The members of the politically motivated group have been in a pre-trial detention center since March after a guerrilla performance inside the Cathedral of Christ the Saviour in which they were only able to execute a 40 second rendition of their song "Our Lady, Chase Putin Out" before getting escorted out by security guards. The women could be facing a three-year prison sentence for "hooliganism motivated by religious hatred." Pussy Riot adamantly denies any malice to Catholicism; they maintain they were only making an artistic political statement. Over the past month, support for Pussy Riot has poured in from the likes of Madonna, Paul McCartney and the Red Hot Chili Peppers. Peaches has released a tribute song, all proceeds will go to the band's legal fees.

Karen Finley, performance artist and one of the most animated readers of the night gave The Observer her stance on the trial: "There's a history of the church being a place for prayer but also for speaking one's mind. Yes, we're using these larger-than-life statements, but that's part of the art and the expression."

Ms. Finley—no stranger to controversy, as she has often been criticized and indicted for her own art—explained why she felt such a connection to the girls in a Moscow prison cell: "Pussy Riot was influenced so much by Bikini Kill, and Kathleen Hanna [lead singer and front woman for Bikini Kill], tells me I influenced her, so I feel responsible in a certain way."

Ace Hotel's Liberty Hall was donated out to head organizers Robert Lieber and J.D. Samson (a member of Riot Grrrl band Le Tigre) for the evening. Ms. Samson told The Observer that she had started organizing a giant show in Moscow in support of Pussy Riot, but after the trial started moving faster than predicted, she decided to do something here in New York to show her support.  "We were planning to do a show, and then Rob and I were discussing these wonderful statements the women had made in trial, and he said, 'What about these words? Shouldn't they be read somewhere?' And that was that."

"I sent out all these emails—only last Saturday—and all these friends of mine came out to support," Ms. Samson added.

Amongst Ms. Samson's friends was the actress and ultimate hipster Ms. Sevigny, who read a letter that Maria Alyekhina sent from prison.

"I got threatened to get transferred to a disciplinary cell for not making up my bed properly today. Here in pre-trial center, nobody knows what a duvet case is, just like in Europe, but everybody knows you're a criminal and here for a good reason," Ms. Sevigny read, looking ironically innocent in a white dress and a blonde bob.

"I had no idea that they were such intellectuals," Johanna Fateman, member of Le Tigre told The Observer after her reading of the closing statement of Ms. Samutsevich. "They could come off almost like a prank—which is part of it—but they truly are so much more."

Although Ms. Fateman said she wanted to be an optimist, she assumed that the girls would most likely be found guilty. "It's more just a question of how long the sentence will be," she added.

Other readers last night were Justin Vivian Bond, Masha Gessen and poet Eileen Myles, who told The Observer that the poems that she read by Ms. Alyekhina, "really spoke to me."

No matter how the verdict shapes up (it is expected to be delivered this morning), a protest, march and rally are all scheduled in New York. Although there were talks on Pussy Riot's Facebook page of suiting up in the band's trademark neon balaclavas for the protest, Daphne Carr, an organizer of the day's events, warned participants last night that this would be civil disobedience. New York has an obscure "anti-mask law" that prevents three or more people wearing face coverings without a permit, an offense that several Occupy Wall Street protesters were charged with and that could land Pussy Riot supporters in jail. Ms. Carr offered up some alternatives.

"Paint your face to look like a balaclava. Write 'this is my balaclava' on your face. Or take one of these," she said while holding up a sheet of paper with a black and white image of a balaclava.

Catch the crowd wearing those modified balaclavas on Madison Avenue around noon today.

Mr. Pinsky

Imagine, if you will, the landscape of New York City 15 years hence. A drive to Citi Field in Willets Point takes you past a pleasant if overpriced cluster of residential buildings, rather than seedy chop-shops. Roosevelt Island is home to a sprawling $2 billion applied-sciences campus spinning out an army of developers to populate ping-pong-table-clad start-up clusters from Dumbo to Union Square. On Manhattan’s far West Side, the rezoned stretch of Hudson Yards offers millions of square feet for office space, housing and retail and 14 acres of open public space. You can already see traces of a more built-up, scrubbed-down New York in Luna Park’s freshly-painted Scream Zone, the first new roller-coasters Coney Island has seen in 80 years, and the rapidly-metastasizing arena at Atlantic Yards, which will soon play home court to the rebranded Brooklyn Nets.

It’s hardly a scenario Seth Pinsky could have imagined in September 2008, when Lehman Brothers collapsed just seven months into his tenure as president of the New York City Economic Development Corporation (EDC), a not-for-profit arm of the Mayor's office charged with fostering economic growth across the five boroughs.

At the time, Mr. Pinsky was a 36-year-old former lawyer and investment analyst, only a few years removed from a private sector gig refinancing real estate deals for the big banks as an associate at Cleary Gottlieb. He had one big win under his belt—jump-starting the World Trade Center redevelopment project—but he didn’t have “a political bone in his body,” as one insider put it. “People kept saying to me, ‘Wow, you’re the head of the Economic Development Corporation? We’re in an economic meltdown!’’ Mr. Pinsky told The Observer.

“At the time it meant, ‘You must be really crazy.’”

Under Mr. Pinsky’s leadership, however, observers say the EDC has transformed itself from a real estate matchmaker for companies seeking office space into a policy-setting organization, spearheading diversification away from the finance, insurance, real estate economy (also known by the unofficial acronym, FIRE, which had rarely seemed more apt). Thanks to what one former employee called Mr. Pinsky’s “savant”-like facility with financing and structuring deals, a number of projects first proposed in the ambitious early years of the Bloomberg administration have begun making real progress. Some of the projects, like Willets Point, have “bedeviled administrations for decades,” noted Mr. Pinsky. And then there’s the EDC’s ultimate sleight of hand: convincing Cornell and Stanford to engage in a bitter rivalry to build a $2 billion tech campus, all by waving a $100 million grant and a swath of land on a sleepy East River isle.

All told, these projects will be the tent poles on which Mayor Bloomberg hangs the legacy of his 12 years in office. As careful chroniclers of the Bloomberg administration note, many of these large-scale development projects were first pitched by former deputy mayor for economic development Daniel Doctoroff as part of his grandiose PlaNYC bid for the 2012 Olympics, which drew comparisons to Robert Moses at the time, but didn’t come to fruition in the six years before he was tapped to lead Bloomberg LP.

“Dan in many ways set the agenda, set the vision,” said Robert Lieber, Mr. Doctoroff’s successor as deputy mayor. “And then Seth has been, in no small part, responsible for the execution and getting stuff done.”

In fact, Mr. Pinsky was a protégée of Mr. Doctoroff—part of a group of promising young civil servants he cultivated, which included Department of Transportation commissioner Janette Sadik-Khan, Housing Preservation and Development commissioner Mathew Wambua, Andrew Kimball, head of the Brooklyn Navy Yard, and Mr. Pinsky’s wife, Angela Pinsky (née Sung), now a senior vice president at the Real Estate Board of New York.

Mr. Pinsky’s successes have not come easily. Over the years, he has acquired a reputation in the city’s development community as a fearsome negotiator. Detractors complain about overzealous demands. “There’s a widespread belief that Seth tries to get every friggin’ nickel off ya,” said one source. You wouldn’t know it by looking at him. Narrowly built with a long face, Mr. Pinsky gives off something like a young Woody Allen vibe.

“When one says ‘tough guy,’ it’s not like he’s threatening or anything,” said James Whelan, senior vice president of public affairs for the Real Estate Board of New York, who worked under Mr. Doctoroff at the time. “He’s quite affable, nice guy and everything. Analytically, he's brilliant.”

“His personality can be a little grating on people sometimes,” noted Mr. Lieber. “He’s very picky and argumentative, but I think that has evolved as he’s been there.”

“There are no permanent obstacles with Seth,” said Mr. Doctoroff. Mr. Lieber put it more bluntly: “He wears the other guy out.”

Some blame that stance for the chaotic denouement of the tech campus competition. “There’s a line that Stanford left because Seth was too difficult to deal with,” the source said. Those privy to negotiations say Stanford was taken aback by the binding legal penalties involving factors outside of their control.

“I’m not sure anyone really knows what happened there,” Mr. Pinsky said. “I think developers are used to dealing with cities that just write a check and say, ‘Will you just swear on a Bible that you’ll do this?’”

Meanwhile, community advocates and urban planners decry the EDC’s corporate structure and lack of transparency. “They pass for being a government agency, and in fact they have more power than many of the line agencies under the mayor,” said Tom Angotti, director of the Center for Community Planning and Development at Hunter College and the author of New York for Sale, who noted that by the time neighborhoods are consulted, the EDC has typically already made up its mind.

“If [closing deals] is the only criterion, he’s been a success. But for me that’s not the only criteria, nor should it be for the public. The question is what’s the quality of the deals,” added Mr. Angotti, a technical advisor to the alternative plans for the arena at Atlantic Yards. He cited the Brooklyn stadium as an example of selecting a more suburbanized approach over a plan that would benefit locals. “It divides three neighborhoods instead of uniting them and it just creates another giant super block in the middle of Brooklyn."

*

“When I was in middle school I used to design cities,” Mr. Pinsky told The Observer. We were sitting down for lunch at the Stone Street Tavern, an old-school City Hall favorite, with shamrocks on the menu and Louie Prima in high rotation.

“I had a city that I designed on four big pieces of tag board, where I kind of mapped everything out,” he explained, removing his ’50s-style Browline glasses. The elaborate maps used color coding to show the business district, the residential districts, subway lines. “I made up the companies that were based there,” Mr. Pinsky added of his pre-SimCity urban dreamscapes.

Zoning fantasies don’t often rank among a 13-year-old boy’s after-school activities, but Mr. Pinsky, who tucked his diamond-patterned purple tie into his dress shirt once the food arrived, comes across as a guy who, even as a kid, was more comfortable around adults.

Which isn’t to say he’s without his youthful indulgences. “I have—this is an embarrassing admission—I eat American cheese almost every day,” he said admiringly of The Observer’s grilled cheese. “I actually think I’ve had American cheese for one meal almost every day since I was about six-years-old.” The routine involves some bread and often a condiment. “Not mayo, Miracle Whip. Big difference,” he elaborated.

Mr. Pinsky grew up in the suburbs of New York until he was 10, when his father, a Reform rabbi, moved the family to Minnesota. “I like to tell people I grew up in the New York area and I just lived in Minnesota,” he said. “I was fully formed by the time I moved there.”

After earning a history degree from Columbia, Mr. Pinsky took a job as a financial analyst in M&A at Wolfensohn Inc., the investment firm launched by former World Bank president James Wolfensohn, albeit with some reservations. He made a bargain with himself to take the LSATs to decrease the likelihood of “going into finance for the rest of my life.”

From there he went on to Harvard Law, eventually working as an associate at Cleary Gottlieb, where partners, aware of interest in New York, would try to steer local cases his way. The company’s office was at 1 Liberty Plaza, but the day the towers fell, Mr. Pinsky happened to be on a business trip in Washington, D.C. Months later, when employees were allowed back in the building, he would monitor the recovery and cleanup efforts, watching as workers searched for remains and stopped to salute as bodies were driven out of the site covered in an American flag.

As he gazed out from his office window, Mr. Pinsky thought, “If I’m ever going to do it, now is the time.”

On paper, Mr. Pinsky’s résumé doesn’t necessarily read like that of a closer. Indeed, his ascent still mystifies some City Hall insiders. One former official sent us snippets of Mr. Pinsky’s bio via instant message. “Like WTF,” the source commented, still baffled by Mr. Pinsky’s appointment. “There are 500 people in the NYC McKinsey office with more experience than that.”

After he was hired “sort of into the bowels of EDC,” as Mr. Doctoroff put it, Mr. Pinsky distinguished himself with uncommon financial prowess. “You know, in city government there is not a wide range of those sort of skills that are available, particularly when you’re dealing with commercial parties on the other side,” he said. In other words, you can’t go up against Larry Silverstein with a bleeding-heart nonprofit type. Thus, Mr. Doctoroff decided to appoint Mr. Pinsky the “quarterback” of WTC negotiations launched in 2005.

WTC site in 2006 (inset) and 2012.

“Seth was instrumental in helping break that Rubik’s Cube of what it was Larry really wanted,” Mr. Lieber recalled. The city offered Mr. Silverstein an ultimatum: Take $300 million for his interest in the site or sign an alternative deal that offered financing with Liberty Bonds while allowing the Port Authority to take back the Freedom Tower. The offer involved intense backroom finagling with Governor George Pataki and Port Authority chairman Anthony Coscia.

“Not a lot of people have ever focused on that deal,” said Mr. Doctoroff, but it “essentially unlocked the site and allowed it move forward, and Seth really did a lot of the work.”

Mr. Pinsky described his approach to dealmaking as “empathetic”—trying to get into the other party’s head. “I think most people would probably not agree with that,” he admitted. “But I mean it in a very specific way.”

After the WTC deal, Mr. Doctoroff said he saw to it that Mr. Pinsky was promoted to head the EDC’s Real Estate Transactional Group. He was tapped to lead the EDC in 2008.

When the housing bubble started to collapse, Mr. Pinsky was on vacation in Uzbekistan (hardly an unusual choice for someone who picked Sudan and Egypt as his honeymoon spot), keeping up with the news on his BlackBerry. Layoffs in FIRE were imminent, and the city needed to figure out a way to counter the loss.

Sometime that winter, Mr. Pinsky took a walk around Brooklyn and ended up in East New York. “Again, it’s a little bit embarrassing to admit, but what hit me was that we’re called ‘the Economic Development Corporation,’ but what we really are is the ‘real estate development corporation.’ And we really didn’t do that much with the underlying economy itself.” Spending months luring a company to Lower Manhattan with an incentive package to secure just 300 jobs wouldn't cut it.

Earlier that year, Mr. Pinsky had brought in more “strategically minded” hires from the private sector. “Nobody really knew what do with them and I’m not sure they knew what to do with themselves,” he recalled. That group became the Center for Economic Transformation, tasked with reaching out to individual industries, like the tech community—an approach that’s garnered copycat interest from London to Austin.

Mr. Doctoroff pointed out that the EDC has been behind big strides toward diversification before. Under interim president Andy Alper, for example, the EDC helped bring about the Alexandria Center for Life Sciences. There was also an effort to incentivize the film and television industries to shoot in New York.

Mr. Doctoroff characterized initiatives toward growing the tech sector as an unprecedented shift. “We really are on the cusp of a paradigm change. We can gain extraordinary leverage at a unique moment.”

Sources close to Mr. Pinsky insist he has no interest in parlaying his newfound visibility into public office, predicting instead a policy-related track in the real estate field. “I don’t like politics,” Mr. Pinsky concurred. “That’s not my thing.”

In the meantime, however, there’s a lot of work to be done before the mayor’s third term ends next year. “He has a countdown clock in the bullpen,” Mr. Pinsky said. “We’re all very conscious of the deadline. I don’t think he likes unfinished business.”

-ntiku@observer.com

“I work on a lot of the same issues,” said Ms. Pinsky, who married Economic Development Corporation head Seth Pinsky last summer. “The thing about the real estate industry, it’s very civic minded. Many owners are family businesses and there’s this strong tradition in the industry of wanting projects and policies that are best not just for the industry’s own interests, but for the entire city.

Angela Pinsky. (Photo by Kiki Conway)

Landlords know that their success and the health of their investments depend on the health of the city as a whole.”

Ms. Pinsky joined the mayor’s office during the heady first years of the Bloomberg administration, a period of sweeping vision, and bore witness firsthand to how real estate could provide government with the levers for urban change.

Starting as then-Deputy Mayor Dan Doctoroff’s chief of staff, one of the first projects she worked on was the rezoning of the Williamsburg and Greenpoint neighborhoods in Brooklyn, a process that would eventually allow a wave of residential development to sprout in the area. The neighborhood’s potential wasn’t as easy to see then. Ms. Pinsky lived in Williamsburg at the time, near the waterfront, an area that was a forlorn stretch of derelict-looking industrial buildings.

“If you didn’t get dinner by 6:00 you weren’t going to eat that night,” Ms. Pinsky said. “It’s hard to believe looking at the neighborhood today, but there weren’t grocery stores or restaurants back then.”

The area was already gaining momentum as a place for artists and hipsters and for its proximity to Manhattan. The rezoning, though, kicked that transformation into high gear and made the neighborhood the magnet for living, culture and nightlife that it is today. The project was just one of many seeds of revitalization that the administration sought to plant around the city, a bold agenda that galvanized Mrs. Pinsky’s view of real estate as a tonic that could cure the city’s ills.

“I worked on the Olympic bid and PlaNYC,” Ms. Pinsky said. “There was the feeling that you were never doing enough.”

Mayor Bloomberg arranged the office in City Hall as a large bullpen with everyone sitting at open workstations. His was, and still is, at the center of the room. Ms. Pinsky sat near the periphery, but the layout avoided isolation and permitted everyone in the room to feel within the fold of the office’s work.

“You could hear what the mayor was talking about on the phone and you always had an awareness of what was going on,” Ms. Pinsky said. “There were no silos. That was one of the great things about the administration—it was transparent.”

She remembers Mayor Bloomberg as having a photographic memory and a talent with data. “Numbers are part of his body,” Ms. Pinsky said. “But he was also very instinctual. The mayor would do the research and then trust his gut.”

Mr. Doctoroff, who left city government in 2007 to become the chief executive of Mayor Bloomberg’s financial information company, Bloomberg LP, was more analytical. “Dan wanted analyses down to the penny and he would ask you little details to see if you knew about a project inside and out,” Ms. Pinsky said.

Ms. Pinsky grew close with Mr. Doctoroff. She said he still checks in on her. “I had a very strong attachment to Dan,” Ms. Pinsky said. “I was young and had a lot to learn. I was timid. Working in that situation makes you learn about decision-making. I grew up a lot in that role. Dan still calls all of us. He’s very protective.”

Mrs. Pinsky stayed on when Mr. Doctoroff left, maintaining her position as a chief staffer for Bob Lieber, a former Lehman Brothers executive who was hired as Mr. Doctoroff’s successor in the role of deputy mayor of economic development. Mr. Lieber was less of a visionary than Mr. Doctoroff, according to Ms. Pinsky, but had a clear talent for negotiating deals, skills that Ms. Pinsky would also soon come to appreciate.

One of the first issues they handled together was what to do with Off Track Betting. The parlors were oozing red ink, Ms. Pinsky said, largely because the city and state took money out of its total revenue rather than its profits. “OTB expenses were rising and there was nothing to compensate it for that,” Ms. Pinsky said.

Mr. Lieber helped devise a solution in which the city and state would share a cut of OTB’s profits only, an approach that would pad its bottom line. He worked hard to align various interests in the state that would permit the idea to be implemented. But the negotiations bogged down and eventually he retreated, arranging a deal that would allow the state to take control of the organization. A year later, it was shuttered.

Mr. Lieber’s efforts had paid off in one sense; the city was no longer on the hook for OTB’s $500 million of pension and other liabilities. Still, it was demoralizing to see how such a common-sense solution could meet defeat when OTB’s inevitable demise had been so widely predicted.

By the spring of 2010, with the economy and government-spurred developed in slow gear due to the recession, Ms. Pinsky was ready for change. Mr. Lieber had left office to return to the private sector, taking a job at C3 Capital Partners. She soon got her own chance to switch over as well. “Mike Slattery, an executive at REBNY, called me in,” Ms. Pinsky said. “I wasn’t expecting it but they had an opening.”

For REBNY, Ms. Pinsky was a hugely attractive hire, as she had not only valuable connections in city government, but also a close feel for how it works. Having staff with Ms. Pinsky’s skill set and experience has been essential for the city’s real estate industry, whose health depends not just on economic winds but as much on the burdens and restrictions that government places on it too.

In recent months Ms. Pinsky has been working on a range of issues. Taxes on carried interest, an investment structure typically employed by hedge funds but also by some real estate partnerships, will likely be raised from the current capital gains rate. Ms. Pinsky and other lobbyists hope to segregate real estate from the issue, which has been focused at increasing taxes specifically for investment funds.

The outcome of their efforts could have a profound effect on how ownership structures are arranged in the real estate business. Closer to home, the City Council is grappling with whether to pass living-wage legislation, a regulation hotly opposed by the city’s real estate industry. The requirement primarily affects retail tenants, forcing them to pay higher wages to employees in buildings that receive city subsidies or incentives.

The issue is what brought down a bid by the Related Companies to redevelop the Kingsbridge Armory in 2009, when Bronx Borough President Ruben Diaz backed instituting requirements that would have forced Related’s tenants in the project to pay the higher wage rate.

“Related couldn’t build under that requirement,” Ms. Pinsky said. “Retailers aren’t going to go to a building if they can get space across the street that’s cheaper. And developers know that and they’re not going to build if they can’t be as competitive.”

Ms. Pinsky, née Sung, got married to Seth Pinsky last summer. At least on the surface, the marriage seems like a well-suited match. Mr. Pinsky is the head of the city’s Economic Development Corporation, the pseudo government agency that the mayor’s office uses as one of its primary arms of economic development. Mrs. Pinsky said that she and her husband are actually quite different. “It really was a case of opposites attracting,” Mrs. Pinsky said. “I like dance music, he listens to nothing but classical. I’m very social and he tends to be more introverted.”

While Mrs. Pinsky would have preferred a getaway like Hawaii for their honeymoon, Mr. Pinsky chose the Sudan and then Egypt. Mr. Pinsky prefers exotic, out-of-the-way destinations that sometimes verge on risky. He was days away from visiting North Korea before the government there canceled his papers permitting entry. He went to Iran earlier in their relationship without Mrs. Pinsky.

“We had a safe word,” Mrs. Pinsky remembers. “Waffles. If he got captured and said that, I knew to send the U.S. government.”

The travel, especially in former Soviet countries, an area that fascinates Mr. Pinsky, has afforded her a perspective on infrastructure here.

“You can compare what they have in other cities and see where it has gone right and wrong and, also, what we do that is right and wrong,” Mrs. Pinsky said. “I still want to go to Hawaii.”

DGeiger@Observer.com

The deputy mayor for economic development since 2008, Mr. Lieber today announced he would be leaving the Bloomberg administration to work with real estate investor and former Andrew Cuomo employer Andrew Farkas, founder of one-time powerhouse firm Insignia (which later became CB Richard Ellis) and a person who had worked with Mr. Lieber in the past.

This makes him the third deputy mayor to depart in the past three months, an exodus that invites a major change in the voices surrounding the mayor. (Ed Skyler announced his departure for Citigroup in March, as did Kevin Sheekey with his move to Bloomberg LP.)

A former real estate banker at Lehman Brothers, Mr. Lieber was brought in to city government in 2007 after he helped the Bloomberg administration with an analysis on the World Trade Center, assisting city officials with their plan to restructure a financial deal at the site. He was given the post of president of the Economic Development Corporation, working a year in that job before being appointed successor to Deputy Mayor Dan Doctoroff, who left to run Bloomberg LP.

His charge was to implement the long list of projects that Mr. Doctoroff and his staff had dreamed up, with the expectation of a two-year commitment, since the mayor had yet to overhaul term  limits.

Within the real estate field, comparisons still abound between Mr. Lieber and Mr. Doctoroff, the lead booster for the Olympic bid who had grand dreams for economic development and planning, and a hard-driving driving style that often drew detractors. To be certain, Mr. Lieber did not assume the high-profile character of Mr. Doctoroff, and was known for a more relaxed and less aggressive style when dealing with elected officials or neighborhood groups—an approach that elected officials generally seemed to appreciate. And in the end, he did get major development plans through the City Council, such as Coney Island and Willets Point in Queens (the exception was the Kingsbridge Armory in the Bronx, for which the administration suffered a defeat when living wage came to dominate the issue).

THE FREQUENT COMPLAINTS about Mr. Lieber, including from some on his staff, was that he lacked vision, sticking to what was already on the agenda and not pushing the envelope to deviate from it. Still, he was handed a plate of projects that was probably far more than any administration could realistically take on at once, particularly as budgets shrunk and complexities became apparent.

He leaves behind an economic development direction that was still quite focused on real estate development, particularly on two major development projects that have grown in cost, and that arguably seem more complex and distant in terms of reality than when they were first proposed. Coney Island, for which the Bloomberg administration negotiated a favorable deal to buy property from an intransigent private landlord, appears to need hundreds of millions in infrastructure work before any significant housing or commercial development can occur. And Willets Point—which at one point city officials said they intended to bid out to developers before the end 2009—is gradually moving forward but has been slowed significantly by the market.

Some efforts were made to diversify the economic development agenda beyond real estate—the EDC launched notable media, finance and fashion-related programs, and has shown more interest in a working waterfront—but the emphasis is still on development projects.

In one of his more bold moves since coming in, Mr. Lieber recently has focused on pushing the state out of shared city/state assets and development projects, and has helped negotiate deals to take control of Governors Island and Brooklyn Bridge Park. He has also recently focused on taking over Battery Park City, highlighting the economic benefits to the city, however the political complexities of such a move are not yet clear.

ebrown@observer.com

Mr. Ciampa will take a job as a senior vice president for government affairs at Madison Square Garden, a mayoral spokesman confirmed, a company that was recently spun off from Dolan family-owned Cablevision to become its own entity.

Mr. Ciampa became a key figure on the economic development and land-use fronts in the last two years of the second Bloomberg administration, coordinating often-contentious political efforts to win City Council approval of rezonings such as Coney Island, Willets Point and the West Side rail yards.

Between Mr. Ciampa and Mr. Lieber, the style of the administration has been noticably more conciliatory than that of the more forceful Deputy Mayor Dan Doctoroff, who left in early 2008.

Mr. Ciampa also was on hand when the Bloomberg administration suffered an embarrassing defeat over a planned mall for the Kingsbridge Armory in the Bronx, which was voted down after the developer and administration failed to meet a demand to guarantee wages of at least $10 an hour inside. Local Council members have since blamed the administration for putting out a compromise plan on the issue of living wage before later retracting it, saying a deal was near.

Mr. Ciampa will presumably work under former Giuliani Deputy Mayor Joe Lhota, previously a Cablevision executive who last month was named MSG's executive vice president overseeing government relations. The Garden always seems to have some business before the city, and just a few years back it went to war with the Bloomberg administration over the mayor's proposal to put a stadium on the West Side. There's also a perennial movement to strip the facility of its unique property tax break (worth more than $10 annually), which was awarded in 1982 when the owners threatened to move the Knicks out of town.

ebrown@observer.com

“You’re basically saying that the city is going to subsidize a project that basically is going to have jobs that are not even committed to paying the minimum poverty level,” said Councilman Robert Jackson, one of at least seven consecutive members to bring up the wage issue.

This all came as very welcome, if not unexpected, news to Stuart Appelbaum, the politically connected president of the Retail, Wholesale and Department Store Union, who has been relentlessly pushing the Council on the living-wage issue.

“I was pleased with every single one of the members of the committee who were there today,” he said. “The city is putting so many resources into the armory that I think we have the right to ask for something specific in return.”

Recession be damned. New construction may be scarce in New York, but now many a union is viewing the present as a prime time to win new labor concessions at economic development projects overseen by the city, raising wages and opening the door for easier union organizing.

A collection of unions has been ratcheting up pressure in the past few years on a resistant Bloomberg administration over development issues, extracting concessions on individual large-scale projects such as Willets Point in Queens. Given the help, both organizational and financial, that they provided this past election season, labor leaders hope the political scene is ripe for spreading the policies they’ve been pushing. After all, unions and the labor-heavy Working Families Party won numerous victories in Council races this past fall, and the two citywide office winners other than the mayor, John Liu as public advocate and Bill de Blasio as city comptroller, were both backed by many unions.

THIS GOES WELL beyond the Kingsbridge Armory.

On Monday, a bill was introduced in the Council, pushed by the building service workers union SEIU 32BJ, that would require nearly every economic development project receiving city subsidies to guarantee prevailing wages—typically well above minimum wage—for the service employees. The hotel workers’ union, which backed Mayor Bloomberg, as well as Messrs. Liu and de Blasio and the majority of new council members, has been pushing to require Council approval on new hotel development, an area the union presumably wants to continue and expand.

For the labor initiatives, the rhetoric is similarly caustic, ridiculing policies that give subsidies without wage guarantees. “Tax dollars shouldn’t create poverty jobs,” said Mike Fishman, president of 32BJ.

“Incumbents and new members of the Council are all people we’ve had relationships with, and most of them people we’ve worked with and helped,” he said of the bill, introduced by Councilwoman Melissa Mark-Viverito. “I don’t know what the percentage will be, but I think we’ll be able to get to a majority and pass it.”

The situation at Kingsbridge is illustrative of the broader issues: Had the planned giant mall gone before the Council a few years ago, the retail workers’ union likely would not have put such considerable pressure on the council, content instead to take whatever union jobs might be created on their own as opposed to trying to kill the whole project.

(Indeed they haven’t: Numerous mall projects have been approved by the Council in recent years without living-wage guarantees, including one by the same developer in the same borough: Related’s Bronx Terminal Market.)

“We’re taking a new approach to dealing with economic development, as it relates to retail workers,” Mr. Appelbaum said.

Indeed. Mr. Appelbaum and his retail union, as well as others, are trying to get the Council to kill the Kingsbridge mall over the living wage, about $10 an hour for this project. Related says it will walk away from the project if living wage is required.

IN A SENSE, it’s surprising New York doesn’t have many of these wage restrictions already. Despite a comparatively robust labor movement locally, unions in numerous other cities—Oakland, Minneapolis, San Antonio—have been more successful in forcing laws requiring higher wages for employers that receive city subsidies.

Perhaps it’s due to New York having two successive Republican mayors, or perhaps it’s a testament to the power of the city’s real estate industry, which would surely resist such measures.

Either way, for labor, their goals remain little more than aspirations, and having a few more labor-friendly elected officials in City Hall hardly guarantees success on issues generally resisted by the Bloomberg administration and the business community.

City officials have, with varying degrees of success, pushed back against labor on wage requirements in development projects, saying such restrictions will scare away investment.

Mayor Bloomberg addressed the issue Tuesday morning, coming down against the unions in the context of Kingsbridge, saying the city “shouldn’t be” guaranteeing wages in private building.

And then there’s the issue of the economy, the fall of which has flattened development citywide. Any added burdens would change the economics of developments, meaning either that developers would need to take on more risk or seek more subsidy. Thus the real estate industry can surely be counted on to oppose any broader union push.

Particularly with regard to Kingsbridge, the living-wage issue seems to be a frustrating one for the administration, which wants to see it disappear. Speaking to reporters Tuesday, Bob Lieber, deputy mayor for economic development, became agitated after repeated questions from reporters about living wages, which followed an hour of questions from the Council. “Mandatory wage requirements,” he said bluntly, “Scare. Tenants. Away.”

ebrown@observer.com

“Even someone with a good job today is afraid to spend, because he is afraid he will not have a job a few months down the road.”

Mr. Barnett, the prolific president of development concern Extell, then offered a policy prescription for encouraging business amid what was just starting to be called the Great Recession. It was a business philosophy that sought to encourage activity rather than mere survival: a three-year extension on all current mortgages; federal subsidies for 30-year mortgages; a law forbidding firms with more than 500 employees from lay-offs they could show an urgent need. “This is just not the time to do it. A) Have a heart, b) be a patriot," he later said. "The wave of firings breeds more firings, and more firings, and we could spiral into an extremely serious depression."

“It really was just one man’s opinion, so to speak,” Mr. Barnett told The Observer on Monday evening, by cell phone. “We’re seeing it from the real estate side, the banking side, from the housing side. So we had a decent perspective from which to form an opinion.

“I’ve gotten calls on it, but I don’t see anyone doing it,” continued Mr. Barnett, before launching into a critique of the current federal stimulus plan.  

The man is himself something of a stimulus plan for New York City’s catatonic development market.

“He’s probably the biggest developer right now in New York,” said Eric Michael Anton, an investment sales broker at Eastern Consolidated, who has worked with Mr. Barnett in the past.

Or, as Deputy Mayor Robert Lieber put it, “You can see Gary’s fingerprints all over the city in what has been done and will be done.”

Much has been done: The 37-story Ariel East and 31-story Ariel West condos at 100th Street and Broadway, which prompted the creation of groups like Stop Extell and Westsiders for Responsible Development, and spurred the city to downzone a chunk of the Upper West Side; the Ariels are nearly all sold and carry no debt, Mr. Barnett said. There are also the Lucida condos on East 85th Street; the sold-out Orion at 350 West 42nd Street; and the Avery at 100 Riverside Boulevard, among others.

What will be done: Quite a lot, something all the more striking given the anemic real estate financing market; the skittishness of Mr. Barnett’s peers; and the nature of some of Extell’s developments in the pipeline – office towers, hotels – which clearly fall outside Mr. Barnett’s residential comfort zone.

These include industry-specific giants like the $750 million, 750,000-square-foot Gem Tower at 50 West 47th Street; and the 1.5 million-square-foot World Product Centre at 555 West 33rd Street, the site of the old Copacabana.

Also, in the four months leading up to the city’s new building code, instituted on July 1, Mr. Barnett filed plans for no fewer than six projects totaling 1.45 million square feet, including an 830,000-square-foot, Costas Kondylis-designed tower for 157 West 57th Street; a 13-story, 54-unit residential building at 147 West 21st Street; an 18-story, 58-unit building at 225 West 85th Street; a 29-story hotel at 112 West 25th Street, the site of the Antiques Garage flea market; a 24-story, 175-unit hotel at 30 West 46th Street; and a 35-story hotel at 68 Charlton Street, between Hudson and Varick.

“We’re not going ahead with every single project yet,” Mr. Barnett said Monday. “But we think hotels are going to come back first when the cycle starts again, because New York is still New York.”

UNLIKE MANY OF HIS big real estate peers, Mr. Barnett does not come from a real estate background. Born in New York City, he began his career in Antwerp trading diamonds, according to a report filed by New York’s Office of the Inspector General in 2007, related to Mr. Barnett’s bid to operate the racetracks at Aqueduct, Belmont and Saratoga.

Given the diamond industry’s reputation for all manner of savagery in Africa, one has to wonder how Mr. Barnett, an apparently civic-minded guy, overcame his moral qualms.

“If you look back at that time, Africa wasn’t going through the same turmoil; it was much more stable, much less bloodshed,” Mr. Barnett said. “Some of the diamonds in some of these countries, like Zaire and Congo and Liberia and Sierra Leone, probably could be called blood diamonds. But anything we had to do with it then was not involved at all in that kind of stuff. ... If you were giving a diamond to someone you love, you would want to make sure it was not the cause of bloodshed or someone’s harm.”

In the early 1990s, Mr. Barnett began to make U.S. real estate purchases, says the report, though he didn’t move full-time to the country until around 1995, a year after he and partners purchased the Belnord apartment house.

In 1995, Extell was first incorporated as Diamond Heritage Properties. In 1998, it changed its name to Intell Management and Investment Company. After Intel, the tech company, sued him, Mr. Barnett renamed his firm Extell. The report defined Mr. Barnett as the “sole owner” of a firm that in 1998, “sold properties totaling approximately 3.5 million square feet...”—less than a decade after he began his U.S. real estate spree.

This pace has led many to label Mr. Barnett’s American—and, more specifically, New York—rise as meteoric, but he has an exceedingly methodical approach to the business.

“He does his homework, and he does his homework well,” said Marc Shaw, a former deputy mayor who for the Bloomberg administration who worked for Mr. Barnett for nearly three years. “The fact that some of the best parcels he has are on 57th Street in Manhattan, that allow him to build as-of-right buildings, with views of Central Park… that took a lot of foresight.”

Mr. Barnett puts it another way. “I find that when we make mistakes, it was when we weren’t methodical enough.”

METHOD EXTENDS TO THE developer’s private life.

Before speaking with The Observer, his assistant called to warn that Mr. Barnett would not be answering personal questions. Indeed, he declined to confirm his age (early 50s supposedly); his borough of residence (reportedly Queens); or the size of his family (quite large, it’s understood).

“This is not about me,” Mr. Barnett said later. “Some people have big egos and it’s all about them; and they like that. I don’t care about that. That’s not what I’m about. ...Private is private.”

At least one facet of his life is public knowledge, however. Extell seems to virtually shut down during every Jewish holiday, no matter how obscure. “He’s obviously a very serious, observant Jew who takes that part of his life enormously seriously,” Mr. Shaw said. “That’s where he also gets all of his satisfaction.

“His job as a real estate developer is just to make money,” he added. “It’s not to play in the ego world of New York real estate.”

Mr. Barnett later agreed—to an extent.

“It’s not only about making money,” Mr. Barnett said. “Certainly, that’s what real estate people are interested in, but I do get a tremendous amount of joy and satisfaction from putting together a project, all the different pieces.” He compared it to a puzzle.

And the solver, at times, has exhibited chutzpah. He once financed a small landowner’s lawsuit against the state over its use of eminent domain to build The New York Times building. And he bid against Bruce Ratner for the rights to Atlantic Yards, even though it was accepted wisdom that Mr. Ratner was going to win.  

Now, through his frenetic investing amid the Great Recession, Mr. Barnett is taking one big gamble—perhaps of a professional lifetime —on the resurgence of New York real estate, particularly commercial.

He does not yet have construction financing for either the Gem Tower or the World Product Centre, which he is developing with Israel Green and the Greater New York Hospital Association. He and his partners are reportedly investing as much as $175 million in the Gem Tower, including the building of its three basement floors, which began last year and is to be completed by the end of 2009. Once they sell most of the industrial condos, Mr. Barnett’s staff has said it should be able to attain a construction loan.

“The one thing that Gary is doing that is somewhat unique as compared to others is that he is beginning construction in this market when there is no real construction financing available,” Mr. Lieber, the deputy mayor, said.

Mr. Barnett will not try to get a construction loan for the World Product Centre until about one-third of the exhibition space (which comprises about half of the building) is pre-sold. “We think we’re right on target,” said Michael Resnick, executive vice president of the World Product Centre. “We’ve announced the 11 [licensees], and we plan to announce more in the near future.” Mr. Resnick expects excavation to begin in November, and construction to be completed in 2013.

DESPITE THE ENORMOUS RISKS involved, there’s some question whether such towers are needed for the respective industries, diamond and medical. “In today’s atmosphere, I think it would be pretty difficult to bring in new people from Europe,” said Kenneth Kahn, a Diamond District landlord who has opposed the Gem Tower. “People are not moving around. A lot of people are concerned. The whole industry is on edge.”

So, too, is the healthcare industry, which is awaiting the fallout of President Obama’s health care plan, and which, according to some industry experts, isn’t in any particular need of a 1.5 million-square-foot, New York-based merchandise-and-education mart.

“My impression of the way that people buy products in this field is that they learn about them through colleagues or at meetings where people who develop products present or go to places and see them work,” said Jeff Goldsmith, president of Health Futures Inc. and a public health science faculty member at the University of Virginia, who declared himself “a little baffled” by the project. “The crucial question is do these products work? You’re not going to find that out in a building.”

James Unland, president of the Chicago-based Health Capital Group, called the World Product Centre “a long play, but a very interesting play.”

“In this day and age, though, getting people to physically go somewhere is a lot more difficult than it used to be,” he said.

Still, Mr. Barnett’s recent moves have fans.

“Gary is one of the sharpest guys out there and he sees trends often before they happen,” said Robert Knakal, chairman of investment sales firm Massey Knakal, who sometimes works with Mr. Barnett. “You look back to when he became transparently active in the real estate business--he bought the Belnord at a time when people weren’t really looking for assets like that and it had significant issues to overcome and he took a big chance, but he saw the value in that property and that was probably one of the best acquisitions in the last 40 years.”

“He’s a bit of a visionary,” Mr. Lieber said. “He thinks outside of the box. I think he also recognizes the cycles of the market. The time to be building is when no one else is. Gary is not bound by convention.”

The elusive Mr. Barnett, age unknown and future plans deliberately vague, laughed off any such notions of superior intellect. “If I understand the market cycles, I wouldn’t have as much property as I have,” he said. “I would have sold it off.”

drubinstein@observer.com

Nowhere was this more apparent than the city’s capital budget, the decade-long plan that pays for new parks, schools, firehouses, infrastructure and economic development with $47 billion in city funds. The Bloomberg administration is proposing to shrink its capital spending by about $8 billion from an earlier version unveiled last fall, an act that, if approved by the City Council this month, will inspire a wave of cuts for new projects citywide.

But, at least in terms of economic development, two legacy real estate projects that have long been the focus of city officials—the redevelopment of Coney Island and of Willets Point in Queens—have escaped the knife entirely (and in the case of Willets Point, slightly more money was added).

This prioritization of the large and high profile offers a glimpse into the Bloomberg administration’s unabashed fervency regarding mega-development, an approach that has inspired no shortage of critics. While substantial development on these projects is likely many years off and ultimate success is hardly a given, officials argue that Coney and Willets deserve to be at the top of the list because of their potentially transformative effects in two underdeveloped areas.

In all, the city lists about $133 million in its capital budget for Coney Island and $424 million for Willets Point, which is by far the largest single economic development initiative. The entire 10-year budget calls for about $1 billion to go toward economic development over the next 10 years.

In the long list of smaller development projects, which range from industrial infrastructure to new retail centers, budget cuts were many. Varying from the preliminary budget in January, the administration scaled back or cut out investment in the Brooklyn Navy Yard, an incubator of sorts for industrial and manufacturing businesses; the Homeport mixed-use development on Staten Island; the Hunt’s Point produce market in the Bronx; and the development of Governors Island.

Most notably, the city took nearly $100 million out of the money it had set aside for a future expansion of the Javits Center, according to budget documents. Of course, the Javits money would not be needed for at least a few years anyway, as there are no firm expansion plans (earlier plans have been scrapped and the convention center is just starting a $463 million renovation). But it takes a heavy lift to put in such large sums of money—in 2006, both the city and state each committed $350 million to an expansion—and with the money removed, there is no pledge to put any of it back in at a later date.

Willets Point and Coney Island were by no means the only projects to maintain funding levels amid the cuts—some, such as the South Bronx Greenway and Long Island City streetscape improvements, received additional funds—but city officials said they indeed prioritized these two.

Seth Pinsky, president of the city’s Economic Development Corporation, which oversees much of the economic development budget, said Coney and Willets have tremendous potential to generate hefty financial returns and wholly alter neighborhoods.

“It’s these kinds of projects that I think the city and state have undertaken at their best moments,” he said. “You’re not looking for payback the next day.”

Deputy Mayor Bob Lieber, who oversees the city’s economic development efforts, said there is also a strong desire to push these larger, more difficult projects to a point of critical mass.

“You have to dig in now, and you have to remain steadfast to making the necessary investments so you can get these projects to that point of inflection,” he said.

The projects are envisioned to entail multiple billions of dollars of new investment and thousands of new apartments—by reinventing the amusement hub in the case of Coney Island, and redeveloping an undermaintained auto repair hub at Willets Point. But both are risky, if ambitious, and large-scale development in this city does not have a strong track record of success.

Still, everything comes at a cost, and at least in Mr. Lieber’s portfolio, it appears as though funding for affordable housing took more of a hit than did economic development programs.

Between last fall, when a preliminary 10-year capital plan was unveiled, and May, when a revised plan was announced, the budget for housing fell by 30 percent—or $1 billion—compared with 18 percent—$237 million—for economic development. As the city’s Independent Budget Office noted in its analysis of the mayor’s budget, funding for housing showed one of the largest decreases of any category.

This raises a host of questions about Mayor Bloomberg’s $7.5 billion affordable-housing plan, for which he once pledged to build 92,000 new low- and middle-income units and preserve 73,000 over 10 years. As the economy collapsed and the plan was already struggling to meet its new construction goals, 10 years became 11, and now with less money and a host of other factors hurting the affordable-housing industry, it’s difficult to see a scenario where the plan meets its revised goals, a priority for a mayor focused on numbers.

Mr. Lieber acknowledged that it would be difficult, and said that the city may need to shift the numbers some and put more emphasis on preservation than new construction.

“We still remain committed to the housing plan,” he said. “I think it’s going to be more difficult to achieve that same target.”

Overall, the capital budget did not undergo as large a decrease as once foreseen. Back in January, in an effort to cut back on high debt costs, the mayor proposed scaling back the 10-year plan by 30 percent. In recent years, the plan had reached tremendous spending levels, as the administration had poured about $10 billion annually into infrastructure such as new schools, water projects and economic development efforts (both mega-projects and smaller projects).

But most capital money is borrowed, and the city’s debt has reached noticeably high levels—the city has about $62 billion in outstanding debt and other obligations, an amount that is rapidly growing—at the very time that revenues are contracting, thus inspiring the cutback.

The powerful construction industry, which is now heavily reliant on public spending, pushed back against the initial cuts, as did the City Council. The end result: a decrease of about 15 percent.

ebrown@observer.com

Yes, really.

Bob Lieber, the deputy mayor for economic development and a former Lehman Brothers executive himself (he left when times were still good), was asked at a New York Building Congress forum on Tuesday morning what the Bloomberg administration was doing to look past the financial industry as the main driver of the city’s economy.

His response: “I’m very bullish about financial services."

“We’ve seen boom and bust cycles around this industry before,” he added. “Simplistically, I think the model for financial services is sound. I think the model of a publicly owned propriety trading firm taking huge bets with incredible leverage is not a good model.”

This seems to be a common line these days among city officials, who often repeat a refrain that goes something like this: downturns have hit New York many times before, and every single time, New York has rebounded, stronger than ever each time. 

This was the main focus of a speech at the start of the month by Dan Doctoroff, Mr. Lieber’s predecessor in City Hall. Now the president of Bloomberg LP (and therefore manager of much of Mayor Bloomberg’s wealth), Mr. Doctoroff compared the financial industry to a forest, filled with large trees. “Some may topple,” he said, “some may wither, but from them come dozens of new offshoots—new saplings pushing up a groundswell of new life.”

Those “saplings” are the small private capital firms that have apparently been springing up via traders who have left large financial firms.

More generally, while mayor after mayor has talked about diversifying the local economy beyond Wall Street, the sector offers a temptingly large contribution to the city’s tax base. Speaking at the Building Congress, Mr. Lieber rattled off some stats about the sector: 9 percent of the residents of New York City generated 35 percent of the payroll tax.

“It’s going to be hard to replicate that kind of revenue,” he said. “But we’re very bullish about replicating those kinds of jobs.”