Hedge fund Citadel bets on Miami as debate over New York second homes heats up

By Matt Tracy

WASHINGTON, May 5 (Reuters) – Hedge fund Citadel is “doubling down” on its Miami ventures, billionaire CEO Ken Griffin said on Tuesday, after criticism from New York City’s mayor who is trying to raise tax money with levies on multi-million dollar pieds-a-terre.

Mayor Zohran Mamdani, a democratic socialist, in April ‌filmed a video titled, “Happy Tax Day, New York. We’re taxing the rich” in front of Griffin’s penthouse. Griffin, speaking in webcast remarks at the 2026 Milken Institute Global Conference on Tuesday, said that Mamdani’s video in front of his home was “creepy and weird.”

The new tax, which would impose an added annual charge on second homes, condos and co-ops valued at over $5 million if the owner doesn’t list them as their permanent residence, has fueled debate over a potential exodus of New York City’s mega-rich. Griffin, founder and ​CEO of Citadel, paid $238 million in 2019 ​for a penthouse condominium overlooking Manhattan’s Central Park in a deal that set a ‌record ⁠for a U.S. home sale at the time.

“You know, Mamdani’s making it really clear: New York doesn’t welcome success,” Griffin said. “Are these states trying to push away from their populations those who really do believe in the merits of capitalism, the merits of a free society, the importance of education?”

When asked about Citadel’s plans for its massive office redevelopment project in Midtown Manhattan, Griffin said the project was “still a point of discussion internally.” Meanwhile, the firm has revised its plans and will expand its Miami office, he added.

Citadel’s principals and team members have paid nearly $2.3 billion in city and state taxes over the past five years, Citadel Chief ​Operating Officer Gerald Beeson said in an internal memo seen by Reuters last month.

Others have weighed in with similar concerns. 

“If your goal is to make New York City financially solvent, what you don’t want to do is drive out the Ken Griffins of the world,” Bill Ackman, billionaire CEO of hedge fund Pershing Square Capital, told Bloomberg at the Milken conference on Monday.

Barry Sternlicht, CEO of Starwood Capital Group, said at Milken on Monday that Florida and Texas had been investing in improving their infrastructure while states including New York were focused on taxing the rich, which would impact where jobs go. 

“Mayor Mamdani wants all New Yorkers to succeed,” including Griffin and the city’s entrepreneurs and business owners, said Joe Calvello, the mayor’s press secretary, in a written statement.

“That does not negate the fact, however, that our tax system is fundamentally broken,” Calvello said. “If we want this city to become a place that working people can afford, we need meaningful tax reform that includes the wealthiest New Yorkers contributing their fair share.”

LOOMING TAX RAISES VALUATION QUESTIONS 

Governor Kathy Hochul said at an April 15 press conference that roughly 13,000 properties would be subject to the tax once imposed, and New York City legislators are currently reviewing the most effective method to value properties so as to reach their $500 million revenue goal, according to a person familiar with the matter.

Real estate experts have raised questions about how the properties will be valued. They are worried the tax could miss large swaths of expensive properties when using the traditional “assessed values” used for tax purposes, which often lag significantly behind actual sale prices, often by 10% to 30%, according to estimates by industry data provider Trepp.

“You can have a property that’s sold for $20 million or $30 million, but its tax or assessed value might still be below that $5 million mark,” said Stephen Buschbom, head of applied research and analytics at Trepp.

There are just under 2,900 properties that could be affected by the new tax when using traditional assessed value, according to Dr. Selma Hepp, chief economist at property data provider Cotality.

But this figure jumps to roughly 11,800 properties when using sale price, or market value, totaling just under $180 billion in market value, said Hepp, who gave the caveat that many of these properties could be rental properties and thus excluded from the tax.

One potential solution for the new tax’s purposes would be to create thresholds that would serve as a proxy for market value, said Ben Williams, who leads the property tax department at law firm Rosenberg & Estis. 

“The latest iterations (of the proposed tax) have used a $300,000 assessed value as equivalent to a $5 million market value,” Williams noted, in reference to a proposed 2019 state bill. 

(Reporting by Matt Tracy; additional reporting by Arasu Kannagi Basil, Editing by Megan Davies, Mark Porter and Anna Driver)