TRD interviews pioneering real-estate reporter Charles Bagli (but not about Atlantic Yards)

It's worth reading a couple of Real Deal interviews, by Hiten Samtani, with the now-retired real estate reporter Charles Bagli, who made his bones at the "no sacred cows" New York Observer, then went to the New York Times.

Bagli has not been replaced, which means the Times has lost institutional memory. Also, his coverage of Atlantic Yards, I'd note, was highly inconsistent, sometimes with scoops, too often channeling the developer's narrative, yet also belatedly tough on developer Bruce Ranter. (That didn't come up in the interviews.)

There's lots of good stuff in the interviews, but I'll point to only a few excerpts.

Part 1: Setting the frame

From Scoundrels of the skyline: Charles Bagli on the most colorful characters in the real estate biz, published 8/12/20:

“As a former Catholic boy, I make a distinction between sins of omission and sins of commission,” he would tell the likes of Harry Helmsley, Donald Trump and Harry Macklowe, developers and inveterate gamblers he got to know well over his career on the beat. “Never lie to me.”

But lies of omission require reporters to do their homework, of course. As Bagli says, "And if I didn’t ask the right question, and they didn’t provide the information, that’s on me."

A "backwater" beat

Initially, Bagli says, his beat was "viewed as sort of a backwater," which left many stories uncovered, or "relegated to the so-called real estate pages."

He adds: "And zoning, here’s this boring subject, but it can make land worthless [or] as valuable as the Taj Mahal."

"Look, there's only two legal ways to create money in the United States," architect Vishaan Chakrabarti once said, "the Federal Reserve and an upzoning. So free FAR [floor area ratio] is worth its weight in gold."

The cost of ignoring "process"

From Bagli's interviewer:

Developers and others associated with the industry almost took advantage of that sort of boringness of the process to get away with some incredible things.

The response:

Absolutely. There would be big scandals about individual situations, but there wasn’t a sort of systemic look at how it functions and how [people] influence politicians and change the face of the city. 

Part 2: Other People's Money

In the second interview, published 8/21/20, Bagli, among other things, talked about his book Other People's Money, the failed acquisition of Stuyvesant Town-Peter Cooper Village.

One question:

The rent projections were almost a vertical line. How was there such a big disconnect between what the appraisers and the lenders thought about this, and what was actually playing out on the ground?

The response:

I think what had happened is you had a situation where the financing for all those projects during that period was coming from Wall Street, unlike the past, where you went to a commercial bank and borrowed money and it was on their balance sheets so they were very much looking over your shoulder...
The situation was great for Wall Street, because unlike the commercial banks, they never carry this loan on their books. What they did is they made money by making the loan. They then took the loan, sliced it up, combined it with other loans and then sold them to investors. So this was never on their books. There was never an incentive to ensure that this was a viable project. 

REBNY writing legislation, on site

There's a notable anecdote about the power of the real-estate industry:

I think we’re seeing the pendulum swing in the other direction. If you look back during the 12 years of the Pataki administration, the real estate industry was in the driver’s seat. Every year when rent laws would come up for renewal, they’d move to make them more pro-landlord. In fact, there was one year where [former REBNY president] Steve Spinola was in the Senate office writing the legislation when I talked to him. And I was shocked — not that he was doing that, I was shocked that he called me.

Well, it's not shocking that lobbyists draft, or write, legislation, since they have the interest and the wherewithal, especially in under-powered legislatures. But doing so inside the Senate office is kind of a next-level New York example.

It reminded me of the 2007 "Atlantic Yards carve-out," a special tax break for the project, as Bagli reported 6/29/07:

But many advocates, city officials and even some Senate Republicans are saying that Steven Spinola, president of the Real Estate Board of New York, betrayed the city’s effort. By all accounts, Mr. Spinola, the leading industry lobbyist, played a major role in negotiating the compromises and the tax deals for Atlantic Yards and other developments that led to Senate approval.
“This was a backroom deal,” said Liz Krueger, one of only two state senators who voted against the bill.