MaryAnne Gilmartin Live from the Cornell Tech Campus Part 1
EisnerAmper Real Estate Services Group Chair Ken Weissenberg chats with MaryAnne Gilmartin, President & CEO of Forest City Ratner, about the new Cornell Tech campus, building new neighborhoods in New York, and the Barclay Center.
Ken Weissenberg: Hi. Ken Weissenberg partner at EisnerAmper Real Estate Practice group. I’m here with MaryAnne Gilmartin at the beautiful Cornell Tech Center which is under construction. MaryAnne, why don't you tell us a little bit about the Cornell Tech building, it's really incredible from what I seen so far.
MaryAnne Gilmartin: This is a project that is a really great example of place making, which is what we like to think we do. We really just don't put up buildings, we create places. So, we were selected by Cornell to create a campus, a really a new place on Roosevelt Island, and it is an academic institution. But it's much more than that because there's a residential tower going up beside this building, and we are building a building that's really the first of its kind-we call it “The Bridge”, and it's bridging the academic world with the commercial world. What Cornell's hope is, is that the institution will deliver some of the brightest entrepreneurial minds out of their academic program, and that those individuals will become entrepreneurs, startups, and part of larger companies inside the four walls of this building. So under a single roof we think a billion ideals will be launched inside of this building, and we're doing it by removing all the boundaries the physical boundaries, and the psychological boundaries that hold back innovation. So this is a building that will have co-working space; it'll have partial presence of Cornell Tech itself, and we're going to basically infill the other spaces with entrepreneurs, startups, incubators and larger corporate technology companies.
KW: So since this building is all about tech, can you tell us about some of the technical innovations in this property?
MG: Well first I should begin by saying that the architecture is stunningly beautiful, and it's a high-performance building. To Cornell's credit, they put architecture and quality place making at the very top of the list. Whether it's the building we're building here, or the building that we're working on with them as a developer across the way, the academic building, both have incredible architects. They are all advanced buildings in terms of LEED certification. The residential building, which is not being built by Forest City, is passive house which means that it is basically supplying all of the energy and the needs inside of the building itself-it’s its own ecosystem, and it's the first of its kind here in New York. So the campus is going to be cutting edge, not just in terms of what's taught inside of the academic building, what the companies create while they're here, but also the buildings themselves represent the very best of our business.
KW: Judging from the view this building has, the Manhattans are going to have a wonderful view of a beautiful and unique project.
MG: Well as a Brooklyn and Queens gal, I say that the views are always better outside of Manhattan, so it is just stunning. The sweeping views that you get from this building-every floor of the building and of course Queens looks pretty good as well-so the building is really not turning its back on Queens. It's a very gracious welcoming building that really embraces not just all of the Manhattan skyline but Queens and of course the bridge.
KW: Now as you mentioned you guys transform areas of the city when you build Pacific Park Atlantic Yards project has been transformative to downtown Brooklyn as was Metro Tech which started I guess about 20 years ago so it's pretty amazing what you do with neighborhoods. Can you tell us where you are with the Pacific Park development and what's going on there?
MG: So let me start by saying Brooklyn has been our front yard and our backyard and our side yard since I began working there, and it's almost 30 years ago that we started building Metro Tech. When we started the project you know, Brooklyn was not a place that people felt particularly safe about launching a business or growing a company. In those days companies were in search of cheaper locations to do business and Mayor Koch created the third central business district in Brooklyn and Forest City was a very big part of that but those were the days when companies would come over the Brooklyn Bridge and bulletproof limousines they would step outside take one look around get back in the limo head back over the bridge and we never hear from them again now that is almost unimaginable when you think about Brooklyn today.
KW: It's so transformed it's amazing. I used to do tax hearings at the Hansen place in New York State’s offices, and I literally had the car wait for me because the neighborhood was very iffy at the time. Now it's incredible the stores that people traffic, the Barclays center is stunningly beautiful.
MG: So I like to say that Barclays and the Pacific Park project was catalytic to everything that happens in Brooklyn, but Brooklyn's rising was due to really the people and the neighborhoods that make Brooklyn. The project really sits at the confluence of some of the most beautiful neighborhoods in all of America. So the fact that there was a 22-acre swath of land that we could really knit neighborhoods together and create place was a tremendous opportunity for us. I like to say that if it's not complicated we're probably not interested; this project has been the uber.
KW: That’s my line.
MG: So this is probably the uber example of what development place making involves. So it took over ten years to put the entitlements together and to ready the land for vertical construction. We had over 35 legal actions that really resulted in extraordinary delays and cost increases.
KW: That's the joint doing business in New York.
MG: Right. This is a high barriers-to-entry business, and it's not for the faint of heart. We are hopeless developers, and we're committed to long-term value creation. For us this project has been well worth the wait, and the toiling to build it. But we began with Barclays. That was the cornerstone of the project. It was to create a building with public purpose, and what's amazing about the building is that it is world-class. It's among the most beautiful, high-performing arenas in all of the country-if not the world. It has a great architectural lineup that was responsible for creating the beautiful steel that rusted steel that is evocative of brownstone Brooklyn. What's my favorite aspect of the building is when you pop up out of the subway, you can actually see the scoreboard. So the building is welcoming to people outside its front door and people inside of the building.
KW: It's really created a hub in downtown Brooklyn that wasn't there before.
MG: I think you're right. In fact, we say that the Oculus-which when it was built was the largest Oculus in the world. The oculus is to Brooklyn, as the clock is at Grand Central to a meeting place in Manhattan, so we do think that it's become a place for people to get together and connect even if they're just using the unbelievable transit connections that that exist beneath Barclays. Barclays was the beginning and we’re at a point now we are tremendously proud of the speed with which we're putting up vertical buildings. We got a partner, a Chinese partner, and this was a groundbreaking deal because at the time we made this deal there was no name in the Chinese language for joint venture. So we were creating something in America that had never been done with a real estate company. If you fast-forward in just a few years, we made an extraordinary partnership arrangement. There's been a ton of equity plowed into real estate, and we have now 1,800 units of housing being built. Of that, over 800 of them are affordable, and that is for Brooklyn and for all of New York City. Extremely important if you want to have a livable 21st century city.
KW: You're doing a new project around the Pacific Park area in a modular building, 461 Dean will be the tallest modular building in history.
MG: Yes and I'm proud to say it is the tallest modular building in the world today because we finished stacking the last mods.
MG: Yes and this was a labor.
KW: I missed the topping out party!
MG: Well we've quietly been readying it for marketing and I would love to be able to take you through it because for us it's successful in that if I took you through the building, you would say to me Marianne I don't see how this building was put together sixty-five percent off site three miles away in the Brooklyn Navy Yard. It feels like a regular, beautiful luxury rental building half of its affordable-half of its market rate, but the building success is the fact that for community benefits, less impact to the neighborhood it should have been a speedier construction, but with anything innovative it often doesn't go the way you expect. We've had a number of bumps along the way. The building stands up. It’s high performing. You can put sixty-five percent of it together in a factory, and you can pick it with a crane and place it in a way on site that makes it super-efficient. So now we just need to prove the numbers. Of course, in our business, it's about the numbers. We have a set of numbers that demonstrate that the simultaneous activities, and the fact that it is so efficient, prove it out, I'm very hopeful that the next project will finish the story around high-rise modular in New York.
In the third segment of this interview, MaryAnne Gilmartin, President & CEO of Forest City Ratner discusses her start in the real estate industry and role as CEO, the importance of bringing on the right talent, and the growth of women in commercial real estate.
In the second part of this interview, MaryAnne Gilmartin, President & CEO of Forest City Ratner speaks with EisnerAmper Real Estate Services Group Chair Ken Weissenberg foreign investors, building financing partnerships, creating a REIT to finance new projects, and how to identify the next frontier in development.