When Robert C. Lieber left the New York City Economic Development Corporation to replace Deputy Mayor Daniel L. Doctoroff, Mayor Michael R. Bloomberg appointed Seth Pinsky to lead EDC through the end of the administration. As EDC President, Pinsky must now shepherd through such legacy projects as World Trade Center, Hudson Yards, Yankee Stadium, and Willets Point. Less than a month after his promotion, and with less than 700 days remaining in the Bloomberg Administration, Pinsky discussed with CityLand EDC’s goals and challenges.
Investment Banking and Big Law. As a sophomore in high school, Pinsky spent a summer working in the library of an investment bank founded by James Wolfensohn, who would later become President of the World Bank, and former Federal Reserve Chairman Paul Volcker. Pinsky moved to the City to attend Columbia University, where he graduated with a degree in Ancient History. Upon graduating from college, he returned to the bank as an analyst, focusing on mergers and acquisitions. Looking back, he sees his banking days as a detour— albeit a beneficial one for the financial skills he gained—from his longstanding goal of going to law school and working for the government. After two years at the bank, Pinsky left to attend Harvard Law School.
Pinsky then practiced at the law firm Cleary Gottlieb Steen & Hamilton, whose office was located directly across the street from the World Trade Center. Pinsky says that after 9/11, he decided “it was the right time to work for the government.” He became a Vice President in EDC’s Transaction Services group after an 18-month job search, admitting that he did not even know what EDC did when first told about the position.
Breaking the WTC Deadlock. Pinsky recalled how he compiled a report scrutinizing the finances involved with rebuilding at the World Trade Center site. The report concluded that, even with subsidized debt, the project’s costs would likely exceed its revenues because the site was underinsured, the rent charged by the Port Authority was too high, and the market for office space was too weak.
The report proved to be quite effective in breaking the impasse between Larry Silverstein, the City, the State, and the Port Authority. The Mayor, citing the report’s findings, adopted a more cooperative approach and moved to reopen negotiations with Silverstein. After several months of tense talks, “we restructured the deal that we think created value for everyone.” Pinsky’s team renegotiated the rent schedule and ownership structure at the site. They also allocated the Liberty Bonds—part of federal assistance to subsidize rebuilding after 9/11—to different parts of the project, and set tight construction deadlines backed by stiff financial penalties.
Willets Point and the Bloomberg philosophy. Pinsky said that EDC will renew its efforts to redevelop the longneglected Willets Point neighborhood of Queens. While recognizing the project will be “potentially disruptive” for many local businesses, he is confident that it will create substantially more jobs and housing once complete. As he explained, part of the Bloomberg philosophy is that by partnering with the private sector, “we can create more opportunities and more wealth for everyone.” When pressed about the increasingly controversial use of eminent domain, he noted that, considering the scale of development in the City, EDC has been “extremely judicious,” preferring instead to reach deals such as Hudson Yards and the proposed No. 7 subway line extension. He pointed out that in the past, “governments would not have bothered” with negotiation, simply opting to take the land.
22 Months and Counting. Pinsky acknowledged that most of the projects he is working on will not be completed until the next administration, but noted that the goal of EDC is to put the City on a trajectory that will sustain economic development for the long term. When asked about how the specter of budget deficits and an economy in recession affected this long-term approach, Pinsky responded that the City is “shooting for rational investment” now to ensure economic growth in the future. Indeed, Pinsky warned that “you can’t cut to the bone and stop investing when the cycle turns negative, because then you are not in a position to capture growth when it turns.” — Jonathan Reingold