Real Estate Hasn't Backed Away From Eric Adams Amid Bribery Scandal
As New York City Mayor Eric Adams’ mayoralty descends into crisis following his indictment on five federal criminal charges, the vibe in the city’s commercial real estate industry is a cocktail of concern and confidence that the industry won’t go down — even if the mayor does.
“I don't think anyone's happy about this development,” said Jeff Gural, chairman of GFP Real Estate and former head of powerhouse brokerage Newmark. “I liked Eric. I thought he was doing a good job.”
Adams pleaded not guilty Friday morning to charges including wire fraud, bribery, and receiving and soliciting campaign contributions from a foreign national.
The 57-page indictment, brought by Damian Williams, the U.S. attorney for the Southern District of New York, was unsealed Thursday. It detailed allegations stemming from FBI investigations into illegal foreign campaign donations, including that Adams pressured the Fire Department of New York City to allow a $300M, 36-story skyscraper, home to the Turkish Consulate, to open without an inspection.
Federal prosecutors say Adams also accepted and solicited illegal campaign contributions from two construction companies doing business in the city. He is also charged with applying for and using $10M in public funds from the city’s program to match campaign donations.
This week’s indictment is one of five separate federal probes into Adams and figures close to his administration. In recent weeks, multiple senior officials have also stepped down from their positions, including New York City Police Department Commissioner Edward Caban and Chief Counsel Lisa Zornberg, who resigned late Sept. 13.
Adams has relied on the real estate industry's financial support in his rise to the top of New York City politics. He once famously declared, “I am real estate,” and he has pushed to back developers as many of his fellow Democrats tried to distance themselves from real estate interests.
“The news about the indictment is really distressing for all New York City residents, but I feel like the silver lining is that there are really great bureaucrats in charge of some of the housing and planning work that's going on, and that's vital to producing affordable housing,” Rachel Fee, executive director of affordable housing advocacy group New York Housing Conference, told Bisnow.
What Could Happen Next
Adams stood in court for 20 minutes on Friday morning to hear the charges against him, which carry a combined maximum prison sentence of 45 years. His lawyer, Alex Spiro, said he would file a motion asking for the case to be dismissed, The Associated Press reported. The mayor is due back in court on Wednesday for a hearing, according to The Washington Post.
Calls for Adams to resign began pouring in Wednesday as news of the indictment broke, with figures from left-leaning Rep. Alexandria Ocasio-Cortez to conservative Queens city Council Member Bob Holden questioning whether Adams can govern efficiently amid the investigations, Gothamist reported.
Gov. Kathy Hochul, who can legally force the city’s mayor to step aside — a power no governor has used in state history — said in a statement Thursday that she is focused on “ensuring stability” in the city.
“While I review my options and obligations as the Governor of New York, I expect the Mayor to take the next few days to review the situation and find an appropriate path forward to ensure the people of New York City are being well-served by their leaders,” Hochul said.
If Adams resigns or is removed from office, Public Advocate Jumaane Williams will step in as acting mayor while the city holds a special election to find a successor. Multiple elected officials had already declared their candidacy for the next mayoral election in 2025, including New York City Comptroller Brad Lander and state Sen. Jessica Ramos, who represents Queens.
Where The Industry Stands
While Damian Williams framed his investigation as revealing a politician putting his interests and those of a foreign power over those of the city's residents, some expressed understanding for Adams' alleged actions.
Before he was mayor but after he had won the Democratic primary in 2021, almost assuring him of victory, Adams pressured members of the fire department's inspection division to overlook dozens of fire code violations at the Turkish Consulate at 828 United Nations Plaza, according to the indictment.
That pressure came after Adams had allegedly accepted free or discounted flights, luxury hotel stays and meals from individuals working for the Turkish government. When Turkish President Recep Tayyip Erdogan was expected to christen the new tower in September 2021 during the United Nations General Assembly, Adams' Turkish contacts allegedly cashed in that favor and implored the then-Brooklyn borough president to speed up the process.
“The fire department was so backed up, if the president of Turkey was coming, then I would expect that the mayor would ask the fire department to accelerate that inspection,” said Gural, who owns millions of square feet of city real estate and has donated more than $2K to Adams' 2025 campaign, according to the city's campaign finance board.
He added that he hopes Adams didn’t do anything illegal to facilitate that, but “everyone knows, the fire department, if you wanted an inspection, you could wait months.”
The real estate industry has long had friendly ties to Adams, who has given addresses at the recent annual galas thrown by the powerful Real Estate Board of New York. A REBNY spokesperson didn't respond to Bisnow's request for comment.
There have been no public calls from real estate players for Adams' resignation. And in the case he resigns or is forced out, the industry is keeping a close eye on who a successor might be, Rlty Co. CEO Briggs Elwell told Bisnow.
“Everybody is always looking forward to see who is in office next,” said Elwell, who previously worked at Related Cos. “The biggest risk when you're doing an investment or a development in New York — or any other major city — is that the mayor is going to have their own priorities. Their priorities may or may not align with the respective development you're trying to build or sell.”
Kathryn Wylde, president and CEO of the Partnership for New York City, said in a public statement that the public “must allow the legal process to take its course, including a full assessment of a substantive response from the mayor to the charges against him.”
“The city economy is strong and the issues surrounding the mayor will have no effect so long as the government continues to function effectively,” Wylde told Bisnow in an email.
What The Indictment Could Mean For NYC's Housing Crisis
The city's housing affordability crisis has reached a fever pitch since Adams became mayor. Developers attributed the slowdown of new construction to the state government allowing a key development tax break to expire in 2022, coupled with the rise in interest rates and change in rent control policies.
Rents skyrocketed to never-before-seen levels last year, while apartment vacancies reached record lows of 1.4%. Finding other ways to fund new housing development has been one of Adams' biggest policy pushes, but he has had limited success, and some have pointed to projects stalling in part due to understaffing at key agencies.
“It's going to be really important for HPD to make sure that they're retaining staff and really focus on moving projects through the pipeline,” Fee said. “Since the pandemic, when they had that huge staffing crisis, they've been moving in the right direction.”
Developers and other industry players dismissed the idea that Adams' criminal case could have an impact on the day-to-day tasks city agencies need to complete to keep the real estate business functional.
“There are some staffing issues at HPD, just like any other agency,” said Mitch Korbey, a partner and land use attorney at Herrick Feinstein. “But the ability to hire folks and the ability to bring professionals on board — the machinery of government moves on.”
Experts speaking to Bisnow Friday morning also didn't foresee any immediate danger for Adams’ signature housing policy, City of Yes — a proposal to overhaul the 55-year-old citywide zoning text to cut red tape and facilitate new housing development in all corners of the city.
“At first, thinking about the City of Yes, I think it felt like, could this get stalled? But I'm actually really optimistic that the city council is going to move it forward,” Fee said. “[Council] Speaker [Adrienne Adams], in particular, has an amazing track record on housing.”
City of Yes passed a hearing at the City Planning Commission this week and is being finalized before it is sent to the city council. Once it is heard by the city’s lawmakers, they will have a 50-day window to negotiate any changes and vote on its future.
City of Yes will continue to move forward to its review, Director of the Department of City Planning and Chair of the City Planning Commission Dan Garodnick told Bisnow.
“The fact that too many New Yorkers are struggling to find an affordable home has not changed with the events of this week, nor has our commitment to address it,” he said in a statement.
