New York City Mayor Zohran Mamdani announced a proposal for the city’s first-ever pied-à-terre tax on April 15, targeting luxury properties owned by non-residents. The announcement, made outside a high-profile Manhattan residence, directly named Citadel founder and CEO Ken Griffin, subsequently drawing a strong rebuke from Citadel that has put a significant Midtown Manhattan development project into question.
"It is shameful that he used Ken’s name as the example of those who supposedly aren’t carrying their fair share of the burdens associated with New York City’s often costly and wasteful spending." — Gerald Beeson, Citadel Chief Operating Officer.
Standing outside 220 Central Park South, the location of a penthouse owned by Griffin, Mayor Mamdani used the property as a visual centerpiece for his declaration on Tax Day. In a video posted through the NYC Mayor’s Office, which garnered nearly 470,000 views across social media, Mamdani stated, "When I ran for mayor, I said I was going to tax the rich. Well, today we’re taxing the rich.”
The proposed levy would impose an annual surcharge on condominiums, co-ops, and one-to-three-family homes with valuations exceeding $5 million, provided the owner's primary residence is outside New York City limits. Mayor Mamdani's office projects that the tax could affect approximately 13,000 properties citywide and generate at least $500 million in annual revenue. The projected funds are earmarked for critical city services, including free childcare, street cleaning initiatives, and neighborhood safety programs. Mamdani inherited a $5.3 billion budget gap upon entering office, with the city's budget deadline approaching on May 1.
During his announcement, Mayor Mamdani did not speak in generalities, directly identifying Griffin and his property. "This is an annual fee on luxury properties worth more than $5 million, whose owners do not live full-time in the city,” the mayor said. “Like for this penthouse, which hedge fund CEO Ken Griffin bought for $238 million.” Griffin acquired the four-floor penthouse in 2019 for $238 million, setting a record at the time for the most expensive single-family home sale in American history.
Ken Griffin has not maintained a full-time residence in New York for several years. In 2022, he relocated Citadel’s headquarters from Chicago to Miami, establishing Florida, a state with no personal income tax, as his primary state of residence. Despite this, Griffin recently added a $38 million duplex apartment just steps from the same block where Mamdani delivered his announcement, underscoring his continued investment in New York City real estate.
Seven days after Mayor Mamdani's announcement, Citadel issued a response via an internal memo to employees from Gerald Beeson, Citadel’s Chief Operating Officer. The memo, subsequently obtained by major news outlets including the Wall Street Journal, directly addressed the mayor’s public naming of Griffin and raised concerns about a major redevelopment project.
Beeson's letter put the future of a massive Midtown Manhattan construction undertaking into question. "We are about to commence the redevelopment of 350 Park Avenue, creating 6,000 highly paid construction jobs and supporting the creation of more than 15,000 permanent jobs in mid-town New York,” Beeson wrote. “The project—if we move forward—will entail more than $6 billion dollars of spending.” The phrase “if we move forward” has been interpreted as placing over two decades’ worth of potential economic activity, encompassing thousands of construction jobs and tens of thousands of permanent roles, in jeopardy.
Citadel's COO trained his sharpest language directly on the mayor’s decision to name Griffin publicly. "It is shameful that he used Ken’s name as the example of those who supposedly aren’t carrying their fair share of the burdens associated with New York City’s often costly and wasteful spending," the memo stated. Beeson further criticized the mayor, saying, "In doing so, the mayor has once again manifested the ignorance and disdain of the elite political class towards those who have been consistently committed to building one of the greatest cities in the world.”
To counter the narrative of insufficient contribution, Beeson provided figures detailing Citadel's and its principals' economic impact on the city. Over the preceding five years, Citadel’s “principals and team members (including nonresidents) have paid nearly $2.3 billion dollars in city and state taxes.” Additionally, Griffin personally directed $650 million in charitable contributions toward New York City institutions during the same period. The firm currently employs close to 2,500 people in New York, and nearly 200 Citadel employees serve on the boards of local charitable organizations. Beeson reiterated, “We have nearly 2,500 colleagues who have chosen to build their careers here.”
The memo concluded with a pointed declaration: “We understand that our hard work and success will, on occasion, make us targets for political rhetoric. But it should not diminish the pride we take in building firms that will continue to help New York City thrive for decades ahead.”
The proposed pied-à-terre tax has the backing of Governor Kathy Hochul but still requires approval from the state legislature before it can take effect. The debate surrounding the tax highlights the ongoing tension between addressing wealth inequality and ensuring New York City remains an attractive hub for high-net-worth individuals and major corporations. The outcome of this legislative push could have significant implications for both city finances and its economic landscape.
