Companies based in the outer boroughs are making their way into Manhattan to lease older of ce space at reduced prices
By C. J. Hughes
Hunting for o ce space before the pandemic, executives at ad agency Wellcom Worldwide were dismayed to encounter asking rents of $90 per square foot a year in Manhattan, which wound up being a deal-breaker. e company landed in far-cheaper Dumbo instead.
But now, with Manhattan prices still below pre-Covid levels at many addresses, the same executives recently calculated that
breaking their Brooklyn lease at 175 Pearl St. and venturing across the East River made nancial sense.
“It’s a di erent world in Manhattan now,” said David Bridges, the global CEO of the company. Earlier this year Wellcom relocated to an older, unfussy site with limited bells and whistles and a blend-into-the-background feel: the Class B commercial building 16 Madison Square West. e rent at the property near Madison Square Park was not only
about half what Bridges was seeing pre-Covid but even slightly lower than what his rm was paying in Dumbo. “A major correction has occurred,” he added.
Wellcom is not alone. Legal industry-focused software startups, music talent agencies, co ee-machine vendors and other tenants that have been based in the outer boroughs for years are now noticing that Class B’s, di erentiated from Class A properties because
City’s Cantonese restaurants evolve to expand their audience
Since 2021, a variety of eateries featuring a modern take on traditional fare have opened
By Julianne Cuba
Kenny Leung, head chef and co-owner of Yao, a contemporary Cantonese restaurant in the Financial District, rst learned to cook at 15 years old in Guangzhou, China.
Many of the ingredients he relies on today to create Cantonese dishes, which focus on bringing out the natural avors of the food, are the same ones he used nearly 40 years ago. But now, at age 55, his kitchen is lled with modern tools, such as immersion circulators, combi ovens and dehydrating machines.
BY THE NUMBERS
2,000
A picture of a dish posted to Bonnie’s Instagram page racked up almost 2,000 likes; the restaurant has 57,700 followers.
“Chef is always using new tools,” Henry Li, general manager at Yao, said of Leung. “But you still need the required technique; you can't deviate from that.”
Across the city in recent years, a cluster of Cantonese restau-
GOTHAM GIG
NYC Marathon group’s CEO touts the ‘purity,’
rants has opened seeking to marry the past and the present. ey are combining heritage ingredients with the latest culinary techniques and taking new spins on the classics, while modernizing the ways they connect to customers. As the restaurants look to attract the next generation of Chinese food enthusiasts, social media-ready spaces and dishes meant to catch the eye during a scroll through one's feed have become key factors in creating the new Cantonese vibe. Such fare includes Yao's $38 sweet-andsour pork on ice, which, when doused with water, emits a wave of smoke — and the server knows to wait until diners have their cameras ready to capture it.
“We wanted to make it a little
See CLASS B on Page 19 See CANTONESE on Page 18
Yao co-owner Kenny Leung cooking mapo tofu with lobster in the kitchen of the Pearl Street restaurant. | BUCK ENNIS
Alan Mucatel (center), CEO of Rising Ground, inside his company’s new headquarters at 1333 Broadway in NoMad | BUCK ENNIS
Hochul appeals to Trump’s vanity to woo federal dollars
By Caroline Spivack
Gov. Kathy Hochul aims to appeal to President-elect Donald Trump’s ego and origins as a real estate developer to overcome his antipathy to the city in leveraging funds for legacy-defining New York City transit projects, including an overhaul of Penn Station and modernizing the city’s aging subway system, she said at a Crain’s event on Nov. 19.
Hochul said she stressed the importance of federal funds coming down the pike to ensure New York can heavily invest in modernizing the mass transit systems on which the region’s workers rely in a call with Trump earlier this month.
York Business NYC Crossroads event at the New York Marriott Marquis.
“I called him up and I said, ‘I think we can work on some significant projects,’ and he really started listening,” she added. “I need the subway system to be world class. This defines us. This could be a legacy project for all of us, as well as for Penn Station.”
Critic of congestion pricing
However, Trump is a noted critic of congestion pricing, the Metropolitan Transportation Authority’s plan to toll drivers entering Manhattan south of 60th Street a peak fee of $9 by early January. The effort is poised to generate $15 billion for the MTA to fund long-overdue mass transit upgrades.
New York’s governor sought to build bridges with President-elect Donald Trump in a recent call.
“He understands how important the New York economy is to the entire nation, he understands that these infrastructure projects cannot be ignored any longer,” Hochul said during Crain’s New
Trump doubled down on his opposition to the program this month, lambasting Hochul’s plan to revive the tolls with escalating fees in a statement.
“I have great respect for the governor of New York, Kathy Hochul, and look forward to working with her to Make New York and America Great Again. But I strongly disagree with the decision on the
congestion tax,” Trump said in a statement.
Congestion costs the city an estimated $20 billion in excess costs annually due to the inefficient movement of people and goods, according to the Partnership for New York.
“The city also needs to start moving again and that is an economic barrier for us if you think of how much economic productivity is lost,” added Hochul.
Hochul did not say whether she
broached the subject of congestion tolls with Trump.
When asked if Hochul believes she can cultivate a productive relationship with the president-elect, after a pause Hochul hedged with, “Why not?”
Newmark CEO Barry Gosin sees ‘green shoots’ springing up in New York City’s beleaguered office market
By C. J. Hughes
The struggling office market and the next Trump administration have one thing in common, according to Barry Gosin, CEO of real estate firm Newmark: Both situations will eventually pass.
“The thing that cycles have in common? They all end,” said Gosin, who was taking part in the panel discussion “What’s Next for Real Estate?” at Crain’s NYC Crossroads event in Times Square Nov. 19. “Every cycle is different,” he added. “But it always works itself out.
In fact, some “green shoots” are already visible: New York this year is on track to experience as much as 35 million square feet in leasing volume, he said, a total that would put it on par with the prepandemic year of 2016.
Converting to housing
And the 11 million square feet currently being converted into housing, including several projects in the Financial District, are helping to put a dent in the 50 million square feet of excess space weighing down the sector today, he said.
Adopting a strong anti-remote-work stance, both Gosin and fellow panelist Jed Walentas, managing principal of developer Two Trees Management, agreed that getting people back into the office full time would help fill
some surplus. “There are a lot of scenarios when technology has made life way better for a lot of people,” Walentas said. “But in terms of running a company and building
a culture,” people need to be onsite, he added. “Being at home is a joke.”
“It’s silly,” Gosin said.
As for president-elect Donald Trump and a Republican-con-
trolled Congress in 2025, don’t expect to see the kinds of government-backed programs to create housing favored by Democrats but instead likely new tax credits to stimulate investment, Gosin
“The thing that cycles have in common? They all end. Every cycle is different, but it always works itself out.”
predicted. That could help with much-needed apartment production in New York, he said.
Both Gosin and Walentas, who spoke to more than 150 people in a ballroom of the Marriott Marquis hotel, also analyzed the results of this month’s elections.
The pinkish, pro-GOP tinge seen in some city neighborhoods is not a consequence of high housing costs, Walentas opined, but instead was due to an “overreach” by far-left leaders into people’s personal lives. “We dipped too far left in the city,” he said.
For his part, Gosin pointed out that Trump, in winning the popular vote and all seven swing states, does indeed have a mandate to govern. But he also noted that those states were decided by just 175,000 votes. “There’s something to be said about Republicans,” he added to some laughs. “Something.”
Barry Gosin, CEO of real estate firm Newmark
Gov. Kathy Hochul and Partnership for New York City President Kathryn Wylde at a Crain’s New York Business event on Nov. 19. BUCK ENNIS
Jed Walentas (center) and Barry Gosin (right) spoke at a Crain’s New York Business event Nov. 19. | BUCK ENNIS
Startup aims to make users invisible online
The idea behind Cloaked is to provide consumers with an all-in-one solution to protect their privacy on the internet
The Upstart: Cloaked
For a week in mid-September, a billboard in Times Square urged passersby to call a toll-free number that could tell them whether their information had been compromised. I called, and the robot voice on the other end of the line read my name, parts of my Social Security number, and my address.
“This data is being sold online without your consent,” the robot warned. Arjun Bhatnagar, CEO and co-founder of Cloaked — the consumer privacy and security startup whose advertisement had flashed on the big screen — said, “a single data point, like your phone number, can bring up everything about you. Name, address, SSN. Your family, their personal information, your passwords, your email addresses.”
Cloaked was founded in 2020 by brothers Arjun and Abhijay Bhatnagar, both engineers and, respectively, chief executive officer and chief product officer. At the time they were living at their parents’ house in Massachusetts at the start of the pandemic. The idea behind the company is to provide consumers with an all-in-one solution to protect their privacy online. Cloaked’s mobile app and internet browser extension generate unique email addresses, phone numbers and usernames to help mask the real identities of its users on websites asking for personal information.
“Every single business knows everything about you. Why does a parking app know my address, my name, my visitation history — all this information, and I’m just going to park here?” Arjun continued. “This is the idea that every single company is trying to build a profile on you. And do you trust a company selling vitamins to have the same security as Chase?”
Data breaches have become commonplace on the internet and the theft of personal information has been rising at a staggering rate. The volume of data breaches more than tripled between 2013 and 2022, exposing 2.6 billion personal records to hackers, according to a study by researchers at the Massachusetts Institute of Technology.
“This whole idea is that we shouldn’t be giving up everything about ourselves to every single business we interact with,” Arjun said.
One user, Alysha, asked that Crain’s use only her first name. She called Cloaked’s toll-free number and was horrified to see how much of her personal information was available online. On the app, Alysha saw her phone number, her home address and those of her relatives — including people who were deceased.
“It’s the intrusiveness, it’s the lack of consent — I don’t recall anybody ever asking me permission because I would have said, ‘Hell no!’” Alysha said. “And it’s all woven together, like this whole tangled web.”
Tempe, Arizona, and Prague, offers three comprehensive plans ranging from $190 to $365 a year, depending on the number of covered phones and computers as well as the breadth of the security coverage.
How to conquer the giant
Users signing up for a Cloaked membership are offered more than a dozen features to protect existing and future information online. Some include data removal, identity monitoring in case of breaches, a password manager and virtual disguises.
The company provides users with both a phone application and a browser extension, which is part of Cloaked’s defining characteristics according to Armaan Ali, co-founder and CEO of Human Capital, a venture capital firm that has led funding for the company.
“They’re not trying to change behavior. They’re existing on all the surfaces that you use and trying to make it as seamless as possible,” Ali said. “We need to build a service that sort of lives in a way in your life such that you don’t need to massively change consumer behavior.”
Next steps
Cloaked currently has 100,000 people using the beta version of its services, released in 2022. Users are evenly split between men and women and range in age from 25 to 65. Since moving into their wider release, the brothers said the number of users has increased by 1.5 times monthly. Customers’ costs range from $120 to $450 per year. Cloaked has raised a total of $29 million across their seed and Series A funding rounds. The company declined to share its annual revenue.
Data is a collection of our activity on the internet, Abhijay explained. Your browsing history, your clicks — all these details are connected to an identity, your social media profiles and other information online. In conversation, Arjun and Abhijay complete each other’s explanations — one goes wide while the other goes deep.
Before joining Cloaked, Alysha had already signed up with other services like MyFICO to receive notifications about her credit score and with Kroll, which would inform her if her financial information had been included in data breaches. She needed more. “I’m signed up for those alerts, but it just lets me know ‘Your information is out there,’” she said. “And I’m like, thanks. Now what?”
She appreciated that Cloaked provided actionable steps to erase her information online. Less than a month into being a user, Cloaked informed her that it had removed 146 of her records online and that another 107 were undergoing that same process.
The reigning Goliath: Norton 360 with LifeLock
Norton 360 with LifeLock is Norton’s latest suite of multi-layered security services. The company, based in
The Bhatnagar brothers believe they are working within a window of opportunity because, Arjun said, “AI is making the problem much worse.”
“You’re seeing the phishing, the scams, getting much more sophisticated and targeting people,” he added. They are working on additional tools and features to make Cloaked a more comprehensive privacy and security application. The plans are currently available to individual consumers, but the company is thinking of providing Cloaked to businesses as part of employee benefits packages.
“We have to find a way to make deep tech really approachable and consumer friendly,” Abhijay said. “So to that end, a lot of the stuff that Arjun is talking about, a lot of these holistic, all-in-ones — tackling the entire industry in one place.”
Olivia Bensimon is a freelance journalist in New York City who reports on human-centered stories.
Brothers Abhijay (left) and Arjun Bhatnagar, both engineers, built Cloaked in part to mask the identities of its users on sites asking for personal information. | bUCK eNNIS
OLIVIA BENSIMON
Billionaire investor Ackman lists pair of Central Park apartments for about $20 million
The side-by-side co-ops at the Beresford would be sold at a loss at the current price
By C. J. Hughes
Billionaire investor Bill Ackman is looking to leave the Beresford. And he seems prepared to take a loss to do so.
The founder of Pershing Square Capital Management has listed two side-by-side apartments at the storied two-towered co-op at 211 Central Park West on the Upper West Side for a total of $19.9 million, according to an ad that appeared Nov. 15.
$19.9M
sion, bought both units a few weeks apart in the summer of 2017, according to the city register. No. 8F cost him $13.5 million, while No. 8E was $8.6 million, for a total of $22.1 million, according to the city register. In other words, he could take about a 10% loss if the units traded at their asking prices.
Listing price for No. 8E and 8F at 211 Central Park West
The units, Nos. 8E and 8F, both three-bedroom apartments with about 2,900 square feet that were never formally connected, can also be purchased separately. No. 8E is on for $8.4 million, and No.
No. 8F cost him $13.5 million, while No. 8E was $8.6 million, for a total of $22.1 million
8F, which has a larger kitchen and more of an open layout, is available for $11.5 million, their listings show.
Ackman, who is known for his controversial “shorting” approach with stocks, including betting against the housing market before it imploded in the Great Reces-
Why sell now?
It’s not clear why Ackman decided to sell at a building in which he was once a major investor. Indeed, in 2006, he and his former wife, landscape architect Karen Ackman, snapped up a duplex on the 17th and 18th floors of the 23-story Art Deco structure for $26 million. The Ackmans separated in 2016 and were divorced afterward. In 2018 Ackman transferred the apartment, plus two staff rooms located elsewhere in the co-op, to his ex-wife in a deal valued at $15 million, tax records show. Ackman married designer Neri Oxman in 2019. Ackman, a longtime donor to Democratic politicians, switched sides this past presidential election to become a vocal supporter of Republican nominee Donald Trump. Ackman also made headlines recently for his push to oust leaders at his alma mater, Harvard
University, over a perceived climate of antisemitism on campus. Harvard president Claudine Gay, who also faced accusations of plagiarism, resigned in January. Ackman does not appear to have lived in either of the Beresford apartments, which look to be staged for marketing purposes. He is known to own other homes in New York, including some extravagant ones.
Reportedly among the bunch is a six-bedroom condo on Billion-
aires Row at 157 W. 57th St., No. 75, a six-bedroom duplex that in 2015 cost a hefty $91.5 million, according to the register. The owner is officially listed on its deed as a shell company, 57177 Co. LLC. An email sent to Pershing Square’s press office was not returned by press time. And Deborah Kern, an agent with the
clined to comment. The other agent, Vivian Fisher of the firm Sloane Square, did not return an email seeking comment.
Cult-favorite West Village bagel shop could face eviction
By Julianne Cuba
One of the city’s new bagel shops is now so popular that it’s facing eviction at its West Village storefront, according to a lawsuit seeking to stop the expulsion filed in Manhattan Supreme Court Nov. 18.
What started about four years ago as a pop-up at a sourdough pizza place in Williamsburg, Apollo Bagels has since gained a following and social media stardom, having opened its first full-time location, in the East Village, in March and its second, at 73 Greenwich Ave. on the West Side, this past August. But just several months into its West Village lease, its landlord, Midtown-based real estate firm BLDG Management, is threatening to boot Apollo from its corner digs at West 11th Street because of what the company says are dangerously long lines that are creating a “safety hazard” and are in “violation of law and the lease,” documents show.
BLDG Management — founded
by prominent real estate developer Lloyd Goldman — last month sent a letter to Apollo, including its co-owners Kevin Rezvani and Paras Jain, warning that the bagel shop has until Nov. 30 to fix the alleged problems or it will receive a notice of eviction within five days of that.
Long lines spark complaints
“Landlord has received numerous complaints that tenant is guiding its customers to line up directly in front of other neighboring tenant’s premises,” the Oct. 17 letter states, referring to the adjacent Mighty Quinn’s BBQ and Li-Lac Chocolates. “This is blocking the entrance of the neighboring tenants and is impacting the business operations of the neighboring tenants.” The missive was signed by Alan Starkman, vice president of BLDG Management, records show. Apollo occupies a roughly 1,000-square-foot retail space on the ground floor of the 6-story building, which also contains 42 apartments on the upper floors.
The asking rent is $230 per square foot, according to brokers involved in the transaction, and the lease is not set to expire until Jan. 31, 2033, records show.
Apollo is fighting back and filed what’s called a Yellowstone in-
junction, calling on the court to stop the potential lease termination. For its part, Apollo claims through its attorney, Steven Fox, a partner at Midtown-based law firm Wrobel Markham, that it has mitigated the lines through efforts
such as posting signs, roping off areas and hiring a full-time employee to serve as a line monitor, court documents reveal. Neither Fox nor BLDG Management responded to requests for comment by press time.
Corcoran Group, one of two brokerages listing the properties, de-
73 Greenwich Ave. | GOOGLE STREET vIEW
211 Central Park West, No. 8E and No. 8F, Upper West Side CORCORAN GROUP
South Shore University Hospital’s new inpatient pavilion will cost $69 million more than when it was proposed
By Ethan Geringer-Sameth
South Shore University Hospital’s new inpatient pavilion is coming in $69 million over budget, due in part to the cost of an additional 30 intensive care unit beds being incorporated into the project, state records show.
Originally estimated at $461 million when it was first proposed four years ago, the six-story, 90bed expansion in Bay Shore is now expected to come in at $530 mil-
ing along with additional support space.
A large portion of the price difference comes from the cost of fitting out previously approved space with the beds, said Northwell spokeswoman Barbara Osborn. Other infrastructure requirements that were identified after construction started also pushed up the price tag, she said.
The project has grown from 179,000 square feet to 186,000 square feet since an application for construction was first filed with the state Health Department in 2020. Along the way, the existing facility, formerly known as Southside Hospital, has separately added 20 beds, the filings show.
Originally estimated at $461 million when it was first proposed four years ago, the six-story, 90-bed expansion in Bay Shore is now expected to come in at $530 million.
lion, according to a filing with the state this month. The addition of intensive care beds is part of an aggressive capital construction agenda across Northwell Health’s Long Island sites. The unit will sit on the top floor of the new build-
The additional beds will help the hospital care for a growing volume of surgical patients, Osborn said. The new building, which will be connected to the old by a pedestrian skybridge, will bring the hospital’s total bed count to 415.
The state is issuing $1.1 billion in bonds through the Dormitory Authority of the State of New York to help fund the development along with other Northwell capital
projects, including a $560 million surgery center at North Shore University Hospital in Manhasset, a $52 million emergency department expansion at John T. Mather Hospital in Port Jefferson, and a $4 million cardiac catheterization lab at Long Island Jewish Medical Center in New Hyde Park. The state is separately backing part of the construction of a $430
million gene therapy research and manufacturing complex at the health system’s Lake Success campus with a $150 million development contract.
Largest health system
The new South Shore building will include 60 private medical-surgical patient rooms in addi-
INNOVATIVE HEART CARE FOR WHAT OTHERS
tion to the new ICU beds, plus six operating rooms and two endoscopy rooms.
It will also house 41 pre- and post-operative rooms. Northwell Health is the state’s largest health system, with 21 hospitals and 890 outpatient facilities across the city, Long Island and the Hudson Valley. The system brought in $16.9 billion in revenue last year.
At Northwell’s Cardiovascular Institute, we’re making “too complex” a thing of the past.
We’re pioneering lifesaving treatments that no one else has for even the most challenging cases. With groundbreaking clinical trials, the newest medical devices, advanced robotic surgery, and invaluable training for future leaders in the field, we’re changing what’s possible in heart care for generations to come.
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Good riddance to mandatory broker fees
Don’t believe the real estate industry’s arguments against the legislation shifting the costs away from tenants
In most American cities, a tenant about to rent an apartment only has two costs to worry about: the rst month’s rent and the security deposit.
In the hothouse real estate market of New York City, three costs come into play. ere’s the rst month’s rent, the security deposit, and the broker fee. While the rst two are xed — rent won’t vary for 12 months and a security deposit is, in most instances, one month’s rent — the broker fee is a true wild card. Before the pandemic, a broker fee would rarely be more than the monthly rent. Now, it can be anything. If an apartment is desirable enough, brokers can demand twice the cost of the monthly rent or as much as 20% of what the annual rent might be. I’ve seen this rsthand: a tenant I know trying to rent an apartment for less than $2,000 in Brooklyn was told the broker fee would exceed $3,000. With inventory low and demand exceedingly high, the broker can charge whatever the market might bear. is practice, thankfully, might be ending. Chi Ossé, a Brooklyn city councilman, backed legislation preventing city tenants from being forced to pay broker fees and it passed the City Council this
month with enough votes to override a mayoral veto. Ossé’s bill is quite straightforward: it would require whoever hires a broker — which, in practice, is usually the landlord — to pay the broker fees. e real estate industry has been a forceful opponent of the legislation. ey’ve argued it will cause rents to increase even further because the cost will be passed on to the tenant if the landlord is forced to always pay the broker. Brokers themselves have said it could put their business in jeopardy.
Before these arguments are addressed, it should be noted that the practice of forcing tenants to pay broker fees would be unthinkable in almost any other facet of the economy. It’s the equivalent of a business hiring an outside consultant and compelling the consumer to somehow pay for the service. Or a bank deciding that a portion of the teller’s salary must be paid directly by the customer who is asking a question about their account.
For buyers, brokers are a necessity. It would be unwise to purchase an apartment or house without a broker, especially in New York, and paying for that service is sensible. Buyers can also choose not to pay a broker and
Hotelier Sam Chang sells latest Manhattan inn for almost $60M
By Julianne Cuba
A proli c hotelier looking toward retirement has o oaded his latest Manhattan inn for almost $60 million, records show. It's at least his eighth sale since 2021. Real estate mogul Sam Chang, of Long Island-based rm McSam Hotel Group, has parted ways with a Holiday Inn Express at 232 W. 29th St. for $59.8 million, according to a deed that appeared in the
The head of Long Islandbased rm McSam Hotel Group has sold more than half a dozen hotels in the past few years as he plans to retire.
city register Nov. 18. e 228-key inn between Seventh and Eighth avenues, and just a ve-minute walk to Penn Station, was built in 2005 and opened a year later.
negotiate the purchase themselves.
Forced to pay for a service
In the city’s rental market, that choice is taken away. is is both usurious and, ultimately, un-American. A tenant shouldn’t be forced to pay for a service — the hiring of a broker — they don’t need or want. e reality is that apartment-hunting in New York in the age of Zillow and StreetEasy can be done without a broker, and not all brokers are helpful. It’s not uncommon to meet an agent who
knows little about the apartment and is mostly on hand to unlock the door and process paperwork. e brokerage business will be ne if the City Council legislation becomes law. Larger property owners will still pay for brokers to show tenants apartments, as the broker Michael Corley has pointed out. Small property owners will have to foot the cost too, but the rental market is lucrative enough that it shouldn’t prevent them from turning a strong pro t.
As for rents rising, they’re already quite high, and it’s hard to see the new legislation making life
more di cult for prospective tenants than it already is. Landlords weren’t bene ting from brokers charging exorbitant fees for apartments, anyway. is was excess cash heading straight into the pockets of the brokers. If landlords simply decide to pay the equivalent of one month’s rent to the broker, that will determine the market rate for their services. In the end, that’s the fairest way. New York must join the rest of the country and end the exploitation of tenants.
Ross Barkan is a journalist and author in New York City.
Chang, who told Crain's three years ago at age 60 that he would nally hang up his hat for good, sold the 13-story property to Midtown-based private equity rm Prospect Ridge, which acquired the hotel through an entity named Cactus Street PropCo. Neither Prospect Ridge nor Chang respond to a request for comment by press time. Although owned by Chang, the hotel appears to be managed by the company Hersha Hotels and Resorts, which is headquartered in Philadelphia and owns and operates 21 hotels across ve states and the District of Columbia. Attempts to reach Hersha Hotels and Resorts were also unsuccessful, and it was unclear as of press time if the company would continue operating the West 29th Street property. Chang has been busy selling o the last of his portfolio in recent months. He parted ways with a Long Island City development site
at 38-15 Ninth St., where he had planned to build a DoubleTree by Hilton hotel after purchasing the property in 2018, Crain's reported in September. at sale came after half a dozen others from the year prior. In late 2023 Chang sold three Manhattan hotels, at 16 E. 39th St., 292 Fifth Ave. and 25 W. 51st St., for more than $200 million overall. He had previously parted ways with a Long Island City Holiday
Inn for $76.5 million, a hotel complex in Times Square for roughly $450 million and a Chelsea Marriott project for more than $147 million. It's unclear how much of Chang's portfolio remains.
e city's hotel occupancy rate, which plummeted during the pandemic to 47% in 2020, has continued to rebound and climbed back up to 87.4% in August, according to the latest monthly eco-
nomic snapshot report from the New York City Economic Development Corp. — a jump that was, in part, buoyed by an in ux of migrants seeking shelter. Crain's reported this month that about 12% of the city's total hotel inventory, or about 15,000 rooms, were occupied by migrants earlier this year. at makeup, however, is likely to change as the city winds down its contracts with such hotels.
Ross Barkan
The city’s broker-fee system is both usurious and fundamentally un-American. | BUCK ENNIS
Holiday Inn Express at 232 W. 29th St. | GOOGLE STREET VIEW
Cost for Newark Airport’s new AirTrain jumps to $3.5B
By Caroline Spivack
e cost of the long-awaited project to replace Newark Liberty International Airport’s AirTrain system has jumped a whopping 75% to a $3.5 billion price tag. Construction on the new people mover will take place while the current system continues to operate; the new AirTrain is expected to be up and running as soon as 2030, according to Port Authority o cials.
e board of the Port Authority of New York and New Jersey ap-
“To get into the treetops of what happened on this program, the Covid-19 pandemic pause and the re-procurement of [elements] resulted in a ve-year delay,” said James Heitmann, the Port Authority’s chief operating o cer during the board’s meeting. “So a lot of escalation costs hit the program, that’s probably the biggest driver of that increase.”
“A new AirTrain is essential to both meeting increasing volumes at our airports and delivering a world-class passenger experience for Newark Liberty passengers.”
Rick Cotton, executive director, Port Authority
proved a $1.45 billion budget increase Nov. 14 to build the 2.5mile AirTrain project after o cials said a Covid-related rise in construction costs and supply chain disruptions bloated the airport project’s budget from a previous $2 billion estimate.
On Nov. 14 the Port Authority also greenlit its largest and arguably most crucial contract for the AirTrain venture: A $1.2 billion award to California-based Tutor Perini Corp. and Connecticut-headquartered O&G Industries for the design and construction on the AirTrain’s elevated rail structure, known as the guideway, and for three new stations that will e ectively become the spine for the Port Authority’s ongoing redevelopment of Newark airport. Tutor Perini and O&G will also create designs for a fourth station to be part of a future new Terminal B.
E orts to revitalize the 28-yearold monorail system began in earnest in 2019 due to frequent breakdowns, but the project has since su ered multiple ts and starts. In
2022 the Port Authority received contractor proposals to build the system at signi cantly higher costs than o cials had anticipated. If the agency had advanced project procurement then, the project’s costs would have swelled to $4.6 billion, said Heitmann.
e Port Authority instead chose to break up the project’s procurement package to spread out the risk of major delays. at work began in December 2023 with the Port Authority selecting Austria-based Doppelmayr for the design, construction, operation and maintenance of the new people mover system and its railcars. Port Authority o cials also tapped Canadian engineering rm Stantec, in July, to design a new maintenance and control facility, along with eventually decommissioning Newark airport’s existing AirTrain system.
Construction is scheduled to begin in the third quarter of 2025, and the Port Authority, perhaps somewhat optimistically, plans to have the AirTrain operational by 2030. Demolition of the current AirTrain system would then get underway.
Footing the bill
Port Authority o cials are footing the bill of the cost increase by reducing and deferring spending
on other projects, according to Heitmann. Deferred spending from the agency’s PATH expansion and other projects through 2026 will make up in the increase, according to the Port Authority.
e current AirTrain system serves an average of 33,000 passengers each day, or 12 million people annually, but Port Authority o cials have long said the system is nearing the end of its useful life and requires extensive maintenance to keep operational. It rst launched in 1996 and was designed in such a way that cannot
be merely expanded to meet the airport’s growing needs. And so the bi-state agency has sought to take advantage of a broader e ort to reimagine Newark airport by embarking on an overhaul of the AirTrain system.
“Our major airports are the front doors of this region,” said Port Authority Executive Director Rick Cotton. “A new AirTrain is essential to both meeting increasing volumes at our airports and delivering a world-class passenger experience for Newark Liberty passengers.”
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Bold moves toward urban redevelopment could breathe new life into the cityscape
Barry Gosin, CEO of real estate giant Newmark, got it exactly right at a recent Crain’s event when he remarked, “ ere isn’t really an oversupply, it’s under-demolished.” is candid observation perfectly encapsulates the current predicament of New York City’s real estate landscape, where antiquated o ce towers loom over a city in desperate need of housing. ankfully, it seems that Mayor Eric Adams’ administration is working on this mismatch.
In an encouraging move, the city’s economic development chief Andrew Kimball revealed that his agency is working with the Real Estate Board of New York and other stakeholders to craft a plan to make the demolition of obsolete o ce buildings more nancially viable. Considering the astronomical costs associated with such demolitions — highlighted by the $160 million JPMorgan shelled out to dismantle its old headquarters — the need for a strategic intervention is clear. e proposed program targets non-landmarked buildings that fail to attract tenants, paving the way for their replacement
with modern o ce spaces or much-needed residential towers. For developers lacking JPMorgan’s deep pockets, the city is considering a mix of property-tax discounts, loan subsidies or cash grants. is initiative could breathe new life into the cityscape by replacing dormant structures. Currently, one-quarter of Manhattan’s staggering 600 million square feet of o ce space stands empty. In Midtown South alone, the vacancy rate has soared to a re-
cord 26%. Meanwhile, Class A o ce spaces are almost fully occupied. is stark contrast underscores the urgency for a program that not only incentivizes redevelopment but also aligns with market demands.
e city has previously attempted to revitalize aging commercial spaces through the Manhattan Commercial Revitalization program, which encourages landlords to transform older Class B or C buildings into
Fix the affordable housing crisis by lowering insurance premiums
Though a ordable housing was a hot topic during the presidential campaign, President-elect Donald Trump’s policy platform was light on details of how he plans to address this ongoing crisis.
In the face of this uncertainty, we know one thing for sure: e a ordable housing crisis is not going away. In fact it is only growing, and its impact is felt most acutely by those at the lowest rung of the socioeconomic ladder, with a staggering shortfall of over 666,000 of a ordable units available in New York City alone for the more than 1 million extremely low income renter households.
Given that insurance costs often comprise a substantial portion of operating expenses for a ordable housing providers, this is a staggering jump.
While the Legislature took commendable steps in the FY2025 budget to address this issue, the reality is that these initial steps must be bolstered with additional reforms if they are to make a lasting impact on housing a ordability for New Yorkers.
Behind this shortage lies a complex web of policy and economic factors that has resulted in a chronic underproduction of affordable units. Among the most pressing is the sharp rise in insurance premiums for housing developers. Addressing thisnancial barrier is crucial to protecting and growing our a ordable housing stock while also protecting renters from steep increases.
A 2022 report revealed a dramatic 43 percent increase in insurance premiums.
While they await action by Albany, housing advocates and industry innovators are not standing idly by. ey are working to identify outside-the-box solutions to address out-of-control insurance costs. Among them are Susan Camerata and John Crotty, founders of Milford Street Association Captive Insurance Company, who recently received the 2024 Innovator of the Year in A ordable Housing Award from the New York State Association for A ordable Housing. Milford Street is a captive insurance company owned by its premium payers and provides insurance exclusively to a ordable rental buildings. Its goal is to generate signi cant savings for a ordable housing developments and alleviate some of the nan-
top-tier Class A o ce spaces. Yet, the tepid response to this program, with only two buildings approved for up to $100 million in incentives as of January, signals a need for more aggressive measures. It’s crucial to acknowledge, however, that not every old building is a candidate for demolition. As noted by Crain’s senior reporter C. J. Hughes in this week’s issue, there remains a silver lining for the Class B subsector. A steady in ux of midsize rms is relocating from outer boroughs to neighborhoods like the Garment District and Hudson Square, as the recent glut has eroded prices and made Manhattan more a ordable. is nuanced approach to urban development — demolishing where necessary and rejuvenating where possible — promises to reshape New York City’s architectural and social fabric. By supporting this transformative vision, New Yorkers can look forward to a city that addresses today’s needs and anticipates tomorrow’s challenges. Let’s support these pivotal changes and help our city turn a critical corner toward revitalization.
cial pressures these projects face to encourage the expansion and preservation of much-needed units. is type of innovation and commitment is critical to New York’s housing future. Lower insurance costs for developers directly enable the production and maintenance of more a ordable housing units, moving us closer to closing the housing gap. e success of Milford Street’s model is a testament to what the industry can achieve through targeted e orts and collective will.
Policy evolution required
However, systemic change requires continued policy evolution, and the Legislature has a vital role to play in supporting these e orts.
For New York to fully address its a ordable housing shortage, state leaders must consider additional, comprehensive approaches to lower insurance costs. Possible strategies could include new programs, tax incentives for insurers who provide fair rates to a ordable housing projects, and properly implementing anti-discrimination measures. ese ap-
proaches would not only ease the nancial strain on developers but also create a more stable environment for the a ordable housing industry overall.
A ordable housing is a long-term public good, addressing our current crisis must be a shared priority among a wide variety of stakeholders in both the public and private sectors. Milford Street’s approach demonstrates the power of innovation in overcoming systemic obstacles. Still, without a supportive regulatory and policy environment, these innovations alone will not su ce.
We must urge New York lawmakers to think boldly and collaboratively in their e orts to reduce nancial barriers for developers. As part of their e orts, the role of fair insurance premiums cannot be underestimated. By recognizing and reinforcing this need, we take a critical step forward in achieving a more equitable and sustainable future for a ordable housing in New York.
Jolie Milstein is president and CEO of the New York State Association for A ordable Housing.
Example of how a building could grow (right) if New York passes the City of Yes zoning reforms | DEPARTMENT OF CITY PLANNING
It’s time to remove sidewalk sheds in New York City
If you’ve walked through New York City in recent years, you’ve probably experienced the unsightly, claustrophobic obstacle course created by construction scaffolding. Also known as sidewalk sheds, these ubiquitous green or gray metal and wood structures may serve a safety purpose, but they have come to symbolize neglect and long-term disrepair covering our streets, neighborhoods, and public spaces. The city’s “Get Sheds Down” initiative seeks to change that, addressing not only safety concerns but the quality of life for millions of New Yorkers and visitors.
underlying issues. This not only results in eyesores but fosters illegal activities like drug-trading and graffiti, contributing to a sense of neglect and diminished public safety.
Dan Biederman is the president of the 34th Street Partnership, a business improvement district that stretches from Park to 10th Avenues, and encompassing blocks to the north and south of 34th St.
Sidewalk sheds were originally designed as a temporary safety measure, protecting pedestrians from falling debris during construction or building facade repairs. However, what was meant to be a short-term solution has become a long-standing blight on our city. These structures often stay up for years, sometimes even decades. In some cases, building owners fail to carry out necessary maintenance in a timely manner, leaving sheds up as a placeholder instead of addressing the
In the 34th Street Partnership Business Improvement District, building owners have been extremely cooperative in our efforts to free the sidewalks of these sheds. Over the last couple of years, the blocks covering the district have seen a 40 percent reduction in linear feet of sidewalk sheds. This reduction has had a significant impact on pedestrian walkways and public spaces, but there is still more to be done throughout the city. This is why the New York City Council is considering a comprehensive package of bills to hold property owners accountable to making repairs promptly so that sheds can come down and our streets can breathe again.
Local Law 11, passed in 1998, requires inspections every five years for buildings six stories or higher. While the law aims to ensure the safety of building facades, it has not been reviewed
for over two decades. A one-size-fits-all approach doesn’t work for a city as architecturally diverse as New York, where massive apartment complexes, historic brownstones, and modern glass towers coexist.
The Department of Buildings (DOB) is currently reviewing data to understand the law’s impact on different buildings, and this presents a vital opportunity to tailor the inspection cycle more effectively. For example, a six-story walk-up made of brick should not face the same frequency of inspection as a massive apartment complex.
Sheds clutter both residential neighborhoods and busy commercial areas alike, affecting thousands of pedestrians— whether they’re walking to work, school, or the local grocery store. The legislative package will transform not only the physical landscape of the city but also the daily experience of millions of New Yorkers.
At the heart of the package is a set of bills that will reshape the way sidewalk sheds are used and managed.
Int. 391 will introduce new design requirements for sidewalk sheds, allowing for more aesthetically pleasing alternatives like mesh netting and higher structures that won’t choke pedestrian spaces. These new requirements will also encourage alternatives to traditional sheds.
Int. 393 ensures that once construction is complete, equipment related to the construction, including sidewalk sheds, will be removed in a timely manner. This bill also empowers the city to correct unsafe exterior conditions if property owners fail to act.
Int. 394 addresses the issue of coordinating repairs. By requiring critical facade examinations to occur simultaneously on a given block, it reduces the chances of repeated disturbances to pedestrians and consolidates the repair process.
Int. 661 will create penalties for property owners who fail to apply for work permits within six months of installing a sidewalk shed, ensuring that building owners can no longer delay repairs without consequence. The time has come to modernize our approach to building safety and maintenance. Sheds should no longer be long-standing fixtures in our neighborhoods, fostering crime, blocking sunlight, and marring the beauty of our city. By passing this legislative package, the City Council has an opportunity to improve the pedestrian experience, maintain safety, and transform our streets. These changes will allow New York to maintain its famous skyline, while ensuring residents and visitors alike can enjoy walking through a city that feels vibrant, safe, and well-maintained.
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Pei Pei Cheng de Castro, partner, has joined Barclay Damon’s Commercial Litigation & Complex Trials and White Collar & Government Investigations Practice Areas. As former deputy counsel to the Governor of New York, she managed high-profile disputes and controversies for all executive agencies, handled special projects, oversaw executive state litigation, and was liaison to the Office of the Attorney General, the State Comptroller, and other federal and state regulatory and investigative bodies.
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Priscilla Escobedo, special counsel, has joined Barclay Damon’s Health & Human Services Providers Team and Corporate Practice Area. Escobedo concentrates her practice on representing for-profit and notfor-profit corporations in mergers and acquisitions, as well as other contract, governance, and compliance matters, in a wide range of industries, including health care providers. She speaks English and Spanish. Previously, Escobedo was an associate at a full-service law firm in New York City.
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Morgan Lewis Matthew O’Donnell a New York-based Morgan Lewis partner, has been named co-leader of the firm’s Bankruptcy, Restructuring and Insolvency practice area, part of the firm’s leading finance department. Matthew represents financial institutions on the full range of loan restructurings, out-of-court workouts, bankruptcy proceedings, and lending transactions including US and cross-border commodity financing, asset-based loans, leveraged financing, and aircraft and other equipment financings.
Shawmut Design and Construction, a leading $2 billion national construction management firm, has acquired premier full-service hotel renovation contractor First Finish, combining expertise in large, complex hotel projects with expertise in fast-track, luxury interiors. With current pent-up demand for refreshed rooms and amenities in New York, this partnership combines the specialties of each firm to provide a more strategic analysis of an overall project, bringing value with a holistic view that identifies and solves challenges upfront. While most full-scale hotel renovations require two contractors or more, Shawmut and First Finish provide one team that can execute structural, infrastructure, public space, and room work cost-effectively.
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Ben Falber, partner, has joined Barclay Damon’s Regulatory and Energy Practice Areas. Falber brings over a decade of experience advising on complex regulatory matters within the energy sector. He provides an insider’s perspective on utility and energy policy, enabling him to anticipate and strategically navigate potential obstacles. Previously, he served as senior in-house counsel at a major public utility serving New York, appearing before the New York PSC in a variety of proceedings.
Central Park’s well-used drives will soon get a makeover
By Caroline Spivack
The city intends to reengineer the six miles of drives that loop through Central Park as early as the summer of 2025, as part of a new vision by the park’s stewards to reimagine how its roads can better serve pedestrians and a boom of bicyclists and electric-powered devices.
The Central Park Conservancy, the nonprofit that manages the park, partnered with the Department of Transportation and the Department of Parks and Recreation on a 79-page blueprint that details more than a dozen short and longer-term recommendations to improve how the park’s 42 million annual visitors navigate the paved drives.
Among the recommendations is to better allocate space for pedestrians and bikers by piloting new textures and colors on the road-
bed, remove the park’s 50 traffic lights since the drives have been off-limits to most cars since 2018 and improve cross-park access for bikers with new protected bike lanes along the 86th Street transverse. The report’s proposals ultimately work toward a Central Park
we need a fresh look at how we can manage the park so that it remains a reprieve from the city.”
Park officials want to reinvent a six-mile loop of paved roads to better serve pedestrians and cyclists.
that better segregates its modern mix of users.
“Olmsted wasn’t dealing with pedicabs,” said Elizabeth Smith, president and chief executive of the Central Park Conservancy, referencing the park’s designer, in an interview. “But we’re now dealing with all of these things and I think
Nearly half of Central Park’s annual visitors (48%) are pedestrians with the bulk of the remaining users made up of bikers (45%) — though a diverse mix of e-bikers, pedicabs, horse-drawn carriages, mopeds and other vehicles also are among the park’s users, the study found. Overwhelmingly, the park’s users are locals, with 70% living in the city and 65% visiting more than once a week, according to the report.
A swell of bikers (which is likely to increase as drivers seek to avoid new congestion tolls) spurred the conservancy and the city to work with Sam Schwartz Engineering to gather input from thousands of park goers through surveys and public meetings, and seek inspira-
tion from greenspaces elsewhere in the U.S. and around the world.
To the conservancy’s surprise, it found no universal strategy peer parks in cities such as London, Vancouver and Mexico City are utilizing to better serve their user mix. The challenges remain the same — managing speeds, getting people to follow the rules and developing new regulations for electric devices — but the solutions are often a tailored mix of interventions to create clearly defined separated and shared spaces, said David Saltonstall, the conservancy’s vice president for government relations, policy and community affairs.
“We thought that if we would scour the world that we would find a couple of parks that had really figured out how to accommodate a diversity of users in the e-micromobility age, and we didn’t,” said Saltonstall. “People are still really grappling with how this can all fit together.”
In Central Park, the city has committed to working with the conservancy to repave and restripe the roads beginning as soon as next summer. The effort would keep the pedestrian lane on the left side of the road but resurfaced, likely with a sort of rubberized material that’s softer underfoot for those on a run or taking a walk, said Saltonstall. Another measure the conservancy aims to pilot as part of the resurfacing is a grooved “rumble strip” similar to those on highways to prevent bikers from veering into the pedestrian lane.
“It’s not going to cause you to fall off your bike, but you’re going to notice it,” added Saltonstall.
The middle lane, he said, would be more clearly marked for casual bikers and an outside lane would also better delineate space for emergency vehicles and electric-powered devices.
Multi-million dollar price tag
Before such work can begin the conservancy says it must share a detailed survey of each crosswalk in the park with the city, which Smith said is underway. The initial effort to repave and redesign the drives is expected to come with a multi-million dollar price tag that will be paid for by the city, according to Smith.
One medium-term recommendation encourages transit officials to redesign certain “conflict hot spots.” Those include West Drive and 72nd Street, East Drive and 72nd Street, East Drive and Center Drive and Columbus Circle. One policy intervention the conservancy suggests is the creation of a “Pedicab Reform Working Group” to better regulate the proliferation of three-wheelers ferrying — and often price gouging — tourists along the drives.
Officials with the conservancy now intend to revisit every community board that borders Central Park to present their final recommendations, and soak up additional feedback, before charting a more detailed path forward.
Helmsley Building’s value falls by 40%, appraiser says
By Aaron Elstein
The Helmsley Building has shed 40% of its value in the last three years, according to a new appraisal of the landmarked tower at 230 Park Ave.
The 1.4 million-square-foot building is worth an estimated $770 million, down from $1.3 billion in 2021, bond-rating firm Morningstar Credit said in a client note Nov. 18. The decline complicates RXR Realty’s plans to secure a new mortgage after the building defaulted on $795 million in debt late last year. RXR CEO Scott Rechler has said the Helmsley could be partially converted into apartments.
In a statement, a spokesperson
said “RXR is still in constructive conversations with the lender.”
The Helmsley was developed in 1929 by the New York Central Railroad and after developer Harry Helmsley acquired the property in 1978 he renamed it, reportedly at the behest of his wife Leona. She kept an office in the building for many years before going to prison in 1992 for tax fraud and evasion. Upon her death in 2007 she bequeathed $12 million to her dog, a Maltese named Trouble, and excluded two grandchildren from her will. Her estate was valued at more than $4 billion.
The Helmsley was acquired in 2015 by RXR, which owns about 26 million square feet of commercial space, for $1.2 billion. RXR invest-
ed $100 million in renovations. In 2021 the building took out a $670 million mortgage and carries $125 million in mezzanine debt held by Brookfield and Morgan Stanley. SL Green is the Helmsley’s special servicer.
Despite stellar location
Even though it has a stellar location atop Grand Central Terminal, the Helmsley is just 70% leased; its tenants including Voya Financial and Clarion Partners are expected to move out next year. Net cash flow has fallen by 21% in the last three years, Morningstar Credit said.
In an effort to reverse the building’s sliding fortunes, RXR is ex-
pected to unveil residential-conversion plans this quarter, according to bond-rating firm KBRA. It could be an expensive project considering the cost of the
nearby Waldorf Astoria’s conversion had risen to $2 billion by 2022. That project isn’t expected to be finished until 2025, eight years after it started.
A rendering of Central Park’s drives, redesigned to better separate pedestrians and bikers. | CeNTrAL PArK CoNServANCY
The Helmsley Building, 230 Park Ave. | bUCK eNNIS
The conservancy wants to improve cross-park access for bikers with new protected bike lanes along the 86th Street transverse, and potentially other transverse roads in the greenspace. CeNTrAL PArK CoNServANCY
HGTV designers sell a Greenwich Village penthouse at 39 Fifth Ave. for the second time in a decade
By C. J. Hughes
Two stars of design-based reality shows have said goodbye to their Greenwich Village home for the second time in a decade.
Nate Berkus and Jeremiah Brent have offloaded their triplex penthouse atop 39 Fifth Ave. for $19 million, according to a tax record that appeared in the city register Nov. 14. They had previously owned the home in a slightly smaller configuration from 2013 to 2016, before buying it back in 2021.
Featuring a living room with a fireplace, a kitchen with greenhouse-style arched windows and a wraparound terrace in a 15-story prewar building near East 11th Street, the co-op, the sale of which closed Nov. 7, according to the re-
The buyer in the deal is a bit of a bold-faced real estate name himself: Dexter Goei is the former CEO and a current director of telecom giant Altice USA, which bought Cablevision from New York’s Dolan family in 2016 for about $18 billion. In January Goei sold a pair of joined townhouses on nearby West 11th Street for a whopping $72.5 million, which appears to be a 2024 record for the townhouse sector by a long shot.
Paid $11.1 million in 2021
Nate Berkus and Jeremiah Brent have offloaded their triplex penthouse atop 39 Fifth Ave. for $19 million.
cord, was officially transacted by a shell company, Clevenger Properties LLC.
But that company’s address is also that of Berkus’ Chicago office, and the company appears to have borrowed its moniker from Brent’s middle name, Clevenger. Also the No. 39 penthouse and its occupants have been the subject of recent stories in the design press.
Berkus and Brent did well with the deal. According to the register, they paid a total of $11.1 million for the home in 2021 by way of two separate deals, an $8.9 million acquisition of the penthouse and a $2.2 million purchase of an apartment below it, No. 13C. They appear to have subsequently joined the units in a renovation worthy of the couple’s latest reality show, the HGTV series The Nate and Jeremiah Home Project, whose makeovers are intended to help “moving families get a fresh start,” the show’s website says.
In the stars’ case, the additional floor was needed to accommodate the couple’s two young children, according to an interview that Berkus gave in 2022 to the magazine Architectural Digest
It’s the couple’s second stint at the Rosario Candela-designed
building. The first time around was from 2013 to 2016, and it, too, involved a major restyling. Berkus and Brent snapped up the penthouse, which then appeared to be located on just a single floor, as well as an apartment below it, No. 14C, for a total of about $6 million, the register shows. A combination, which turned the two apartments into a duplex, followed back then too.
In 2016 the couple sold the duplex to Charles de Viel Castel, a managing director of a Latin America-focused investment bank, for $9.8 million, records show, before relocating across the country to a Spanish Colonial home in the Hancock Park section
of Los Angeles, based on news reports, and renovating the historic property.
In a whir of whiplash-inducing deal-making, they then sold the L.A. house and bounded back to New York, snapping up a townhouse at 66 Charles St. in the West Village in 2019 for $9.8 million. After fixing up that property, Berkus and Brent found a taker for it in 2021 for $12.6 million, according to a deed. Around then, De Viel Castel reportedly contacted the couple directly about selling the penthouse, which might explain why there are no marketing photos online showing it in its current state.
In his own estimation, Berkus is someone “who doesn’t hold on to
real estate,” according to the Architectural Digest article, though the No. 39 aerie “was always the one that got away.”
The 10,800-square-foot Village mansion sold by Goei earlier this year, meanwhile, went to an unknown buyer who used a shell company, 137+1 Holdings LLC. Goei had purchased that site, at 138 W. 11th St., in 2016 for $31 million, records indicate.
Altice, which does business in the U.S. through the Optimum brand, offers broadband services in 21 states to 5 million customers. Requests for comment sent to both Berkus’ and Brent’s offices were not returned by press time, and Goei could not be reached.
Luxe Park Avenue tower stripped of AAA rating
By Aaron Elstein
As office buildings go, 1 Park Ave. has a lot going for it. The Beaux Arts tower is in good condition, anchored by a high-quality tenant with long-term lease, and conveniently located between Grand Central Terminal, Penn Station and FDR Drive. What the building at East 33rd Street doesn’t have anymore is a AAA rating.
It appears to be the third Midtown tower to lose that status.
One of a handful of properties in the city whose debt was deemed as safe as Uncle Sam’s, 1 Park was stripped of its elite status Nov. 14 by S&P Global.
Although occupancy at the building is a robust 93.5%, it’s been down a bit ever since a French perfume company moved out two years ago. That vacant space may not get filled anytime soon because, in S&P’s estimation, the Vornado-owned building lacks the right stuff.
“The property, in our opinion, is
a solid class B office building that may garner less tenant demand than well-located properties that are newer and contain class A amenities,” S&P said in downgrading the building’s $525 million mortgage to AA.
While 1 Park Ave. may be lacking in what S&P considers Class A amenities, the 20-story, 1 million-square foot tower has plenty to offer. Its intricate facade has patterned mascarons decorating large windows. A deep setback inside leads to a large lobby that’s been restored to showcase original features, including 20-foot cathedral-stone ceilings, large chandeliers and inlaid stone floors.
The lobby was deemed “excellent” in 2021 by KBRA, a rival to S&P in the bond-rating arena.
1 Park appears to be the third Midtown office tower to lose its AAA rating. 667 Madison, owned by Leonard Stern’s Hartz Mountain Industries, was downgraded in August. The same happened to Blackstone Group-owned 1740 Broadway in 2023.
Vornado Realty Trust acquired 1 Park in 2011 for $374 million. In 2014, the Canada Pension Plan Investment Board bought 45% of it for about $250 million. In early 2021, partners extracted nearly
$200 million in cash from the property when the mortgage was refinanced. A few months later, the Canadian pension fund sold its stake in the building back to Vornado for $158 million.
Credit-worthy borrowers
AAA ratings are reserved for the most credit-worthy borrowers, such as the U.S. government, Microsoft and Johnson & Johnson.
But 1 Park’s mortgage was deemed AAA because, even though it’s for an older Midtown office building, 67% was leased to NYU Langone Health that operates Tisch Hospital four blocks to the east. NYU Langone houses administrative and clinical staff in 1 Park’s offices with 12-foot-high ceilings and large windows. It eventually broadened its footprint to 73% of the space with leases that don’t expire until 2038 and 2050.
Another big tenant, Robert A.M. Stern Architects, leases 7% of the building through 2033. Its office space includes a grand floorthrough staircase on the 16th floor and a library that is an interpretation of one designed by Michaelangelo in Florence, according to the firm’s website. A
common area outfitted with a gallery is used for cocktail-hour gatherings and opens to a planted terrace.
Unfortunately, there isn’t much margin for error when it comes to keeping a AAA rating and in 2022 1 Park Ave. sprung a leak. Clarins, a French perfume maker, vacated 40,000 square feet of office space at a base rent of $72 a square foot. S&P said no one has
filled the hole and occupancy has been “stagnant.” It could stay that way, S&P said, because space is widely available in buildings along Park Avenue south of Grand Central. The Murray Hill office submarket’s vacancy rate is 17%, according to CoStar, which projects it will reach 20% in 2026, when 1 Park’s $525 million mortgage comes due. Vornado declined to comment.
Jeremiah Brent (left) and Nate Berkus; 39 Fifth Ave., Greenwich Village GETTY ImAGES, CORE REAL ESTATE
Lobby at 1 Park Ave. BUCK ENNIS
Northwell’s city nurses win a $20K pay bump, better staffing, improved pension benefits in new contract
By Amanda D’Ambrosio
Roughly 1,500 nurses who work at Northwell’s Lenox Hill Hospital and its two Manhattan affiliates are set to get wage bumps and better staffing ratios after they secured a new labor contract this month.
Nurses at Lenox Hill, Lenox Health Greenwich Village and Manhattan Eye, Ear and Throat Hospital on the Upper East Side voted by 76% on Nov. 14 to ap-
Organized labor has pushed for wage hikes and improved staffing within the nursing sector since the Covid-19 pandemic, when hospital working conditions led to patient care concerns and clinician burnout. A January 2023 strike involving more than 7,000 nurses employed by Mount Sinai and Montefiore sparked labor movements across the health workforce, including among resident physicians and home care workers.
“Now, I think they recognize that if you want to make significant change, you really need to have a union behind you.”
Kathleen Flynn, president of the New York Professional Nurses Association
prove the new contract, according to the union New York Professional Nurses Association. The agreement comes with a more than 20% raise over three years, better pension benefits and expanded staffing requirements in some of Northwell’s busiest hospital units.
The strike resulted in historic wage increases, mechanisms to hold hospitals accountable to new staffing rules — and a chance for other unions to achieve comparable pay rates, said Kathleen Flynn, president of the New York Professional Nurses Association. The labor movement also encouraged younger nurses, who previously may not have seen the value of a union, to get involved, she said.
“Now, I think they recognize that if you want to make significant change, you really need to have a union behind you,” Flynn said.
Margarita Oksenkrug, a spokes-
woman for Lenox Hill Hospital, said the agreement “reinforces our commitment to providing a supportive work environment for our nurses, advances our goals of recruiting and retaining top talent, and supports the highest standard of care” for patients at the three hospitals.
Averted a strike
The contract comes after the union bargained with Northwell for two months about improving staffing ratios, Flynn said. Northwell offered a contract that the nurses rejected because of its low staffing provisions, ultimately leading the union to threaten to go on strike in October. But the health system averted a strike by fulfilling some staffing requests and offering a pension plan that Flynn described as a “major tipping point” in the negotiations.
In addition to a $38 million wage package that will raise baseline salaries by between $21,000 and $29,000 in the next three years, the union secured a defined benefit pension plan — a “much richer” plan that could increase pension payments for nurses who
choose to work at Northwell for many years, Flynn said. The nurses have an option to choose between two types of plans: a fixed contribution or one commensurate with their years of employment. The choice of pension plan is a rare offering at a city hospital system, Flynn added.
The contract includes better staffing ratios for Lenox Hill’s labor unit and postpartum department, Flynn said. It also adds staff to the emergency department at
Lenox Health Greenwich Village — one of the many hospitals that is expected to see an influx of emergency visits after Mount Sinai Beth Israel closes, she added. Northwell Health consists of 21 hospitals, but could have as many as 28 pending government approval of its planned affiliation with the Connecticut-based health system Nuvance. Northwell, which employs roughly 85,000 workers, brought in nearly $17 billion in annual revenue last year.
Fatal stabbing spree in Manhattan shows failure of criminal justice, mental health systems, mayor says
By Ethan Geringer-Sameth
Two people were killed and a third is in critical condition after being stabbed in separate unprovoked attacks across Manhattan on Nov. 18.
The suspect, a 51-year-old resident of Bellevue Men’s Shelter now in police custody, is believed to have chosen his victims at random as he walked across Manhattan from Chelsea to Murray Hill, police said.
Mayor Eric Adams called the incident, “a clear example of a criminal justice system and a mental health system that continue to fail New Yorkers,” at a press conference with the NYPD Nov. 18. The city is investigating the suspect’s history, he said, noting that he had been sentenced in recent weeks for an unrelated crime and that he had severe mental health issues “that should have been examined.”
“There’s a real question on why he was on the street,” the mayor said.
The city has struggled to address the mental health needs of homeless New Yorkers, a problem that has played out in several high-profile incidents and become marquee issues for Adams and Gov. Kathy Hochul. In response to a spate of similar violent attacks by people with untreated severe
“There’s a real question on why he was on the street.”
mental illness, the city and state have beefed up policing in the subways and rolled out several pilot programs aimed at street outreach. Adams has also called for more use of court-ordered mental health treatment, known as assisted outpatient treatment, under Kendra’s Law and more psychiatric beds in hospitals. Some mental health and homeless advocates have raised alarms about the increased reliance on the courts for what they say should be more resources to providers.
Outpatient treatment or bail?
The Mayor’s office did not immediately respond to a request for comment about whether the suspect was on assisted outpatient treatment. The Manhattan District Attorney’s office did not say whether bail was sought in the suspect’s prior cases.
Hochul agreed with the mayor’s assessment at a Crain’s event on Nov. 19, saying “the system in New York City failed,” adding that the attacks renewed public concerns
about safety on city streets.
The mental health crisis has become a prominent policy focus for the governor, who allocated $1 billion to address behavioral health in her first term. That funding has supported subway outreach programs, crisis programs and opening more inpatient beds – but Hochul said she plans to set aside more money for such initiatives in the next budget. She also raised
questions about why the suspect wasn’t already in custody related to his history with the justice system without going into specifics.
The suspect was not on either of the city’s so-called Top 50 lists, which catalogs the homeless individuals most in need of help, according to a source with knowledge of the lists.
The individual was found near the United Nations with two
blood-stained kitchen knives and blood on his clothing after a cab driver pointed him out to police, said Chief of Detectives Joseph Kenny. The stabbings occurred at West 19th St. and 10th Ave., East 30th St. and FDR Dr. and and East 42nd St. and 1st Ave. Police have not released the names of the victims or the suspect.
Amanda D’Ambrosio contributed reporting to this article.
Clean Slate Act could expand access to jobs with health insurance benefits for people with past convictions
By Ethan Geringer-Sameth
The state’s Clean Slate Act went into effect on Nov. 16, beginning the process of sealing the criminal records of 2.3 million New Yorkers with past convictions. The law has been lauded as a tool to fight discrimination in employment and could make it easier for hundreds of thousands of disproportionately Black residents to get health insurance through their employers.
Gov. Kathy Hochul signed the law last year after years of lobbying by criminal justice advocates seeking to remove one of the key barriers to employment faced by formerly incarcerated New Yorkers. The law automatically seals criminal records for most misdemeanors after three years and felonies after eight years from conviction or release from prison.
The law is expected to be a boon to people who fail to get a job after disclosing a past criminal conviction. That could mean fewer people reentering society without insurance, which costs the state millions in aid to local providers each year.
The state pays hundreds of millions of dollars each year for the net deficit providers run when they treat uninsured residents.
The state Office of Addiction Services and Supports alone budgeted more than $500 million to help fill those gaps for substance use providers this year.
Criminal background checks
Employers in most of the state outside the city are allowed to ask about an applicant’s past criminal
history. Though employers in the five boroughs cannot ask that question until after a job offer is made, advocates say offers are often revoked during criminal background checks.
Jobs are the biggest source of health coverage in New York, with 47% of New Yorkers getting insurance through their employer, according to the health policy think
tank KFF. But about 60% percent of people in New York are unemployed a year after leaving prison while gaps in Medicare and Medicaid persist, said Megan FrenchMarcelin, senior director of New York State policy at the Legal Action Center, who supported the law.
The new law will mean many of those residents could now find work that comes with health and
The law automatically seals some criminal records, eliminating a significant hurdle to finding a job with health benefits after leaving lock-up.
other benefits, which will save lives and money for the state, French-Marcelin said. “Having employer-paid health insurance… means that people aren’t ending up in emergency departments in the middle of a crisis.”
The biggest risk for people reentering society is still those first weeks outside of incarceration when prison-based services disappear before other health coverage kicks in, especially for the large number of people with substance use issues, she added. Courts will now begin sealing criminal records, rejecting those with pending criminal charges, people on the sex offender registry, people with class A felony convictions and those still on probation or parole. They have until November 2027 to finish the job.
Mayor Eric Adams
Mayor Eric Adams announced a mental health crisis plan in 2022. | ED REED/mAYORAL PHOTOGRAPHY OFFICE
Building refinancing in Queens shows mounting problems for owners of rent-regulated housing
By Aaron Elstein
With average rents of just $1,550 a month, it’s no surprise that 96% of the apartments at 144-25 Roosevelt Ave. in Flushing are occupied. One reason so few are available is that the building is becoming a less attractive place for its landlord to own.
Cash flow is falling at the 161unit building, where 160 apart-
rent-stabilized apartments. Apartments with regulated rents account for about a quarter of the city’s 3.7 million housing units.
The value of buildings with these apartments has sunk by two-thirds since the state enacted a law in 2019 that limited profit opportunities for owners, according to brokerage firm Marcus & Millichap.
“There is no path to profitability that anyone can see right now,” said Seth Glasser, a Marcus & Millichap senior managing director.
Cash flow is falling and costs are rising at the Flushing building owned by JRC Management.
ments are rent-stabilized. That’s because increases set by the city’s Rent Guidelines Board — 2.75% this year — aren’t keeping up with rising overhead. Banks are providing less capital and as a condition for refinancing the Roosevelt Avenue’s mortgage its owners were forced to kick in more than $1 million.
Analysts say the deteriorating economics at 144-25 Roosevelt are typical at properties with a lot of
Affordable housing is more scarce than ever, even though it is one thing everyone agrees New York needs more of.
Production of affordable apartments in 2023 came in 20% below the four-year average ending in 2021, according to a report by the New York City comptroller’s office. Higher interest rates are one factor. Heavy turnover at the city Department of Housing Preservation and Development was another cited by the comptroller.
144-25 Roosevelt Ave., located near the end of the 7 subway line and a Long Island Rail Road station, was developed in 1962 and
acquired in 2009 for $18.7 million by JRC Management, which owns 1,100 apartments around the city. Since acquisition the landlord invested $1.1 million in upgrading the apartments, or about $6,800 per unit. A call to one of its partners, Richard Podpirka, wasn’t returned.
Details about the Flushing building’s finances and its owners were disclosed in a report this month from credit-rating agency KBRA describing the property’s new mortgage.
Due to rising overhead
Net rental revenue rose to $2.9 million last year from $2.8 million in 2022 and $2.7 million in 2021, the report said. But net cash flow fell to $1.5 million last year from $1.6 million in 2021 due to rising
overhead. Insurance costs rose by nearly 50%, to $136,000, while utilities rose by 75%, to $355,000. Property taxes rose by 9%, to $752,000.
Even with higher costs, the building generates an 8% annual return for JRC.
Still, declining cash flow and rising costs created challenges for refinancing the building’s $17.6 million debt. Citigroup agreed to
write a $16.8 million loan maturing in five years at a 6.4% interest rate. JRC contributed $1.4 million in cash.
While JRC had the resources necessary to refinance the mortgage and keep its property, Glasser said that many owners of rent-regulated buildings don’t.
“This transaction is not typical in that sense,” he said. “Clearly JRC is in it for the long run.”
144-25 Roosevelt Ave. | bUCK eNNIS
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more dramatic and amplified. It is more captivating since we put it on social media. We definitely want to take advantage of that,” Li said of the dish’s visual appeal. “As we all know, most people refer to social media to get a glimpse of the cuisine or the ambience of the place. We try to incorporate both.”
‘Distinctly different’
Leung and his business partner, Thomas Tang, opened Yao on the second floor of 213 Pearl St. at the start of this year. Since then the restaurant, which has a 160-person-capacity dining room, has averaged $300,000 a month in gross revenue, its owners say. Tang and Leung’s first establishment, August Gatherings, opened in Chinatown almost 10 years ago. Both restaurants pride themselves on serving traditional Cantonese food — which Li argues is widely misunderstood — but with a modern twist and for a wider, more visual audience.
In Williamsburg, Calvin Eng, the chef and owner of Bonnie’s, fills his menu with dishes that honor the foods he grew up eating, including traditional Cantonese, American fast food and even a blend of both. One of them is the $22 fuyu cacio e pepe mein, which is cacio e pepe and fermented beancurd with pecorino and black and white pepper — a Chinese spin on the Italian classic. A picture posted to the restaurant’s Instagram page racked up almost 2,000 likes; the restaurant has 57,700 followers.
“Everything I know about Cantonese food is from home cooking from my mom,” he said. “We had noodles all the time. And then a lot of times, when we didn’t have Cantonese-style noodles, we would just use dried American pasta from the supermarket and cook those in Chinese applications.”
Like Bonnie’s, the menu at Potluck Club on the Lower East Side is a blend of traditional Cantonese and modern American. One such dish is its $25 salt-and-pepper chicken and biscuits, which is paired with a pickled jalapeno and chili plum jam. The scallion biscuit is a version of a scallion pan-
cake — a staple at Chinese restaurants — and the salt-and-pepper chicken is quintessential Cantonese, said Cory Ng, one of the five owners, all of whom grew up in Chinatown.
“What I love about that is you’re never gonna get chicken and biscuits in a Cantonese restaurant,” said Ng. “It’s distinctly different at Potluck Club because it’s made with full Chinese flavors.”
Potluck Club opened at 133 Chrystie St. in 2022, and its sister restaurant, Phoenix Palace, launched at 85 Bowery this past summer. Ng and his team didn’t waste any time in setting up social media accounts for both in order to highlight their food and lively, art-filled dining rooms on social media. Since opening just two years ago, Potluck Club has earned
“We’re currently witnessing and living, in real time, the shrinkage of Chinatown.”
Cory Ng, co-owner Potluck Club
itself a mention in the Michelin guide, and the restaurants combined have so far amassed a following of more than 30,000 on social media.
“There’s a lot of short-format content we definitely use to make reels and to tell the story of our food and our brand,” said Ng. “That’s just how the world works now.”
Elsewhere downtown, Cha Cha
Tang started as a pop-up and opened full time at 257 Sixth Ave. in the West Village in August.
From restaurateurs Wilson Tang and John McDonald and led by chef Doron Wong, Cha Cha Tang is a play on what’s called a cha chaan teng — a fast-casual establishment popular in Hong Kong, where diners “sit, order and eat in under 10 minutes,” said Vivian Chen, a part owner of the restaurant.
Both its dishes and its ambience are inspired by what one would get and experience at a traditional cha chaan teng, sans the hurried pace. Its modern twist comes in part from its beverage selection.
“We created a different environment to match the West Village feel with a beautiful wine list and whiskeys,” said Chen. “And our
staff has ties and red coats and vests. We wanted to create that old-school Cantonese restaurant in New York and then mix it with a more modern take.”
Keeping tradition alive
Bonnie’s Eng grew up in Bay Ridge but would regularly visit his grandparents in Chinatown. He saw the community begin to struggle, exacerbated by the pandemic, when Asian Americans became a scapegoat for the spread of a deadly virus.
“It was maybe 10 years ago, or less, that I noticed a lot of things started to change in Chinatown, a lot of places were closing,” he said. “The older generation was moving out, and the younger generation wasn’t moving in. And then just businesses started to change. The mom-and-pop shops couldn’t afford to stay around anymore.”
Bonnie’s opened at 398 Manhattan Ave. in Williamsburg at the end of 2021. Eng told Crain’s he felt it his duty to open Bonnie’s — in honor of his mother’s American name — to preserve the traditions of his family.
“This is the community that raised us,” he said. “In my eyes, I had a ton of responsibility to learn those things and to carry on those traditions and the cuisine and the culture.”
Ng, of Potluck Club, said he feels similarly, and uses food — and now social media — as a way to both preserve and share his culture. A video Potluck Club posted to Instagram as “a love letter to Chinatown” and which references breathing “new life into Cantonese food” has garnered almost 2,000 likes. The restaurant has posted other Chinatown-focused content, calling out issues such as gentrification and displacement that are hurting the community.
“We’re currently witnessing and living, in real time, the shrinkage of Chinatown,” Ng said.
When it comes down to it, the owners of the city’s newest Cantonese restaurants want to give the next generation of diners a taste of their heritage.
“This shift isn’t just about flavor; it’s about creating a vibrant cultural experience that speaks to the evolving taste to the new generation,” said Tang of Cha Cha Tang. “I’m thrilled to see more people connecting with it.”
Yao co-owners Kenny Leung and Thomas Tang in the dining room of their Pearl Street restaurant. | BUCK ENNIS
Left, Yao’s sweet-and-sour pork on ice. Right, Yao’s egg tart | BUCK ENNIS
Left, Phoenix Palace at 85 Bowery. Right, Cha Cha Tang at 257 Sixth Ave. | BUCK ENNIS
Ray McGuire still sounds like he’s running for office
By Jack Grieve
Ray McGuire was Wall Street’s pick three years ago to take over for Bill de Blasio at City Hall. And while the former mayoral candidate is now the president of Lazard and not running for public office, he remains outspoken on city issues in a manner akin to someone who might still want to lead the charge to fix them someday.
McGuire fielded questions from Kathryn Wylde, president and CEO of the Partnership for New York City, during a Crain’s event on Nov. 19. He was flanked by Steven Swartz, CEO of Hearst, and Henry Timms, CEO of the Brunswick Group, and their panel focused on the future of New York and competitiveness of the city.
Education was among the issues McGuire talked about most during his 2021 campaign, and the same was true for the panel. McGuire described the state of education in New York as an “unmitigated disaster.” He shared stories of parents in the Bronx having to buy school supplies on their own and recited abysmal test score
CLASS B
From Page 1
they’re not as new or as amenitized, are priced right, a major factor in their decision to move to Manhattan, according to brokers, landlords and company executives.
Indeed, a small but steady stream of midsize firms is packing up and relocating to neighborhoods such as the Garment District, NoMad and Hudson Square, presenting a bit of a silver lining for a subsector often written off as obsolete.
“The rent reductions are allowing deals that would not have been possible five years ago,” said Stephen Powers, a co-founder of the brokerage OPEN Impact Real Estate, which has been working with a handful of clients interested in a Manhattan move.
Among the recent transplants is social services provider Rising Ground, which recently combined its two administrative teams, one
data from memory.
McGuire said he thought the city’s education issues were not the products of budget shortcomings but rather challenges of efficiency, leadership and management. He called for reinvigorated investment not just in traditional education but vocational learning, too.
“If there’s one area of focus that we need to have, education is it,” he said.
McGuire was also eager to talk about how public-private partnerships could shape the city’s future, particularly as they relate to creating more housing. This echoed a sentiment McGuire embraced on the campaign trail; he often pitched himself as uniquely equipped to forge partnerships between the city and business sector for infrastructure improvements.
“There are opportunities out there that are immediately in front of us that if we were to engage in public-private partnership, the benefit that exists across the five boroughs (would be) material,” he said Nov. 19.
condo” deal that allows the nonprofit to avoid real estate taxes.
The firm’s new office, at West 35th Street, houses about 120 employees so far. Founded as an orphanage near Wall Street in 1831 and based in Manhattan until 1891, the consolidation into No. 1333 can be seen as a sort of homecoming. “It was a strategic move for us,” said Rising Ground CEO Alan Mucatel. “And we are happy about bringing jobs into the central business district of New York.”
The commuting factor
Cost savings are only part of the equation. Even more than in past years, a Manhattan address is a tool for recruiting employees, who may be based in the suburbs after leaving during Covid but need to commute into the city a few days a week, brokers say.
“The rent reductions are allowing deals that would not have been possible five years ago.”
Stephen Powers, co-founder of the brokerage OPEN Impact Real Estate
in Downtown Brooklyn at 151 Livingston St. and another in Westchester County, and installed them in a single, 30,000-squarefoot headquarters at 1333 Broadway, a brick-and-terracotta edifice built in the early 20th century.
For its full-floor space at the 12-story building, which is owned by Empire State Building landlord Empire State Realty Trust, Rising Ground pays $40 a square foot as part of a special 30-year “leasehold
Separately, Wylde asked the panelists about corporate social responsibility and the role business leaders play as it relates to certain political issues. In response, McGuire suggested a calculated but active approach, saying, “if you stand for nothing, you lay down for anything.”
Disappearing funds
He then called out the dwindling nature of diversity efforts across the city. “When’s the last time we talked about George Floyd?” he asked. Companies in 2020 promised between $50 billion to $100 billion to fund diversity programs, he thinks, but only about $5 billion or $10 billion materialized. “We’ve gone silent,” he said. “Was it right to stand? Absolutely? Did we retreat from that? 100%.”
McGuire also reflected on his 2021 run during the panel. He said voters saw “a Wall Street guy who happened to be Black, as opposed to a Black man who had made it on Wall Street.” He acknowledged the different interests of Manhattan donors versus Brooklyn and
Queens voters but said he did not recognize the importance of that distinction until too late into the campaign.
To be clear, McGuire gave no reason to think he is gearing up for another mayoral run — or eyeing any public office for that matter. He has played an outsized role in politics recently, though, as one of Wall Street’s biggest backers and active proponents of Kamala Harris.
Timms and Swartz also weighed in on an array of topics relating to the future of New York and its current competitiveness.
Timms, previously the CEO of Lincoln Center, said one of the toughest challenges for the city will be navigating the broader divorce of facts and feelings in society. “The way things are and the way things feel have become different,” he said. He used crime as an example. The data may show crime is down, but many people don’t feel safe in New York right now, and the latter is the narrative that prevails. The city must figure out how to flip that on its head, he said. “In a feelings game world, how do we tell stories about our
city that tell a different kind of truth?”
Swartz, who oversees one of the country’s largest media organizations, touched on what he sees as a need for a more pro-business mentality from local government here. He sees that pro-business mentality from the governor’s office and from Washington D.C., but “sometimes some of the things that would come out of the City Council and out of the state legislature do not seem like showing a full understanding of what business needs to succeed,” he said.
quality’ in any down market,” said Levy, referring to the frequent term referring to how Class A buildings are the real winners these days. “But the flight is not about switching asset classes. You go to a better building than the kind you are used to.”
For some companies, Brooklyn seems synonymous with startup mode, but when businesses scale up, they want the more formal corporate presence that Manhattan exudes, they say.
For example, Terra Kaffe, a company that sells high-end home espresso machines, in August vaulted from a 2,400-square-foot space in Greenpoint, Brooklyn, to a 5,000-square-foot berth at 36 W. 25th St., a midblock prewar site with an unattended lobby facing a parking lot in Chelsea, in part because of its proximity to transportation hubs. As the firm has grown, from a startup founded in 2018 to a 20-employee company today, this ease of access has become more critical, said company founder Sahand Dilmaghani.
“Not everybody was willing to commute to Greenpoint because there’s just one subway line that goes there,” said Dilmaghani, who added that he toured 30 buildings before pulling the trigger on his company’s current home. “I’m shocked how competitive the Manhattan rents are regardless of the neighborhood.”
Terra Kaffe’s Greenpoint space
cost about $45 a foot, though that amount was scheduled to climb to $52 a foot, Dilmaghani said. At Manhattan’s No. 36, which is controlled by Adams & Co. Real Estate, meanwhile, rents average about $40, brokers say.
Corporate presence
The current interest in Class B properties represents a turnaround. In fact, Class B’s had fallen so far out of favor in recent years with some tenants, in a city that frequently worships shiny new things, that some of the aged sites have met wrecking balls. For instance, the former Dumbo home of Wellcom, 175 Pearl St., was snapped up by the developer Watermark Capital in May for $67 million as a part of a plan to have it razed and replaced with a 238unit residential tower. (And Wellcom, whose clients have included Raising Cane’s, Woolworth and Ben & Jerry’s, has a history with this sort of displacement. It came to 175 Pearl after the building that housed its previous office in the Hudson Yards neighborhood was itself redeveloped.)
In any event, Wellcom’s Bridges says his new space in NoMad, which will open in January after a renovation is complete, is a more professional setting for his growing company.
“Dumbo became too residential, so there was no real benefit from a business synergy perspective to be there any more,” Bridges said of his former 43,000-squarefoot home, which cost about $65 a foot per year.
Although planning officials and developers have recently been eyeing Class B’s in places like the Garment District for residential conversions, some owners say the zeal for redevelopment of these unfussy structures may be misplaced.
David Levy, the principal of Adams, says many of the B sites in which his firm owns stakes in the Garment District, including 48 W. 37th St., 42 W. 39th St. and 463 Seventh Ave., are 100% full. Levy is also an investor in Wellcom’s new home, 16 Madison Square West, in which he bought out a partner last year in a deal that valued the site at $144 million.
“Of course there is a ‘flight to
GFP Real Estate, another major owner of B’s in Manhattan, recently welcomed five-year-old clean energy power provider David Energy Systems to an 8,000-squarefoot berth at 200 Varick St., a former printing press site circa 1924 in Hudson Square. David Energy relocated to the 12-story building from 417 Grand St., a modest, 4-story, mixed-use midblock property in Williamsburg, after locking down a $23 million funding round in September.
To be sure, while some Bs are overperforming, the overall segment is weak. In the third quarter in Manhattan, based on data from the brokerage Newmark, Class B’s had an availability rate of nearly 20%, down slightly from a post-pandemic peak of about 21% in the second quarter. In contrast, Class A’s have a 16% availability rate, down from a peak of 18% in the second quarter of 2023.
And A’s are busier, with 14 million square feet leased in 2024 so far versus 4 million for B’s, Newmark said.
But don’t paint all B’s with the same brush, according to their recent fans. “Some buildings that I toured felt like skeletons of their former selves, with all their empty offices,” Dilmaghani said. “But that’s a lot less true in some others, who feel like they’re in the middle of a metamorphosis as they bounce back.”
Jeff Buslik (left) and Bradley Cohn of Adams & Co. Real Estate at one of their Class B buildings, 16 Madison Square West | bUCK eNNIS
Ray McGuire has big ideas to fix the city’s most pressing problems. | bUCK eNNIS
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Notice of Formation of HARTFORD CT HOLDINGS LLC
Arts of Org filed with Secy of State of NY (SSNY) on 10/7/24. Office Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 156A EAST 83RD STREET, NEW YORK, NEW YORK 10028, USA. Purpose: any lawful act.
Notice of Qualification of REDA 242 EAST 75 LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/13/24. Office location: NY County. LLC formed in Delaware (DE) on 11/06/24. 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 DE Secy. of State, John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
Notice of Qualification of VERBITSKY CAPITAL LLC
Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/08/24. Office location: NY County. LLC formed in Delaware (DE) on 10/03/24. Princ. office of LLC: 300 Central Park West, Apt. 3K, NY, NY 10024. 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: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of the State of DE, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
Notice of Qualification of AM LENDER LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/14/24. Office location: NY County. LLC formed in Delaware (DE) on 11/12/24. 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 122072543. DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
NOTICE OF FORMATION of MOORE CLEANER LLC Arts of Org filed with Secy. of State of NY (SSNY) on 6/2/24. 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, #136790, NY, NY 10003. R/A: US Corp Agents, Inc. 7014 13th Ave, #202, BK, NY 11228. Purpose: any lawful act.
Notice of App of Auth of Story Strategy Group LLC filed with NY DOS on 1/24/2023. LLC juris and date of org: D.C., 12/1/2022. Filed with Dep’y Supt of Corp, 1100 4th St, SW, Washington, DC 20024. DC Office loc: 1620 Eye St NW, Ste 900, Washington, DC 20006. NY Office loc: NY County. NY Sec of State has been designated as agent upon who process shall be served and shall mail copy of process against LLC, to; C T Corp System, 28 Liberty St, NY, NY 10028 Purpose: any lawful act.
Notice of Qualification of CADIAN SOFTWARE GP, LLC
Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/23/24. Office location: NY County. LLC formed in Delaware (DE) on 09/25/24. 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: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of DE, Div. of Corps., The John G. Townsend Bldg., PO Box 898, Dover, DE 19903. Purpose: Any lawful activity
Notice of Formation of THE AUCTION FILM LLC Arts of Org filed with Secy of State of NY (SSNY) on 7/29/24. Office Location: KINGS County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to; THE LLC, 1 GRACE CT, BRKLYN, NY 11201, USA. Purpose: any lawful act.
Notice of Formation of FORCE MAJEURE LIFESTYLE, LLC Arts of Org filed with Secy of State of NY (SSNY) on 9/3/24. Office Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to PO BOX 89, DARRIEN, CT, 06820, USA Purpose: any lawful act.
Notice of Qualification of DAVANTI LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/11/24. Office location: NY County. LLC formed in Delaware (DE) on 03/21/22. Princ. office of LLC: 32 Ave. of the Americas, 26th Fl., NY, NY 10013. NYS fictitious name: DVTI NY LLC. 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 DE Secy. of State, 1351 W. North St., Ste. 1014, Dover, DE 19904. Purpose: Any lawful activity.
Notice of Formation of LP PRESERVATION DEVELOPER LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/25/24. Office location: NY County. Princ. office of LLC: 116 E. 27th St., 11th Fl., 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., 80 State St., Albany, NY 12207. Purpose: Real Estate Investment & Development
BLUEFISH APPAREL LLC. Arts. of Org. filed with the SSNY on 08/22/24. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 34 West 33rd Street, 7th Floor, New York, NY 10001. Purpose: Any lawful purpose.
Notice of Formation of SHARAWADGI, LLC Arts of Org filed with Secy of State of NY (SSNY) on 10/31/24 Office Loc: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 19 Stuyvesant Opal, Apt 12A, NY, NY 10009 Purpose: any lawful act
Notice of Formation of D. LOUVEL MARKETING LLC Arts of Org filed with Secy of State of NY (SSNY) on 10/28/24. Office Loc: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 136 E. 76th St Apt 15E, NY, NY 10021.Purpose: any lawful act
GEORGE PRODUCTIONS, LLC. Arts. of Org. filed with the SSNY on 10/09/24.Office: New York. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 61 Horatio Street, Apt 3G, New York, NY 10014. Purpose: Any lawful purpose.
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Kings County Hospital pediatrics chief and subordinate fined for moonlighting at Grenada-based medical school
By Ethan Geringer-Sameth
The chief of pediatrics and a subordinate at Kings County Hospital violated city ethics laws by moonlighting for a Grenada-based medical school that had business with their department, according to a ruling from the Conflicts of Interest Board.
Dr. Ninad Desai, the pediatrics
stop city employees, including public hospital staff, from using their positions to enrich themselves and advance the interests of an outside firm with city business.
“NYC Health + Hospitals has long-standing relationships with several medical schools, which benefits our patients, the health care system, and providers.”
Christopher Miller, Health + Hospitals spokesman
chief, and Dr. Vikas Shah, the director of pediatric intensive care, both held paid positions at St. George’s University School of Medicine while also overseeing a clerkship for its students at Kings County Hospital, part of New York City Health + Hospitals. The dual roles violated laws intended to
Desai has been the Kings County chief of pediatrics and its chief academic officer, responsible for supervising clinical trainees including those from outside institutions, since 2012. For the last eight years, he also held the chief of pediatrics title at St. George’s medical school, which paid him a $40,000 annual salary. His role was to ensure students “receive an optimal clinical experience” at its training sites, including at Health + Hospitals, according a 2020 post on St. George’s website that has since been taken down.
Desai used his city position to assign teachers and supervisors to St. George’s students, who as attendees of a foreign medical school must complete clerkships and residencies in the U.S. in order to practice here, the ruling stated.
“My intention was to benefit Health + Hospitals, but I acknowl-
edge that my actions benefited [St. George’s],” Desai wrote in the signed disposition.
While Desai never explicitly discussed the conflict between his city employment and his job at St. George’s with the Conflicts of Interest Board, he did report the position and compensation on annual disclosure forms and notified Health + Hospital’s then-president and the CEO of Kings County, according to the ruling. “Neither raised any concerns about it,” the disposition said.
Conflicts of Interest Board
Shah has served as the director of the pediatric clerkship at Kings County since 2012, the same year he took an unpaid position at St. George’s, which led to a paid role helping design the school’s clinical curriculum in 2022. Desai approved Shah’s positions at the medical school and the Kings County CEO was also aware, but Shah never reported them to the Conflicts of Interest Board, according to the ruling.
Health + Hospitals did not answer questions about why the agency allowed the illicit relation-
ship and why it wasn’t reported to the Conflicts of Interest Board.
“NYC Health + Hospitals has long-standing relationships with several medical schools, which benefits our patients, the health care system, and providers,” said Health + Hospitals spokesman Christopher Miller. St. George’s is one of the leading sources of doctors to New York, he noted. The school is the largest source of doctors to the United States, according to its website.
Desai and Shah both resigned from St. George’s this year after being notified by the board that their positions violated the City Charter. Desai agreed to pay a $13,000 fine and Shah agreed to pay $4,000.
“COIB’s ruling is very reasonable,” said John Kaehny, executive director of the government ethics watchdog Reinvent Albany, adding that the city’s ethics rules “need to be as clear, simple and easy to understand as possible.”
NYC Marathon group’s CEO touts ‘purity’ and accessibility of running
New York Road Runners serves more than 60,000 members through hundreds of annual races, other events
By | Caroline Spivack
Lifelong runner Rob Simmelkjaer may be the chief executive of the New York Road Runners, the nonpro t best known for putting on the TCS New York City Marathon, but he admits that running a marathon is somewhat out of his comfort zone.
Simmelkjaer’s ideal race distance is a 10K, not the grueling 26.2 miles that make up a marathon, but that preference didn’t stop him from challenging himself to run the New York City marathon twice, rst in 1997 and then again in 2013 (coming in 16 minutes faster than his rst time). at was well before he took over the helm at the New York Road Runners in late 2022.
“I joke around that then I was running the marathon; now I’m, in quote marks, running the marathon, like in charge of it,” said Simmelkjaer. “Sometimes I can’t believe that I’m doing this, and other times I look at it and [feel as if] everything did seemingly lead up to this.”
Simmelkjaer’s route to leading the organization was a circuitous one. From a young age, all things sports, particularly cross-country running and baseball, were a passion. When he attended Dartmouth College in the early ’90s, Simmelkjaer joined the radio sta-
tion and became the “voice of Dartmouth sports” as the announcer for games played by several of the college’s teams.
Initially, he sidelined his aspirations for a job in sports media by opting to attend Harvard Law School. But after a few years of law rm life, Simmelkjaer leveraged a connection he made while interning at CBS Sports in college to help him land the role of director of programming at ESPN in 2002.
The sports business
From there, Simmelkjaer built a career that touched on multiple aspects of the sports business, from the top tiers of management at ESPN, to on-air stints at ABC News and NBC Sports, to shaping sports-gaming policy as chairman of the Connecticut Lottery Corp. Still, there remained one position that eluded Simmelkjaer: leading the New York Road Runners. He harbored hopes for the role when then-Chief Executive Mary Wittenberg left in 2015, but the nonpro t was focused on internal candidates at the time. So when, in 2021, the organization embarked on a broader search for its next leader, Simmelkjaer jumped.
“My whole career I always tried
to nd a balance between the business side of what I did and trying to do something that I believed in,” he said. Getting the Road Runners job “was just kind of the perfect combination for me, everything I knew and everything I care about, and all around the sport that I love.”
New York Road Runners serves more than 60,000 members of all ages and abilities through hundreds of annual races, neighborhood runs and other events to promote healthier lifestyles and communities.
e nonpro t reported earning more than $103 million in revenue for the scal year beginning in April 2022 and ending in May 2023, including over $50 million just from its races and other programs, according to the nonprofit’s most recent tax ling.
Beyond putting on the city’s famed marathon, Simmelkjaer and the New York Road Runners’ programs prioritize fostering the joy of running, and all the physical, mental and even social benets New Yorkers can get by lacing up and going for a jog.
“I love the purity of running,” he said. “ e ability that everybody has to [put on] a pair of running shoes and just step outside is always there.”
Age 52
Grew up Primarily in Bergen County, New Jersey Resides Westport, Connecticut
Education Bachelor’s in political philosophy, Dartmouth College; law degree, Harvard Law School New York roots Previous generations of Simmelkjaer’s family mostly stuck to Manhattan, either living in Harlem or on the Upper West Side.
Family affair Simmelkjaer shares his passion for running with his two daughters. His 15-year-old runs cross-country at school — as Simmelkjaer did — and in 2022 she ran her rst race, the Abbott Dash to the Finish Line 5K in Manhattan, with her dad. Meanwhile, Simmelkjaer’s 10-year-old has run a handful of races, most recently the Citizens Queens 10K during the summer. “I’m starting to see a little spark develop,” said Simmelkjaer.
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Rob Simmelkjaer has served as the chief executive of the New York Road Runners since late 2022. | BUCK ENNIS
