The Closing: Don Capoccia

The veteran builder on going up against the Hells Angels, his controversial Bedford Armory redevelopment and fighting for LGBT rights

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Mar.March 27, 2020 07:30 AM

Donald Capoccia (Photos by Axel Dupeux)

Donald Capoccia is a founding member and principal at BFC Partners, which has pioneered development in emerging neighborhoods like the Lower East Side, East Harlem and Downtown Brooklyn and is tackling some of the largest projects in the city today. Capoccia started his company 35 years ago with partners Greg Baron and Peter Ferrara and now works with their sons, Brandon Baron and Joseph Ferrara. BFC’s current developments include the six-acre Essex Crossing megaproject on the Lower East Side and the 1.1 million-square-foot Empire Outlets shopping center on Staten Island’s North Shore. BFC is also working on projects in Brooklyn, Queens and the Bronx — which Capoccia claims makes the company unique as a sponsor on simultaneous development projects in all five boroughs. Capoccia’s storied career, however, hasn’t been without controversy. During his early years, he gained a reputation as a hard-nosed developer who bulldozed community gardens on the Lower East Side to make way for new condominiums. More recently, his company broke ground on the redevelopment of the Bedford Union Armory in Crown Heights despite vociferous community opposition. But Capoccia, a founding member of the New York State Affordable Housing Association, staunchly defends his track record, arguing that his projects have created thousands of new housing units (many below market rate) as well as jobs. Capoccia is also one of the few openly gay professionals in New York real estate and is actively involved in advocating for LGBT civil rights. Capoccia and his husband, Tommie Pegues, were married four and a half years ago. During a lengthy sit-down interview at his Bedford Union Armory project in February, Capoccia discussed his run-ins with the Hells Angels motorcycle gang, his advocacy work and escaping to the horse farm he owns in Uruguay.

DOB: March 23, 1955
Live in: Soho
Hometown: Rome, New York
Family: Married

How did you get your start as a developer?
I came to New York City to do a master’s in urban planning at Hunter College in 1979. I went to work for a planning consultant, who one day threw an RFP on my desk and it was for the Dollar Building program when Ed Koch was mayor. We were designated for a building on East Third Street between First and Second avenues, right across from the Hells Angels.

What was it like being across the street from the Hells Angels?
I met Sandy Alexander, the head of the Hells Angels, and told him, “Look, I’m going to be buying this building.” They were still using it, so I said, “You have to clear all your stuff out for me to do my work.” “Oh yeah, no problem,” he said. This went on for eight or nine months. My lawyer had the bright idea of sending them a certified letter, return receipt requested. So you can imagine we never saw that letter again. But the day we closed, I had no choice. We rented a pickup truck, I hired some day laborers, and I got my bolt cutters.

Chick-fil-A wants to come into Empire Outlets. So, that’s not going to happen.

Did you have to prepare yourself for that?
At that point I was so broke, I had no choice. I just turned my back and did my work that day. I would not be here telling you the story today if it had gone any other way.

What was your life like growing up in Rome, New York?
Oh, it’s a very small Main Street type of city. My father was a general contractor, so I spent much of my childhood on construction sites. And of course, I had dinner every night for 18 years with a GC at the head of the table, so you absorb much more than you think.

When did you realize that you were gay?
I was a teenager. I went to Catholic high school. I was raised Catholic. So, let’s say, in the early ’70s I began to realize that I wasn’t as interested in everything else that my buddies in school were interested in. So it became pretty clear to me.

How did you meet your husband, Tommie?
Through a mutual friend: Match.com. That was 14 years ago, and we got married four and a half years ago.

Did you have LGBT role models or allies in the industry as you were coming up through the business?
Where I spent my time in that world is really in the world of civil rights. I work closely with a guy named Jeff Soref, who used to be head of the Empire State Pride Agenda. We took on a lot of projects. One that I’m still most proud of is getting the Sexual Orientation Non-Discrimination Act done in New York in 2002.

It was getting close and I was concerned about it happening, so I went to visit Lenny Litwin from Glenwood. Lenny met me in one of his buildings, and I explained to him what I was doing and why I was doing it. Now this was at the time when he was probably in his 80s, and he was like, “Landlords can discriminate against people if they’re gay?” I said, “Yes, Lenny, that is lawful, there’s nothing stopping people from doing it.” He was shocked. I needed him to call [then-Senate Majority Leader] Joe Bruno, and he picked up the phone and called Joe Bruno. So that was an instance where Lenny was like an amazing role model.

Litwin was a controversial figure because he spent so much donating to politicians. What do you think about that?
I don’t know much more than what I read, like everyone else. Personally, it never changed my opinion about Lenny Litwin.

In the mid-aughts, you resigned from then-President George Bush’s arts commission over his stance on gay marriage. Have you ever had to make a principled stand like that in business?
Yeah, just recently. Chick-fil-A wants to come into Empire Outlets. So, that’s not going to happen.

What’s the latest on [the Staten Island shopping outlet]?
It’s probably the most challenging job we ever did. There was massive infrastructure work that needed to be done. Mid-design, Sandy hit and we had to redesign for the 500-year floodplain and resiliency. We finished the job and opened in May, and we had north of 500,000 visitors a month out there for six months running straight. So what’s our challenge right now? Getting our food and beverage open. And I’m hoping that half a million visitors a month will turn into 650,000 or 750,000.

BFC was one of the first developers to do affordable apartments with market-rate rentals. Do you think that’s still a successful business model?
Yes, I do. The impact in the buildings themselves, and the communities, has been really positive. But we have a limited amount of [borrowing capacity] available to the state. You can imagine the demand in New York for affordable housing is extraordinary, and there’s nowhere near the resources to completely address the problem.

Donald Capoccia (Photos by Axel Dupeux)

What do you think about Mayor de Blasio’s affordable housing plan in 2020?
We’ve done a lot of work under the de Blasio administration. They’ve got an amazing team of people that are driven by getting housing produced. That’s how they measure their contribution to New York, and that’s how we measure it as well. So we’re very aligned on that.

Is the brain damage worth it? Wouldn’t it be easier to just go and do market-rate rentals or condos?
But that’s expensive. I got spoiled on my first building: I paid one dollar. I don’t want to overpay for a piece of property. We had a good long run in East Harlem with several thousand units, but then we priced ourselves out of the market, which is what happens in these neighborhoods.

Your firm’s Bedford Union Armory redevelopment has faced a lot of local community opposition. How have you handled that?
Throughout that period while we were preparing for ULURP, we just put our heads down and continued our community engagement work. There was a lot of unpleasant noise but we felt very strongly then, as we do today, that this project is going to be extraordinarily beneficial to the community.

What was the inspiration for BFC’s Stonewall project [in partnership with the LGBT elders group SAGE]?
Many years ago I was in Santa Fe and I passed by an LGBT senior project. There have been activists who are late in their life, and they go into this industrial complex of the Social Security world, where suddenly they sit in front of someone who says, “Is your husband or wife still living? Do your children take interest in your care?” With all the questions that get asked, it’s very clear to the person on the other side of the table that they better tell the story the right way or they’re not going to benefit like everybody else in the world, right? So, to put it in its most harsh terms, people literally have to go back to the closet after a life of activism. I found that to be completely unacceptable, totally mean-spirited.

So Michael Adams, of SAGE, and I have been on the hunt for an opportunity to do an LGBT affordable senior housing job for at least a decade. The stars finally aligned when the New York City Housing Authority issued their first RFP for what they call Next Gen, which is infill housing.

Is it something that produces an attractive return, or is it more of a passion project?
Every project has to have a bottom line. The Bedford Armory has to be a nonprofit operation forever, and we took that on in return for the opportunity to develop the housing. So I would say that project is the only sort of break-even nonprofit project we’ve ever done.

How did you meet your original partners?
After I finished my first job across from the Hells Angels, there was this broker who kept calling about these two guys who really wanted to meet. But I was trying to put together my next deal in the East Village and really didn’t have time to meet anybody. [It later] became painfully clear to me that my equity investor was not coming along for this ride, the phone rang and it was the broker. We met, and probably after an hour discussion we shook hands on the deal. And we’ve been partners ever since on a handshake.

What’s the dynamic like working with their sons?
Working with their sons has been very good. I’m 65, and my partners are in their mid-70s. Their sons are in their 50s, so there is a little bit of a bridge to a lot of the people who are working for us who are younger.

What do you do to relax?
My husband and I lead a pretty quiet life when we’re in New York. I love going to Carnegie Hall and Lincoln Center. We have a house upstate we go to on the weekends. My husband has an apple orchard there and spends much of the year keeping an eye on the orchard. Fall becomes a very busy time of year, making cider and harvesting apples. I’m always on the hunt for peace and quiet. There’s a lot of excitement every day at work.

Do you own any other homes?
We have an apartment in Miami and a farm in Uruguay where we raise endurance horses. We get there once or twice a year. I learned to ride many, many years ago when I used to live in Arizona.

What’s the most extravagant purchase you’ve made in the past year?
I bought myself a Steinway grand piano that plays itself. It’s very extravagant for me.

Is there something you want to be remembered by?
We’ve housed thousands and thousands — probably well in excess of 15,000 families — over these many years, and that’s a great feeling to have been able to do that. We’ve all seen New York evolve, and we had a small hand in that. So I mean who could ask for more?


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