Williams Joins Investment Firm
Wednesday, January 24, 2007
Less than a month after leaving office, former District mayor Anthony A. Williams has taken on a new role as chief executive of a real estate investment firm that will seek to do deals with municipal governments and nonprofit organizations.
Public Properties Realty Investment Trust, which officially starts business today as a subsidiary of Arlington investment firm Friedman, Billings, Ramsey Group, plans to buy land owned by government and nonprofit organizations, which can then use the cash for capital improvement projects and other investments. The deals can be structured in a way to allow organizations to lease the property back from the company or buy it over an extended period.
FBR is initially financing the operating costs of Public Properties Trust before raising funds from private investors. The firm expects to buy its first property by the end of the year. Williams, the only executive on board, is in the process of hiring a team of six employees.
The new company is designed to allow government and nonprofit entities, including those with limited sources of funding or borrowing limits, to capitalize on the value of their real estate. Williams said the alternative source of funding can be used to revitalize neighborhoods, fund new facilities or support ongoing operations.
"We're seeing more and more cities and states making an effort to better manage their properties," Williams said. "It's just another stage in the public sector taking prudent steps to making sure their entire balance sheet is working for them."
During his eight years as mayor, Williams, a Democrat, was largely credited with guiding the District out of the economic ruin of the late 1990s, when the D.C. government was overseen by the Financial Control Board set up by Congress.
Williams helped balance the D.C. budget as chief financial officer for Mayor Marion Barry. After succeeding Barry in 1999, Williams oversaw an economic renaissance of downtown Washington and part of Northwest that brought new development and revenue to the District.
But many residents complained that Williams was often too cozy with developers, a reputation magnified by the District's agreement to fund a $611 million baseball stadium for the Washington Nationals with public money. Williams also drew criticism for his frequent travel to other cities and countries, particularly in 2005, when he served as the head of the National League of Cities.
Former colleagues said the new position is a good fit for Williams because it combines the technical aspects of municipal financing with the potential to capitalize on the connections he made during his travels.
"This is what Tony Williams has trained for 25 years of his professional life to do," said Tony Bullock, Williams's former spokesman who now works for a private communications company. "He lives and breathes and knows this subject like few others in the country. There are many other things he could have done and would have done beautifully . . . but this really has the potential to transform public financing."
The question of where Williams would land after he left office had been a popular guessing game. Near the end of his second term, Williams was reported to have met with Gary Abramson, chairman of American University's board of trustees, to talk about that school's open president's job. But two sources said Abramson was not encouraging during the meeting.
Williams said at a farewell news conference that he probably would end up doing nonprofit work related to children.
As a former D.C. government employee, Williams is barred from lobbying the District or taking government contracts for two years. Williams said the firm's initial focus does not include the District. The new job reunites Williams with Margret Nedelkoff Kellems, his former homeland security adviser and deputy mayor for public safety and justice. Kellems is chief administrative officer for FBR's investment banking practice.
FBR would not say how much capital it hopes to raise. Over the past decade, FBR has spearheaded two other real estate investment firms that swapped cash for the land under car dealerships and banks. The companies, Capital Automotive and American Financial Trust, eventually went public, and FBR's chief operating officer Richard J. Hendrix hopes Public Properties Trust would follow in their footsteps.
Williams is "probably the most experienced person around when it comes to government finance," Hendrix said. "He wants [the company] to not only be a financial success but to provide true value to municipalities. It's a way to provide financial help for new infrastructure in high growth regions."