The Commercial Observer: Tell me about this building you’re building at 42nd and 10th.
Mr. Beal: At the end of ’07—it was a $900 million deal, we got $700 million of financing. That was all put together prior. … We built the foundation and I think then we woke up in the middle of ’08, and we said, ‘The market’s changing drastically, the cost structure doesn’t work anymore.’ Rather than just putting the blinders on, and saying it’s going to be what it’s going to be, we basically shut the job down. … We went to a nine-month process where we did everything from look at the design of the building—how do we make it more efficient to the materials—and then working with all the contractors and our design team to try to make it much more efficient, and then at the same time, obviously, we were very, I think, thoughtful and also diligent about the way we thought about the unions and the labor and the way the job was going to be built.
How much do you think you said you’ve reduced costs by?
Does it depend on the market picking up in order for it to be successful?
It’s a question of building for the future. It’s still a long construction period, like two-plus-year construction period; it’s a big building. And every single day we have to continue to work to deliver that business plan, and if things change again we’re going to have to adjust that business plan accordingly.
You’ve started a new bank. First, with the name of it: It’s SJB Bank?
So is that Stephen, Jeff and Bruce? [Stephen Ross is Related’s chairman and CEO, and Jeff Blau is its president.]
Yeah. It’s a placeholder.
What’s the purpose? That’s to buy new assets?
We’re working with the F.D.I.C., and we’re not allowed to comment on what we’re going to do. But there are opportunities that we think exist. And we’re excited to work with the F.D.I.C. We have a bank charter, and we think there’s a good business there. That’s about all we can say. … We’re principals in the bank outside of Related. … We have a separate management team that would be completely independent of Related.
At Related, is anyone else a partner? It’s just you and Jeff, and Stephen is the chairman?
Are you two the heirs apparent?
You have to ask Stephen. … I’ve been with Stephen and Jeff for 14 years. We all work great together. Stephen’s not going anywhere. We have a great team; we have a lot of great professionals up and down. We have a good plan to allow for the company to continue, and I think that was what was most important for Stephen, that the company have a legacy going forward that survived—that it could continue, it wasn’t something that was just going to end.
How’s your role differentiated from Stephen and Jeff?
I think the easier way to think of it is, all the sorts of nuts and bolts that go into getting these projects built, running sort of the day-to-day operations on the development side is really my responsibility. … I also work with the affordable-development group.
The city’s housing plan has taken a pretty big cut in terms of the budget.
We think that one of the things that has to happen is the city needs to be very aggressive, with the state, at the federal level. We have to ask and push the administration in Washington at the federal level to provide capital. The way you produce affordable housing is having capital. Without continued federal support, it’s not going to happen.