The Manhattan Connection

The Manhattan Connection

commercial real estate by Jean Gruss | Editor/Lee-Collier

James DeCuzzi served in New York City Mayor Rudy Giuliani's cabinet and managed 7 million square feet of prime Manhattan office space. So what's he doing in Fort Myers?

There often comes a time when successful people take stock of their lives and make big changes.

Consider James DeCuzzi.

The 49-year-old lifelong New Yorker was a member of Mayor Rudy Giuliani's cabinet, president of the New York City Tax Commission and CEO of a real estate company that owned 7 million square feet of some of the most coveted office space in the world in Manhattan.

His wife Penelope Rose-DeCuzzi, is equally accomplished. She was a senior aide to former U.S. Secretary of State Henry Kissinger and later Viacom's Sumner Redstone.

Earlier this year, the New York power couple moved to Fort Myers. The draw: A better quality of life to raise a family and a vision for building a powerhouse development company in Southwest Florida.

As the newly appointed chief operating officer of Fort Myers-based McGarvey Development Co., he plans to double the company's portfolio of commercial buildings to 3 million square feet. That's enough space to fill 52 football fields. Earlier this year, McGarvey bought land that was once going to be the new headquarters for Chico's FAS in Fort Myers where it plans to build more than 1 million square feet of office, retail and industrial space.

Founder John McGarvey himself made the leap to Southwest Florida 10 years ago, when he sold a portfolio of 25 buildings containing 1.5 million square feet of office and industrial space in Southern New Jersey to real estate investment trust Mack-Cali Realty Corp. for about $100 million. Since he started building in the late 1970s, McGarvey has built more than 5 million square feet of commercial space and developed 500 acres of industrial parks, much of it in southern New Jersey and Philadelphia.

Thirty-seven employees followed McGarvey to Southwest Florida from New Jersey shortly after the asset sale to Mack-Cali, starting over in a new part of the country and building an equally large portfolio of commercial properties. The company also builds multi-million-dollar luxury custom homes. "That really struck me," DeCuzzi says.

As the organization grows, McGarvey says DeCuzzi brings structure, a broader perspective and superior negotiation skills honed in hyper-competitive New York City. "Southwest Florida's market is getting very competitive," McGarvey says.

Manhattan dealmaker

DeCuzzi's broad smile and soft-spoken manner belies a person who's a tough negotiator and dealmaker. Most recently, DeCuzzi was the chief executive officer of The Sapir Organization, founded by Soviet emigre and self-made billionaire Tamir Sapir. Last year, Forbes magazine ranked Sapir as the world's 410th richest person.

Sapir now owns 7 million square feet of some of the most coveted office space in Manhattan. When DeCuzzi joined the company in 2002, Sapir had accumulated 3 million square feet.

"He was acquiring assets but had no organization," DeCuzzi recalls. "We built the organization, the structure, the professional management, the public relations, the brokerage and freed up other capital."

That let DeCuzzi and Sapir do deals like the acquisition 11 Madison, a 2.2-million-square-foot building that is home to the U.S. operations of Credit Suisse First Boston. DeCuzzi beat a half-dozen competitors by closing on the $675 million acquisition in a record 30 days and arranging $500 million in financing. It was the second largest deal in New York City in 2003. Two years later, the building's value was pegged at $1.2 billion.

DeCuzzi is a tough negotiator, says Nicholas Valastro, a friend, business associate and president of ValTech Research, a national real estate research firm.

"You don't want to upset him," Valastro cautions. "He's very firm with his conviction and beliefs about what needs to be done in a deal."

Despite his reputation for toughness, DeCuzzi succeeds by persuading opponents to see it his way. "He's an extremely tough negotiator, but he can defend people and looks for win-win situation. I've seen him do this many times." Valastro says. "He's a magician in being able to get the deal done."

DeCuzzi says he learned some valuable lessons from Sapir. For example, people scoffed at the price Sapir paid for 11 Madison and even executives within Sapir's own company thought the deal was excessive. "Context is everything," DeCuzzi says looking back. "Things that at first blush don't seem optimal might be worth a closer second look."

The key is to be able to see the big picture. Sapir saw that the demographics of New York City and the demand for space made 11 Madison a great investment, even as the memories of the attacks of Sept. 11, 2001, were fresh on the minds of many people. "He made believers out of us," DeCuzzi says.

There are parallels with Southwest Florida, which is experiencing a severe residential real estate downturn that is showing some signs of spreading to commercial real estate. But that's temporary, DeCuzzi says. "We are very optimistic about the market, and the commercial market in particular," he says. "We're in it for the long term."

DeCuzzi ticks off the reasons for his outlook: Limited supply of land, the continued movement of people and capital to Southwest Florida and the businesses that follow them here. If it takes time to work through the cycle, then so be it. "We don't need to hit home runs with everything."

Can't say no to Rudy

DeCuzzi's ability to get things done in New York City was due in part to his political astuteness. "He's extremely politically connected," says Valastro. "He's soft-spoken, but he carries a very big Rolodex."

His father, Frank DeCuzzi, was a well-connected union leader. As the young James DeCuzzi successfully grew his real estate and construction law practice in Manhattan, he became active in the Columbian Lawyers Association, an organization of Italian-American lawyers.

As the program director and president of the association, DeCuzzi invited Rudy Giuliani to speak to the organization at a dinner in January 1989. A few days before his speech, Giuliani stepped down as U.S. Attorney and announced he was going to run for mayor of the city. At the dinner, DeCuzzi sat next to the future mayor. "We hit it off," DeCuzzi recalls. "My Dad and I got very involved in his campaign."

After losing the first time around, Giuliani won the next mayoral election and appointed DeCuzzi president of the cabinet-level New York City Tax Commission in 1997. DeCuzzi closed his law practice. "How do you say no to Rudy Giuliani?" he asks.

The commission oversees the property tax appeals for New York City's 1 million tax lots and handles about 50,000 applications every year representing $5 billion worth of property taxes. DeCuzzi brought to the organization the mandate that Giuliani had promised to weary New Yorkers during his campaign: to respect the customer, to be more efficient, to institute measurement yardsticks and to elevate expectations from employees. Among other accomplishments, DeCuzzi reduced the amount of time it took to resolve cases by investing in technology.

DeCuzzi experienced the horrors of Sept. 11, 2001, as his office was a few blocks from the World Trade Center. On that day, DeCuzzi had the rare day off and was attending a political primary in the Bronx. But the following weeks were challenging, as he had to deal with issues such as obtaining gas masks for employees and developing protocols for handling mail in light of anthrax attacks.

The attacks of 9/11 left an indelible mark. DeCuzzi had spent many vacations in Southwest Florida and the terrorist attacks were another reason to move to Fort Myers.

DeCuzzi started investigating opportunities on the computer and stumbled across a posting for a job at McGarvey Development. McGarvey and DeCuzzi got along immediately and eventually the COO position was created.

"The world has become a much smaller place," DeCuzzi says.

A growing portfolio

McGarvey Development Co. has become a dominant development company in Southwest Florida in just 10 years. Here's a list of projects completed, under construction and planned:

Project name: Riverview Corporate Center

Address: Riverview Center Boulevard, Bonita Springs

Status: Construction complete

Details: Nine buildings containing more than 300,000 square feet of office and retail space

Project name: International Center

Address: Plantation Road and International Center Boulevard, Fort Myers

Status: Construction complete

Details: Three buildings totaling 70,000 square feet of industrial flex space

Project name: Bonita Bay Executive Center

Address: Bonita Bay Boulevard, Bonita Springs

Status: Construction complete

Details: Two buildings with 52,380 square feet of office space

Project name: Bonita Bay Professional Court

Address: Bonita Bay Boulevard, Bonita Springs

Status: Construction complete

Details: Three buildings with 10,500 square feet of office space

Project name: Renaissance Center

Address: Marketplace Road, Fort Myers

Status: Construction complete

Details: Three-story building, 65,000 square feet

Project name: Westlinks Business Park

Address: Commonwealth Drive, Fort Myers

Status: Construction complete

Details: Fourteen buildings, 511,000 square feet of office and warehouse space

Project name: Eastlinks Business Park

Address: Daniels Parkway, Fort Myers

Status: Two buildings complete

Details: Four buildings totaling 173,000 square feet of custom industrial flex space; three buildings totaling 102,000 square feet of industrial flex space

Project name: Mid Cape Corporate Center

Address: Pine Island Road, Cape Coral

Status: All flex and one office building completed

Details: Four buildings totaling 176,000 square feet of office space; three buildings totaling 102,000 square feet of industrial flex space

Project name: East Cape Commerce Center

Address: Pine Island Road, Cape Coral

Status: Construction has started

Details: Ten buildings totaling 400,000 square feet of industrial flex space

Project name: Estero Park Commons

Address: Corkscrew Road, Estero

Status: Construction complete

Details: One building, 23,808 square feet of office space

Project name: Three Oaks Regional Center

Address: Southwest corner of Alico Road and Three Oaks Parkway

Status: Planning underway

Details: Complex with 1.15 million square feet of office space and 146,000 square feet of retail space

Project name: Three Oaks Center

Address: Southwest corner of Alico Road and Three Oaks Parkway

Status: In design phase, construction in fourth quarter 2008

Details: Complex with 800,000 square feet of office and industrial flex space

REVIEW SUMMARY

Company. McGarvey Development

Executive. James DeCuzzi

Key. Southwest Florida commercial development is destined for continued growth despite the short-term slowdown.