well-monied neighborhood still has a lot of growing to do. Moskovits said that the millions of square feet of office space in the pipeline for Downtown Brooklyn say little about the demand that exists for quality leasing opportunities in North Brooklyn. Spitzer said the transformation of Williamsburg was “the story of New York” and said it will “increase and accelerate.”
Catsimatidis believes in Brooklyn, too, but expressed it somewhat differently. Brooklyn, after all, is now America’s third largest city, he said. “Chicago dropped off, they murdered so many people. It’s gone.”
The panelists also discussed the viability of the luxury condo market and the effectiveness of the Affordable New York developer tax exemption, which Spitzer argued was “fundamentally flawed.”
Catsimatidis said he wasn’t concerned about affordable housing for “people that get on a bus from South Carolina and come to New York and want affordable housing.”
“I don’t give a darn about those people,” he said. He said he instead cared more about middle-class New Yorkers, like firefighters and teachers, having an affordable home. “How about a middle class? Let’s vote for that too.”
The panelists capped things off with advice for young developers. Shaoul’s wisdom came in a concise package: “Take less leverage,” he warned.