Since announcing his $41 billion affordable housing plan in 2014, New York Mayor Bill de Blasio has encountered fierce resistance from grassroots housing advocates, who have pointed out that the plan would displace thousands of low-income families and spur gentrification in neighborhoods targeted for rezoning.
Until very recently, that opposition was also matched by the city’s 59 community boards and five borough presidents, which near unanimously struck down rezoning proposals that composed the wider housing plan. But last week the City Council’s land use committee, satisfied with amendments to the plan that partially expand the number of affordable units, voted 15-2 for its approval. Some advocates have celebrated the changes; others noted that thousands of low-income New Yorkers would still be left out of the deal. The full City Council body is expected to vote on the mayor’s plan this week.
Rarely mentioned amid the political jostling are the names of the developers pushing the plan forward. Here’s one: Ron Moelis of L+M Development. In terms of financial and personal ties to the de Blasio administration, Moelis stands out among his peers as the affordable housing developer behind de Blasio’s plan.
Moelis, a major financial supporter of the mayor, is the city’s top affordable housing developer and will be a significant beneficiary of de Blasio’s plan, which city hall staffers close to Moelis created. L+M is currently developing and financing over 15,000 apartments across the city, and had a warm relationship with the city before de Blasio assumed office: the New York Housing Commission named Moelis’s firm Private Developer of the Year in 2013. At the start of the mayor’s tenure, 90 percent of L+M’s work was in affordable housing.
This map shows the connections between de Blasio and Moelis, which are also discussed below:
Deep support from Ron Moelis and his firm, L+M Development Partners
Moelis and L+M have raised significant amounts of money for de Blasio, but he appears to prefer routing the contributions through his personal network.
Moelis reportedly raised $75,000 for de Blasio’s mayoral campaign. Much of that amount appears to have been raised at an October 2013 fundraiser that L+M hosted alongside another real estate firm, BFC Capital. Attendees included prominent real estate firms such as Brown Harris, Townhouse Properties and Xhema Builders.
One of the official co-hosts of the L+M fundraiser, Lisa Gomez, is the firm’s chief operating officer and has been chair of the New York State Association for Affordable Housing since November 2014. She is also a de Blasio bundler, raising $13,850 for his first mayoral campaign and personally contributing $200 to it. In a speech, the mayor called Gomez “a good friend” who he has “turned to for advice and insight for many years.” Other L+M de Blasio donors include David Dishy and Debra Kenyon.
Moelis himself did not donate directly to de Blasio’s mayoral campaign, but members of his family did: according to information from the New York City Campaign Finance Board, Moelis’s son Andrew, an associate project manager at L+M, gave $175 to de Blasio, and his daughter Madelyn gave $50; his nephew Jordan, who runs a hedge fund based in Los Angeles, has given $150; and his cousin, Jeffery Moelis, who owns the the property management arm of L+M, gave the mayor $1,000. The smaller amounts, as long as they are given by donors living in New York City, are matched up to six times in accordance with the city’s public financing law.
In 2008, Moelis himself donated $320 to de Blasio’s public advocate campaign.
Top housing staffers connected to Moelis
Moelis also has close ties to the two housing staffers who shaped de Blasio’s housing plan.
The developer was a major supporter of Housing and Preservation Development Commissioner Vicki Been before she joined the de Blasio administration. In her previous job, Been was co-director of New York University’s Furman Institute for Real Estate and Urban Policy, which has received $2 million from the Moelis Institute for Affordable Housing Policy, the research center at NYU that Moelis funds.
Deputy Mayor for Housing Alicia Glen was on the board of the Moelis Institute before working for the city. Her main job was head of the Urban Investment Group at Goldman Sachs, which has made a record-setting $500 million investment in an L+M project that Moelis described as “the culmination of what I’ve been doing for 30 years.” Moelis also has ties to de Blasio through the lobbyist for that project, detailed in the following section.
Glen, who referred to de Blasio’s affordable housing plan as “my plan,” is the mayor’s top expert on leveraging private sector investment for 200,000 units of affordable housing. And as HPD Commissioner, Been is “charged with creating and implementing” de Blasio’s plan, according to the HPD website.
One development, many ties to City Hall
Unspooling the forces behind the Essex Crossing development, which was announced a few months before de Blasio’s election, reveals numerous ties between City Hall and Moelis.
The city hopes that Essex Crossing will become a new cultural center in the Lower East Side, offering shops, restaurants, and entertainment spaces. It will also feature 626 units of housing at below-market rates. L+M has a five percent stake in the Essex Development, as do BFC Partners and Taconic Investment Partners.
Both Alicia Glen and Vicki Been were associated with the the $1.1 billion project before working for City Hall. Essex is being being financed primarily by the Goldman Sachs Urban Investment Group, which was overseen by Glen when the deal was announced and for whom the development is its largest investment ever. Been, meanwhile, may have been an important bridge between the development and New York University, her former employer, which signed a 55,000 square foot lease for a new Medical Center at the Essex Development. Been is married to former NYU law school dean Richard Revesz, to whom the university gave a $5.2 million loan for a vacation home. NYU also financed the couple’s “handsome West Village Townhouse.”
The mayor also has ties to the lobbying firm that pushed for Essex, Capalino & Associates. The firm collected $70,000 from L+M, BFC, and Taconic (through a partnership called Delancey Streets Associates) between September 1, 2014 and December 31, 2015, and is headed by James Capalino, a close associate of the mayor who “rounded up $29,260 for the mayor’s re-election in 2017” and donated $10,000 to the mayor’s non-profit, Campaign for One New York, the New York Post reported.
Moelis’s fingerprints are all over town
Ron Moelis and former associates of L+M are also connected to some of City Hall’s most important initiatives.
L+M is developing the first phase of a mixed-use development in East New York that it says will include 278 affordable residential rental units. The potential rezoning of East New York is a critically important test case for the mayor’s wider plan.
Moelis is also on the board of the Mayor’s Fund to Advance New York City, a relatively opaque philanthropic organization that is controlled by the Mayor and raises money from private sector donors. And L+M is also one of 60 private sector partners for the mayor’s Center for Youth Employment, an initiative that will leverage corporate partnerships for the goal of “connecting 100,000 young New Yorkers ages 14-24 to summer jobs, mentorships, and internships each year by 2020.”
But perhaps the ultimate private sector coup d’etat for L+M and Moelis is their deal with NYCHA. L+M partnered with BFC Partners in a 30-year deal wherein the two developers are purchasing a 50% stake in nearly 900 units of NYCHA public housing, in return for an immediate cash infusion of $150 million, an additional $100 million over the course of two years, and an additional $100 million over the course of 15 years. Critics of the deal worry that NYCHA will be unable to keep those units from going to market in the years to come, leading to fears that the arrangement is “part of a larger plan to diminish the City’s stake in housing,” as State Assemblymember Robert J. Rodriguez, a representative for East Harlem, wrote in the Gotham Gazette.
Moelis, however, sees a brighter future. “We can do really cool, interesting things in the community, hopefully make money doing it, and build something that is going to be a real legacy project,” he told Crains New York in December 2013. What that project actually does for the city’s low-income residents will determine the mayor’s own legacy.