July 28, 2020
The Real Deal

Rent-a-CEO: Inside Gilmartin’s short-term gig at Mack-Cali

After a massive shakeup of Mack-Cali’s board, MaryAnne Gilmartin is temporarily stepping in as the New Jersey-based real estate investment trust’s CEO.

Gilmartin, through an agreement between Mack-Cali and her company MAG Partners, will serve as CEO for six months or until the company finds a replacement, whichever happens first, according to filings with the Securities and Exchange Commission. Mack-Cali, in turn, will pay MAG Partners a monthly fee of $150,000 and offer a one-time cash sign-on bonus of $300,000 and a completion bonus of $200,000 at the end of Gilmartin’s term, according to filings. An activist investor had pushed for the resignation of Mack-Cali CEO Michael DeMarco since earlier this year.

MAG Partners has also been offered a fully vested stock option to purchase up to 230,000 shares of common stock at $14.39 per share, and up to 100,000 shares of common stock at $20 per share. Gilmartin is still serving as chair of Mack-Cali’s board, which will lead the search for a permanent CEO.

“I think this is going to be an awesome gig. There are many many people who have been sidelined for lots of reasons. Or have just been looking for something new, given that the world order has shifted,” Gilmartin said in an interview Monday. “I’m wildly confident that we will have a great selection of talent.”

Gilmartin said she’s not “stepping away in any significant way” from MAG Partners, the development firm she launched last year as a spinoff from the partnership she formed with L&L Holding nearly two years prior. Her team — largely made of Forest City alums — will continue to handle day-to-day operations. MAG Partners is one of several firms looking to develop part of the former Amazon site in Long Island City. Most recently, the company signed letter of intent for a ground lease with Trinity Real Estate to develop a 150,000-square-foot boutique office at 122 Varick Street.

Mack-Cali, meanwhile, has been shifting its strategy from operating suburban offices to acquiring multifamily and office properties on the Hudson County waterfront. In December, the REIT agreed to sell its entire suburban office portfolio to a joint venture led by Onyx Equities in a deal valued at $288.5 million. Last March, it unloaded a 56-building portfolio in Westchester and Fairfield for $487.5 million.

Gilmartin was one of four board directors who had criticized Mack-Cali’s leadership in May, amid the REIT’s proxy fight with investor Bow Street. Gilmartin — along with three other board directors backed by Bow Street — said other members of the board put a “rubber stamp” on decisions favored by ousted CEO DeMarco, Bloomberg reported at the time. Bow Street, which owns a 4.9 percent stake in Mack-Cali, ultimately won eight of the nine board of director seats last month. Gilmartin was named chair.

In a March letter to shareholders, Bow Street had called for DeMarco to resign, accusing him of various missteps, including ignoring viable bids from companies interested in acquiring Mack-Cali. A representative for Bow Street declined to comment. DeMarco, who replaced Mitch Rudin as CEO in 2017, couldn’t immediately be reached.

Daniel Ismail, an analyst at Green Street Advisors who covers Mack-Cali, said the CEO switch was expected by investors, given the recent shakeup of the board. He expects activist investors to continue pushing for a sale or merger of the company. He noted that Gilmartin has experience working for a public REIT, Forest City, which was also sold shortly after she left the company.

“There’s probably a lot that can be reconfigured,” he said. “But in this environment — in the middle of a pandemic — many of these large strategic things are going to be difficult, as is looking for a permanent CEO.”

When asked about her goals as interim CEO, given her criticism of previous leadership, Gilmartin pointed to the reconfigured board, which aims to create an “independent transparent board that focuses on governance and strategy.” She sees herself as an intermediary between management and the board and says she is focused on company culture.

“There is no direction yet as to the board’s thinking on strategy because the board has really just been reconstituted,” she said. “There’s no great reveal yet because the work has really yet to be done.”

Rich Bockmann contributed reporting.

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July 27, 2020
Commercial Observer

MaryAnne Gilmartin Appointed Interim CEO of Mack-Cali

Real estate titan MaryAnne Gilmartin, who cut her teeth at Forest City Ratner and went on to form a partnership with David Levinson and Rob Lapidus before leaving to start MAG Partners last year, has been appointed interim Chief Executive Officer at Mack-Cali, according to a release from the real estate investment trust.

In addition, Tammy K. Jones, Co-Founder and CEO of Basis Investment Group, was named Lead Independent Director of the REIT.

Prior to today’s announcement, both Gilmartin and Jones had been serving on Mack-Cali’s board. The release said that Gilmartin will continue to also operate MAG Partners. There was little said about where the previous CEO, Michael DeMarco, is going, other than a statement of thanks from Gilmartin.

“On behalf of the Board, I would like to thank Michael for his service to Mack-Cali,” Gilmartin said in a statement. “I look forward to working with the talented Mack-Cali team and all of our stakeholders to ensure that the Company operates at the highest level.”

However, there had been a concerted push for DeMarco’s removal from Bow Street LLC, a New York-based investment firm that owned 4.5 percent of Mack-Cali’s stock. Bow Street called for just such action in an open letter published in March. “It is now clear that the rot at Mack-Cali goes far deeper than any of us knew,” the letter said, “and that more comprehensive action is required to protect shareholders’ investment.”

July 27, 2020
Commercial Observer

#72 MaryAnne Gilmartin Founder and CEO at MAG Partners

“Resiliency” is a word that gets thrown around a lot right now, but for some executives, the belief in a rebound is deeply rooted in experience. “Right after 9/11, when we were building The New York Times building,” recalled MaryAnne Gilmartin, who was then at developer Forest City Ratner, “people were like, ‘No one is going to want to be in a skyscraper ever again.’”

Her point is that you don’t bet against New York, the city that she has loved fiercely ever since growing up in Far Rockaway, Queens. Yes, today there’s a pandemic, but “developers,” Gilmartin said, “are hopeless optimists.”

Certainly her Happy Warrior buoyancy has played out well for the City in the past. In a career spanning more than two decades at FCR—the last six as CEO—Gilmartin added not just the Times Building, but also the Barclays Center, Frank Gehry’s downtown Spruce Street tower, and the Tata Center at Cornell Tech to the skyline.

In March 2020, she took her optimism to its logical extension by forming her own firm, MAG Partners. “For me to own 100 percent of the company is a big move for me,” noted Gilmartin. “As much as I love risk, I also knew that I was taking on a team of people whose livelihood depended on me.”

For two years she had been at L&L MAG, a partnership with Robert Lapidus and David Levinson, but, “after the first couple of deals with L&L, I realized that people would back me with my track record.”

Umm, yeah!

Now on the drawing board are three projects. She is part of a four-developer team in Long Island City (“we call it Amazon Redux: It will be a veritable job engine for Queens, and we’re doing it with the community at the table,” noted Gilmartin). Downtown, her firm is working on 122 Varick, an office building on land leased from Trinity Church. She explained her vision, “I could have the first office building in that submarket, which is Google and Disney all day long.” On the residential front, she is building a 480-unit rental at 241 West 28th Street, 30 percent of which will be affordable.

“We are really nimble,” she said of MAG Partners, “because we have sites, not buildings, so a lot of my thinking is ‘how is this building going to perform in a post-COVID world?’ Now I’m focused on things like ‘what are we going to care out about forever?’”

To her full plate, last month she added the chairmanship of Mack-Cali. Gilmartin, who is also on the board of NY Public Radio and BAM, had been a director of the Jersey City-based REIT for a year after being elected as part of an activist slate. New York City might be a little jealous about sharing her, but if Gilmartin’s history is any indication, there’s plenty of her positive energy to go around.—A.R.

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July 2, 2020
New York Magazine

For Blue-Sky Urban Ideas, It May Be Now or Never

Last month, I passed through Tribeca, which was deathly quiet, its storefronts armored in plywood. Suddenly, a mirage appeared: a woman, coiffed and made up, wearing a skirt and high heels, strode down a deserted block, swinging a white handbag. She seemed like an alien who had dropped in on our world of stay-at-home schlumps, or maybe just a visitor from another year, a normal person highlighting just how abnormal our city had become. A few weeks later, New York is starting to feel like New York again, though fitfully, and still with a streak of the surreal. The racket has returned, with construction crews and traffic once more drowning out birds. A few streets are alive with sidewalk drinkers, although much of midtown still lies under its cone of silence. The woman with the handbag might blend in again.

It’s too soon for celebration, and the picture is too mixed for optimism. But at least, after months of eternal present, the future is coming into view: we can at last begin to look ahead, and not just with dread. New York is beginning to rethink many of its ossified assumptions. You can see it in the push to strip hundreds of millions of dollars from the NYPD, in the mayor’s executive order commandeering privately owned public spaces for the common good, in the short-order network of bike lanes and open streets, in the multiplication of dedicated busways, in the conversion of hotels to housing for the homeless. Governor Cuomo and Mayor De Blasio have wisely held off letting restaurants operate indoors, where diners are at the mercy of unreliable air-conditioning systems. If, come cooler weather, distrust of the great indoors persists and restaurants can’t lure customers back into their dining rooms, New York should invest heavily in heat lamps, emulating Northern Europe’s virtually year-round outdoor dining culture—not just in the brunchiest zip codes, but along, say, Dyckman Street or wherever New Yorkers eat.

Some of these measures are temporary or insufficient, but they suggest a willingness to draft in the wake of bolder cities. Paris has just reelected mayor Anne Hidalgo, who has made pedestrianizing and de-polluting her city so central to her campaign that she recently floated a proposal to turn its beltway, the much-loathed Périph, into a more leisurely, verdant, and crossable boulevard. New York should aspire to similarly transformative moves.

We tend to treat cities like the weather, using past patterns to predict outcomes over which we have no control. But the last few months have reminded us that cities are not givens, the status quo isn’t immovable, and citizens can force their elected officials to crash through bureaucracy and inertia. As New Yorkers emerge from a bitter spring and weeks of angry but hopeful protest, we can—must—recognize that after the fears of infection comes a point of inflection in the city’s history when its future is up for grabs. What will happen is what we make happen.

During the most heated days of the protests, I watched crowds march for a more equitable city, and worried that New York seemed suddenly, intensely fragile. A deadly shot, an out-of-control fire, a spate of destruction—any of these could have marked New York for a generation, and I wasn’t sure how great a body blow it could absorb before it began to conform to Trumpian fever dreams. My optimism about the city’s resilience ebbed by the minute. The crisis administered local and national governments all over the world a brutal series of tests, and the record is not good. They failed to contain the epidemic. While some East Asian cities managed to blunt its worst effects, New York couldn’t. Could the nation take necessary public health actions without bringing financial catastrophe on millions of households? Nope. Could we finally bring the contagion under control, or start opening up without triggering a new assault? Depends where you look. The cost of incompetence has been horrific.

Now New York’s leaders are confronting another round of challenges. The most immediate question is: Can we keep the city from entering a death spiral, where residents pull up stakes, revenues fall, the city becomes less appealing, causing more people to leave, and so on? The key to preserving New York’s magnetism is to restore its feeling of safety—from crime, from the cops, and from coronavirus.

Even before the pandemic, moving around New York was always a leap of faith. You had to trust that almost everyone in the swarms around you would behave with respect and a sense of cooperative sense of sharing. Urban living is a form of minute-by-minute collaboration. Conflict, cruelty, and violence are everyday occurrences, but they are also relatively rare. Every rush hour, millions of people brush past one other without incident, packing subway platforms without acting on an urge to shove, sharing elevators without fear of being stabbed, ordering at Shake Shack without worrying that the milkshake is poisoned.

Getting back to daily life means rebuilding that delicate web of trust. If I’m going to ride the subway, I have to assume that the man sitting next to me takes the same sorts of reasonable precautions I do. Before we can function normally, we must each be convinced that new habits and protocols are sensible, and that restaurants, employers, schools, and public agencies all scrupulously follow them. And then we have to make a greater leap, and learn to trust governments that have let us down.

Change is risky, but business as usual is Russian roulette: keep at it long enough, and death is sure to follow. An $8 billion crevasse has opened in the budget of the MTA, leading the agency to halt all work on its five-year capital plan. Not enough people are riding the subway, so we have no money; do we really want to let the system go to hell so that nobody wants to ride the subway ever again? Those who can drive will, causing gridlock that makes East Midtown during the United Nations General Assembly seem like a desert highway. The more commuters rely on their cars, the more they will fight any attempt to claw some pavement back for restaurant tables, bike paths, pedestrian plazas, and bus lanes. SUVs will spread like bishop’s weed, smog will refill the air, and professionals will jump at the chance to stay in the suburbs and work remotely.

In the past 20 years, as the number of tourists and New Yorkers has continued to grow along with the economy, there were those who felt that the city city was being swamped. Yet we can’t let this become a place where only the hardy and hopeless choose to stay. I’m less worried about spooked residents’ fleeing—that’s a fine New York tradition—than about potential newcomers’ being unable to arrive. For now, the gates remain closed: immigration has all but stopped, flights from abroad are scarce, and Cuomo has made it clear that visitors and returnees from Florida, Texas, and other virus-stricken states are welcome only if they commit to quarantine. The prolonged freeze will deepen the city’s wounds. “I’ve seen other external shocks to our industry,” says Vijay Dandapani, head of the Hotel Association of New York City. “After 9/11 and the Great Recession, it took a year and a half for revenue growth to happen. But in both those cases, occupancy never dropped below 60 percent. Now, there’s no pulse.” (During the pandemic, it has dipped as low as 16 percent.) Dandapani says he figures it will be five years before the tourism industry begins to resemble 2019 again.

Impromptu decisions can have long-term implications if we pay attention: Treat those who cry for justice as an enemy horde and you will divide your city further; treat them as teachers and you can heal. In Aurora, Colorado, a protest to commemorate the death of Elijah McClain summoned violinists for “an improvised harmonization,” which wound up so alarming the police that they tried to break up the concert with riot gear. Even so, the electric fiddler Jeff Hughes jumped on a truck and kept the music going. String-instrument actions are going national: another took place a few days later in Washington Square, and it was not  treated as a security threat.

After months of communing with our devices, we badly need live music. Traditional venues will stay dark for the rest of the year, but in the meantime, the city might breathe life into New York’s musical life by seeding it outdoors. The Department of Cultural Affairs should team up with cultural heavy hitters like Lincoln Center, plus Make Music New York, an organization that mounts a twice-annual solstice celebration with more than a thousand concerts, large and small, all across the city. One of my indelible musical memories is from a decade ago, when I drifted in a rowboat out onto the lake in Central Park and listening to Iannis Xenakis’s Persephassa as it was performed by percussionists ranged along the shore. The year before, Bang on a Can launched an avant-garde marching band, Asphalt Orchestra, that could be revived as a rapid-deployment morale booster, popping up around New York for half an hour of joyful mayhem. Pop-up concerts, chamber music flash mobs, socially distanced dance parties, and parking lot recitals can be quick, small, cheap, and safe. They would go a long way to bringing some joy back to New York’s streets and keep the death spiral at bay.

As we navigate these next fluid months, we should be thinking about another question that will test New York’s character: Can we learn the right lessons from our overlapping crises—disease, discrimination, and threats to democracy—and put them into action, even after the immediate sense of emergency has passed? Passing that test means baking principles of equity into the zoning code and development plans, intensifying the fight to control pollution and climate change, rethinking the way New Yorkers move around the city, and reopening the spigots that bring in immigrants, visitors, and workers from other states to refresh the city’s economy.

Even as the city pares its budget and prunes its payroll, we can’t just hunker down and hope for the best. We need to intensify our ambitions for the developments and public projects that will define the next iteration of New York. We still need Gateway or its equivalent (the new passenger-rail tunnel beneath the Hudson), a transformed Penn Station, a new Port Authority, and a less noxious version of the BQE. (Yes, tax revenue has tanked and federal funding may have to wait for a changing of the guard in Washington, but there’s plenty of planning to do in the meantime.) Sunnyside Yard still holds promise as an anti-Hudson Yards. The areas of Long Island City that Amazon walked away from in 2018 can still benefit from large-scale development. “I’m bullish on Queens,” says MaryAnne Gilmartin, one of the developers involved in a mixed-use project next to the ex–-Amazon site. “The problem is to get people to stop reacting and think ahead. Even though the [city’s] Economic Development Corporation is hard-wired to think about the future, right now they’re mired in the present.”

A crisis is a challenge to our notion of impossibility. It inflicts on us circumstances we thought fantastical, and reminds us that distant threats quickly become real. Climate change will be like that. But it also teaches us not to despair. What we thought was impossible is doable. During the pandemic, we moved our social, work, and cultural lives online. We survived without planning ahead. And through it all, we preserved our indignation, our moral instincts and our sense of shame. We emerged ready to ask not just What’s gonna happen next? but: How do we get to the city we want to live in?

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