Crain's New York Business, September 16, 2024 by crains-new-york-business

New York’s nonpro t

SHADOW GOVERNMENT

New York City has outsourced many core functions to a little-known group of human services contractors

On paper, New York City is governed by an elected mayor and City Council. But in reality, much of the day-to-day work of running the city is overseen by a vast network of private vendors that provide services that millions of New Yorkers rely upon: from temporary shelter to job training, addiction rehabilitation to escaping a violent home, cleaning public schools to maintaining animal shelters.

Many of these organizations operate with little public scrutiny even as they control billions of dollars in taxpayer money under contracts that span decades. ey amount to a sort of shadow government, providing services more typically associated with the public sector but with structures that can’t be easily reformed by lawmakers, and leaders who can’t be voted out of o ce. As these groups use city contracts to expand their teams, take on new assignments, and even build real estate empires, the city’s own budget has continued to grow alongside them.

See CONTRACTORS on Page 12

Read about all 14 nonpro ts at CrainsNewYork.com/shadow

These 14 nonpro ts have a portfolio of contracts that each exceeds $1 billion. They are entrenched with long-term deals and operate without heavy city oversight.

Local political leaders hedge their presidential bets

Those in power are making preparations for a Trump or Harris win that could shake up the city

By Nick Garber

is summer, when New York secured federal funding to nally build a new rail tunnel under the Hudson River, local leaders could hardly contain their enthusiasm.

at’s because the $7 billion commitment to the Gateway tunnel was more than a big chunk of money — it all but ensured that Donald Trump could not halt the project if he is elected president again.

“ e Trump administration delayed the work for years, but we never backed down, and now there's no turning back,” said a gleeful Chuck Schumer, the Brooklyn Democrat and Senate majority leader, at a July event celebrating the funding from President Joe Biden’s administration. Trump, a native New Yorker now alienated from his home

state, stalled the critical project as he sought to tie it to funding for his border wall with Mexico.

Gateway may be safe, but other key local issues are now on a razor’s edge.

As the November presidential election draws closer, New York’s overwhelmingly Democratic

See POLITICS on Page 18

GOTHAM GIGS

Skyline Windows CEO Matthew Kraus has a clear view of his 103-year-old family business’s future.

PAGE 23

REAL ESTATE

Bryant Park Grill, one of the nation’s highest-grossing restaurants, may close as lease expiration looms.

PAGE 3

STORY BY NICK GARBER | DATA BY AMANDA GLODOWSKI

Mastro backs out as nominee for city’s top lawyer

By Nick Garber

Randy Mastro withdrew from consideration to be the city’s top lawyer on Sept. 10, asking Mayor Eric Adams to rescind his nomination days before he was likely to be rejected by the City Council.

“It is with a heavy heart that I respectfully request you withdraw your nomination of me to become the City’s next corporation counsel,” Mastro said in a letter to Adams obtained by Crain’s Sept. 10. “I appreciate the opportunity you sought to a ord me. And I remain deeply honored and humbled by the con dence you have shown in me to serve the city in this important legal capacity. But it is not to be.”

City Council members had harshly grilled Mastro in a grueling eight-hour con rmation hearing last month, asking him to answer for his stint as a deputy mayor for Republican Rudy Giuliani and his history of representing controversial clients in private practice.

e council was expected to formally vote Mastro down on Sept. 12.

e defeat is a major setback for Adams, who favored Mastro thanks to his reputation as an aggressive litigator. e mayor is dealing with a raft of legal troubles, including what appear to be four separate federal investigations and a lawsuit from a former colleague accusing him of sexual assault in the 1990s.

But the corporation counsel is charged with representing the entire city, including the council, and lawmakers were concerned that Mastro would be more beholden to the mayor in cases

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where the two disagree. Indeed, the mayor and the council have been battling in court over his refusal to implement a set of laws expanding housing vouchers, and are also at odds over the council’s attempt to expand its powers over mayoral appointees — plus a parallel e ort by Adams to slow the council’s legislative process.

Council Speaker Adrienne Adams hinted during Mastro’s Aug. 27 con rmation hearing that he did not meet the “high standard” to which lawmakers would hold the next corporation counsel.

“ eir record of ghting for the people, for standing up for workers’ rights and pursuing racial equality and justice, must be uncompromising,” the speaker said of her ideal nominee. Ultimately, Mastro was unable to convince lawmakers of his credentials as a lifelong Democrat who would work independently of the mayor while leading the city’s 800-attorney Law Department.

e mayor must now choose a new nominee to replace the outgoing corporation counsel, Sylvia Hinds-Radix, who left the post in

May. In a statement, Mayor Adams thanked Mastro for his willingness to serve and added: “It’s unfortunate that politics has seeped into this process and, as a result, will deprive New Yorkers of one of the most quali ed candidates for this o ce our city has ever seen.” Mastro sounded a de ant note in his letter to the mayor, saying that the speaker had “made clear, by the way she permitted the Council to conduct its hearing on my nomination,” that she planned to compel members to reject him. e attorney cited editorials in

newspapers like the Daily News and amNewYork that were critical of how the hearing played out, in which lawmakers frequently interrupted Mastro and left little doubt as to where his nomination stood.

“Unfortunately, as much as I respect the City Council’s role and looked forward to representing it with the same professionalism and responsiveness as the rest of city government, I will apparently be denied that opportunity, based on a hearing that was anything but fair,” Mastro wrote.

Still, beating back Mastro’s nomination counts as a win for Speaker Adams, a onetime ally of the mayor’s who has shown an increased willingness to defy him. e visible tensions between City Hall and the council may complicate the mayor’s e orts to convince lawmakers to approve his wide-ranging City of Yes housing plan later this year.

Mastro, an accomplished attorney who is currently a partner at King & Spalding, tried to reframe the discussion around his nomination by focusing on his extensive pro bono work, in which he often served clients more palatable to progressives. But left-leaning lawmakers focused on other clients: landlords opposed to the Local Law 97 climate policy, the state of New Jersey in its case against congestion pricing, and Upper West Side residents opposed to a pandemic-era homeless shelter.

Mastro and the mayor’s o ce also marshaled prominent defenders, including former Gov. David Paterson and people who previously served as corporation counsel.

City rents fall again; another record unlikely

By Eddie Small

It looks as if New York will avoid a second consecutive year of record-high rents.

e median rent price was down across the board in Manhattan, Brooklyn and northwest Queens in August compared to last year, according to the latest report from Douglas Elliman and Miller Samuel. Although there are still four months to go in 2024, the rental market typically peaks during the summer months, so the chances of rents this year surpassing their all-time highs from 2023 now seem quite slim.

“It’s not a soft market,” said Jonathan Miller, CEO of Miller Samuel and author of the report. “One out of ve transactions are renting above the landlord ask, but the market is not on the upward trajectory that it’s been for the last few years.”

In Manhattan, the median rent was $4,245 in August, down 1.3% from July and 3.5% from August 2023, the report says. is was the third time in the past four months the median had dropped year over year. New lease signings skyrocketed to 8,223, up more than 60%

year over year, while listing inventory nearly doubled, to 11,065 apartments.

And the borough’s listing discount was back in positive territo-

ry, with apartments typically going for 0.7% less than the landlord’s initial asking price, the report says.

In Brooklyn, the median rent

was $3,650, up slightly from July but down 5.2% year over year. New leases reached their highest number on record, at 4,895, while listing inventory increased to 7,008 apartments. Both gures were up almost 300% year over year.

And in northwest Queens, the median rent was $3,541, up 2.6% from July but down 9.2% year over year. New lease signings were at their second-highest level on record, at 868, while listing inventory increased almost sevenfold year over year to reach 1,082 apartments.

Rents in Manhattan and Brooklyn had soared to records for the month of April this year, creating the expectation that they would reach all-time highs over the summer, especially with high interest rates trapping potential homebuyers in the rental market. However, the city has now made it through the summer without seeing this, and the Federal Reserve is poised to make its long-awaited interest rate cut later this month.

“ at’s going to bring down mortgage rates somewhat further,” Miller said, “and that will continue to reduce the pressure on the rental market.”

Randy Mastro faced harsh questioning from City Council members in a grueling con rmation hearing in August, prompting him to withdraw from consideration as corporation counsel on Sept. 10. | JOHN MCCARTEN/NYC COUNCIL MEDIA UNIT

Rents in Manhattan, Brooklyn and northwest Queens all declined in August. | BLOOMBERG

Bryant Park Grill lease expiration looms

The restaurant, one of the highest grossing in the nation, may lose space to Jean-Georges or Catch Hospitality Group

By Aaron Elstein

Restaurateur Michael Weinstein took a risk others refused when he opened the Bryant Park Grill almost 30 years ago. e park was a shambles in the 1980s, with some of the New York Public Library’s walls stained yellow from people relieving themselves. Park o cials thought opening a restaurant could bring people back, but the owners of Tavern on the Green and Gotham Bar and Grill declined after concluding the plan wouldn’t work.

“ e prospect of a restaurant without street frontage–that faced internally on the park–was a di cult sell,” former park o cial Andrew Manshel recalled in his 2020 book, “Learning from Bryant Park.”

Today the Bryant Park Grill is one of the nation’s highest-grossing restaurants. It generates $28 million in annual revenue at its indoor and outdoor spaces, Weinstein said. at’s more than Tavern on the Green’s $27 million or the agship Smith & Wollensky’s $26 million, according to trade publication Restaurant Business. Weinstein’s enterprise pays $2.5 million in rent annually, based on a percentage of sales, to a nonpro t that manages the park.

But Weinstein fears Bryant Park Grill’s days may be numbered.

Its lease expires next May, and while Weinstein applied for a renewal about a year ago, he hasn’t heard back from landlord Bryant Park Corp. Restaurant manager Diane Giovannone said representatives from Jean-Georges Restaurants and Catch Hospitality Group have examined the space.

“Just a few weeks ago we recognized some from Jean-Georges with blueprints of the restaurant pulled out in front of some of our sta members,” she said. Neither Jean-Georges nor Catch Hospitality returned a request for comment.

e fate of the Bryant Park Grill is in the hands of Bryant Park Corp. President Dan Biederman, who led the charge to revitalize the park decades ago. In addition to running the park and the 34th Street Partnership, he runs Biederman Redevelopment Ventures, a consulting rm that advises developers and municipalities on reimagining public spaces, such as Salesforce Park in downtown San Francisco.

A spokesman said Biederman was on vacation and unavailable for comment, but did provide a statement from Bryant Park Corp. saying: “No decision on a new operator has been made, and there is no new agreement with any party. ere are no in-

dications current workers would lose or retain their jobs, and it is premature to suggest either.”

e chance to grab some of the most valuable restaurant space in the city seems to have attracted deep-pocketed contenders.

Jean-Georges is 25%-owned by Seaport Entertainment Group, a newly public company which owns the South Street Seaport and is in the process of raising $175 million in cash via an equity o ering. Catch Hospitality runs steak and seafood restaurants in New York, Aspen, Miami Beach and other cities; partners include Tilman Fertitta, a billionaire described by Eater as the world’s biggest restaurant owner. His holdings include Bubba Gump Shrimp Co., Morton’s steakhouses, Las Vegas’s Golden Nugget hotel and casino, and the NBA’s Houston Rockets. Weinstein brings formidable resources in this ght over food. His rm, Ark Restaurants, operates 17 restaurants in New York, Las Vegas, Florida, and other places. Revenue over the nine months ending in June was $140 million.

Under Bryant Park Grill’s lease, signed in 1995 and renewed in 2015, the restaurant pays minimum base rent of $1.3 million a year plus 8% of the rst $5 million in gross sales, 9% of the next $5

million, and 10% of receipts over $10 million. e cafe pays $400,000 in base rent plus 16.5% of gross receipts over $2.5 million. Weinstein said he is prepared to negotiate new terms if that’s what park management wants.

While park o cials decide on who gets to run the restaurant in Bryant Park, sta ers say uncertainty over the future is hurting business. ey’ve turned away customers seeking to book space for weddings next year and had to cancel events because they’re not sure the restaurant will be around beyond next May. On Sept. 9, dozens of employees held a press conference before the lunchtime rush to plead with the powers that be to keep their restaurant going.

Waiter Michael Philips, who works at the restaurant with his husband, said their wages support his mother-in-law who has a disability.

“I consider this way more than a restaurant, more like a cultural anchor of the city. ese are the stories of empathy and investing in people for a greater cause. ese stories will go down in history as contributions to a rich human experience. at is the very essence of New York City,” Philips said. “And all these stories, and all these lives, and all this history are much bigger than your rent.”

Bryant Park Grill manager Diane Giovannone speaks at a press conference. | BUCK ENNIS

Developer-friendly architect lists West Village townhouse

The six-bedroom, four-bath property grafts new industrial-style elements onto the prewar site

C. J. Hughes

Architect Morris Adjmi, a goto source for some of the city’s top luxury developers, is saying goodbye to his own highend West Village home.

e six-bedroom, four-bath townhouse, which is located at 233 W. 11th St. on a treelined block in a landmarked district near West Fourth Street, came to market Sept. 5 at $13.5 million.

Around the same time he and Mahar wrapped up a multiyear restoration of a new home for themselves in the city’s Garden District, a 4,500-square-foot and columned Greek Revival mansion, according to a 2023 pro le in Architectural Digest

Morris Adjmi Architects’ main o ce remains in the Financial District.

$13.5M

List price for 233 W. 11th St.

Featuring a kitchen on its garden level, a living room one ight up on the parlor oor and, on the same story, a primary suite with a replace, the ve-level walk-up is decorated in a modern and minimalist style.

Like some of Adjmi’s buildings, including a glass-tower-topped former meatpacking plant at 450 W. 14th St. by the High Line, the townhouse also grafts new industrial-style elements — speci cally wide casement windows — onto the prewar site. e Greek Revival-style residence additionally offers front and back yards.

Adjmi, who handled the renovation of the home himself, according to its listing, paid $1.3 million for the property in 1995, according to data from StreetEasy.

Adjmi and his wife, architect Lisa Mahar, are unloading the property because they’ve relocated to Brooklyn, a spokeswoman said. Earlier this year the couple purchased a similar but smaller prewar townhouse in Fort Greene for $3.3 million, according to the city register.

In recent years the couple has also been dividing their time between New York and New Orleans, where Adjmi grew up. In 2018 Adjmi, who has increasingly taken on national clients lately, opened a second o ce for his rm there.

In 1986 Adjmi rst hung up a shingle in New York alongside his former teacher, Pritzker prize-winning architect Aldo Rossi.

One of their early commissions involved adding a contemporary addition to a landmarked structure in SoHo to create a headquarters for children’s publisher Scholastic.

After founding his own rm in 1997, Adjmi went on to regularly work for developers such as Two Trees Management, Avery Hall Investments and CIM Group, which led the team behind Front & York, a sweeping condo-and-rental project tucked among the historic warehouses of Brooklyn’s Dumbo neighborhood.

More recently Adjmi enlisted with the rm Hope Street Capital for 550 Clinton Ave., a 29-story, 284-unit mixed-use rental tower whose facade is detailed with concrete; it opened in 2023.

But in the face of steep interest rates and inconsistent tax incentives, New York has hit a relative drought when it comes to development of large multifamily projects, despite Mayor Eric Adams’ vow to construct 500,000 new units by 2033.

Yet a new tax incentive, 485-x, a replacement for the former 421-a program that abates property taxes in exchange for meeting a ordability and wage thresholds, is expected to juice housing production, as is a recently approved tax credit for o ce-to-residential conversions.

Related les to demolish 625 Madison

A Madison Avenue o ce tower is slated for demolition, records show, as high-pro le developer e Related Cos. seeks to radically transform the Midtown block. e proli c rm, which redeveloped Hudson Yards and is now angling for city approval to build a sprawling casino complex there, led plans with the Department of Buildings last month to raze the 17-story tower at 613 Madison Ave., which shares an address with 625 Madison Ave. Related, which is headquartered in Hudson Yards, was quietly in contract to buy the full-block property, between East 58th and East 59th streets, for $632.5 million late last year from Midtown-based rm SL Green — as

part of one of the largest deals of 2023, sources told Crain’s at the time.

e Stephen Ross-founded rm, which owns about $60 billion worth of property nationwide, was at rst identi ed only as a “global real estate investor,” but later disclosed by sources as the buyer. e roughly 530,000-square-foot building was originally erected in 1956 as Nabisco’s headquarters. It more recently was home to the nightclub Lavo, which vacated the building in January. e demolition permits come as Related is planning for a ground-up, ultra-luxury, 1,200-foot development that will include retail, a hotel and condos at 625 Madison. Interior demolition has already begun, and the full tear-down is expected to take about nine months, said Natalie Ravitz, a

spokeswoman for the company, who declined to provide the total projected development cost. at stretch of Madison Avenue has undergone quite a shakeup in the past few months. Just a few blocks uptown, between East 60th and East 61st streets, a di erent developer, Williams Equities, led plans to tear down its own 24-story o ce tower at 655 Madison Ave., Crain’s reported last month. And several weeks before that, billionaire developer Ben Ashkenazy, who heads Ashkenazy Acquisition Corp., lost his ground lease at 635 Madison Ave. to foreclosure. e property went back to the lender.

Related’s Ross announced in July that he was stepping down from the rm to focus on a new enterprise.

Julianne Cuba

625 Madison Ave. in Midtown COSTAR

New York homes getting more expensive and smaller

By Jack Grieve

Homes in New York are not just getting more expensive, they are also getting smaller.

e median listing in the New York metro area has shrunk by about 20% since 2019. at outpaces the national rate of shrinkage, with homes across the country slimming by just 6%.

Meanwhile, the price per square foot for New York area homes increased by 82%, signi cantly outpacing the 52% price hike seen nationwide. Square footage aside, listing prices for New York area homes increased 35%, slightly less than the average 39% increase across the U.S.

ose gures are according to an August report from USA Today Homefront, a team made up of reporters from USA Today and their service journalism partner Home Solutions. ey used data from realtor.com to analyze changes in listing prices and square footage over the last ve years in the 150 most populous U.S. metro areas.

“The trend with groceries and shrink ation, where you pay the same or even more but are getting less, it’s a trend that’s also hitting close to home — literally.”

Drake said.

Notably, the report did not examine New York City-speci c listings but rather data for the o cial New York-Newark-Jersey City, NYNJ-PA metropolitan statistical area surrounding the city, which is home to roughly 19.6 million resi-

“ e trend with groceries and shrink ation, where you pay the same or even more but are getting less, it’s a trend that’s also hitting close to home — literally,” said Dayna Drake, a researcher at USA Today Homefront. “Buyers are paying a lot more for a lot less space.”

dents. e analysis looked at data not just for single family homes but also townhouses and condos. e report found the median size of a home in the New York metro area to be 1,930 square feet in 2019. Homebuyers paid about $302 per square foot with median listing prices at $585,000.

Now, the median home is 1,556 square feet. Buyers are paying $550 per square foot, and the median listing price is up to $789,000.

Nationwide, listings are up $125,000, but homes are 128 square feet smaller.

“Home sizes are getting smaller, but the prices keep climbing,”

New York experienced a bigger price per square foot percent increase than all but one major metro area. e Naples—Marco Island, Fla. statistical area saw the most signi cant shrink ation, with homebuyers in the southwest Florida area paying 87% more per square foot.

“Shrink ation in homebuying is pervasive across the 150 most populous metros in the U.S., with all but 18 showing a decrease in median square footage over the last ve years,” the report said. “All 150 demonstrated an increase in home prices.”

Dayna Drake, a researcher at USA Today Homefront

Eric Adams has never looked weaker

The mayor is in true peril after raids on the homes of senior City Hall of cials

It’s getting late early for Mayor Eric Adams.

Federal agents this month searched the homes of multiple senior o cials in Adams’ administration, including Police Commissioner Edward Caban and Deputy Mayors Sheena Wright and Philip Banks. Investigators also seized the phones of o cials including senior Adams adviser Tim Pearson.

e reason for the searches wasn’t immediately clear, though it is apparently unrelated to the federal probe into Adams’ 2021 campaign for potential campaign nance violations. at investigation is tied to a possible straw donor scheme to conceal illegal contributions to Adams’ campaign from the Turkish government or Turkish nationals.

and he’s running out of time to do damage control. Flailing from crisis to crisis, and unable to produce the sort of tangible and memorable policy accomplishments that could boost his popularity (de Blasio had universal pre-kindergarten), Adams nds himself in a uniquely vulnerable position.

An incumbent mayor hasn’t lost a re-election since David Dinkins, who was the rst Black man ever elected to the position. Adams is the second, and he has invoked Dinkins’ legacy of late, as both a way to burnish his image and warn challengers away.

What happens next is anyone’s guess. Indictments of top Adams aides, or Adams himself, could follow — or they might not. No sitting mayor of New York has ever been indicted. Investigations swirled around Adams’ predecessor, Bill de Blasio, although these current probes seem more serious and touch more powerful members of the City Hall inner circle.

If an indictment of someone close to Adams arrives — let alone the mayor himself — it will probably in ict permanent political damage. Adams has already seen his job approval ratings tumble,

But Dinkins, who lost a general election battle against Rudy Giuliani and wasn’t threatened in a primary, was unraveled by circumstance: elevated crime that was only beginning to abate, bitter racial tensions in outer borough neighborhoods, and a crack epidemic that hadn’t yet disappeared. It was a very di cult time to govern the city, and the courtly Dinkins — who didn’t have corruption clouds hanging over his administration — was an ill t for the moment.

Most of Adams’ failures are self-in icted. He has stocked City Hall with patronage hires, behaved brazenly and failed to focus on the nuts-and-bolts of governing. His conduct has invited Democratic challengers: City Comptroller Brad Lander and Lander’s predecessor, Scott Stringer, as well

City Council pushes NYC Ferry expansion to Rockaways, Coney Island

By Caroline Spivack

A pair of new bills before the City Council would require the city to explore an expansion of the NYC Ferry system along the Rockaway Peninsula and to Coney Island — even as city o cials work to rein in costs for the embattled ferry network.

Queens Councilwoman Selvena Brooks-Powers is pushing a bill that would require the Economic Development Corp. to study and report on the feasibility of building new ferry terminals along the Rockaways, with a particular focus on east of Beach 86th Street. e NYC Ferry system currently runs service to a stop at Beach Channel Drive and Beach 108th Street.

A similar bill, proposed by Brooklyn Councilman Justin Brannan, would require the EDC to study the logistics of creating a

as Zellnor Myrie, a state senator from Brooklyn. More candidates might emerge, including Andrew Cuomo, the disgraced former governor hoping for a comeback. In June 2025, the ranked-choice voting Democratic primary will be held to e ectively decide who the next mayor will be. Adams will still probably be in this race and he does have a chance to win. His working-class base hasn’t entirely defected from him. His challengers all have signi cant weaknesses. If the feds decide to bring a case against Adams or his inner ring, they will probably do it soon. Historically, prosecutors — at least in

New York — prefer not to hand out indictments during election years.

e sheer number of leaks to the media concerning the FBI raids and cellphone seizures suggests indictments may happen, since the feds sometimes like to build their cases in the public eye ahead of time. Adams might hope, like Cuomo, that he can survive if indictments merely reach those who work closely with him. Cuomo won a third term after Joe Percoco, his closest aide and someone Mario Cuomo once described as a “third son,” was indicted on corruption charges. Cuomo successfully distanced himself and was re-elected

in 2018.

At the time of the Percoco indictment, though, Cuomo was more popular than Adams is now and he had eight years in the governor’s mansion to fall back upon — accomplishments to tout, favors to call in and political machinery he thoroughly controlled. Adams is in a far weaker position. National Democrats have moved on (he had no speaking role at the Democratic convention), and locals sni blood in the water. is is, without question, his most perilous period yet.

Ross Barkan is a journalist and author in New York City.

new NYC Ferry landing in Coney Island with particular consideration to using the Steeplechase Pier near West 16th Street.

Lawmakers’ push to expand NYC Ferry service comes as the EDC has struggled to reduce the system’s notoriously high per-ride public subsidy and tries to raise new revenue through corporate partnerships. In 2022 the Adams administration launched a nancial improvement plan for the system known as NYC Ferry Forward that immediately raised the fare from $2.75 to $4 for casual riders, while o ering discounts for low-income, senior and disabled riders. As of Sept. 9 the city again boosted the price of a single-trip ticket to $4.50 from $4.

But even with the changes EDC con rmed Sept. 10 that as of 2023 the average per passenger subsidy for the service is $8.55 — that’s just four cents less than the $8.59 per

rider subsidy EDC reported for the system in 2021, just before the city began its scal reforms.

Both City Council bills would task the city with identifying new locations, studying how to create new ferry routes and estimating project costs.

James Wong, the executive di-

rector of NYC Ferry at EDC, said during a Sept. 5 City Council hearing that his agency currently doesn’t have plans to expand the ferry system and poured cold water on bringing new service to the Rockaways and Coney Island, calling it expensive and logistically di cult.

e city initially planned to launch a ferry landing on the Coney Island Creek side of the peninsula in 2021, but o cials scrapped the plan after they said they underestimated the amount of sand migrating into the tidal inlet and the costly dredging required to mitigate the issue.

Ross Barkan

A NYC Ferry vessel cruises on the East River. | BUCK ENNIS

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EDITORIAL

City must keep a closer watch on its massive nonpro t contractors

It isn’t a new phenomenon for cities to outsource a growing portion of what were once core government functions to private contractors. In New York City, nonpro t human-services contractors have fared particularly well, snagging long-term, lucrative deals to tackle thorny problems ranging from homelessness to the migrant crisis.

In fact, there are now 14 nonpro t organizations that each has $1 billion or more in city contracts. ey’ve ballooned in size over decades, funded almost entirely by public money, and employ thousands of people, paying big salaries to leaders who are often former government o cials, while mostly keeping a low public pro le.

One important aspect has not kept pace as these nonpro t empires have boomed: City oversight.

Many of the nonpro ts we report on in our cover story this week and pro le at CrainsNewYork.com/shadow are at best lightly regulated by city agencies like the Department of Homeless Services. City ofcials, who seem more inclined to look out for these agencies than to hold them accountable, repeatedly declined Crain’s requests to turn over reports it says are “designed for internal oversight” of the nonpro ts. And it’s little wonder: DHS is small, at 1,800 employees, compared to the 15,000 employees who work at the 11

PERSONAL VIEW

When

Investigation noted in a 2021 report. “DOI has conducted dozens of investigations into corruption, waste, fraud, and other abuse involving these outsourced human service contracts that deliver a variety of vital services,” the report said. e city has made some progress by boosting oversight of nonpro t contractors, including adopting an anti-nepotism policy this year and de ning con icts of interest. But it’s time for Mayor Eric Adams’ administration to tackle DOI’s meatier recommendations, including the creation of a new set of standard con ict-of-interest forms and a closer city review of nonpro ts’ spending, including subcontracts.

Additionally, the city should require every nonpro t to disclose annually in a report available for public review their executive salaries, related-party contracts, spending on lobbying, hires of city employees or o cials, total headcount, and standardized key performance benchmarks such as cost-per-night to provide housing.

ts are closely scrutinized, such reviews can uncover problems ranging from inappropriate spending to self-dealing, as the city’s Department of

Many of the city’s nonpro t contractors are well-regarded and e ective, demonstrating that private entities can play an important role in delivering services and tackling big challenges more nimbly than a slow-moving government bureaucracy. But they must do so with clear expectations for transparency and accountability to ensure a fair shake for taxpayers.

Air conditioning mandate could undermine city’s carbon goals

New York City, known for its sweltering summers and intense heat, is considering a law requiring landlords to install air conditioning units in all rental apartments. is seems like a sensible policy — since cooling access is increasingly regarded as essential for comfort and public health. However well-intentioned, this proposed mandate will likely harm the people it’s meant to protect most, by increasing housing costs and undermining the city’s signi cant carbon reduction goals under Local Law 97.

already high cost of housing in the city.

Beyond the economic impact on residents, there’s a more signi cant consequence: a drastic increase in AC usage. Installing thousands of new AC units will substantially increase usage, leading to a corresponding rise in electricity and carbon emissions, directly undermining the city’s environmental objectives of reducing greenhouse gas emission by 80% by 2050.

e rental market in the city is famous for its low elasticity, meaning landlords are likely to pass any new costs — like the installation and maintenance of AC units — onto tenants through higher rents. Rather than making AC more accessible and a ordable, the mandate would e ectively force all residents to pay for air conditioning, even those who might not have chosen to do so otherwise. e net result is likely to be an increase in the

One of the central contradictions of the proposed AC mandate is how it con icts with Local Law 97, a cornerstone of NYC’s climate action plan. e legislation specifically targets energy usage, incentivizing property owners to make buildings more energy-e cient. Although e ective at combating heat, air conditioning is one of the most energy-intensive systems used in residential buildings. If every rental unit in the city were required to have one or more units, the result would be a massive spike in electricity

demand, leading to signi cantly higher carbon emissions — directly contradicting the objectives of Local Law 97.

Instead of mandating AC installations, a more nuanced approach might involve incentivizing the adoption of passive cooling techniques, such as improved insulation, re ective roo ng, or green building practices. For example, EmPower+ is a program that incentives low-and moderate-income New York households to save energy and money toward energy improvements made to their primary residence. ese methods not only reduce the need for air condition-

ing but also contribute to overall energy efciency, helping the city stay on track to meet its carbon reduction targets.

Another solution would be to o er free or low-cost, high-e ciency AC units to New Yorkers below a certain income level.

In fact, New Yorkers can already apply to receive a free AC unit or fan via the HEAP Cooling Assistance bene t. e simple speed bump of requiring residents to be economically quali ed and incentivized enough to request the units would substantially reduce their demand, while still providing cooling to those in need.

By mandating air conditioning in every rental unit, the city would encourage more energy consumption and higher carbon emissions when it should be doing the opposite. As the debate over this policy continues, it’s crucial that lawmakers consider the full range of impacts — both economic and environmental — before moving forward. In the ght against climate change, New York has increasingly become a model for other cities targeting climate goals. A mistake at a pivotal moment like this could very well set the city and country back at a time when it needs to be moving forward.

nonpro ts we pro led that work in homeless services, and the nonpro ts often hire from the ranks of city employees and spend signi cant sums on lobbying.

nonpro

New York City Hall | BUCK ENNIS

BLOOMBERG

Lee Hoffman is the cofounder and president of Runwise, a New Yorkbased startup that’s built an end-to-end boiler and heating system management platform.

PERSONAL VIEW

A menopause-inclusive workplace is good for business

Nancy Klotz

Women’s health has been historically overlooked in the workplace. But the tide is shifting: companies are beginning to o er more customized bene ts for women, such as maternity leave, child care services and family planning services.

Yet, one service lags the rest: menopause bene ts. Menopause, a life stage marked by hormonal and physical changes, can begin any time between the ages of 40 and 55. Women in this age group are among the best represented in the workforce — with about 75-76% participating in the labor force. At Brighton Health Plan Solutions, for instance, 80% of our employees are female and about 63% of our vice presidents are women.

Employers that o er menopause bene ts can help women get the care and support they need to feel their best and share their knowledge and experience in the workplace. O ering menopause bene ts is also an effective way to stand out to potential job candidates, many of whom prioritize working for inclusive companies.

Understanding the impact

Most women experience common symptoms of menopause such as hot ashes, mood changes, depression, joint aches, sleeplessness or brain fog — but menopause also puts women at an in-

PERSONAL VIEW

creased risk for certain chronic health problems such as heart disease, stroke, osteoporosis and urinary incontinence.

As women experiencing menopause are often established in their careers and hold important responsibilities, their absence can impact your company’s operations, at a cost of $1.8 billion in lost work time per year. Add in the associated medical costs and that estimate soars to $26.6 billion.

Despite the impact of menopause on women in the workplace, only 4% of businesses o er accommodations for menopause symptoms. Yet, more women are now interested in receiving these bene ts.

Internet searches for employer-sponsored menopause bene ts exploded by 1,300% from 2019 to 2023. Filling this gap in care can help give your company a competitive advantage in a tight labor market.

Your organization’s coverage needs

Understanding the current and future needs of your workforce is important to the long-term success of your company. If you’re considering adding coverage for menopause bene ts, ask yourself the following questions to get started.

◗ What percentage of your employees are women 40 and older? Your bene ts administrator can analyze claims data to identify the number of employees who may be experiencing perimenopause or menopause.

◗ What percentage of your workforce will

New York needs to look back 6 decades to solve housing crisis

By Eric Kober

In New York City neighborhoods like Riverdale, Flushing and Sheepshead Bay, you’ll see nearly uniform redbrick apartment buildings, all six stories tall, often among small homes. In the 1950s and early 1960s, they were a good solution to making housing a ordable to middle-income families. But their construction abruptly ceased as a result of zoning changes in 1961 that greatly diminished the locations where such buildings could be built in the boroughs outside Manhattan.

More than 60 years later, the city has never equaled the sustained postwar burst of family-friendly housing construction under the pre-1961 zoning rules, which produced 60,000 new units in its peak year. While the city was then building signi cant amounts of public housing and other types of government-assisted housing, a robust private housing development sector accounted for the great majority of these units.

at private construction was remarkably reliant on a single housing prototype, the “semi- reproof” six-story apartment building. is design represented an ecient solution not only to the pre-1961 zoning code, but other laws regulating new housing. Private developers could reuse similar building plans, achieving construction e ciencies. Middle-class families could nd a ordable new apartments and continue living in New York City. at’s no

enter menopause in the next ve years?

Even if the majority of your workforce isn’t currently experiencing menopause, you should consider the future needs of your employees as they age.

◗ Do employees have opportunities to provide feedback on bene ts?

It’s important to gather insights from employees on what kinds of support they need and the services they would like to see in the future. You can collect feedback through anonymous surveys or by working with existing Employee Resource Groups (ERGs) that represent women in the workplace.

What bene ts should you provide?

Menopause bene ts can vary. Di erent companies may o er:

◗ Flexible schedules and/or time o to manage symptoms

◗ In-o ce temperature control

◗ Menopause support groups

◗ On-demand video chat and messaging with doctors, nurses and coaches specializing in menopause

◗ Discounts/referrals for hormone replacement therapy (HRT)

You may also nd that many health and wellness services for menopause are already included in your current bene ts package, such as nutritional counseling or mental health support. If you already provide these services, the solution may be as simple as communicating with your employees about

their bene ts packages. Your bene ts administrator can provide a collection of menopause resources, including how best to access any available services and how they help ease menopause symptoms.

Your bene ts administrator can help you repackage existing plans, as well. Add-ons such as access to menopause specialists through established telehealth bene ts or adding OBGYN case management to existing reproductive health bene ts are lowcost options that will bring value to your employees and your company.

Menopause bene ts have the potential to have a signi cant impact on your workforce. When these bene ts are o ered, 58% of women report positive e ects on their work and a more positive perception of their workplace. Employees also feel more inclined to recommend their company as a great place to work, opening opportunities for businesses to retain experienced leaders and attract top talent.

Women’s health care needs are diverse, but meeting those needs does not have to be costly or complicated. Work with your benets administrator to explore how these bene ts can help support senior talent and ensure the success of your company.

Nancy K. Klotz, MD, MBA, FACP, is chief medical o cer at Brighton Health Plan Solutions LLC, where she is responsible for clinical strategy across the company’s various business segments.

longer the case today.

Mayor Eric Adams has rightly set a “moonshot” goal of constructing 500,000 units over 10 years, which could lead to abundant and a ordable housing for all New Yorkers. And he correctly identi es the 1961 adoption of new, much more restrictive zoning citywide as key to today’s crisis. He has proposed ambitious zoning changes, called “City of Yes.” But while laudable, the mayor’s proposed zoning changes at best get us only a fraction of the way to the “moonshot” goal.

In a new Manhattan Institute report, I explain that reaching that goal requires a return to past policies that worked. My report concludes that a vital change — one that Adams did not dare to put in front of a development-adverse City Council in “City of Yes” — is again to allow abundant development sites for modern-day versions of the old six-story apartment buildings. Current zoning allows little more housing density than existing small homes over large areas of the city, and “City of Yes” would allow only modest increases. Going back to the zoning pattern of 1960, in contrast, would change the housing development game completely.

And it would make for very di cult politics. Many people just like their neighborhoods the way they are. Politicians are mistrusted, not without cause, when they say that in the future the neighborhood will be denser, but just as nice. Still, there are good reasons why neighborhood residents say

“no” instead of “yes,” and less good. e restrictive post-1961 zoning ensures that older homes become ever more expensive to buy. Homeowners with big mortgages worry about what could happen to their home values if zoning no longer mandates scarcity. However, small home values could be sustained if developers could acquire them as potential sites for apartment buildings.

To reduce the cost of new development, the “City of Yes” would repeal zoning requirements for o -street parking. Many residents, encouraged by elected o cials, feel that they have a right to free and abundant street parking, and do not want to compete for that parking with new neighbors moving into apartments. ese New Yorkers object to being told that they will have to walk and use public transit more or pay market prices to garage their cars. e 1961 zoning was explicitly intended

to accommodate mass automobile ownership in New York City. We now understand that is incompatible with housing a ordability. Convincing the public to adopt lifestyles consistent with higher urban densities requires other zoning changes “City of Yes” did not address: Eroding the strict physical separation between housing and business services and repealing o -street parking requirements that make building commercial space hard even when it is permitted. Public transit, buses particularly, will need to become fast and reliable.

Accomplishing all this is a daunting challenge for city government and the MTA, neither of which has lately demonstrated notable capacity for innovation. But it is the route to achieving the “moonshot” housing goal.

Eric Kober is a senior fellow at the Manhattan Institute and a former New York City planner.

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CONSTRUCTION

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Schimenti Construction announces recent strategic promotions highlighting commitment to employees and vision for future growth as an ESOP.

James Harrison has been appointed Executive Vice President, with broad responsibility for strategic growth and planning, nancial forecasting, customer relations, preconstruction, and marketing, and serves as lead for major accounts.

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CONSULTING

Moonshot Strategies

John Tritt joins Moonshot Strategies as Senior Vice President, Government Relations. John joins from 32BJ SEIU, where he managed major campaigns as Deputy Political Director. After beginning his career as a union organizer with the Hotel Trades Council, he served as Executive Director of Outreach for Early Childhood Education and Student Enrollment at the NYC Department of Education. Louis Cholden-Brown also joins Moonshot as Senior Vice President, Government Relations. He last served as Special Counsel at the United Federation of Teachers. He has held senior roles with the New York City Comptroller, New York City Council, 2019 Charter Revision Commission, and advocacy organizations. He graduated from the Fordham University School of Law.

CholdenBrown

FINANCE

Wells Fargo Technology Banking Group

Dzung Nguyen joined Wells Fargo Technology Banking Group as Executive for the East coast region spanning 21 states. Based in New York City, Nguyen leads a team that provides industry expertise to ntech, software, hardware, e-commerce and sustainable tech companies from early and growth stage to mid-corporate clients. She joins Wells Fargo from Bank of America where she led both Business Banking for mid-sized corporate companies and the Emerging Growth & Technology segment.

LAW

Latham & Watkins

Joe Zujkowski has joined the New York of ce of Latham & Watkins as a partner in the Restructuring & Special Situations Practice. Joe represents debtors, ad hoc creditor groups, and individual creditors in in-court and out-of-court restructurings and in executing complicated nancing transactions.

Harrison Holland

Tritt

Merger of landlord advocacy groups becomes of cial

By Julianne Cuba

e merger of two city landlord advocacy organizations — now called the New York Apartment Association — became o cial Sept. 5, several months after rumblings of the organizations’ unication began circulating within the industry.

e new real estate trade association joins together the Community Housing Improvement Program, which represents more than 400,000 rent-stabilized rental properties across the city, with the Rent Stabilization Association, which represents 25,000 rental property owners. ere are more than 1 million rent-stabilized apartments across the city.

Former Bronx Assemblyman Kenny Burgos, who abruptly resigned from his Albany post in July after two terms in o ce, will lead the new organization as its chief executive o cer.

Burgos said the New York Apartment Association will focus

on tough issues that matter to tenants and landlords alike, such as the bureaucracy that slows down the voucher process, the modernization of the city’s antiquated zoning code and the reform of what the association calls the “fundamentally unfair and inequitable property tax system,” all with the goal of boosting supply to help alleviate the growing housing and a ordability crises.

“Housing is more than just a roof over our heads — it’s the very lifeblood of New York. When we elevate housing, we elevate lives, boost the economy and energize entire communities,” said Burgos.

Burgos and his team will work out of 123 William St., the former digs of the Rent Stabilization Association.

Both CHIP and RSA had existed in the five boroughs for more than five decades and had previously worked together. In 2019 the pair filed a federal lawsuit against New York’s rent law,

“Housing is more than just a roof over our heads — it’s the very lifeblood of New York. When we elevate housing, we elevate lives, boost the economy and energize entire communities.”

Kenny Burgos, former Bronx assemblyman

which made dramatic changes to the state’s rules surrounding rent-regulated apartments. The lawsuit was recently dismissed

for a third time after the U.S. Supreme Court declined to hear the case, but it’s been said within real estate circles that the 2019

legislation was the impetus for a potential merger. They have also had some minor differences in the past. Crain’s reported last year that the RSA opposed a bill that would require more transparency when it comes to limited liability companies, which often are used to shield the identity of a building’s true owner. CHIP, meanwhile, was not against the bill, but the group’s executive director, Jay Martin, said he did not believe it would help the struggling housing market.

CONTRACTORS

From Page 1

For most of their existence, these outside groups have worked under the radar, to little notice from the general public and uneven city oversight. But in recent years, a series of crises including the Covid-19 pandemic, an in ux of migrants and a rise in homelessness have boosted their pro les — and spotlighted the city’s willingness to tackle thorny problems by signing gargantuan contracts with vendors less beholden to public scrutiny.

Crain’s identi ed and is pro ling 14 nonpro t organizations that have each inked deals with the city adding up to $1 billion or more in taxpayer money — over terms ranging from one to 42 years. Many are well regarded and seen as e ective, while others have come under criticism for doing subpar work, spending city money on personal expenses, steering subcontracts to entities their leaders control, maintaining near-monopolies over certain services and paying large salaries. Several of these organizations began as early as the 1960s as modest neighborhood shelters and treatment centers, then evolved into sprawling networks of well-funded facilities.

A review of these 14 nonpro ts shows that:

◗ ey are relatively obscure, with names such as Public Health Solutions and Help Social Service Corp. that few New Yorkers would recognize even as they purchase properties and score big contracts. Because they operate outside of government, the city has limited powers to conduct oversight.

◗ ey pay their leaders signi cant salaries and sta their boards and C-suites with current and former government o cials, real estate executives and lobbyists. Across these 14 nonpro ts, 47 executives were paid a higher salary than Mayor Eric Adams’ $258,750.

◗ Most receive virtually all their revenue — as high as 99% — from government contracts. e Hotel Association of New York City Foundation, a vendor that controls $1 billion in taxpayer money, had never even held a contract before 2020; another, Camba, began as a small merchants’ association in Brooklyn in 1977 before becoming a heavyweight contractor.

◗ ey employ about 24,000 people across the city. e 11 organizations that work in homeless services alone employ about 15,000 people — dwarfing the size of the city’s own Department of Homeless Services, which has about 1,800 employees.

Despite altruistic mission statements, many in this billionaires’ club of contractors are savvy political players,

The nonpro ts

greasing the wheels of city government to maintain their contracts by hiring lobbyists, shelling out campaign donations and hiring former government ofcials. Top Albany lobbyist Rick Ostro , for example, sits on the board of social service provider Help USA; other pro-

viders, like Public Health Solutions and Camba, have monthly retainers with lobbyists at the city and state levels. Before his organization scored a major city contract during the migrant crisis, the head of the Hotel Association of New York City personally gave money to a

slew of candidates for o ce, including Eric Adams’ 2021 mayoral campaign.

“You have a situation where these entities are self-perpetuating,” said John Kaehny, executive director of Reinvent Albany, a nonpartisan watchdog group that advocates for transparency in government spending. “ ey have so much enormous lobbying repower and ability to make contributions.”

e border between city government and the nonpro t world can be porous. Top o cials like First Deputy Mayor Sheena Wright led nonpro ts before entering City Hall, and people who leave government often land quickly at these billion-dollar contractors — including former Council Speaker Christine Quinn, who now leads the shelter provider Women in Need, and Dawn Pinnock, who resigned as Citywide Administrative Services commissioner this year to lead the Center for Urban Community Services.

e nonpro t leaders enjoy sizable salaries, tax lings show. David Rowe, chief administration o cer at a ordable housing nonpro t Camba, raked in $629,018 in 2021, more than double Mayor Eric Adams’ salary. Raul Russi, the president of Acacia Network Housing, was compensated more than triple, at $861,432 in 2022, in a salary paid via an Acacia a liate. Quinn earned $417,058 as of 2022, far more than the $112,500 she made as City Council speaker.

e large paychecks aren’t only for executives; Diego Pedroza, a reperson for the custodial nonpro t created to serve the Department of Education, brought in $284,593 in 2022. Although the nonpro ts’ senior leaders are subject to strict campaign donation limits because they do business with the city, the same limits do not apply to the nonpro ts’ well-connected board members or to mid-level executives who often earn hefty salaries themselves.

‘The city is terrible at oversight’

City government can get real bene ts from using private contractors if the city keeps a close watch on budgets and results. Lower-level nonpro t employees tend to be paid less than city workers and don’t have costly pensions.

“When the city hires workers, they’re not only paying them for the years they work — they’re paying them in perpetuity because they’re paying their pension,” said Muzzy Rosenblatt, president and CEO of Bowery Residents’ Committee. “When you hire a nonpro t, the city washes its hands of all the long-termnancial liabilities that come with a municipal employee.”

Mayor Eric Adams (left), former mayors Bill de Blasio, Michael Bloomberg and Rudy Giuliani. CRAIN’S ILLUSTRATION

Who makes more than Mayor Eric Adams

Raul Russi, Acacia Network Housing

Lymaris Albors, Acacia Network Housing

Vijay Dandapani, HANYC Foundation

David Rowe, Camba

Jose Rodriguez, Acacia Network Housing

Joanne Oplustil, Camba

$861,432

$748,860

$657,842

$629,018

$560,176

Nathaniel Fields, Urban Resource Institute

$505,550

Mitchell Netburn, Samaritan Daytop Village

Lawrence Rosenblatt, Bowery Residents Committee

$455,008

Vicky Gatell, Acacia Network Housing

$432,484

And these nonpro ts are not all-powerful actors: e city is often chronically late at paying them money they are owed. Nearly one-third of human services nonpro ts had their contracts registered more than a year late during the 2023 scal year, the comptroller found, forcing them to essentially work for free before getting any payments.

Supporters argue the nonpro t sector can work more nimbly than slow-moving bureaucracies and be more sensitive to conditions on the ground: “I don’t think the city would do it as well,” said Quinn, the former council speaker who now runs a shelter provider. “You need to be very culturally competent to do this work well.”

But critics across the ideological spectrum have philosophical objections to the outsourcing, calling it a privatization of public services. ere are also practical concerns about whether the city has the means to hold these outside actors accountable for the quality of their work — unlike city agencies, whose performance is monitored in the annual mayor’s management report, nonpro t vendors are not held to any standard set of benchmarks.

“It’s just something that evolved and is probably pretty smart,” Kaehny said, referring to the potential cost savings

for the city. “ e problem is that the city is terrible at oversight.”

e nonpro ts’ contracts, reviewed by Crain’s, typically give the city some ability to back out based on poor performance.

But the city’s power on that front varies from contract to contract — sometimes

letting the city nullify a pact for almost any reason, but in other cases only if the nonpro t refuses to cooperate with investigations. Instances of a major contract being canceled are rare — in 2021, the city cut ties with the shelter operator Core Services Group, the recipient of some $800 million in contracts in previous years, only after news reports exposed that its chief executive had hired family members and directed city money to for-pro t companies he controlled.

When watchdogs like the city and state comptrollers have scrutinized some of these 14 billion-dollar contractors, un attering details have emerged. Employees of Bowery Residents’ Committee spent taxpayer dollars on movie tickets and a “booze cruise.” Another group, Acacia Network Housing, hired a for-pro t security rm controlled by its own CEO, while a third, Samaritan Daytop Village, was found this year to have overbilled the city by more than $500,000 over two years. e city continues to work with all three.

Mayor Eric Adams’ o ce said in a statement that partnering with nonpro ts lets the city tap into the groups’ community ties while bolstering their work through added funding. Agencies keep nonpro ts accountable by holding payments until work has been completed and developing corrective action plans

when vendors fall short, City Hall spokeswoman Liz Garcia said.

“From housing to health care to education, we rely on an experienced network of not-for-pro t providers that are on the ground every day to ensure the e ective delivery of critical services and quality care for millions of New Yorkers each year,” Garcia said.

Oversight also comes from the city comptroller, who must approve large contracts and has audited some of these billion-dollar nonpro ts. Comptroller Brad Lander said in a statement that human services nonpro ts are “vital” for needs ranging from child care to health care, and said they often do that work better than government.

“While the vast majority of the city’s nonpro t partners provide high-quality services and administer public funds responsibly, it is of course critical — as it is in every area of procurement — that the city have strong procedures in place to measure outcomes, ensure integrity and safeguard city resources,” Lander said.

Lander, who is challenging Adams for re-election, said he has “repeatedly urged” the mayor to implement a series of reforms proposed in 2021 by the Department of Investigation that would guard against nonpro t corruption. e proposals would require contractors to disclose their executives’ salaries to the city each year, create a set of standard con ict-of-interest forms for human services nonpro ts, and require a closer review of nonpro ts’ spending, including subcontracts.

e Adams administration has taken steps toward reform, said Garcia, the City Hall spokeswoman, including by adopting an anti-nepotism policy for human services contractors and de ning inappropriate con icts of interest in a city manual for nonpro t providers. And a panel of vendors convened by City Hall plans to advance other policies that will address more of the reforms proposed by DOI, according to Garcia, who did not provide a timeframe for that work.

Pivotal moments

How did this shadow government emerge? Experts point to several events that led New York, and other American cities, to o oad so much responsibility onto these outside groups. As city governments began spending more on social services during the 1960s, nonprofits presented themselves as appealing, nonunionized workforces capable of administering those new programs cheaply. Reagan-era privatization in the 1980s led local governments to shift even more services to the private sector

Mayor Eric Adams $258,750

Adams’ tangle of investigations explained

Legal crises have engulfed the mayor’s administration for nearly a year

By Nick Garber

e number of federal inquiries into Mayor Eric Adams, his campaign, and his inner circle has reached head-spinning status.

e stunning Sept. 4 raids reportedly targeted deputy mayors Sheena Wright and Phil Banks, Police Commissioner Edward Caban and schools Chancellor David Banks. ose home searches and phone seizures were only the latest in a cascading series of legal crises that have engulfed the Adams administration for nearly a year.

Neither the mayor nor any of his aides have been charged or accused of wrongdoing, but the existence of at least four separate probes threatens to paralyze city government and embolden challengers to the already-unpopular mayor as he faces re-election next year.

Ties to Turkey?

e mayor’s legal troubles burst into the public eye last November, when federal agents searched the Brooklyn home of Brianna Suggs, the chief fundraiser for his 2021 mayoral campaign. Multiple outlets soon reported that the raid stemmed from a corruption inquiry by the Southern District of New York, the Manhattan-based federal prosecutor’s o ce, into whether Adams’ campaign had conspired with the Turkish government to take illegal “straw” donations.

Last fall’s searches also targeted another mayoral aide, Rana Abbasova, who had served as Adams’ campaign liaison to the Turkish community.

Agents seized the mayor’s two phones and his iPad in November after stopping him on a Manhat-

tan street (the items were returned to him shortly after). Investigators were seeking materials like text messages and documents from both the mayor himself and his campaign, the New York Times reported.

e probe dragged on for months with few public updates — until August 2024, when Adams con rmed that he had been served with a subpoena in that case. He stated at the time that he and his administration would cooperate fully with law enforcement, a position he has repeated consistently.

Winnie Greco

e number of known probes into Adams’ City Hall increased to two in February, when FBI agents searched a Bronx home owned by Winnie Greco. Greco was a major

fundraiser for Adams’ campaign and now serves as City Hall’s director of Asian a airs.

at operation was reportedly directed by prosecutors from the Eastern District of New York, a Brooklyn-based o ce separate from the one leading the Turkey investigation. e focus of the investigation into Greco is unclear, but the raid came months after the news site e City reported that Greco had solicited what appeared to be illegal “straw” donations to Adams’ 2021 campaign, and allegedly pressured one man into doing renovations at her Bronx home in exchange for helping him get a City Hall job.

In addition to Greco’s home, agents also raided the New World Mall in Flushing, where Greco had organized several fundraisers for the Adams campaign, e City reported.

Startup raises $65M to expand home care services to new states

By Amanda D’Ambrosio

Flatiron District-based home care startup Vesta Healthcare raised money from investors this month to serve people in more states.

Vesta Healthcare, a virtual home care navigation provider, announced Sept. 4 that it raised $65 million in a Series C funding round, bringing its total funding to $130 million. e company was founded in 2018 to connect home care aides — who spend the most time of any provider with homebound patients — with doctors and health plans in an e ort to improve care coordination and outcomes. It also provides technology to monitor patients’ health care information remotely and track

improvement over time.

e company’s new capital consists of a 50-50 split between equity and debt, which CEO Randy Klein said will allow Vesta Healthcare to grow its reach to other states while re nancing existing debts. e startup currently provides services to 50,000 patients in 12 U.S. states including New York, but it’s in the process of expanding its patient population to nearly two dozen additional states, Klein said.

RA Capital Management, an investment rm based in Boston, led the equity fundraising round, with participation from other investors, including Midtown-based Deer eld Management, Kaiser Permanente Ventures and CareCentrix, a home health company owned by Walgreens. e debt -

nancing was provided by Horizon Technology Finance Corp.

e new funding comes as New York state o cials keep a close eye on the growing local home care industry. e state’s population is aging at a rapid rate, creating a demand for health care services outside of traditional facilities like hospitals and nursing homes. But exponential growth in one home care sector known as the Consumer-Directed Personal Assistance Program – which allows individuals to hire and train their own caregivers, who can be family members – has strained the state’s Medicaid budget, spurring Gov. Kathy Hochul to make controversial cuts to the program.

Klein said the demand for home care creates opportunities for

NBC New York. ose, in turn, are separate from the investigations that emerged months earlier that touch on Greco and Adams’ ties to Turkey.

In a handful of public appearances in the ensuing days, Adams said he did not know why the authorities had honed in on his administration.

“ e Southern District that’s conducting this review, they can answer those questions,” Adams said Sept. 6, repeating a mantra that he says he instills in his own sta : “Follow the law.”

“Anything we can do to assist, we’re doing,” he said.

Other distractions

Two other cases that touch on Adams’ administration have already led to prosecutions, although the mayor was not accused of any wrongdoing in either case.

Greco was put on leave in the wake of that search, but returned to work by May, according to e City.

Inner circle

en came the September raids, which targeted several of the most powerful o cials in Adams’ City Hall — including Wright and her partner David Banks, and Banks’s brother Philip, who is the deputy mayor for public safety. Caban and several other NYPD o cials also had their phones seized by agents, according to multiple reports.

e two probes appear distinct: one focusing on City Hall o cials, and another on the police department, which also involves the IRS and relates to enforcement of city regulations in nightclubs, according to reports by the Times and

Last July, Manhattan prosecutors indicted six people for an alleged scheme to steer public money to Adams’ 2021 campaign by using straw donors to secure more public funding. Adams was not alleged to have any knowledge of the scheme, which authorities said was hatched by people seeking to boost his campaign “as leverage in potential future requests of the mayor’s o ce.”

By June 2024, however, prosecutors dropped charges against one of those six people. Four of the other defendants had pleaded guilty, while the sole remaining defendant was still ghting the charges against her.

Separately, scandal has ensnared Adams’ rst Buildings Commissioner, Eric Ulrich, a former Republican City Councilman from Queens. Ulrich was arrested last year on charges that he took a wide range of bribes from associates seeking everything from rezonings to health inspections. Ulrich’s case is pending.

companies to improve how services are delivered, and ultimately save state and federal governments money on acute care.

“Home care, when combined with clinical care – which is what

we do – actually reduces the costs of hospitalization, reduces acuity,” Klein said. “I would just say if the state looks for savings, it should look at health improvement as a source of savings too.”

An aging population has created demand for health care services outside of traditional facilities like hospitals and nursing homes. | BLOOMBERG

Mayor Eric Adams, pictured during a Sept. 2 church service, faces at least four separate federal probes that focus on his campaign and mayoral administration threatening to paralyze city government and embolden challengers to the mayor. | MAYORAL PHOTOGRAPHY OFFICE

Streetsblog rides congestion pricing crusade to donor spike

By Caroline Spivack

When Gov. Kathy Hochul paused congestion pricing on June 5, arguably no outlet has covered the fallout with more intensity than the small nonpro t newsroom Streetsblog New York City.

e digital publication, which focuses on cheeky original reporting and commentary on the city’s transportation systems, in the last three months has published more than 60 stories and op-eds seeking to decipher thenancial, political and environmental implications of the pause on tolls.

e site installed a live-updating graphic on its homepage that tracks key metrics since the pause, including lost revenue from tolls ($187 million as of Sept. 6), wasted hours in tra c (2.7 million so far), and additional tons of carbon emitted (482,000).

Readers are taking notice. Streetsblog saw a swell of donations in June, receiving $4,600 in individual donations and a $20,000 grant from a foundation speci cally owing to the publication’s congestion pricing coverage, said Gersh Kuntzman, Streetblog’s editor-in-chief. Kuntzman declined to name the funder be-

hind the grant, describing it only as a foundation that supports equitably addressing the challenges of a changing climate.

Nearly $25,000 in donations for a single month may, on its face, not sound like much, but considering that the nonpro t newsroom with a sta of seven and a roster of freelancers draws the bulk of its

funding from annual donation drives at the end of each year, the in ux of cash came as a welcome surprise.

“It told me that readers did appreciate the intense gaze we were putting on the issue,” said Kuntzman. “We aren’t advocates but we are covering the advocacy community, so what we’ve done is give

a great deal of space to advocates who point out the aws with the governor’s logic.”

In its initial coverage Streetsblog published a note at the top of stories reminding readers that the outlet is “a non-pro t newsroom devoted to covering the ght for livable cities” and that “when we cover big, fast-moving stories like

congestion pricing we kindly implore our readers to show some support to help fund our coverage,” with a link on how to donate. “It was nice to see our readers responded with understanding the challenges of modern American journalism,” said Kuntzman. e moment is a bright spot for the city’s local media landscape, which perpetually struggles with funding challenges and layo s. Other local digital outlets, such as New York Public Radio-owned Gothamist and nonpro t investigative newsroom New York Focus, also have heavily covered the issue.

Congestion pricing has been a major story for Streetsblog essentially since it was founded in 2006. e site is an independent member of Open Plans, a nonpro t that advocates for making the city’s streets more liveable for all New Yorkers. e newsroom’s funding comes from foundation grants, sponsorships and advertising, along with reader donations. e stie’s funders include the TransitCenter, the Institute for Transportation and Development Policy and the philanthropic organization La Vida Feliza Foundation — the trustee of which is Aaron Sosnick, a wealthy hedge fund magnate.

Streetsblog received a swell of donations in June during the height of its congestion pricing coverage. BUCK ENNIS

POLITICS

From Page 1

leaders are publicly bullish about the chances of their nominee, Kamala Harris, who would likely represent continuity from President Joe Biden on most major policies that a ect the city and state. But in private, people in and around government in New York are making plans — speculating about Cabinet appointments and preparing for drastic policy changes and bracing for how a Trump win in particular would transform New York’s own political scene, much as his rst term did.

“People are starting to talk about plans, speculate about outcomes,” said one Albany lobbyist.

e last Trump administration denied the city law enforcement funding over its immigration policies and cut taxes for the city’s high earners, as well as stymying New York on Gateway.

Another Trump victory could quickly reshape the landscape on issues like immigration, infrastructure and transit — potentially killing congestion pricing, putting undocumented immigrants at risk of deportation and depriving the city of federal funding. At the same time, some in the city’s business community have high hopes for how Trump might approach taxes and regulation.

New York leaders are hedging their bets on a range of outcomes, plus an added wild card: whether Trump will follow through on his hinted desire to exact revenge on his former home state following his criminal and civil courtroom defeats here.

“Last time, [Trump] didn’t have his footing. It took a while for them to get their shit together,” said one well-connected political strategist in the city.

“Now, he’s been stewing for four years about all the people that he wants to settle scores with.”

Trump’s consolation prize

Early this year, as Biden trailed Trump badly in the polls, state Sen. Liz Krueger approached some contacts in the Canadian government with a half-serious proposal: If Trump were elected president again, would Canada be open to welcoming a few sympathetic Northeast states as new provinces?

“I was o ering the state of New York to Canada,” recalled Krueger, an in uential Manhattan Democrat, who believes a

second Trump presidency would mean “the end of constitutional democracy.” ( e Canadian o cials were receptive, but nothing came of her informal overture, she said.)

ese days, Krueger and other New York Democrats are feeling much better about their party’s chances. But Trump’s campaign remains strong, and Krueger’s entreaty to Ottawa was an extreme example of the contingency plans New York ofcials are making behind closed doors.

Not everyone in deep-blue

New York dreads a potential second Trump term. Kathryn Wylde, president and CEO of the Partnership for New York City, estimated that 80% of her group’s business-executive members are supporting the Democratic ticket, and even they see a potential silver lining if Trump wins.

“ e consolation prize with Trump is the change in the regulatory regime,” Wylde said.

Business leaders are deeply unhappy with the aggressive antitrust e orts being taken by Biden’s Federal Trade Commission, and would look to a Republican president for relief, Wylde said.

But even that critique has been muted by the rise of Harris, who has ties with New York business leaders dating back to her days as California attorney general, Wylde said.

“ ere’s relationships, and con dence that she’s not going to be as subject to pressure from the ideological left as Biden was,” said Wylde. “He was more vulnerable politically there, and as a result was more deferential to the critics of American business.”

On taxes, too, New York’s business community is watching the election with interest, amid talk in Congress of rolling back parts of Trump’s 2017 law that reduced taxes on corporations. While Harris has pledged to raise corporate taxes, the Washington-based Business Roundtable is pushing to lower

Donald Trump and Kamala Harris squared off in a debate on Sept. 10. BLOOMBERG

A street vendor sells merchandise supporting Kamala Harris outside a pro-Harris event in Harlem in August. | NICK GARBER

corporate tax rates even further, Wylde noted.

A select few in uential New Yorkers could gain something else from a Trump or Harris administration: a new job. New York businesspeople have held senior roles in recent administrations — like Goldman Sachs executive Steven Mnuchin, who was Trump’s Treasury secretary — and Wylde said she has heard from people angling for Cabinet positions from both parties.

Sealed-off city

Democrats in the state Legislature, having taken a lesson from the rst Trump administration, have tried in recent years to wall the state o from unwanted interference from Washington — passing laws that codi ed abortion rights, limited who can buy rearms, and expanded voting access.

“ ose four years of Trump and the people he put on the courts and decisions coming out of the courts made it extremely obvious to us in state government that we couldn’t count on or trust Washington,” Krueger said.

But federal law supersedes state policies, and many observers predict that legal battles pitting City Hall and Albany against Washington would be a de ning characteristic of a second Trump term. at would put a spotlight on state Attorney General Letitia James, who stoked Trump’s ire by winning a $450 million civil judgment against his company this year. James’ o ce is already making preparations for a potential Trump administration, people familiar with those discussions told Crain’s

It would also test the city’s Law Department. e impact there is already being felt: Randy Mastro, Mayor Eric Adams’ failed nominee to lead that department as corporation counsel, said explicitly that he saw the job as a potential foil against a Trump White House.

“I’m one of the only lawyers in private practice who has sued Donald Trump,” Mastro told Crain’s in an interview in August. “We have to have lawyers protecting our city from that.”

Zachary Carter, who served as corporation counsel under Bill de Blasio and represented the city in multiple immigration-related cases against the Trump administration, said that “past is prologue.”

“When you think of all the energy we spent pushing back against Trump overreach, I would expect that would happen again,” Carter said in an interview.

Immigration policy would be sure to emerge as a ashpoint, given Trump’s pledge to deport millions of undocumented immigrants. New York City’s “sanctuary” law, in place in various forms since 2011, limits how much local law enforce-

ment cooperates with federal immigration authorities.

But Trump could pressure the city on immigration in other ways. As one strategist put it hypothetically: “ e federal government stops giving us money for this or that program until we round up all the migrants.”

Immigrants are crucial to the city’s economy, and Wylde said she fears how Trump will act now that his daughter Ivanka and son-in-law Jared Kushner — who reportedly urged him to preserve protections for young undocumented immigrants during his rst term — are apparently distancing themselves from politics.

“ ey were our New York secret weapon,” Wylde said of the couple. “ ey understood the needs of the city.”

Murad Awawdeh, president and CEO of the New York Immigration Coalition, said his organization has been holding scenario-planning workshops to prepare for either outcome

of the presidential race, especially the possibility that Trump might make a point of targeting sanctuary cities like New York for immigration enforcement.

But the distinction between the two major candidates has been blurred in some respects, Awawdeh said, as Democrats voice support for increasingly hard-line immigration policies like ramping up deportations and limiting asylum protections.

“Unfortunately, both candidates are horrible on the border,” Awawdeh said.

Megaprojects on ice

Infrastructure and transit loom as another arena where Trump could have an immediate impact after winning.

Since Trump has vowed to revoke federal support for congestion pricing, supporters of the still-paused Manhattan tolling program say it is crucial that Gov. Kathy Hochul unveil her

Wright said the latest $7 billion commitment by Biden should allow contracts to be signed before a new president takes o ce. As for the $1 trillion infrastructure law that has disbursed over $20 billion to New York alone, Wright said he would expect few changes under Trump, since much of the money is being given out based on pre-set formulas.

Transit also stands out as an area where Harris could make her own mark, distinct from Biden, who brought a particular focus on Amtrak that stemmed from his years of experience riding the train system himself.

“A Harris administration would probably be di erent than a Biden one,” Wright said. “Gateway has made progress to some degree because Biden is personally supportive of it.”

Backlash brewing

Policy aside, some strategists and lobbyists are already considering how a Harris or Trump victory would scramble electoral politics in New York.

Trump’s 2016 upset win stoked a re in New York Democrats, helping the party sweep the 2018 midterms and seize control of the state Senate for the rst time in years. At the city level, then-Mayor Bill de Blasio used his frequent sparring with the Trump administration as a fundraising message during his 2017 reelection campaign, helping the unpopular mayor deter primary challengers.

potential tweaks to the $15 toll before inauguration day in January.

“Unpausing congestion pricing under a Trump administration is probably impossible,” said Tom Wright, president and CEO of the Regional Plan Association. Wright was equally cynical about the chances of securing federal funding for other megaprojects like a renovation or expansion of Penn Station.

“ e expectation is that all that would be on hold for four years unless a future President Trump decided he wanted to support it for some reason,” Wright said.

But transit advocates were ecstatic about recent progress on the Gateway Program: the $16 billion megaproject that will include the new Hudson River tunnel. e project is seen as crucial for expanding capacity for Amtrak and New Jersey Transit, and averting the logistical disaster that could ensue if the single existing tunnel were damaged.

Under Biden, by contrast, New York politics in some respects have swung to the right: Adams, a pro-police centrist, beat out progressive rivals to win the mayoralty in 2021, and Democratic Gov. Kathy Hochul came perilously close to losing reelection to a Republican in 2022. Local politicians who criticized police abuse four years ago are now rushing to embrace the NYPD.

Some observers expect a similar pattern to hold in the future. A Trump win might make it harder for moderate Democrats like Adams and Hochul to survive their next primaries in 2025 and 2026; a Harris victory might embolden their Republican challengers.

“It’s the law of opposites,” said one lobbyist, who said chatter in Albany focuses largely on how this year’s presidential race will impact state contests in 2026.

e Republican Hudson Valley Congressman Mike Lawler, widely believed to aspire to the governor’s o ce, could face a tougher road if Trump wins and sparks a liberal backlash. After all, in today’s polarized political environment, whichever party seizes the White House in 2024 may be on the defensive by 2026.

“Whoever wins,” the lobbyist said, “is going to be unpopular in two years.”

Former Mayor Bill de Blasio used Donald Trump as a frequent foil during Trump’s presidency, and spoke at a November 2017 rally against the tax cuts enacted by congressional Republicans. | ED REED/MAYORAL PHOTOGRAPHY OFFICE

Supporters of former President Donald Trump rallied outside Trump Tower following his criminal conviction in May. Another Trump victory could reshape New York politics, and people in government are already making plans. BUCK ENNIS

CLASSIFIEDS

Client Operations Specialist (Citadel Securities Americas Services LLC – New York, NY); Mult. Pos. Avail. Offer’ng salary range of $140,000 - $180,000 / year. Rspbl for front to back onboarding of new & exstng. clients while maintaining continual client and internal stakeholder communication. Coordinate the KYC, Credit, Legal, and Account Opening reqs for all counterparties while ensuring that both onboarding and counterparty maintenance requests are completed w/in expected timeframes. F/T. Resumes: citadelrecruitment@citadel.com. Ref: JobID: 8097929

Data Analyst (Citadel Enterprise Americas Services LLC – New York, NY); Mult. Pos. Avail. Apply expertise in quant analysis and the presentation of data to see beyond the numbers and help inform, influence, support, and execute talent decisions. Manage mult concurrent projects that req inputs from cross-functional stakeholders while balancing impact on bus needs. F/T. Sal range $115,000$135,000/yr. Resumes: citadelrecruitment@citadel.com. Ref: JobID: 7901243

Brooklyn Legal Services Corporation A seeks Staff Attorney in Brooklyn, NY

to intake & provide advice & brief services to potential clients. Reqs J.D. & license to practice law in NY. Hybrid-remote. Salary: $95,222. To apply, submit resume to AdvisoryServices@bka.org.

PUBLIC & LEGAL NOTICES

Notice of Formation of BUCK RIDGE PRINTING LLC

Arts of Org filed with Secy of State of NY (SSNY) on 6/5/24. Office

Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 21 W 38TH ST, FL 10, New York, NY 10018. Purpose: any lawful act.

Notice Of Formation of DIALMA Logistics LLC. Arts. of Org. filed w/SS of NY on 7/1/24, Office location: Bronx County. SSNY has been designated as agent of the LLC upon whom process against it may be served and shall mail a copy of process to principal business address: 600 Concord Ave 1J, Bronx, NY 10455. Purpose: For any lawful act

Notice of Qualification of INFORMA CONNECT USA LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/05/24. Office location: NY County. LLC formed in Delaware (DE) on 04/30/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Jeffrey W. Bullock, Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

The text of the legal notice is as follows: Fable & Harmony Studio, LLC Articles of Org. filed NY Sec. of State (SSNY) 7/3/24. Office in NY Co. SSNY desig. agent of LLC upon whom process may be served. SSNY shall mail copy of process to 131 7th Ave PMB 102, NY NY 10011. Purpose: Any lawful purpose.

Notice of Qualification of ESRT 9294 NORTH 6TH STREET, L.L.C. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 06/26/24. Office location: NY County. LLC formed in Delaware (DE) on 06/11/24. Princ. office of LLC: 111 W. 33rd St., NY, NY 10120. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of FOUR LION CAPITAL, LP Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/22/24. Office location: NY County. LP formed in Delaware (DE) on 07/09/24. NYS fictitious name: FOUR LION CAPITAL, L.P. Duration of LP is Perpetual. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to the Partnership, 575 5th Ave., 15th Fl., NY, NY 10017. Name and addr. of each general partner are available from SSNY. DE addr. of LP: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with Secy. of State of DE, Dept. of State, Div. of Corps., John Townsend Bldg., 401 Federal St., Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of COMFLUENCE LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/22/24. Office location: NY County. LLC formed in Delaware (DE) on 08/19/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation: Nagle Qiu & Shi LLC Art. Of Org. filed with Sec. of State of NY (SSNY) on 08/26/2024. Office Loc.: New York County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 82 Nagle AVE, New York, NY 10040, USA Purpose: Any lawful activity.

Notice of Formation of MOMOHEALTH LLC Arts of Org filed with Secy of State of NY (SSNY) on 5/13/24. Office Location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against PLLC to 1466 1st Ave, 3A, NY, NY, US 10075. Purpose: any lawful act.

Notice of Qualification of ESRT 8191 NORTH 6TH STREET, L.L.C. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/09/24. Office location: NY County. LLC formed in Delaware (DE) on 06/11/24. Princ. office of LLC: 111 W. 33rd St., NY, NY 10120. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation RMMAP LLC. Arts of Org Filed 7/3/24. Office: NY Co. SSNY designated as agent for process & shall mail to: 222 W. 77th ST. #324228, NY, NY 10024. Registered Agent: United States Corporation Agents, Inc., 7014 13th Ave , Ste 202, Bklyn, NY 11228. Purpose: Any lawful actvity.

Notice of Qualification of VerisFi, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/14/24. Office location: NY County. LLC formed in Delaware (DE) on 08/17/22. Princ. office of LLC: 222 Lakeview Ave., Ste. 800, W. Palm Beach, FL 33401. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of AMP CAPITAL VENTURES, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/08/24. Office location: NY County. LLC formed in Delaware (DE) on 07/01/24. Princ. office of LLC: 90 Park Ave., NY, NY 10016. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, John G. Townsend Bldg., 401 Federal St., Dover, DE 19901. Purpose: Any lawful activity

Notice of Qualification of CONSTRAFOR IRIDIUM LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/17/24. Office location: NY County. LLC formed in Delaware (DE) on 03/13/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, John G. Townsend Bldg., 401 Federal St., Dover, DE 19901. Purpose: Any lawful activity

Notice of Qualification of RADIATE CAPITAL PARTNERS, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/19/24. Office location: NY County. LLC formed in Delaware (DE) on 07/21/23. Princ. office of LLC: 3 Columbus Circle, 24th Fl., NY, NY 10019. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of 522

FIFTH AVENUE LENDER LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/14/24. Office location: NY County. LLC formed in Delaware (DE) on 08/13/24. Princ. office of LLC: 1 Vanderbilt Ave., NY, NY 10017. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Jeffrey W. Bullock, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation of VICTORYFIEDLER ACQUISITION, LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/24/24. Office location: NY County. Princ. office of LLC: 30 Hudson Yards, 72nd Fl., NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Any lawful activity.

Notice of Qualification of FOUR LION CAPITAL GP, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/16/24. Office location: NY County. LLC formed in Delaware (DE) on 07/09/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Four Lion Capital, LP, 575 5th Ave., 15th Fl., NY, NY 10017. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of DE, Dept. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of RADIATE CAPITAL, LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/19/24. Office location: NY County. LLC formed in Delaware (DE) on 09/27/22. Princ. office of LLC: 3 Columbus Circle, 24th Fl., NY, NY 10019. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of ESRT 130-136 NORTH 6TH STREET, L.L.C. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/09/24. Office location: NY County. LLC formed in Delaware (DE) on 06/11/24. Princ. office of LLC: 111 W. 33rd St., NY, NY 10120. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: Any lawful activity.

Investors in Sixth Avenue of ce tower face 60% loss

By Aaron Elstein

A credit agency is warning that investors in a Sixth Avenue o ce tower’s mortgage are poised to lose up to 63% of their investment should the troubled owner default or somehow nd a buyer for the ailing property.

1140 Sixth Ave. is a Class A o ce tower at the corner of West 44th Street that’s 21% vacant. Owner American Strategic Investment Co. wrote down the value of the 22-story, 250,000 square-foot building by half last year, to $70 million, or $110 million less than it paid in 2016. at same year the landlord bought a Times Square o ce tower that it agreed to sell in June for $100 million less than it paid.

American Strategic’s hold on 1140 Sixth may not last much longer. It has breached two provisions in the $99 million mortgage that comes due in two years. e rm, owner of 1.2 million square feet of commercial and residential space in New York, has said it intends to sell properties including 123 William St., a 550,000 square-foot Financial District o ce building with a low-for-the-neighborhood vacancy rate of 11%. It has not announced its plans for 1140 Sixth.

Plenty of older Manhattan o ce buildings are struggling nancial-

ly but 1140 Sixth’s di culties seem particularly acute. Its debt-service coverage ratio is -5%, bond-rating rm KBRA said in a report Sept. 6, which means operating costs are devouring all the building’s cash ow and then some. Buildings are expected to generate enough cash to cover at least 100% of their mortgage costs and other expenses.

Citing 1140 Sixth’s deteriorating nancial condition, KBRA warned mortgage investors could su er a $62 million loss, or 63% of their investment. A year ago the rm estimated a $4 million loss.

e building was developed in 1926 and extensively renovated between 2007 and 2015 before Blackstone Group sold it for $180 million to American Strategic Investment, a publicly traded company that raised money from individuals dabbling in New York real estate. In 2019, the Securities and Exchange Commission charged former CEO and Chairman Nicholas Schorsch with pocketing in ated incentive fees. He and two other defendants paid $60 million to settle the fraud case the same year.

“REIT managers and their professionals have an obligation to tell the truth,” Marc Berger, head of the SEC’s New York o ce, said when the case was settled.

CLASSIFIEDS

CL VISTA HOLDINGS LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 8/02/24. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to; 1293 Broadway, NY, NY 10001, USA Purpose: Any lawful activity

DREAM VARIATION

ENTERTAINMENT LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 6/12/24. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to; 2248 Broadway, #1153, NY, NY 10024 Purpose: Any lawful activity

Schorsch “failed to do so and bene tted [himself] greatly at the expense of shareholders.”

e rm’s remaining seven New York o ce and residential proper-

NOTICE OF FORMATION of SOMETHING ABOUT L.L.C. Arts of Org filed with Secy. of State of NY (SSNY) on 7/3/24. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 228 Park Ave S, #584937, NY, NY 10003. R/A: US Corp Agents, Inc. 7014 13th Ave, #202, BK, NY 11228. Purpose: any lawful act.

Notice of Formation SKOPE CONSULTING LLC. Arts of Org Filed 6/10/24. Office: NY Co. SSNY designated as agent for process & shall mail to: 228 Park Ave S #894016, NY, NY 10003 Registered Agent: United States Corporation Agents, Inc., 7014 13th Ave , Ste 202, Bklyn, NY 11228. Purpose: Any lawful actvity

Notice of Formation of LIBERTY HILL PARTNERS LLC Arts of Org filed with the SSNY on 7/26/24 . Office: NY County. SSNY designated as agent upon whom process against it may be served. The SSNY shall mail a copy of any process against the LLC served upon him/her is: 228 Park ave S #566585, NY, NY 10003, USA.. Purpose: any lawful act or activity.

ties are valued at $600 million, according to a regulatory ling. Unfortunately, the company’s market capitalization is just $23 million, meaning remaining investors

don’t think management can extract much value from the portfolio. e company didn’t return a request for comment.

Notice of Formation of TENFORTY CENTRAL LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/13/24. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 590 Madison Ave., 6th Fl., NY, NY 10022. Purpose: Any lawful activity.

Notice of Formation of CHIP MEDIA LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/17/24. Office location: NY County. Princ. office of LLC: 435 Hudson St., NY, NY 10014. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. Purpose: Any lawful activity.

Notice of Formation of LEGACY NATIONAL TITLE AGENCY, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/13/24. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. Purpose: Any lawful activity.

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Arts of Org filed with Secy of State of NY (SSNY) on 7/24/24. Office

Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC to 500 West 18th Street, Unit 20E, New York, ,NY 10011. Purpose: any lawful act.

Notice of Formation of 34 WEST 95TH STREET LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/22/24. Office location: NY County. Princ. office of LLC: 34 W. 95th St., NY, NY 10025. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: Any lawful activity.

Notice of Formation of KOPRULU DESIGN LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 5/27/24. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to 244 Madison Ave #1105, NY, NY 10016. Purpose: Any lawful activity

1140 Sixth Ave. | BUCK ENNIS

Small life sciences market a ‘silver lining’ amid industry slowdown

Small and Amanda D’Ambrosio

New York has long lagged behind cities like Boston and San Diego in the life sciences industry. While this was generally seen as a problem for the region to overcome, these days, it can seem more like an unexpected advantage.

Boston, San Diego and the Bay Area are all dealing with a glut of life sciences space, to the point where developers are looking into using some as traditional o ce space, according to recent reporting in the Wall Street Journal. But in New York, the relatively small amount of life sciences space in its commercial real estate market — which is still facing plenty of its own problems — has kept the supply and demand balance largely intact.

“It’s an emerging market in New York relative to Boston and the Bay Area, which are the two largest life science markets,” said Newmark Executive Managing Director Jonathan Fanuzzi. “ ose are 35, 36 million-square-foot markets. We have 3 million square feet.”

e city’s glut remains in its 730 million-square-foot o ce market, where there is a much greater focus on transforming that space into residential buildings as opposed to worrying about whether

lab space can work as regular ofce buildings.

Although life sciences leasing has been slow in recent years, activity has gradually started to turn a corner. Firms leased 71,000 square feet of lab space in the city during the second quarter, according to a recent report from CBRE — a welcome increase from at activity in previous quarters.

Roughly 10% of the city’s prebuilt lab space remained vacant at the end of June, signi cantly lower than more established life sciences hubs. Around 16% of lab space in Boston, 18% in San Diego and

ences space is having in the city is a lack of new projects planned for the area, multiple industry sources said. e only major life sciences project in New York’s pipeline is the city’s sprawling life sciences development planned for Kips Bay, but this is not expected to be done until 2031, meaning it could be opening in a completely di erent economic landscape, according to Cushman & Wake eld Research Manager Sandy Romero.

ese have slowed down property sales in general and made it harder to build and secure nancing for virtually any new type of real estate project, life sciences buildings included.

25% in the Bay Area was vacant, according to the report.

New York also has much less subleased space on the market than other cities, indicating that life sciences rms didn’t lease too much space when the market was growing that they ultimately had to get rid of to cut costs, according to David Stockel, a broker at CBRE.

“I don’t remember a time where we had more than ve or six lab subleases on the market at once,” Stockel said. “It’s kind of like a tough-to-predict silver lining.”

e main impact a broader slowdown in demand for life sci-

And some projects that seemed on their way as recently as last year have since changed course. Alexandria Real Estate Equities, a major player in the industry, noted in a 2023 Securities and Exchange Commission ling that it was considering turning part of Midtown’s former P zer headquarters into laboratory space, but it has since sold this real estate to developers Metro Loft and David Werner, who are turning the property into a massive residential complex.

Alexandria also sold a Long Island City site where it had been planning a life sciences campus at the tail end of 2023 for $19.1 million, a steep loss compared to the $25 million it paid for the site in 2019.

But while these sales were speci c to New York, some problems facing the life sciences industry are broader and more macro in scale, namely high interest rates.

High interest rates also tend to dry up companies’ expansion plans and venture capital funding, making it harder for life sciences rms to grow to the point where they need to ink a large lease. But the Federal Reserve’s long-anticipated interest rate cut is widely expected to arrive later this month, which could make 2025 a better year for the life sciences industry in New York and elsewhere.

“ is market is typically not driven by lease expiration. It’s driven by new company formation,” said JLL Executive Vice President Bill Harvey. “ ey go from needing 10,000 square feet to 35,000 square feet almost overnight.”

For now, though, the market remains slow. And although developers and brokers love to complain about how hard it is to construct anything in the city, at this speci c moment, that may have worked to its advantage.

“We’re not dealing with the supply overhang that you see in other cities,” said Harvey. “It’s very, very di cult to build in New York, and for once maybe that’s actually a good thing.”

Eddie

Window rm CEO has a clear view

of his family business’s future

Matthew Kraus has led Skyline Windows since 2022

By | Aaron Elstein

German-American architect

Mies Van der Rohe freed the city from the con nes of small windows in 1958, when 375 Park Ave. became the rst ofce tower with oor-to-ceiling panes. e concept crossed over into residential real estate, and oor-to-ceiling windows have become a must-have feature for certain discriminating New York apartment buyers.

As the CEO of Skyline Windows, a 103-year-old family business with $100 million in annual sales, Matthew Kraus’ view into this world is crystal clear. Skyline designed, manufactured and installed the windows at Rockefeller Center, the Chrysler Building, the Pierre Hotel, the San Remo and thousands more.

In Europe, he said, Europeans like their windows framed because frames link buildings to the time before industrialization, before glass towers rose up everywhere, mimicking Van der Rohe’s achievement on Park Avenue.

“A big, beefy frame in Europe is OK,” Kraus said in his Bronx o ce,

near the 138th Street subway station, where the tables are covered with building plans, and the windows are small.

“New Yorkers want as little frame as possible,” Kraus continued. “ ey also want their windows to do a lot.”

Kraus, who has led the family rm since 2022, said New Yorkers prize windows that really let the sunshine in and block sound. Effectively, they want a permanent silent movie viewable from their apartment. Understandably, they prefer the screen to be as large and unblemished as possible. For that, only oor-to-ceiling windows will do.

ey also want windows to let fresh air in but keep dust out. ey certainly don’t want panes to hurt animals, so under a city law that took e ect in 2021, new buildings must contain glass engineered to be more visible to birds, in an effort to minimize the common avian error of slamming into a building.

Kraus started his career at Skyline in 2008 as a sales project manager. He rose up through the ranks

and took responsibilities such as factory improvement and systems development, before he was put in charge of all sales and marketing in 2014. In 2017 he was named president and today runs the show. His father, Steven, is chairman.

is year Skyline sold a 30% stake in itself to Schuco, Europe’s largest European window company, with the intent to acquire, after private equity shareholders Deutsch Capital and Oakmont Capital were ready to sell after eight years.

Opportunity is opening up for Skyline, thanks to a new city law mandating that commercial and residential buildings lower carbon emissions by 2030. But in six years, an estimated 75% of buildings won’t be compliant, and part of the solution could entail replacing drafty windows. Windows are a big expense for buildings; in a new $100 million tower, they can account for 2% to 8% of the cost, Kraus said.

“ e good news is, windows last a long time,” he said, “if they’re made and installed right.”

Raised: Greenwich Village

Resides: Rye, Westchester County

Education: Bachelor’s in business management and marketing, Northeastern University

Most memorable job: The windows atop 70 Pine St., a Financial District tower that looks like the Chrysler Building, enclose a private space with 360-degree views and an elevator that comes into the middle of the room. “It’s like a Willy Wonka scene,” Kraus said.

Family in uence: His father, Steven, in the 1980s helped the Landmarks Preservation Commission set the standards for the restoration of windows in all landmarked buildings.

Matthew Kraus

As the CEO of Skyline Windows, a 103-year-old family business with $100 million in annual sales, Matthew Kraus’ view into this world is crystal clear. | BUCK ENNIS

Crain's New York Business, September 16, 2024

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Small life sciences market a ‘silver lining’ amid industry slowdown

Window rm CEO has a clear view

of his family business’s future

Matthew Kraus has led Skyline Windows since 2022

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