Manhattan Borough President Candidates Shun Developer Money

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Manhattan Borough President Candidates Shun Developer Cash

Borough presidents have few real powers, but they do have a role in rezonings and development because they make advisory recommendations as part of the land use review.

Adi Talwar

The corner of Broome Street and Broadway in SoHo, where a city rezoning plan is underway.

Not long ago, the real estate titans that shape the Manhattan skyline could count on shaping the borough’s political landscape too. New York City’s biggest developers, including executives from Related, Durst and Two Trees, poured cash into campaigns for Manhattan borough president in 2005, 2009 and 2013. So did officials from smaller but still powerful real estate firms pursuing projects in one of the world’s hottest real estate markets.

This year, however, four of the top candidates for Manhattan borough president have publicly sworn off money from developers and large landlords as they vie to replace term-limited beep Gale Brewer. Brewer, now running for a seat in the City Council, previously eschewed developer contributions in her successful 2013 and 2017 borough president campaigns. 

Councilmembers Mark Levine and Ben Kallos, State Sen. Brad Hoylman, and Lindsey Boylan, a former state economic development aide, have each publicly rejected contributions from real estate interests, though such pledges can be ambiguous, with room for flexibility. A fifth candidate, former community board chair Elizabeth Caputo, has not made the same pledge.

Kimberly Watkins, a local community education council president, has not taken in money from developers and one other person appearing on the ballot, Guillermo Perez, has not reported any campaign contributions.

The promises are part of a political shift in recent years, as left-leaning candidates have sought to distance themselves from the real estate industry. Public backlash around land use proposals like city rezonings has been fierce, and few candidates want to give the impression that developers can influence their decision-making, says tenants rights organizer Cea Weaver.

“The real estate issue became a real progressive litmus test and Manhattan is pretty progressive,” Weaver says. “It used to be that they (developers) could buy elections and they can’t any more.”

Unlike races for mayor and City Council, developer-backed SuperPACs have also stayed out of the contest for Manhattan borough president. That’s probably a good thing for candidates.

“Real estate money has become toxic,” said political consultant Doug Forand, whose firm Red Horse Strategies is working with Levine this election.

Borough presidents have few real powers, but they do have a role in rezonings and development because they make advisory recommendations as part of the city’s Universal Land Use Review Procedure. Brewer will soon weigh in on the city’s plan to rezone a swath of SoHo and NoHo to allow for more residential development.

Many of her potential successors have avoided taking a clear stance on that proposal, but whoever wins the Democratic primary and general election will face tough decisions on future land use plans in a borough recovering from the COVID-19 crisis.

As the candidates attempt to frame themselves as developers’ most formidable foe, industry groups advise them to also consider real estate’s role in that recovery.

“Real estate accounts for more than half of the tax revenue the city collects each year,” said Real Estate Board of New York President James Whelan. “Anyone elected to help guide the city’s future understands the importance of working collaboratively with the real estate industry, among other stakeholders, to deliver real results for New Yorkers.”

Read more elections coverage here.

Real estate and the candidates 

Despite their aversion to developer contributions in this election cycle, all of the candidates have benefited from people associated with the real estate industry, like lobbyists, financiers, brokers, architects and construction firms. Some have collected developer cash during recent campaigns. 

Hoylman, for example, accepted big sums from major developers and real estate lobbyists during his 2020 senate reelection bid, including $5,000 from Mario Palumbo of Millennium Partners, $5,000 from Donald Capoccia of BFC Partners, $2,500 from West 42nd Street Development LLC and $250 from John Zaccaro.

Hoylman’s spokesperson Haley Scott said he decided to reject similar contributions during his borough president campaign to avoid the perception that he would be beholden to real estate. 

“Brad stopped accepting NYC real estate and development money when he ran for BP because of the unique role that the borough president has over land use, development and zoning,” Scott said. “He declared that when he launched and, while his record on standing up to real estate and developers in the senate is irrefutable, he didn’t want there to be any doubts over who was influencing his land use decisions: he is responsive only to the residents of Manhattan and its various communities.”

He has received $436,388.70 in private contributions to his campaign for borough president, according to reports filed with the city’s Campaign Finance Board.

In a separate statement, Hoylman highlighted his role in enacting key protections for tenants before and during the COVID-19 pandemic. He sponsored the Tenant Safe Harbor Act, the first pandemic-era legislation intended to help renters stave off evictions, and backed a package of major renter protection laws in 2019.

“I’ve always stood up for tenants, plus it’s no secret that I’ve been a thorn in the side of the real estate lobby,” he said, citing legislation he introduced to establish a pied-à-terre tax on second and third investment properties worth at least $5 million.

A portion of Hoylman’s personal wealth comes from real estate via his in-law’s companies in the Washington D.C. area. His husband David Sigal has a stake in multiple development and construction firms founded by his father, and Hoylman has indicated on state financial disclosure forms that the shares generated between $474,004 and $1,004,000 from 2012 to 2019. Hoylman said those D.C. area investments have no bearing on his decision-making.

“My husband’s and in-laws’ income, which is derived exclusively from the Washington, D.C. area, clearly has no impact on my work in New York,” Hoylman said. 

He has earned support from progressive colleagues, including Brooklyn State Sen. Julia Salazar.  He also received a second-place ranked endorsement from TenantsPAC, despite not being a tenant himself.

Hoylman and his husband own a large apartment on Fifth Avenue. They received a series of Landmarks Preservation Commission (LPC) approvals to merge three adjacent units in their building, located in the Greenwich Village historic district. 

Nevertheless, he has frequently criticized the LPC for conceding to various development proposals. 

“I strongly disagree with many recent LPC decisions like the new tower at 250 Water Street in the Seaport Historic District, failing to protect the historic interior of the landmarked McGraw-Hill building, greenlighting the demolition of the 1889 Demarest Building, and recently clearing way for a 213-foot tall luxury condo tower that has no affordable units,” he said.

Two other candidates in the race also own property: Levine, chair of the Council’s Health Committee, has a unit in Northern Manhattan outside his council district, and Kallos, chair of the Committee on Contracts, purchased a co-op on the Upper East Side in February. 

Levine’s campaign said he had a tenant in the unit who left during the pandemic. He made between $5,000 to $49,999 in rental income in 2019, according to his most recent disclosure form filed with the Conflict of Interests Board. He had previously failed to report that income to the city before amending his COIB filings, the New York Post reported.  

Levine and his family rent a separate apartment located within Council District 7, which he represents, and he has earned the first-choice endorsement of TenantsPAC. Last year, Levine introduced legislation to speed the implementation of the right to an attorney for all New Yorkers who earn below a certain threshold and face eviction proceedings The city’s right to counsel law previously prioritized residents of certain zip codes.

This election cycle, Levine has rejected or refunded contributions from developers, large landlords and people with significant real estate holdings. He has raised $490,533.76 in private contributions, and financial disclosure reports show Levine has refunded tens of thousands of dollars from people in the real estate industry or their family members in order to comply with the “no real estate” pledge.

City Limits reviewed Levine’s disclosure reports and identified three contributions totaling $3,000 from a management company called Babad Management, finance firm Mission Capital and “real estate services” firm Patrick Partners Inc. 

Levine’s campaign said they will refund those contributions.

Kallos has frequently criticized the other elected officials in the race for not rejecting real estate contributions earlier in their careers. He first won a seat in the council in 2013 while saying he would turn away cash from developers, before it became the norm among left-leaning politicians. 

“In 2013, I didn’t take the money. I did it again in 2017, and finally in 2021,” he said. “I’m glad other people are doing it now too.” 

Still, Kallos’ $344,558.25 in campaign contributions includes money from real estate consultants as well as architects, financiers and management companies. He received nine separate contributions totaling $900 from real estate consultant Edward Mermelstein, an attorney who also heads the Council of Jewish Emigré Community Organizations. Kallos said he considers each contribution on a case by case basis.

“If a person puts down real estate, we give the money back,” he said of the CFB’s contribution system, which asks donors to identify their occupation. “If a person calls back and says they’re not real estate we may accept it. Ed Mermelstein is a lawyer, not a person I’ve ever spoken with about real estate.”

Mermelstein told the Daily News last year that he thinks the anti-real estate posturing is a “fad.” 

Kallos told City Limits he disagreed with that assessment and said he decided to forgo money from the powerful industry because of his own experiences as a tenant. He said he and his wife left an Upper East Side apartment three years ago when the landlord decided to raise their rent by $200 a month while his wife was pregnant.

“We said, ‘Hey, can we get a one-year extension without this huge rent increase? We’re in the middle of a high-risk pregnancy and they said, ‘We don’t care,’” Kallos recalled.

The family next moved to a nearby apartment where they again faced problems with a landlord who declined to renegotiate their rent during the pandemic. In February, Kallos, his wife and 3-year-old daughter moved to a nearby one-bedroom co-op on 90th Street that they purchased. He said the unit had no working toilet or shower when they moved in.

“The very reason I am running for borough president is because I don’t want to be forced out of the city where I grew up,” he said. “I want to raise my family here.” 

Boylan has also publicly shunned real estate contributions, despite her previous role as a New York state economic development official. She ran for congress last year and later became the first woman to accuse Gov. Andrew Cuomo of sexual harassment and misconduct.

“I refuse to take corporate PAC or real estate (money),” she tweeted when she announced her borough president bid last year. 

While she has returned money from developers, City Limits identified five contributions totaling $2,700 from people with jobs in the real estate industry, including $1,500 from Elias Kefalidis, CEO of investment firm KLM Equities.

Boylan’s campaign spokesperson said the contributions were “oversights” and that they will refund the money. 

Boylan rents a unit with her husband Leroy Kim, managing director at the investment bank Allen & Company. People who listed the bank as their employer contributed at least $18,500 to Boylan’s campaign and she has raised a total of $194,928.45 in private contributions.

Caputo, the former community board chair, did not respond to requests for comment for this story. She has said she rents her home and she has accepted real estate industry contributions.

She has raised $159,650 in private contributions, including $1,500 from real estate investor Peter Friedland, according to CFB reports.

Watkins, president of Community Education Council 3, has framed herself as the “anti-establishment” pick for borough president. She has raised just over $40,000 while slamming lawmakers with close ties to real estate. “Local leaders must advocate for policies that force developers to abide by the rules,” she wrote on her campaign website. “As Manhattan Borough President, I will stand with the people and against real estate corruption.”

SoHo a no go?

The anti-real estate posturing signals to voters that a candidate will not bend to the whim of developers on land use decisions and that the would-be leader is seeking to correct a system long tilted toward real estate, says Weaver, the tenant organizer with the Housing Justice For All campaign.

In response, developers and the city have begun framing projects as necessary for creating more affordable housing, she says.

That has been the case in the SoHo/NoHo rezoning proposal put forth by the city, which supporters say will create and preserve affordable units in the district while creating strict rules for the sorts of businesses that can operate there. Opponents, including community preservation groups, say the plan will allow for large luxury towers with the promise of a paltry number of somewhat affordable units.

Fair housing advocates “have bought into the false dichotomy promulgated by real estate interests and the de Blasio administration that the only way to get new affordable housing in New York City is to grant massive bonuses to luxury and market-rate housing developers, vastly increasing their profits and the size of their developments, and requiring a small payback of affordable housing in return,” wrote Greenwich Village Society for Historic Preservation Executive Director Andrew Berman in a piece for City Limits last year.

Hoylman has tended to agree with that assessment and criticized the city’s SoHo/NoHo proposal as the “Amy Coney Barrett of rezoning projects” because Mayor Bill de Blasio was attempting to push through the plan before his term ends (In that way, he said, it was similar to how President Donald Trump and Senate Republicans rushed to confirm Coney Barrett to the Supreme Court before the November 2020 election).

Hoylman told City Limits that he would not support the current plan without more input from local residents.

“First, we need to ensure the neighborhood has been properly consulted,” he said. “We need in-person public meetings and hearings. But most importantly, we need more housing affordability than the 20-30 percent that’s being proposed and deeper than the 120% percent of AMI that’s currently on the table.”

Hoylman said he supports an alternate plan created by Berman and other local civic associations, “which includes a ban on ‘big box’ stores to protect small businesses and would push for it to be implemented.” 

Kallos said he also supports the alternate proposal and worries the city will not hold developers accountable for creating affordable housing. “We keep seeing rezoning after rezoning where the city says one thing but really does another,” he said. 

He also suggested he would go rogue when it comes to land use decisions during his final few months in office as a councilmember, following a decision on an application to rezone the current headquarters of the New York Blood Center to enable the organization to build a taller research facility. Kallos has opposed the plan.

“Once the Blood Center is done in my district I don’t have to honor member deference,” he said Wednesday. “I’d like to think I’m going to be voting against a lot of projects.”

He noted that his two predecessors in Council District 5, Jessica Lappin and Gifford Miller, have both moved into development roles — Lappin with the pro-real estate Alliance for New York and Miller with the firm Signature Urban Properties. Kallos said he has no plans to follow a similar path.

A spokesperson for Boylan said she “believes the SoHo NoHo project needs to be a community-driven plan and not primarily a property-owner driven plan, which is why she supports the Chinatown Working Group Plan, because it is community-led.”

The Chinatown Working Group Plan would limit building size, mandate that all new development on NYCHA property be set aside for low-income New Yorkers and create more affordable housing in Lower Manhattan.

Levine has stood out as the lone elected official in the race who has gone on record supporting the SoHo/NoHo rezoning. The plan, which began undergoing public review last month, will serve to create more affordable housing and diversify a predominantly white and wealthy neighborhood, supporters say. 

Levine’s campaign said he understands the concerns of local community members, but he has sided with tenants rights advocates who want the city to upzone lower Manhattan and other wealthy areas after previous neighborhood-level rezonings pursued by the de Blasio administration focused on mostly Black and Latino low- to middle-income parts of the city.

Caputo has also backed the SoHo/NoHo rezoning plan, as well as a rezoning of the South Street Seaport.

“I believe that the revised Soho/Noho and South Street Seaport rezonings, while by no means perfect, should proceed responsibly and only when there is the maximum amount of public and local input, convening the community as the projects continue both during the construction and after they are built,” she told Patch.