Restoring Confidence

Gargano's Leadership Key Ingredient in City's Economic Success

by Natalie Keith

When Charles Gargano first started as chairman with the Empire State Development Corp. in 1995, economic development in New York City was at a virtual standstill.

Despite years of planning and discussion, critical redevelopment projects in areas such as Times Square and Columbus Circle had stalled. Even worse, the private sector lacked one of the most important ingredients in any successful development projects: Confidence.

"For a period of about four years, commercial development had stopped," Gargano said in an interview in his midtown office. "Times Square had gone from an area of great excitement and entertainment to a blight-ridden street."

Today, Times Square is a revamped entertainment mecca, Columbus Circle is home to the massive Time Warner Center and work is under way in areas like Queens West and the Hudson River Park. Almost as remarkable is that development has flourished despite the devastating events of recent history.

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On Sept. 11, 2001, New York City experienced the worst terrorist attack in the nation's history, which was followed by a national recession that puts the brakes on economic activity across the country.

With much of the economic hard times in the past, the future of New York City development seems as bright as its recent past. Plans are in the works for a the $1 billion Farley-Penn Station project and the $2.8 billion project to transform Manhattan's Far West Side by expanding the Jacob Javits Convention Center and building a new stadium for the New York Jets, among other initiatives.

Many credit Gargano, the economic development czar appointed by Gov. George Pataki, as one of the reasons the city has thrived over the past decade. It is for this reason that New York Construction magazine has named Gargano as the 2004 Owner and Developer of the Year. Although the Empire State Development Corp. is not a traditional owner or developer, the magazine selected the agency and its head, Gargano, because of the important role the public sector plays in development efforts.

In addition to his work in New York City, Gargano spearheads upstate revitalization efforts as chairman of USA Niagara Corp. and chairman of the Niagara Falls Casino/Community Accommodation Improvement Commission. His ongoing work in heading up the "I Love New York" tourism campaign has also led to his most recent appointment to the U. S. Department of Commerce's Tourism Advisory Board.

As vice chairman of the Port Authority of New York and New Jersey, Gargano is the governor's principal aide in carrying out interstate shipping and transportation policies, bringing multibillion dollar investments to John F. Kennedy International Airport.

"(Gargano) has been one of the best things to ever happen to the city and state in terms of economic development," said Louis Coletti, president and CEO of the Building Trades Employers' Association. "He has served as a catalyst for growth."

One of Gargano's greatest assets has been his ability to bring planned projects to fruition. For example, redevelopment plans for Times Square had been on the books since the 1980s.

"He's pushed for some projects that had been on the books for a long time but hadn't gone anywhere," said Dominick Servedio, chairman and CEO of STV Group Inc. in New York City. "They really didn't get going until he got involved."

Gargano gives credit to Pataki who, while campaigning for governor in the early 1990s, stressed the need to restore the business community's confidence in government.

With the governor's approach in mind, Gargano works constantly at building and strengthening the bridge between the public and private sectors.

"(The governor) wanted to establish a partnership between the public and private sectors, rather than government being looked at as the enemy," Gargano said.

When Pataki assigned Gargano with the task of making headway on the 42nd Street Development Project, Gargano began meeting with the Walt Disney Co. The meetings eventually led to an agreement with regard to the New Amsterdam Theater. While the pact was a "major milestone" for the city, it came with a stipulation.

"With Disney, we had to guarantee that we would get rid of the blight in the area," Gargano said.

The Disney agreement sparked other agreements for Times Square developments. In July 1995, a memorandum of understanding was signed with Forest City Ratner Cos. of Brooklyn to build a 13-level structure with a 25-screen AMC Theater and a Madame Tussaud's Wax Museum. In September 1996, Tishman Urban Development Corp. of New York City announced its plans for "E Walk," featuring an 860-room hotel and a 200,000-sq.-ft. entertainment and retail center.

Then, the Durst Organization announced plans for the first office tower to be constructed in the city for a decade. The 48-story Conde Nast Building at 4 Times Square was designed by Fox & Fowle Architects and features "green" elements.

"There was a confidence that started to develop quickly on 42nd Street, and $200 million in public investment resulted in $2.2 billion in private investment," Gargano said.

Robert Selsam, senior vice president and manager of the New York office of Boston Properties Inc., has worked with Gargano on several major projects. Boston Properties was the developer of two of the Times Square office towers, 5 Times Square and the Times Square Tower.

"Charles Gargano has given New York state a business-friendly face," Selsam added. "He understands the needs of business and the role of government in assisting business."

In recent years, Gargano has also demonstrated his ability to bring diverse interests to the bargaining table when he worked with city officials, including Daniel Doctoroff, deputy mayor for economic development and rebuilding, on the plan to expand the Javits Center and build a football stadium. A memorandum of understanding between the Empire State Development Corp., Jets Development LLC and the Metropolitan Transportation Authority was signed March 25. While the agreement does not guarantee the successful completion of the project, it does represent a level of progress in bringing a sports facility to the Far West Side that was never attained by past administrations.

Colleagues point to Gargano's level of involvement in the industry as one of his strengths as he moves projects from the conceptual stage to the finished product.

Richard Tomasetti, co-chairman of the Thornton-Tomasetti Group, has had a longstanding professional relationship with Gargano through organizations such as the New York Building Congress and the American Council of Engineering Cos. of New York. The Thornton-Tomasetti Group is involved with the Jets stadium plans.

"His style of leadership engages so many people and makes them feel a part of the project," said Tomasetti.

Industry officials say Gargano's engineering background is another of his important assets. Gargano served as an engineer and principal at J.D. Posillico Engineering and Construction of Farmingdale, N.Y., prior to entering public service.

"He's widely admired and respected throughout the design and construction industry," said Richard Anderson, president of the New York Building Congress. "He's always been accessible to the leaders of this industry and follows through on his commitments."

One of the ways that the Empire State Development Corp. has achieved success in recent years is by streamlining the agency. Prior to Pataki, economic development issues were handled by four state agencies, including the Urban Development Corp.

"There was a lot of bureaucracy, with hundreds of different programs," Gargano said. "Often, agencies were competing with each other."

In January 1995, there were about 1,000 employees who worked for the four agencies. Now, the agencies have been combined into the Empire State Development Corp., which has about 550 employees.

"It was a huge reduction in staff, but we're a much more efficient agency," Gargano added. "We use our resources much more effectively."

One of the biggest challenges he has faced while in office came with the terrorist attacks on the World Trade Center. Not only did the attacks wipe out an entire section of Lower Manhattan, they were a blow to the confidence of the city. In the weeks that followed, many feared that the city would lose the economic gains it had fought so hard to achieve.

"In one day, more than 300,000 jobs were displaced in Lower Manhattan," Gargano said. "It was a devastating blow to the economy, not just to Lower Manhattan but to the whole country."

To mitigate the impact, the Empire State Development Corp. set up an emergency business assistance center on Sept. 13 in the lobby of the midtown building where the agency's offices are located. Between 30 and 40 agency employees staffed the center where thousands of businesses came for help.

The center was operational until November when the state pledged grant money to assist businesses and the federal government announced $20 billion in emergency aid for New York City.

In the years that have followed, the subway stations impacted by the attacks have been restored and a temporary PATH station constructed at the World Trade Center site. Construction continues on an office building at 7 World Trade Center and a groundbreaking ceremony for the Freedom Tower will be held July 4.

"As a result most of the jobs have returned despite the national recession and corporate governance problems," Gargano said.

In looking to the future, Gargano said he is hoping to continue working on the many projects the city is planning to undertake, such as Brooklyn Bridge Park, the new Farley-Penn Station and the Far West Side development with the expansion of the Jacob Javits Convention Center and the new Jets stadium.

"There's no question that we have support for the expansion of the Javits Center," he added. "I'm confident that the stadium portion will also be supported."

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