PUBLIC TESTIMONY
Testimony by Bradley Burwell, Executive Vice President at Colliers, on Intro 991-B
1:50:26
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127 sec
Bradley Burwell, Executive Vice President at Colliers, testifies against Intro 991-B, warning of significant negative impacts on New York City's hospitality real estate sector. He argues that the bill would lead to widespread unionization, resulting in decreased property values, foreclosures, and substantial tax revenue losses for the city.
- Predicts a sharp decline in hotel real estate transactions and financing if the bill passes
- Estimates a potential $250 million annual loss in tax revenue due to decreased property values and sales
- Warns of potential hotel conversions to alternative uses and employee terminations as owners try to avoid value decreases
Bradley Burwell
1:50:26
Good afternoon.
1:50:27
Thank you for the opportunity to share my expertise.
1:50:31
My name is Bradley Burwell.
1:50:32
I'm an Executive Vice President and the leader of the Hospitality Investment Sales Group at Colliers, the 3rd largest real estate advisor globally.
1:50:41
I've been in the Hotel Capital Markets Advisor business in New York City for more than 20 years.
1:50:46
And I can say without hesitation that 991b will cause significant disruption and long term negative consequences for New York City's Hospitality Real Estate Sector.
1:50:57
Since the Bill's introduction, we've already seen a sharp decline in real estate transactions, with many investors stating that they will not buy nor finance hotels in New York City if it passes.
1:51:08
This is because the direct employment requirement in the bill will likely result in the unionization of many, if not, most, of the city's 40,000 nonunion hotel rooms.
1:51:19
While the union plays an important role in our industry, unionization reduces hotel's cash flows by 30% to 40% with an outsized impact on property values.
1:51:29
As property values fall many hotels will be worth less than their outstanding debt leading to a wave of foreclosures.
1:51:34
This process can take 3 to 5 years during which hotels deteriorate due to the lack of investment and absolute staff productions resulting in a decline in guest experience.
1:51:45
Many owners will absolutely convert hotels to alternative uses and terminate their employees to avoid the decrease in property values.
1:51:53
Typically, New York City sees $3,000,000,000 to $4,000,000,000 in hotel real estate sales and an equal amount in financings each year.
1:52:01
If this bill passes, we expect a $2,000,000,000 drop in sales and a near freeze on financings for 3 to 5 years, costing the city and state more than $100,000,000 of lost transfer and mortgage recording taxes.
1:52:15
Nonunion hotels also generate about $400,000,000 in property taxes each year.
1:52:20
The corresponding decline in their values could result in $150,000,000 reduction in property taxes.
1:52:27
Let me be clear about this.
1:52:29
This bill could lead to a loss of over $250,000,000 in annual tax revenue.
