Sizing up Scott Stringer: What will new comptroller mean for NYC real estate?
“It’s been said that politics is the second oldest profession,” quipped President Ronald Reagan. “I have learned that it bears a striking resemblance to the first.” Eliot Spitzer, whose tenure as governor of New York was cut short by a 2008 prostitution scandal, was clearly familiar with both, but his attempted comeback to the political scene was nipped in the bud this week, when Manhattan Borough President Scott Stringer bested him in the race for New York City comptroller.
But while Spitzer – the scion of a real estate family with a roughly $1 billion portfolio – has close ties to the industry, there is more uncertainty about what Stringer’s win will mean for key issues such as development, rezoning and property taxes.
“The comptroller can have a significant impact on real estate development by being a watchdog,” John Liu, who is in the comptroller’s chair until the end of the year, told The Real Deal. “Scott would bring a level of pragmatism to the role.”
Though a comptroller isn’t involved in real estate decisions the way a borough president – whose recommendations carry tremendous influence over the city’s land review process – would be, Liu said that as real estate contributes such a vast amount to the city’s coffers, the city’s de facto chief financial officer plays an important role in the industry’s fate.
One of the key issues Stringer could impact in his new role would be real estate taxes, said Bob Knakal, the chairman of Massey Knakal Realty Services, through his oversight of the city’s five pension funds that collectively hold about $140 billion dollars and his role as the city’s chief auditor.
“Stringer’s TV ads said he would audit ‘every’ city agency,” Knakal said. “If so, he will be a busy guy based upon all the waste, fraud and abuse that exists. To the extent he can weed those things out, we may not need to dramatically increase real estate taxes to get additional needed revenue. If he can’t, taxes are going to skyrocket.”
Stringer declined to comment for this story. But the borough president’s stance on Madison Square Garden’s permit and the campus expansions of Columbia University and New York University show his willingness to adapt and bring people to a consensus, a member of the Stringer campaign requesting anonymity told The Real Deal.
“Look at Columbia and what he did in the Village with NYU,” Rubicon Property’s Jason Haber, a longtime Stringer supporter and fundraiser, said, echoing the campaign staffer’s statements. “Those were really contentious rezoning projects, but he was dogged. He worked with all the stakeholders from the members of the community to the boards of the schools. He really, to his credit, led a lot of those conversations.”
Stringer’s background on development projects is mixed. In March, he called for a 10-year limit on Madison Square Garden’s permit above Penn Station, citing the need to make room for future development and the need to build a bigger, more modern station. And he threw his weight behind the Bloomberg administration’s Midtown East rezoning proposal once the city agreed to include upfront funding for transit improvements.
A 2012 report commissioned by Stringer called “StartupCity” asked the city to press on with zoning for micro-units and allow for the construction of “accessory dwelling units,” extra living units on a property that are currently illegal in New York City.
But he has also spoken out against a number of projects, such as Jamestown Properties’ proposal to expand Chelsea Market. Jamestown wanted to build an eight-story, 240,000-square-foot office addition to the 10th Avenue side of the market, but Stringer told the New York Times last year that the plan “didn’t meet the standard to becoming a part of the community.”
“They have to coexist with that community, not overwhelm it,” Stringer said.
And in January 2012, Stringer expressed his strong opposition to Mayor Michael Bloomberg’s plan to sell three city-owned Lower Manhattan commercial buildings, saying that the buildings should be used for schools and affordable housing units instead.
Though during the campaign it was Spitzer who had shouted from the rooftops about expanding the role of comptroller, Liu said that it was likely that Stringer would take a similar initiative.
“As borough president [Stringer] wasn’t shy about pushing the envelope with respect to the power of his office.” Liu said. “It seems that he would do the same here.”