The Real Deal New York

The people’s champ — and the industry’s adversary

After facing down the e-commerce giant run by the world’s richest man, Sen. Michael Gianaris of Queens is ready to go toe to toe with real estate’s elite
By Decca Muldowney | March 01, 2019 12:00PM

Michael Gianaris (Photo by Sasha Maslov)

After the collapse of Amazon’s plan to build an office megacomplex in Long Island City for roughly $3 billion in subsidies, New York’s real estate industry and larger business community were seething.

Developer David Lichtenstein, of the Lightstone Group, said the e-commerce giant’s about-face was the “worst day for NYC since 9/11.”

“Except this time, the terrorists were elected,” Lichtenstein wrote in an email — an inflammatory dig at the local politicians who fiercely criticized the tech giant’s plan to bring half of its “second headquarters” to Queens. The developer later emphasized that he was referring only to the financial implications Amazon’s withdrawal would cause.

Related: Amazon’s ashes

But state Sen. Michael Gianaris, who’s been called both “the Amazon slayer” and “the man who killed the Amazon deal,” wasn’t shy about condemning Lichtenstein’s remarks.

“It’s disgusting,” Gianaris told The Real Deal after a February press conference calling for the end of corporate welfare. “Anyone who tarnishes the memory of 9/11 by using it for their own interests is really out of bounds and should apologize. It’s shocking that he hasn’t yet.”

The state senator and former assemblyman from Astoria — part of the district he now represents — has been making waves in New York real estate. Within the past few months, he’s joined a growing number of politicians who refuse to accept donations from the industry, while strongly backing pro-tenant rent reforms in Albany and calling for an end to the kinds of corporate subsidies offered to Amazon.

And he has little sympathy for those who have been outraged by his agenda.

“I understand the real estate community stood to make a lot of money off [the Amazon deal], to the detriment of the people that live in western Queens,” Gianaris said. “But I represent the people, not the moneyed interests.”

For landlords, developers and other real estate players in his district — some of whom know the senator personally — Gianaris’ blunt opposition is a clear warning sign. That comes on the heels of a wider political turn against the industry’s interests.

“This is a pivotal moment and wake-up call for the business and real estate community,” said Suri Kasirer, one of the city’s top lobbyists.

Tense reactions

A week before Amazon pulled out, the head of one the most active residential brokerages in Long Island City sent a desperate text to Gianaris.

Modern Spaces CEO and co-founder Eric Benaim said he pleaded with the state senator to temper his opposition and sit down with executives at Amazon to negotiate a compromise. Gianaris said he was receiving a lot of messages at the time and doesn’t remember Benaim’s text specifically.

The two had met multiple times at ribbon-cuttings and other community events in Queens, and until a few months ago, Benaim said, he couldn’t have named a single bad thing about Gianaris.

But that was before the lawmaker came out swinging against Amazon. “It’s a sad story, because he’s a really good guy,” Benaim said. “He just made a strategic mistake.”

The brokerage executive said he blames the victory of U.S. Rep. Alexandria Ocasio-Cortez for pulling local Democrats like Gianaris to the far left — a position he thinks many will come to regret when elections come around. “This is not a socialist city,” he said.

Since the Amazon deal collapsed, Benaim said, he’s been thinking about texting Gianaris again to tell the state senator: “I told you this would happen.”

Others, including Gov. Andrew Cuomo, a slew of developers and even construction union boss Gary LaBarbera (to name a few), have been even more direct.

Related: Can real estate lobby the left?

“We will remember which legislators forgot about us and this opportunity,” LaBarbera told TRD right after the Amazon deal fell apart, singling out Gianaris and City Council member Jimmy Van Bramer of Queens. “What’s their plan to create $27 billion in economic activity?”

Jerry Wolkoff, the developer behind LIC’s controversial 5Pointz condo project, called Gianaris and the other politicians who opposed the Amazon deal “moronic.” Politicians can threaten the real estate industry all they want, he said, but “bottom line: This is what makes New York terrific.”

Sharp turns

Despite initially signing a letter supporting Amazon’s bid, Gianaris later lashed out against the deal. He publicly criticized the billions in subsidies and tax breaks the city and state were offering and argued that potential housing and infrastructure problems hadn’t been fully addressed.

Gianaris at a Long Island City Amazon protest last November

But before the deal was announced last November, many people in New York real estate had never heard of the state senator who represents Astoria, Long Island City and other western Queens neighborhoods. If they did know him, it might have been in his role as a fundraiser eliciting donations for state Democrats.

Since 2010, Gianaris had received more than $100,000 from the real estate industry, a review of public records by TRD found in November. That included at least $52,000 from the New York State Association of Realtors PAC, $36,000 from developer Glenwood Management and $27,800 from the Real Estate Board of New York — the industry’s largest trade group.

Few people would have said he represented a serious threat to the real estate business. But that quickly changed over the course of a few short months.

Real estate became a hot-button issue leading up to the November elections, and a handful of Democrats, including Gianaris, Van Bramer and freshman state Sen. Julia Salazar, announced they weren’t accepting campaign money from the industry.

“I’ve watched firsthand [real estate’s] influence over the New York Senate, keeping good laws and regulations from passing,” Gianaris said in a phone interview a few weeks before the Amazon deal fell apart.

Just before the new year, Democrats took control of the state Senate for the first time in a decade, putting rent reforms and other pro-tenant legislation back on the table. Then Gianaris, alongside Van Bramer and Ocasio-Cortez, voiced their strong opposition to the Amazon deal.

A decisive moment reportedly came in early February, when Gianaris was nominated to the somewhat obscure Public Authorities Control Board. The five-member committee holds the power to veto land-use plans like the one the e-commerce giant had been offered for its new headquarters.

Speaking on Albany public radio station WAMC after the plan collapsed, the governor — who once joked that he would rename himself “Amazon Cuomo” if it helped seal the deal — called Gianaris’ nomination to the PACB a “death knell for the project.” And Senate Majority Leader Andrea Stewart-Cousins ultimately withdrew her colleague’s nomination last month, due to lack of support from Cuomo.

But while Gianaris was instrumental in his opposition, some insiders say New York’s larger political divides and Amazon’s own incentives were the driving forces behind the company backing out.

“It’s much bigger than him,” said Mitch Korbey, a partner at the law firm Herrick Feinstein and former director of the Department of City Planning’s Brooklyn office.

Korbey said Gianaris’ nomination to the PACB made him a “central figure,” but that it was the “hyper-localization of decision-making” in New York that killed the deal — setting neighborhood, city and state interests against one another.

In a public statement, Amazon placed the blame on “a number of state and local politicians” who opposed the deal and would not “work with us to build the type of relationships that are required to go forward.”

Learning the ropes

The son of immigrants from the town of Kalavryta, in Greece’s mountainous south, Gianaris was born and raised in Astoria. He said he remembers the area as ethnic and blue-collar, a place where new waves of immigrants gradually replaced previous generations.

Gianaris attended public school in the neighborhood before going to Fordham University, where his father was an economics professor, and then Harvard Law School, where he was only a few years behind Barack Obama.

He first got involved in politics when Mike Dukakis, a fellow Greek-American Democrat, ran for president in 1988, and led a voter registration drive — signing up 10,000 people in Astoria. Though Dukakis lost out to George H.W. Bush, Gianaris credits that race with his own election to the New York state Legislature years later.

After spending a few years as an attorney to pay off student loans, he landed a job as an aide in former Gov. Mario Cuomo’s office, where he first met Andrew Cuomo in 1994. Gianaris was later elected to the state Assembly in 2000 and the Senate in 2012, representing District 12 in western Queens.

It was during his years in the Assembly that Gianaris first met REBNY President John Banks, then vice president of government relations at Con Edison. In July 2006, Gianaris went to war with the utility company over a 10-day blackout that hit his district.

“I fought them tooth and nail to deliver accountability and make sure we had infrastructure in place that wouldn’t create problems again,” he said. With the exception of the eerie blue light that appeared over Queens in December, Con Ed has been doing a pretty good job since, he added.

Banks and Gianaris found themselves facing off again years later — on opposite sides of the Amazon deal. Banks said he sees the state senator as a “fierce advocate” for his constituents.

“I’ve always found [Gianaris] to be a smart, candid person,” he said. “Even when we were battling it out, I always had a direct line of communication to him.”

Banks added that he hopes the same will be true as Senate Democrats look to enact proposed rent reforms.

Gaining momentum

Gianaris said no one should be surprised about his stances on real estate — including his refusal to accept money from the industry in 2019 — stating that he’s always been on the side of tenants.

“I’d already introduced legislation to eliminate the [major capital improvements, or MCI] program, which many of them were unhappy with,” he noted in reference to a bill he proposed last year to end legal rent increases tied to upgrades at rent-stabilized buildings. That bill is now in committee in the state Senate.

“The relationship at best was cordial,” Gianaris said regarding his ties to real estate. “And the writing was on the wall that it was going to be less than that as time went on.”

Many are quickly getting the message and sending back their own.

Evi Angelakis, founder of the Astoria-based brokerage Golden Key Realty, wrote in a Queens Chronicle opinion piece about Amazon’s withdrawal that the state senator “should resign over his harmful and unjustified actions.”

A turning point in Gianaris’ relationship with the real estate industry came earlier this year when he was promoted to deputy majority speaker for the Senate Democrats, the highest position so far in his career. He said he wanted to take a stand for tenants and be crystal clear that no one would interfere with his decision-making on expiring rent laws.

Gianaris said lessons from his fight with Con Edison, as well as a showdown with the airline industry over passenger protections that later became federal law, taught him about strategy.

“These big interests operate out of the same playbook,” he said, citing Amazon’s mail-outs encouraging residents of Queens to call his office and its threats to pull out of the deal. “But what they learned this week is that they’re not bigger than New York.”

The state senator’s now turning to other political issues, including criminal justice reform and efforts to fix the MTA.

He said he wants to “peel apart” what went wrong with the Amazon deal and create a cross-state agreement to stop the practice of corporate subsidies. He’s also looking to examine legislation around the Opportunity Zones program and tackle what he calls “insider trading” in real estate.

One of the biggest and most complex legislative packages Gianaris supports — and one that’s highly contentious for landlords and other real estate players — is comprehensive rent reform.

On top of proposing legislation to get rid of the MCI provision, the state senator has backed bills aimed at reforming preferential rents and ending vacancy decontrol, both of which New York landlords have long resisted.

“The complete elimination of MCIs would be catastrophic to the industry,” Jay Martin, of the Community Housing Improvement Program, a landlord lobbying group, told TRD in January.

But Gianaris dismissed the idea that New York’s real estate industry should worry about his political aims.

“Worry about what?” he said with a laugh. “They are some of the richest people on earth.”

 

Correction: An earlier version of this story misstated that Politico called Gianaris “REBNY’s new favorite senator” in 2016. Politico, in fact, was referring to Sen. Todd Kaminsky.