Mayor Eric Adams’ administration plans to study the city’s commercial real estate industry to determine whether minority- and women-owned developers face any particular hurdles and could use a boost from city contracts.
The city’s Economic Development Corp. said Monday that it has chosen the consulting firm MGT Solutions to carry out the “disparity study,” which aims to find out whether race, ethnicity or gender affect developers’ ability to make deals and acquire capital or bonding. It’s the first time the city has attempted such a study of the real estate industry, although previous disparity studies of city contracts are the basis of the MWBE program that sets targets for city spending on firms owned by various demographic groups.
EDC does considerable business with commercial developers as the city’s construction arm, possessing a $2.9 billion capital budget for fiscal years 2024 through 2028. The quasi-public government agency is partnering with firms like Related Cos. and Sterling Equities on the huge Willets Point development, and last week announced it had chosen Joy Construction and Maddd Equities to lead an overhaul of the Kingsbridge Armory in the Bronx.
Before April 30, EDC is asking developers to fill out an online survey about their experience in the industry — regardless of their MWBE status or whether they have held city contracts. The results will be shared by late 2025, and EDC says the study could lead to policy changes if it finds that MWBE developers face disproportionate challenges.
Adams, New York’s second Black mayor, has campaigned on boosting city support for MWBEs. Although some data has shown limited progress, the administration says it awarded a record $6.4 billion in MWBE contracts last fiscal year and hopes to reach a cumulative $60 billion between 2023 and 2030 — double the current spending.
Michael Garner, the city’s chief business diversity officer, said in a statement that construction and real estate development continue to show the largest disparities between MWBE firms and their white- or male-owned counterparts.
“The findings of this study will inform policies and initiatives that are designed to facilitate equitable opportunities within the industry, reduce barriers to entry, spark new economic growth, and expand opportunities for all New Yorkers,” EDC President and CEO Andrew Kimball said in a statement.
The study will analyze EDC’s existing contracts with commercial developers and include a data analysis based on the discriminatory barriers shared by developers and others in the industry, EDC spokeswoman Julia Zita said.
MGT, the firm chosen to spearhead the study, led the city’s previous disparity study for MWBEs in 2018. Dating back to a 1989 Supreme Court decision, federal courts have allowed local governments to give preference to MWBE firms as long as they can point to evidence that racial disparities in contracting exist.
MGT received $496,000 from the Small Business Services Department for that 2018 study, city records show. EDC did not say how much it will pay MGT for the developer study.
