MaryAnne Gilmartin of MAG Partners | 241 West 28th Street in New York City | Building When No One Else Is
Transcript
Announcer 00:06
What goes into making an iconic building in America? What are the stories and who are the people behind the next generation of architecture? If your work touches the real estate industry in any way, or you're just curious about what goes into one of a kind cities and towns all across our country, join us on the American building podcast. In season two, we learn about everything from skyscrapers to single family homes from the famous and soon to be famous designers and developers responsible for them. This season focuses particularly on the pandemic and how our buildings will change in response. Our sponsor is the iconic design firm Michael Graves architecture and design. And now your host award winning architect turned entrepreneur, Atif Qadir, AIA
Atif Qadir 01:04
This is American Building and I'm your host Atif Qadir. There we are recording from the historic home of world renowned architect, Michael Graves and Princeton, New Jersey. Check out this amazing space for yourself at the Michael Graves architecture and design YouTube channel. Now let's build something. today. Our guest is MaryAnne Gilmartin. Maryann is the founder and CEO of mag partners, a real estate development company based in New York City. Medpartners has one project under construction and was recently announced as the developer for another. She's also actively looking for deals within the metro area and beyond as well. Formerly, she was the board chair and the interim CEO of Mack Cali Realty Corp. And the President and CEO of Forest City Ratner companies. She is one of the most well known and well respected professionals in the real estate business with 7 million square feet 2000 housing units and $4.5 billion of building value created under her leadership, we will be talking about 241 was 20. Xtreme a new construction residential building in the Chelsea neighborhood of Manhattan. This is the only major development in the city to break ground last year, during the once in a century COVID pandemic. Was the crazy smart, or was that crazy? So we'll find out. I'm really excited to see what Maryanne says, Thank you so much for being here with us.
MaryAnne Gilmartin 02:30
My pleasure.
Atif Qadir 02:31
So many of our listeners are in college and graduate school and the path there to leadership roles in our industry can seem to be an impossibly long one. When you look back, what were the pivot points where you saw your career accelerate and take off.
MaryAnne Gilmartin 02:48
I'll start by saying I think we all need a plan, the most important thing to remember is we all need to be prepared to have our plan up ended leave space for the role of serendipity. So I was an urban fellow and had the ability to go into public development under Ed Koch, the city's only recruitment tool, really to draw young people into government before they headed to the private sector. I knew nothing about real estate, I was on my way to law school. And I couldn't even even describe what a real estate developer did. And I interviewed with all the commissioners, because you were able to be hired directly by a commissioner, unfettered access to the commissioner's office and City Hall. So it was a great gig. But I really didn't believe that I would be doing anything other than fighting for the rights of juveniles in the justice system. And I stepped into the walls into the offices of economic development. And I thought to myself, This is so grown up there was a president, there's a board of directors. And because I had two fellowships, I actually was just extremely practical. And I said, I'll spend the summer trying something I don't know anything about. And then in September, I will take my second fellowship, and I'll devote it to juvenile justice there that I was thrown into a career that I realized I had a passion for it, I realized I had real estate in my veins, because I had access to so many facets of what it takes to make a place to change a skyline and to create a ground. And so for me, if I had a plan, and I wasn't willing to disrupt my plan, I wouldn't be here speaking to you today, my career. And so I would encourage everyone to be open to the possibility that sometimes the answers to life are really outside the box. The other thing I'd say is I would always vote for a great mentor and great access to a pipeline of opportunity over some big brand name. If you could work with a fine mentor, somebody who you respect, who's going to give you access to their time and their craft. I would vote for that any day over bigger company with a bigger portfolio and a bigger balance sheet or you're just a cog in a wheel. So I think you really should follow people because it really takes great people to do great things. And you have to be inside of a great organization and organizations are great people defined by the people that makes them great. So for young people listening, I think you want to be someplace where they value as a rookie. Because again, you're bringing a perspective and a lens that is unique and different and young and fresh. And if you're not in an organization that sees value in that, I think it's somewhat problematic for career trajectory of someone young and ambitious.
Atif Qadir 05:20
That's so interesting that you say that, because in terms of awards and recognition or industry, it often feels that the, it's this lone wolf at the top of the pyramid or the top, a team that's responsible for everything from the financing to laying the bricks in the building. And the reality is exactly like you described, there are many, many, many people. And I think one person that you've been particularly vocal about in the past as being one of your mentors, and that allowed for that room to happen for people to develop their own skills as Bruce Ratner. So could you talk about the path that you had, at the firm that he started, and particularly projects like the New York Times building, Pacific Park, Barclays Center of the Cornell Tech campus, and how each of those helped develop not only your technical skills as a developer, but then also your skills to eventually become the leader of the firm as well.
MaryAnne Gilmartin 06:11
Bruce Ratner is one of the great mentors of my career, for sure. I started with Bruce after coming out of public development, because he did so much work with the government that I realized I could work on the private side with someone like Bruce, I could do the same scale, the same complexity and make the same impact. But I could pay back my college loans, I could probably earn a bit of money, and I could understand what it's like to be on the private side of that public private partnership. And I started with Bruce, he was for me just an icon, hero, and somebody who I was somewhat intimidated by. And you have to understand over 23 years, he became a friend, a mentor, and eventually a partner. But Bruce is not only a great visionary, he is the keeper of a great meritocracy producer was just whether it was the best man or woman for the job. He was always looking for the high performer, he was looking to give people a room to think and grow and actually to be wrong. So by way of example, when I was invited to bid for the New York Times commission, I ran into his office, and I was so excited, because Brooklyn developer, were the only ones that were in Park Avenue builders. And I said, You're not gonna believe we got invited to bid as their developer partner. And Bruce said to me, Well, we've been wasting our time, we're not going to win. And it would be a colossal cost, both in terms of resources and time. And I said, I just, I couldn't accept you not letting me do that. And I feel like we had, we have to do this, and we have to win. So he basically said to me, we're not going to win. And you're going to learn lessons along the way about what it takes to be in the room, and what it feels like to do everything in your power and realize that sometimes the decks just stacked against you. So he allowed me for six months to drive an organization full of talented but busy people into a room to present to the New York Times. And ultimately, of course, we ended up winning. But to your point, I used to get all the accolades for that building. And I would stand up and say all that I am is the vessel through which all of this unbelievable talent flows on the beneficiary, I'm not the one to create all this magic. And the team would always say to me that there is always one individual with the kind of sense of urgency and the patience all at once, to keep going broke ground on New York Times building, the Construction Group bought me an EMT hat. And they said that the deal had died three times. Sometimes people call my notable quotables back to me, and I'm like, I think I did say that. And it was so very true, which is that some things have to die to live. And I believe Trinity and things have to die three times, and we had a near death experiences on that building. And every time it happened, I would get back in there and I would prop up the troops and I would forge forward and never really let them see me sweat and worry. And so what's great about being a developer is many organizations, the model is that the developer really is the one that delivers all of the final decisions around profitability, placemaking, and generally core of a building. And not true, but developers touched so many different aspects of the process, that they end up giving a lot of credit for it. But it takes a kind of person who can deal with all those moving parts. I call it the great Rubik's cube. And it's really not for everyone, right? Because so many things are moving around, there's so much uncertainty. And it's really sometimes not easy for people to accept all of that. All of those moving parts and all of that dynamic inside of one single edifice, ultimately.
Atif Qadir 09:31
So let me ask you this, the amazing company that Bruce Ratner built and the one that you continue to build, as CEO, you eventually left, why did you leave and what was that process like
MaryAnne Gilmartin 09:42
23 years, the proudest part of my role there was we really moved from commoditized building to quality design. I'm really proud of the fact that we were able to build a building like Barclays Center, but I never ever look past the fact that when I go up the escalator at Barclays Center, I Look at the Party City, neon sign reflecting from Atlantic center into Barclays Center, realizing that they built that building to those two buildings right across the street from each other represent for me, the evolution and the arc of the company in terms of where it was when I started there and where it was, when I decided it was time for me to leave. The decision to leave was a tough one, I'd become the CEO in 2013. I was on my sixth year of being the CEO, it was the most amazing experience I've ever had. And as I said, challenging and that I've stepped into Bruce Wagner's shoes. And you have to know as your audience will know that they followed the work that Forest City did, he always said, Bruce Lee Ratner. Any article about the company would start with Bruce Ratner. You when we bought the nets and move them to Brooklyn, it was always on behalf of the company. Bruce was such a cult of personality that the article by the way, started with him. He was larger than life. And then somewhere buried in the middle of the piece. You've learned about Forest City over this company, like it's not even just going to be a headless horseman or rudderless ship, because Bruce is no longer the president and CEO. But truth be told, we had an incredible transition plan he stayed on as the chair. So I had the great benefit of having him down the hall in the corner office. But the company had been operating as a public company non REIT for many years since 1968. So they went to the public markets for their money, but they weren't a real estate investment trust, and we will want to have one just no company was operating that way. It was a vestige of a time gone by. And so he really the family had a lot of control over the board and the decision making that fell out of favor as REITs became more professional and independent. I was 23 years and ready to go raise my own money and build projects because I believed in them not because I thought an analyst on a call was gonna say it was okay.
Atif Qadir 11:45
Yeah, I think that that path, then from there to mag partners is what brings you to the project that we'll be talking about today. So I want to focus on Chelsea so our listeners from the New York area will know Chelsea very well, it's a very popular neighborhood in Manhattan for those that aren't from New York City. Could you tell us a bit more about Chelsea it says masonry buildings as also as nondescript apartment blocks as public housing. There's a lot of things that are going on in this neighborhood that impact what you are able to do on this site. Tell us about the neighborhood and the site and and how those two are intertwined.
MaryAnne Gilmartin 12:21
Sure. Well, the West Chelsea of today is very different than the West Chelsea 20 years ago. And it's a neighborhood that's gone through extraordinary change. And a lot of it has to do with the fact that it's an unbelievably diverse neighborhood in terms of its building types, right. But it's still a garment center, rich contextual buildings that or masonry, and then spiking West at Hudson Yards building these giant edifices of, of steel and glass. And so West, Chelsea became a combination of things a place that tech really wanted to be post Google purchasing Eighth Avenue, more 11/8 Avenue. And suddenly, you saw an explosion of tech talent and the creative class. And that creative class not only wanted to work there, but they wanted to play there, they wanted to live there. And so you saw new restaurants, and you saw the advent of new types of residential buildings. And so I think in West Chelsea, you can find very a collective talent base, and employment base and building types for residential communities. And when we really were drawn to is that the idea of building your Hudson Yards was attractive to me just because we didn't want to build anything like what you find and Hudson Yards or on on the avenues. Even if you think about what the Sixth Avenue corridors and Seventh Avenue corridor started to look like from multifamily point of view, we're drawn to the midblock to tower 22 storey scheme, where it really feels like home. And so people have coveted this site and had coveted the site for a very long time because it was a parking lot owned by the Edison family directly. And that's it. But again, in the hub in the center of all of this amazing activity. So it's always about, it's always alive with energy, whether it's Monday through Friday or on the weekends. And so we knew was a winning location because whether it was the office rents for the residents who were on the upswing. At the same time, you have pencils, which is one of the most successful coops around the corner where people live in tents out between 26 and 20 Main Street between the late values on all of the land, going back to JFK when he decided that this was a model for affordable housing, and aided a cooperative for people to be able to afford to live in New York City and to live with and to live through generations. So you have pens out directly around the corner, you have rents that pierce the $100 a square foot mark in the residential case. So we knew that its strength was its diversity. Its building types were you favored, the more modest to kind of not the tower schemes, but the lower rise entering from 28th or 29th Street with an amazing courtyard in between. So we knew we could build the kind of building that people would want to live in. We also knew that we were sitting across from fit near NYU, in a place where if you chose to build a very young building, you could do. But at the same time, we were trapped by this idea that you could have a kind of a young vibe in the building, but you could also attract young families and young couples, that would make it sort of altogether interesting, because it would be almost a microcosm of what West Chelsea really is. So for us the site, not easy to get our myths on it, we had to convince the Edison ownership to give us 120 days to come to them with a proposed transaction, we were fortunate because it was a ground nice. This is not a family that wanted to sell it off. They learned early on back in their days in Jersey, that you should never sell, and go talk by the great patriarch, they knew that they should always hold their interest in the land, which meant that condominiums were not possible. And for us, we didn't want to build condos. That's a kind of a moment in time where you cash out if you're lucky. And you end up having some troubles if you don't hit the market at the right time. So that the hangover of condominiums in New York when we started this project, made it very unattractive for us to build condos. But because they wanted a ground lease, it had to be priced for multifamily, because that's all you can really justify building the biggest challenges you can build multifamily in some of the most amazing neighborhoods in New York because all of the land is priced for condos, and just don't pencil out. So we found ourselves with something quite sweet, which is an ability to deliver foreign Juniata units with economics that allowed us to build the multifamily. But at the same time, there was 3000 total units coming to the market, in the three year horizon that we were studying from construction commencement to completion
Atif Qadir 16:41
1000 for the whole island of Manhattan or just a particular part
MaryAnne Gilmartin 16:45
of the market. Okay, so yeah, highest performing sub markets next to one another. In Manhattan, you have a limited amount of new supplies, you've got a mid block location with a two tower scheme entrances on on two different vibrant streets. So everything was looking dandy and super successful. Our capital was primed to fund the law was on the brink of being closed and the pandemic.
Atif Qadir 17:10
And that's when you hit the gong, and it's like, Oh, my God.
MaryAnne Gilmartin 17:13
And then it became really kind of binary, it became just a binary question of do you believe in New York? Do you think New York is going to come back? And for me, I've read all of the obituaries that have been written about New York over and over again, through multiple cycles and many crises. But it wasn't just what I caught, right? It was three Capital Partners and the lender. So the lender that we had teed up, you know, ready to close, disappeared. The lender said, We love this project. We love the sponsorship, we would get thrown out of Investment Committee, if we walked in and asked for $173 million loan to build a building ground up in West Chelsea in the middle of the country. And our partners said, Should we take a step back? Should we put it on pause. And we went on this heavily data driven exercise to demonstrate that if we built the building has planned and started last November, as scheduled, that we would come out of the ground. At the right time when Very little was being built, we would stabilize this building when Very little was being brought online. And we'd be through the pandemic. We didn't necessarily have the transparency into the vaccine at the time because the vaccine is warmed, approved yet. But we just felt as if we were going to bet on the fact that the horizon to build a building gave us the liberty to ignore some of the near term challenges and just dial back the rent, knock rode around for a few years. So they could climb out as a whole vast pandemic put it in and recover quite nicely, would otherwise have been the most straightforward, single residential tower on the block in a midblock area in Manhattan where you do not have extreme circumstances. And it lo and behold became as challenging as the 10 years it took us to have a single vertical building coming out of rec center, in large part because pandemic made it impossible to get the funds lined up for the loan and without the loan. There wasn't.
Atif Qadir 19:03
So it sounds like it's either you find a tough project that's on projects find you it's one way or the other I
MaryAnne Gilmartin 19:08
I think I am the bet I find gravitational pull toward the complexity. And of course, I'm not interested in doing a single Infoblox I really like and also it's a differentiator, right, because the complex stuff, a lot of people run for the hills and complexity, I see opportunity like rallies, people say you can't build multifamily underground and you can never get it financed. The success we had on 28th Street really led to the invitation we got from Penn south to build your site. And ultimately there are 1000s of people that had to opine on our fitness and our partnering skills.
Atif Qadir 19:43
So when the Renew residents of the building, walk through talk to us about what they're seeing in the lobby in the courtyards the hallways on the way to their apartment, what does this look and what does this feel? What does that experience going to be like?
MaryAnne Gilmartin 19:56
So first is going to be contextual. So one of the things that we love to wreck geysers, we're going to be building a building on 50s and Second Avenue on the Upper East Side. And that's going to be a different kind of a building with a different architecture because it's a different place. And in the great neighborhoods that make up New York City, you really need to understand the context. And so this building will look and feel as if it belongs in West Chelsea, really proud of that. And all of the details that were developed with, we're super respectful of the history of that area. And so masonry building has beautiful wall, there are unbelievable details on the brick, and on the windows that will make it visually pleasing. It does have an abundance of outdoor spaces, open space. And again, we designed all this COVID. If you said to me, one of the major swings that you introduced because of it, I think it actually reinforced a direction we taught the industry was going, which is the importance of high design and quality of flight to quality, if you will, building commercial or residential, this idea that wellness is important. And people want to live and work in healthy buildings that like mere matter. For example, we have a quarter we basically designed around the ability to introduce light into the corridors and the hallways. So when we get off the elevator where this guy has the light in your home, transparency, the fact that this lobby runs through 28th to 29th Street, the fact that you come upon an outdoor courtyard that separates the two towers, and that that is a very welcoming space for everyone. On the top of the building, overlooking at a very interesting level, we have an outdoor pool, which I'm really excited about on one tower. And then we have barbecue space, outdoor space and leisure space on the tops of both of the towers. So I think it's a very livable building. And it's got a very human scale, because it's not a tower, kind of a soloist tower, it's trans transparency, the wall is not a tinted a wall system, lots of light. And now when it comes to what's changed through the pandemic, is just this idea that you can enter the lobby and go all the way up to your home and really never touch any through your phone, you can call the elevator, you can open your front door and you can get from now, it's highly amenitized, we have about 1000 square feet of retail, which we will not put a big number on in terms of rent, because we believe very strongly that square footage makes an enormous impact on the way the building really lands in the community. And it's all about the amenities to people that live in the building. So it'll be food, there'll be services, it'll be focused on health and wellness. And there'll be lots of bike space, and amenity space to work out and to stay healthy.
Atif Qadir 22:35
So the fact that a lot of the aspects that you brought up that are are natural and well being related on Titus desire for biophilic design the building, for people that might hear that and roll their eyes or be like, or OSI. Could you talk about besides that data of the reasons why these are good ideas? What was the emotional thing that convinced you to say, Yes, this is what we're doing, as opposed to, no, we're not going to waste XYZ, and we're just gonna do it the normal way.
MaryAnne Gilmartin 23:09
One of the biggest reasons for doing it is just to visit Rick's office, I mean, what he has done with his own sometimes your own space becomes your best testimonial for what matters, and what he's done with his own office and how he has incorporated Biophilia in his space. And his gardens outside of his internal demise is nothing short of extraordinary. And it's a building on 57th Street. And not a lot of architects would like be drawn to 57th Street. But again, the care and feeding that he put into his own space, he demonstrated almost a proof of concept by building his space, the way that he likes to build other spaces for clients. And so when buildings, particularly your home, can offer that it absolutely has a positive impact on your well being. Now sustainability is like one step above breaking the law. And we talked about resiliency, because building resilience, they really should be contributing to saving the environment, not just not destroying it. And so I think what I believe about the generation that really represents your generation of the people who are probably listening to this podcast, is that really matters. It matters where things were sourced, it matters, what it took to build, the place they call home. It matters, the climate and the future of the climate for folks in your generation. And so we're building really, in some ways, I don't want to sound so high and mighty. It's a lot of it is necessary, really, to meet the market to where the market wants to be.
Atif Qadir 24:35
And I think that what it particularly is, is do you choose the path of cynicism? Or do you choose the path of change and opportunity and potential? For my experience as a developer, the intrinsic nature of a developer's one who looks for opportunity? And it seems like a no brainer to me and I think what I have come to realize as well and correct me if this is what you're thinking you're underwriting it is that you actually getting a premium on your rents? It's not just doing it, you're likely to have faster lease up and higher rents. Is that what your hypothesis is as well,
MaryAnne Gilmartin 25:09
by doing good, you're doing well. And I think that it definitely pencils out. And sometimes it is a proof of concept that proves it. But in the end of the day, I do think that it's a marginal cost in terms of undertakes to do it this way. It does create more timeless buildings, and a better investment all around this whole notion of flight to quality. One of the reasons why I wanted to break out on my own is that I wanted to build beautiful buildings, and demonstrate that those buildings deliver great value to the partners to the investors, right, but also to the communities in which we build. And I wanted to build buy in with people that look like the communities we build it. And so this is like so simple. Like, of course, that's the way it should be. Well, it turns out in our industry, particularly in New York, it's not that way. It's the usual suspects, building commoditized product, unless it's a condo, and somebody's going to come along and plop $50 million down and take it off your hands. What about this idea of long term value creation, or building beauty. And so it started with once you build something with Renzo Piano, you actually can't go back and build commoditized stuff, you just can't look at the work so differently. And not everybody. You don't have to have Renzo Piano, you just when you're building beauty, and you're thinking through every detail, you're not just putting commoditized building up, it's an imperative, it's not even an option to do it. Once you go through that process, when you recognize the value, you've convinced the partners, the lenders, and the people who live and work there, that it's all worth it. And so once you go through that process, you never turn it around and go back and do it a different way just doesn't make any sense.
Atif Qadir 26:42
So our listeners are gonna take a quick break here, and I'm gonna let you in on some great news. We will be having Kim Yao of architecture research office on this show. Aaro was the AIA firm of the year. Last year, we'll be talking about one of her New West Coast projects. So subscribe to the podcast, and you'll be the first to listen to that. So we've talked about this amazing project that's in the works and what stage are you out right now.
MaryAnne Gilmartin 27:07
So we are pouring concrete and we are coming up out of the ground. And we will be delivering the building in the latter part of 2022. So it's been on schedule, we've had no material impacts. Jeddah COVID. If you can imagine if we had been enclosed, we probably would have had many more challenges keeping the safe. Because it was effectively an outdoor workspace, we got to shut down for very few days during the height of the pandemic, we're able to open up pretty quickly. And then so many projects has evaporated that the buying market super favorable, because contractors were just panicking about the pipeline of their own work. And again, most of this is just good fortunate. But I think this building is going to be the high performing. And in fact, the same investor group that we have in 20 streets is very likely to support Eighth Avenue because they just want more of what they see there. And again, another indication that when you are a good partner, and you know how to be a good partner, it's the gift that keeps on giving.
Atif Qadir 28:07
And just to confirm the partners that you mentioned are salvia kualitas, often odd and Madison Realty capital, right. Those are the partners. Excellent. And for any one of our listeners that has tried to renovate their home, over the course of this year, they've probably well versed in the supply chain disruptions that have affected every part of our industry, from kitchen appliances to tile to wood, for example, is now 40% higher than it was in the past couple of years. Could you talk about some of the ways that you strategically planned ahead in terms of your supply chain for materials and purchasing in order to mitigate these huge bullwhip effects that COVID has had both through small scale developers as well as the largest?
MaryAnne Gilmartin 28:57
It's really an interesting question, because I think it starts with this idea that the world as we knew it completely stopped and dried up a while homebuilding and fixing up your kitchen was definitely something people thought, Gee, I want to be home. Now I can do that. On large scale projects, only the projects that were fully financed, were moving forward, anything on the Georgia boards came to a grinding halt. And so with our with UHV, our contractor, we just had a just an extreme focus on it. And anytime we could pick up the appliances at a time where the materials that we thought might be coming in demand as the world came roaring back, we did that. And I can tell you that it's almost like threading a needle full speed ahead when nobody was. And we were thinking through all those issues, because we knew we needed those dishwashers wasn't a sector that matter. We had the ability to buy the dishwashers. Before everybody woke up and said, I'm back in business. Let's go to put that project back on the drawing boards and by those dishwashers. So I think what I believe is I think it's temporary. I think it's a bit of a blip. And of course, as most developers I'm an optimist and I want to believe it Avenue in 15th Street will experience those same high swings in costs and disruption. And why? Because we'll catch up with ourselves.
Atif Qadir 30:07
So I think for developers that are now looking to be resilient for the next potential disruption of this scale, the idea of buying American and American first in our manufacturing is something that is seems so foreign to developers, what are ways that you're starting to think about the specifications, the materials and finishes that you have in your buildings in order to be more responsive to what will likely be a disruption like this in the not too distant future.
MaryAnne Gilmartin 30:39
So I'm fascinated with the kid apart, modular nature of the business and how we haven't really exploited that communication was a mild obsession of mine when we built each a modular, and the fact is, when you can have these pre assembled components, and you can bring them to the site pre assembled, you take not only a lot of inefficiency out of the process, but you're a layer neighbor, to your community, because so much of the work is happening off site. And if you are doing that you can be building you can dig in your foundation, while you're fabricating your parts. And so I think prefabrication and modular construction has still a long way to go. I think that prisons and parking garages by any stretch of Buckminster Fuller How to know how to write, I think that there's a place for modular construction, particularly in cities where efficiency of process really process innovation, it's just figuring out buildings together differently. And the two modular was a high performing building that we sold at an amazing cap rate, it had a lot of hair on it and got very complicated because like anything innovative, the first one out of the gate, was bound to have challenges. I wouldn't say that it penciled out and demonstrated the 10 to 20% savings that we thought we could. But of course, it really works when it's done in scale. So if you have multiple buildings to build, and you can feed a factory or beast and you can create that demand, the kit of parts, the prefabricated materials and pre assembly is going to really revolutionize the art of construction, particularly in a city like New York, when you have a lot of repetition. So residential, hotels, dormitories, I think that modular has a great place in our cities and other cities where a density and complexity.
Atif Qadir 32:19
So in the Pacific Park project, the modular aspect of it was in the news quite frequently, and I think reps accurate, but also some inaccurate representations of what it was for people that may not be that familiar with on that project and modular, what would you say is the biggest change that has happened since every prospect 2010 2015 till now 2021 That is going to that you believe is going to make modular preps both the answer to domestic supply chain big necessary as well as this incredible need for affordable housing, and also middle class housing across our country.
MaryAnne Gilmartin 32:57
I think it comes down to what happens in the factory, I think it's about Hell or High Water point that you have to push these mods out of the factory, and you've got to produce them in a timely fashion. So the technology that we basically walked away from, but shop architects kind of picked up on and then created assembly as a company that all the lessons learned with each modular and their ability to embrace technology, generally, as an architectural firm allowed them to advance into a more developed stage. And what they've been able to do in the speed with which they can assemble the mods, the quality of the modular construction inside the factory, and the ability for it to move across an assembly line in a way where it gets delivered to the site with everything but the paper towel in it. And I think that we had a cruder solution where we believed it could happen. But we picked apartment we picked Skanska, as a partner really run that factory. And they were not innovators in the factory. And so we had all these great ideas, but we really didn't understand that if somebody didn't order the widgets, and you suddenly were hurry up and waiting, then you your whole entire process was screwed up, you couldn't put the line. And so it really is a much more sophisticated design and process of putting the modules together at a speed at which is going to save you extraordinary time and money. And I've seen the way that they've advanced the technology. And a lot of it's the way you design the building and the way you buy the job. But you're not going to buy the job the same way. When you're talking to plumbers and drywall unions. You just not gonna do it that way because sequencing is altogether different. So I think that has been a huge difference. And again, it was never about building single family homes. In Pennsylvania. It was about building density and building it efficiently. And I think what assembly has been doing is really encouraging and what they really need is proof of concept through a gorilla. Giant user of multifamily wants to build a community of dentists units and they want to build it quickly and efficiently. And they want technology to have a big role. It can change the way cities address their affordable housing. And so after Sandy, I remember talking to the Bluffton administration, you should just take over our factory, and you should build mods and you should bring up the Rockaways and you should address the fact that queens, Rockaway is underwater, and I think it takes innovation on the part of mint to recognize that and read anything about innovation, there have to be some really hairy, unfortunate for seconds and thirds, for taxes to take hold. And I think we went through the growing pains, figuring out something that in its future iterations will prove to be invaluable for addressing housing, particularly affordable housing, etc.
Atif Qadir 35:43
So I think that in this conversation, we've touched on the role of government, it's very intrinsic role within real estate several times in terms of the production of affordable housing on a physical sense. And then from a financial incentive sense with the 7030 housing program. There's a number of really important elections right now in New York City. What would you say primary elections this month? What would you say are the ways that, from your experience and your career in your tenure next to that New York City has done a very good job of working with the real estate development community to achieve these goals of a large tax base, as well as the provision of public goods like affordable housing? What ways would you encourage the next mayor to work with our industry?
MaryAnne Gilmartin 36:30
June 22, is a very important day for our city. And I am somewhat schizophrenic where I come out, I've obviously spent time and met the candidates, and I want a lot of things for our city. I don't think that the answer really lies in any one particular candidate. But I have said that the city needs to be managed, and it needs to be run well, because that's the big aspirational stuff that gets everybody tingly and excited. But it it's the path to recovery. And so people like husband, Garcia really know how to get shit done. She knows how to run. And she's a seasoned leader. And so there's a lot in that. And then I can listen to Andrew Yang and say like, he's somebody when he has an idea, you want to follow him and hit you really excited about your great city. And we'll think of things differently than where we started them before. And so I think that it's unclear to me where the city is going to shake out. But I can tell you, hostility generally towards the real estate industry is unfortunate. And I know why on some level, it happens because not all real estate developers and real estate owner operators are really that invested in, in what makes the city great. And that, that there's closing the gap of income disparity and making sure that there's equitable opportunity for all and that people can afford to live here. And that people that hold up our city that are firemen, teachers, police officers can afford to live near the core, so that they can so they can participate in everyday city living. So the pandemic was interesting, because a lot of real estate people fled, and a lot of them are coming back. And they don't like the tax base, and they can't stand the government. I'm deeply frustrated with the government, both city and state. I love my city too much to let a politician who's not here forever, drive me out. So I'm curious and hopeful for a new kind of conversation about the role of real estate in rebuilding a city. It is a lasting, formidable impact on our city, it should be taken seriously, it should be treated with great responsibility. And we are not criers. I mean we're some of the some of the most committed cultural leaders in our city, who care about our schools, we care about health and safety, because all of that's good for real estate. So I'm interested in a conversation where the real estate community is called upon to help in a constructive way to build a city back better than before, discouraged by the dialog and the diatribe about real estate being evil. And that real estate is buying all of its opportunities. And it's not the world that I live in. It's foreign to me. And I think caricature that was painted about real estate is unfortunate, because I know when you build a scale and when you build with the government, actual partner, the kinds of decisions that you pined over every day, are not the pro forma, it's the subway stop. It's the it's the curtain wall, it's the life safety, it's it's the way the building is going to face your neighbor. These are things that real Placemakers focus on so I'm more of a pacemaker. I'm more pacemaker than I am a real estate developer and that's enlarged, because I don't necessarily like the images that conjures up and robots and whatnot. But there's also a real sentiment against the development community in the real estate community in New York. So I think the new mayor hopefully will partner with the real estate community and idea that they don't take real estate money like that makes me feel like I need to go take it Shower like you're not going to take my contribution and support you so that you can approve my rezoning. I want to support because I think you can help our city. So I'm in a little bit of conflict with most things in my profession lineup. It's all I know, it's what I do. I'm super passionate about it.
Atif Qadir 40:14
Excellent. Yeah, I think that what I would say from my experience as a city planning commissioner, and in Hoboken right across the river from New York, is that real estate developers certainly are an easy punching bag for either NIMBY interests on one side, or other types of interests in terms of public goods, social goods, affordable housing. But I would have to also say is we don't make it very easy on ourselves. And in terms of the types of people that we raise up as leaders in our industry and the way that we verbalize and talk about things amongst each other. And amongst those outside of our industry, there's absolutely a tie between it's so much. And I think that there's leaders, a new generation of leaders that think differently, and specifically a chance to speak to some of your team members and Medpartners. What stuck with me was this, as people said, I feel really comfortable working here, and honestly, is how we do business. Most important value for us is respectability. And we consider the humanity of our actions, both large and small. And most importantly, it's not all about the money. So how did you build? How did you make that happen? It sounds like something HR would write up, but not something that people would actually say in response to a question like this.
MaryAnne Gilmartin 41:36
Well, first hats off to you for caring enough to ask the question of people for which I had no idea that you did. And it's really music to my ears, because it's the most important thing is building is fun. But building a company with people, like the people I've surrounded myself with is just, it's my greatest career honor to do that. And remember, I was able to handpick the folks that came with me. And I've worked with tremendous talents. But we have a lot in common. And we've worked together and finish each other's sentences for decades. So I ended up hiring season professionals around which I could build a company. And then the young people will follow, I can do one class at HBS and get 25 resumes the next day. But I want to make sure that the people who are leading the company, when I'm not around, are like minded. And so we've been together for a very long time. We've been through a lot together. And I think sometimes it's the challenging times when you reconnect with what matters, who's turned down assignments, because we feel like we're doing business with the devil or we're not going to be respected or it's not a good partner. And so these are all learning experiences, but it's the work of the team. And that's why it's my partners, I started as l&l mag, I bought out my partners, took the company to control the company, and then realize that my partners are the people who have built the company with me. And I think they know that. And we all started for the most part in the public company format, the kind of freedom like kind of liberty, and the kind of agency you get when you start your own company. Each of us feel that every day, feel this enormous sense of creativity and possibility. But we also feel responsibility. And so it's just awesome to hear that my team said that to you. Because I believe that's the kind of company that I'm building. But it's super, super amazing to hear it come back to me through their words.
Atif Qadir 43:28
That's excellent. And I'm guessing there are a number of our listeners who would love to work for you, or you're hiring, what's the story,
MaryAnne Gilmartin 43:37
we just hired two individuals. In the last two months. I'm working on something outside New York, which I can't talk about, but which is a big game changing. And it has to do with not just impact investing, but an impact community. And I think that in American cities today, post pandemic, and after last summer, there's a certain responsibility we have as a country to make sure that certain cities are lifted up, and that we deal with the challenges that are facing some of the second tier cities, but two cities that have been overlooked and neglected and haven't really found their moment in the sun. And so this particular opportunity is an opportunity of scale. And it's an opportunity outside of New York. And it's an opportunity for which if I do it, I will scale the business. And so I will always keep people's credentials when I think that they're a pluses, keep them close. Because the one thing I won't do is scale prematurely because I take so seriously the decision to bring somebody into the company, but at the same time, the culture has become so important. I spend a lot of time focused on the person can build not just buildings, but connection build with me a culture that's everlasting. And I want people in the company that are going to stay with the company and make a career out of it. That's a lot as young young people, and you want them to be invested back and there are no guarantees. So the way you keep people are you make sure that Do you hire like minded people? The last thing I'll say is the crown jewel now for me of retention is that I can give people a quality of life, knowing that the work we do can be done in many different ways. And so whether I have somebody in the team that wants to spend August to me, or I have another person that wants to ski in the winter, I give my team not a big company right anymore. So I give people the flexibility, knowing that they give their heart and soul to my partners. And I can let them do that for various churches around the globe and know that if you want to go to a different city every month, but you're still going to get the job done. And that's going to be six months in the life of the teeth, like I can give that to someone. And I like that, because I'm the boss, I'm gonna have to go through HR because I'm reading the HR department of my dreams. And it's because I think the quality of our lives, high quality of life produces a high performing professional.
Atif Qadir 45:51
Cool. So thank you so much for joining us today on the American building podcast. MaryAnne. If you want to hear the behind the scenes stories of how iconic buildings in our country were designed and built, subscribe to this podcast on Spotify, iTunes, Google, or wherever it is that you listen, we all know that real estate is a tough industry to make it. So how can professionals stand out and make a name for themselves in today's world? Hear from me, the team at Michael Graves and many of our spectacular guests. Just like Marianne on what we did to make it where we are, grab our exclusive guide seven tips on how to stand out stand out near field at American building. podcast.com. Finally, we live in the richest country in the history of humankind. We must be must reach beyond the boundaries we see and the boundaries we create in order to help build homes and communities. Today, Marianne and I have made donations to the United Nations High Commission for Refugees, which focuses on relief for people in war torn countries around the world. I encourage you our listeners to support their worthwhile work as well. My name is author scholar, and this has been American building by Michael Graves.