The Real Estate Board of New York has tapped Jack Lusk at the executive recruiting firm Harris Rand Lusk to lead the search for its first new president in nearly three decades, sources told The Real Deal.
The news follows last month’s revelation that REBNY President Steven Spinola will be stepping down at the end of 2015, when his contract expires, after nearly 30 years at the helm of the industry’s influential trade group.
Rob Speyer — the CEO of Tishman Speyer who took over as REBNY chairman last year — is heading an internal committee created to find a successor to Spinola, and multiple sources told TRD he hired Lusk to lead the search.
REBNY wouldn’t comment on the hire. Lusk did not respond to requests for comment.
Harris Rand Lusk’s clients have included the Association for a Better New York, the Port Authority of New York & New Jersey, various city government agencies and the Fund for the City of New York, according to its website.
Industry insiders said the new REBNY president will likely be someone skilled in politicking with government officials, given that the organization is one of the biggest lobbying groups in the state. Those skills will also be crucial as the next REBNY president is faced with working with Mayor Bill de Blasio as he implements his affordable-housing agenda, which many in the development world are skeptical about.
While it’s still early and sources said REBNY does not yet have a short list of replacement candidates, several names are being bandied about in the industry as meeting some key criteria. They include REBNY Vice President of Public Affairs James Whelan, a former operative in the Bloomberg administration who’s in charge of the organization’s political efforts, and Michelle Adams, head of government and community relations at Tishman Speyer. Whelan and Adams did not return calls for comment.
Spinola’s replacement will undoubtedly have big shoes to fill, especially when it comes to finding common ground and building consensus among the powerful, and often clashing, personalities who make up REBNY’s membership.
“There are one or two — maybe three — massive egos, and these people are not shy in any sense of the word. They make their feelings known quite definitively, so that nobody has a hesitation as to where they stand,” developer Larry Silverstein, who served as REBNY chairman from 1983 to 1985 and currently sits on the executive committee, told TRD.
“And yet, notwithstanding the conflict represented among the different leading members of REBNY — and they have been considerable — he’s handled them deftly,” Silverstein added of Spinola.
Others agreed that the new REBNY president will have to be someone who, like Spinola, can bring together the multitude of factions within the organization that are often at odds with each other, such as residential and commercial brokers, developers and landlords.
“Steve’s role is a very difficult one. He has to form a consensus and strategize and basically lead a group of very wealthy and powerful individuals who don’t necessarily agree on a heck of a lot,” one real estate insider said.
“It’s an interesting process,” added the source, who spoke on the condition of anonymity. “There are a lot of internal politics among REBNY members who try to wield influence over others based on their contributions to the organization, their longevity in the business, and the size of their portfolios.”
Caught off guard
The beginning of the end of the Spinola era had a somewhat rocky start.
REBNY itself was caught off guard when news broke about his departure. (It appears a source leaked the story to the Financial Times, which first broke the story.) Soon after the story was published, Spinola sent a statement to board members confirming the news, while calling the article “premature.”
In the statement Spinola, 65, also said he will stay on as a consultant and advisor for “a number” of years after stepping down. He did not provide a reason for his departure.
It was not clear whether his wife, Eileen Spinola, who serves as a senior vice president at REBNY, will be stepping down along with her husband.
A REBNY spokesman said the long-time face of the industry had not planned on going public with the news until closer to his exit. Executive committee member Douglas Durst said the disclosure ties Spinola’s hands during his remaining months.
“I don’t know why somebody would have put it out there,” Durst said. “It undercuts Steve’s ability to do anything for the next six months or so.”
When asked for details on the consulting firm and how the Speyer-led committee would begin its mission, the REBNY spokesman said only “there will be an orderly selection process.”
Spinola — who earned a compensation package totaling $925,031 in 2012, according to tax filings — ran the city’s Public Development Corporation, the forerunner to today’s New York City Economic Development Corp., before being tapped by REBNY.
As president, he is tasked with overseeing a budget of $10.9 million and a staff of 52 employees, in addition to all of the organization’s members. He is also the organization’s primary lobbyist.
Triumphs and challenges
The organization has been transformed during Spinola’s tenure, which started when he took the reins at REBNY in 1986. The trade group swelled to 15,000 members from 4,000, and pulled members of the residential brokerage community into the fold.
Spinola is also credited with steering the industry through tough times, including the post-9/11 downturn, the 2008 financial crisis, and Superstorm Sandy.
And he effectively increased REBNY’s involvement in political races throughout the city and state.
Last summer, the good-government group Common Cause NY criticized what it called a “skillful and calculated manipulation” of the state’s campaign-finance laws by REBNY and its leaders, which have increasingly pumped money into state and local races to the tune of some $44 million since 2005.
There have been some recent challenges, including the investigation into 421a tax breaks that some of REBNY’s most powerful members were facing. Late last year, the state’s Moreland Commission to Investigate Public Corruption reportedly sent subpoenas to Extell Development, Silverstein Properties and Thor Equities after Albany approved the lucrative tax incentives for the developers. Spinola was never publicly named in connection with the investigation, but the issue was a major public relations blow for the industry. After Gov. Andrew Cuomo disbanded the Moreland Commission, U.S. Attorney for the Southern District of New York Preet Bharara reportedly issued subpoenas seeking information about how the anti-corruption investigation was handled.
No model to follow
Given that Spinola has led the organization for nearly three decades, longer than any of his predecessors, looking back at the last selection process is not that useful in finding clues for how his successor will be selected.
Back in 1985, Silverstein was finishing up his term as chairman when Spinola was hired.
The developer said he was involved in the selection process, but was hard pressed to recall specifics about how it went.
“This goes back a year or two, or 30,” he said.