Real estate players back Newsom in recall election

Brokers, developers, investors have donated $3.3M to keep governor in office, 3 times what they’ve given his opponents. Here’s a breakdown:

Los Angeles /
Jul.July 19, 2021 12:12 PM
Real estate players back Newsom in recall election
Geoff Palmer, California Building Industry Association’s Dan Dunmoyer, Relevant Group’s Grant King and John A. Pritzker have poured money into the recall election. Palmer has contributed to a Republican challenger while the other three have steered money to Newsom.  (Getty, CBIA, Relevant Group, and Geolo)

In May, California Association of Realtors gave $1.5 million to a political action committee called “Stop the Republican Recall of Governor Newsom.” In July, another $1.1 million poured into pro-Newsom efforts from California Building Industry Association, a homebuilding trade group whose members include Toll Brothers and Lennar.

In all, $3.3 million has been raised from 130 real estate developers, investors, brokers and organizations to help Gov. Gavin Newsom win in the Sept. 14 recall election, according to a Real Deal analysis of California Secretary of State contribution filings through mid-July.

The total dwarfs the $1.1 million the industry has contributed to seven Republican opponents looking to unseat Newsom, including his four main challengers. They are: real estate multimillionaires John Cox and Doug Ose, former San Diego Mayor Kevin Faulconer and Caitlyn Jenner, the Olympic gold medal-winning decathlete and more recent reality TV star.

In total, 254 individuals and companies have contributed to candidates vying to unseat the first-term Democrat. Heading that list is developer Geoff Palmer, who has given $400,000 to campaigns supporting the recall. Palmer, president of Beverly Hills-based G.H. Palmer Associates, also contributed $32,400 directly to Faulconer. Palmer was one of former President Donald Trump’s most loyal and generous supporters; his firm gave $6.4 million to candidates and committees affiliated with either Trump or Republican Party candidates and super PACs in the leadup to the November 2020 election.

In the September recall vote, Newsom is being challenged by Republicans still furious over Covid restrictions he imposed last year as the virus swept through the state. In late April, the recall effort garnered the necessary 1.5 millions signatures to trigger an election. There are 41 candidates who have met the criteria to run.

Fundraising efforts for the governor have collected a total of $29.9 million from around 7,600 contributions.

Housing ‘priority’
Building Industry Association CEO Dan Dunmoyer is among the few Newsom supporters in real estate willing to discuss the reasons. Newsom “made housing production a top priority,” Dumoyer said, adding, “he is the first governor who called it out: we need to build more homes.”

In May, Newsom signed legislation to make it easier for large housing and development projects to move through environmental reviews. And last year, he signed a slew of bills aimed at accelerating housing development and protecting tenants, including legislation to boost medium-income, moderate-density housing.

But the state’s housing crisis has only intensified during his time in office, and L.A. County alone is short 500,000 affordable rental homes, according to a recent tally.

High-profile support
And Peter Lowy, former co-CEO of California mall giant Westfield — now Unibail-Rodamco-Westfield — donated $64,800 to Newsom’s 2022 campaign.

It is the same amount developer Eli Broad and his wife Edythe donated in late April, FEC records show. Eli Broad died a week later. The Eli and Edythe Broad Foundation did not immediately respond to a request for comment.

The governor has also garnered support from the industry in San Francisco, where he served two terms as mayor. Last month, two prominent San Francisco-area landlords Thomas Coates and Tod Spieker each donated $100,000 to the Stop the Republican Recall committee that supports the governor. And the San Francisco Apartment Association also contributed $25,000 to the same committee. A request for comment was redirected to the California Apartment Association — the umbrella organization — which did not respond.

Much of the Republican-led effort to oust Newsom has been fueled by the governor’s moves to shutter hotels, offices and malls for long stretches during the pandmic, and to close off indoor dining at restaurants when Covid cases spiked.

That hasn’t stopped Flynn Properties, which owns nine office buildings in San Francisco and a luxury hotel in the Napa Valley, from donating $100,000 to the Stop the Republican Recall committee.

And Grant King, a managing partner of L.A.-based hotel developer Relevant Group, also contributed $25,000 to the same PAC.

Billionaire John A. Pritzker — a member of the Hyatt Hotels family — and his former wife Lisa donated a total $100,000 to help Newsom win in September. Pritzker sold his firm Two Roads Hospitality to Hyatt for nearly $500 million in 2018. He is a cousin of Illinois Democratic Gov. J.B. Pritzker. John Pritzker could not be reached for comment.

The opposition
On the Republican side, around 250 individuals and entities related to real estate have donated to the candidates running to unseat Newsom.

Former San Diego Mayor Kevin Faulconer is among the top contenders, and the one who has received direct financial support for the recall from Palmer. The campaign has received $270,300 in donations from individuals connected to the real estate industry, mostly in Southern California. That’s the most so far among Republican candidates.

Faulconer served as mayor from 2014 to last year, and the San Diego Association of Realtors endorsed his first run for mayor. He was criticized for several real estate purchases the city made during his term, including an office tower that required extension renovation, asbestos abatement and which also had legal issues. Another was an indoor skydiving facility that had been set to be converted into a homeless services facility until the city bought it. For his recall run, Faulconer has proposed a plan to tackle homelessness, a growing problem in the state but one the governor is pouring billions into addressing.

Cox, president of Equity Property Management — and its sole shareholder — has collected $76,800 from property developers and a Berkshire Hathaway agent in San Diego, Steven Caincross.

Ose, founder of Sacramento-based Ose Properties, appears to have just one donation from real estate: $7,100 from Sacramento-based developer Gerry Kamilos.

Jenner has received $5,500 from Westlake Village-based developer John Scardino.

Both sides have received donations from around 50 real estate brokers, but agents have contributed around three times more collectively to efforts to recall the governor.

Brokers from Cushman & Wakefield, Berkshire Hathaway, RE/MAX, JLL and smaller brokerages across California have donated over $24,000 to committees supporting the recall. Santiago Arana, a top Compass broker in L.A., donated $500 to the effort.

Brokers against the recall have donated a total of $7,070, filings show.

Eyes on 2022

Because Newsom is favored to win in September, real estate players are also looking past the election to the 2022 campaign.

The governor has raised $420,000 for his reelection campaign. The building association has already donated $35,100 to that effort. Homebuilders Lennar, Taylor Morrison, Shea Homes, Meritage Homes and Pulte Homes have each donated $32,400 to his 2022 campaign. None of the companies responded to requests for comment.

The industry has also donated $560,000 to candidates running against Newsom next year. Faulconer, who has also announced his intention to run in that election, received $32,000 from Daniel Ryan, chief investment officer of Alexandria Real Estate. Earlier this year, L.A.-based real estate investment trust Kilroy Realty donated $25,000 to Faulconer’s exploratory committee for 2022.

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