The CSR Awards: Real Estate, Construction & Housing

March 2015

CORPORATE SOCIAL RESPONSIBILITY AWARDS

REAL ESTATE, CONSTRUCTION & HOUSING CITYANDSTATEREPORTS.COM

Thanks for making a difference.

Congratulations to the Corporate Social Responsibility Awards recipients for Real Estate, Construction and Housing.

THE TIME FOR CORPORATE SOCIAL RESPONSIBILITY IS NOW

TOM ALLON Co-Founder & President of City & State Reports

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orporate Social Responsibility is undoubtedly one of the most important trends in business today. Customers increasingly expect the companies they do business with to be engaged in doing good. This is especially true among Millennials, many of whom believe that good corporate citizenship should be as central to a company’s mission as making profits. Here in New York, there are probably more businesses – large and small – engaged in more aspects of Corporate Social Responsibility than anyplace else in the world.

So, what exactly is Corporate Social Responsibility? For many, CSR is a broad umbrella that covers everything from philanthropy to environmental stewardship to the treatment of workers in the developing world. Others describe it as a philosophy, an approach to commerce that counsels: “Do well by doing good.”

The staff at City & State Reports wanted to refine that thought. So, we

took a deep dive into the world of CSR, examined the best examples, and distilled them into series of tenets we call “The 10 Core Principles of Corporate Social Responsibility.” They are: • Charity: Promotes contributions to worthy causes from the organization and its employees.

• Customers: Works to ensure the fair and respectful treatment of the organization’s customers and the marketing of wholesome, fair-value products.

• Diversity: Works to create and maintain a diverse and contented workforce.

• Environment & Sustainability: Helps the organization support effective sustainability programs and the responsible stewardship of the environment.

• Equity: Promotes fair and equitable compensation and career opportunities for the organization’s employees regardless of race, gender, age, ethnicity, religion, sexual orientation or disability.

• Ethics: Helps the organization maintain the highest standards regarding the law, regulations, and industry codes of conduct.

• Privacy: Works to protect, secure and responsibly manage the personal information and privacy of the organization’s customers and employees.

• Sourcing: Ensures that the organization uses outside contractors and suppliers that treat their employees fairly and handle issues such as the environment responsibly.

• Transparency: Ensures that the organization reports its activities openly and honestly to its employees, investors

and the public.

• Volunteerism & Community Engagement: Encourages the organization’s employees, individually and collectively, to perform volunteer work and engage with the local community on issues ranging from education to affordable housing.

The next question was how could we promote this trend and encourage more businesses throughout the New York region to embrace the principles of CSR? Answer: Conduct a series of events that would celebrate the best examples of CSR and the people who make it happen.

From that, we created City & State Reports, whose mission is to promote CSR by shining a light on the companies that have successfully put one or more of the 10 Core Principles of Corporate Social Responsibility into practice. Along with our event and conference series, we will accomplish this goal journalistically, through our City & State media platform, and academically, through our unique partnership with the City University of New York. Which brings us to today, our inaugural CSR event, where we will honor the achievements of some of the most accomplished professionals from New York’s Real Estate, Construction and Housing sector. Over the next several months, we will spotlight other major segments of New York’s economy.

We hope you will join us over the coming year as we continue to highlight the best of CSR in New York and honor the business leaders who are doing truly great things to help strengthen the communities they serve.

March 2015

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THANK YOU TO OUR GENEROUS SUPPORTERS CAPALINO & COMPANY TD BANK BANK LEUMI ALLIEDBARTON DUCERE GREENBERG TRAURIG KASIRER CONSULTING LAK PUBLIC RELATIONS NEW YORK GIANTS THE PARKSIDE GROUP RED APPLE GROUP RELATED TIME WARNER

STAY TUNED FOR OUR UPCOMING EVENTS: Law, Consulting & Business Services – April 22 – Baruch College Technology, Telecommunications & New Media – May 14 – Hunter College Banking, Asset Management & Insurance – June 11 – Hunter College Health Care & Pharmaceuticals – September 10 – Baruch College Hospitality, Gaming & Tourism – October 7 – Baruch College Sports, Entertainment & Television – November 4 – Baruch College For more information visit: www.cityandstatereports.com

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March 2015

CONGRATULATIONS, FRANK!

CONGRATULATIONS, FRANK! CBRE joins in celebrating Frank R. Alvarado on his Distinguished Service Award

CBRE joins in celebrating Frank R. Alvarado on his Distinguished Service corporate Award for Excellence in Corporate Mentoring and Diversity.

We commend Frank’s responsibility efforts, and we thankand CityDiversity. & State for the corporate forsocial Excellence in Corporate Mentoring Weacknowledging commend Frank’s influential individuals of New York. social responsibility efforts, and we thank City & State for acknowledging the influential individuals of New York.

cbre.com/tristate

cbre.com/tristate

BILL RUDIN CEO & VICE CHAIRMAN OF RUDIN MANAGEMENT COMPANY LIFETIME ACHIEVEMENT AWARD

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ill Rudin believes in the city. Its connectivity. The possibilities that flow from chance encounters. The meeting of interlocking ideas.

“Spontaneous combustion,” he called it.

For as long as he can remember, Rudin has been at the center of that whirling civic web. In the 1970s, with the city in crisis mode, his father, Lewis, founded the Association for a Better New York (ABNY).

“My father and uncle realized that the real estate we owned had no value if the areas surrounding our property weren’t clean, and public transportation didn’t work, and there was high crime,” Rudin said. “They realized that government couldn’t solve the problems of the city alone–that business and labor and ordinary citizens had to engage as well. So they came up with a very early version of a public-private partnership.”

“Operation Clean Sweep,” which encouraged building owners on the West Side of Manhattan to sweep the pavement and gutters in front of their properties, was an early ABNY initiative. From there, the organization took an active role in nearly every facet of civic life, from tax policy to education to leading the legendary “I Love NY” campaign.

“You have to get engaged,” said Rudin, who has been Chairman of ABNY since 2001. “You have to show up.”

Rudin credits his father and uncle with teaching him the value of breaking bread with people, of understanding different perspectives, and working together for the common good. Over the past few decades, he has been a key player in the revitalization of Lower Manhattan which, like the rest of New York, has bounced back in remarkable fashion. The resulting population growth, ironically, brings with it added pressures on public infrastructure.

“We’re sort of victims of our own success,” Rudin explained.

These days, the CEO of Rudin Management sees his most important role as transitioning the business—as well as its philanthropic arm—to the next generation. Indeed, after all these years, the company remains not only within the family, but within the city limits as well.

“My grandfather used to say that if we can’t get there by subway, he doesn’t want to own it,” recalled Rudin, who, when not focusing his attention on his tenants and his family, serves as Chairman of the Battery Conservancy, President of the Empire State Relief Fund, board member of the Lower Manhattan Development Corporation, the Partnership for NYC, the Mayor’s Fund to Advance New York City, the Metropolitan Museum of Art, New York University, the New York Center for Autism, and the Alliance for Downtown New York.

Would he do more? Almost certainly. But, as Rudin said, “There are only so many hours in the day.”

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March 2015

1800 AT TO RNE YS | 37 LO CATI O NS WO RL DW I D E˚

We join in recognizing the 2015 Corporate Social Responsibility honorees for their outstanding work in New York’s Real Estate, Construction & Housing Sectors.

At Greenberg Traurig we share your dedication to the citizens of New York City and the commitment to uphold the principles that make New York a beautiful city to live and work.

CO NGR AT U L AT I ONS! Franklin R. Alvarado E. Bruce Barrett Bruce Beal, Jr. Adolfo Carrion

Rafael Cestero Bill Dacunto Dennis Friedrich

Amy Hattan Joseph Ienuso Andrea Olshan

Mitch Roschelle Bill Rudin Joseph Sitt Nick Stolatis

Greenberg Traurig’s Real Estate, Land Use, Environmental and Government Law & Policy practices provide a one-stop shop for companies involved in real estate transactions. With experience in elected office and government positions, we help clients navigate government.

Government Law & Policy: John Mascialino | Ed Wallace | Robert Harding | Will Mack Real Estate: Robert Ivanhoe | Stephen Rabinowitz Land Use: Jay Segal | Deirdre Carson | Nick Hockens Environmental: Steven Russo GREENBERG TRAURIG, LLP | METLIFE BUILDING | 200 PARK AVENUE | NEW YORK, NY 10166 | 212.801.9200

GREENBERG TRAURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2015 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved.

Contact: Ed Wallace, John Mascialino in New York at 212.801.9200. °These numbers are subject to fluctuation.

24895

FRANK R. ALVARADO SENIOR MANAGING DIRECTOR, PROJECT & COST MANAGEMENT, CBRE GROUP, INC., NEW YORK DISTINGUISHED SERVICE AWARD FOR EXCELLENCE IN CORPORATE MENTORING & DIVERSITY

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aving immigrated to this country from Costa Rica when he was nine years old, Frank Alvarado has not forgotten his initial struggles adjusting to a new language and culture as a member of a minority group. Nor has he forgotten the many mentors who supported him along the way. As Chairman of the Professional Development, Career Opportunities and Internship Committee for CBRE’s Hispanic Networking Group, Alvarado is committed to providing the same help to young professionals facing similar challenges.

“I see a lot of young folks trying to get ahead, but they let a setback hold them back,” Alvarado said. “They feel that because they didn’t make it to the goal line the first time, it’s over. I try to show them that we didn’t get to where we are because we made no mistakes—what we did instead was learn from our setbacks.”

The committee employs a variety of approaches, including one-on-one mentoring, coaching and group discussion.

All of these are important, Alvarado points out, because some of the company’s brightest young prospects come from families that might not be equipped to help guide them into and through the rigors of a demanding industry like real estate. He has heard many stories of talented individuals who reject real estate as a viable career path— sometimes for no other reason than lack of knowledge of the field. That is why Alvarado, who also serves on the Corporate Advisory Board for the Committee for Hispanic Children and Families, Inc., is so committed to diversity in his recruitment efforts – and why he helps mentor these professionals once they’re hired.

Alvarado believes the real estate industry draws great benefits from workforce diversity. He has learned through years of experience that a company like CBRE derives huge benefits by employing a workforce with a diversity of outlooks. By reflecting the makeup of the polyglot communities they serve, his team is able to respond even more effectively to the needs of its many clients.

“At CBRE, we recognize that in order to bring value to clients from diverse backgrounds, we need to be able to offer a diversity of thought and culture,” Alvarado said. “That value proposition is what’s driving us to bring about a more diverse workforce through everyday recruitment and development.”

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March 2015

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E. BRUCE BARRETT NYC SCHOOL CONSTRUCTION AUTHORITY (SCA), VICE PRESIDENT FOR ARCHITECTURE AND ENGINEERING OUTSTANDING ACHIEVEMENT IN SUSTAINABLE DESIGN FOR PUBLIC SCHOOLS

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schoolteacher-turned-architect-turned-green innovator, E. Bruce Barrett credits the 12 years she spent at the head of classrooms with helping to guide her designs today.

“It gave me an understanding of how things flow, and what can happen in a school,” Barrett said. “Welldesigned spaces can help kids focus, feel comfortable, feel secure as well as build a sense of community—and that is probably the highest goal of all.”

Her tenure designing schools is among the longest in the history of the Department of Education. In that time, Barrett has helped oversee the transition to more environmentally sound building practices throughout the school system. She has raised the bar for sustainable design, leading the development of the NYC Green Schools Guide to meet the requirements of Local Law 86/05. The guide now serves as a practical handbook for sustainable school design.

Though hundreds of city schools bear her imprint, one that is currently under construction may wind up the crown jewel of her portfolio. P.S. 62 in Staten Island will not only be the first net-zero energy school in New York, but one of few in the entire world. Incorporating more than 2,000 photovoltaic panels, the school is expected to generate at least as much energy onsite as it will consume – with surplus sold back to the grid through a process known as “net metering.” Located in a low-density neighborhood with no nearby buildings casting shade, the physical characteristics of the 3.5-acre site lend itself to an undertaking of this scope. Some of the more innovative design elements generated by this “sustainability laboratory” will likely be replicated elsewhere.

One such feature is the building envelope, which will reduce air infiltration to “pretty much unheard of levels,” according to Barrett. Additionally, the prevalence of skylights and triple-glazed windows should allow the school on sunny days to be 80 to 90 percent daylight autonomous. Barrett hopes these and other “passive” strategies— designs that do not employ mechanical or electrical solutions, nor sophisticated controls to maintain—will continue to be developed in future projects.

And she hopes that P.S. 62, which is scheduled to open this fall, will inform the children and community alike about the importance of energy conservation and sustainability so “they can all be committed to maintaining a better Planet Earth for the future.”

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March 2015

A single conversation with a wise person is better than 10 years of study

-Chinese proverb

Make a real difference in the developing world by giving just 45 minutes as a member of the Ducere Global Faculty.

The Global Faculty are interviewed on film...

...for approximately forty-five minutes...

... which is then used to educate students studying Ducere leadership, business and government qualifications, worldwide.

Join over 150 Ducere Global Faculty Leaders, including: Hon. John Howard OM, AC Prime Minister, Australia

Ms Kay Koplovitz Founder, USA Networks

Archbishop Desmond Tutu Nobel Peace Prize (1984)

Jeff Gural Chairman, Newmark Grubb Knight Frank

His Excellency Sir Ketumile Masire GCMG President, Republic of Botswana (1980–1998)

James Capalino Founder, Capalino+Company

Baroness Valerie Amos PC Under-Secretary-General, United Nations

Robert George Associate Editorial Page Editor, NY Post

David Dinkins Mayor, New York City (1990-1993)

Jeff Parness Founder, New York Says Thank You Foundation

Prof. Robert S. Kaplan Professor, Management Practice, Harvard Business School

and many other thought leaders, industry experts, philanthropists and entrepreneurs.

For more information on the Ducere Global Faculty contact jordani@ducere.co

www.ducere.co

BRUCE BEAL, JR. PRESIDENT & GENERAL PARTNER OF RELATED COMPANIES OUTSTANDING CORPORATE ACHIEVEMENT IN THE PRESERVATION & DEVELOPMENT OF AFFORDABLE HOUSING

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hough his firm has made its share of sleek additions to the cityscape—the Time Warner Center, for instance— and is now leading one of the largest developments in the city’s history—Hudson Yards—Bruce Beal, Jr. is no less proud of Related Companies’ longstanding commitment to providing affordable housing in New York and beyond.

“The way we look at it,” he said, “we’re going to be in this city for the long term. And for communities to do well, we have to provide great and affordable housing.”

Related currently holds 45,000 units of affordable and workforce housing across the country, with 8,500 located in New York City. Its winning proposal for the Hunter’s Point South development in Queens will add another 925 units of permanent workforce housing to that total—well above the 60 percent minimum called for in the RFP. In fact, Hunter’s Point South will be the city’s largest new workforce housing development in decades.

In partnership with New York City’s pension funds, Related also recently acquired, and preserved as affordable, approximately 2,300 units in the Bronx.

To make affordable housing a reality requires a measure of creativity. But even more important, according to Beal, is the will to do it.

“You can’t look for the maximum profit on every single job,” said Beal, who, after high school spent a year building affordable housing for low-income families in rural Ontario. “You have to be willing to make an acceptable return, and, at the same time, give something back.”

Sustainability is another area of social responsibility where Related and Beal have made notable strides. While many developers add sustainable features to market-rate or luxury buildings, few have shown the same level of commitment when it comes to affordable units. At its complex on Gerald Avenue in the Bronx, Related oversaw the largest-ever installation of solar panels for an affordable housing development in New York City. The firm also installed one of the city’s largest residential cogeneration systems at Manhattan Plaza, a 1,600-unit Section 8 development. In addition, the company has converted all its affordable housing sites that burned heating oil to natural gas.

And though applying a sustainable approach can be good for business, in some instances the economic justification is harder to quantify—or simply not there.

“It’s no different than affordable housing,” Beal said. “Sometimes you can make more money just building high-rise condos without a thought about sustainability. Which is why that inner core of social responsibility has to be there.”

Unlike other industries that can relocate across the river or overseas, real estate firms—particularly providers of rental housing—are married to the neighborhoods they serve.

“We can’t move our buildings,” Beal said. “We want to invest in the city. We want to see the city do well in the long term, which means we are going to be responsible.”

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March 2015

ADOLFO CARRION EXECUTIVE VICE PRESIDENT OF STAGG GROUP OUTSTANDING ACHIEVEMENT IN THE PUBLIC & PRIVATE DEVELOPMENT OF AFFORDABLE HOUSING

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ver the course of an accomplished career in public service, Adolfo Carrion has always counted affordable housing among his foremost concerns. Carrion began as a middle school teacher in the Fordham section of the Bronx, where he observed firsthand the struggles of working families trying to make ends meet in New York. Carrion went on to earn a master’s degree in urban planning from Hunter College, and then worked at the NYC Department of City Planning before being elected to the City Council. As Bronx Borough President, he led a series of ambitious rezoning initiatives that resulted in the creation and preservation of more than 40,000 units of affordable housing. Carrion subsequently served as Director of the White House Office of Urban Affairs and then Regional Administrator for the U.S. Department of Housing and Urban Development (HUD), where he oversaw $6 billion in federal housing investments in New York and New Jersey.

Now working in the private sector as an executive with the Stagg Group, Carrion is in the process of bringing a large-scale development to the North Bronx that will include hundreds of affordable housing units.

When asked what can be done to address the current affordable housing crunch, he replied: “We need more density, more height. We need the housing agencies to be more efficient in moving projects through the process.

We need to modernize the building code to be more responsive to new realities.”

And while the former Borough President acknowledges that it’s not always easy to make affordable housing economically viable, he knows that where there’s a will there’s a way. “If you’re going to produce affordable housing in New York City, you’re running tight margins,” Carrion explained. “But it can be profitable. It’s really about running a tight ship.”

Incorporating sustainable features, which often require higher upfront investments, can pose additional challenges. “You need to have patience for the return,” Carrion said. “It’s an area where the government can and should continue to assist.”

In his days as an elected and government official, Carrion had countless developers bring new projects before him. So, now that he’s working on the private side of the equation, what advice would Carrion give to his former public-sector self?

“Time is money,” he laughed, “in big bold letters! When we drag our feet on the government side, we discourage investment in our city. That’s very important because when you buy a property you want to develop it. Sitting on it, waiting for someone else to act, burns through a lot of resources.”

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March 2015

Manhattan Plaza

Hunter’s Point South

Hunter’s Point South

North Park

Victory-Fiedler Apartments

Gateway Apartments

New Horizons

529 West 29th St

Building neighBorhoods And enhAncing communities Related Companies is proud to have contributed to our city’s diverse and vibrant communities for over four decades. From the waterfront of Queens to midtown Manhattan and the southern tip of Brooklyn, we have developed or preserved nearly 8,500 units of affordable & workforce housing across all five boroughs... and we are just getting started. related.com

The Caroline

Bradhurst Court

French Apartments

Terrific Tenements

Ocean Park

RAFAEL E. CESTERO PRESIDENT & CHIEF EXECUTIVE OFFICER OF THE COMMUNITY PRESERVATION CORPORATION EXCELLENCE IN THE RESPONSIBLE MANAGEMENT OF A NON-PROFIT ORGANIZATION

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or New York to continue to be a desirable place for people of all backgrounds to live, its housing sector must confront two great challenges: embrace sustainable practices on a profound scale, and produce enough affordable housing to meet the demands of a growing and diverse population.

The Community Preservation Corporation, led by CEO Rafael Cestero, has shown how an organization can address both challenges at the same time.

Here’s how it works: When building owners adopt more efficient, sustainable practices, they reduce their operating costs. Lower operating costs, in turn, reduce the pressure to raise rents. The logic is simple enough. But efficiency upgrades can be expensive, which means owners often need help getting over the hump of upfront costs.

CPC’s Green Financing Initiative seeks to address both issues. “As a lender, what we try to do is make it easy for building owners to increase the amount of the loan that we’re providing them by the dollar amount it takes to make the improvement,” explained Cestero, a former commissioner of NYC’s Department of Housing Preservation and Development.

On the technical side, CPC schools building owners in simple measures they can adopt to curtail energy consumption, whether sealing windows and doors or installing efficient light fixtures and low-flow showerheads.

“We have a whole energy audit process that we go through with buildings,” Cestero said. “The built environment generates more environmental damage than any other part of our economy, and so if we can lower energy consumption in apartment buildings, that brings a significant benefit to the environment.”

A mortgage finance lender specializing in the preservation and construction of multi-family affordable housing throughout New York, CPC has served a vital role in post-Sandy rebuilding efforts, providing repair loans that enable small property owners to bring their units back online, as well as assistance navigating the bureaucratic complexities of relief aid. The not-for-profit organization has also partnered with the city to finance the construction of new homes.

“We work with small neighborhood-based owners and developers of affordable housing because we believe those owners have the same needs for financing that the big players in the city do. But the market doesn’t really provide for that need,” said Cestero, whose organization’s aim is to achieve comprehensive neighborhood revitalization.

“Our mission is to provide those owners with the capital they need in order to maintain and sustain their buildings as stable, affordable places for people to live.”

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March 2015

The Howard Hughes Corporation is honored to be recognized among the top companies in fostering community engagement through corporate philanthropy and volunteerism for its work at New York’s oldest new neighborhood, the Seaport District.

BILL DACUNTO EXECUTIVE VICE PRESIDENT OF OPERATIONS OF SILVERSTEIN PROPERTIES, INC. SPECIAL AWARD FOR ALL-AROUND EXCELLENCE IN CORPORATE SOCIAL RESPONSIBILITY

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even World Trade Center was the last building to fall on September 11, 2001. And it was the first to rise again: the prototype for every other tower that will grow out of that resilient patch of Lower Manhattan.

“People thought Larry [Silverstein] was crazy for building here again,” said Bill Dacunto, from his office on the 38th floor of 7 WTC. “But he did it anyway. And businesses and residences started to return after this building went up.”

Dacunto played no small role in the resurgence, leading the effort to remove 51,395 tons of contaminated soil, 3,308 gallons of oil and oily water, and 11 drums of solid waste from the 7 WTC site. The trauma of 9/11 transformed not only the city and nation, but also companies like Silverstein Properties that bore the brunt of the disaster.

“People died on this site. We have a huge responsibility,” said Dacunto, whose own life was likely spared by happenstance: He was attending a meeting on the building’s ground floor when the attacks occurred. Had he been on an upper floor, he might not have been able to escape.

When your business is skyscrapers, and you have the will to make a difference, small steps can add up. Donating blood, for instance, was a cause that Dacunto had always championed. After 9/11, however, Dacunto decided to ask not only Silverstein employees, but tenants, contractors, and vendors to participate in blood drives as well.

“What if I went around my neighborhood, just ringing a bell? What if I yelled out: ‘I’m hosting a blood drive.

I’m collecting toys, food for the homeless—what would I get?” Dacunto asked. “But when I have buildings behind me—these huge edifices—I can reach thousands of people.”

His blood drives have collected 4,500 pints to date. Buoyed by that success, Dacunto spearheaded toy and coat collections as well. He then began to promote sustainability in all Silverstein offices, insisting on photocopying on both sides of a page. He eliminated cover sheets from print jobs and changed the default modes of printers to conserve power. Coffee mugs replaced disposable cups, water filtration systems replaced coolers, which, Dacunto notes, need to be transported to and from the office.

“A skeptic could say: ‘You’re just saving the company money. Yeah, sure I am,” Dacunto said. “But I’m also not contributing to that diesel those trucks are spewing in the street.”

Having done his part to rebuild in the wake of one of the greatest tragedies the nation ever endured, Dacunto has turned his attention to the little things that just might help prevent even bigger tragedies in the environment.

When carried out on a towering scale, little things can mean a lot.

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March 2015

Impacting 2.5 million students and educators

There is a critical need to improve the financial literacy of today’s youth.

That’s why, in June 2012, we launched PwC’s Earn Your Future, a groundbreaking five-year commitment—$60 million in cash donations and one million service hours—to support youth education.

To learn more about this commitment and our other Corporate Responsibility initiatives, visit www.pwc.com/us/corporateresponsibility © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved.

DENNIS FRIEDRICH CHIEF EXECUTIVE OFFICER OF BROOKFIELD PROPERTY PARTNERS OFFICE DIVISION SPECIAL AWARD FOR OUTSTANDING LEADERSHIP IN SUSTAINABILITY, CORPORATE PHILANTHROPY & COMMUNITY ENGAGEMENT

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or Dennis Friedrich, being a good neighbor might take the form of a sculpture crafted of canned goods or carved ice, a summer festival featuring live blues, or a drive-in style movie. With people working longer hours and spending more time in the office, Friedrich hopes the 400-plus art installations and cultural events Brookfield Office Properties opens to the public every year will contribute to more “energetic public spaces” and “unique urban environments.” And since supporting a vibrant cultural scene can only boost the quality of life in the communities where Brookfield has holdings, Friedrich views his firm’s commitment as one with mutual benefits.

“It differentiates our brand and also our assets,” he said.

As an institution, Brookfield encourages its employees to support worthy causes as well. The company incentivizes charitable donations through a dollar-for-dollar matching gift program, and has created an in-house group dedicated to facilitating employee participation in social causes, especially those rooted in the neighborhoods where the company has holdings.

“You need to take a long-term view of the communities that you’re investing in,” Friedrich said. “We’ve seen in our history that positively contributing to the community make us more aligned with tenants—and, at the end of the day, they are the lifeblood of our business.”

In the wake of Superstorm Sandy, Brookfield employees organized a grassroots relief effort on Staten Island. The company provided financial support as well as buses that transported volunteers from the office and back.

“When everyone got back from spending a day or two on Staten Island, you could feel the energy, people talking about it,” Friedrich said. “That creates greater productivity, and a sense of loyalty to Brookfield. Whether or not it shows up in our financial results, I can’t measure that completely. But I know it’s there.”

Brookfield also contributed to the Sandy recovery by making office space available to small business that were knocked offline by the storm, in addition to donating to the Mayor’s Fund to Advance New York City.

With one of the largest building portfolios in the world, Friedrich has undertaken ambitious initiatives to achieve optimal energy efficiency and reduce his firm’s carbon footprint. Last year, Brookfield was rated North America’s No. 1 performer by the Green Real Estate Sustainability Benchmark. Sustainable practices, Friedrich notes, can bring economic returns to the firm, or returns that the firm can pass along to tenants, or even society at large (installing electric charging stations at its parking facility, for instance).

“From the tenant’s standpoint, they want to know that they are also making a social and environmental contribution,” Friedrich said. “It’s an expectation at this point.”

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March 2015

AMY HATTAN CORPORATE SUSTAINABILITY OFFICER, THORNTON TOMASETTI SPECIAL AWARD FOR PROMOTING THE PRINCIPLES OF SUSTAINABILITY THROUGHOUT A LARGE CORPORATION

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ractice what you preach. That was the message Amy Hattan brought to Thornton Tomasetti after the structural engineering consulting firm acquired Fore Solutions, the green building consulting firm where she had served as COO. As Hattan explained it: “AEC firms have traditionally been more focused on providing sustainable services than incorporating sustainability as an integral part of their own operations and practice. But if we’re asking others to do certain things, shouldn’t we be doing them ourselves?”

At Thornton Tomasetti, Hattan has implemented sustainability targets along with mechanisms—such as biannual carbon footprint inventories of the firm’s 27 office locations—for measuring progress along the way. The ultimate goal: Carbon-neutral business operations by 2030. Through her efforts, three of the firm’s offices have received LEED Gold certifications, and another five could soon follow. Along with the considerable energy savings, Hattan believes that sustainable practices also benefit employee health. Though harder to quantify, fewer toxins in the office will surely yield a healthier, more productive workforce.

“There is a cost upfront,” Hattan said, “but that should pay itself back in the long run.”

With guidance from Hattan, the firm—which issues a substantive corporate sustainability report annually—has adopted a three-pronged approach to corporate sustainability: planet, people, and profit.

Planet: Reduce the environmental impact of the firm’s operations by moving sustainability practices into all of its services.

People: Improve employee wellness and satisfaction while engaging with the community. Hattan persuaded the Thornton Tomasetti board to approve a volunteer benefit day, not only to give the firm a better presence within the communities it serves, but also to provide informal training for employees, giving them opportunities to engage in activities they might otherwise never experience.

Profits: Although there may not be a direct link, the firm strives to improve on all three levels, including bottom line.

“If you want to build an enduring organization, sustainability is as key as anything that we previously believed,” Hatton said. “Begin with a celebration of what you are already doing. After that, measurement is key. Measurement allows you to see what your baseline is and what needs to be improved upon. It will show your achievements, as well as where you are going.”

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March 2015

NEW CONSTRUCTION AND PRESERVATION OF

CPC is pleased to be recognized

AFFORDABLE HOUSING

with City & State’s award for

“

SMALL OCCUPIED BUILDING REHAB FINANCING

Excellence in the

Responsible Management of A Non-profit Organization

SUPPORTIVE AND SPECIAL NEEDS HOUSING FINANCING

”

Congratulations to all deserving winners from New York’s Real Estate, Construction and Housing Industries!

DOWNTOWN REVITALIZATION DEVELOPMENT LOANS CONSTRUCTION FINANCING •New Construction of Multifamily Properties •Refinancing and Rehabilitation of Occupied Properties •Gut Renovation of Vacant Buildings PERMANENT FINANCING •SONYMA insured loans •Uninsured Private Placement •Freddie Mac SBL & Conventional Lending

www.communityp.com

The Community Preservation Corporation

JOE IENUSO EXECUTIVE VICE PRESIDENT FOR FACILITIES & OPERATIONS, COLUMBIA UNIVERSITY EXCELLENCE IN THE PROMOTION OF WORKPLACE DIVERSITY

F

or all its bright lights and grandiose heights, the heart and soul of New York are its residential neighborhoods.

For the past century, Columbia University has served as an anchor and source of stability in one of those neighborhoods: Morningside Heights. Now that the university has begun an ambitious move into Harlem as well, Joseph Ienuso, a chief architect of that expansion, is taking a similarly long view.

“We are responsible for the full life of anything we build,” said Ienuso, who makes it his business to deliver the capital projects that simultaneously serve the university and its surrounding communities. To that end, Ienuso has instituted two ambitious goals: The first calls for at least 35 percent of dollars spent on Columbia’s construction contracts to go to local businesses owned by women or underrepresented minorities. The second requires that 40 percent of the workforce for the university’s projects come from the local community.

“It’s great to have a philosophical view,” Ienuso said. “But you also need goals.”

A goal in itself, though, isn’t always enough—especially if the program’s intended beneficiaries have not been properly prepared to succeed. That’s why Columbia partnered with the NYC Department of Small Business Services to create a free program to mentor women and minority-owned firms in a wide range of business skills. To date, the university has awarded some $30-35 million in contracts to program participants.

Of course, there have been challenges. Sometimes a firm isn’t able to make the grade. It goes with the territory, according to Ienuso, who serves as Chair of Nontraditional Employment for Women. Large-scale projects are always difficult to execute, independent of concerns for diversity.

“I have to spend part of my time being a little bit of a cheerleader,” Ienuso said. “We may not be able to meet the goal on every project. But it’s important that we know we tried.”

Ienuso also deserves recognition for the unprecedented strides he’s made in sustainable building. When planning commenced for the new Manhattanville campus, Ienuso decided that LEED standards would have to be applied.

He then worked in partnership with the U.S. Green Building Council to determine how their certification process could be applied to the entire 17-acre development.

“It was an extensive application, to say the least,” Ienuso recalled.

After the university devised a clean development plan to address air quality —especially important given the prevalence of asthma among children in the community—noise and other environmental concerns, the new campus became New York’s first development—and Columbia, the first institution of higher learning—to earn a LEED Neighborhood Development (ND) Platinum rating.

All in a day’s work for Ienuso, who looks forward to overseeing Columbia’s biggest development project since it moved to Morningside Heights more than a century ago.

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March 2015

Congratulations to our Board Chairman and Founder JOSEPH J. SITT on being honored with City & State’s 2015 Corporate Social Responsibility Award for Outstanding Leadership in the Promotion & Improvement of New York’s Airports.

The Global Gateway Alliance was established by Joseph J. Sitt, President & CEO of Thor Equities, to address the major challenges facing the Metropolitan region’s airports and related infrastructure that, if left unaddressed, will serve as a major impediment to the long-term growth of New York City. By harnessing the expertise of leaders in business, government, academia, labor and other sectors, we seek to tackle these challenges head-on and serve as the leading advocate in an effort to improve our airports and facilitate the continued growth of the region.

Board Chairman & President

Board Members

GlobalGatewayAlliance.org

STUART APPELBAUM ANGELO GENOVA CHRIS GIAMO DAVID HOPKINS JARED KUSHNER

JOSEPH J. SITT

@GGA_NYNJ

GEORGE L. MIRANDA MITCHELL MOSS WILLIAM C. RUDIN JOSEPH E. SPINNATO ALVIN S. TRENK

PETER WARD THOMAS K. WRIGHT KATHRYN S. WYLDE TIM ZAGAT

ANDREA OLSHAN CHIEF EXECUTIVE OFFICER OF OLSHAN PROPERTIES SPECIAL AWARD FOR CORPORATE ACHIEVEMENT IN VOLUNTEERISM

W

hen she was growing up, a family “vacation” often meant hopping on a plane and scoping out some mall in a distant part of the country. But Andrea Olshan, CEO of Olshan Properties and daughter of the firm’s founder, insists that more than just a passion for real estate runs in the family.

“My father taught us that you can do well and do good,” Olshan recalled. “They aren’t mutually exclusive. Being a good citizen is ultimately the most important thing.”

Given how real estate is interwoven in the fabric of communities, Olshan believes that firms like hers have a responsibility to help the areas they serve, even more so than in other industries.

“Creating spaces for people to live and work and shop and enjoy time with their families makes neighborhoods better,” Olshan said. “You can give back to communities without extracting every last dollar, while at the same time being profitable,” Said Olshan, a Harvard College and Columbia Business School grad said.

When Olshan took over the company in 2012, she sought to advance her father’s commitment to community outreach even further. At the heart of this renewed effort is a mandatory paid day of service for every employee in the organization.

“There’s no greater team-building experience than having everyone together, regardless of seniority, wearing hairnets and breaking down pallets of macaroni for a food bank,” Olshan said.

In order to ensure a constant flow of fresh ideas, top executive are tasked with picking a different junior employee to join the outreach committee each year. The committee ultimately decides which cause the firm will support in the coming year. “We get so much buy-in from the team because they’re part of the decision-making process,” Olshan said.

The fight against hunger was the focus of last year’s campaign. At one event, hotel staff from Columbus, Ohio drove an hour to Dayton to volunteer alongside the retail team from the Greene Town Center. “People literally formed a line, and passed boxes of cans down the line to be stacked. The event enabled that kind of teamwork,” Olshan explained. “One of the main points of feedback was: ‘I wish my kids were here. Next year can we make this a family event?’”

Through scores of food drives and community events, the companywide effort resulted in the distribution of 12,000 lbs. of food to people in need.

“It’s the easiest thing in the world,” Olshan said. “There are so many places that need help, volunteers. Just pick a day and place. You’ll wonder why you waited so long.”

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March 2015

MITCH ROSCHELLE PRICEWATERHOUSECOOPERS, PARTNER & NATIONAL LEADER, U.S. REAL ESTATE ADVISORY PRACTICE DISTINGUISHED SERVICE AWARD FOR CONTRIBUTIONS TO PUBLIC EDUCATION & CHILD LITERACY

I

f we have learned anything from the Great Recession, it’s that we all must strive to be financially literate. As we now know, when millions of Americans amass debt burdens they are unable to repay, it can take the nation years to emerge from the ensuing crisis.

With its world-class corps of financial experts, PricewaterhouseCoopers has committed itself to addressing the problem of financial literacy. To date, the firm has sent more than 5,000 employees to volunteer in NYC schools.

For Mitch Roschelle, New York head of PwC’s “Earn Your Future” financial literacy campaign, this type of skillsbased volunteerism lies at the core of the firm’s of corporate responsibility efforts.

“Try to take advantage of the skills in your organization and share them with those in the community that would benefit,” said Roschelle, who is a board member of the non-profit PENCIL and the PwC Charitable Foundation.

“Our corporate responsibility philosophy revolves around employee engagement, because we have found that when you create opportunities for your workforce to give back to the community with the currency of their time, they feel much better about their purpose within the organization.”

According to Roschelle, the real estate community has traditionally engaged in philanthropy of the pocketbook variety. Yet companies can have even more impact on both employees and tenants by exploring volunteer-based efforts, whether cleaning parks or assisting schools with infrastructure challenges or building for the homeless.

As a firm, PwC is well aware of the changing demographics and values of its workforce. More than half, according to Roschelle, is made up of Millennials, with a median age of just 27.

“Millennials are much more accustomed to volunteering their time than writing a check,” Roschelle said. “If you look at how they’ve been educated, many have had service learning as part of their school curriculum.”

According to Roschelle, it’s not merely a question of retaining good employees and improving morale. When a company creates opportunities for its employees to give back, it adds a dimension to their experience within the organization—one that is more important to more workers than ever before.

“When the purpose statement of the company includes giving back to the community, and the purpose statement of the individual includes giving back to the community,” Roschelle said, “that alignment leads to a much more rewarding experience for both employee and employer.”

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March 2015

Connecting Communities and Capital

The Richman Group and RHR Funding LLC

Salute Bruce Beal for a well‐deserved Award in Outstanding Corporate Achievement in the Preservation & Development of Affordable Housing of Excellence

RHR Funding is a Richman Group Company. For more information contact Mathew Wambua, President @ 347-821-4778

JOSEPH SITT CHIEF EXECUTIVE OFFICER OF THOR EQUITIES GATEWAY AWARD FOR OUTSTANDING LEADERSHIP IN THE PROMOTION & IMPROVEMENT OF NEW YORK’S AIRPORTS

I

n the course of his travels as a global investor, Joseph Sitt, Chief Executive of Thor Equities, has passed through his share of world-class airports in cities such as Hong Kong, Dubai, London and Paris. Observing first-hand the modern amenities and streamlined operations of these facilities, Sitt, a proud New Yorker, realized just how substandard the airports serving his hometown were.

“I’d return to the outdated, inefficient and embarrassing airports of New York,” Sitt said. “The lack of investment has become undeniably obvious, and the inefficiency is curtailing potential for economic growth. Our global reputation is at stake.”

Tired of waiting for others to act, Sitt decided to take matters into his own hands. In 2012, he founded the Global Gateway Alliance (GGA), a non-profit whose mission is to improve the city’s airport infrastructure. Since then, GGA has played an instrumental role in advocating for upgrades to the city’s three major airports, which serve more than 111 million passengers a year.

“Our greatest success has been putting airports on the public map and political agenda,” said Sitt. “For too long, they were getting short shrift.”

As part of its airport improvement campaign, GGA has conducted a number of studies to shed light on particular deficiencies. One revealed that JFK customs wait times were among the longest in the nation. The report got management’s attention. Soon after its release, new kiosks were installed in two terminals to help eliminate bottlenecks. GGA also successfully lobbied for 30 minutes of free Wi-Fi per passenger in the three major airports.

What’s more, Gov. Cuomo recently allocated $8 billion to upgrade airport infrastructure.

Still, much remains to be done. Sitt lists the redevelopment of the Central Terminal Building at LaGuardia and bringing a first-class hotel to JFK as priorities. He has also begun to advocate for infrastructure investment on a national level.

A Brooklyn native, Sitt is an active board member of the Bedford Stuyvesant Restoration Corporation. Though he acknowledges many mentors over the course of his career, he cites former Mayor Bloomberg, with whom he worked closely on the Coney Island and Downtown Brooklyn redevelopment projects, as someone who inspired him to strive to contribute to the city.

“As both a businessman and mayor,” Sitt said, “he’s been altruistic and socially conscious about his responsibility to give back to the city and make the world a better place. And I’ve tried very hard to keep that ethos in my own small way.”

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March 2015

TIAA-CREF Global Real Estate proudly congratulates NICK STOLATIS, Senior Director of Global Sustainability for being recognized with City & State’s 2015 Corporate Social Responsibility Special Leadership Award for the Promotion of Sustainability through Investment, Education & Civic Engagement. Nick has guided TIAACREF’s energy management program and helped boost the energy efficiency of the firm’s real estate portfolios by approximately 17.6% since 2007. The energy saved in 2014 through these efforts is equivalent to $14 million in avoided energy costs and over 47,500 metric tons of greenhouse gas emissions.

TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $851 billion in total assets under management (as of 12/31/2014) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

TIAA-CREF Global Real Estate is the real estate investment and management business of TIAA-CREF. As the nation’s largest manager of U.S. institutional tax-exempt real estate assets* with approximately $56 billion in assets under management.

The platform has a global presence via the recent formation of London-based real estate asset management firm TIAA Henderson Real Estate (TH Real Estate), which has $26 billion in assets under management across 50 funds and mandates, bringing the combined worldwide assets under management for TIAA-CREF Global Real Estate and TH Real Estate to over $82 billion (as of 12/31/2014). *According to Pensions & Investments, Real Estate Managers ranking, October 27, 2014

TIAA-CREF personnel, through its investment management area, provides investment advice and portfolio management services through the following entities: Teachers Advisors, Inc., TIAA-CREF Alternatives Advisors, LLC and Teachers Insurance and Annuity Association (TIAA). TIAA-CREF Individuals & Institutional Services, LLC, and Teachers Personal Investors Services , Inc. members FINRA, distribute securities products. © 2015 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA-CREF). 730 Third Ave. New York, NY 10017 C 22739

NICK STOLATIS SENIOR DIRECTOR OF GLOBAL SUSTAINABILITY, TIAACREF GLOBAL REAL ESTATE SPECIAL LEADERSHIP AWARD FOR THE PROMOTION OF SUSTAINABILITY THROUGH INVESTMENT, EDUCATION & CIVIC ENGAGEMENT

A

fter earning an MBA at NYU’s Stern School of Business, Nick Stolatis came to the sustainability field by way of real estate asset management, which is not nearly as improbable as it may seem.

“Asset managers are by nature focused on conserving resources, operating efficiently, saving money,” Stolatis explained.

Indeed, for Stolatis, operational excellence is the foundation of any sustainable enterprise.

“If you’re not engaging in sustainable operations, you’re leaving money on the table,” he said. “It’s more expensive not to be sustainable.”

According to Stolatis, businesses that view sustainability as expensive often equate it with investing in new technology. Operational excellence, on the other hand, is about managing the technology you already have as efficiently as possible. People are often surprised at how simple that can be.

If conservation is a central tactic for achieving sustainable operations, the bedrock of TIAA’s strategy is benchmarking. “Measure your performance,” Stolatis said. “You can’t manage that which you don’t measure.”

Utilizing the ENERGY STAR Portfolio Manager, TIAA has achieved extraordinary success at reducing energy consumption. It is the only financial services organization, in fact, to receive the prestigious ENERGY STAR Partner of the Year Award from the EPA for seven consecutive years.

As Senior Director of Global Sustainability for TIAA-CREF Global Real Estate, Stolatis insists that sustainability factors into each of his firm’s real estate investment and asset management decisions. An industry leader in showcasing the benefits of benchmarking and monitoring energy use, Stolatis helped articulate TIAA’s sustainability vision in the company’s Global Real Estate Sustainability Initiative (GRESI), which focuses on three critical areas that property owners can manage to mitigate both their environmental impact and energy costs: conserving energy and water resources, and reducing the waste stream.

“Understand what your situation is,” Stolatis said. “That allows you to track performance against targets and recognize the impact that specific actions will have on your energy efficiency.”

TIAA’s U.S. real estate platform has full or partial ownership stakes in more than 600 properties nationwide.

Stolatis has made significant operational upgrades aimed at increasing energy efficiency throughout that portfolio.

In this day and age, a company can ill afford to ignore either the business or moral imperatives of instituting sustainable practices.

“Given the growth of information and overall interest in the topic of sustainability, investors are certainly asking questions about it,” Stolatis said. “It’s important not only to respond that you are doing it, but to offer the evidence, the metrics, associated with how well are you performing.”

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March 2015

IS PROUD TO SUPPORT

CORPORATE SOCIAL RESPONSIBILITY AWARD SERIES CONGRATULATIONS TO THE HONOREES FOR REAL ESTATE, CONSTRUCTION & HOUSING

DAVID WEINREB CHIEF EXECUTIVE OFFICER OF THE HOWARD HUGHES CORPORATION OUTSTANDING ACHIEVEMENT IN FOSTERING COMMUNITY ENGAGEMENT THROUGH CORPORATE PHILANTHROPY & VOLUNTEERISM.

“

One of our core brand values is authenticity,” said David Weinreb, Chief Executive of Howard Hughes Corporation. “When we enter a new market, the first thing we do is work to understand the history and dynamics of the site, as well as the needs of the community.”

Weinreb takes a “community-based” approach to development. At the outset of a project, he makes listening to the community a priority. That enables his company to tailor its developments and programing to drive local growth and support worthy causes.

“No two communities are alike,” Weinreb said. “Different communities have different needs. We assimilate into the market.”

Weinreb’s partnership approach comes through in a variety of ways—most commonly in the form of assistance to public schools, cultural programs, or small local businesses. In Lower Manhattan, where Weinreb is planning a largescale rehabilitation and redevelopment of the South Street Seaport, HHC has donated more than $750,000 to a range of local charitable programs. In addition, the company has supported organizations such as Growing Great, Faberge Big Egg Hunt, TPS Spruce Street and Habitat for Humanity. Its partnerships have focused on helping local artists, interacting with the elderly, and assisting families facing financial hardships.

In the wake of Superstorm Sandy, HHC’s popular SEE/CHANGE program helped bring the historic downtown port back to life. The program included the innovative use of “pop-up “shipping containers to feature local retailers, an outdoor cinema, concerts, yoga, and more.

For Hawaii’s Ward Village, HHC’s massive 60-acre residential community development, Weinreb created the Ward Village Foundation, which has already awarded 20 grants to local non-profits as part of a program to make $1 million in local charitable investments over a two-year period.

In order to make Ward Village work, HHC’s professionals spent several years learning the local culture and history as they developed an intricate master plan that resulted in the nation’s largest LEED-Neighborhood Development Platinum-certified community.

Corporate social responsibility, according to Weinreb, is especially important for real estate developers. “We don’t simply build neighborhoods and move on,” he said. “As place-makers, we have a bigger responsibility as stewards of a community over the long term.”

So, it’s not surprising to learn that Weinreb, who has committed more than $120,000 to New York-based nonprofits just in the last year, will be honored by the Boys and Girls Harbor in May. “I believe that today people are more conscious of the values of the company they work for, the impact their company has on their community, and, more broadly, on the world,” he said.

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March 2015

Suri KaSirer

Special Congratulations to this morning’s honorees especially Dennis Friedrich, David Weinreb, Adolfo Carrion, Bill Rudin & all of the other honorees whose efforts make our City an even greater place.

Julie GreenberG Omar alvarellOS Cynthia DameS traCy FletCher tyeSa GallOway miChael Krevet Peter KrOKOnDelaS Shane myerS

—Kasirer Consulting Please visit us at our new home on the web: www.kasirerconsulting.nyc

JervOnne SinGletary

BULLETIN: AFFORDABLE HOUSING

BUILDING BRONX Map Emerges For Affordable Housing Development

By KATE PASTOR from CITY LIMITS

T

he Bronx is building—or at least that’s the plan.

City Limits has identified dozens of addresses being eyed for housing development in the Bronx.

Some are under-used lots owned by the city’s department of Housing, Preservation and Development (HPD), which is seeking developers for at least 25 of them to build 100 percent affordable housing. Some were pinpointed as possible sites for affordable housing in an advisory document created by the office of Bronx Borough President Ruben Diaz Jr. and passed on to the mayor and city housing agencies last winter, and others are already being marketed for their affordable housing potential.

Though Diaz has no formal role in choosing the sites that will make up the mayor’s ambitious to build or preserve nearly 200,000 units of affordable housing, he has taken early steps to

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March 2015

insert himself into the process and has emphasized what power he does have over building in the borough.

He likened his build green edict to “an executive order” and says he holds sway over developers who need an address for a new structure, who want to build on city land or who request capital funding for their projects.

“We use that as leverage,” he said in front of a group of architects and developers on a tour of the Bronx last fall.

When it comes to the mayor’s housing plan, Diaz’s rundown includes a crop of HPD-owned sites in addition to the ones for which the city is seeking developers. It lists vacant lots and parcels identified as underutilized by HPD, as well as privately owned parcels where the beep nevertheless sees room to build.

HPD says it is currently in talks with some of the private owners.

Diaz’s report doesn’t just point to individual properties but entire swaths

of the borough being eyed for rezoning, like the controversial Jerome Avenue project on a 73-block stretch that spans the avenue from Mullaly Park north across the Cross Bronx Expressway to just south of Fordham Road. The area is now the subject of a neighborhood study by the Department of City Planning.

Less defined areas for potential rezoning are Tremont/Crotona, Concourse Village, around Metro-North stations in Tremont and Fordham and proposed stations in Hunts Point, Morris Park and Parkchester.

Diaz’s plan for development in the borough includes the Harlem River waterfront from Third Avenue to 149th Street. In recent comments, he called the stretch from 138th to 149th streets “the next frontier of high-rise development,” and pointed to the 161st Street corridor, the southern portion of the Grand Concourse and up-zoned parts of Webster Avenue, Fordham and White Plains roads as places where new development could thrive—even dazzle.

If a listing for 320 Fordham Road is any indication, real estate forces are getting on board with the borough president’s vision for both the waterfront and the borough’s growing housing potential. The waterfront site in University Heights called Fordham Landing is being marketed by Massey Knakal for $29 million and offers close to 1 million square feet of residential development.

The bulk of addresses on the borough president’s list are concentrated in the South Bronx, where the borough’s

Brookfield Property Partners is proud to be honored at the City & State’s 2015 Corporate Social Responsibility Award for Outstanding Leadership in Sustainability, Corporate & Community Engagement.

Manhattan West

We congratulate and thank all of this year’s CSR recipients for making our city more socially responsible. www.Brookfield.com

300 Madison Avenue 245 Park Avenue The Grace Building 450 West 33rd Street One Liberty Plaza

One New York Plaza Brookfield Place 200 Liberty Street 225 Liberty Street 200 Vesey Street

250 Vesey Street 300 Vesey Street Winter Garden Manhattan West

affordable housing of all kinds is a major component of that goal.”

DeSio says Diaz would stick with funding housing projects serving households making between 30 percent and 110 percent of area median income, a range that encompasses $2,5150 to $90,612 for a family of four. He adds that while there may be some wiggle room on the high end, 30 percent of AMI is the lowest income level for which capital funds can be used.

Not all new housing would be income-targeted: Borough Hall also recently pitched building housing above train yards, including two in the Northwest Bronx, but did not bill it as “affordable.” Still, the real estate

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poverty is most pronounced. Diaz’s office says that’s because land is cheaper and more plentiful in the south.

“Our office is actively engaged with the de Blasio administration and the appropriate agencies on their housing plan, and we have submitted numerous potential sites to this administration for consideration for future development.

These include the Harlem River waterfront and the potential decking of three borough train yards, as well as other sites across the Bronx,” said John DeSio, communications director for Bronx Borough President Ruben Diaz Jr., in a statement. “We are committed to helping to keep this borough and this city affordable, and the development of new,

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April 2015

brokerage Massey Knakal/Cushman & Wakefield, which has several sites listed on its website that could be used for affordable housing, is certainly peddling the borough’s potential in the affordable housing arena.

“With Manhattan sites fetching $500 to $800 per [base semi finished] and prime Brooklyn/Queens between $200 & $300, the Bronx is an increasingly attractive market for both public and private housing developers and one that will likely become even more popular as the new administration strives to reach its housing targets,” the Fordham Landing listing boasts.

But Tom Angotti, professor of urban affairs and planning at Hunter College and a former senior planner with the city, warns that city officials must not think in terms of quotas, but rather in terms of communities, when planning affordable housing.

“Their vision is to build housing, 200,000 units of affordable housing and there’s talk about community, but so far it’s a numbers game. And in fact they’re putting their foot forward first with these rezonings, in East New York and in the South Bronx. What that really does is put new market rate development first,” he said, noting that even proposed rezonings can reinforce a “ speculative land-buying frenzy.”

He argues that government should not be in the business of identifying points on map as development opportunities without considering whether communities can sustain and support new housing.

“Then you’re thinking like a real estate developer and not like a public agency,” he said.

This story was published by City Limits, which City & State is partnering with to cover crucial housing policy stories in 2015.

Congratulates Congratulates

Brookfield Property Partners Office Division Brookfield Property Partners Office Division

Dennis Friedrich, CEO Dennis Friedrich, CEO

for for Outstanding in Sustainability Sustainability Corporate OutstandingLeadership Leadership in Corporate Philanthropy Engagement Philanthropy&&Community Community Engagement Thank you City&&State State for for making Social Thank you City makingCorporate Corporate Social Responsibilityaapriority priority in Responsibility inyour yourcoverage coverage www.nicholaslence.com

www.nicholaslence.com Cristyne Nicholas Cristyne CEO Nicholas

CEO

George Lence George Lence President

President

BULLETIN: AFFORDABLE HOUSING

IN RISING MARKET, VITAL MITCHELL-LAMA PROGRAM AT CROSSROADS

O

pened in 1976, the fourbuilding Lakeview apartment complex at Fifth Avenue and 107th Street once illustrated the promise and ambition of New York state’s Mitchell-Lama housing program, which offered low-interest loans, cheap land and tax breaks—plus a guaranteed 6 percent return—in exchange for lower- and middle-class affordability.

From 1955 to 1978, Mitchell-Lama produced nearly 70,000 rental units in 174 properties around the city, often anchoring neighborhoods while the city lost population.

In recent years, however, Lakeview has also illustrated the strains and fissures facing Mitchell-Lama, which has been hailed, for example, by Manhattan Borough President Gale Brewer as “the best housing program ever conceived, middle-income.” It also houses low- and moderate-income tenants.

Through what tenants call “landlord neglect,” the 446-unit Lakeview has fallen into disrepair. Tenant association president Jo Ann Lawson points to defective elevators, missing light fixtures, mold, walls going years unpainted and— perhaps most glaring—scaffolding that has lingered more than nine years to protect residents from falling bricks. “I am ashamed of where I live,” she told legislators at a hearing last year.

The solution to those problems may come at the expense of the complex’s long-term affordability. Lakeviews’s parkside location in East Harlem is growing ever more attractive, as the cost of market-rate apartments and

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March 2015

BY NORMAN ODER land shoots up. The incoming owner of Lakeview—Portland, Me.-based Low Income Housing Corporation (LIHC)—plans to implement more than $20 million in repairs, and to catch up on a mortgage that went unpaid for 18 months. To do so, however, it may move Lakeview out of Mitchell-Lama, as is permissible, and jack up rents. MitchellLama projects must only maintain program restrictions for 20 years and owners who pay off the mortgage can leave the program.

Most existing tenants likely won’t face punishing costs, since other regulatory programs should serve as a stopgap, providing rent support while ensuring the landlord has the money to invest. But even solutions that help existing tenants leave advocates and elected officials wondering about the fate of a program enacted with expiration dates. After all, though city regulators say they have loan funds for repairs, they can’t compel owners to stay in MitchellLama when privatization may be more lucrative.

Scant funding from Albany Early Mitchell-Lama buildings faced a 50-year affordability commitment, but that was reduced to 35 years two years into the program, and to 20 years two years later, as noted by the NYU Furman Center. Pre-1974 rental buildings that leave the program must go into rent stabilization, but many newer buildings face no such restriction. The MitchellLama Residents Coalition (MLRC) has long advocated that rent-stabilization be applied to all newer buildings, but

that remains an uphill battle in the state Legislature.

By the end of 2012, as the Community Service Society (CSS) reported in its 2013 “Closing the Door” report, some 47 percent of MitchellLama rental units had left the program since 1990. Though the rate of loss slowed significantly after 2007, when the financial crisis began, “the losses could be revived by a change in the investment climate,” wrote Tom Waters and Victor Bach of CSS. The challenge is especially acute in Manhattan, where the real estate market is hottest and departures have been concentrated.

Assemblyman Robert Rodriguez, who represents East Harlem, calls the situation facing Mitchell-Lama a crisis, pointing to buildings fallen into disrepair or vulnerable to leaving the program.

Like other legislators and advocates, he’d like to see a much greater public commitment to Mitchell-Lama.

Last December, in a Daily News op-ed, Rodriguez called for the state to dedicate $1.5 billion from a $5 billion banking settlement fund for housing preservation and new construction geared toward the Mitchell-Lama program, aimed at a range of incomes, including low-income households. Bronx Sen. Jeff Klein and his Independent Democratic Conference recently called for $750 million to fund new MitchellLama construction, for a middle-class constituency.

The New York State Association for Affordable Housing, a coalition of builders and others working in the

affordable field, in November proposed that $1 billion of the settlement—which derives in part from misrepresentation of mortgages—be used to develop and preserve affordable housing, including Mitchell-Lama.

That hasn’t happened. The gubernatorial budget directs just $440 million of settlement funds to housing, including $50 million for new low- and moderate-income construction, and $50 million for Mitchell-Lama repairs. “It’s a missed opportunity,” Rodriguez says.

Another coalition, the Fair Share for Housing Coalition, launched March 10 to argue for more of the bank settlement to be spent on housing.

Any effort to restart Mitchell-Lama would have to grapple with the ways the world has changed since the 1970s.

For one thing, the city no longer has a large supply of cheap land to offer.

For another, subsidized borrowing is no longer a great lure, because all borrowing is so much cheaper. Last October, former housing official Charles Urstadt told the Observer that mortgage rates are now so low, close to tax-exempt rates, that they couldn’t spur a similar program.

Making the math work Rodriguez is keenly interested in Lakeview. “We’re in negotiations with the developer [of Lakeview] right now, to figure out the level of investment for capital improvements that are necessitating the exit,” says Rodriguez.

“We’re really hoping our wonderful mayor steps up and tries to keep this place affordable,” Lawson said. “We are prime real estate.”

The process takes a while, and the landlord did seek a meeting with the tenants. “He was very receptive to our conversation,” Lawson says of LIHC founder Charlie Gendron. “We have countered [that] we will do everything we can do to give you what you’re looking

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for and stay in the program.” The city Department of Housing Preservation and Development (HPD) says it has reached out to the owner. A public hearing and state approval are necessary to exit the program.

If Lakeview leaves Mitchell-Lama, one potential outcome is a program in which rents rise on paper—one-bedrooms vaulting from some $850 a month to at least $2,000—though tenants would be responsible for a fraction.

Perhaps three-quarters of the tenants (those earning up to 95 percent of Area Median Income, or about $79,700 for a four-person household) would pay 30 percent of their income. That’s thanks to special housing vouchers from the federal Department of Housing and Urban Development (HUD). About half of all Mitchell-Lama buildings in New York City have HUD mortgages, which make them eligible for such “sticky vouchers.”

Better-off tenants ineligible for vouchers might see rents capped for a defined period under a negotiated Landlord Assistance Program, or LAP, though such programs are unregulated.

But the owner is also considering other potential resolutions, depending on government funds.

“For years, the building has lacked funds for regular maintenance, which has led to severe water infiltration, elevators that frequently break down, and a rat infestation,” a LIHC spokeswoman tells City Limits in a statement. “Under this proposal, low to moderate-income tenants and seniors—which are a vast majority of the building tenants—will remain eligible for rental assistance and there will be a limit on how much they pay.” (LIHC points out that it has extended the project-based Section 8 contract with a nearby building, Villa Hermosa, for 15 years, longer than the typical term.)

Lawson describes both “a great deal

of excitement” about improvements, as well as “a great deal of fear” among tenants. While most existing tenants would qualify for vouchers, anyone not formally on the lease would be out of luck. Those whose family members have left would have to downsize to a smaller apartment, with no money to pay for moving. And, Lawson points out, tenants have already faced unexpected costs, such as prepping their apartments—it cost her $2,400—to respond to a “bad bedbug epidemic.”

Flaws and consequences The increasing attractiveness of Mitchell-Lama buildings comes on top of what many tenants consider official neglect—a feeling that was backed up partly by a 2007 state Inspector General’s report slamming the Division of Housing and Community Renewal’s oversight of Mitchell-Lama.

“Rather than safeguarding the integrity of the program, DHCR, through its own shortcomings, has allowed housing companies to flout rules regarding apartment allocation, financial reporting, and contracting,” the IG stated. That meant, among other things, “deterioration of facilities” and “waste of taxpayer money.” DHCR pledged to take remedial action.

Some one-third of the city’s Mitchell-Lama developments have major capital repair needs, with $80 million in construction costs, HPD Assistant Commissioner Julie Walpert said at the February 2014 Assembly hearing. To some degree those are the result of flaws in the program that benefited tenants in the past—and could punish them severely now.

Because of the way the program was constructed, Mitchell-Lama tenants, on average, pay about 20 percent of their income towards rent, while those over the income limit per building pay less

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than nine percent, according to Walpert’s testimony.

The huge repair needs at these buildings, combined with a common lack of capital reserves thanks to low rent rolls in the past, now means rent increases can be huge, sometimes even 50 percent.

Walpert pointed to the example of Tracey Towers in the Bronx, which required more than $20 million in capital work, but had not had a rent increase in nearly a decade. (The Daily News quoted the owner as saying rents were $163 per room.) After HDC refinanced the mortgage, the complex stayed in Mitchell-Lama, and HPD implemented a rent increase—proposed at 65 percent, but reduced to 61.5 percent after a lawsuit was settled—over four years.

“Had Tracey Towers been required to take modest annual rent increases, they could have budgeted more easily and not been faced with such a large increase,” Walpert testified. Tenant leaders, however, pointed to a history of bad faith by building owners and managers who didn’t make promised repairs that would have justified ongoing rent increases.

To mitigate the impact of large rent increases, especially after years of static rents, HPD could require annual rent increases for city Mitchell-Lama developments that follow either the consumer price index or the increase set by the Rent Guidelines Board, Walpert suggested at the hearing.

Forks in the road HPD’s proposal to lift rents and add a surcharge to higher-income tenants hasn’t made legislative progress. As the gap between building expenses and revenues remains, owners of MitchellLama buildings face a fork in the road: stay in the program thanks to refinancing (since 2000, HPD and the city’s Housing Development Corporation (HDC) have preserved more than

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35,000 units of Mitchell-Lama housing) or exit, directly or indirectly, toward the market, depending on available funding and regulatory regimes.

Buildings that don’t stay in the Mitchell-Lama program can transition to Housing Development Fund Companies (HDFC) under the state’s Article XI tax incentive, which extends protections for mixed-income tenants for up to 40 years. The process requires HPD review and approval by the City Council.

Still other Mitchell-Lama buildings— those with HUD loans—may go the voucher route. But that ultimately portends the loss of protected units, and also makes the units vulnerable to precarious federal housing budgets.

While most residents were eligible to remain with Section 8 vouchers when the Urban American Putnam Portfolio—five former Mitchell-Lama projects in upper Manhattan and Roosevelt Island with nearly 4,000 units—left the program in 2005, Crain’s New York Business reported in January 2014 that only about half of the unit-holders had vouchers.

The reason is unclear, but Katie Goldstein, executive director of Tenants and Neighbors, suggested it was “either poor conditions or they decided to move.” (A spokesperson for Urban American and Brookfield says the 5 percent annual turnover is comparable to similar buildings and that they’ve invested in repairs.)

“Vouchers on their own are problematic,” says Kerri White, organizing director of the Urban Homesteading Assistance Board, because vacated apartments can go to market. She’s argued that buyers of the Putnam Portfolio—like buyers at some other complexes with regulated rents but gaudy price tags—have paid so much they must push units to market rates.

“They can essentially triple the rent.”

City leverage?

The city’s leverage over MitchellLama owners has been subject to debate.

White said advocates met with the office of Comptroller Scott Stringer, who inherited an investment in part of the Putnam portfolio, to ask for the city to use its pension funds to ensure affordability. But the comptroller has a fiduciary responsibility to enhance pension-fund investments. “While they understand what was problematic about this portfolio, they have an obligation to the investment,” she reports.

A Stringer spokesman told City Limits, “The Putnam investment was made at the height of the real estate market in 2005-2007 and created a unique situation unlikely to be found in the rest of the portfolio. However, to ensure that the pension funds are never put in that type of situation again, our real estate partnerships include a clause that allows for a reputational risk opt-out.”

In 2007, warning about “predatory equity,” Tenants and Neighbors asked that city investment funds not invest in firms making private equity or other highly leveraged investments in subsidized housing; Indeed, the opt-out policy in the comptroller’s office dates back to 2008, advocates say.

But advocates haven’t achieved another request, that “regulatory agencies that supervise Mitchell-Lama developments” find ways to scrutinize sales so “neither tenants nor the assets are being placed at risk.” HPD notes it cannot legally interfere with an owner’s right to exit Mitchell-Lama, nor impose requirements to stop a buyout, but says rules require significant transparency during the one-year buyout process.

White agrees that the city often “does come to the table” regarding Mitchell-Lama preservation, though there

are times “they can definitely push harder.”

A citywide challenge For tenants with Mitchell-Lama leases and decent conditions—not a given—the program is a holy grail, an unusual opportunity in an increasingly unaffordable city. Last year, retired rocker and bar operator Handsome Dick Manitoba told New York magazine he’d waited nine years for a “great two-bedroom apartment with a terrace…

Mitchell Lama. Hit the apartment lotto!”

Fewer get that chance. A February 2004 report from then-Comptroller Thompson warned of “New York City’s Looming Crisis in Mitchell-Lama and Limited Dividend Housing.” It noted that “a combination of historically low-interest rates, an upward swing of real-estate prices, and initial mortgages nearing their maturation date” made it likely that such subsidized buildings would leave the programs.

That is exactly what happened, as noted by the Community Service Society. After slowing for the recession, the trend is poised for another upswing.

Over the next nine years, NYU’s the Furman Center reported in January, more than 58,000 units of subsidized affordable rental housing—including but not limited to Mitchell-Lama units—will be eligible to opt out of all affordability restrictions.

So the “city must prepare for the return of the market conditions that caused the last wave of MitchellLama losses by creating and funding incentives for owners to maintain their commitment to affordability,” as well as help with repairs in buildings remaining in the program, Waters and Bach wrote in the CSS report.

As buildings leave the program, that portends changes like those MLRC officer Ed Rosner says he’s seen at his complex, Independent Plaza North in TriBeCa, with the regular turnover of

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market-rate units making it “almost like a college dorm.” Such transient renters have “none of the awareness or consciousness of long-term tenants.”

As legislative and rule changes get proposed, the current position of Mitchell-Lama rental buildings provokes painful hindsight. Programs like MitchellLama were created in tougher times, and with expiration dates rather than permanent affordability. That leaves advocates scrambling. “We’d prefer to save the housing,” says Katy Bondonaro of the Mitchell-Lama Residents Coalition, “but if not, we’d prefer to save the people who built these communities.”

••• For Co-ops, a “Windfall”?

According to a 2011 Furman Center report, 97 Mitchell-Lama co-ops, with 69,700 units, were built in New York City. Relatively few co-ops have left Mitchell-Lama, but some exits have prompted huge debates, such as at the 1651-unit Southbridge Towers in Lower Manhattan. Cooperators at Southbridge, paid about an average of $17,500 for their co-ops, with an average monthly maintenance fee of $620, the Times reported last year. When the units go to market, the Southbridge offering plan— according to the Times—predicts that a shareholder could sell a one-bedroom apartment for $550,000 and reap $325,000 after a significant flip tax.

Should those who have benefited from affordability get an unfair “windfall profit,” as Cooperators United for Mitchell-Lama (CUML) dubs it? Or do they deserve an award for taking a risk by moving to a community decades ago and helping it serve as a magnet for growth?

Defenders note that the program began with a time horizon, and also note that co-op sales generate new tax revenue because all co-op sales are taxed. Many would like to pass on an asset to their children. They got a boost

last December, when a state court ruled that those buildings leaving the program were not subject to the city’s Real Property Transfer Tax; a lawyer for those considering privatizing told the Daily News that residents would be “dancing in the street.”

Critics, however, believe MitchellLama cooperators are cashing in on an affordable housing investment made by someone else—namely, taxpayers.

Max Weselcouch, director of the Moelis Institute for Affordable Housing Policy at the NYU Furman Center, contrasts the Mitchell-Lama rentals, where the owners took on some risk with the expectation of an eventual market-rate future, with the co-ops, whose shareholders took on less risk.

“They have the potential for a huge profit in buying out,” she observes. “It’s unclear whose interest that is in. The city and state invested in these properties when they were built. Now they won’t be available for future generations.”

As with Mitchell-Lama rentals, hindsight suggests an awkward fit with today’s city. “I think if someone were to design a limited equity program today,” Weselcouch suggested, “there probably wouldn’t be an option for shareholders to opt out.”

HPD has begun a co-op buyout plan in which buildings can be converted under state law to income-restricted buildings, which would provide the cooperators with some limited growth in their equity. Once outside MitchellLama, however, the building’s waiting list—the next generation for entry— would be eliminated, since the units could be sold on the open market.

And while buyers would face income limits and restrictions on sales prices, Cooperators United for Mitchell-Lama has warned this will put the buildings out of reach of many previously eligible to buy in.

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