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‘Giving the government more money to spend the government way is pretty dumb:’ Red Apple Group CEO on Biden tax policy

Yahoo Finance’s Alexis Christoforous and John Catsimatidis, CEO of Red Apple Group, discuss the coronavirus impact on the grocery and real estate industries and well as business outlook under a Biden administration.

Video Transcript

ALEXIS CHRISTOFOROUS: As the coronavirus surges across the country, consumers are rushing back out to the supermarket to stock up on essentials again, but should they be? Joining me now is John Catsimatidis, CEO of the Red Apple Group, which owns the Gristedes and many of the D'Agostino supermarkets in New York City. John, good to see you again. The last time we spoke was a few months ago, and people were out hoarding. What have you been seeing in your business the past few days and weeks?

JOHN CATSIMATIDIS: Well, in the last week or so, there has been some active buying in certain categories. And we have been on several television stations and saying to them that it's not necessary. We have ample supplies.

And the only time there's going to be a problem when customers lose control and they just go out and hoard and just take stuff and buy stuff for no reason at all. But I did warn our customers that we have ample supplies of Thanksgiving day products-- but if they hoard-- buy early so you don't take a chance, take a chance on ruining your Thanksgiving, that you can't get cranberry sauce or something like that. But if everybody stays calm, we have ample supplies of everything.

ALEXIS CHRISTOFOROUS: Have you had to put any limits on items? I remember during different times in this pandemic, I've seen only two hand sanitizers per person or two paper towels per person. Have you had to do that?

JOHN CATSIMATIDIS: As of this time, no, but we are monitoring the situation very carefully. And we will if we have to. And you know, at what point do you do it? That's the problem.

ALEXIS CHRISTOFOROUS: What are you hearing from your suppliers? And are there any potential hiccups you see down the road, especially with certain kinds of products, with those paper products, which have been really difficult to find?

JOHN CATSIMATIDIS: Well, the A brand's, Charmin, Bounty, there still in short supply for some reason. But we'll always have toilet paper. You might not get the toilet paper you want to get. You get the B brands.

ALEXIS CHRISTOFOROUS: All right, we have to make do with the B brands. You have a very diverse portfolio of businesses there at the Red Apple Group. It's not just supermarkets. It ranges from energy and shipping to real estate and even media.

I know you bought WABC radio last year, but I want to hone in on real estate. You're a landlord many times over in the city. All this talk about an exodus, people leaving the city in droves. Are you personally seeing that right now?

JOHN CATSIMATIDIS: It is horrible. You know, I've lived in Suffolk County during the pandemic a little bit and you know, our beach house out there. And Suffolk County has as many as 500,000 New Yorkers there.

Right now, they're still in the middle of November. There's still 300,000 New Yorkers out there. And a lot of them have registered their children and schools in Suffolk County. And a lot of them are not necessarily coming back.

They're not selling their apartments necessarily, but they feel safer out there. And it's not because you've COVID, Alexis. It's about feeling safe in the streets, because of the new laws that were passed in Albany with the bail laws.

Police officers, the NYPD arrest people, and they get a parking ticket. I call it a parking ticket, whatever they call it, ACD ticket. And nobody used to carry a gun in New York, unless you had a license, because there was a mandatory one year in jail if you got caught carrying a gun. And I had the deputy commissioner on one of my shows the other day. And there was 1,400 gun arrests in the last three months, four months.

And you know how many of them are in jail? None They've got desk appearance tickets. They've got parking tickets. How many of those people do you think are ever going to show up to report to the court? None of them.

ALEXIS CHRISTOFOROUS: John, what I'm hearing from you is that you're talking about the crime rate in New York City. You're talking about quality of life issues. A lot of that has to do with the governor.

A lot of it has to do with our Mayor de Blasio. You ran for mayor back in 2013 on the Republican ticket. Are you going to run again next year, John?

JOHN CATSIMATIDIS: I'm being urged to do so. And I haven't made up my mind. You know, I'm enjoying my life. And I'm enjoying my children. I'm enjoying showing my children how to run our companies, and see me in January.

ALEXIS CHRISTOFOROUS: We will do that. We will definitely come back and ask you. I want to stay on politics for a moment, because you're a prolific campaign donor.

You're a vocal supporter of President Trump. What do you make of him still not conceding, not working with President-elect Biden in terms of national security and in briefing him? I mean, is it time for President Trump to concede this presidential race?

JOHN CATSIMATIDIS: No. The electoral college doesn't meet to the middle of December. I had Joe Lieberman, Senator Lieberman on my show a couple weeks ago, but-- no a week ago. And Al Gore and Senator Lieberman didn't concede till mid-December.

Let's go through the process. Let's go through-- let the Justice Department do their job. Let the FBI do their job. Let the lawsuits-- the Supreme Court do their job. And whoever is elected president of the United States on December 14, I will salute him as Mr. President.

ALEXIS CHRISTOFOROUS: OK. If that person is indeed President-elect Biden, he has promised to raise corporate taxes on day one. John, as a billionaire businessman in a high state tax like New York, do you agree with Biden's tax proposals?

JOHN CATSIMATIDIS: I do not agree with it. I don't think the giving the government more money to spend-- the government way-- is pretty dumb. I don't think the government has been spending money the right way in the last few years. And I believe low taxes has attracted companies to come back to the United States. And all we're going to do is they're going to find a way to leave again. And high taxes in New York state, you know, Florida come on down.

ALEXIS CHRISTOFOROUS: Right. But, I mean, look, New York and basically every state in this country is having a problem with a revenue drain because of this pandemic. You know, how do you deal with that? If you're not going to raise taxes, how do you replenish the coffers, John?

JOHN CATSIMATIDIS: Well, you know, when you are CEO of a company, you raise the taxes a little bit, or you raise, whatever you have to, gross margin a little bit and you reduce your belt a little bit. Politicians have not learned how to do that. All they know how to do is raise, raise, raise. And that's the problem of American politics right now.

ALEXIS CHRISTOFOROUS: I want to get back to the supermarket business for a moment. Are you hiring more people? What have you been doing throughout this pandemic because your store is considered-- your stores are essential. And they've been very crowded. So what has the workforce been like for you?

JOHN CATSIMATIDIS: We're making sure our employees stay safe, because, you know, we supply most of the food for the borough of Manhattan, which is the center of New York City. And getting the product in, making sure our employees stay safe, and making sure our customers are taken care of, that's the basics.

ALEXIS CHRISTOFOROUS: And finally, just as a longtime New Yorker, having built your business there, raising a family there, how long do you think it's going to take to have New York City go back to pre-pandemic levels?

JOHN CATSIMATIDIS: I am very concerned about New York City. If a-- a lot of big companies-- I've talked to Cushman and Wakefield. I've talked to other people. A lot of big companies, if they have 10,000 employees in Manhattan or in New York City, they're looking to cut it in half. So I think New York could have a permanent problem because of this.

ALEXIS CHRISTOFOROUS: And you could fix it if you were mayor?

JOHN CATSIMATIDIS: I think if you have the right mayor, if you have the right mayor in New York, and there's confidence, that's all it takes, confidence that the right thing, that the common sense thing will be done, a common sense mayor, will be able to fix it.

ALEXIS CHRISTOFOROUS: All right, we'll talk again in January and see if you've actually-- if you're throwing a hat in the ring. John Catsimatidis, CEO of the Red Apple Group. Thanks for being with us.

JOHN CATSIMATIDIS: Thank you, Alexis.