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New York Candidates Awash in Real Estate Cash

February 1, 2008

The real estate industry, racing to beat strict new limits on campaign contributions, has been flooding New York City candidates with donations for the 2009 campaign at a rate three and four times that in previous election cycles.

The industry, which looks to City Hall for everything from zoning changes to tax breaks, is traditionally a dependable source of cash for city election candidates. But with new regulations set to take effect starting on Saturday, donations have soared.

The New York Times examined contributions from executives and others affiliated with 25 of the city’s most prominent property management, brokerage and real estate development firms.

The companies together had given more than $1 million by Jan. 15, the most recent reporting deadline for the 2009 election. Those same firms had given $239,000 by the same point in January 2004 and $348,000 by January 2000.

The giving reflects a broader trend: Over all, candidates have raised about $28.8 million to date for the 2009 race, up from $12.2 million in 2001 and $8 million in 2005, according to the city’s Campaign Finance Board.

The surge is driven in large part by a major overhaul in the city’s campaign finance law, which, starting this month, will cap contributions for people who do business with the city at less than a tenth of what is allowed now. That means many developers, brokers, landlords and contractors will be limited to giving $400 to a mayoral candidate, compared with $4,950 now.

“They’ve got to get the money to the potential elected officials, so they’ve got to pump this money out as fast as they can,” said Douglas A. Muzzio, a professor of public policy at Baruch College.

The changes, aimed at reducing the influence of big money in elections, are set to be phased in over the next 10 months as the city creates databases to monitor donors.

The real estate industry will be most affected in the final phase, set to begin in December, which applies to anyone involved in land use decisions. But firms signing or renewing city leases or seeking economic development agreements could be affected in the first and second phases, which take effect this Saturday and in August.

Some industry officials say that candidates have used the looming restrictions as a way to aggressively solicit money now. The changes, which the City Council passed in June, have caused broad confusion and worry among firms that do business with the city, and some lobbyists have discussed filing a legal challenge to block it.

“Even while the bill was still being discussed, the candidates would say, ‘Well, we don’t know what’s going to happen after January, so you have to give us the money now,’ ” said Steven Spinola, president of the Real Estate Board of New York, a trade group and lobbying arm for the industry.

The major real estate firms examined by The Times are spreading money generously and in similar amounts to those considered the leading contenders for mayor: Council Speaker Christine C. Quinn, Representative Anthony D. Weiner and City Comptroller William C. Thompson Jr., with Ms. Quinn collecting the most of the three.

But no one has attracted more real estate money than Councilwoman Melinda Katz, who has used her perch as chairwoman of the powerful Land Use Committee, which must approve all major projects and zoning changes, to assemble a Who’s Who of industry supporters. A candidate for city comptroller, Ms. Katz, a Queens Democrat, received $196,266 from the 25 firms examined by The Times.

“No matter who gives to you, there’s going to be a perception,” she said. “But I think the perception I have is: These are folks that care deeply about the future of New York. They have an interest in making sure the economy of this city is strong and remains viable. And if they have faith that I may be the one able to provide that, then that’s not a bad perception.”

The real estate industry is coming off a period of not only extraordinary growth in the city, but also exceptional cooperation from City Hall. Daniel L. Doctoroff, who stepped down as deputy mayor for economic development on Jan. 11, recently boasted at a meeting of Brooklyn leaders that the Bloomberg administration was 78-0 in pushing zoning changes through the City Council.

“At least until recently the industry had been in a remarkable period in its history,” said Kenneth K. Fisher, a land-use lawyer with the firm of Wolf, Block, Schorr & Solis-Cohen and a former City Council member. “And I think a lot of industry players wanted to encourage that so that it continues, so they are supporting people who they feel will be supportive of continued development.”

That cooperation could be even more critical as the credit market continues to slump, which could force many developers to seek more generous tax and subsidy packages from the city.

Among the biggest contributors are companies engaged in pivotal development battles. The most money was given by Rudin Management, run by one of the royal families of New York real estate. The company, which appears headed for a major landmarks fight over the redevelopment of St. Vincent’s Hospital Manhattan and the surrounding area in Greenwich Village, had given $199,600 to a dozen candidates by Jan. 15, an increase of 45 percent over the firm’s contributions in the entire 2001 and 2005 elections combined.

Source: NY Times Read the full story here

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