Latest / Earn Your Leisure / EYL #194 Don Peebles on Billion Dollar Real Estate Lessons & NYC's First Black Owned Skyscraper

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EYL #194 Don Peebles on Billion Dollar Real Estate Lessons & NYC's First Black Owned Skyscraper · Earn Your Leisure

• 0:04
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• 1:00
  Speaker 3: Let's just redesign the building and let's get ourselves up
• 1:03
  Speaker 3: to sixteen hundred, so one hundred below or sixteen fifty,
• 1:08
  Speaker 3: you know, to be just below to you know, to
• 1:11
  Speaker 3: pay respect to one world trade, but to be the
• 1:14
  Speaker 3: tallest building. I made the decision, I said, change the design,
• 1:18
  Speaker 3: come back with a building that's sixteen hundred and fifty
• 1:20
  Speaker 3: feet tall or better. If we're going to build the
• 1:22
  Speaker 3: first guyscraper and we've waited this long to get a
• 1:25
  Speaker 3: chance to do it, it needs to make a powerful statement.
• 1:28
  Speaker 4: It needs to be the best.
• 1:32
  Speaker 5: My graduates from my school being forced.
• 1:35
  Speaker 6: Back drop back drop might drop back drop, b drop.
• 1:53
  Speaker 4: Make some noise.
• 1:55
  Speaker 5: I hope you guys fully appreciate this opportunity to ahead.
• 1:58
  Speaker 5: As gentleman speak, it's not every day that you you
• 2:02
  Speaker 5: hear somebody of his caliber, you know, communicate. So this
• 2:06
  Speaker 5: is something that's very very, very very important, and something,
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  Speaker 5: like I said, we actually flew back from LA for
• 2:12
  Speaker 5: this because we understood how important this was. So first
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  Speaker 5: and foremost, I want to thank you, appreciate it, thank you.
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  Speaker 4: Yeah.
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  Speaker 3: Yeah, so I think I'm on Yeah. So, by the way,
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  Speaker 3: it's also important for me. So I was in Boston.
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  Speaker 3: We've got two projects in Boston and that we're developing
• 2:29
  Speaker 3: right now. And I was in Boston Wednesday through Friday,
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  Speaker 3: and left my last meeting and then went and flew
• 2:36
  Speaker 3: to the Hampton's uh to go to a friend of
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  Speaker 3: mine's birthday party.
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  Speaker 4: And then I drove in here.
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  Speaker 3: A couple of hours ago so I can make sure
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  Speaker 3: i'm here as well because it's very important.
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  Speaker 4: There you have it.
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  Speaker 5: So this this is gonna be a fun conversation, a
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  Speaker 5: high level of conversation. But before I just want to
• 2:56
  Speaker 5: preface it so we actually it's interesting how life. So
• 3:00
  Speaker 5: this was years ago, probably when I first graduated from college.
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  Speaker 5: My dad he got me a book. And I really
• 3:06
  Speaker 5: don't even read a lot of books, honestly, I'm of
• 3:08
  Speaker 5: an audio guy. But I actually took the time to
• 3:12
  Speaker 5: read this book and it was The People Principles and
• 3:16
  Speaker 5: I was reading the book and I learned a lot
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  Speaker 5: about you. But after that, it was an event in
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  Speaker 5: New York. It was a networking event in New York.
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  Speaker 5: And this is when I first started my career as
• 3:26
  Speaker 5: a financial vile. It used to be a financial visor
• 3:27
  Speaker 5: before I do this, before I did this, And I'm like,
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  Speaker 5: I gotta go because I heard he was going to
• 3:32
  Speaker 5: be there, so I gotta go, and we went. I
• 3:35
  Speaker 5: went by myself and I met him and I was
• 3:38
  Speaker 5: telling him like, you know, I'm a big fan. I
• 3:40
  Speaker 5: read your book. I didn't really have anything to offer,
• 3:43
  Speaker 5: but I just wanted to just introduce myself and he
• 3:47
  Speaker 5: was like, yeah, man, keep working. I'm sure we're running
• 3:49
  Speaker 5: to each other again. So like fifteen years later, we
• 3:52
  Speaker 5: read it to each other again.
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  Speaker 7: So, yeah, your dad wanted to let you. He told
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  Speaker 7: me before we came. Make sure a seat tells a
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  Speaker 7: story of me buying him the book. So thank you
• 4:01
  Speaker 7: on his behalf for sure, for sure.
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  Speaker 5: So mister Peoples needs no introduction, but I'll try to
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  Speaker 5: give a brief form before we get into this conversation.
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  Speaker 5: Real estate entrepreneur, developer, author, political activists, and you know,
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  Speaker 5: it always gave me great pride when I went to
• 4:19
  Speaker 5: South Beach because when we were young, we used to
• 4:20
  Speaker 5: go to South Beach a lot and the Royal Palms,
• 4:24
  Speaker 5: and that was your hotel. And I believe that was
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  Speaker 5: the only black owned hotel on South Beach, right, that's right, Yeah,
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  Speaker 5: So we used to stay there. So I stayed there
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  Speaker 5: before I even knew it was your hotel. And when
• 4:36
  Speaker 5: I found out that it was your hotel, like, it
• 4:38
  Speaker 5: gave me even more of a pride to actually stay there.
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  Speaker 5: So and I don't know if these numbers, you know,
• 4:45
  Speaker 5: but I guess I did some googling. They said seven
• 4:48
  Speaker 5: hundred million networth that was.
• 4:50
  Speaker 4: In two thousand and seven. Okay, so.
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  Speaker 6: I'll let you do the man.
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  Speaker 4: Slight slight stunt.
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  Speaker 6: Hey, Mike, edit this. This is gonna be a billion
• 5:03
  Speaker 6: dollar conversation.
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  Speaker 4: To the man.
• 5:08
  Speaker 6: But I want to jump into this.
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  Speaker 4: So, how did you get your start in real estate?
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  Speaker 6: I know, I believe it started in d.
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  Speaker 4: C, right with the mayor. I did start in DC.
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  Speaker 3: And and by the way, and I think one of
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  Speaker 3: the things you mentioned, the fourbe story about the seven
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  Speaker 3: hundred million dollars, I would not cooperate with them anytime
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  Speaker 3: after that, mainly because that isn't who I am. And
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  Speaker 3: I don't want anybody to know me based on that,
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  Speaker 3: whether it's a dollar or seven hundred or billion, whatever
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  Speaker 3: it is. I mean, I would like to think that
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  Speaker 3: my purpose is deeper than that. And so I got
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  Speaker 3: into real estate in d C because I was initially
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  Speaker 3: gonna be a doctor and then change my mind and
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  Speaker 3: quit school and went back to d C. But I
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  Speaker 3: learned it from my mother, and and I mentioned that
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  Speaker 3: because it's shaped who I am and what kind of
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  Speaker 3: business person I am. So and I think it's important
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  Speaker 3: for everybody to understand a bit about I think what
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  Speaker 3: drives me as a business person, because I think it
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  Speaker 3: drives you all as well, and we all have different experiences.
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  Speaker 3: But I was born in nineteen sixty, so that was
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  Speaker 3: during the peak of the civil rights movement, the nineteen sixties,
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  Speaker 3: and so I remember as an eight year old when
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  Speaker 3: Doctor King was assassinated. I remember my community being inflamed
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  Speaker 3: and my mother driving me home from school and having
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  Speaker 3: me get down on the floor of the car because
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  Speaker 3: our city was on fire. And I remember Robert Kennedy
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  Speaker 3: getting assassinated, and so that shaped my life quite a bit.
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  Speaker 3: And so my mother, who had me at nineteen years old,
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  Speaker 3: was a secretary, and then after buying a house in
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  Speaker 3: Prince George's County, Maryland, saw on the closing statement how
• 6:57
  Speaker 3: much the broker's commission was and how little time the
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  Speaker 3: person with her, and so she decided to go to
• 7:02
  Speaker 3: night school and get her license, and then she and
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  Speaker 3: I relocated to Detroit, where her sister was living and
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  Speaker 3: with her husband who was doing his internship in residency.
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  Speaker 3: And that was nineteen sixty eight, so they had already
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  Speaker 3: experienced the riots, and we'd moved there, and my mother
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  Speaker 3: got a real estate sales license, and then a couple
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  Speaker 3: of years later, my uncle was in private practice and
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  Speaker 3: invested in her and backed her as a real estate broker,
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  Speaker 3: and she had her own real estate business and broken business.
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  Speaker 3: And then the recession hit in nineteen seventy three, and
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  Speaker 3: my aunt and uncle moved and she moved.
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  Speaker 4: She and I moved back to d C.
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  Speaker 3: And she got a job in DC and it was
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  Speaker 3: a job being the sales director for a project called
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  Speaker 3: town Center in Southwest Washington, d C.
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  Speaker 4: Which was under urban renewal.
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  Speaker 3: And she there was no internet, there was no faxing,
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  Speaker 3: there was no video conferencing, no FaceTime. So she got
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  Speaker 3: her job based on a telephone interview and a resume
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  Speaker 3: that was mailed. And so when she reported to work
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  Speaker 3: in DC, they didn't know she was a black woman,
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  Speaker 3: and they were sended the offer and said that they
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  Speaker 3: didn't think that the white sales team would be comfortable,
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  Speaker 3: you know, reporting to a black woman, even though they
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  Speaker 3: were selling many of those properties to black professionals. So
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  Speaker 3: my mother had to go back and being a secretary.
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  Speaker 3: And so I was thirteen when that happened, and unfortunately
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  Speaker 3: she got one of her temporary jobs was at Fannie
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  Speaker 3: May and she came across, you know, a man who
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  Speaker 3: you know, was a senior executive and she was a
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  Speaker 3: secretary and when he found out what she was doing,
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  Speaker 3: he said, you're way overqualified for this, and then he
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  Speaker 3: arranged for her to get a position as a mortgage
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  Speaker 3: analyst at Fanny May and then that helped.
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  Speaker 4: Her resume her career.
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  Speaker 3: But I watched her throughout my childhood confront obstacles as
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  Speaker 3: a black woman, and so being a Black American, there's
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  Speaker 3: one obstacle we have, and as black men, we confront that.
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  Speaker 3: Women confront that, but black women have a double headwinds
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  Speaker 3: at them. And I saw that, and so it shaped me.
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  Speaker 3: And from day one, I wanted to run a different
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  Speaker 3: type of business and one that would be receptive to
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  Speaker 3: someone talented like my mother. And that shaped me as
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  Speaker 3: a business person. And that is what I try to
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  Speaker 3: do each day I'm in business, is to knock down
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  Speaker 3: those kinds of barriers. And so that story I just
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  Speaker 3: told you is much more relevant about who I am
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  Speaker 3: than Forbes or anybody else saying how much money I
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  Speaker 3: got or something like that.
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  Speaker 6: Clip it off for that. So you went to college,
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  Speaker 6: but you didn't finish college.
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  Speaker 7: A lot of the stuff you learned real estate obviously
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  Speaker 7: you watch from mom, and it was kind of self taught.
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  Speaker 7: At twenty three you start your own business, but at
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  Speaker 7: twenty six you develop your own first building. Take us
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  Speaker 7: through that process twenty three, like he said, we were
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  Speaker 7: at the Royal Palms at your building at twenty three
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  Speaker 7: year building of a twenty six year building, the first one.
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  Speaker 6: Let's talk us about that process.
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  Speaker 3: Well, I mean I so I when I moved back
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  Speaker 3: to DC, my mother thought it was important that I'd
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  Speaker 3: be exposed to black men achieving things and also to
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  Speaker 3: understand the power of politics. So she had me volunteer
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  Speaker 3: for a DC in nineteen seventy four, so I was fourteen.
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  Speaker 3: That's when the city got home rule and got a
• 10:29
  Speaker 3: chance to elect its own government. So she had me
• 10:31
  Speaker 3: volunteer for a She said, you got to pick one
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  Speaker 3: of these candidates that's running for the city council and
• 10:37
  Speaker 3: volunteer for them, you know, for one month out of
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  Speaker 3: the summer. And I'm like, I don't want to work
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  Speaker 3: for free. Well you have to do that, and you
• 10:44
  Speaker 3: got to pick somebody. So I picked the most radical person,
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  Speaker 3: I mean, the most progressive one, and it was a
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  Speaker 3: guy named Marion Barry, and he had. He was the
• 10:54
  Speaker 3: co founder of SNICK with John Lewis and let the
• 10:59
  Speaker 3: Students Nonviolent Coordinating Council, and was very active in the
• 11:04
  Speaker 3: civil rights movement with doctor King and had come to
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  Speaker 3: d C and was pressing an agenda for economic empowerment
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  Speaker 3: for black people, and so I volunteered for him. I
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  Speaker 3: was fourteen, met him a few times with a kind
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  Speaker 3: of talkative young man, and you know, we were friendly
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  Speaker 3: and I made him laugh a little bit. He won,
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  Speaker 3: and then you know, he was on the city council.
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  Speaker 3: I went to the inauguration and all that stuff. And
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  Speaker 3: then after that, four years later, I mean two years later,
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  Speaker 3: my mother said, you know, you need to go work
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  Speaker 3: on Capitol Hill learn politics there. So she got me
• 11:38
  Speaker 3: a six months patronage or a term to be a
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  Speaker 3: page on Capitol Hill. And I didn't even know what
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  Speaker 3: that was until I went to work there. So that
• 11:45
  Speaker 3: a school on the top floor of the Library of
• 11:47
  Speaker 3: Congress and right across from the US Capitol. And you'd
• 11:51
  Speaker 3: go to school there from six in the morning until
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  Speaker 3: ten thirty, and then eleven o'clock on you'd walk you'd
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  Speaker 3: be at the US Capitol and you'd work as like
• 11:58
  Speaker 3: a messenger for the Congress. So I went up there
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  Speaker 3: for six months. I ended up staying there for two years.
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  Speaker 3: I became very friendly with Ron Dellams, who was a
• 12:07
  Speaker 3: congressman from California, John Conyers, who had brought me up
• 12:11
  Speaker 3: there from Michigan, and Charlie Rangel, and I worked for
• 12:16
  Speaker 3: all three of them and got a chance to really
• 12:19
  Speaker 3: get a perspective of about what black leadership was about
• 12:22
  Speaker 3: and what a sense of purpose was. And then after
• 12:24
  Speaker 3: that I went to I graduated high school and my
• 12:29
  Speaker 3: graduation ceremony was in the Cannon Caucus room where they
• 12:32
  Speaker 3: elected Speaker of the House of Representatives. In that morning,
• 12:35
  Speaker 3: my mother and I and my grandfather, my aunt and
• 12:38
  Speaker 3: uncle went over to the White House and got a
• 12:40
  Speaker 3: certificate of achievement from President Carter in the Rose Garden.
• 12:43
  Speaker 3: So I had, you know, kind of big expectations. I
• 12:45
  Speaker 3: was going to be a doctor like my uncle. And
• 12:47
  Speaker 3: then after my first year quit and I went back
• 12:50
  Speaker 3: to d C. And that was nineteen seventy nine, and
• 12:53
  Speaker 3: then nineteen eighty I started working as an appraiser with
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  Speaker 3: my for my mother, and then Barry ran for reelection
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  Speaker 3: in nineteen eighty two and I got much more engaged
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  Speaker 3: in his campaign. He won a second term, and within
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  Speaker 3: a few months I was appointed to the Property Assessment
• 13:12
  Speaker 3: Appeal Board, which was a board that reviewed all the
• 13:16
  Speaker 3: real estate assessments for the city. And then the following
• 13:18
  Speaker 3: year he made me chairperson. So at twenty three I
• 13:21
  Speaker 3: was on the most powerful board in the city. At
• 13:23
  Speaker 3: twenty four, I was chairman of it, and so I
• 13:25
  Speaker 3: was a very powerful person in local politics and local
• 13:29
  Speaker 3: government at that point. And then a year or so later,
• 13:34
  Speaker 3: his government and he agreed to prelease an office building
• 13:38
  Speaker 3: that I proposed developing in an area called Anacostia that
• 13:41
  Speaker 3: had been destroyed by the riots that I remember in
• 13:43
  Speaker 3: nineteen sixty eight. And then I became a part of
• 13:46
  Speaker 3: helping rebuild it and that project with one hundred thousand
• 13:49
  Speaker 3: square foot building, the goal was to kickstart economic development
• 13:53
  Speaker 3: and a predominantly black community and start redevelopment of a
• 13:56
  Speaker 3: black community and then to you know, you know, ignite redevelopment. Today,
• 14:03
  Speaker 3: Homeland Security spend over five billion. I built that building
• 14:05
  Speaker 3: in nineteen eight, I delivered in eighty nine. Today Homeland
• 14:09
  Speaker 3: Security is a five billion dollar campus over there. It's
• 14:11
  Speaker 3: one of the hottest neighborhoods in Washington, DC a lot
• 14:14
  Speaker 3: of economic development activity and that project. That wasn't easy though,
• 14:17
  Speaker 3: because I ended up on the front page of the
• 14:19
  Speaker 3: Washington Post and other people didn't like the fact that
• 14:22
  Speaker 3: Barry had supported someone who was inexperience like me. And
• 14:27
  Speaker 3: I never owned a house yet, alone a building, but
• 14:30
  Speaker 3: I built the building about nine months early, and that
• 14:33
  Speaker 3: was the beginning of my career. And I would never
• 14:35
  Speaker 3: have been here today if it wasn't for him given
• 14:39
  Speaker 3: me that opportunity. And that's why I say, I mean,
• 14:41
  Speaker 3: we cannot look. I mean every black political leader to
• 14:46
  Speaker 3: knock down these barriers was a target. Doctor King was
• 14:50
  Speaker 3: a target of our own government. By the way, the
• 14:52
  Speaker 3: FBI has never been the friend of black economic empowerment.
• 14:56
  Speaker 3: Jaka Hoover ran a racist organization and that was the
• 14:59
  Speaker 3: culture of the FBI, and they investigated doctor King, Malcolm X. Mecker, Evers,
• 15:03
  Speaker 3: every civil rights leader, including Barry, and Barry was vulnerable
• 15:07
  Speaker 3: and they got him and embarrassed him. But he had
• 15:10
  Speaker 3: done some transformative things and I am an example of that.
• 15:14
  Speaker 3: And so we can't let one mistake when we live
• 15:17
  Speaker 3: in a society where so many people are given second
• 15:21
  Speaker 3: chances that we can't say that black men only get
• 15:24
  Speaker 3: one chance, one striking, you're out. And so we got
• 15:26
  Speaker 3: to judge people by the entirety of who they are.
• 15:34
  Speaker 5: Yes, clap it up for that and rest in peace
• 15:38
  Speaker 5: to men and Marion Barry. So let me ask you this.
• 15:42
  Speaker 5: There's a lot of people here that are looking to
• 15:44
  Speaker 5: get into real estate, real estate development. Your start came
• 15:47
  Speaker 5: from working with the government. How important is it to
• 15:50
  Speaker 5: make in roads with local government officials if you want
• 15:53
  Speaker 5: to be in real estate, especially real estate development, And
• 15:56
  Speaker 5: what are some ways that you can make in roads
• 15:59
  Speaker 5: with politicians?
• 16:01
  Speaker 4: Great, great questions.
• 16:02
  Speaker 3: So, first of all, I think one of the reasons
• 16:04
  Speaker 3: why I ended up in a deal where the government
• 16:09
  Speaker 3: was involved is because I could not get a fair
• 16:13
  Speaker 3: chance from the private sector. The DC was a majority
• 16:19
  Speaker 3: black city and there was one black developer in it
• 16:22
  Speaker 3: when I started. And there was a reason for that
• 16:26
  Speaker 3: because if they opened, if the floodgates got opened, then
• 16:30
  Speaker 3: and more of us walked through those doors, and there'd
• 16:32
  Speaker 3: be no excuse to say, well, why don't we have
• 16:34
  Speaker 3: more black developers? And so the development community has never
• 16:38
  Speaker 3: been hospitable to change. And we can look here in
• 16:41
  Speaker 3: New York City, and which hopefully we'll have a chance
• 16:44
  Speaker 3: to talk a little bit more about later. But there's
• 16:46
  Speaker 3: not one major building, not one skyscraper in New York
• 16:49
  Speaker 3: City own or developed by someone black. And as far
• 16:53
  Speaker 3: as I know, the only major building south of one
• 16:56
  Speaker 3: hundred and tenth Street owned by a black developers mine
• 16:58
  Speaker 3: at one away Leonard Street. So that tells you that
• 17:02
  Speaker 3: we have an unfair system. So the idea, though, and
• 17:06
  Speaker 3: also the idea in the private sector, you to break
• 17:09
  Speaker 3: down some barriers. You gotta have a lot of cash
• 17:11
  Speaker 3: to do it. And government you can have political power,
• 17:15
  Speaker 3: the right, the opportunity to vote, the opportunity collectively to
• 17:20
  Speaker 3: shape you know, the outcome. And so let's just think
• 17:23
  Speaker 3: about Joe Biden. Joe Biden would be on the porch
• 17:26
  Speaker 3: of his house in Rehopa's Beach, Delaware, looking out of
• 17:29
  Speaker 3: the ocean as a private citizen if it wasn't for
• 17:31
  Speaker 3: black people, especially black women, because black women brought him
• 17:34
  Speaker 3: to the Promised Land in Georgia. Never would have won Georgia.
• 17:37
  Speaker 3: Without black women, he didn't win. He went won Michigan
• 17:41
  Speaker 3: because of black voters. He won Pennsylvania cause the black
• 17:44
  Speaker 3: voters and that got him presidency, and in the primary
• 17:47
  Speaker 3: he was dead in the water there and it was
• 17:50
  Speaker 3: Jim Clyburn in South Carolina that saved him there. So
• 17:54
  Speaker 3: black Americans elected the president of the United States. So
• 17:59
  Speaker 3: he oh, so he owes us a big debt and
• 18:07
  Speaker 3: it's time for us to collect it. And June Teen's
• 18:09
  Speaker 3: while a nice important memory, isn't enough to pay the debt.
• 18:14
  Speaker 3: And I think that's part of the mindset that we
• 18:16
  Speaker 3: need to have. So I got into public private partnerships
• 18:19
  Speaker 3: because I knew I got a fair chance.
• 18:21
  Speaker 4: It was somebody fighting for me.
• 18:22
  Speaker 3: The mayor of Washington, DC said we're doing this and
• 18:25
  Speaker 3: it doesn't matter that you're complaining about it or you're
• 18:28
  Speaker 3: saying that he's a protege a of mind. So what
• 18:31
  Speaker 3: I'm doing this And that was a political power, and
• 18:33
  Speaker 3: the voters backed him up and kept re electing him.
• 18:36
  Speaker 3: And so public private partnerships are designed for theory fairness.
• 18:45
  Speaker 3: So if we think about where we are in this
• 18:47
  Speaker 3: country today, there's two issues that this country. There's two
• 18:51
  Speaker 3: moments in time right now for this country. The first
• 18:54
  Speaker 3: one is a global pandemic that COVID has decimated our
• 18:58
  Speaker 3: economy and our entry, and this is you know, a
• 19:03
  Speaker 3: once in a century. The last pandemic of this magnitude
• 19:07
  Speaker 3: was a Spanish flu exactly one hundred years ago. And
• 19:11
  Speaker 3: the second one is the unprecedented civil protest around the country,
• 19:19
  Speaker 3: fighting and protesting for economic equality and criminal justice fairness
• 19:27
  Speaker 3: for black Americans. Those are the two moments. So right now,
• 19:31
  Speaker 3: those two moments are right for us because you have
• 19:38
  Speaker 3: the government spending trillions of dollars to rebuild our economy,
• 19:43
  Speaker 3: and supposedly the private sector has heard the voices of
• 19:47
  Speaker 3: the protesters and all of us about this quest and
• 19:50
  Speaker 3: our quest for fairness. So the private sector is not
• 19:55
  Speaker 3: doesn't have those burdens of responsibility.
• 19:59
  Speaker 4: I think they're getting closer to that.
• 20:00
  Speaker 3: So the public sector provides economic opportunities, and so the
• 20:04
  Speaker 3: government does affordable housing buying large and so my view
• 20:07
  Speaker 3: is that shouldn't affordable housing be reflective of the population
• 20:10
  Speaker 3: demographics of the people who occupy them, and shouldn't the
• 20:13
  Speaker 3: economic benefits from them be reflective of the population demographics.
• 20:18
  Speaker 3: Shouldn't development opportunities in New York City that is sixty
• 20:22
  Speaker 3: nine percent of people of color and fifty three percent females.
• 20:26
  Speaker 3: Shouldn't those opportunities be distributed reflective of the population demographics.
• 20:30
  Speaker 3: They should be, and they can be, and we have
• 20:33
  Speaker 3: the currency.
• 20:33
  Speaker 4: To require that.
• 20:34
  Speaker 3: So that's why I like public private partnerships. And then
• 20:36
  Speaker 3: on the real estate side, the simplicity of it is
• 20:40
  Speaker 3: that we don't. If I want to go and build
• 20:44
  Speaker 3: a tower in Manhattan and the site's worth five hundred
• 20:47
  Speaker 3: million dollars, I got to go pay five hundred million dollars.
• 20:49
  Speaker 3: And that's the and whoever pays the most money is
• 20:52
  Speaker 3: going to win. That is going to get the right
• 20:54
  Speaker 3: to buy that property from the seller, if it's a
• 20:56
  Speaker 3: private seller, the public sector, the government wants other things.
• 21:00
  Speaker 3: They're not land speculatd So normally they want a certain outcome,
• 21:03
  Speaker 3: they want a certain type of building, they want a
• 21:05
  Speaker 3: certain type of use, and in theory they say now
• 21:09
  Speaker 3: more often they want inclusion and diversity, and so those
• 21:14
  Speaker 3: are other griting criterias are not relevant to dollars, so
• 21:19
  Speaker 3: you can not have to pay as much. The other
• 21:22
  Speaker 3: thing is is that you don't pay for the land
• 21:24
  Speaker 3: until you're ready to develop the land. So to think
• 21:28
  Speaker 3: about that for a second, let's use an example. There's
• 21:32
  Speaker 3: a project called eleven X one right on the high
• 21:36
  Speaker 3: Line that went into foreclosure, etc. And that was developed
• 21:39
  Speaker 3: by HFZ. They paid a billion dollars for that site.
• 21:42
  Speaker 3: Took them three years to develop that site to start construction.
• 21:46
  Speaker 3: So the carrying costs we're about twenty percent of the
• 21:49
  Speaker 3: year property taxes, insurance, debt service on the interest and
• 21:53
  Speaker 3: the equity. So that's two hundred million dollars a year
• 21:57
  Speaker 3: they're carrying that cost, right, So and then so you're
• 22:02
  Speaker 3: starting off with the land actually costing one point six
• 22:05
  Speaker 3: billion dollars. Now go up the street to Hudson Yards
• 22:09
  Speaker 3: and Related has that whole development there. They don't pay
• 22:14
  Speaker 3: until they commenced construction on a piece by piece basis.
• 22:18
  Speaker 3: They fix their price back when they got the rights
• 22:21
  Speaker 3: to do it, and I think O seven and you
• 22:24
  Speaker 3: know how prices have gone up. So they got this
• 22:26
  Speaker 3: big arbitrage. And then the city and the states gave
• 22:31
  Speaker 3: them a subsidy apparently of about two billion dollars and
• 22:35
  Speaker 3: they built a subway station to support that. So there
• 22:40
  Speaker 3: the developer has made billions of dollars just on the
• 22:43
  Speaker 3: land appreciation and the valuation of the subsidies. And so
• 22:48
  Speaker 3: think about Related which and I hate to pick on
• 22:50
  Speaker 3: them because they're a great company, but think about them
• 22:52
  Speaker 3: as the largest private developer in the United States. Their
• 22:56
  Speaker 3: biggest projects have been public private partnerships. Arted off as
• 23:01
  Speaker 3: a as a affordable housing tax credit lawyer, then got
• 23:06
  Speaker 3: into building affordable housing himself. Then the AOL Time Warner
• 23:10
  Speaker 3: Center that was on government land. That was an old
• 23:13
  Speaker 3: New York Coliseum site. And then Hudson Yards, which is
• 23:17
  Speaker 3: gonna have a dozen or more buildings, and that was
• 23:19
  Speaker 3: government land. So imagine if I told you I'm gonna
• 23:23
  Speaker 3: sell we're in a hot market. I'm gonna sell you
• 23:25
  Speaker 3: a piece of property, but that's worth a billion. I'm
• 23:28
  Speaker 3: gonna sell it to you below market for seven hundred million,
• 23:31
  Speaker 3: and it's gonna take you three or four years to
• 23:33
  Speaker 3: build the first building, and you don't have to pay
• 23:36
  Speaker 3: me any of the money until then, and there's no interest,
• 23:39
  Speaker 3: and you don't have to pay property taxes, and you
• 23:40
  Speaker 3: don't have to pay any insurance. I'm gonna pay all
• 23:42
  Speaker 3: That be a great deal, right, and you shouldn't. And
• 23:44
  Speaker 3: you have to go out of your way not to
• 23:45
  Speaker 3: make money. So that's the probab private process in a snapshot.
• 23:50
  Speaker 6: So that's incredible so let's talk about it.
• 23:53
  Speaker 7: Since we're on the top of the New York development,
• 23:55
  Speaker 7: the Affirmation Tower and Portant, and correct me if I'm
• 23:57
  Speaker 7: on a toilest tower that, when finished in New York City,
• 24:01
  Speaker 7: the first black, fully black developers that are doing it.
• 24:05
  Speaker 6: What was the process of getting that in the importance
• 24:07
  Speaker 6: of doing it?
• 24:08
  Speaker 3: Well, I think first of all, look, I was so
• 24:11
  Speaker 3: this came the state issued in RFP for that site
• 24:17
  Speaker 3: in two thousand and twenty, I think late twenty twenty,
• 24:23
  Speaker 3: and so we had a global pandemic already, people were
• 24:27
  Speaker 3: leaving New York. Businesses were leaving New York. Office market
• 24:30
  Speaker 3: was soft before the pandemic. So initially, when I looked
• 24:33
  Speaker 3: at it and my team look at we all agreed
• 24:36
  Speaker 3: to pass. And then I happened to be reading an
• 24:39
  Speaker 3: article about Hudson Yards, and I'm like, wait a minute,
• 24:43
  Speaker 3: we ought to go Maybe we should go after this
• 24:45
  Speaker 3: site because the chances are we won't be building anything
• 24:47
  Speaker 3: for three, four or five years so and prices are
• 24:50
  Speaker 3: down now, so maybe we take a shot and tie
• 24:53
  Speaker 3: it up. So we kicked it around and we looked
• 24:57
  Speaker 3: at what the use could be, and then I thought
• 25:00
  Speaker 3: about it, and I said you know, if I'm going
• 25:01
  Speaker 3: to take a risk and do something in New York,
• 25:02
  Speaker 3: because this is probably the last big deal I'm gonna
• 25:05
  Speaker 3: do in New York for a while, you know, how
• 25:07
  Speaker 3: do I want to do it? I want to do
• 25:09
  Speaker 3: it differently, And so I started off toly I want
• 25:11
  Speaker 3: it to be all black owned and or majority black owned.
• 25:15
  Speaker 3: So I called up Cheryl mckissack, you know, who runs
• 25:18
  Speaker 3: the oldest black owned construction company in the country, And
• 25:21
  Speaker 3: I said, like, I want you to, you know, partner
• 25:23
  Speaker 3: up with Suffolk, who is the large, the largest privately
• 25:25
  Speaker 3: owned construction company in the country who we do business with.
• 25:28
  Speaker 3: I want you to partner up with them. We're going
• 25:29
  Speaker 3: to do this on a joint venture basis, and you're
• 25:31
  Speaker 3: gonna We're going to develop this project, and I want
• 25:34
  Speaker 3: you to also be a owner in the development. So
• 25:38
  Speaker 3: she came in on the development team as well, and
• 25:39
  Speaker 3: then Craig Livingston Livingston of zach Kapitel brought him in
• 25:44
  Speaker 3: and then our company. But I recognized, and I think
• 25:46
  Speaker 3: this is always very important. I think the true mark
• 25:50
  Speaker 3: of business intelligence is to recognize our own limitations.
• 25:54
  Speaker 4: Right.
• 25:55
  Speaker 3: So I had never built a skyscraper in New York before,
• 25:59
  Speaker 3: so I said, okay, well let's make it so that's
• 26:02
  Speaker 3: not an excuse not to pick us. So I contacted
• 26:05
  Speaker 3: a friend and business associate, Steve Whitcoff, who had just
• 26:08
  Speaker 3: finished a building called one eleven Murray, which was a
• 26:10
  Speaker 3: super tall building and geometry wise similar to what I
• 26:14
  Speaker 3: wanted to build, and brought him in. And he's a
• 26:17
  Speaker 3: twenty percent partner and he his company and our company
• 26:20
  Speaker 3: or co developing it. And so once we had the
• 26:23
  Speaker 3: ownership set and I said, okay, I want to build
• 26:25
  Speaker 3: a transformative building. I want a black architect, but I
• 26:27
  Speaker 3: want to send a message. So I brought in David Adj.
• 26:30
  Speaker 3: David Adj is the one of the he's one of
• 26:33
  Speaker 3: the top architects in the world and the world's most
• 26:36
  Speaker 3: prominent black architect. He did the Museum for African American
• 26:39
  Speaker 3: History and Culture on the Smithsonian Mall. So I brought
• 26:42
  Speaker 3: him in to do the design, and then we brought
• 26:45
  Speaker 3: in I wanted to give the NAACP of New York
• 26:47
  Speaker 3: their headquarters in our building.
• 26:49
  Speaker 4: Brought them in and then the design.
• 26:53
  Speaker 3: So I David designed the building, gave him the sense
• 26:55
  Speaker 3: of what we wanted to do in terms of uses.
• 26:57
  Speaker 3: So it's going to have two hotels, sculpture garden showcasing
• 27:02
  Speaker 3: Black New Yorkers who've affected, you know, the lives of
• 27:05
  Speaker 3: you know, of all of us, and then we do
• 27:08
  Speaker 3: offices and then observation deck and some other stuff on
• 27:11
  Speaker 3: the roof. So they came back to me with a
• 27:13
  Speaker 3: building that was about twelve hundred and fifty feet tall
• 27:16
  Speaker 3: and a budget to build it. And I'm you know,
• 27:18
  Speaker 3: super tall buildings are very expensive to build. So twelve
• 27:21
  Speaker 3: hundred and fifty feet way twelve fifty Well, that's how
• 27:23
  Speaker 3: the layout went on the far and so forth. I said, well,
• 27:26
  Speaker 3: let's look at doing something different. What's the tallest building
• 27:29
  Speaker 3: in New York And so they said one World Trade
• 27:33
  Speaker 3: and I looked. We pulled it up on a screen
• 27:35
  Speaker 3: and we're looking at it, and it was really not
• 27:38
  Speaker 3: so it was sixteen hundred seventeen hundred feet, but it
• 27:42
  Speaker 3: was at the top of a spire, this little antenna
• 27:45
  Speaker 3: almost on the top of it. And so I said, well,
• 27:48
  Speaker 3: why don't we build let's just redesign the building and
• 27:51
  Speaker 3: let's get ourselves up to sixteen hundred so one hundred
• 27:55
  Speaker 3: below or sixteen fifty, you know, to be just below,
• 28:00
  Speaker 3: you know, to pay respect to One World Trade, but
• 28:03
  Speaker 3: to be the tallest building. And I also would ask
• 28:07
  Speaker 3: what's the tallest building in the Western Hemisphere and it
• 28:10
  Speaker 3: was One World Trade, And I said, to the roofline,
• 28:13
  Speaker 3: what is it? And then there was some other buildings.
• 28:15
  Speaker 3: So we decided to build what would be I made
• 28:18
  Speaker 3: the decision. I said, change the design, come back with
• 28:20
  Speaker 3: a building that's sixteen hundred and fifty feet tall or better.
• 28:23
  Speaker 4: And that's what we ended up with.
• 28:24
  Speaker 3: And that's how we designed it because I mean, so
• 28:26
  Speaker 3: my point was is that it was going to be
• 28:27
  Speaker 3: the first. It's the first guyscraper to be built in
• 28:30
  Speaker 3: New York City. If we're going to build the first
• 28:32
  Speaker 3: guyscraper and we've waited this long to get a chance
• 28:36
  Speaker 3: to do it, it needs to make a powerful statement.
• 28:39
  Speaker 4: It needs to be the best.
• 28:41
  Speaker 5: Go bigger, go bigger. So can you walk us through, like,
• 28:49
  Speaker 5: how does financing for a project.
• 28:51
  Speaker 4: Like that work? I mean I think that.
• 28:54
  Speaker 3: Look, I mean the thing about development, and I'd say
• 28:58
  Speaker 3: one of the other elements of why I think I've
• 29:00
  Speaker 3: been successful at this is that I'm a dreamer. I'm
• 29:04
  Speaker 3: a pisces. And I remember my mom telling that when's
• 29:08
  Speaker 3: your birthday? March second? All right, seven?
• 29:12
  Speaker 6: So we got a March thing going, man, Yeah, pisce.
• 29:17
  Speaker 3: My mother told me that pisces were dreamers, and so
• 29:21
  Speaker 3: I said, okay, and I and I took that kind
• 29:22
  Speaker 3: of almost negative. It's like a challenge. I said, well,
• 29:24
  Speaker 3: I'm a dream big I'm gonna make them come true.
• 29:27
  Speaker 4: And so I have. Again. We talked about this earlier.
• 29:31
  Speaker 6: I do.
• 29:31
  Speaker 3: I mean, I worked initially for money because I wanted
• 29:34
  Speaker 3: to be able to eat and have a roof over
• 29:36
  Speaker 3: my head like everybody else, and to live well and
• 29:41
  Speaker 3: then to be able to live as well as anybody else.
• 29:44
  Speaker 3: But but it got to a point real fastt I
• 29:47
  Speaker 3: mean that, and it was never just that, But I
• 29:51
  Speaker 3: got to a place where I wasn't looking to work
• 29:55
  Speaker 3: for for money. I was looking to work for transformation.
• 29:59
  Speaker 3: I wanted to do something very different, and I wanted
• 30:02
  Speaker 3: to make a statement, and I wanted to knock down
• 30:05
  Speaker 3: some barrier so that we could have greater diversity and inclusion,
• 30:09
  Speaker 3: because I just don't think that black Americans can. We
• 30:11
  Speaker 3: should not be burdened with a disproportionate burden of poverty
• 30:16
  Speaker 3: and the way that that changes isn't by somebody giving
• 30:19
  Speaker 3: it to us. It's that we got to go out
• 30:20
  Speaker 3: and set the course ourselves. So I've always worked to
• 30:24
  Speaker 3: try to do bigger. So I always look at the
• 30:26
  Speaker 3: next bigger deal, the next bigger deal, the next bigger deal,
• 30:28
  Speaker 3: And I always figure I learned a long time ago,
• 30:31
  Speaker 3: I figure it out as I go. And so in
• 30:34
  Speaker 3: this instance, though, I had to prove to the state
• 30:36
  Speaker 3: that we could afford to build it.
• 30:37
  Speaker 4: So the debt.
• 30:39
  Speaker 3: I contacted a fund that we've done a lot of
• 30:43
  Speaker 3: business with that I know the CEO of the fund,
• 30:46
  Speaker 3: and said, look, we're doing a three point six billion
• 30:49
  Speaker 3: dollar development. So good news is you can deploy a
• 30:52
  Speaker 3: whole lot of capital, but I'm gonna need you to
• 30:54
  Speaker 3: step up and lend us sixty percent of that. And
• 30:58
  Speaker 3: then I caught one of the largest asset managers in
• 31:00
  Speaker 3: the world who've been touting how they're going to be
• 31:02
  Speaker 3: more inclusive in ESG, and I said, I want you
• 31:05
  Speaker 3: to think beyond affordable housing. I want you to think
• 31:07
  Speaker 3: beyond you know, helping a few small business people's think bigger.
• 31:11
  Speaker 3: You're going to build the tallest building in the Western Hemisphere,
• 31:13
  Speaker 3: and it's going to be an instant landmark. And you
• 31:16
  Speaker 3: also are going to get to deploy over a billion dollars.
• 31:19
  Speaker 3: And so you're going to get to deploy a billion
• 31:22
  Speaker 3: dollars because in the end of the day, they're in
• 31:26
  Speaker 3: the business. You got to think about this. They're in
• 31:28
  Speaker 3: the business to make money. They have to deploy capital
• 31:33
  Speaker 3: to make money. Give you any Blackstone just did a
• 31:36
  Speaker 3: fund and raise twenty five billion dollars.
• 31:40
  Speaker 4: For an equity fund.
• 31:42
  Speaker 3: There's so much capital going on out there that's out
• 31:45
  Speaker 3: there that they can't deploy enough. There's more capital than
• 31:49
  Speaker 3: there are opportunities. They just don't look at us as
• 31:53
  Speaker 3: a business opportunity. They look at us philanthropically, as opposed
• 31:57
  Speaker 3: to seeing us as a place to do business and
• 32:00
  Speaker 3: people to do business with. But there's a tremendous amount
• 32:03
  Speaker 3: of capital. So when I was at an event the
• 32:05
  Speaker 3: other day speaking and I was saying, because I gave
• 32:07
  Speaker 3: a statistic that showed how unfair you know, white men
• 32:12
  Speaker 3: have this, you know, tremendous advantage, I said, nothing will
• 32:15
  Speaker 3: ever be taken from you guys because they can't deploy
• 32:18
  Speaker 3: all the capitol now, So you want to deploy it all,
• 32:21
  Speaker 3: it'll be better. You'll make more money because you'll be
• 32:23
  Speaker 3: able to lend all the money out. So anyway, so
• 32:25
  Speaker 3: long and short of the story is is that we
• 32:27
  Speaker 3: got this company, this firm to step up to over
• 32:30
  Speaker 3: a billion dollars of private equity and UH and then
• 32:34
  Speaker 3: to commit to that and give us a letter. So
• 32:36
  Speaker 3: we went to the state and when we presented, the
• 32:38
  Speaker 3: one thing that the analyst said is who was who
• 32:41
  Speaker 3: was doing the financial analysis and the consultants that we
• 32:43
  Speaker 3: have no doubt that you walk in finance a building.
• 32:45
  Speaker 3: And I thought that was a pretty powerful statement. At
• 32:48
  Speaker 3: three point six billion dollar building. We proposed building a
• 32:51
  Speaker 3: bigger building than anybody else, and we proposed building a
• 32:54
  Speaker 3: taller building than anybody else, and we proposed unprecedented diversity
• 32:57
  Speaker 3: and and and also had the money need to pay
• 33:00
  Speaker 3: for it. And so I thought that was a winning proposition.
• 33:04
  Speaker 3: And then Andrew Como had to leave office, and then
• 33:08
  Speaker 3: we got a new governor and she's tiptoeing around and
• 33:11
  Speaker 3: so they have now canceled the RFP and are going
• 33:14
  Speaker 3: to reissue it. And so that is indicative of what
• 33:19
  Speaker 3: kind of happens is that you know in New York
• 33:23
  Speaker 3: more than any place else, is that when we cross
• 33:26
  Speaker 3: the barrier, then the barrier gets moved. But we are
• 33:32
  Speaker 3: close to making an announcement to bring the Civil Rights
• 33:35
  Speaker 3: Museum to Affirmation Tower as well, and we're not giving up.
• 33:39
  Speaker 3: And there's such a great deal of support for what
• 33:42
  Speaker 3: it stands for. And by the way, I am building
• 33:44
  Speaker 3: it for what it stands for. I will be risking
• 33:47
  Speaker 3: almost all of my net worth to build it, but
• 33:51
  Speaker 3: it's something that has to be built, and I want
• 33:54
  Speaker 3: to build something so that when our young people look
• 33:56
  Speaker 3: at the skyline, because that's what New York City is
• 33:59
  Speaker 3: known for, when they look at the skyline, they can
• 34:01
  Speaker 3: see that the tallest building was built by people like them.
• 34:08
  Speaker 6: Powerful powerful.
• 34:15
  Speaker 7: You know, as you were speaking, I remember this this
• 34:18
  Speaker 7: jay Z line. He was like, there's more blacks to
• 34:20
  Speaker 7: how I go. And so you're kicking down doors, you're
• 34:24
  Speaker 7: breaking barriers for all of us. I'm wondering, was this
• 34:27
  Speaker 7: somebody that helped you, like in the mentorship role. As
• 34:30
  Speaker 7: you're climbing this ladder and on the other end, are
• 34:33
  Speaker 7: you seeing young more black African Americans as you're climbing
• 34:37
  Speaker 7: that You're like, you know what, I love what you're
• 34:39
  Speaker 7: doing in this space.
• 34:40
  Speaker 6: Let me give you some tutelage as I grow as well.
• 34:43
  Speaker 3: Yeah, I mean, look, when I started, there were not
• 34:46
  Speaker 3: many black business people in the real estate space, very
• 34:50
  Speaker 3: few black entrepreneurs, and so my mentorship really came from
• 34:55
  Speaker 3: black politicians. I mean, I cannot underemphasize what I learned
• 34:59
  Speaker 3: from me Arian Barry and I I mean, I can't
• 35:03
  Speaker 3: underemphasize what I learned from a John Conyers or Ron Dellams.
• 35:07
  Speaker 3: I mean, they were my role models. And then I'll
• 35:10
  Speaker 3: never forget, you know. And it was Barry who introduced
• 35:15
  Speaker 3: me to other black business leaders in DC. And so
• 35:19
  Speaker 3: when I was doing my first building in Anacostia, the
• 35:23
  Speaker 3: first building I did while so there was another developer
• 35:27
  Speaker 3: who had wanted to develop that a white developer, and
• 35:29
  Speaker 3: so he leaked out a story to the Washington Post.
• 35:33
  Speaker 3: So one day I came in from my office, came
• 35:35
  Speaker 3: from a meeting outside my office, and then my assistant
• 35:38
  Speaker 3: gave me, you know, the messager throwing sheets of paperback.
• 35:41
  Speaker 3: Then this is nineteen eighty six, and so there's a
• 35:44
  Speaker 3: call from a report at the Washington Post. I said, Wow,
• 35:47
  Speaker 3: this is great. They're going to do a nice story
• 35:49
  Speaker 3: about you know, this nice building. That we're doing a
• 35:52
  Speaker 3: built by.
• 35:52
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  Speaker 3: Washingtonian a black developer redeveloping a major project in a
• 37:49
  Speaker 3: historically black community. We're rebuilding our community.
• 37:51
  Speaker 4: It's all good.
• 37:52
  Speaker 3: It's gonna be a great story. So I called the reporter.
• 37:54
  Speaker 3: Back reporter gets on and says, how, I'm Tom Sherwood.
• 37:57
  Speaker 3: I'm from the I'm an investigative reporter from the Washington Post.
• 38:00
  Speaker 3: I said, what do you mean, investigative reporter and he said, well,
• 38:03
  Speaker 3: we're looking into your relationship with the mayor and how
• 38:07
  Speaker 3: that resulted in the city paying you more than what
• 38:11
  Speaker 3: the rent's worth for your building. And I'm like, okay, well,
• 38:14
  Speaker 3: let me call you back. So I called the mayor's
• 38:20
  Speaker 3: office and spoke to his press assistant, and the press
• 38:24
  Speaker 3: secretary advised me on how to handle it, and so
• 38:27
  Speaker 3: do a meeting in person, record it and so forth.
• 38:29
  Speaker 3: I did this meeting, and I had remembered when I
• 38:33
  Speaker 3: I wanted to make it easy for Barry because I was,
• 38:35
  Speaker 3: you know, pretty, I was somewhat politically astute. So when
• 38:38
  Speaker 3: I made my proposal, I had offered to do to
• 38:43
  Speaker 3: lease the space for less money than what he had
• 38:46
  Speaker 3: signed a letter of intent for with a white developer.
• 38:49
  Speaker 3: So a white developer was going to develop this site
• 38:51
  Speaker 3: but hadn't had the site under control and was negotiating
• 38:54
  Speaker 3: with the seller. And went to the seller and gave
• 38:58
  Speaker 3: him this letter from the mayors saying, no one's gonna
• 39:00
  Speaker 3: buy your land other than me, and I'm gonna pay
• 39:02
  Speaker 3: you seven hundred and fifty thousand dollars for it. The
• 39:05
  Speaker 3: broker for that seller happened to be a subtenant of
• 39:08
  Speaker 3: mine and brought the deal to me, and that's how
• 39:10
  Speaker 3: I got it. So we offered this mayrite signed a
• 39:13
  Speaker 3: letter for twenty two dollars and fifty cents a square foot.
• 39:16
  Speaker 3: I did a letter for eighteen seventy five, so less money,
• 39:21
  Speaker 3: and so it's better deal for the city. So this
• 39:25
  Speaker 3: guy did this article and it was on the front
• 39:27
  Speaker 3: page of the Washington Post, next to the Iran Contra
• 39:30
  Speaker 3: articles of Ronald Reagan. There was my little building in Anacostia,
• 39:33
  Speaker 3: and I'm like, God, I'm trying to get ahead, and
• 39:36
  Speaker 3: this is what I got a deal with. And I'm like,
• 39:37
  Speaker 3: I'm twenty six, so I'm really not, you know, mentally
• 39:41
  Speaker 3: as strong enough to deal with an attack from one
• 39:44
  Speaker 3: of the most powerful media organizations in the country. And
• 39:48
  Speaker 3: I'm like, why are they coming after me? So I
• 39:52
  Speaker 3: went to lunch that day to meet a friend of mine,
• 39:54
  Speaker 3: and I went to this place. It's called Joe and Mose.
• 39:56
  Speaker 3: It was a power lunch place of DC.
• 40:00
  Speaker 4: A lot of.
• 40:02
  Speaker 3: Real estate power brokers and political power brokers locally, and
• 40:06
  Speaker 3: some black business people. It was kind of the hangout
• 40:09
  Speaker 3: for the business establishment there in DC. So I walk
• 40:14
  Speaker 3: in there and the head of the oldest and largest
• 40:18
  Speaker 3: black bank in the country, Independence Federal Savings Bank, And
• 40:20
  Speaker 3: the guy's name was Billy Fitzgerald, and so I walked
• 40:23
  Speaker 3: down these stairs coming into the restaurant. I'm like holding
• 40:25
  Speaker 3: my head down a little bit. Billy comes over to
• 40:28
  Speaker 3: me and I was, as I said, twenty six. He
• 40:32
  Speaker 3: was probably my age now sixty two. So he comes
• 40:35
  Speaker 3: over to me and he says, welcome to the club.
• 40:38
  Speaker 3: And then he explained to me that you are not
• 40:41
  Speaker 3: going to have a fan club here. There's not gonna
• 40:44
  Speaker 3: be a cheering section for you. They're just gonna be
• 40:47
  Speaker 3: land mines and obstacles, and the cheering section is gonna
• 40:50
  Speaker 3: be us. We're going to cheer for each other, and
• 40:53
  Speaker 3: you're gonna cheer for each other. And I want you
• 40:55
  Speaker 3: to remember this day that how you're feeling, well, some
• 40:59
  Speaker 3: of our and sisters are going to feel that same way.
• 41:02
  Speaker 3: And I want you to do what we're going to
• 41:04
  Speaker 3: do today. And so he said, you're taking a day off.
• 41:06
  Speaker 3: I had my lunch, we hung out, We played poker
• 41:09
  Speaker 3: and hung out in the back room and played cards
• 41:11
  Speaker 3: and had a good time. And it cemented a friendship
• 41:14
  Speaker 3: for the rest of my life with.
• 41:15
  Speaker 5: Him always going to be obstacles in life. Is there
• 41:20
  Speaker 5: a set of real estate commandments that you live by,
• 41:23
  Speaker 5: No location, location, innovation is something that I know you
• 41:27
  Speaker 5: were credited for.
• 41:28
  Speaker 4: So can you explain that?
• 41:30
  Speaker 5: And are there real estate commandments that you live by?
• 41:34
  Speaker 4: Yeah?
• 41:34
  Speaker 3: They are, And the number one is make your money
• 41:38
  Speaker 3: going in. So I gave you a little hint about
• 41:42
  Speaker 3: public private partnerships. So rumor has it that Hudson Yards,
• 41:47
  Speaker 3: before the pandemic related was up three and a half
• 41:51
  Speaker 3: billion on land value alone, and that that gave some
• 41:55
  Speaker 3: resources to buy the dolphins. So that's what rumor has it.
• 41:59
  Speaker 3: But so imagine now again, if you control the property,
• 42:04
  Speaker 3: you fix the price, and you go three years down
• 42:08
  Speaker 3: the line. Remember the billion dollar asset. I told you
• 42:10
  Speaker 3: about how two hundred million a year to carry it.
• 42:13
  Speaker 3: So if the value didn't go up at all, you're up,
• 42:17
  Speaker 3: you know, six hundred million dollars if you didn't have
• 42:19
  Speaker 3: to pay that right. So the public private deals I
• 42:22
  Speaker 3: like the most because I can control I don't. The
• 42:25
  Speaker 3: price number one is not the sole determining factor, and
• 42:27
  Speaker 3: so we have to be smart enough to figure out
• 42:30
  Speaker 3: how to give people something more than price. Two, you
• 42:34
  Speaker 3: pay when you're ready to start putting the land to
• 42:36
  Speaker 3: use and not before. And three you don't take intitle
• 42:39
  Speaker 3: of risk. So I like to make my money going in,
• 42:42
  Speaker 3: so I take risk, but they're very controlled risk. And
• 42:46
  Speaker 3: I like the public private space because it allows me
• 42:50
  Speaker 3: to make my money on the land value. So historically,
• 42:53
  Speaker 3: throughout my career, I've always looked to make sure that
• 42:57
  Speaker 3: the day I'm committing to the deal, it's profitable and
• 43:01
  Speaker 3: that I don't have to ride the market up.
• 43:03
  Speaker 4: I don't.
• 43:04
  Speaker 3: I'm insulated, and so make your money going in. Look
• 43:07
  Speaker 3: to get the best value. Anyone, well not anyone, but
• 43:12
  Speaker 3: most people. I mean, it doesn't take a lot of
• 43:14
  Speaker 3: ingenuity if you have cash or access to capital to
• 43:18
  Speaker 3: go pay more than anybody else. And in a hot market,
• 43:21
  Speaker 3: that's what you have to do in order to control
• 43:23
  Speaker 3: a piece of property in the private sector. So you
• 43:26
  Speaker 3: got to figure out how to do that. And I
• 43:28
  Speaker 3: do it through public private projects, or I take entitlement risk.
• 43:32
  Speaker 3: I take more complicated deals and then say give me
• 43:36
  Speaker 3: time to make your deal uncomplicated and I'll pay you
• 43:39
  Speaker 3: more money. And so that's the number one principle is there.
• 43:44
  Speaker 3: And then the second one is to think big. I
• 43:46
  Speaker 3: mean to be uncomfortable. I mean, you know, I had
• 43:50
  Speaker 3: to stop listening to all my relatives. I'd stopped listening
• 43:53
  Speaker 3: to my mother, as well intended as she was. It's
• 43:55
  Speaker 3: because they're trying to protect me, and I wasn't really
• 43:58
  Speaker 3: interested in being protected. I was interested in excelling, and
• 44:01
  Speaker 3: so I had to get way out of my comfort zone.
• 44:04
  Speaker 3: But I would say that the number one thing make
• 44:06
  Speaker 3: the money going.
• 44:06
  Speaker 6: In yeah, valuable.
• 44:09
  Speaker 7: Let's so, we obviously talked about the barriers that you
• 44:14
  Speaker 7: face here in New York trying to develop.
• 44:15
  Speaker 6: We know what you've done in DC, but.
• 44:17
  Speaker 7: I watched this like thirty minute interview when they were
• 44:19
  Speaker 7: asking about it in the next twenty years, where's a
• 44:22
  Speaker 7: place in America that we should be looking at for
• 44:23
  Speaker 7: talking about developers?
• 44:25
  Speaker 6: And you said, Miami. Obviously you have some. You know,
• 44:28
  Speaker 6: we talked about I stay there.
• 44:29
  Speaker 7: But what is it that you saw in Miami as
• 44:31
  Speaker 7: from the development side that made you make that statement?
• 44:33
  Speaker 3: Fundamentals, I think you got to look at things. I mean,
• 44:37
  Speaker 3: one of my most favorite quotes, It's been inspirational to
• 44:42
  Speaker 3: me for so long. Robert Kennedy used it a lot.
• 44:45
  Speaker 3: It was some people see things as they are and
• 44:48
  Speaker 3: they ask why I dream of things that never were
• 44:51
  Speaker 3: and asked why not. That is how Barack Obama got
• 44:55
  Speaker 3: to be president, right, That is how all of us
• 45:00
  Speaker 3: made it. The progress that we've made in our lives
• 45:03
  Speaker 3: is why not. And so I have looked at I
• 45:07
  Speaker 3: look at Miami, and you have to look at real
• 45:09
  Speaker 3: estate differently. So New York has always been New York.
• 45:11
  Speaker 3: It's New York, New York, New York, okay, But Miami's growing,
• 45:15
  Speaker 3: And so what would make Miami attractive? And why people
• 45:18
  Speaker 3: beginning to shift down here? Well, they were shifting down
• 45:21
  Speaker 3: to Miami. One reason is nice quality of life, nice weather,
• 45:25
  Speaker 3: no snow, nice quality of life, the beach, the ocean,
• 45:29
  Speaker 3: and then one other thing. And it was a reason
• 45:32
  Speaker 3: I moved there. So I was living there. I got
• 45:35
  Speaker 3: a vacation home there in nineteen ninety five and won
• 45:38
  Speaker 3: the rights to the Royal Palm was in six months,
• 45:41
  Speaker 3: and so I was going back and forth to DC.
• 45:44
  Speaker 3: And my son was two years old, and so we
• 45:46
  Speaker 3: had an apartment down there, and I was going back
• 45:49
  Speaker 3: to DC to meet with my offense team, my staff,
• 45:52
  Speaker 3: and the development side, and then I met with my
• 45:53
  Speaker 3: accountants as well. Because it's like in some early April
• 45:56
  Speaker 3: and then it had been hit by this massive snowstorm
• 45:59
  Speaker 3: and the snow was piled up on both sides of
• 46:01
  Speaker 3: the roads where they plowed it. So I met with
• 46:03
  Speaker 3: my accountants and they were telling me how much I
• 46:05
  Speaker 3: owed in local taxes, and I'm like, why am I
• 46:09
  Speaker 3: paying that? I mean, I don't my son doesn't go
• 46:12
  Speaker 3: to public schools, go to a private school. I mean,
• 46:15
  Speaker 3: I don't use the infrastructure here. I'm not burdening the
• 46:18
  Speaker 3: infrastructure with that much money. And he said, well, you know,
• 46:21
  Speaker 3: you could save all of this if you just became
• 46:23
  Speaker 3: a Florida resident. So I said, really, all of it?
• 46:27
  Speaker 3: And he's all of it. So I reloke. I got
• 46:30
  Speaker 3: a home in Miami. I sold my house in DC,
• 46:33
  Speaker 3: and I moved my company down to Miami. And I
• 46:36
  Speaker 3: did it because the quality of life and economics. So
• 46:40
  Speaker 3: I always felt okay, But I made that decision in Washington,
• 46:43
  Speaker 3: DC's my hometown. I mean, I had as if I'm
• 46:46
  Speaker 3: gonna have home field advantage, it was there. It was
• 46:49
  Speaker 3: a predominantly black city. I knew the entire political establishment,
• 46:53
  Speaker 3: and I'd learned to navigate the city.
• 46:55
  Speaker 4: And I picked up and left.
• 46:57
  Speaker 3: So I felt that if I were willing to do that,
• 46:59
  Speaker 3: I mean, couldn't that argument be made by many more
• 47:03
  Speaker 3: people in DC, many people in New York, many people
• 47:05
  Speaker 3: in Chicago and so forth.
• 47:07
  Speaker 4: And I felt that that would be the case. And
• 47:09
  Speaker 4: also I found Miami.
• 47:10
  Speaker 3: To be more multicultural and more diverse on an everyday experience,
• 47:16
  Speaker 3: as opposed to I saw New York as more segregated.
• 47:18
  Speaker 3: I saw DC as more segregated. And so I thought
• 47:21
  Speaker 3: that that would be the future. You know of our
• 47:25
  Speaker 3: country is greater connections amongst people. And so I saw
• 47:29
  Speaker 3: Miami and all those reasons, and it was undervalued.
• 47:31
  Speaker 4: So you could buy.
• 47:32
  Speaker 3: An apartment in Miami on the ocean, say back in
• 47:39
  Speaker 3: two thousand and two, you could buy or right after,
• 47:42
  Speaker 3: say after nine eleven, etc. When everything's percolating, Let's go
• 47:45
  Speaker 3: to two thousand and eight and buy an apartment, a
• 47:47
  Speaker 3: beautiful apartment on the ocean in Miami. The best building
• 47:49
  Speaker 3: for eight hundred dollars a square foot. Best building in
• 47:51
  Speaker 3: New York was, you know, eight thousand a square foot.
• 47:55
  Speaker 3: So the economics were more compelling, and so I thought
• 47:58
  Speaker 3: for those reasons, Miami had a lot of runway, because
• 48:02
  Speaker 3: it can compete favorably to New York, and it can
• 48:07
  Speaker 3: compete favorably to Chicago and other areas in the Northeast
• 48:10
  Speaker 3: and the mid Atlantic, and that's all true. And then
• 48:13
  Speaker 3: Citadel Ken Griffin, Illinois's richest citizen, just announced yesterday's moving
• 48:18
  Speaker 3: his whole company down to Miami, a thousand people and
• 48:22
  Speaker 3: taking his money with him. And I think we're gonna
• 48:24
  Speaker 3: and more and more New Yorkers are down there as well.
• 48:26
  Speaker 3: So I think looking at what can be as opposed
• 48:30
  Speaker 3: to what is is a great way to invest in
• 48:32
  Speaker 3: real estate.
• 48:33
  Speaker 5: They're also trying to become the crypto capital of America.
• 48:36
  Speaker 5: They're taking strong steps forward with that. So yeah, Miami
• 48:40
  Speaker 5: real estate is hot right now. But let me ask
• 48:41
  Speaker 5: you this, as far as the real estate market in
• 48:43
  Speaker 5: general has not declined, even when the stock market has declined,
• 48:48
  Speaker 5: crypto has declined, real estate has continued to going up,
• 48:51
  Speaker 5: and now you know interest rates arising, it's pretty much.
• 48:57
  Speaker 5: I think we're already in a recession, but they haven't
• 48:59
  Speaker 5: announced it yet. You know, after this quarter will probably
• 49:02
  Speaker 5: officially be in a recession. So people are concerned about
• 49:07
  Speaker 5: real estate. What is your overall thoughts about the real
• 49:10
  Speaker 5: estate market commercial residential? Are you concerned or do you
• 49:14
  Speaker 5: have any fear in it? Well, I mean I think
• 49:18
  Speaker 5: your assessment's right. I think we are in the recession.
• 49:20
  Speaker 5: We're seeing it in the statistics and start showing it soon.
• 49:24
  Speaker 5: I think that we real estate.
• 49:28
  Speaker 3: If you're in the real estate business, then you can
• 49:31
  Speaker 3: make money in every aspect of it. So I made
• 49:36
  Speaker 3: more money, the most money at the time of our
• 49:40
  Speaker 3: company's history, back in the early nineteen nineties when I
• 49:43
  Speaker 3: started buying, because we had a banking and financial crisis
• 49:48
  Speaker 3: and the junk bond crises and the SNL crisis. In
• 49:50
  Speaker 3: the early nineties, I started buying up land in downtown
• 49:55
  Speaker 3: d C. You know, at twenty cents ten cents on
• 49:58
  Speaker 3: the dollar, and and I was able. I bought one
• 50:02
  Speaker 3: building for million, five million dollars and then cut a
• 50:07
  Speaker 3: deal with the defaulting tenant to pay off their lease
• 50:10
  Speaker 3: for a million two fifty, so I paid three million,
• 50:13
  Speaker 3: seven fifty. I ended up holding it for a little
• 50:15
  Speaker 3: while and then converting it it was an office building,
• 50:19
  Speaker 3: converting it to a Marriott hotel, which I owned for
• 50:22
  Speaker 3: twenty years, and it was in an enterprise zone in
• 50:25
  Speaker 3: downtown DC, so there was no capital gains tax for
• 50:30
  Speaker 3: first twenty years. I sold it at the end of
• 50:32
  Speaker 3: the twentieth year for one hundred and thirty million dollars
• 50:34
  Speaker 3: and I put all in. I think I had twenty
• 50:37
  Speaker 3: million in it, so there's always a way. And then
• 50:40
  Speaker 3: we made money all along the way too in cash
• 50:42
  Speaker 3: lit So if you're in the real estate business, it's
• 50:44
  Speaker 3: gonna be great buying opportunities. But I think places like
• 50:47
  Speaker 3: New York, the real estate markets pulled back in New
• 50:49
  Speaker 3: York and overall in the country. While prices have been holding,
• 50:53
  Speaker 3: volume is down for the four straight months, so but
• 50:56
  Speaker 3: all markets aren't created equally. So New York there's no reason,
• 51:03
  Speaker 3: just fundamentally to think about how New York will continue
• 51:06
  Speaker 3: to hold values right, because now I'll hold it at
• 51:09
  Speaker 3: the moderate level and at what would be entry level
• 51:14
  Speaker 3: for luxury in New York, which is a couple million
• 51:17
  Speaker 3: dollars because it's supply constrained, but going up beyond that,
• 51:22
  Speaker 3: people are going to be much more interest rates sensitive
• 51:24
  Speaker 3: because now the cost of a mortgage is double what
• 51:27
  Speaker 3: it was a year ago. And also less people are
• 51:30
  Speaker 3: living here and people are working remotely. So a place
• 51:33
  Speaker 3: like New York, you'd have to look at certain pockets,
• 51:36
  Speaker 3: but overall, as a market, it's going to pull back. Miami,
• 51:41
  Speaker 3: where they can't build a housing quick enough. They can't
• 51:44
  Speaker 3: build office space. We're doing two buildings in South office
• 51:47
  Speaker 3: buildings in South Speech because there's not enough office space.
• 51:50
  Speaker 3: And so for King Griffin's going to have to I
• 51:53
  Speaker 3: don't know where He's going to have his employees. I
• 51:55
  Speaker 3: mean they have to be in an apartment or something.
• 51:57
  Speaker 3: I mean they'll work remotely because there's no space for them.
• 51:59
  Speaker 3: So that I mean, so that market is going to
• 52:02
  Speaker 3: continue to attract Nashville the Sun Belt in general, but
• 52:08
  Speaker 3: the cities with strong fundamentals, lower taxes, business friendly and
• 52:12
  Speaker 3: opportunity for growth and quality of life. And so you're
• 52:15
  Speaker 3: going to see some of those markets. Chicago's in big trouble.
• 52:18
  Speaker 3: DC on the office market is in terrible shape, and
• 52:22
  Speaker 3: because people are working remotely, so all markets, it's important
• 52:25
  Speaker 3: that everybody think about this. Yes, there's a recession, so
• 52:28
  Speaker 3: now there will be a time period and I think
• 52:30
  Speaker 3: what's gonna happen. I think we're going to have an
• 52:32
  Speaker 3: experience very similar to nineteen seventy nine nineteen eighty where
• 52:36
  Speaker 3: an Opec had an oil embargo against US. Inflation was
• 52:39
  Speaker 3: running out of control, and the feed were trying to
• 52:42
  Speaker 3: control inflation by raising interest rates, and it put us
• 52:45
  Speaker 3: into a terrible recession. And then Ronald Reagan came in.
• 52:49
  Speaker 3: Is as horrible as he was as a president, it
• 52:51
  Speaker 3: was great for business because what he did is immediately
• 52:53
  Speaker 3: gave tax cuts and push an interest rays down. So
• 52:56
  Speaker 3: I think we've got two years of very painful experiences
• 53:00
  Speaker 3: to happen in many sectors of our economy, and then
• 53:03
  Speaker 3: it'll roll into twenty twenty five you'll start seeing some
• 53:08
  Speaker 3: real runs. So the thing to do on real estate
• 53:11
  Speaker 3: in place is if you look at real estate as
• 53:13
  Speaker 3: a twelve hour clock, which is how I like to
• 53:15
  Speaker 3: look at real estate, twelve o'clock being the peak, right,
• 53:18
  Speaker 3: then you want to definitely not be a buyer, you know,
• 53:21
  Speaker 3: at one o'clock, two o'clock, three o'clock, right, because you
• 53:24
  Speaker 3: know you're losing money, right, so you want to start
• 53:26
  Speaker 3: buying though about four o'clock four thirty, and you want
• 53:30
  Speaker 3: to buy all the way up until like seven, eight o'clock,
• 53:33
  Speaker 3: nine o'clock because you're making money, but you buy so
• 53:37
  Speaker 3: but from twelve to four you're a student of the market,
• 53:43
  Speaker 3: and then from nine o'clock ten o'clock, depending on when
• 53:48
  Speaker 3: you bought, you're a seller, and if you play it
• 53:50
  Speaker 3: that way, then you can always perpetually be in real estate.
• 53:54
  Speaker 4: And our company.
• 53:56
  Speaker 3: I focused our company on geographic diversification. That's why we're
• 54:00
  Speaker 3: in multiple markets because while New York may not be moving,
• 54:04
  Speaker 3: you know, Miami's on fire, so we just do more there.
• 54:07
  Speaker 4: Or Charlotte it's on fire.
• 54:08
  Speaker 3: So you know, Boston Life Science office market in Boston's struggling,
• 54:13
  Speaker 3: but Life Sciences is on fire, big backlocks, so we're
• 54:16
  Speaker 3: doing two life Science buildings. I mean, so playing geographic
• 54:20
  Speaker 3: product type diversification and being in the real estate business
• 54:26
  Speaker 3: so make money when other people are losing money.
• 54:29
  Speaker 4: Happens all the time, a.
• 54:31
  Speaker 6: Whole lot of game.
• 54:33
  Speaker 7: So can we talk the legacy for a second, because
• 54:35
  Speaker 7: your company is first generation, right, Obviously your mom introduced
• 54:39
  Speaker 7: you to real estate, but your company, you've started the
• 54:41
  Speaker 7: business itself.
• 54:42
  Speaker 6: You have two children.
• 54:44
  Speaker 7: Obviously your son's in real estate, your daughter, I'm assuming
• 54:48
  Speaker 7: hopefully how did you get them involved that they just
• 54:50
  Speaker 7: had a natural interest for it because they were watching
• 54:52
  Speaker 7: what you were doing.
• 54:54
  Speaker 3: Well, it's interesting my son did not want to work
• 54:56
  Speaker 3: in the company when he was a teenager, and so forth,
• 55:00
  Speaker 3: he's more interested in spending some time with me, and
• 55:02
  Speaker 3: so I kind of we had this kind of interaction
• 55:04
  Speaker 3: where he'd spend some time with me as I coached
• 55:07
  Speaker 3: him in basketball, but he also spent some time with
• 55:09
  Speaker 3: me working, and so he got exposed to the business
• 55:13
  Speaker 3: a bit, and I gave him moments. He introduced me
• 55:16
  Speaker 3: into groundbreaking ceremony for the bass club condo, for example,
• 55:20
  Speaker 3: when he was eight or nine, and I've involved him
• 55:23
  Speaker 3: more in the business. So and then he let him
• 55:26
  Speaker 3: do his own thing when he went to Columbia, and
• 55:29
  Speaker 3: then after after a couple of years, decided he took
• 55:32
  Speaker 3: an internship. I did a summer internship with us, and
• 55:34
  Speaker 3: after working in a couple other places, and then he
• 55:37
  Speaker 3: took to the business.
• 55:37
  Speaker 4: He got a good aptitude for it.
• 55:39
  Speaker 3: And and then he you know, he and I compliment
• 55:42
  Speaker 3: each other where similar in some regards were different, but
• 55:46
  Speaker 3: it was that it was I gave him the freedom,
• 55:49
  Speaker 3: gave him the freedom, uh, you know.
• 55:51
  Speaker 4: To learn.
• 55:52
  Speaker 3: He didn't work for me or report to me. He's
• 55:54
  Speaker 3: reported to two different people, one the head of development
• 55:56
  Speaker 3: in New York. And then he went to d C
• 55:59
  Speaker 3: and was on his own while I was here. So
• 56:02
  Speaker 3: more giving him the environment, but also you know, the
• 56:05
  Speaker 3: rewards he learned as he matured that he was working
• 56:07
  Speaker 3: for himself.
• 56:09
  Speaker 4: And uh and so.
• 56:11
  Speaker 3: You know, I think that part of that was adding
• 56:14
  Speaker 3: And I think I've instilled nothing else. I've instilled in
• 56:18
  Speaker 3: our kids a sense of purpose and a sense of purpose,
• 56:25
  Speaker 3: not money focused, but a sense of purpose of being
• 56:28
  Speaker 3: a transformer to observe and see the wrongs in our society,
• 56:32
  Speaker 3: but to not consider themselves spectators, but parts of solutions
• 56:37
  Speaker 3: of how to right these wrongs and how to change
• 56:39
  Speaker 3: the course of things. So, you know, so that's kind
• 56:42
  Speaker 3: of how I got him in. It's interesting, though, my
• 56:45
  Speaker 3: daughter is got more like my personalities, is really stubborn
• 56:49
  Speaker 3: and uh and so she's told me, I'm never going
• 56:51
  Speaker 3: to work with you. And now she's got a point.
• 56:53
  Speaker 3: She's a rising sophomore at TCU, and she's beginning to say, well,
• 56:59
  Speaker 3: you know, if you if you're gonna, if you give me,
• 57:03
  Speaker 3: you know, like some you know, some independence, I could
• 57:05
  Speaker 3: maybe work with you. So right, But I but I
• 57:09
  Speaker 3: tried to. I called her. I was in uh La
• 57:14
  Speaker 3: a couple of weeks ago. I got in COVID, so
• 57:16
  Speaker 3: I was quarantining in La and I was getting our
• 57:20
  Speaker 3: company was getting an award for diversity and inclusion here
• 57:23
  Speaker 3: in New York City. She was in the city and
• 57:25
  Speaker 3: I said, look, I can't go.
• 57:27
  Speaker 6: You know.
• 57:28
  Speaker 3: I called her the night before and I said, I
• 57:30
  Speaker 3: can't go. You know, you have time to go and
• 57:33
  Speaker 3: accept the award for me. She said, well, what do
• 57:35
  Speaker 3: you mean You're not going to be to go And
• 57:36
  Speaker 3: I said no, And I said, Donna Hues in Charlotte
• 57:39
  Speaker 3: he can't go, or he's in Boston, one of the
• 57:42
  Speaker 3: two and he can't go. So either, I mean, no
• 57:46
  Speaker 3: one from our family's going to be to go, and
• 57:48
  Speaker 3: so but maybe you go. Let me think about it.
• 57:51
  Speaker 3: So next day she called me up and says, okay,
• 57:54
  Speaker 3: I'll do it. I said, okay, well, I'll have some
• 57:56
  Speaker 3: remarks written for you and then you can tweak them
• 57:58
  Speaker 3: and so forth. So I said remarks for her and anyway,
• 58:01
  Speaker 3: then she, you know, said okay, I'll do it. And
• 58:04
  Speaker 3: then she said, because somebody has to be there to
• 58:06
  Speaker 3: accept it, and I said ok and she said you
• 58:08
  Speaker 3: should have been here. I said, I'm sick.
• 58:09
  Speaker 4: I can't be there.
• 58:11
  Speaker 3: And so anyway, she went and took it and accepted
• 58:13
  Speaker 3: the award and uh, and then felt good about it,
• 58:16
  Speaker 3: felt good about her contributing something and accepting something. And
• 58:19
  Speaker 3: she's you know, a big, you know, proponent of of
• 58:24
  Speaker 3: inclusion for women, and so I think that piqued her
• 58:28
  Speaker 3: interest a little bit. And so and even today I said, look,
• 58:31
  Speaker 3: I'm not gonna be able to go, you know, hang
• 58:32
  Speaker 3: out with you and watch your horseback ride today, I'm
• 58:34
  Speaker 3: gonna be doing this. And she said, that's very important.
• 58:36
  Speaker 3: You should go, and she put some water in a
• 58:39
  Speaker 3: selda by the door for me to drink on the ride.
• 58:41
  Speaker 6: End.
• 58:41
  Speaker 3: So I think ultimately getting them interested in the greater purpose.
• 58:45
  Speaker 3: I mean, it's hard to motivate someone especially, I mean
• 58:48
  Speaker 3: someone who's had, you know, never had never had to
• 58:53
  Speaker 3: worry economically about anything. It's hard to motivate them with money.
• 58:56
  Speaker 3: So it's more about a sense of purpose. And so
• 58:58
  Speaker 3: I think Donahue operates from with a sense of purpose,
• 59:01
  Speaker 3: and I think Chloe definitely will. If she goes into
• 59:04
  Speaker 3: the business or does whatever she does, it will be
• 59:06
  Speaker 3: with a sense of purpose. And again I think that
• 59:08
  Speaker 3: that's the way to be suc truly successful business people,
• 59:14
  Speaker 3: to be motivated by a sense of purpose. I mean,
• 59:16
  Speaker 3: because at a certain point you'll get to a place
• 59:18
  Speaker 3: where you say the money is worth this, I mean yeah,
• 59:21
  Speaker 3: and so you'll need something else to propel you and
• 59:25
  Speaker 3: give you that purpose.
• 59:27
  Speaker 5: So in twenty nineteen, you announced a fund initiated just
• 59:32
  Speaker 5: five hundred million dollar fun I believe for minority and
• 59:36
  Speaker 5: women developers. So how has that gone? What type of
• 59:40
  Speaker 5: projects have been funded with that initiative.
• 59:42
  Speaker 3: So I've always I've been very frustrated to see the
• 59:47
  Speaker 3: lack of diversity in the development industry and the real
• 59:50
  Speaker 3: estate industry. Very frustrated, and so I've given a lot
• 59:54
  Speaker 3: of thought and research as to why that is the case,
• 1:00:00
  Speaker 3: and I you know, came up with you know, my
• 1:00:03
  Speaker 3: conclusions were, one, our young people don't get exposed as
• 1:00:08
  Speaker 3: much to real estate and entrepreneurship as they should. And
• 1:00:11
  Speaker 3: so I got lucky. I was exposed to it real
• 1:00:15
  Speaker 3: estate at eight years old.
• 1:00:16
  Speaker 4: But so how do we do that?
• 1:00:18
  Speaker 3: And so we can do that through exposure early on,
• 1:00:20
  Speaker 3: through you know, putting it in public schools systems. I
• 1:00:23
  Speaker 3: mean to learn about American history, you know, and the
• 1:00:26
  Speaker 3: founding fathers as useless to our young people, as opposed
• 1:00:29
  Speaker 3: to why not teaching them about how to manage money,
• 1:00:31
  Speaker 3: how to go into business and so forth. I think,
• 1:00:33
  Speaker 3: so exposure to the industry itself, and opportunity for adults
• 1:00:38
  Speaker 3: to get into the industry by having opportunities to work
• 1:00:42
  Speaker 3: in companies and to learn the business. And then the
• 1:00:45
  Speaker 3: other one, and the bigger one, was capital. So every
• 1:00:49
  Speaker 3: black business person I know, and I got to believe
• 1:00:52
  Speaker 3: that there's I mean, I'd be interested to see is
• 1:00:55
  Speaker 3: there one person in this room or anybody in this
• 1:00:58
  Speaker 3: room who's in the real life state business or any
• 1:01:01
  Speaker 3: kind of business doesn't need any money.
• 1:01:05
  Speaker 4: Speak now, now I'm curious, do you all?
• 1:01:08
  Speaker 3: Does every raise your hand if you have all the
• 1:01:10
  Speaker 3: capital you need to start or grow your business. Now,
• 1:01:15
  Speaker 3: think about that one person in the background, Okay, one person?
• 1:01:18
  Speaker 4: All right?
• 1:01:19
  Speaker 3: So all right, now all the room in here, right,
• 1:01:23
  Speaker 3: So I'm like everybody I know, So why is that
• 1:01:26
  Speaker 3: the case?
• 1:01:26
  Speaker 4: So I did some research.
• 1:01:28
  Speaker 3: So there is sixty nine trillion dollars, sixty nine trillion
• 1:01:34
  Speaker 3: dollars currently invested in venture capital and private equity, sixty
• 1:01:39
  Speaker 3: nine trillion. Now, Biden spent less than two trillion to
• 1:01:43
  Speaker 3: try to save the country for COVID and build back
• 1:01:46
  Speaker 3: from the recession and all that, and sixty nine trillion
• 1:01:50
  Speaker 3: in that two sectors. Now, of that sixty nine trillion,
• 1:01:56
  Speaker 3: less than one point three percent is invested in firms founded, run,
• 1:02:05
  Speaker 3: or owned by women and people of color combined one
• 1:02:12
  Speaker 3: point three percent. Now give you a little footnote. Last year,
• 1:02:17
  Speaker 3: the one group who started the most small businesses of
• 1:02:21
  Speaker 3: any category were black women. Thirty percent of all small
• 1:02:26
  Speaker 3: businesses in the United States and twenty twenty one were
• 1:02:30
  Speaker 3: started by black women. Black women get less than two
• 1:02:34
  Speaker 3: tenths of one percent of venture capital or private equity.
• 1:02:39
  Speaker 3: So imagine the unfair advantage majority of the country of
• 1:02:45
  Speaker 3: female The country is becoming more and more diverse, and
• 1:02:50
  Speaker 3: so yet we don't have this kind of access to capital.
• 1:02:53
  Speaker 3: So white men receive ninety eight point seven percent of
• 1:02:59
  Speaker 3: all capitals. Imagine that. Now imagine how unfair that is.
• 1:03:05
  Speaker 3: And so when you look at that, I said, Okay,
• 1:03:08
  Speaker 3: well we got to do something about it. So I
• 1:03:11
  Speaker 3: can do a private equity fund. I've been doing this
• 1:03:13
  Speaker 3: for a long time. So I said, I'm going to
• 1:03:14
  Speaker 3: raise a private equity fund, and I'm going to raise
• 1:03:16
  Speaker 3: it for you know, minority developers and women. And so
• 1:03:22
  Speaker 3: initially I was told, one, you can't do that. I
• 1:03:25
  Speaker 3: got to say it's for emerging developers. And because I
• 1:03:30
  Speaker 3: can't do it based on race, and I can't do
• 1:03:32
  Speaker 3: it based on gender, so I said, okay, So I go,
• 1:03:35
  Speaker 3: and I go to these public employee pension systems, like
• 1:03:38
  Speaker 3: say New York City for example.
• 1:03:40
  Speaker 4: Now give you an idea.
• 1:03:41
  Speaker 3: New York City eighty percent of its workforce is people
• 1:03:45
  Speaker 3: of color the government, and over sixty percent of its
• 1:03:50
  Speaker 3: workforce is female. And yet they have invested less than
• 1:03:54
  Speaker 3: three percent of their money in firms run or managed
• 1:03:59
  Speaker 3: by women and people of color combined.
• 1:04:02
  Speaker 4: And so I went to them.
• 1:04:05
  Speaker 3: I went to others, and they say, hey, we invest
• 1:04:06
  Speaker 3: in your company, but we think it's too risky to
• 1:04:09
  Speaker 3: invest in you know, minority firms and the small minority firms.
• 1:04:14
  Speaker 3: And so I have been going around trying to raise
• 1:04:19
  Speaker 3: this money. I got the State of California teachers gave
• 1:04:23
  Speaker 3: us a proposal, a term sheet. We've got some proposals
• 1:04:26
  Speaker 3: from a couple of different banks. But it's been the
• 1:04:28
  Speaker 3: hardest exercise to raise. I mean, it took me thirty
• 1:04:32
  Speaker 3: five days or so to get the commitments to finance.
• 1:04:37
  Speaker 3: You know, our building in Tribeca, it was five hundred
• 1:04:39
  Speaker 3: and forty million. It took less than a month to
• 1:04:43
  Speaker 3: get commitments of three point six billion for Affirmation Tower,
• 1:04:46
  Speaker 3: and I'm like, wait a minute, we're going to this
• 1:04:48
  Speaker 3: is right during, this is George Floyd, the protests, all this,
• 1:04:52
  Speaker 3: everybody's saying they want to do more, and these public
• 1:04:54
  Speaker 3: employee pension systems would not commit. New York State says
• 1:05:00
  Speaker 3: they don't do first time funds. I said, well, we're
• 1:05:03
  Speaker 3: not a first time fund we are. Our company's been
• 1:05:06
  Speaker 3: in business for almost forty years. We've been developing for
• 1:05:08
  Speaker 3: thirty six years. Yeah, but you haven't been a fiduciary,
• 1:05:11
  Speaker 3: so we can't do that. So we have yet to
• 1:05:16
  Speaker 3: raise a little, tiny five hundred million dollar fund.
• 1:05:19
  Speaker 4: I just told you all.
• 1:05:20
  Speaker 3: Blackstone raised last month twenty five billion for Opportunistic And
• 1:05:25
  Speaker 3: now the irony is that both the Controller of the
• 1:05:29
  Speaker 3: City of New York and the Controller of the State
• 1:05:32
  Speaker 3: of New York, Tom DiNapoli, are elected. And no Democrat
• 1:05:39
  Speaker 3: can win statewide without winning New York City, and no
• 1:05:46
  Speaker 3: Democrat can win New York City without getting the majority
• 1:05:50
  Speaker 3: of the black boat. So we need to be more
• 1:05:54
  Speaker 3: educated about how our capitals deployed. And the irony is
• 1:05:57
  Speaker 3: in New York City. Again of the workforce are people
• 1:06:03
  Speaker 3: of color, and yet we can't get fair access to
• 1:06:06
  Speaker 3: our own money. So the challenge is access to capital.
• 1:06:09
  Speaker 3: So if all of you all want to be in
• 1:06:11
  Speaker 3: a position where one day you can raise your hand
• 1:06:13
  Speaker 3: like the woman in Red, you all need to be
• 1:06:17
  Speaker 3: engaged in the political process because it's our money, but
• 1:06:22
  Speaker 3: yet we can't get access to it, fair access to it.
• 1:06:27
  Speaker 3: We wouldn't be I wouldn't be making this an issue
• 1:06:29
  Speaker 3: if the sixty nine trillion was deployed reflective of the
• 1:06:34
  Speaker 3: population demographics of our country. But it's unfair to have
• 1:06:41
  Speaker 3: to compete at such an extreme disadvantage. Now that doesn't
• 1:06:45
  Speaker 3: mean we give up or have an excuse. I don't
• 1:06:47
  Speaker 3: look at it as an excuse. I didn't expect it
• 1:06:50
  Speaker 3: to be harder. My grandparents told me I was going
• 1:06:53
  Speaker 3: to have to be twice to three times as good
• 1:06:55
  Speaker 3: and never expect it to be easy. I would have
• 1:06:58
  Speaker 3: hoped by now it would be easy, but it isn't.
• 1:07:01
  Speaker 3: So my advice is, don't expect it to be easy.
• 1:07:06
  Speaker 3: Keep pushing hard and keep fighting and growing your business
• 1:07:11
  Speaker 3: and being successful like that. Thirty percent of the black
• 1:07:14
  Speaker 3: women who were starting businesses last year. They didn't give
• 1:07:17
  Speaker 3: up or quit. They kept going. But at the same hand,
• 1:07:20
  Speaker 3: we cannot ignore this systemic discrimination when it comes to
• 1:07:26
  Speaker 3: access to capital. Remember what doctor King said during the
• 1:07:30
  Speaker 3: Civil Rights movement? What good does it do the negro
• 1:07:33
  Speaker 3: to desegregate a lunch counter when they can't afford to
• 1:07:37
  Speaker 3: buy a Hamburger?
• 1:07:38
  Speaker 4: Right?
• 1:07:39
  Speaker 3: So there's a capitalistic democracy and we need to be active,
• 1:07:45
  Speaker 3: equal participants in that capitalism. And you all cannot accept
• 1:07:53
  Speaker 3: this unfairness, and so it's important that you all challenged
• 1:07:58
  Speaker 3: the system too and demand that these politicians step up,
• 1:08:02
  Speaker 3: because think about it again, this city, and this is
• 1:08:05
  Speaker 3: majority minority. Why is capital not deployed that way? But
• 1:08:09
  Speaker 3: that's why I'm doing this fun and I'm keep pushing.
• 1:08:12
  Speaker 3: And by the way, I committed to putting up ten
• 1:08:14
  Speaker 3: percent of the fund. I'll never forget. I went into
• 1:08:16
  Speaker 3: one meeting with the owner of a big private equity
• 1:08:18
  Speaker 3: fund and we're talking about I said, I'll put up
• 1:08:22
  Speaker 3: We're raising four hundred and fifty million dollars and I'm
• 1:08:24
  Speaker 3: gonna put up personally ten percent of it. Now Blackstone
• 1:08:28
  Speaker 3: and they're twenty five billion, is putting up like one
• 1:08:30
  Speaker 3: or two percent. We're and the guys you're putting up
• 1:08:33
  Speaker 3: ten percent And I said yeah. He said, well, why,
• 1:08:36
  Speaker 3: I said, you think anybody's going to give me any
• 1:08:38
  Speaker 3: money If I don't put up ten percent, They say
• 1:08:39
  Speaker 3: you don't have enough alignment of interests. I said, I
• 1:08:41
  Speaker 3: want the fund to be raised, So I'm going to
• 1:08:43
  Speaker 3: keep pushing. And I don't mean I'm doing it because
• 1:08:46
  Speaker 3: I know because of all of you all who didn't
• 1:08:48
  Speaker 3: raise your hand, I know the challenges that you're having,
• 1:08:52
  Speaker 3: and that's why I'm going to keep trying to do it.
• 1:08:54
  Speaker 3: And if I fail, I'm going to keep trying and
• 1:08:56
  Speaker 3: keep trying and raising This is an issue. And what
• 1:08:59
  Speaker 3: I really would like if I could ask anything from
• 1:09:01
  Speaker 3: you all, it's for you all to start raising this
• 1:09:03
  Speaker 3: as an issue. It's just not fair and you shouldn't
• 1:09:05
  Speaker 3: accept it. And imagine. Let's imagine the world in a
• 1:09:10
  Speaker 3: place where out of that sixty nine trillion dollars, thirteen percent,
• 1:09:15
  Speaker 3: which is our population demographic in the United States, went
• 1:09:19
  Speaker 3: to black businesses, so that would be eight trillion dollars.
• 1:09:28
  Speaker 3: We'd all have our hands up right. So I need
• 1:09:32
  Speaker 3: you all to realize that this is the frontier that
• 1:09:35
  Speaker 3: you're going to have to keep confronting. But you're not
• 1:09:38
  Speaker 3: getting the capital because your ideas aren't as good. You're
• 1:09:42
  Speaker 3: not getting the capital because you're not capable. You're getting
• 1:09:46
  Speaker 3: the capital because the way it's deployed is systemically discriminatory.
• 1:09:49
  Speaker 3: Because what these pension funds do is they don't they
• 1:09:53
  Speaker 3: don't deal directly with us. They deal with Blackstone, black Rock,
• 1:09:56
  Speaker 3: gold Ma, Sachs and others, and they deploy capital and
• 1:10:01
  Speaker 3: human and capitals deployed by human beings.
• 1:10:03
  Speaker 4: Companies.
• 1:10:04
  Speaker 3: Companies execute their plans by human beings, and those human
• 1:10:08
  Speaker 3: beings bring their own perspective, and if they look at
• 1:10:11
  Speaker 3: you philanthropically, then you're not gonna get anything unless they
• 1:10:14
  Speaker 3: want to give it to you.
• 1:10:17
  Speaker 4: So before.
• 1:10:21
  Speaker 5: Before we wrap, I just want to I want to
• 1:10:23
  Speaker 5: ask a question that I'm sure a lot of people
• 1:10:25
  Speaker 5: are asking, so I'll ask for you. There's probably a
• 1:10:28
  Speaker 5: lot of emerging developers here. How can they work with you?
• 1:10:33
  Speaker 4: Well, anyway?
• 1:10:34
  Speaker 3: First of all, anyone can reach out to us and
• 1:10:36
  Speaker 3: I and we will try to connect you with someplace
• 1:10:40
  Speaker 3: to have capital. But ultimately the emerging developers all need
• 1:10:45
  Speaker 3: to demand to write the controller, to write the newspapers
• 1:10:51
  Speaker 3: to do op ed pieces, to write to your politicians,
• 1:10:55
  Speaker 3: to call them. You want fair access to capital, because
• 1:10:58
  Speaker 3: that's really what this is all about, and we are
• 1:11:01
  Speaker 3: never going to make the great progress.
• 1:11:04
  Speaker 4: They'll be an outlier.
• 1:11:05
  Speaker 3: They'll be a Robert Smith, they'll be my friend Tracy
• 1:11:08
  Speaker 3: Maitland or Byron Allen or me or somebody will be outliers.
• 1:11:12
  Speaker 4: Right.
• 1:11:13
  Speaker 3: But that's because we found that little kind of crack
• 1:11:17
  Speaker 3: in the wall that no one could see and we
• 1:11:19
  Speaker 3: just by luck happened to hit it. And so but
• 1:11:23
  Speaker 3: in terms of having a meritocracy, that means that we
• 1:11:27
  Speaker 3: got to open up the door as a capitol, and
• 1:11:29
  Speaker 3: you all can't have to do I cannot do it
• 1:11:31
  Speaker 3: by myself. I can raise the issues, and I promise
• 1:11:33
  Speaker 3: you I raise it every time I have a conversation
• 1:11:37
  Speaker 3: in the media or in environments like this, but you
• 1:11:41
  Speaker 3: all have to be the change agents. You guys cannot
• 1:11:45
  Speaker 3: accept this anymore.
• 1:11:54
  Speaker 6: Well, we thank you. This has been incredible. I'm impressed
• 1:11:57
  Speaker 6: by your memory, the way you're running the numbers off.
• 1:12:00
  Speaker 7: I'm trying to do the math in my head like
• 1:12:02
  Speaker 7: then this is from twenty thirty forty years So thank
• 1:12:05
  Speaker 7: you for all the knowledge thank you for everybody that's
• 1:12:07
  Speaker 7: been here that got to receive this knowledge, and thank
• 1:12:09
  Speaker 7: you for all your.
• 1:12:10
  Speaker 6: Work that she's done for our community, and we'll continue to.
• 1:12:12
  Speaker 6: We appreciate you all hardly my pleasure, appreciate it.
• 1:12:18
  Speaker 1: My graduates from my school being forced back drop bag
• 1:12:23
  Speaker 1: drop Mike drop back drop dropt.
• 1:12:36
  Speaker 8: An illegal alien from Guatemala charged with raping a child
• 1:12:40
  Speaker 8: in Massachusetts. An MS thirteen gang member from El Salvador
• 1:12:44
  Speaker 8: accused of murdering a Texas man of Venezuelan charged with
• 1:12:48
  Speaker 8: filming and selling child pornography in Michigan. These are just
• 1:12:52
  Speaker 8: some of the heinous migrant criminals caught because of President
• 1:12:56
  Speaker 8: Donald J. Trump's leadership. I'm Christine Noman, the United State
• 1:13:00
  Speaker 8: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 1:13:05
  Speaker 8: crossings are at the lowest levels ever recorded, and over
• 1:13:08
  Speaker 8: one hundred thousand illegal aliens have been arrested. If you
• 1:13:12
  Speaker 8: are here illegally, your next you will be fined nearly
• 1:13:15
  Speaker 8: one thousand dollars a day, imprisoned, and deported. You will
• 1:13:20
  Speaker 8: never return. But if you register using our CBP home
• 1:13:23
  Speaker 8: app and leave now, you could be allowed to return legally.
• 1:13:27
  Speaker 8: Do what's right leave Now. Under President Trump, America's laws,
• 1:13:32
  Speaker 8: border and families will be protected.
• 1:13:34
  Speaker 4: Sponsored by the United States Department of Homeland Security,