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Changing Coastal Skylines

Veronica Hackett

Age: 62

Company: The Clarett Group

Title: Managing Partner

Time in current role: Eight years

Currently reading: “The Great Escape: Nine Jews Who Fled Hitler and Changed the World” by Kati Marton

Eight years ago, Veronica Hackett and her late business partner Neil Klarfeld founded The Clarett Group, a New York development firm specializing in multifamily and mixed-use projects. He had the construction know-how; she was savvy about finance, leasing and marketing. Today, Hackett guides a powerhouse that has transformed parts of the New York skyline with elegant high-rises and developed 2.6 million sq. ft. of residential space valued at more than $2 billion.

Clarett now plans to enliven Hollywood, Calif., with a $400 million, 1.2 million sq. ft. mixed-use project near the famed intersection of Hollywood and Vine. Hackett personally helped persuade the community to back the privately funded development, with its 1,000 rental units and 175,000 sq. ft. of retail space. The Los Angeles Planning Commission approved the project, and site demolition starts this month.

“This is a very, very important project for us. It is really going to set the standard for Hollywood development,” says Hollywood Chamber of Commerce President and CEO Leron Gubler. “Veronica is an extremely sharp and impressive lady.” She won over early critics and garnered wide support, he says.

From her Madison Avenue headquarters, Hackett steers the company through economic turbulence with a strategy that calls for buying properties with loans already in place.

She focuses on income-producing rental units rather than condos, which are harder to finance today. The developer is also taking the initiative in putting together loan packages rather than, as in more liquid times, watching lenders compete for the firm's business.

Hackett insists on cost control. “We've done nine high-rise buildings in Manhattan in the last six years and we've not had a cost overrun,” she says. That track record helps the financing process.

Clarett holds another advantage — a financial partnership with Prudential Real Estate Investors, a joint venture in which Prudential has a majority equity stake. Prudential sits on Clarett's board of directors and helps decide whether the firm should enter large transactions.

“We realized early on that in order to do the kind of development that we wanted to do, we needed a capital partner who was with us in everything,” Hackett says. Still, to bolster some projects, Clarett brings in an institutional capital partner such as Goldman Sachs, ING Clarion, or Vornado Realty Trust.

Earlier in her career, Hackett was Citicorp's first female real estate lender. She avoids lowball initial quotes and later requests for more money. “That's the kiss of death,” she says. Clarett guarantees construction costs after precise designs clarify expenses.

Clarett intends to build a 12-story office tower atop the historic Pantages Theatre in Hollywood, a former site of the Academy Awards. Architectural designs approved about 80 years ago had been shelved after the 1929 stock market crash and the owner's legal troubles.

A Florida native, Hackett graduated from Baltimore's College of Notre Dame and earned an MBA in finance from New York University. In the 1980s, as a senior executive with the developer of Times Square, she advised The New York Times on real estate issues.

At 62, Hackett, married with a grown son, has no plans to retire. After her business partner died in 2004, she faced dark days alone at the helm.

She laments that few women head major real estate firms. “I would have expected we'd be a lot further today. I'm encouraged by the number of women in business school and that we've been able to hire, but when you look at this industry, it's still pitifully small.”

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