The David Rubenstein Show: Stephen Ross

[Music] ultimately you build a development that became the biggest development in New York at that time which is a Time Warner development I was motivated you know like most people who you know you want to do something impactful in life you decide to build something even bigger which became the biggest real estate development in the history of our country but Hudson Yards Hudson Yards by building a live-work-play environment right in the middle of New York you know the real need for it no how come your team isn't in the Superbowl that's a good question right you know hey you know would you fix your time please well people wouldn't recognize me if my tie was fixed but okay just leave it this way all right I don't consider myself a journalist and nobody else would consider myself a journalist I began to take on the life of being an interviewer even though I have a day job running a private equity firm how do you define leadership what is it that makes somebody tick [Music] many people in the investment world have bought sports teams I'm not one of them but I do admire others who have fulfilled their ambitions to get involved in sports one of them is Steve Ross he bought the Miami Dolphins a number of years ago we developed a stadium area and this year he was the host for the Super Bowl it's an incredible diversion from all the other successful things he's done almost everything he touches works out quite well his business interest is real estate interest and now his sports interesting one of the early signers of the Giving Pledge he's given away hundreds and hundreds of millions of dollars for education among other major purposes I really admire him as an investor but also Zeek MANET Area [Music] you're gonna be the host of the Super Bowl this weekend so is it hard to get to be the host does anybody that they just call you up and say how about doing this or is it just a little bit harder than that well I mean it's very competitive I think every team in every city really wants a Super Bowl because there's such a great economic development tool you know for the city and how it the impact it has is fantastic I think the fans they love coming to Miami because we have the best weather this type of the year all the time but it's the policy of the NFL to reward teams who build new stadiums to get at least one Super Bowl but I think when you you know this is the eleventh time of the Super Bowl which is the most of any city that the Super Bowl has been in in Miami okay so how come your team isn't in the Super Bowl that's a good question right you know hey you know all right well it's not as easy to think okay so let me ask you about this when will the Dolphins be in the Super Bowl anytime soon and I read that Tom Brady might be a free agent I don't know whether you're allowed to talk about that there's an owner but I mean I heard he's gonna be a free agent but I would say that you know one we're not allowed to talk to him until sometime in March and you know I mean we're a team now it's building I don't know you know why he'd really want to come to the Dolphins he's probably one of the fiercest competitors there is and you know we're at the stage for the Dolphins trying to really build the team you know for the future and doing it through the draft when it was announced the Super Bowl was coming here did a lot of friends of your say by the way I'd like some tickets or how does it how do you get tickets for this well I mean yes I've been inundated with requests for tickets really the NFL takes over the whole stadium and they control all the ticketing in fact I have to buy my own box hip turn of the stadium that I own I have to I get a discount or not not really not really I've just said I'm one of 32 okay when you're an owner of an NFL team you get together very often with owners what are those meetings like with NFL owners are there for small egos in those rooms and very nice people and no complaining or anything they're not really what you'd expect I think the NFL realizes you have 32 egos and that you know you divide and conquer so I think that the NFL really kind of controls the meetings they're not what you really you know finding all these individuals standing up and stating you know all these different reasonings I think they're pretty calm actually so let's talk about it when the team was owned by Wayne who Zynga you bought originally I think in 2008 or so thousand eight 2008 you bought 49% with an obligation to buy another 51% we had we had a buy sell on the other 1% so you bought at the subsequent year and you paid roughly 1.1 billion or whatever it was something like that 1.1 billion okay so is it worth 1.1 billion today no you know worth more a lot more and would you ever sell no never gonna sell no okay and were you a football player when you were younger yeah I played high school football really yes what position were you tackle okay now there are a lot of people who are owners of NFL teams who are Jewish are there any Jewish football players actually they're more owners who are Jewish or more players who are doing well actually actually we have a Jewish quarterback we're like Josh Rosen so Wow the answer is all right so there are some do as players I wish you was a better maybe I'd be playing today now did you ever think you are gonna be an NFL player not a quarterback no all right so let's talk about how you actually came to be an owner because it's not that easy to buy a team it costs a fair amount of money so let's talk about your background you grew up originally in Detroit area yeah and then your your father was an inventor right what isn't it when inventor is that like a real job that you just kind of tinker with things or well I mean he was always tinkering and you know always the office trying to do something said a steady income when you're kind of tinkering him not really he did well he married my mother okay and what did your mother do those issues is the housewife okay so you grew up in Detroit area and you went to ninth grade there but then your family moved to Miami for the high school right and why did they move to Miami my my grandfather had bought a hotel and my father I think his inventing days you know were over yet a living and he went down to help manage the hotel you know real mom pop what was the name of the hotel the Martinique alright you're living Miami Beach and you went to high school in Miami Miami Beach right and so you did I assume reasonably well in high school not really but anyway oh you didn't do this but you were football player so you didn't have time are you weren't supposed to trying okay originally you went to University of Florida I went there for the first year that I transferred the University of Michigan okay you like the cold weather better or what why did you do that well it was always a dream to go to the University of Michigan and I didn't have the grades to get in right out of high school so I was able to transfer you know from Florida up to Michigan and it had a real impact in my life and I think that's one of the reasons why I've been so active with the University of Michigan so you've given the University of Michigan about four hundred million dollars yeah maybe a little more more than four hundred million okay the University of Florida ever said to you while you were here for one year why don't you give us something I don't think they know who I am oh really I don't tell them either I think they know who you are okay so you go to the University of Michigan and then you I decide to be a lawyer you go to Wayne State Law School right right did you want to be a lawyer not really why'd you go because you were Jewish you had to go to law school or medical school at that time we had Vietnam we had a draft okay so I decided I stayed in the army oh cool toe is about 26 and after Wayne State Law School you went to NYU to get a masters in tax yes okay then you went back to the Troy and you worked in an accounting firm yeah it was a tax lawyer Hank's lawyer okay and then you went to New York right in investment banking yeah that's where I ended up working for an investment banking firm and thinking I would go back to Detroit eventually but you know it's like I came home to a place I've never been really alright once you're in New York it's an exciting place for young people that really you know want to succeed and okay so you your work at Bear Stearns right and then you got fired right and did you get fired because you just were smarter than everybody else and they didn't like more people or what do you think that sounds good okay all right so how hard is it to call your mother up and say I've got a law degree I've got a master's in in tax and I've been fired is that hard I need money so I wanted to stay in New York you know I didn't know what I would do I didn't think I was really would be able to get a job I didn't want to go through that process again so you know I kind of thought at that point in time you know what do I know where the great opportunities are and where do I have my interest and passion and kind of wrote out a thought of a process wrote out a bit a business plan and I started you know my own company so your mother lent you $10,000 I had to live and did you ever pay it back or yes turn it more or less why didn't she she didn't want equity in your company if she had equity she would be pretty old yet a good mother all right so nobody negotiated for equity for her she doesn't like the money back all right so you started a company called related right right yes where'd you get that name from when I started looking at real estate and there's so many aspects of how it's related like we had related development related management you know and so it was kind of a name that kind of made sense from that standpoint and you know it was a bad enough name and nobody had ever used it before all right so you have the name related and you're literally your syndicating real estate deals you go to wealthy people and say would you like to invest in this real estate project or something like that in those days we had a lot more business cycles as you know and you know it was either boom or bust and real estate so I saw the idea that you had to have a steady stream of income and then you could invest those profits into development because that's really where you can really make a large sums of money so it was like we had this financial service arm which was a syndication side at that point it was selling tax losses to wealthy investors we had a different tax law at that point in time using those profits to plow it back in to development and since I didn't know anything about development at all I put it I and I saw the opportunities in affordable housing I did strippy I think for the first six seven years of my career all I did was affordable housing so to people who are not real estate developers what does a developer really do no I mean he's the one who finds the land as the concept hires the architect works through the plans you know make sure the building gets built you know on budget on time and then manages it when it's completed and you know assumes all those responsibilities okay so you you became one of the larger developers of let's say low-income housing or subsidized housing the United States over a period of time just before I started the company Lyndon Johnson had with his Great Society programs that really set up the government to provide the funds for affordable housing and then have the section 8 program as the government initiated after and so it was a really a question of taking the government subsidies and applying him you know across the country and I saw when I read it I said this is too good to be true and we really I think in I started the company really in developing in 72 and by 1980 we had built something close to 8,000 units I suppose I want to buy an apartment in Hudson Yards what kind of what would it cost to buy an apartment there that was a good time to buy because the real estate market in New York is soft you know so anything else I can get I got it I got a deal for you trust me stop the interview right now let's make a deal so you you're doing a lot in this area of subsidized housing low-income housing affordable housing and then ultimately you build a development that became the biggest development in New York at that time which is the Time Warner Development Center right on Columbus Circle south of Central Park how did you get the right to do that and why was that such a big deal I was motivated you know like most people who you know you want to do something impactful in life you know and it's not a question of the money you're not really working because money I mean everybody can make money but you want to do something impactful and that's you know a meaningful and challenging alright so time warner became a big development it was it had the mandatory know it had apartment buildings that had lots of office space time warner had its offices there and you lived there as well correct so ultimately though you decide to build something even bigger which became the biggest real estate development in the history of our country cut Hudson Yards so for people who don't live in New York or don't visit New York what is the big deal about Hudson Yards well Hudson Yards was real I mean what was happening in New York over 60% of the buildings were over 60 years old you know in New York they were obsolete in New York was growing and the hottest area of New York was the place called Chelsea which was down there and I saw the idea when the Hudson Yards came about to creating a live workplace environment I mean people are looking for sustainable developments and Hudson Yards by building a live-work-play environment right in the middle of New York you know there was a real need for it and we were able to attract the corporation's because they're looking for talent and Chelsea was really the hottest part of the city where the young people are she got the right from New York City to build this in around 2008 yes and that's what time the recession was going on so was it scary to get that right then we had just weird-- under contract in in 2008 before Lehman and the crisis really started if you'll call it that and then before we signed the country had signed our letter of intent and it put up some money but before he went hard we had negotiated some points in the deal that we wouldn't have to start the project chose until certain events happen that in other words that the office there would be an office market there'd be the availability of money and that the condo market would be able to absorb some units first Hudson Yards the total square footage is it like sixteen thousand 16 million square feet or something like that well it started out through the city Woodward Hudson Yards was really what the request for proposals was roughly for about thirteen million square feet we went out and we acquired land around it so our development today will be over 20 million square feet and how much of the total purchase price how much at you and the lenders and all the investors have to put into this to make it work well I mean right now we're in it for probably 15 to 18 million billion it will probably be somewhere between 25 and 30 billion I mean billion not 25 to 30 billion 25 to 30 billion okay and you're gonna make a profit on that I would hope all right so no project in the United States history commercial project has ever been that expensive even Rockefeller Center many years ago was modest compared to this is that right if you look at in terms of square footage which is really I think how you'd measure you know the size of something it's the largest private development ever in the United so why didn't you consider calling it the Ross cent yards or a Ross Center you didn't want to put your name on it no no and now you have a sculpture there that's very famous some people think it's great some people think it's not so great who doesn't like it well a couple architecture critics I read the New York Times doesn't like anything that we do explain what that is what is so controversial you pick the architect you saw him from something he designed the Olympics and then he designed this sculpture what is the sculpture well we call it a vessel it's really a hundred and fifty foot high a series of steps if you will that you can walk around and we aren't want to create the new heart of New York and so I looked at it you had to have some type of a conic conic structure and if you look at New York and I would look I think you know you take Rockefeller Center which I looked as being the heart of the city and every tourist especially during Christmas everybody goes to Rockefeller Center and so I wanted some type of structure there would be a 365 day Christmas tree so I you know we looked for it and I found this designer Thomas either way so I selected it you know I didn't know what the cost was everybody thought I was nuts but I think it was what it cost what did I think I thought it would cost maybe 75 million and it cost probably about 160 mmm you convinced a lot of famous companies Blackrock KKR among others to move there do you have to personally go to Larry Fink at Blackrock and say move from where you are to Hudson area I mean yeah I was involved in sewing all that I mean you know and the appeal was look at corporations today survived by getting talent and you want and they solved one they're an obsolete space and they knew this is where their talent wanted to live and so I think when we sold them they could see what we were creating and we were very fortunate to get probably the top companies in each field in New York so it wasn't any one industry we hit across all industries and without building and opening it I mean I'm very I love saying it we get the highest rents in New York today and it's probably the area that's most in-demand you don't mean to say the highest rent you mean the rents that are most appropriate for the winter give that space for the great thing that we built yes let's suppose I want to buy an apartment in Hudson Yards what kind of what would it cost to buy an apartment there that was a good time to buy because the real estate market in New York is soft you know so any deals I could get I got it I got a deal for you trust me stop the interview right now let's make a deal if somebody is watching this says I want to be like Steve Ross I want to be a successful real estate developer what is the skill set I mean I think to be successful in anything you have to have a nation' let's talk about your philanthropy for a moment you've signed The Giving Pledge with Bill Gates and Warren Buffett and so forth why did you do that why did you agree to give away Hampshire Network what are your children say about that I don't think you have anything to complain about it starts there but I mean yes I'm giving away most of my net worth you know I've taken care of my children and I just believe in giving back you know some people look at it their family's diagnostically and other people and I believe I was very fortunate and and I want to give it back and do something that's significant and so I think I kind of grew up with that idea you know and I don't think you know it's a there's a feeling of not feeling entitled yes so what are your passionate causes in philanthropy you want to do things they're impactful you just don't want to just you know give it away in that and I may have certain interests that really I'm very involved in you know wonderful first of all you know you start with education and making the cities and places where you live better but today I mean to me the biggest area of concern that I have is the environment climate I think that's you know that impacts everybody and you know it any disease or anything you might give to when you talk about survival you know there's nothing more impactful than that if somebody is watching this or somebody's in the audience now and says I want to be like Steve Ross I want to be a successful real estate developer what is the skill set is it smart hard-working Locke money from your mother what is the thing that makes it possible I'll be above okay I think to be successful in anything you have to have a passion for what you're doing and you know if you have that passion I mean it was great and I looked at affordable housing from the standpoint you're doing well when you're doing good at the same time and using that as a basis and today you know affordable housing is still probably the greatest need that we have in America and will continue to be one of the great things but I think you know to be successful as you know building your company it was a question of the you have an idea and you expand upon it and then you connect the dots as you grow and and you and you never stop working so when you build your company related like my company Carlisle your company at some point you say well that somebody else can run it day to day you might reach a certain age we say somebody else can run it I am NOT the co-ceo any longer I'm executive chairman of my firm are you the CEO still no I'm just the chairman and I mean I think you know you only grow companies by really surrounding yourself with great people you know with like-minded ideas and thoughts and in doing things and I think you know I attribute most of my success there how much all my success - really the people I've surrounding myself with and their partners you know and I look at them and working together and executing is probably the most exciting thing in life so did your parents live to see your success parsley I mean you know they never say well you should have worked harder you should have stayed as a lawyer they ever say that no my mother never could describe what I did so I was always a lawyer it's done the lawyer you know you know you had this incredible career you're become a very wealthy person where I respected you owned a football team a happy family any regrets about what you've done with your life well I regret that we're not playing the Super Bowl this weekend here in Miami but no really I mean I I really really love what I do you know I still have great passion for it look a very successful career thank you for taking the time today I know you're very busy this weekend because everybody's here once your time every wants a ticket by the way if I need a ticket how would I get one you want a condo I got a ticket

Channel: David Rubenstein

Views: 36,955

Keywords: Bloomberg

Id: 3SjYvmv1RHw

Length: 24min 6sec (1446 seconds)

Published: Thu Mar 19 2020