Living on the Edge

In the still moments of dawn on Sept. 27, Carol J. Galante stood with hundreds of other San Francisco Bay Area women on the shores of Shadow Cliffs Lake in Pleasanton, Calif. At 7:30 am, a starting pistol cracked the morning silence, and a wave of competitors in the See Jane Tri sprint triathlon plunged into the lake's chilly waters, emerging 500 meters later for an 11-mile bike ride followed by a 3-mile run.

No mere race, the sprint triathlon requires a mastery of the distinctly different disciplines of swimming, cycling, and running—all at distances designed to challenge the speed, agility, and endurance of its competitors. Some two-and-a-half to three grueling hours after starting, those who have mustered the physical drive and mental acuity to master the course can momentarily bask in the glory of achievement before turning their attention to training for the next event or life challenge.

If sport is a metaphor, the sprint triathlon is well suited for Galante, president of San Francisco-based BRIDGE Housing Corp. and MULTIFAMILY EXECUTIVE's 2008 Executive of the Year. Three years ago, an organizational consultant performed personality profiles for the senior staff at BRIDGE and revealed that Galante, 54, was happiest when she had too many things to handle. The executive team smiled wryly and nodded their heads in agreement. “I wouldn't say I am restless, but I do need multiple challenges to keep me occupied,” Galante agrees with little reluctance. “I need a lot of balls in the air; I almost need to be on the edge to feel like I am alive.”

Galante was named president of BRIDGE following the sudden and tragic 1996 death of the organization's co-founder, housing icon Don Terner. [See “Carrying the Legacy” on opposite page.] And since then, she and BRIDGE have been on the edge all right—on the bleeding edge of quality affordable housing production that embraces innovative green building and operating practices, unprecedented public housing redevelopment efforts, and a political and public policy outreach machine second to none.

In production capacity alone (1,133 starts and 785 completions in 2007), the company is now the largest affordable rental housing developer in the state of California. That's no small feat considering that BRIDGE's competitors include Bay Area nonprofit stalwarts such as Mercy Housing, Eden Housing (where Galante was executive director prior to joining BRIDGE) and Mid Peninsula Housing Coalition, as well as a host of for-profit national developers. And standing at the helm, driven by confidence and passion, is Galante.

Sheer size is one of BRIDGE's greatest achievements. In fact, BRIDGE is the ninth-largest affordable housing developer in the country and ranks only 67 starts behind its closest nonprofit peer, according to annual rankings compiled by AFFORDABLE HOSUING FINANCE magazine, a sister publication to MFE. Credit those achievements to the mission objectives at BRIDGE, Galante says. Since inception, the firm has unwaveringly included mandates for size, scale, and growth, as well as directives to operate the company as if it were a for-profit entity. While following those mandates has led to distinctive opportunities—including partnering with giant pension funds and market-rate developers on New Urbanism projects—it has also made it difficult to keep the entrepreneurial spirit alive in a company becoming increasingly large and layered.

Most recently, that challenge manifested itself in a duel between cowboys and checkboxes, of all things. Looking at BRIDGE's growth, the company's senior vice president and CFO D. Kemp Valentine has been leaning on Galante to adopt a more formalized employee screening and review process. However, executive vice president Lydia Tan in the real estate division has pushed back, arguing that her development team needs to be unbridled for maximum success in the marketplace. “It is a good example of how the senior management team can be at odds,” Galante explains. “[D. Kemp] is trying to develop more prescriptive processes, while Lydia is hiring a bunch of cowboys to go out into California and find dirt. It's a conflict between trying to mitigate risk and trying to keep the engine of the company satisfied.”

Galante says that the choice in this particular case was clear. “I came up on the development side; I get that we need to protect that culture. That doesn't mean that we do not need personnel procedures, but for this portion of the staff, those processes are not going to be check-the-box.”

The BRIDGE team isn't always so contentious, but Galante does seem to appreciate a Hamilton vs. Jeffersonian streak among her senior advisors as she guides the company strategically. Her leadership style is a careful balance between unilateral decision-making and team consultation. While her door is always open, her sleeves rolled up to tackle all corporate initiatives, she also knows when to make a call without hesitation. “I really want to hear from people; I really want to weigh all opinions,” she says. “But at the end of the day, I break the tie. We are not going to be paralyzed by a lack of consensus.”

The approach is somewhat atypical among nonprofit affordable housing providers and doesn't go without notice in the industry. “Carol is the ultimate effective influencer—nimble and flexible, but at the same time extremely direct,” says Diane Spaulding, executive director of San Francisco's NonProfit Housing Association of Northern California (NPH). “You don't have to guess what she is thinking or where she is headed. As a representative of the nonprofit housing sector, that is one of the qualities that puts her at the top and refutes the perception that nonprofit developers are not as good, not as professional, not as smart,” she says.

Despite her ability to dispense with strategic hesitancy, Galante is certainly not a my-way-or-the-highway despot, choosing instead to push initiative downward through the organization rather than making the final call on every single corporate move. “Again, we are balancing the desire to create an organizational framework for people but emphasize ownership of the deal,” Galante says. “We have informal check-in points, but basically, you find it, you put together the architects and contractors, and you live with that deal until the keys are turned over to the property management company. That's how people feel ownership of the projects they are working on.”

Still, Galante admits to relishing an opportunity to get personally involved in projects when she can, particularly during the entitlement process. Case in point: Cottonwood Creek Apartments, a $27.5 million, 94-unit garden-style affordable community in Suisun City, Calif., that had its grand opening last month. Galante helped to spearhead financing and ease the entitlement process for the property, working in partnership with Suisun City Mayor Pete Sanchez and the city council to issue revenue bonds that helped fund the project. Rents at the community range from $393 to $890 per month, a pittance for a Bay-area apartment that also boasts environmentally friendly features such as solar panels powering all common areas and water-efficient fixtures and appliances that help the property exceed California's energy code requirements by 15 percent. “Working with BRIDGE has enabled us to make sure Cottonwood Creek has all the features and amenities needed for this brand new neighborhood to stand the test of time,” Sanchez says. “The terrific results speak for themselves.”

Credit Galante's zest for working such politics of deal-making to a five-year stint in the City of Santa Barbara's planning and community development department immediately after graduating from the University of California, Berkeley, with a master's degree in city and regional planning. “It taught me how to find compromise and how to count votes,” Galante says. “It may seem simplistic, but you need those three votes out of five. It is an important lesson. It taught me how to understand that if you are going to approach doing large-scale, mixed-income, mixed-use real estate development, you have got to be able to get through the politics of a locality.”

If Phil Angelides had his way, Galante's politics might not have been so local. The former California state treasurer ran a spirited though unsuccessful campaign for governor in 2006 against incumbent Gov. Arnold Schwarzenegger. Angelides' first call had he been elected? “Carol's would have been one of the first numbers I would have dialed in assembling my cabinet,” says Angelides, who now chairs the Canyon-Johnson Urban Communities Fund and is principal of Beverly Hills, Calif.-based Canyon Capital Realty Advisors. “Carol is outstanding and takes an immense amount of pride in what she does, as she should. BRIDGE's communities are high-quality: They add to the urban fabric, and they provide great living environments for the families they serve. Galante hits on all pistons.”

Those comments come with a certain weight considering that Angelides' Canyon-Johnson Urban Communities fund directly competes with BRIDGE for key investment dollars from the California Public Employee Retirement System (CalPERS) pension fund. Launched in 2000, the BRIDGE Urban Infill Land Development (BUILD) program was granted $100 million in CalPERS equity that was invested in seven mixed-income developments. In 2006, CalPERS followed up with an additional $75 million in equity to continue funding the BUILD program.

Despite the competition for dollars (the $1 billion Canyon Johnson Urban Fund III includes a $225 million buy-in from CalPERS), Angelides says BRIDGE can teach market-rate developers a thing or two about successfully executing mixed-income, mixed-use urban projects. “Carol has applied diligence in building an organization that serves as a model not just to nonprofit housing developers but [also] to for-profit providers,” Angelides says. “In fact, I pick up the phone often to consult with her and ask her advice. We want to take into the for-profit world the best-in-class examples that Carol has set at BRIDGE for the nonprofit world.”

Most notably, the CalPERS investments have enabled BRIDGE to partner with Oakland, Calif.-based McGrath Properties to develop the MacArthur BART Transit Village, a 29-acre, 1,500-unit community of market-rate homes, retail space, and affordable housing rentals that has been selected by the U.S. Green Building Council to be part of the LEED Neighborhood Development pilot program. Included in the Oakland, Calif., project is 14th Street Apartments, a 99-unit development by BRIDGE that will be reserved for working families earning between 30 percent and 50 percent of the area median income (AMI).

Just don't explain it that way to Galante. “AMI. If there is one buzz word that I really don't care for, it is AMI,” she explains. “Go ahead and talk to mayors and city councils and even neighborhoods about area median income, and just watch their eyes glaze over.” According to Galante, Terner and the other BRIDGE founders were always adamant in trying to lose the lingo, a trait she tries to carry forward in her own dealings with policymakers and the public. AMI has absolutely no meaning, Galante contends, whereas explaining that communities are for teachers or secretaries or plant workers carries much more weight with stakeholders. “Are you building for people who earn between $12,000 and $25,000 a year? Say that. Name the professions. Name the income ranges. People get that. That's how you begin to master convincing people of the things that make sense.”

Galante's skills in that arena were put to the test in 2006, when she co-chaired California's Proposition 1C campaign and helped convince nearly 4.2 million registered voters to pass a $2.85 billion bond measure funding development for lower-income residents and development in urban areas near public transportation. The first award recipient under the program? None other than BRIDGE, which received $100 million from the California Department of Housing and Community Development on July 3, 2008, for seven projects qualifying under Prop 1C's In-fill Infrastructure Grant program and the Transit-Oriented Development program. In total, the projects comprise 870 affordable units in San Mateo County and the cities of San Diego, Oakland, San Francisco, and San Leandro.

And who stepped up to the podium to laud Galante and announce dispersal of the first Prop 1C funds? Try Schwarzenegger himself, who pointed specifically to BRIDGE's San Mateo properties, saying, “There's nothing that I love more than to announce three things simultaneously, which is construction, new jobs, and projects for the people of California. [Prop 1C] projects will create 1,540 jobs, more than $70 million in wages and will leverage a total investment of $316 million. Right here, on this site, [BRIDGE] will break ground this year on 56 affordable apartments for very low-income seniors. It is all wonderful news for us here in California. We use bond money to leverage private investment, create action, create jobs and pump up our economy, and build affordable housing at the same time.”

For the politically minded Galante, working the Prop 1C campaign was an “eye-opener,” from raising the $3 million required to get the measure on the ballot to wheeling and dealing with some of the state's most influential political leaders. “This wasn't grass roots anymore—it really was more pure politics, where you are dealing directly with individuals like [State Senator and Senate President Pro Tem] Don Perata,” she says.

Galante's talent for counting the votes was also put to the test during that time. Real-time polling data for millions of voters was sliced and diced by countless geographies and demographics. In the end, Galante says it is instinct that guides the interpretation of that data.

“Looking at polling data by county and locale —that's pretty cool stuff —but in the end it is hard to know what is in the voter's mind. I think the passage of Prop 1C said less about affordable housing than it did about global warming and urban infill. Did people vote for affordable housing or to fund a new form of urban infrastructure? I think that latter helped [passage of the proposition] a lot.”

Political agendas aside, Galante is thrilled to see real estate developers finally embracing an amalgam of trends and racing toward an eventuality where mixed-income, mixed-use, transit-oriented, urban infill, and green features will all be mentioned in the same sentence.

“There has been a sea change in California in terms of incorporating aspects of New Urbanism, green building, and affordability into all projects. The legislature is concerned with it. The single-family home builders and market-rate apartment developers are starting to tackle really urban projects,” she explains. “We have a much easier time with density in many places than we used to. More and more communities are adopting green building standards. You might not have to be LEED Platinum, but you have to meet some standards—and standards are what raise the bar.”

Galante should know. In 2000—the same year that the U.S. Green Building Council formally launched the LEED program—she established BRIDGE Housing's Green Building Committee, one of the first formalized green building programs in residential construction, let alone affordable housing. Immediate improvements made under the program included the not-so-obvious at the time, including the use of compact fluorescent lighting, low-E glazing on windows, and low-flow and Energy Star-rated appliances. Next-generation green ideas at BRIDGE involve pushing sustainability onto the residents by encouraging energy conservation, composting, and recycling as well as offering preference to renters who commit to using only one vehicle or no vehicle at all.

BRIDGE's environmental initiatives—including a commitment to transitoriented development and preserving open space—are among many company enterprises highlighted at BRIDGEtown, the company's online virtual community that was launched in July 2008. A key project fostered by Galante and designed in partnership with San Francisco-based architectural firm Van Meter Williams Pollack, the virtual community (online at www.bridgehousing.com/BRIDGEtown) allows visitors to check out BRIDGE communities on an interactive map. Users can highlight transit-oriented communities, sites funded by CalPERS or the BUILD program, projects involving historic preservation, affordable projects, or individual communities. They can also read resident testimonials and research affordable housing and green attributes with the click of a mouse.

“The portfolio as a whole shows that you can create a better environment,” Galante says. “We're proud of the quality in public housing redevelopments, but we're equally as proud of some of the smaller projects that are knit into existing upscale communities. As important as it is to revitalize a West Oakland, it is equally as important to be rebuilding quality affordable housing in [Marin County's] Mill Valley. We have a number of incredibly beautiful and wonderful places for families and seniors to call home that look like market-rate condos. That is a BRIDGE signature, and we don't brand it—it is just a beautiful place to live in Everyday, U.S.A.”

This year, BRIDGE turns 25, and the company has developed a list of 25 goals to commit to for the future, along with 25 community celebrations into spring 2009 that will announce programs aimed to maintain BRIDGE's reputation as a developer on the edge. Sustainability factors largely into those goals, but also included are efforts to create affordable housing from existing market-rate stock, a campaign to encourage individuals to bequeath real estate to affordable housing ends, a program to create a listing service for affordable housing properties, a plan to build a model home showcasing low-cost, high-quality construction techniques, and, of course, a commitment to continue the BRIDGE mission of achieving scale by opening a Southern California headquarters office in Los Angeles.

Despite her penchant for taking everything on at once, Galante knows that she can't accomplish the BRIDGE 25 goals alone, nor will she sacrifice the company's core competencies to achieve ideals, however altruistic. In addition to relying on the BRIDGE team, she'll need an engaged public and an invested housing industry fueled by a new generation of stewardship-minded leaders. To that end, she has dedicated time as a guest lecturer on affordable housing and multifamily real estate at community colleges and Ivy League universities across the country. In addition, in 1998, she established and worked to endow the Don Terner Residency, a two-year real estate fellowship working for BRIDGE.

Her dedication to future generations of forward-thinking real estate developers can be found in several photographs in her office. One is a group shot taken last spring at Ohio Wesleyan University when Galante and two other alumni returned to speak about their careers since creating the urban geography major program as students. Two other photos are pictures of her two sons, one of whom is fostering the Galante political gene with an internship on Capitol Hill. Both are undecided about a future in real estate.

“I think what I do is the best job in the world, and I want other people to come into the industry and do it, but I [also] want the best and the brightest,” Galante says. “I feel an obligation to light that light, and I think that it might be that there are more young people gravitating toward the field in the future, particularly given the connection between housing and the environment.”

The one thing Galante doesn't understand about up-and-coming generations? The proclivity for assuming elective risks. “One of my sons got his pilot's license at 15, and the other one is a rock climber, and they both do stuff that drives me crazy. I'm not risk-averse, but that's more risk than I would take on—and more than I want my kids to be taking.” It's an odd sentiment coming from a woman who hit a 3-mile run in stride in the third leg of the See Jane Tri sprint triathlon. To that dichotomy, she laughs, pauses momentarily, and says, “I try not to ever attempt anything that I ultimately believe I am not going to be able to achieve.”

CAROL J. GALANTE

• Age: 54
• Favorite Quote: “Failure is not an option.”
• Best Business Decision: Coming to BRIDGE Housing Corp.
• Greatest Business Challenge: Keeping a smaller, entrepreneurial culture in tact while expanding the business
• Person You Most Admire: BRIDGE co-founder Don Terner
• Best Advice Ever Received: “Don't cover the shit with a hankie and think no one will notice.” —BRIDGE co-founder Rick Holliday
• Leadership Philosophy: Build talented teams
• Playing on iPod: Van Morrison's Greatest Hits
• Last Book Read:Three Cups of Tea by Greg Mortenson and David Oliver Relin, a very inspiring story of one person's individual efforts to make a difference
  
  
  

  Arroyo Point in Santa Rosa, Calif.

  Credit: BRIDGE Housing Corp.

  BRIDGE HOUSING CORP.

  Year Founded: 1983
  
  Headquarters: San Francisco
  
  No. of Employees: 254
  
  2007 Revenue: $116 million
  
  Total Units Developed: 13,080
  
  2007 Units Owned: 9,404 (84% are self-managed; 16% are fee-managed)
  
  Geographic Coverage: California