When the city began its search for developers of a site in the Meatpacking District, the request for proposals encouraged inclusion of an “emerging developer.”
Such a developer, the RFP described, had completed fewer than 10 projects in the past decade, each with fewer than 150 residential units, no more than 100,000 square feet and a cost below $30 million.
Still, the developer couldn’t be completely green; they needed some experience finishing projects in New York City or other urban areas.
An emerging developer wasn’t a requirement of the project application, but prioritizing a more diverse applicant pool was part of the city’s commitment, according to the RFP, to “reduce the barriers to entry into the real estate community.” More than 10 teams applied for the project, part of a development dubbed Gansevoort Square, according to the city’s Economic Development Corporation.
The EDC selected Kinwood Partners alongside Douglaston Development to build 590 housing units on a city-owned site. Kinwood would seem to fit the bill. The firm hasn’t developed anything, but it is led by someone who spent a decade working for a major real estate investment trust as well as on projects in the neighborhood.
David Himmel, former chief operating officer at Jamestown and son of Leslie Wohlman Himmel, co-founder of investment firm Himmel & Meringoff Properties, is Kinwood’s founder. His firm’s selection has raised questions about the intent of designations like “emerging developer” in public-private endeavors
That’s because while Himmel fits the criteria on paper, he’s also a real estate scion who already held an executive role at a multi-billion-dollar REIT.
“It makes a mockery of the whole thing,” said Alicia Glen, founder of the development firm MSquared, which did not bid on the project.
Glen, who served as deputy mayor for housing and economic development under Mayor Bill de Blasio, called the decision “appalling and disgraceful.” She said this classification is intended to support companies that wouldn’t otherwise have access to the types of resources necessary to take on a major development project.
The timing also troubles Glen, given the federal government’s crackdown on diversity, equity and inclusion initiatives. She said New York City should be doing everything it can to be a counterweight to those efforts.
“As a former government official and a feminist, this is disgusting,” she said.
Himmel formed “Himmel Development” in April but changed the name and registered with the state in October as Kinwood. It’s unclear if the company was formed expressly for bidding on the project, though the firm launched the same month the bid was due.
“David and Kinwood bring exactly what we need in partners for projects like Gansevoort Square,” Steven Charno, president of Douglaston, said in a statement. He pointed to Himmel’s experience at Jamestown and his previous work in the Meatpacking District.
“His expertise with local community organizations made our proposal stronger, and we’re excited about what we’re building together for New Yorkers,” he said.
As a firm just starting out, getting development work can be a catch-22: You need experience to get work, but you can’t get work because you don’t have experience. Even an “emerging developer,” by the city’s definition, needs to have some experience. The criteria for this designation, though, doesn’t factor in existing industry connections and to what extent having them can break down barriers to entry.
Another affordable housing developer, who also did not respond to the RFP, said Himmel’s company “fits the letter of the emergent developer guidelines but not the spirit.” The developer, who spoke on the condition of anonymity, said designations are intended to lift up a developer from an underrepresented background, a nonprofit and/or a minority- or women-owned business.
“This is the equivalent of Eric Trump leaving the family firm and forming a new company and calling it an emerging developer,” the developer said.
(Himmel has never worked for his mother’s firm. Through a spokesperson, Leslie Himmel declined to comment.)
EDC in January issued an RFP seeking developers for a 10,000-square-foot lot at the corner of Little West 12th Street and 10th Avenue in the Meatpacking District. The agency announced last month that Douglaston and Kinwood would build the residential building at the site, formerly home to the Gansevoort Meat Market. Up to 55 percent of the apartments will be set aside as affordable, and the developers have indicated that they will not require city funds, though they intend to apply for the property tax break 485x.
“The proposal not only meets but exceeds the number of permanently affordable homes targeted in the RFP as well as other critical criteria laid out from the very beginning — all without public subsidy,” an EDC spokesperson said in a statement. “At a time when Manhattan needs more affordable housing, this proposal will deliver it and further cement Meatpacking as a vibrant economic and cultural corridor.”
The project is part of a broader redevelopment plan that includes expanding the Whitney Museum. EDC estimates that the plan will create 3,700 construction jobs, 160 permanent positions and have a $1.1 billion economic impact.
Douglaston is a veteran affordable housing developer and brought on Kinwood, in part, because of its leader’s experience in the neighborhood. Himmel worked on the Chelsea Market, Milk Studios and Pier 57 while at Jamestown, where he started as an analyst and worked his way up to the C-suite. He also overlapped for some years with Andrew Kimball, who now heads the EDC, though it doesn’t appear that they worked together.
Though the Gansevoort Square RFP did not require an emerging developer, the inclusion of one could give bidders an edge. Separately, the RFP included goals for hiring minority- and women-owned businesses: At least 25 percent of the project’s hard and soft costs should go toward paying M/WBE contractors, subcontractors and suppliers.
As is typical with city and state projects, the goals are not mandates, but project teams have to show that they’ve made a “good faith effort” to meet the minimums. Such goals are, in part, an acknowledgement of the barriers to entry in real estate development, an industry that is capital-intensive, high-risk, reliant on relationships and traditionally white and male-dominated.
The “emerging developer” designation in the RFP is separate from EDC’s emerging developer loan fund, which is not being used by Kinwood.
Monadnock Development’s Kirk Goodrich, who was unfamiliar with the city’s selection on the Meatpacking project, said that, generally speaking, emerging developers should be those who have some level of experience but need institutional support. In other words, someone who would be a developer on their own “but for opportunity and capital.”
“The perfect situation, in my estimation, is: an individual who has toiled in the world of development,” he said. “Could be a lawyer, could be working for a bank, could be working for a nonprofit or nonprofit developer, who never really had the family money or personal capital but has a solid knowledge base and has executed some of these things.”
Someone with no related experience, by contrast, won’t be able to learn and grow as effectively, he said.
“You also don’t want a situation where someone says they are a developer, but have no ability to carry out the core functions of the thing they say they are.”
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