Live on Bloomberg TV

00:00Ultimately 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 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. Hudson Yards . Hudson Yards by building a live work play environment right in the middle of New York. You know a real need for it. So how come your team isn't in the Super Bowl . That's a good question. You know hey you know would you fix your time please. But people wouldn't recognize me if my tie was fixed. But I'm just saying it's just . All right . I don't consider myself a journalist and nobody else would consider myself a generalist. 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 . 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 redeveloped the 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 interests his real estate interests and now his sports interest. 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 as a humanitarian . You're going to be the host the Super Bowl this weekend. So was it hard to get to be the host as 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 it's such a great economic development tool for the city and the impact it has it's 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 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 11th time of the Super Bowl which is the most of any city that the Super Bowl is in Miami. OK. So how come your team isn't in the Super Bowl . That's a good question. You know hey you know. All right . Well it's not as easy as a thing. OK. So let me ask about this . When will the dolphins be in the Super Bowl. Any time soon . And I read that Tom Brady might be a free agent. I don't know what you're allowed to talk about that as an owner but I mean I heard you can 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 in an outdoor building . I don't 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 with the dolphins trying to really build the team for the future and doing it through the draft. When he was announced the Super Bowl was coming here a lot of friends of yours say by the way I'd like some tickets sir. How does that 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 the ticketing. In fact I have to buy my own box. If the mayor of the city that I own I have to buy my own I'll get a discount or not . Not really. Not really. I'm just I'm one of 32. OK. When you're an owner of an NFL team you get together very often with owners. What are those meetings like with NFL owners that ever 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 usually you know finding all these individuals standing up and stating you know all these different reasonings. I think they're pretty cool actually. So let's talk about that. When the team was owned by Wayne who Zynga you bought originally. I think in 2008 or so now is indeed 2008 you bought 49 percent with an obligation to buy another 51 percent or we had we had a buy sell on the other 51 percent. So you bought it the subsequent year and you paid roughly one point one billion or whatever it was something like that 141 billion. OK. So is it worth one point one billion today. No. You know it's worth more of a lot more. And would you ever sell. No. Never gonna sell. No. OK. And were you a football player when you were younger. Yes I played high school football. Really. Yes. What position. Where you tackle. OK . 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 Jewish. We're actually that's. We have a Jewish quarterback . Really. Josh Rosen. So far the answer. Yes. All right. So there are some Jewish players. I wish he was a better quarterback now. Maybe I'll be playing today. Did you ever think you were going to 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. Yes. And then you're your father was an inventor. Right. What is it. What inventor is that like a real job that you just kind of tinker with. Things are. Well I mean he was always tinkering. And you're always in the office trying to do something set a steady income when you're kind of tinkering. Not really. He did well. He married my mother OK . She got her own father. And what did your mother do those issues as the housewife. OK. So you grew up in a 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 is investing days were over. He had a living and he went down to help manage the hotel. You know a real mom pop. What was the name of the hotel. The Martinique. 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 we didn't do that. But you were a football player. He didn't have time. You weren't supposed to . OK. Originally you went to University Florida . I went there for the first year that I transferred the University of Michigan. OK. You like the cold weather. Better . What. Why did you do that. Well it was always a dream to go to University of Michigan. And I didn't have the grades to get in right out of high school. So I would say to transfer you know from Florida up to Michigan. And it had a real impact on 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 Michigan about 400 million dollars . You know maybe a little more. More than 400 million. OK. As University Florida ever said to you while you were here for one year why don't you give us something. I don't they know who I am. I really I don't tell them either. I think they know you are. So you go to the University of Michigan and then you decide to be a lawyer. You go to Wayne State Law School. Right . Right. Did you want to be a lawyer. Not really. Why do you go. Because you were Jewish. You had to go to law school or medical school at that time. We had Vietnam and we had a draft OK . So I decided I'd stayed in the army. OK well tell us about 26 and after Wayne State Law School you went to NYU to get a master's in tax. Yes. OK. Then you went back to Detroit and you worked in accounting firm. I was a tax lawyer. Tax lawyer . OK. 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 I think I would go back to Detroit eventually. But you know it's like I came home to a place they've never been. Really. All right. What do you do in New York. It's an exciting place for young people that really you know want to succeed. OK. So you 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 smart people or what do you think. That was good. All right . OK. All right. So how hard is it to call your mother up and say I've got a law degree. I've got a masters in tax. And I've been fired. Is that hard money. So it would seem 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 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 my own company. So your mother lent you ten thousand dollars. I had to live. And did you ever pay it back or . Yes. More or less. I didn't she. She didn't want equity in your company. If she had equity she would be pretty. Oh yeah . A good mother. OK. All right. So nobody negotiated for equity for her. She gets the money back. All right. So you started a company called Related. Right. Right. Yes. Where'd you get that name from when you start looking at real estate. And there's so many aspects of how it's related. 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 that nobody had ever used it before. All right. So you have the name related and you're usually you're 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 large sums of money . So it was like we had this financial service arm which was the syndication side at that point that was selling tax losses to wealthy investors. We had a different tax slot 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 in. I saw the opportunities in affordable housing. I did strictly 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 . I mean it's the one who finds the land as the concept hires the architect works with 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 assumes all those responsibilities. So you you became one of the larger developers of let's say low income housing or subsidized housing in United States over a period of time. Just before I started the company Lyndon Johnson here is his Great Society programs that really set up the government to provide the funds for affordable housing . And then they had the Section 8 programs the government initiated after. And so it was a really a question of taking the government subsidies and applying them 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 and I started the company really and developing in 72. And by 1980 we had built something close to eight thousand units. 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 many deals I can get. I got it. I got a deal for you. Trust me. Stop the interview. Make a deal . So 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 a 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 money. You're not really working because money. I mean everybody can make money but you want to do something impactful . And that's a meaningful and challenging. Right. So Time Warner became a big development. It had the Mandarin Oriental and 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 decided to build something even bigger which became the biggest real estate development in the history of our country. 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 right. I mean what was happening in New York of over 60 percent of the buildings were over 60 years old. You know in New York they were obsolete. In New York was growing. In the hottest area of New York was a 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 were looking for sustainable developments and Hudson Yards by building a live work play environment right in the middle of New York. You know there is a real need for it. And we were able to attract the corporations because they're looking for talent. And Chelsea was really the hottest part of the city where the young people are. She's got the right from New York City to build this around 2008 . Yes. And that's what time that recession was going on. So was it scary to get that right then. We had just we're under contract in 2008 before Lehman and the crisis really started. If you call it that and then before we signed the contract signed our letter of intent and put up some money. But before we went hard we negotiated some points in the deal that we wouldn't have to start. The project fails till certain events happen. In other words that the office there would be an office market. There'd be availability of money and that the condo market would be able to absorb some units first. Guy Johnson yards a total square footage. Is it like sixteen thousand sixty million square feet or something like that. Well it started out with the city . Would Hudson Yards was really what the request for proposals was roughly for about 13 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 up 25 to 30 billion 25 to 30 billion. OK you're going to 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 it in terms of square footage which is really I think how you'd measure the size of something . It's the largest private development ever in the United States . Why didn't you consider calling it the Ross Set Yards or 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've read The New York Times doesn't like anything that we do . Right. 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 the vessel. So it's really 150 foot high series of steps if you will that you can walk around. And we want to create the new heart of New York. And so I looked at it. You had to have some type of iconic iconic structure. And if you look at New York and I look at 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 that would be a three hundred sixty five day Christmas tree. So I know I. Looked for it and I found this designer Thomas Heather Wick. So I selected it. You know I didn't know what the cost was . Everybody thought I was nuts but I think he went. What did it cost. What did I think. I thought it would cost maybe 75 million and it costs probably about one hundred and sixty million. You convinced a lot of famous companies BlackRock KKR among others to move there. Did you have to personally go to Larry Fink at BlackRock and say move from where you are to Hutchinson. Right. I mean yeah I was involved in selling all that. I mean you know and the appeal was look at corporations today survive by getting talent. And you want and they solve one. They're in 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 an opening it I mean I'm very loved 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 that when you're giving out 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. No. So any deals I can get. I've got 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 passion for what you're doing . Let's talk about your philanthropy for a moment. You've signed the giving pledge with Bill Gates and Warren Buffett forth. Why did you do that. Why did you agree to give away half your network. What do your children say about that . I don't think they 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 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 feeling I'm not feeling entitled . So what are your passionate causes in philanthropy. You want to do things that are impactful. You just don't want to just give it away in that. And I may have certain interests that really I'm very involved in. You know wonderful. First 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 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 is 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 hardworking luck money from your mother. What is the thing that makes that possible. All the above. All the talking. I mean 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 and you're doing good at the same time and using that as the basis. And today you know affordable housing is still probably the greatest need that we have in America and we'll continue to be one of the great things. But I think you know to be successful is you know in building your company. It was a question of you have an idea and you expand upon it and then you connect the dots as you grow and and you never stop working. So when you build your company related like my company Carlyle 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 grow companies but you really surround yourself with great people you know with like minded ideas and thoughts in doing things. And I think you know I attribute most of my success. Almost all my success to really the people I've surrounded 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. Partially. I mean they ever say well you should have worked harder you should have stayed as a lawyer or they ever say that you know a mother never could describe what I did. So I was always a lawyer his son the lawyer. You know you had this incredible career. You become a very wealthy person well respected. You on a football team a happy family. Any regrets about what you've done with your life . Well I regret we're not playing the Super Bowl this weekend here in Miami . But no really I mean I really really love what I do. You know I still have great passion for it like a very successful career . Thank you for taking the time today. I know you're very busy this weekend because everybody's here wants your time. But once a ticket by the way if I need a ticket how would I get one . You want a condo. I got a ticket to .

No schedule data available.

The David Rubenstein Show: Stephen Ross

Stephen Ross, the billionaire chairman and founder at Related Cos. and managing general partner of the Miami Dolphins, talks about being an NFL owner, the development of Hudson Yards in New York, and why having passion for what you do is the path to success. Ross appears on the latest episode of “The David Rubenstein Show: Peer-to-Peer Conversations” in an interview recorded at the Bloomberg Power Players Summit on Jan. 31 in Miami. (Source: Bloomberg)

More From TV Shows
All episodes and clips

Bloomberg Markets
"Bloomberg Markets" is focused on bringing you the most important global business and breaking markets news and information as it happens.
More episodes and clips