Mary Ann Tighe.

The Commercial Observer: Two years ago, you were named chair of the Real Estate Board of New York. Around the same time, you told me that, among other goals, you hoped to increase what was then a membership of 12,000. Have you achieved that goal?
Ms. Tighe: Well, actually, we’re over. I know we’re, right now, at the highest level we’ve ever been in its history. It’s over 12,000, but I don’t know the exact number. I can tell you that we’ve brought in, for example, a number of additional Class A members.

What have you learned from the experience? Has being chairwoman posed challenges?
Well, I think that I did not have a full appreciation of the complexity of REBNY’s portfolio—the diversity, the complexity of it, and the abundance of issues with which REBNY deals. And I now have an appreciation for how encyclopedic Steve Spinola’s knowledge of New York City real estate is. I also have great pride in the reshaping of the staff that happened under my chairmanship.

Besides bringing in new staff members, you also created a political director position, to which you appointed James Whalen. Why hadn’t REBNY already thought of that idea?
Mr. Spinola had done everything, and with a great staff. He has really fine people. But the idea of bringing somebody in to whom Steve could offload hadn’t occurred. We deal with the feds. And that was another important point of emphasis for me. I wanted to make sure we were playing on all fields because, increasingly, federal regulation and the state were as impactful, or potentially as impactful on the city, as New York City was. And so to cover all three playing fields, with the manpower that existed, that was impossible.

And so how is bringing in someone like Jim Whalen helpful?
Just, again, taking a look at, for example, the work that we were able to do in Albany. Jim has engaged the Committee to Save New York. They were critical in the period when we were dealing with the issues of rent stabilization and the legislation connected to that. And we were very concerned about how that was all going to shake out. We were very concerned about some of the regulations that had to do with Fannie and Freddie that said you couldn’t use financing from these entities if you had a flip tax on your property. Now, you know that’s a standard feature in many of the co-ops in the city. So we would have cut off all kinds of funding. Again, that’s a federal-level issue. So it’s in issues like that where they jumped in and were able to have an impact.

Besides playing defense, which is probably a large part of what people like Jim do at REBNY, have you been able to inject fresh thinking into the 116-year-old organization?
When I became chairman I wanted the board not only to play defense, but to also be the generator of big ideas that would help move the city forward. And there are a variety of things we’ve been focused on that are big ideas that will take many years to play out. And that’s another reason why people don’t engage the big ideas—because everybody wants to have something that’s instant gratification.

But I can tell you that I am very proud that the board has engaged the subjects of, for example, the No. 7 line. That’s Example 1. But Example 2 is relooking at Midtown zoning, raising the question with our city planning commission. Have we inadvertently frozen one of the most—in fact, not one of but the most—important business district in the city? As I phrased it when I spoke with Amanda Burden, “Are we in danger of becoming a very romantic 20th-century city because we have made it impossible to build in the 21st century in some of the key locations in the city?’
Last year, you worked on at least three of the city’s biggest and most remarkable office deals: Condé Nast, Coach and Young & Rubicam. All said, was 2011 good for you?
Yeah, 2011 was a very, very good year for our firm. It was a very, very good year for me, personally. And all is well on the personal front. So all in all, fine.

At the beginning of 2011, did you have any inkling that it would end so successfully?
I felt pretty certain we were going to do the Condé Nast deal. Let me say it slightly differently: If we were doing a Condé Nast deal, we were well underway. I had actually thought, since we signed a term sheet in August of 2010, that we would close on the deal by very late in the fourth quarter 2010.

And yet the deal at 1 World Trade Center wasn’t finalized until May. What happened?
We didn’t sign until the third or last week in May. So what happened after we signed the term sheet in August is that we had two quarters of what I call “problem identification.”

What does “problem identification” mean, exactly?
It’s just, basically, not negotiating. You’d start to negotiate, and then, “Whoa, I didn’t know we had that problem.” And, “Whoa, where did that come from?” Because remember, the World Trade Center is a unique site. And I think I had been naive about the fact that because Beijing Vantone Industrial had signed a lease there, I had some expectation that all the questions had been answered. Here’s the simplest example of the first harbinger—which came in September—that questions weren’t answered: Condé Nast asked the question, “Where do we vent out our kitchen? We don’t see vents on the facade.”

You must be referring to Condé Nast’s legendary cafeteria at 4 Times Square, which its rumored to be replicating at 1 World Trade Center. There were problems, you say?
Yes, and they said, “We don’t see any vents on the plans.” Now, how’s that for a straightforward question? So, just showing where our heads were, I’m like, “Oh, we must have some early-stage plan,” because a big part of selling Vantone was that they’re going to have true Chinese food dining on their premises, so that when you headquarter there, you’re going to be able to eat food that tastes like the mother country.

So, I’m like, “Oh, they must know the answer to this.” P.S., the answer came back, “Oh, no. There are no vents.” And so, obviously, Condé asked the next question: “Well, then, how might we exhaust from the kitchen?” And the answer was, “We’re going to run black iron up the shaft”—truly, an enormously expensive thing to do, and also the longest black iron run in history, probably. So we now have a conversation. That’s when the bell sounded. And all of a sudden, we’re like, “Geez!” And we said, “What did you tell Vantone? What was their solution?” By the way, after we asked that two or three times, we began to realize Vantone never asked the question. So there were no solutions.

Considering that the Condé Nast deal was, in fact, signed, I assume the problem got solved?
It was because we had a tremendously gifted team leader from Condé, Bob Bennis, who is a master of design construction, and has been at Condé for many, many years. Bob walks in, and he says, “I can tell you how many deliveries a week Condé Nast gets. I can tell you how many come by messenger, how many come by tractor-trailer, how many come by van. How many people come for lunch.” This is a company that has been operational for years—for decades—and Bob is the master of this data.

Meanwhile, the deal with luxury handbag designer Coach was announced in November, but as I understand it there’s still a ways to go before it’s finalized. What’s left to do?
Everything—all the documentation and all the operational questions: How do we get in? How do we get up? What do we control? What does our signage look like? Who pays for this? Who pays for that? All of it. We have a very detailed term sheet. But now we’re in the nitty gritty phase. And we’ll see whether Coach gets done.

With both of those deals, you paint a tumultuous picture. What about Young & Rubicam?
The big surprise of 2011 was Young & Rubicam—or Y&R, as they call themselves today. Because we’ve been working on Y&R for many years, and we didn’t know whether or not we were going to solve the problem. So fortunately, the problem got solved.

What did the problem surface, and when did it get solved?
Seven weeks before it signed, because we walked into the year thinking that we had a shot to make a deal for Y&R at 1107 Broadway. And around June we discovered that the building was not going to go commercial. It had been bought out of bankruptcy and was going to be converted into a residential building. So that blew up. But the Y&R deal was used as a stalking horse, with the understanding that there was what they call a “kill fee.” If the deal didn’t happen there was a certain sum of money the bankruptcy court gave out. No one wanted the money. Everybody wanted the building and the deal. But, as it turned out, Witkoff triumphed in the auction process, which took place on one day in June. It was just one day in the judge’s chambers.
How many times have you attended the annual REBNY gala?
Oh, gosh. I’ve been, easily, more than 25 times—easy.

Is there one gala that stands out, either because of something great that happened, something embarrassing that happened, or something memorable that happened?
That’s easy. It was the January gala that came immediately after 9/11.

Why?
Remember that our business was frozen for many, many months after 9/11. There was a general sense of, was the model of how we were built—our great vertical city—going to vanish because no one would ever want to be in a skyscraper again? These thoughts seem inconceivable today. But they were absolutely on everybody’s mind back then. And to feel the commitment of the members and the recognition that everybody felt such a connection to the city, and a desire to see its citizens and its skyline restored to health, was inspiring. The energy was about those emotions. That’s the banquet that jumps out.

Without knowing for sure, how would you summarize this week’s REBNY gala?
Brandl Frey, the chairman of the Young Men’s/Young Women’s Real Estate Association, said to me at the banquet last year, “Oh, this is so amazing. This is the first time I’ve ever been.” And so I’m like, “What are you talking about, Brandl?” So I said, “Here’s what I want you to do: Young Men, Young Women, I want you to organize. You pick the number of young people who would not be able to get in through their firms. And let’s get tickets so that we have, for the first time at this one coming up, 2012, a whole slew of people who are the next generation of leaders. And YMREA should be the ones to select them and make them our guests at this event.” So that’s what’s going to happen this year.

jsederstrom@observer.com

The Commercial Observer: With 2011 officially closed, let’s review the biggest issue the Real Estate Board of New York, and the industry at-large, tackled in 2011.
Mr. Spinola: Well, clearly, the first issue would be that the state was in a major downfall with serious budget problems, and Albany pushed to raise taxes and to decrease spending by $10 billion to $13 billion. And so one of the first things that we got involved in was the question of obviously holding the line on spending in the State of New York .

How did REBNY react?
We got involved in lobbying and working with the Committee to Save New York to, I think, accomplish what was not thought to be accomplishable, which is to hold the line on that $10 billion shortfall without raising taxes. More importantly, the business community was able to articulate a common voice on important issues, which included, on a statewide basis, a cap on taxes. It doesn’t affect New York City , but the cap on real estate taxes, as well as holding the line on spending and not going crazy on raising taxes.

As you said yourself, that was one of those issues people thought couldn’t get done, and it got done, but I imagine it wasn’t without major lobbying and publicizing your stance.
Yeah. I think we not only made our points, but we also raised some serious money to be able to address those points and get them on TV. We demonstrated that we can work well with others and we were able to support what I thought was significant leadership on behalf of the governor, taking a lot of shots and yet demonstrating what can happen when the chief executive officer actually gets his hands dirty and gets involved in the discussions and the negotiations and advocates a position.

Generally speaking, Governor Cuomo has a reputation for being easy to work with. Is that how you view the governor and is that how the real estate industry sees him?
The answer is he’s easy to work with because he’s willing to work when you raise an issue with him, or when he cares about an issue. And there’s no holding back as to what his feeling is or his position is or what he thinks can be done. With some other people, who we won’t mention, they may not have wanted to stick their neck out. Well, nobody could accuse Andrew Cuomo of not sticking his neck out.

I assume that at the beginning of each year you gather all the committees together to lay out the important issues and decide which deserve to be addressed. In 2011, were any of those plans disrupted by unexpected events?
I mean, this past year, we had to get 421A extended. We did. But part of that issue was there was a push to require prevailing wages for anybody who got 421A. Well, that would have hurt, we believe, a lot of low-income housing that was going to be built, and it would have guaranteed that Course of Construction would have stayed at a much higher level, and we need to bring down Course. So without breaking our relationship with the construction trades, we fought that off. They’re going to continue to fight for it. It’s an issue that’s going to come up again, but we’re building that relationship. We continue to work on that relationship and articulate the reasons we can’t do it.

The other thing that came up was a serious push for sick-leave requirements in the City Council that put forward that sick leave be given for any employees who were in some way in a building that was getting some kind of a benefit. We fought that. The good news was that Speaker [Christine] Quinn came out and opposed it. And that was a battle that we joined in with the chambers of commerce in all five boroughs and the issue was basically laid aside. Right now, there’s a push, again, to require a living wage.
The Real Estate Board of New York has also taken umbrage at what it believes to be a liberal stance on landmarking by the city’s Landmarks Preservation Commission. Will the board continue to take on that issue in 2012?
It’s not that the city shouldn’t be identifying individual buildings and saying these are wonderful buildings for whatever reasons—the architecture, the historic nature. Let’s landmark those buildings. Nobody is questioning that. We may have a legitimate debate as to whether or not they’re wonderful buildings. But the main concern is that there’s been this aggressive attempt to create districts, huge districts. Districts used to be unique small areas around the city that you want to preserve for a reason, but not districts that basically encompass a collection of different types of architecture, or hundreds of buildings. What’s unique when we’re all of a sudden landmarking hundreds of buildings?

The Real Estate Board of New York is one of the most powerful lobbying arms in the city, but the Landmarks Preservation Department seems to be getting the upper hand here.
There’s no question that we have lost more of those battles than we have won. We think the city is landmarking away its economic future, and during the middle of this year we started to rev up some of our efforts on this. And we’re going to clearly look at 2012 as a year in which we’re going to try to make our case even stronger.

Would you consider yourself David or Goliath in that particular fight?
We’re always David. This is a battle with the City of New York and the Landmarks Commission that seems to want to respond to the landmark advocates who would landmark every building in the City of New York. There are a lot of people who don’t want to see new buildings built. I don’t know if I have an answer as to where we’re going to put the additional million people that are supposed to come and live in the city of New York by 2030. But they don’t want it in their neighborhood, and so they want to landmark buildings. We’ve opposed districts that included empty lots and old gas stations that were determined to be worthy of being included in a landmark district.

Do you ever worry that overdevelopment could threaten the character of New York City ?
Well, the answer to that is I do—there’s always the potential that if every developer decided to start a new office building tomorrow, then I’d be very worried about it. But the truth of the matter is that we have an aging stock of office space. The average age is somewhere over 71 years old for office buildings. That is very different than around the world, where office buildings are much more recent, and clearly more modern.

Just to play devil’s advocate, from the few issues you and I just discussed, most are at odds with the average New Yorker who’s not in real estate. Does that concern you at all?
Well, of course it’s a concern. I think we win our argument if we have an opportunity to lay out our arguments. With landmarking, everybody says, “Oh, isn’t it wonderful?” And then, we ask them to take a look at these buildings: “Do you believe these are worthy of landmarking?” And we usually get a different response if people actually spend the time.

In terms of development, the quick answer for people who say they don’t want development is, well, then where should your children’s jobs be created? Should they be created here, or should they be created somewhere else? Because that’s what we’re talking about. If we don’t have development, we don’t have the companies here that bring the jobs, that pay the salaries, that pay the taxes, that pay for the services that the city of New York desperately needs.
Let’s shift topics. Would you rather have a drink with Robert Moses or Jane Jacobs?
Oh, I don’t know. I don’t drink.

“I don’t drink”? That’s a nonanswer.
I mean, Moses clearly is someone that anybody who’s been in government, as I have been, would like to have a drink with.

Do you think that you and Jane Jacobs would see eye-to-eye on much?
I don’t know.

Despite the fact that you oversee an organization that boasts more than 12,000 members, many of them brokers, you’ve never worked as a broker yourself. Has that ever hampered your ability to understand their particular needs?
No. I mean, when I was with the city, I did economic development, and so, you know, was I functioning as a broker? I don’t think I was functioning as a broker. But when I came here I had the talent of brokers and owners to support me, and I’ve had a tremendous learning experience from the best people in the world in terms of doing real estate, everywhere from brokers to owners, financial institutions, residential, commercial.

So I’ve been to school. And I think I understand a lot of what’s needed to pull deals together, which is what brokers are so great at. I don’t think I’d be a bad broker, but I’ve never gone for a license. I didn’t want to get into potential conflict-of-interest issues.

Governor Pataki appointed you to the New York State Real Estate Board in 1996. What’s more influential: that or the Real Estate Board of New York?
They’re two different organizations. The state board of real estate is really an advisory group that makes recommendations on real estate policy to the governor. I was also then appointed by Joe Bruno when my term was up with Pataki, and I served for 10 years. And one of the things I’m very proud of is that I chaired the education committee on that board and we revamped the curriculum for continuing education for people with licenses.

REBNY is very different from that. We’re a lobby organization, and so, in terms of who’s more influential in getting to the governor? It might be his own state board of real estate. Who’s more influential in terms of dealing with the legislature, the city council and the governor? I’m betting that it probably is REBNY.

Speaking of betting, early on in your career you worked for the New York City Off Track Betting Corporation. Do you ever go out to Belmont to make a bet?
No. I never was a race fan. I’ve been to Belmont once, and I’ve been to a dog track once, and it’s not something that I enjoy. I mean, a horse is a beautiful animal, but it’s not something that I enjoy. Now, I haven’t been to Aqueduct yet either—for the gambling.

When’s the last time you took a vacation?
Well, I haven’t really taken a vacation. I normally take off between Christmas and New Year’s, and I’ll take days here and there, and I take long weekends in the summer. And other than that, we really haven’t gone away. I used to go away. Actually, let me take it back. Easter week we went skiing for a week out in Vail.

Do you ski?
I mean, you’re spoiled when you ski there. I mean, there are other wonderful—especially out West—other wonderful places. I’ve been to Jackson Hole, but we’re just so used to Vail, and we’ve done spring skiing there. I’m not a big cold person, and the weather is usually perfect out there, and you ski the top half of the mountain. And it’s ideal.

I’m so used to talking to real estate professionals who, when you ask about hobbies, they usually just talk about golf.
Well, I do play golf, but I didn’t play much this year. My handicap went way up, and, in part, I just couldn’t get out.

Hopefully, you’ll get a chance.
Believe me, nobody’s crying for me. But I’m not asking for that. But four weeks ago, I came down with pneumonia, so that actually had me out of the office for a few days.

But you’re back in action now?
I’m back.

Jsederstrom@Observer.com

Get off my lawn!

Privately owned public spaces, or POPS, have been largely ignored by New Yorkers, even as they have reshaped the city over the past 50 years. Plazas, passageways and pocket parks have been carved out of giant new office and apartment buildings in exchange for considerable development bonuses (a few hundred thousand square feet here or there). This has led a band of urban activists to fight for awareness of and activity in POPS across the city.

Thanks to the occupation of Zuccotti Park, people have begun to take some notice of at least one such POPS, and the POPSters hope they can turn this into a new awareness of those spaces citywide. But the protests have also angered the landlords responsible for the spaces, and now they are preparing to fight back, possibly placing further restrictions on the city’s POPS.

“Obviously, there needs to be a balance,” Real Estate Board president Steven Spinola told The Commercial Observer. “Most of these places are told they need to be open 24 hours a day, which is why the cops are reluctant to push the protestors out. If you ask me, I don’t know what’s wrong with saying the plazas should close at 1 o’clock, so there’s an added degree of security or even maintenance.”

He echoed complaints made by Brookfield Properties, owners of Zuccotti Park, that the space the protestors have dubbed Liberty Square has become dirty and unsafe—which perhaps ignores the near constant police presence and the surprisingly organized efforts of the protestors to operate trash lines and recycling stations. Brookfield points out that the plaza has not been power washed since Sept. 16, the day before the protests began. Then again, when was the last time Central Park was power washed?

Mr. Spinola said his group, which represents many of the city’s most powerful developers and building managers, would consider pushing the Department of City Planning to create new rules for what they see as better regulation of the city’s POPS. One of the notable things about the events at Zuccotti Park was that the rules were indeed loosely defined, allowing the protesters and the police wide leeway in what activity took place there. Were it a city park, provisions against camping and even hours of operation would have been more obvious. Efforts to implement such restrictions retroactively have so far failed.

“It’s a serious issue,” Mr. Spinola said. “It’s open to the public, but it’s owned by a private company, and perhaps it’s better we balance those two sides.”

How easily new restrictions could be implemented is, like so many things concerning POPS, a little murky. Each of the 516 spaces has its own specific rules and regulations negotiated with the Department of City Planning at the time of the building’s inception. Theoretically, landlords could go back to the department and ask for changes to their POPS regulations where they see fit, but this would require a lengthy and costly public review. These are not uncommon, when a landlord wants to install a café or even a handicap ramp, but if there was a movement for change from most buildings in the city, it would create gridlock at City Planning.

There is the possibility that the department could institute a citywide amendment to the zoning code, the kind of thing the influential Real Estate Board could well lobby for. But the pushback from civil libertarians, parks advocates, community groups and the POPSters seems all but assured if that were the case. They frequently complain that the developers get more than they paid for with their POPS deals—are a few benches and trees really comparable to the millions in additional revenue that the extra stories on a building will eventually generate over time? –Matt Chaban

Mr. Lopez at work.

A rare divide has formed between Democrats and affordable housing advocates over a prevailing wage provision in the extension of the popular 421-a tax credit. Those advocates say that an extension of the 421-a tax credit that includes requiring them to pay prevailing wages to construction workers on non-public projects will drastically reduce the number of affordable housing units being built in the city.

Brooklyn Assemblyman Vito Lopez, chairman of the Housing Committe, and Senator Adriano Espaillat, of northern Manhattan and the Bronx, have proposed a bill to extend the 421-a credit for new development in the city, which expired in December. That bill will also require developers to pay prevailing wages on many new projects with more than 80 units.

“This would have a devastating impact on the industry,” said Alison Badgett, the executive director of the New York State Association for Affordable Housing, a trade association. “There’s widespread recognition that development will stop with prevailing wage, and we cannot build affordable housing without [the 421-a] exemption.”

Prevailing wage would require salaries of $46 an hour for carpenters, as opposed to a median wage otherwise of $27, according to the state Department of Labor.

Those wages would increase the cost of affordable development by 25 to 50 percent, according to a 2008 study by the Center for Government Research. That would offset the benefit from the 421-exemption and make it difficult for them to move ahead with projects, especially given that financing for new residential development is difficult to get right now, say developers. “You cannot add this much cost to a project and not have the result be that there will be fewer projects,” said Brian McMahon, the executive director of the New York State Economic Development Council.

“We put prevailing wage in because the trade unions asked us to put it in,” said Mr. Lopez, a long-time ally of affordable housing advocates. Union leaders point out that the government gave away $930 million in tax breaks under the program this year, and it should provide a broader economic benefit for workers. Mr. Lopez added that wage requirements would affect a narrow range of projects with between 80 and 200 units. (Affordable housing advocates say most of their projects have 100 to 200 units.)

With two weeks left in the legislative session, the bill proposed by Messrs. Lopez and Espaillat is just one of the pieces of legislation on the table to extend 421-a, including one by Republican chair of the Senate Housing Committee Catharine Young, which does not include prevailing wage. The Lopez/Espaillat bill could get swept up in an omnibus bill that would also include rent regulation and a property tax cap, but Mr. Lopez described that as “highly unlikely.”

Meanwhile, behind-the-scenes negotiations are taking place. Steven Spinola, long-time president of the Real Estate Board of New York, has met with Gary LeBarbara, head of the New York State Building and Construction Trades Council, over the course of the last month. “We’re talking to labor leadership about their proposal,” Mr. Spinola told The Observer a few weeks ago. “Clearly it potentially adds costs to projects.”

Democrats also say they’re willing to negotiate, but advocates see little room for compromise. “We would be concerned with any compromise that established thresholds or standards for when prevailing wages could apply," said Mr. McMahon, of the development council. “The precedent would be incredibly important. For the first time we’d be mandating prevailing wages on non-public work projects.”

To promote economic recovery and job growth through capital investment, Albany must renew the 421-a partial tax exemption program, the Industrial and Commercial Abatement Program, the J-51 program, the transfer tax reduction for sales to REITs, and extend rent stabilization as close to the existing law as possible.

Albany needs to act promptly and send a clear, strong signal to the business community and the real estate industry that New York encourages private-sector capital investment and that it is serious about creating more construction jobs. 

The expiration of 421-a, a partial tax exemption program for new residential construction, has stalled six 80/20 projects. These comprise more than $1 billion in capital investment, 9,600 construction-related and building service worker jobs and 600 units of affordable housing.  Other large-scale residential projects throughout the city are stalled, and the industry anxiously awaits the renewal of this critical incentive for new housing construction. 

As part of 421-a, we have proposed an amendment that would permanently preserve the 20 percent low-income units in these buildings in exchange for lowering the real property tax burden on these rental properties to 20 percent of gross income from an unsustainable level of 33 percent.

Even at this lower level, the real property tax burden for owners would be higher than that of comparable properties in most other major cities around the country. To further encourage private-sector capital investment in housing we need to restore 421-a benefits to high-density (FAR 15) districts and extend these benefits to conversions of commercial properties to residential use.

The Industrial and Commercial Abatement Program (ICAP) also expired in February 2011. ICAP has played an invaluable part in encouraging development in the boroughs' and Upper Manhattan's commercial districts. Without this program, projects in these areas would not be economically feasible, and the construction and permanent jobs they create would be lost.

At the end of the year, the J-51 program expires. This program, which provides a financial incentive for upgrading our aging housing stock, has encouraged the renovation of housing for all income groups throughout the city. However, J-51 requires that the capital project be completed by the expiration of the program. As a result, many major capital improvements have been delayed as owners wait to see if the program will be extended, further curtailing job-generating investment.

The transfer tax reduction for sale of property to a REIT, which is scheduled to expire in September 2011, has facilitated numerous sales since its enactment in the mid-1990s. This provision has attracted substantial capital to New York for acquisition and job-generating building improvements. As our economy struggles to recover, we need to provide stability and confidence by renewing this capital investment incentive.

The reforms in the rent-regulation system that began in 1993 have improved the quality of our housing stock, preserved rental housing and attracted national residential owners to invest in New York.

Based on the most recent HPD Housing and Vacancy Survey, the quality of our city's housing stock is the best it has been since 1965, when housing conditions were first surveyed. The introduction of vacancy and luxury decontrol and reasonable rent increases for capital improvements has led residential building owners to maintain their residential property as rentals instead of converting them to condominium or co-operative ownership. In addition, these reforms have encouraged major national residential property owners to begin investing in New York. 

The Legislature must also adopt a fair and workable remedy for the chaos created by the J-51 Roberts Court of Appeals decision. Properties affected by this decision are unable to secure financing and to embark on capital improvements given the uncertainty about apartment rent and the potential for litigation that is emerging from this decision.

The reforms enacted in the rent-regulation system have been good for our housing stock and for the quality of life in New York City. We must vigorously oppose legislation passed in the Assembly that would return us to the 1970s, when regulated apartment rents could neither support necessary capital improvements nor sustain basic building operating expenses.

We cannot legislate ourselves back to a time when abandoned housing dotted our urban landscape. We need to extend the current system and address the impact that the Roberts decision has had on our housing market.

Our priority in Albany is to support legislation that promotes capital investment, not discourages it. For our city to create jobs, generate tax revenue and provide for the fundamental needs of our residents, we must create the climate and opportunity that will attract the capital our city needs to continuously rebuild itself.

editorial@observer.com

Steven Spinola is president of the Real Estate Board of New York.

Mr. Trump nor his eponymous organization are members of the Real Estate Board of New York, the uber-powerful trade group that claims just about every big name in the business on its membership roster.

The group's president told me, "When I asked him about it once, he said, 'I'm not a joiner.' "

He's always kind of been of New York, but not so much in it, the various Trump developments about town notwithstanding. Case in point: Mr. Trump nor his eponymous organization are members of the Real Estate Board of New York, the uber-powerful trade group that claims just about every big name in the business on its membership roster.

"Donald is obviously a very successful real estate and businessman," Steven Spinola, REBNY's president the last 25 years, told our Azi Paybarah this week. "That's all I can say."

Anything to read into the fact that he's not a REBNY member?

"Nothing to read into it," Mr. Spinola said. "When I asked him about it once, he said, 'I'm not a joiner.' [laughs] You know, so we've talked from time to time--when there's a need to talk to him or there's a need for him to talk to me or REBNY--and he is one of my members' colleagues in terms of the people that build this city, and they look at him as a colleague."

tacitelli@observer.com :: @tacitelli

In a January 2010 Observer article, he had sounded one of the earliest calls for not holding the 9/11 terror trials in the federal courthouse in Lower Manhattan. Attorney General Eric Holder announced Monday afternoon that the trials will, indeed, be held at the Guantanamo Bay prison (to the dismay of many among President Obama's lefty base). 

The Observer nabbed Big Real Estate's super at the 101 Club on Park Avenue and queried: Was REBNY the first to sound the call? "I do believe we were," said Mr. Spinola with a wide grin.

As early as December 2009, Mr. Spinola (pictured) met with Bill Rudin, the landlord and Association for a Better New York chair, in his office. Initially, Mr. Spinola spoke with then-White House deputy chief of staff Jim Messina, Homeland Security Secretary Janet Napolitano and presidential adviser and policy wonk David Axelrod. The board at first kept a low public profile on the issue to resist offending the administration.

But Mr. Spinola was getting an earful from REBNY members, as The Observer noted a month after the meeting with Mr. Rudin, more than he had gotten on any single issue since he took over the board in the mid-1980s: "They're saying to me, 'You've got to stop this, you can't let it happen.'" To hold the trial downtown, they said, would disrupt traffic and create security concerns that could drive out tourists and office tenants, plummeting the downtown economy to post-9/11 lows.

The real estate board, one of the most powerful lobby groups in the state, has had an impact on other issues like property taxes, but none with quite such national resonance. In other words, the board took on the president of the United States and won. 

During his Monday evening recap with The Observer, Mr. Spinola also gave credit to Community Board 1 for helping. Victory, Mr. Spinola said, was not surprising (rumors of the administration's reversal surfaced this past January). "We assumed it would not be in New York," he said. "We're very happy." 

lkusisto@observer.com 

"We will go down to the wire," he said after the rally. "This is a 15-round fight." Professional boxing matches are now only 12 rounds. Whatever. "This will be a 15-round fight."

New York State's rent-regulation law, which governs the rents for more than one million stabilized apartments in the city, expires June 15, but Democrats have already thrown the opening punch. State Assembly Speaker Sheldon Silver says that rent regulation must be renewed and strengthened in favor of tenants. If it isn't, he will not support the renewal of a tax incentive that expired in December and was beloved by big apartment developers.

Mr. Silver's move pits the two sides of Big Real Estate against one another-developers vs. landlords-and puts their onetime favorite candidate, Andrew Cuomo, in the middle.

"We shouldn't be extending a tax break for residential developers without making sure we are strengthening protections for the tenants who live in their buildings," Mr. Silver said in a statement last month, which his staff reiterated through an email to The Observer. In fact, the developers of shiny new condos, who stand to benefit the most from the credit, called 421a, are distinct from owners of the older buildings that primarily house the city's rent-stabilized apartments.

A Cuomo spokesman said the governor is "open to everything," though he is not confident a deal will be reached before April.

On one side, the governor has his biggest donors in the 2010 election-developers and landlords, including his top two donors, Jerry Speyer and Daniel Tishman, who contributed a combined $187,400. And on the other side, liberal activists and the politicians they help elect, including Speaker Silver. (And never mind that some in Big Real Estate remember Mario Cuomo, who as governor himself spearheaded the late '80s tax changes that industry people say all but halted real estate trades.)

At last week's rally, the crowd of a dozen politicians and several times more aides and activists recited their new mantra, out of sync but passionate: "Put it in the budget! In the? Budget! Governor Cuomo can do it in the budget! Governor Cuomo must do it in the budget!"

To say rent stabilization is a flash point for the real estate industry understates the issue. It is their Lenin lite, a socialist weed poking through New York's capitalist grange. Kill it, and a million more tenants would be available to pay market-rate rents. As it stands now, the deregulation threshold is $2,000 a month; however, those tenants are protected by annual income benchmarks.

"What if the city said, 'If you own a car, one day a week you have to let somebody use your car because we have a transportation problem in the city'?" said Robert Knakal, chairman of the city's biggest investment-sales brokerage, Massey Knakal, who has brokered the sales of billions in apartment stock. "'You own this building, you pay for it, but you can't charge what the market will bear because we have to protect tenants.'"

The topic clearly rankles. "I have Richard LeFrak to speak with you," a brisk voice said when The Observer answered a recent ring. Then, sans pleasantries or an introduction, Mr. LeFrak, head of one of the city's biggest and most storied real estate concerns, said: "I only have 14,000 of those things [rent-stabilized units] and it's a relatively minor part of my business. ... My comment is that it's not that significant in my world. ... I just built 4,000 apartments on the West Coast and none of them are rent-stabilized. That's my comment."

Rent stabilization has been renewed and revised numerous times, with landlords making important gains over the past two decades. Most recently, in 2003, a Republican majority in the Senate renewed the law in a midnight session, but kept the cap at $2,000. Since regulations were first relaxed in 1993, over 300,000 apartments have been deregulated.

That chills New York City Democrats, whose constituencies are filled with thousands of people who stand to lose their infinitely more affordable homes. Local Democrats hope this will be the year they finally turn the tide, and Mr. Silver's linkage of what they call rent reform to 421a could help them do it.

"Gee, what geniuses they are," said Joseph Strasburg, head of the pro-landlord Rent Stabilization Association, when asked if linking rent reform to 421a will split the industry. "The reality is, both associations are connected together on this issue. We support [the Real Estate Board of New York's] desire to get 421a," which promotes "development and the hiring of thousands and thousands of jobs, like carpenters and steelworkers."

But earlier in the phone interview, Mr. Strasburg pointed to divisions in the industry that gave money to Mr. Cuomo's campaign: "Substantial dollars were from developers. We're bricks and mortars, focusing on existing buildings that families own, operate and want to keep. I challenge anybody to try to lump us as part of the bigger picture."

In spring 2010, when Democrats controlled both legislative houses, they and the Republicans (and the industry) hammered out a package favorable to tenants that also included an extension of 421a. The Assembly passed the bill based on it, but internecine warfare over disgraced Bronx pol Pedro Espada doomed the bill in the Senate. (A spokesman for the current Senate majority leader, Dean Skelos, says the Republicans are focused on the budget now, and as for rumors that rent stabilization would be allowed to lapse post-June 15, other Republicans say that's not true.)

Steven Spinola, head of REBNY, the city's leading trade group for the industry, including both landlords and developers, declined to say whether he supports linking rent stabilization and 421a. "I'm not sacrificing anything," he said, adding, "Rent regulation affects well over one million apartments in the city of New York. Four-twenty-one-a will benefit thousands of jobs and new housing. I'm not going to say one of them is a top priority."

For now, the Democratic strategy is clearly in flux. At the chilly Feb. 24 press conference, senators and assembly members threw their support behind a bill of Senator Espaillat's that would raise the threshold for deregulation to $3,000 a month; stop converting vacant apartments to market rate; close some of the loopholes landlords commonly use to raise rents; and return most of the apartments deregulated in the last 20 years to stabilization. 

Publicly, Governor Cuomo appears to have no stomach for a rent fight while his term is staked on getting a budget passed.

"The important consideration is Governor Cuomo, and that to me at least is an unknown," said the Assembly majority leader, Ron Canestrari. "The more we complicate the budget, whether it's rent control or a real property tax cap, the more difficult it is to get this enacted in about a month."

But if it's not part of the budget, won't it just die? "That's a concern. I can understand that, too," he said, adding vaguely, "There are always ways."

lkusisto@observer.com

He told the Post that "landmarking the entire city does not leave opportunity to grow," and he has a point that there won't be much of the Upper West Side left that is not protected by a historic district:

Using landmark designation to protect views from penthouse apartments, to freeze architectural-style preferences of a few current residents and to promote the self-interests of private parties is a misuse of the landmarks law.

This may be true for developers, because it will increase the cost of building, not only because the city will now review all new buildings but will also likely require higher-quality ones. As a West End supporter puts it, "They're trying to protect the right of developers to put up junk."

Yet the new historic district could also create a windfall, at least for those who are already there, though quite possibly for developers, as well. Preservationists argue that landmarking actually drives up existing property values by protecting what is there and, admittedly, restricting development.

But don't forget that some of the priciest new developments have popped up in historic districts, from Park Slope to the Upper East Side, from Central Park West to Soho. There is even a prime example in 535 West End Avenue, developed by Extell and one of the best new buildings of the year. Its 12 units are commanding top dollar while blending in quite nicely with the neighbors, and this for a building that is outside of any historic district and thus needn't go the faux classical route. Consider the broad successes of Robert A.M. Stern, as well.

It is true a new historic district will probably cost developers more money and time up front. But long-term, it should pay off for them, as well as the city, quite handsomely.

mchaban [at] observer.com | @mc_nyo