Crain's New York Business, November 20, 2023

CRAINSNEWYORK.COM I NOVEMBER 20, 2023

CRAIN’S

1 PENN PLAZA LOBBY

FUTURE OF THE WORKPLACE INSIDE

Office buildings are evolving their amenities to adapt to the changing needs and habits of workers. PAGE 11

Office lobbies go lush PAGE 11

The new rules of coworking PAGE 14

Remote work still has huge impact on city PAGE 17

Crumbling garage over Amtrak line puts focus on safety Concerns heightened as developers have constructed many apartment complexes straddling train tracks in recent years

By C. J. Hughes

A major Amtrak line on Manhattan’s West Side closed last week over fears that a deteriorated parking garage built above it could collapse and crush trains running beneath.

As the discovery of holes and cracks at 524 W. 51st St. has stranded dozens of cars in the garage and hobbled thousands of commuters, it has also called attention to how much development hangs over trav-

elers’ heads as trains rumble in and out of town.

More than a dozen track-straddling developments are near the garage and the 38-story apartment tower called Hudsonview Terrace that is next to it at 747 10th Ave. and has the same owner.

In recent years similar complexes featuring towers and garages have sprouted atop Amtrak’s deep, rock-walled trench between 10th

BY THE NUMBERS

1976

The year the Hudsonview complex opened.

and 11th avenues as developers capitalized on unused air space at a time when conventional parcels were scarce. As a result, what was once largely an open cut resembles a tunnel today.

Few are suggesting that any of those projects, mostly condo and rental buildings, are as potentially dangerous as Hudsonview. Indeed, most of the buildings went up in the last two decades, when

codes were stricter than when Hudsonview opened in 1976. Also, different landlords maintain sites differently.

Plus, it’s unclear if the base of Hudsonview’s residential tower, which has about 400 apartments, is compromised, or if the damage is limited only to the site’s garage, as city officials believe. Garages are usually more susceptible to damage than buildings because they’re exposed to corrosive See SAFETY on Page 22

VOL. 39, NO. 41 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

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GOTHAM GIG New York Foundling CEO wants to empower people to ‘reach their full potential.’

CHASING GIANTS This private networking group is the new hub for the city’s leaders of color.

WHO OWNS THE BLOCK WeWork hangs on to several NoMad sites.

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11/17/23 4:18 PM

City health commissioner backs more safe injection sites, less police in mental health response Dr. Ashwin Vasan said he is ‘not closing the door’ on overdose prevention centers despite opposition from the state

By Amanda D’Ambrosio

New York City’s health commissioner said last week that it was “disappointing” that Gov. Kathy Hochul signaled that she will not use the state’s opioid settlement funds to support overdose prevention centers, but maintained that the city will continue preparing to expand safe injection sites.

Dr. Ashwin Vasan said during a live interview with Crain’s on Nov. 15 that in the face of staggering overdose rates, officials should stop being selective about approaches to support people with substance use disorder and fund a variety of solutions.

“The numbers are going in the wrong direction,” Vasan said at

cause of state concerns about legal and regulatory ambiguity, despite calls from an opioid advisory board to use settlement funds to support overdose prevention centers.

Initial data released by OnPoint NYC shows that the centers have been successful in averting drug overdoses. The city’s two overdose prevention centers have prevented more than 1,000 deaths since they opened in 2021, according to the nonprofit.

Role of employers Vasan said at the Crain’s event that he is “not closing the door on OPCs” despite refusals to support them with public money by the state, adding that he remains hopeful that the city will “find the leadership in the legal and regulatory space” to expand. The city has committed a portion of its initial share of opioid settlement funds, which totals $150 million over five years, to support the expansion of overdose prevention centers, and has published guidance for currently operating and future sites.

The commissioner added that the expansion of overdose prevention centers is not the city’s only response to the crisis — the city also plans to ramp up its distribution of naloxone, a medication that can reverse overdoses, as well as invest in expanding access to medication-assisted treatment such as methadone and buprenorphine.

Vasan said the city’s plan to ad-

“I think law enforcement officials will tell you . . . they don’t want to be doing mental health response.”

— Dr. Ashwin Vasan, New York City’s health commissioner Crain’s forum on the mental health crisis. “As someone whose job it is to protect lives, save lives, that doesn’t seem to me to be a smart strategy to shut doors.”

New York City is home to the state’s only two overdose prevention centers, which are both run by the nonprofit OnPoint NYC. The sites do not receive public funding be-

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dress the mental health crisis focuses not only on reducing overdoses, but serious mental illness and youth mental health. To address serious mental illness, the city has leaned on police involvement — a resource Vasan said he would like to eventually scale back on.

“I think law enforcement officials will tell you in this city and all across this country, they don’t want to be doing mental health response,” Vasan said. He noted that the city is focused on improving funding and staffing of B-Heard, a response team that deploys mental health workers from the fire department and New York City Health + Hospitals to people in crisis, instead of po-

lice. The nationwide mental health hotline, 988, is also a part of the city’s effort to reduce its reliance on law enforcement in responding to mental health crises.

“I think over time, we will start to see that shift happen,” Vasan said. “I wish it could be faster.”

Prevention is another tenet of the city’s mental health response.

Vasan said early intervention initiatives can address mental illnesses before they become severe — an approach that is critical to serving kids and teens.

The commissioner announced the city’s launch of a $26 million partnership with Talkspace to offer tele-therapy to teenagers across the

city at no cost. The platform, called Teenspace, provides talk, text or video therapy to teens from licensed therapists, and became available to youth as early as Nov. 15.

Vasan also emphasized the role of employers in providing pay equity, flexible work conditions and mental health benefits to workers to support the city’s efforts to address the mental health crisis. Efforts to improve mental health are a part of the city’s effort to improve quality of life and increase life expectancy of New Yorkers, he added. The city launched a campaign called HealthyNYC this month to bump life expectancy to exceed 83 years by 2030.

This luxury Chelsea apartment building is fully rented but struggling to pay bills

By Aaron Elstein

DEC. 5

Crain’s editors Cory Schouten (center) and Amanda Glodowski (right) interviewed city Health Commissioner Dr. Ashwin Vasan (left) on Nov. 15 at a Crain’s forum on the mental health crisis. | JENNIFER SAMUELS

After a 21-story apartment building opened its doors six years ago at 221 W. 29th Street, its attractive location, roof deck and 45-space underground garage proved popular among residents who pay up to $5,000 a month to rent a one-bedroom apartment.

The 95-unit Chelsea29 building is now 98.5% occupied, but it’s struggling to make ends meet because operating expenses are taking a growing bite out of rental income. Its mortgage was part of a package of loans downgraded Nov. 13 by Fitch Ratings, which said the building isn’t generating sufficient cash to meet current obligations, such as monthly mortgage bills.

“Despite the high occupancy at the [building], debt service coverage ratio has been consistently under 1.0x, mainly due to increased utilities and payroll and benefits expense,” Fitch wrote.

Chelsea29’s debt-service coverage ratio was 0.80 at the end of last

year, Fitch said, down from 0.97 in 2019. That means the building generates only 80% of the cash needed to pay debt obligations.

The building’s mortgage had a $32.5 million balance in 2019, according to S&P Global.

A building with a debt coverage ratio under 1.0 is at risk of default, although that can be prevented if a landlord kicks in additional funding or lenders set up reserve accounts ahead of time. Chelsea29’s developers, SK Development, CB Developers and Ironstate Development, didn’t respond to requests for comment.

City records show 20% of the Chelsea29 units are set aside for low-income tenants under the defunct 421-a program that offered developers tax breaks for building affordable housing.

Chelsea29’s energy costs are likely high because the building is low efficiency. Its energy-efficiency rating is just 66, for a C grade, according to the Department of Buildings. Properties across the city, which tend to be older, had

Chelsea29, at 221 W. 29th St. | APARTMENTS.COM

an average score of 58 in 2022.

Many apartment buildings are grappling with rapidly rising expenses. Data from research firm Miller Samuel show that monthly operating costs for co-ops have jumped by 53% since the start of 2020 and by 51% at condominiums.

The war in Ukraine has driven up the price of energy. Insurance costs erupted after an apartment building on the Florida coast collapsed two years ago. City laws re-

quire facade inspections every five years and a new statute requires residential buildings to shrink their carbon footprint.

“The cost of everything has gone up,” Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums, which represents about 1,000 buildings, told Crain’s in September.

Caroline Spivack contributed reporting to this article.

2 | CRAIN’S NEW YORK BUSINESS | November 20, 2023

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11/17/23 4:06 PM

CHASING GIANTS

2045 Studio founder Porter Braswell (speaking with mic) addresses a group of members at the company’s Flatiron clubhouse. | BUCK ENNIS

This private networking group is the new hub for the city’s leaders of color 2045 Studio helps companies invest in diverse employees by providing them mentorship and executive coaching

The upstart: 2045 Studio

Members can book conference rooms and private offices for no additional fee.

2045, which has 15 employees and is based in the Flatiron orter Braswell’s first startup, the recruiting platform Jopwell, had a specific mission — to help companies hire District, has so far attracted 30 corporate partners including people of color. His second, launched in June, represents Pfizer and Ford. Companies are currently capped at five mema natural progression. The private membership club, 2045 Stu- bers each to avoid overrepresentation by any one employer. dio, aims to help companies invest in diverse employees by The number of Community members is roughly equal to the number of Leaders, says Braswell, and 85% of the membership providing them mentorship and executive coaching.

Following the killing of George Floyd, Braswell says, compa- lives in the tri-state area.

Shola Aminu has been a clubhouse regular since nies pledged billions to DEI efforts, but little was the space opened in September. His membership is spent. Tenure for people of color in leadership roles, sponsored by his employer, the advertising agency meanwhile, continues to lag that of white employees.

Ogilvy, where he is the global director for diversity, In 2021, just 21.5% of executives and senior level offiequity and inclusion. He sometimes spends full cials in New York — workers within two levels of the workdays in 2045’s clubhouse. “I’m just comfortable CEO — were people of color, according to data from there getting my work done,” he says. “I refer to it as a the U.S. Equal Employment Opportunity Commissafe space — a home away from home where I can sion. Braswell designed 2045 as a perk that compameet like-minded folk.” nies can offer such employees to increase the odds He also attends evening events, like a recent mixolthat they’ll stick around — and get promoted. ogy class. “I made six new friends,” he says.

To qualify for membership, which costs $2,500 to Anne Kadet He says that the fact that Ogilvy is sponsoring his $10,000 annually, a person must self-identify as a membership is an additional factor in him choosing person of color, says Braswell: “We allow for the indito stay with his employer. “There’s some FOMO around it,” he vidual to determine what that means.”

2045 offers two kinds of memberships. Community mem- says of 2045. “Everybody wants to be part of it.” bers, who join directly, get access to the Flatiron District clubhouse, digital meetups and interest groups, online workshops The reigning Goliath: Chief and networking events. “It’s more for being social,” says Braswell. Community members are typically professional athletes, Chief, also based in New York, offers similar services and investors, entrepreneurs and creatives. membership tiers but is aimed at women professionals.

Memberships in the 2045 Leader community are available Launched in 2019, corporate partners include Google, Morgan only to professionals who are nominated and sponsored by Stanley and L’Oréal. It has 20,000 members, landed $100 miltheir employers. These members typically have at least seven lion in funding in 2022 and has clubhouses in five cities includyears of professional experience, hold mid-to-senior level ing New York. roles and have been identified as a star or rising star by their employers.

How to slay the giant A Leader membership includes twelve hours annually of one-on-one coaching and access to “council groups” — circles Braswell searched high and low for a clubhouse space. He of 6-10 professionals who meet on a regular basis with an exec- came close to making an offer on a townhouse but there was utive coach of color. no way to make it accessible.

Leaders can also attend dinners and other evening events Then he had a brain flash: What happened to the clubhouse including off-the-record talks with C-level executives of color, space formerly occupied by the Wing? The women-only social workshops and forums on topics such as serving on boards. club and coworking space closed last year amid accusations The company’s 10,000 square-foot clubhouse, open 9 am to that it mistreated its hourly workers, mainly people of color. “I 9 pm on weekdays, features a rooftop lounge and garden, thought, ‘What if we reclaim it for our community?’’’ spaces for working and socializing and a café serving free Sure enough, the space was available, but its landlord espresso drinks and snacks from Black-owned companies. was wary of renting to what appeared to be another co-

P

working outfit.

Braswell emphasized that his business model was different — more than 80% of his company revenue comes from corporate sponsorships rather than individual members. He signed a lease in late spring.

Fundraising for 2045 was relatively easy compared to his experience launching Jopwell back in 2014 when Braswell was an unknown. “There’s a privilege to being a second-time founder,” he says. “You have leverage.”

This time, he had his pick of investors and was able to negotiate favorable terms for 2045’s pre-seed round by stimulating competition for shares. His strategy: providing a clear and concise vision of just how large his company could be.

His investors also share his vision for the office of the future.

“With the creation of 2045, we believe in the future of a corporate America that reflects the population at large,” says Ken Chenault Jr., Co-Founder & Managing Partner at VC firm Benchstrength, which invested in 2045’s $4.2 million pre-seed round, which closed in June.

To land corporate partners, Braswell capitalized on his existing relationships with employers who had used Jopwell for recruiting, typically approaching C-level executives and division heads who are able to sponsor employees.

“A lot of times, what ends up happening is that people who qualify to be a 2045 Leader will go to their company and say, ‘Can you sponsor me?’” he adds.

The club is attracting community members, meanwhile, by letting Leaders bring guests to events. The startup has spent zero dollars on marketing. “It’s all organic,” says Braswell.

The next challenge Having established the club in New York, Braswell has dinners scheduled in Los Angeles, Atlanta, Chicago, Toronto, Washington and London with influential executives of color, he says, to discuss launching 2045 in their cities.

Within the next few years, he says, 2045 will have a flagship clubhouse in several large cities in addition to chapters operating in smaller markets.

“Some may be bigger, some may be significantly smaller, but we’ll always have the ability to help local community gather,” he says. “We’re deeply focused on making sure that wherever and whenever we show, we can deliver on the promise of helping people uplift themselves personally and professionally.”

Anne Kadet is the creator of Café Anne, a weekly newsletter with a New York City focus.

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11/17/23 3:56 PM

WHO OWNS THE BLOCK 27 E. 28TH ST

WeWork hangs on to several sites in NoMad as it rips up leases across the city About half the roughly 10 sites the firm once controlled in the neighborhood appear to be profitable for the company, which has filed Chapter 11

By C. J. Hughes

88 MADISON AVE. The grand bay-window-lined building piled on this corner site has served as a hotel for more than a century, though the property has cycled through stages of opulence and grit. Operating as Seville from its opening in 1904 through the early 1980s, the building was functioning as a low-cost housing facility known as an SRO by the end of that period. But the Wolfson Group, a Pennsylvania-based developer known for shopping malls, redeveloped the property in the late ‘80s as The Carlton and later added a new modern main entrance at No. 88. Since 2018, the L-shaped, block-through property has been on its third incarnation. It is now the 337-room James New York Nomad, courtesy of GFI Capital Resources Group, which bought the site in 2015 for about $162 million.

GFI was also behind the reinvention of another prewar lodging, the long-shuttered Beekman Hotel at 123 Nassau St. in the Financial District. A storefront in its West 28th Street wing is home to Bourke Street Bakery, an Australian-themed chain that introduced its first New York outpost in 2019.

27 E. 28TH ST. Williams Equities, a multi-generational firm that has partnered with Thor Equities, Jamestown and The Stahl Organization through the years, owns this 16-story corner site where WeWork appears to lease about half the office space. Its name is emblazoned on a ground-floor transom window. Other upstairs tenants at a site with asking rents of about $60 per square foot annually include Ted Moudis Associates, a design firm known for office commissions that occupies 20,000 square feet, CoStar says. Blu Dot, the furniture chain, has leased 18,000 square feet of retail space in the prewar building since 2017. Williams, which says it owns about a dozen office buildings in Manhattan, borrowed $85 million from Citi against No. 27 in 2015, according to property records. Company executives had no comment on the building.

29 E. 28TH ST. Columbia University wasn’t always way uptown. For decades, the Ivy League school’s campus was in the West 40s in Midtown. The 19th century also saw Columbia welcome the first-ever chapter of the fraternity now known as St. Anthony Hall, and in 1879, St. Patrick’s architect James Renwick. Jr. designed this ornate four-story building as the fraternity’s near-to-campus home. An inscribed stone plaque high up on the façade of the structure seems to nod to those collegiate years. After Columbia relocated uptown at the tail end of the 1800s, St. Anthony Hall relocated as well to a chateau-style structure at 434 Riverside Drive where members gather to this day. No. 29’s retail space, meanwhile, has been home to Asian restaurant Chef 28 since 1987, according to its website. Armcap Realty, whose principals seem to be the Porzio family of New Jersey, have owned No. 29 for years, according to the city register. An upstairs four-bedroom, one of seven apartments in the building, rented in May after being listed on StreetEasy at $5,000 per month.

31 E. 28TH ST. It might seem ironic that the longtime home of a company whose business included selling data about condo conversions would later succumb to a condo conversion itself. But that’s exactly what happened at this 12-story prewar office building that was the headquarters of Yale Robbins, a real-estate focused publisher whose offerings include The Cooperator and other periodicals. Art collector-turned-developer Henry Justin purchased the property in 2005 for $18.9 million before undertaking a $53.8 million, 22-unit redevelopment of it, according to its offering plan.

A two-bedroom unit at No. 31 put on the market at about $2.4 million in September went into contract this month. Other condo-ized commercial buildings under Justin’s belt include 130 W. 30th St., a Cass Gilbert-designed structure in New York’s former fur district. Yale Robbins, meanwhile, didn’t have to go far to find new real estate. The firm is now at 205 Lexington Ave., a postwar office building at East 32nd Street.

76 MADISON AVE. Ad agencies and Ronald Reagan’s 1979 New York campaign office were once tenants in this Beaux-Arts-esque commercial building. But in 2007, Centaur Properties bought it for $27.8 million and carved 31 apartments out of its offices as part of a $56 million conversion plan. Some units enjoy 11-foot ceilings, and there is also a 3,500-square-foot landscaped roof deck with a bar and fireplace. Helmed at the time by Henry Hay and Harlan Berger, Centaur developed 305 W. 16th St. as well, a charcoal-colored cond-op in Chelsea with a stylish roof of its own that includes a 5,800-pound daisy sculpture once exhibited at the Burning Man festival. The building started out as a rental but ultimately became a cond-op. Seven Grams Caffe, a coffee shop and bakery known for its thick olive-oil infused chocolate-chip cookies, has one of its three Manhattan locations in No. 76’s retail space.

63 MADISON AVE.

50 E. 28TH ST.

Completed in 1962, this 15-story, 866,400-squarefoot tower presumably was where insurers worked, as a previous owner was the company New York Life.

But around the time when a partnership that included George Comfort & Sons bought the block-wide building in 1995 for $65 million, according to property records, the surrounding area began to give way to book and magazine publishing. Ziff-Davis, known for its computer-focused glossies, leased eight floors here in 1999. The building still bags big media tenants today: CBS reportedly signed a 15-year lease renewal in 2019 for around $90 per square foot annually. But small architecture firms are also tucked throughout, as they are on nearby blocks.

The building’s owners, a group that also includes the firms Jamestown and Loeb Partners Realty, has significantly upgraded the structure in recent years, including adding ground-level retail space. A 54,000-square-foot Whole Foods grocery opened in part of it last year. The landlords gave No. 63 a new name along the way, too. It is now 28 E. 28th St., suggesting the “20s” have achieved some cachet.

Interest in the neighborhood in recent years from high-profile residential developers crystallized with the creation of this massive glass-walled project, a two-in-one condo-and-rental building from the team of Toll Brothers City Living and Equity Residential. Toll contributed 81 condos across the top 18 stories of the 40-story spire while Equity added 269 apartments across 20 floors at its base, a portion called Prism at Park Avenue South. The partnership acquired the site in 2011 for $134 million, according to the city register. The seller was A & R Kalimian Realty, which had planned to develop a similar project at the side-by-side parking lots on the corner but apparently switched gears after securing the necessary permits. The area often seems caught up in crosscurrents of rebranding.

Park Avenue South was Fourth Avenue until 1959, when city planners came up with a new handle to give more oomph to the nine-to-five office district.

BUCK ENNIS, GOOGLE MAPS

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eWork must jettison 1.5 million square feet of underperforming New York office space across more than three dozen leases in order to survive, the company argued in bankruptcy filings.

Whether a judge agrees that a company once valued at $47 billion can walk away from millions of dollars in unpaid rent remains to be seen.

But in the meantime, as WeWork tries to reorganize, it seems worth considering which sites the company is not giving up on despite the dramatic trims to its portfolio. Some of those keepers not only suggest a possible winning formula for coworking real estate but also cast fresh attention on the grip WeWork has on some landlords.

NoMad, as in the blocks north of Madison Square Park, is one place where WeWork has staked a bet on its recovery, according to court filings and company records. Of the roughly 10 sites that the company once controlled in the neighborhood, it intends to keep about half of them.

One site is 27 E. 28th St., where WeWork leases 129,000 square feet that seem to be the embodiment of the polished-industrial look of the 2010s coworking trend. The space is inside a prewar corner former office building that also goes by 79 Madison Ave. Not only does the berth seem representative of a design trend, it also appears to be a major contributor to No. 27’s financial health. Indeed, WeWork’s holding there accounts for about half the entire 225,000-square-foot tower, according to data from CoStar.

Along the same lines, WeWork appears to be one of only a few office tenants in the 16-story building, whose owner is Williams Equities. In fact, CoStar pegs No. 27’s occupancy rate at just 68%, suggesting that if WeWork were to rip up its lease there like it did at other sites, Williams might be in big trouble.

Email and phone messages left for Willams principal Robert Getreu were not returned by press time.

WeWork also likes its chances at other NoMad properties, such as 135 Madison Ave., a 13-story prewar property owned by the Rosen Group, and 450 Park Ave. South, a 12-story building at East 31st Street owned by the Moinian Group.

But the neighborhood hasn’t been strong across the board. Among the sites WeWork wants to abandon are two Walter & Samuels-owned properties, 130 Madison Ave. and 419 Park Avenue South.

Another apparently unprofitable location is 183 Madison Ave., an Art Deco site with a landmark lobby owned by ABF Properties, a landlord with heavy exposure to WeWork leases. Indeed, ABF’s 28 W. 44th St. and 1156 Sixth Ave. beyond NoMad’s borders are also places where WeWork shouldn’t have to fork over rent anymore, according to court documents. Messages left with Walter & Samuels and ABF Properties were not returned.

4 | CRAIN’S NEW YORK BUSINESS | November 20, 2023

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11/17/23 1:47 PM

Development of Hudson tunnel about to speed up as project lands another $3.8 billion in federal funding

By Caroline Spivack

Construction of the long-delayed rail tunnel that links New York and New Jersey is finally on the express track, with officials announcing $3.8 billion in additional federal funds for the endeavor.

The grant money, announced by U.S. Senate Majority Leader Chuck Schumer on Nov. 3, is on top of $6.9 billion in previous commitments from the Federal Transit Administration. The dollars bring Washington’s contribution to the Gateway project to more than $11 billion, or roughly 70% of the project’s cost — 10% more than officials initially an-

ernments can now free up extra money to put into other transit needs,” Schumer said at a Hudson Yards event ushering in a new phase of construction for the project.

“With these new dollars, gateway’s future is assured. All systems go.”

Choke point

The $16.1 billion effort is poised to build a new rail tunnel directly south of the current, 113-year-old tube that was badly damaged by saltwater during Superstorm Sandy in 2012. The existing tunnel, which is owned by Amtrak and also used by New Jersey Transit, is a critical choke point of the Northeast Corridor that carries more than 750,000 passengers each day.

The undertaking has long been an on-again, off-again affair with work underway some 13 years ago only to be halted by — U.S. Transportation Secretary Pete Buttigieg then-New Jersey governor Chris Christie. With federal and regional officials all ticipated, said Schumer.

New York Gov. Kathy Hochul and currently on the same page, develNew Jersey Gov. Phil Murphy opment is about to speed up with agreed in July to split the remaining initial construction now underway on both sides of the Hudson River. costs.

“This is one of the largest and “New York and New Jersey gov-

“This is one of the largest and most significant public works projects in modern American history.”

most significant public works projects in modern American history,” said U.S. Secretary of Transportation Pete Buttigieg at the Nov. 3 event. “If those tunnels became unavailable, you would feel the economic consequences as far away as my home in Michigan and further, which is what makes the Gateway program critically important not just to this city, not just to this region, but to our entire country’s economic security.”

On the New York side, an initial phase of A train emerges from the 113-year-old rail tunnel linking New York and New Jersey. | BLOOMBERG construction will build concrete casing for trains to pass foot clearance between the over- on a portion of tunnel under Hudthrough under Hudson Yards — at pass and tracks leading to the son River Park off Manhattan’s west side, and work to reinforce the a cost of $600 million — before forthcoming tunnel.

The Gateway Development Hudson’s riverbed. reaching the soon-to-built tunnel.

“The most important thing is Work to dig the actual tunnel is ex- Commission governing the maspected to begin in 2025, with its sive effort has broken the tunnel people won’t have to think about two-tracks not expected to be in project down into nine packages, infrastructure that much because five of which are currently active, we did,” said Buttigieg. “People will service until 2035. be riding through those tunnels Meanwhile, in New Jersey, Edi- according to commission staff.

Three other projects are expect- free to think about whatever that son-based contractor Conti Civil is working to raise a highway bridge ed to move into procurement by matters most in their lives because on Tonnelle Avenue in North Ber- year’s end: construction of a shaft they no longer have to worry about gen. The project will create a 19- through the Palisades in Hoboken, disruptions.”

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November 20, 2023 | CRAIN’S NEW YORK BUSINESS | 5

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11/17/23 1:55 PM

ON REAL ESTATE

Bronx council upset bad omen for housing push Elected officials could see Marjorie Velázquez’s loss as a cautionary tale against supporting new projects in their districts

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hen Mayor Eric Adams Throggs Neck project had a unique was asked in September and somewhat confusing approval about potential pushback process that would be difficult to to his ambitious plan for increasing replicate across the city. Velázquez the city’s housing supply, his re- remained adamantly opposed to it until the last minute, sponse strongly implied when she suddenly rethat members of the City versed her position and Council who stand in the urged the City Council to way of more housing in approve it. This took many their districts would suffer Throggs Neck residents by for it at the ballot box. surprise and sparked Based on Nov. 7th’s speculation that the election results, however, Council may have apthe opposite may be true. proved the project even if In an otherwise sleepy Velázquez had not and predictable election Eddie Small changed her position. evening, Bronx City CounMarmorato attacked cil incumbent Democrat Marjorie Velázquez lost to Republi- Velázquez over the rezoning in a can Kristy Marmorato in a major debate this fall, saying “I still have upset, despite Democrats making not met one person in this district up more than 60% of the borough’s that wanted the Bruckner upzonregistered voters. Velázquez’s sup- ing other than you and the mayor,” port of a 2022 rezoning for a 348- the Norwood News reported. She unit residential project in her said she would help find places in Northeast Bronx district appears to the community where people be a major reason why. This is not a want affordable housing and suggood sign for attempts to get gested “a whole strip of buildings” pro-housing legislation through in Morris Park given the new Metthe City Council next year, and the ro-North station planned for the impact could spill over to the state neighborhood, according to the News.

Legislature as well.

A more typical back-and-forth To be fair, the controversial

in the fall of 2022 happened at Astoria’s roughly 3,000-unit Innovation QNS project. Local Councilwoman Julie Won opposed it until the developer agreed to a major increase in its affordable housing component, at which point she got on board. Won easily won re-election.

Powerful image And there was at least one sign this election season that opposing new development could be politically harmful as well. Harlem Councilwoman Kristin Richardson Jordan’s brief tenure in the City Council was marked by her steadfast opposition to a 915-unit project proposed for the neighborhood. She subsequently faced multiple challengers for the June primary and dropped out of the race in May. Incoming Councilman Yusef Salaam seems like he will be more amenable to new projects.

But upset losses tend to linger most strongly in the political imagination, particularly among other elected officials. It seems safe to say they will remember

election results, particularly given his rocky relationship with the body.

Seeing Velázquez lose will only make this more likely and could also make it harder to get something done at the state level. Legislators already scuttled Gov. Kathy Hochul’s controversial housing plan this year, and it’s tough to see why they would have a greater appetite for passing one during Bronx City Council incumbent Democrat Marjorie an election year in Velázquez (above) lost to Republican Kristy Marmorato in light of Velázquez’s a major upset. | NYC COUNCIL/FLICKR loss.

Adams’ housing plan and large Velázquez’s unexpected defeat more than Won’s and Salaam’s ex- New York projects in general are pected wins and may decide to not not dead by any means. Given the support controversial real estate pace of New York politics and real projects in their districts because estate, the Velázquez-Marmorato race might be a faded memory by of it.

Adding housing to low-density the time you finish reading this parts of the city like Throggs Neck sentence. But the image of the first has always been difficult, and Republican in decades to hold a those aspects of Adams’ housing Bronx City Council seat is a powplan probably would have faced erful one that will likely impact the most opposition in the City several housing votes going forCouncil regardless of Nov. 7th’s ward.

ON POLITICS

As Adams scandal deepens, rivals smell blood

Federal probe could put the mayor in real trouble for re-election in 2025. Unlike Donald Trump, there is no cult of personality for him.

T

he city’s political class might the mayor himself. Federal prosejust smell blood in the wa- cutors are reportedly investigating whether Adams’ mayoral camters of City Hall.

At this month’s annual Somos paign conspired with the Turkish conference, the chatter focused on government and a Brooklyn conthe future of Eric Adams, who is struction company to direct foreign facing a federal investigation into money into the campaign through his 2021 mayoral campaign. At straw donations. The investigation least two state senators, Zellnor is also touching on the question of Myrie of Brooklyn and Jessica Ra- the Adams campaign kicking back benefits to the construcmos of Queens, have talktion company and to Turked publicly about runish officials, and on Adning against Adams in ams’ possible interference 2025, when he’s expected in the city Fire Departto seek re-election. Othment’s approval of the ers, depending on who Turkish consulate buildgets indicted when, could ing in Midtown. be coaxed into running, If Adams is personally too. Antonio Reynoso, indicted, his political cathe Brooklyn borough reer will end. He can president, would have to Ross Barkan choose, like Donald risk his seat to run — unTrump, to fight the less there’s a special election, which some Somos attendees charges in court, but he won’t have Trump’s durability. Trump is are suddenly anticipating.

News broke Nov. 10 that the FBI, extremely popular with Republiin addition to raiding the house of cans and is steamrolling his way to Adams’ chief fundraiser, seized Ad- his third consecutive nomination ams’ own phones and iPad. The de- for the presidency.

Adams won the Democratic pritails of the investigation appear to have been made public by an au- mary two years ago by less than thorized leak to the New York Times. 10,000 votes. He has never had Such movement, from the feds, strong approval ratings, and he’s suggests the investigation is quite unpopular in large swaths of the city, particularly in upscale and serious.

Adams has denied any wrongdo- gentrifying neighborhoods.

It’s unclear, too, if his Black and ing, and it’s unclear if the U.S. Attorney’s office will ultimately target Latino base would stick with him

like Republicans have rallied around Trump. There is no cult of personality for Adams. He is another city politician who, through skill and plenty of luck, ended up at City Hall.

No sitting mayor indicted No sitting mayor has ever been indicted. Adams could theoretically survive and win a second term if an indictment comes for a top staffer — or indictments are never unsealed. Bill de Blasio, his predecessor, was investigated without charges ever being brought. Andrew Cuomo’s closest aide, Joe Percoco, was indicted, and Cuomo still won a commanding re-election.

The trouble for Adams is that indictments have already come, though he’s distanced himself from them. Eric Ulrich, his former Buildings commissioner, was indicted by the Manhattan D.A.’s office in an unrelated bribery case.

The mayoral campaign investigation hits much closer to home. This is why Myrie, Ramos and Reynoso are all being floated as candidates.

And why others are considering throwing their hats in the ring.

In the event of a shock resignation, Jumaane Williams, the public advocate, would become the acting mayor until a special election is held. If that came to pass, Wil-

Mayor Eric Adams has denied any wrongdoing. | NYCMAYOROFFICE/FLICKR

liams would be a top contender but could be expected to face down a large field of ambitious challengers. An open race could attract almost every politician of note in the city, especially since ranked-choice voting will be in effect and won’t create the problem of vote-splitting.

It would be a political battle royale like nothing else we’ve seen in modern times.

Quick takes ◗ How large will next year’s budget

gaps be? State Comptroller Tom DiNapoli’s warning to New York

City in a Crain’s op-ed could potentially bring about painful cuts, though it’s unclear what will be needed and if new revenue streams can be found elsewhere. ◗ It appears Tom Suozzi, the former congressman, will have an easier path to the Democratic nomination for his old Long Island and Queens district next year thanks to the dropout of Zak Malamed. George Santos is under indictment and could lose the Republican primary, setting up a more traditional clash for a swing House seat.

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

6 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2023

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EDITORIAL

Mapping a truck route plan in which business and health needs coexist I

n a city that never sleeps, the wheels of commerce churn ceaselessly. Yet, there’s a cost that comes with being the economic powerhouse that is New York City. Our neighborhoods, those vibrant threads in the city’s rich tapestry, have borne the brunt of relentless truck traffic.

City Council’s recent bill mandating the Department of Transportation to craft new trucking routes is a much-needed breath of fresh air. But as the department embarks on this critical task, it must navigate carefully, ensuring that the arteries of commerce do not become clogged in the process.

For businesses, the efficient flow of goods is not merely a convenience but a lifeline. Ninety percent of goods are delivered by truck. The commercial interests at stake include timely deliveries that fuel the just-in-time inventory systems that modern commerce relies on. There’s also the matter of cost — rerouted trucks may travel longer distances, leading to increased fuel consumption and operating expenses, costs that businesses will inevitably pass on to consumers. The competi-

tive edge of a city’s market also hangs in the balance; cumbersome and inefficient truck routes could deter potential new businesses and frustrate those already operating in our urban core.

This is the first overhaul of these routes since the 1970s. The city has changed so much but these routes have not kept up.

The Department of Transportation must balance noble intent with economic pragmatism. The new routes cannot simply shift the problem from one neighborhood to another or stifle the city’s lifeblood of commerce. Instead, they must be the product of a holistic approach, one that considers safety and health without hamstringing the city’s commercial vitality.

The Adams administration supports the bill and intends to include the route plans in a broader strategy to move more deliveries through the city’s waterways and make last-mile delivery more sustainable.

It’s also heartening that the Trucking Association of New York, which represents more than 580 member companies, is on board with this effort. After City Council passed its bill last week, the association re-

Cross-Bronx Expressway in the Bronx | GETTY IMAGES

leased this statement: “The truck route network is a key safety tool, and we must ensure trucks stay on route.”

The safety of our streets and the air we breathe are of paramount importance.

Heavy truck traffic has been a perennial concern, with streets in neighborhoods like Chinatown and the South Bronx clogged with large vehicles and the air thick with emissions. It’s not tenable to

sacrifice the well-being of residents to economic activity. And yet, the health of our city’s economy cannot be an afterthought in the pursuit of environmental justice.

The city’s economic engines, from the momand-pop shops to the large distribution centers, all have a stake in the outcome. It’s a delicate give and take, but one thing is clear: Routes that undermine business will ultimately undermine the communities they aim to protect.

In this new chapter of urban planning, let’s write a narrative that speaks to the collective aspirations of New Yorkers — a city that is safe to walk, clean to breathe and conducive to business. Let the Department of Transportation remember that in its cartography it has the power to uplift our communities and fortify our economy.

PERSONAL VIEW

Don’t believe the doom-loop hype

N

ew York City just marked a critical of Manhattan have lost foot traffic and ecomilestone in our recovery from the nomic activity because of remote work and pandemic, with the announce- a temporary drop in international tourism, ment that jobs in the five boroughs sur- a less Manhattan-centric economy is not passed 4.7 million — an all-time high. necessarily a bad thing for the city and reMore than one year ahead of projections, gion. And we must never underestimate the city recovered all the private sector the creativity of the Manhattan real estate industry, which will inevitably figure out jobs lost during the Covid-19 pandemic. how to transform their lemons Once again, the city’s economy into lemonade. has proven far more resilient than doom-loop prognosticators would have us believe. Despite Leadership matters high taxes and a political climate that is often hostile to business, When handing out credit for New York remains a magnet for New York’s relatively strong recovglobal talent and private investery, as compared to sister cities ment. Employers are committed like San Francisco, Chicago and to a city that offers access to the Philadelphia, it is important to most productive and diverse Kathryn point out how much leadership workforce in the world. matters. Mayor Mike Bloomberg Wylde is the New York was down almost a president and was able to restore business confimillion jobs in 2020, at the height CEO of the dence in the future of the city after of the pandemic, but many core Partnership for 9/11, stabilizing the local economy industries — financial and profes- New York City. and laying the groundwork for sional services, health care and New York’s emergence as a global technology — never lost a beat. The city’s hub of innovation.

GDP quickly rebounded to about $900 bilSimilarly, the current job numbers are a lion, tying us with Tokyo as the world’s larg- clear indication that Mayor Eric Adams’ est urban economy, and is projected to message and priorities have resonated with grow by 2% to 4% this year. business. His focus on public safety and fisMore than 29,000 new businesses were cal restraint, as well as his commitment to created here in the last year, with every bor- maintaining New York’s status as the busiough except Manhattan seeing a net in- ness and financial capital of the nation and crease in its inventory of commercial enter- the world, have encouraged local and interprises. While the Central Business Districts national employers and investors to double

down on New York.

Despite being bushwhacked by the asylum-seeker crisis that is the result of failed federal immigration policies, Adams has continued to push out practical initiatives that are designed to make it easi- Make no mistake, New York City is back, writes Kathryn Wylde. | BUCK ENNIS er to build, invest and create jobs in our city. He has removed are getting safer and cleaner, and the busimore than 13,000 illegal dirt bikes, electric ness community has taken notice.

Make no mistake, New York City is back. scooters and motorcycles from the streets.

His Sanitation Department is mandating The numbers show how far our city has containerization of garbage rather than al- come but, more importantly, New Yorkers lowing plastic bags and the rats that feed off are seeing the progress we have made. them to clutter sidewalks and streets. Whether it is the millions of tourists visitRestaurant sheds are coming down, re- ing our city and filling up the streets of placed by temporary sidewalk and street Times Square or the increase in ridership on our subway system, the vibrancy of café settings.

The mayor’s law enforcement efforts New York City has returned.

New York is a tough city, facing a nevhave reduced shootings by 26% this year, and his team is determined to curb minor er-ending stream of new challenges. The offenses like assaults and harassment that mayor is a genuine champion of the culhave made the city less livable. He has tak- ture of tolerance, optimism and drive that en action to remove homeless encamp- has gotten our city through the worst of ments and to get seriously mentally ill indi- times. These are not the worst of times, as viduals into treatment and housing. His those of us who lived through the 1970’s City of Yes zoning and regulatory proposals and 80’s can attest. Quite the contrary, this will facilitate private investment in conver- is a decisive moment to celebrate New sion of older office buildings to affordable York’s strengths and unite in support of housing and energy upgrades to reduce the practical solutions to its problems. We city’s carbon footprint. In short, our streets should not let it pass unheralded.

Write us: Crain’s welcomes submissions to its opinion pages. Send letters and op-eds of 500 words or fewer to opinion@CrainsNewYork.com. Please include the writer’s name, company, title, address and telephone number. Crain’s reserves the right to edit submissions for clarity.

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PERSONAL VIEW

Action needed now as New York teeters on a ‘fiscal cliff’

A

s public and private watchdogs over New York City’s fiscal health, our mandate is to alert the public when the city faces an alarming financial situation. That moment has arrived: Major looming budget gaps will have serious consequences for New Yorkers, unless action is taken now.

Many New Yorkers already sense the stress given how the staggering influx of asylum seekers and migrants has strained social services and the budget. The city estimates these costs may grow next year to equal what it spends to run the sanitation and parks departments combined.

But the billions of dollars the city will spend to Thomas care for these new arriv- DiNapoli is the als is only one significant New York state contributor to the fiscal comptroller. shortfall — at most, 42 percent of the Fiscal Year 2025 budget gap. Our organizations project that gap for next year could be $9.9 billion and possibly up to $13.8 billion, even with the lower estimate assuming higher tax revenues and lower migrant costs than the city’s Office of Management and Budget anticipates.

The major underlying cause of the budget gap comes from years of added and ex-

panded city programs that — at best — were supported only for a short time by non-recurring revenue or — at worst — not funded at all. City-funded spending has increased more than 50% over the past decade while recurring revenues have not kept pace. Despite the urging of our offices, few efforts have focused on increasing efficiency or shrinking lower impact programs, which could have allowed ongoing revenue to be sufficient to avoid future cuts.

The city and its unions agreed to reasonable raises for city workers, but did not identify how the $16 billion they added to the budget will be funded. The city also used federal Covid aid and a temporary tax revAndrew Rein enue surge from record is president of Wall Street bonuses to the Citizens fund and grow over $2.5 Budget billion of programs, from Commission. housing vouchers to education for 3-year-olds. Spending on overtime, special education and other services also regularly exceeds the budget. We are now facing what we call a “fiscal cliff,” because when funds dry up, the budget gap expands or programs must be cut.

What to do now? Knowing a reckoning is approaching, Mayor Eric Adams has rightly called for immediate action to stabilize the

budget, directing city agencies to propose one round of 5% savings and be prepared for another two, amounting to nearly 15% in total. This is not easy, and must be done right to minimize impact on critical services. And it would be a futile task if city leaders continue to add spending: Adams’ four previous savings plans were helpful, but new spending that was simultaneously added amounted to more than double the planned savings.

To stabilize the budget and minimize any pain from cuts, the most impactful programs should be prioritized first, allowing the city to end programs meant to be temporary and consolidate duplicative efforts.

Doing this well relies on the city greatly improving its data on program efficiency and effectiveness, and implementing a performance management and accountability process.

Second, agencies should implement changes to deliver services more efficiently and help the city run better. Given how inefficiencies are marbled throughout the city’s and its contractors’ operations, many of the best ideas will likely come from management and labor collaborating to change processes and enhance workers’ skills. Opportunities to use technology and reorganize functions can be pursued. The city also should examine how it uses space and vehicles, and identify savings through centralized procurement. Per the mayor’s directive, this savings effort will include

migrant-support services, many of which have outlived any emergency rationale for higher costs.

Finally, city headcount should be managed smartly. Certain areas need more staff to get the job done. Less discussed have been the operations that have sustained staffing losses but are, or can be, managed well with leaner teams. The mayor’s office should take a hard look at staffing and performance, and make nuanced decisions to ensure city government can function well.

The challenges are real, the solutions tough, but a path is at hand. It relies not only on the hard work of management and labor, but also on a transparent, sober discussion of program priorities, impacts, savings efforts and costs. To help this transparent effort, strong consideration should be given to reviving the Program to Eliminate the Gap (PEG) monitoring function that the New York State Financial Control Board provided years ago.

Fiscal stability underpins the city’s ability to provide core services to New Yorkers and is fundamental for economic growth.

Those preferring to avoid major steps like these are inadvertently harming the city’s capacity to serve those in need in the future. Compassionate, creative New Yorkers have no shortage of ideas that may help our neighbors and the city thrive.

Hard choices must be made, with the needs of New Yorkers — today and in the future — at the center.

PERSONAL VIEW

Saying ‘yes’ to modern zoning for a modern economy

A

s business leaders from across New York City, we’ve seen up close the challenges facing our members and small businesses within all five boroughs.

From pandemic-related lifestyle changes to high commercial rents to ever-growing levels of online shopping, businesses in New York already face a significant share of obstacles to succeed. Our own city’s regulations about what kinds of stores can fill a vacant storefront, or precisely how many square feet a particular company can use for a particular purpose, shouldn’t get in the way of a successful business.

Our economy is a constantly evolving organism that changes year-to-year, decade-to-decade. And yet many of the zoning rules that govern our commercial and industrial sectors haven’t been updated since 1961! This stunning dissonance grows more notable with each passing day, contributing to vacant storefronts and preventing entrepreneurial New Yorkers from achieving their dreams.

Fortunately, Mayor Eric Adams and the Department of City Planning have recognized this growing problem and proposed a thorough, far-reaching solution with City of Yes for Economic Opportunity, which just began public review. This plan offers a wide array of common-sense citywide changes that will drive an equitable economy that helps our small businesses open, grow and succeed. As proposed, the plan will clear the way for job-generating uses ranging from large industrial lofts to

local corner stores, opening thousands of opportunities that are arbitrarily limited today for no good reason.

The revisions proposed in the City of Yes plan will not only benefit businesses, but also the corridors they reside in. For example, commonplace businesses like dance studios or clothing rental stores are today only allowed above the ground floor on commercial streets in some districts.

You can wind up with a vacant storefront at street level, with a business restricted to one floor above it. That makes no sense.

City of Yes for Economic Opportunity will let those stores be placed on the ground floor as well.

Today’s rules also create frivolous differences between similar zoning districts. In some areas, you can open a store that sells bicycles but isn’t allowed to rent or repair them. Or you can have a movie theater allowed on one side of the street, but not the other. We think these kinds of rules handcuff businesses with no benefits to the public and should be corrected. We’re glad City Planning agrees.

City of Yes for Economic Opportunity will also more broadly expand what types of businesses are allowed in commercial and residential areas. The businesses of 2023 do not look like the businesses of 1961, when these regulations were created: Our zoning still treats activities like escape rooms or virtual reality the same way that it treats roller coasters and thrill rides.

City of Yes would update and clarify how

Linda Baran from left, is the president and CEO of the Staten Island Chamber of Commerce. Thomas J. Grech is the president and CEO of the Queens Chamber of Commerce. Randy Peers is the president and CEO of the Brooklyn Chamber of Commerce. Lisa Sorin is the president of the Bronx Chamber of Commerce.

Jessica Walker is the president and CEO of the Manhattan Chamber of Commerce. zoning treats these businesses, and allow the safe, quiet amusements to locate closer to customers.

This plan will also create a process that could permit new corner stores, like a bodega, in residential areas. This would unlock easy access to necessities for the 265,000 New Yorkers living in areas where a new corner store could not be located within a quarter mile of their home. There are also many New Yorkers who wish to start a business in their home. But many of these options, like barber shops, interior decorators or advertising agencies, are blocked by zoning today. This plan would open a pathway to these entrepreneurs.

Another big problem with today’s outdated zoning is the way it defines manufacturing. In the 1960s, manufacturing often equated to big factories that generated noxious waste and should be far away from residential or commercial areas. But

today, we have small producers like microbreweries, apparel makers and ceramic shops that have no such environmental impact on a neighborhood. City of Yes will let these businesses open in commercial areas to larger customer bases while still restricting heavy manufacturing.

This only scratches the surface of the sensible changes that City of Yes for Economic Opportunity proposes. Our economy cannot firmly step forward towards prosperity with one foot stuck in the past.

By revisiting outdated guidelines, this plan will give our small businesses a leg up towards long-term success and create a truly dynamic future for our city. If you have a favorite local store and you want to see it thrive, tell your Community Board, borough president and Council member to support this proposal. Together, we can chart a path toward a flourishing future for our city.

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CRAIN’S FUTURE OF THE WORKPLACE

Office lobbies go lush Eager to find and retain tenants, landlords are adding games, bars and many plants By C. J. Hughes

Penn 1

Textile Building

555 Greenwich St.

obbies may no longer be merely places to pass through. Office landlords are taking the usually utilitarian spaces and turning them into venues to see TED speakers, play shuffleboard and sip Manhattans.

In the face of persistently high vacancy rates, the extra oomph could help certain towers stand out, according to tenants, brokers and landlords. But there may be even more existential considerations, as the fate of swaths of the office sector can seem to hang on getting more workers to show up.

“The bar is higher than it’s ever been in terms of enticing people to come in from their homes and to make it feel as pleasant as possible when they do,” said Daniel Rafkin, a director with the firm Hines who is putting the finishing touches on a lobby in the Hudson Square neighborhood that has a stadi-

um-seating-lined meeting space, a game room and a tenant-only café.

Ground-level amenities do jack up a project’s

vendors selling newspapers and candy bars. But as tastes and technology have changed — security passes are often now emailed over in advance of visits, obviating the need for a stop at the security desk — the bases of high-rises have evolved too.

When it comes to repurposing the obsolete square footage, some developers are taking a page from the playbook of hotels. At the former headquarters of CBS in Midtown, on Sixth Avenue between East 52nd and East 53rd streets, Harbor Group International has converted half of the building’s 12,000-squarefoot lobby into a tenant-focused lounge. Opening in December, Club 53 has dark walls, soft furniture and a chandelier to distinguish it from the more-prosaic main entrance.

L

“The bar is higher than it’s ever been in terms of enticing people to come in from their homes....”

— Daniel Rafkin, director, Hines costs, Rafkin admits; nothing is being sacrificed on higher floors to allow for them. “But they’re a critical element to compete today,” he said.

For decades, lobbies had benches, a mailroom and

See LOBBIES on Page 12 November 20, 2023 | CRAIN’S NEW YORK BUSINESS | 11

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FUTURE OF THE WORKPLACE

For decades, lobbies had benches, a mailroom and vendors selling newspapers and candy bars. But as tastes and technology have changed, the bases of high-rises have evolved, too. | BUCK ENNIS

LOBBIES From Page 11

“It’s a place to sit down, gather your thoughts and scroll through your emails,” said William Vazquez, a manager with Harbor Group, which bought the 38-story tower from CBS for $760 million in 2021, in the middle of the pandemic and decided that the building needed a $128 million reboot to survive. “It’s also about serenity.”

If occupancy is any indication, the building, which is simultaneously converting a basement-level copy-machine center and mailroom into an amenity floor with a 2,700-square-foot gym, seems to be in good shape. In October it was 100% leased, though CBS vacated five-and-a-half floors at the end of the month.

Rethinking the office lobby New York landlords are struggling to persuade employees to return to the office. Some are hoping that reimagining their lobbies can make office life more desirable that working from home.

An upscale vibe The vibe is less Hilton and more W in the lively lobby of Penn 1 on West 34th Street, thanks to a recent $450 million redevelopment of the amenity and retail spaces at the postwar tower by Vornado Realty Trust.

The developer replaced the tall security desks inside the front doors with lowerto-the-ground versions to create a more welcoming appearance, said Glen Weiss, the company’s co-head of real estate, during a recent tour. Near them, stairs whose risers sparkle with embedded lights whisk visitors up past a pair of soaring 20-foot-by-11-foot screens that show baseball highlights, or occasionally, Nintendo battles. They face a long, spacious room that has a flickering gas fireplace at

Pla

Visit crainsnewyork.com/lushlobbies to watch a video about new trends in office lobby amenities. | BUCK ENNIS

one end and bookshelves at the other.

And the Landing, a restaurant and bar open to the public, offers a casual meeting spot for tenants and visitors throughout the day, Weiss said.

“We had to create something that would entice people to come back to the

office and that wasn’t going to be some boring old cubicle,” said Weiss about the project, which was conceived prepandemic.

But the lobby’s popularity with on-site employees suggests that even as the pandemic is over, social-distancing habits

ingrained over the last few years may have become a permanent part of the modern office DNA. “The pandemic in many ways proved us right,” Weiss said.

Since the renovation began in 2019, the 2.5 million square foot tower has leased 700,000 square feet of office space to ten-

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FUTURE OF THE WORKPLACE

ants like Samsung, WSP and Anthem at rents of more than $90 per square foot, an increase from the $60 building rent average pre-upgrades, he added.

Joining the revamped Penn 1 in a few weeks will be a retooled Penn 2, a 31-story, 1960s building across the street by Madison Square Garden. There, too, Vornado has put a lot of muscle into redesigning the balcony-lined lobby as part of a buildingwide, $750 million redo.

Among its highlights is a meeting space called a town hall that offers views of busy Seventh Avenue through soaring windows and features seats that fold out like bleachers in a grade-school gym.

Employees of any of Vornado’s Penn-branded towers can avail themselves of the town hall for retreats, TED talks or annual gatherings, a perk that could help bond Vornado’s Penn Station-area portfolio and give it the sense of a “college campus for adults,” Weiss said.

Places to meet Meeting spaces also feature prominently in the Savoy Club, the 35,000-square-foot amenity space that opened in September at the GM Building, the Boston Properties-owned office tower by Central Park. A moodily-lit, oakand-marble-trimmed club space across the entire second floor fashioned from space once occupied by toy store FAO Schwartz but empty for years, the club offers three areas that can be reserved for events with up to 75 attendees per pop, along with a bar for special events. Boston Properties declined to share the cost to build out the space, which was conceived pre-2020.

Gym at Penn 1 | BUCK ENNIS

Similar gathering areas grace the Hines project in Hudson Square, a 16-story tower at 555 Greenwich St. co-developed with Trinity Church and Norway’s sovereign wealth fund. Sloping from the ground floor into the basement and flooded with natural light, the 75-person venue was first just a concept, Rafkin said. But as the pandemic dragged on and tenant needs shifted, Hines decided to emphasize larger meeting spaces.

Big groups can rent the area for events, but people can also just visit and peck away at their phones when it’s unreserved. And by the spring, they will be able to loll around an adjacent game room with pool tables, a putting green and tabletop shuffleboard, along with an honor-system bar.

The calculation about big gathering areas stems from the expectation that on full-capacity days, when work-fromhome employees do come in, tenants will want extra-large spaces to accommodate them. “They can have all-hands or social

functions there,” Rafkin said, adding that a connecting building, 345 Hudson St., will also offer ground-floor conference spaces when it comes online at the end of next year.

Whether tenants will flock is now being tested, as Manhattan’s availability rate is stuck around 18%. Since No. 555 opened in September, a venture capital firm has leased a half a floor, at an address where rents range from $125 to $175 per square foot annually, but the office floors are otherwise still empty.

A sea of green Of course, developers have styled the entryways of buildings to encourage loitering before. The Ford Foundation’s 1960s headquarters on East 43rd Street, for example, offered a lush resting spot courtesy of a tangle of pine trees and bougainvillea under 174-foot ceilings.

But as a space that anyone could wade into, it had more in common with the public atriums dotting Midtown and the Financial District than private office lobbies per se.

Thick vegetation gave way to a more austere, bookmatched-marble kind of mien in recent years. But one new lobby in NoMad seems to be angling for a throwback look.

At 295 Fifth Ave., a former garment

showroom at East 30th Street previously known as the Textile Building, developer Tribeca Investment Group has installed terraced beds of plants on floors and along walls, while boosting the lobby’s size from 1,800 square feet to 6,000 square feet by eliminating storefronts.

Grow lights provide a greenhouse-like glow under ceilings that now stretch to 21 feet after the removal of a mezzanine. A landscaped courtyard created from an ex-freight loading area provides another lobby-level respite.

Post-Covid priorities about air quality and open space are making companies enthusiastic about renting there, said firm principal Elliott Ingerman, though the building is still searching for its first office tenant. Rents at the 19-story tower, which hugs a full block, range from $90 to $135 per square foot a year. In 2019 Tribeca and other investors purchased a ground lease on the site for $375 million and then embarked on a $300 million renovation that wrapped up in fall 2022.

Harrison Green, a decade-old New York landscape firm known for its roof decks, handled the greenery.

Ingerman, who has also developed hotels such as Midtown’s Baccarat, sees offices starting to borrow many of their elements. “With hotels, you think way more about the end user, all the way down to the towels and sheets,” he said. “And that’s what we tried to do here.”

Office lobbies were once just regular lobbies, he added, but to allow tenants to recruit and retain employees, developers may have to start delivering more. “You actually don’t want to be home with this building — you want to come to work,” Ingerman said. “It’s such an amazing environment.”

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The new rules of coworking Smaller spaces, suburban locations and landlord-run options are poised to play major roles moving forward as the highest-profile companies of the past are in a diminished place

By Eddie Small

W

eWork’s early November bankruptcy filing sparked a multitude of questions about the future of the coworking sector, particularly given how synonymous the once high-flying firm has become with the industry.

It was just the latest sign that many of the highest-profile coworking firms of the past decade are now in a greatly diminished place compared to their earlier days, when they seemed poised to transform the staid world of commercial real estate. WeWork’s travails have been well documented at this point by everyone from business reporters to Hollywood A-listers. Its erstwhile rival Knotel, meanwhile, declared bankruptcy in early 2021 and has since become a seldom-discussed part of Newmark’s vast portfolio.

And The Wing, a trendy coworking firm designed specifically for women, closed its final locations in 2022 following years of tumult.

“If there were a great deal of demand within those coworking spaces,” Empire State Realty Trust CEO Tony Malkin said on his firm’s latest earnings call, “those companies would not go out of business.”

Still, savvy landlords aren’t sleeping on the opportunity behind the fizzled coworking hype, particularly in a postCovid office environment that has placed more importance on hybrid work and flexibility. Lower-key coworking firms such as Industrious and Quest Workspaces are still looking to expand, and several of the city’s major landlords are choosing to launch coworking-style options of their own.

“It gives them their true individuality as a brand and as a company with the security and stabilization of knowing that they are doing business with a landlord,” the Durst Organization’s Lauren Ferrentino said of DurstReady, the firm’s in-house flexible office space program, “not a flex operator that is in flux for whether or not they’ll be there tomorrow.”

In other words, though the flexible office market may not lead to the widespread changes predicted during the heady 2010s, it is not going anywhere.

And any landlord looking to survive in the bleakest commercial real estate market the city has seen in decades will need to determine how the option fits into its portfolio sooner rather than later.

“I can’t imagine how any owner at this point in time isn’t thinking about this,” said Quest CEO Laura Kozelouzek. “Because if you’re not, it’s almost like putting your head in the sand.”

Do it yourself The Spiral in Hudson Yards is one of the more recent developments from New York real estate giant Tishman Speyer.

The project was designed by superstar architect Bjarke Ingels and has inked massive headline-grabbing leases from tenants including drugmaker Pfizer (800,000 square feet), the law firm Debevoise & Plimpton (530,000 square feet) and major bank HSBC (265,000 square feet).

The Spiral in Hudson Yards | BUCK ENNIS

The building is also home to two floors of Studio, Tishman Speyer’s in-house coworking option, which it launched shortly before the pandemic began. Those floors can feel more reminiscent of a hotel’s business center than a traditional office, with amenities including conference rooms, lounges and La Colombe coffee.

Although demand for Studio suffered with the arrival of Covid, it has since come back with a vengeance, according to Tishman Speyer’s Nate Pinsley, who runs the program.

“It was a challenge to attract people.

We certainly did not plan that when we launched in 2018,” he said. “But since the pandemic, we have seen a huge resurgence over and above what our prepandemic levels of demand were.”

“I can’t imagine how any owner at this point in time isn’t thinking about this.”

— Quest CEO Laura Kozelouzek Most of the Studio locations now have a waitlist, and the newest option, at 666 Third Ave. near Grand Central, also leased up the fastest, Pinsley said.

Industry City has an in-house coworking option as well, called Camp David, at its Sunset Park campus. There are multiple space options within it, and running the program internally makes it easier to figure out which one will work best for which tenant, said Jeff Fein, senior vice president of leasing.

“I think it’s a very big differentiator to be the operator and the landlord at the same time,” he said, describing Camp David as a combination of Soho House and WeWork. “If there’s an operator, a third party in between us, they can’t discuss our creative workshop options with them.

They can’t do an analysis of what makes more sense.”

Durst has been a longtime skeptic of the independent coworking business model, Ferrentino said, and launched DurstReady in 2019. Firms have leased about 500,000 square feet of space in the program since it launched in 2019, and it is available at

some of Durst’s more prominent buildings such as 1 World Trade Center and 1133 Sixth Ave. She predicted companies leasing flexible office space directly from a landlord would become a more popular option going forward.

“Tenants have zero faith in what used to be and are now migrating toward landlords and the strength of landlords to provide them the same service,” she said. “I don’t understand why other landlords haven’t promoted their success. Maybe they’re not successful.”

Farm it out Landlords being able to do what independent coworking firms were offering had always been a risk for the sector, said Stijn Van Nieuwerburgh, a professor at Columbia Business School.

“Any sophisticated landlord that owns office buildings can essentially emulate what WeWork was doing at a fairly low cost,” he said. “If you’re Tishman Speyer or Related or Vornado, nothing stops you from converting some of your office space into, essentially, a WeWork.”

But even now, not all of them have opted for that model. Vornado’s Penn 1 includes coworking space, for instance, but it is run by Industrious, a longtime player in the city’s flexible office market. The suites were busy with companies and workers on a recent midweek afternoon this fall and included virtually all of the amenities that have become synonymous with coworking in recent years: complimentary snacks, lounge areas, outdoor spaces and the like.

Industrious has its own locations as well, and the firm hopes to increase its presence in the city going forward, noted Senior Director of Real Estate Doug Feinberg. He added that the company is not particularly concerned about more competition from landlords deciding to launch in-house flexible office space programs given the amount of resources it takes to do that.

“There are only a very limited subset of them who are capitalized enough to build out their own platform,” he said, “and even some of those groups are saying, ‘This is a really operationally intensive business. I’d rather partner with a

Tishman Speyer’s Spiral in Hudson Yards has two floors of

Industrious runs the coworking space at Penn 1. | BUCK ENNIS

third party.’”

Quest is similarly looking at additional opportunities in New York, but Kozelouzek acknowledged that the city’s office market is extremely volatile right now. In Florida, where the firm has multiple locations, the uncertain office market has

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Studio, the real estate giant’s in-house coworking option. The floors can feel more reminiscent of a hotel’s business center than a traditional office. | BUCK ENNIS

The coworking space at Penn 1 includes snacks and lounge areas. | BUCK ENNIS

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been offset by an influx of new arrivals, but this has not been the case as much in New York, she said.

Kozelouzek has been in the coworking industry for more than 30 years and has seen plenty of economic upturns and downturns over that time. However, this

moment in particular feels unprecedented to her.

“There was a pattern coming out of recessions, and there were patterns following tough times,” she said. “This time around, there are too many variables at play. It’s hard to predict.”

Location, location, location Many aspects of the post-Covid office market seem like they should be making coworking only more popular. In an era when employers are still extending flexible attendance policies, inking a deal for

a relatively small and affordable office space where workers can meet up at their leisure would appear to be a near-perfect solution.

But the reality hasn’t been that straightforward, and the longtime bane of workers’ existence— commuting — remains a big reason why.

“Where we have coworking spaces isn’t necessarily where New Yorkers want them,” said Eli Dvorkin, editorial and policy director at the think tank Center for an Urban Future. “There are a lot of folks that don’t want to be home every day. They just want an option that isn’t an hourlong ride from where they live.”

A 2021 report from the organization found that the vast majority of coworking spaces were in the city’s major office districts, namely Midtown and Lower Manhattan. Although a few were sprinkled throughout the outer boroughs, in 60% of the city, the only coworking-style option was a library, according to the report.

Industrious is already taking a close look at this, Feinberg says. The bulk of its See COWORKING on Page 17 November 20, 2023 | CRAIN’S NEW YORK BUSINESS | 15

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current New York locations are in the city’s central business districts, but the firm does have a Williamsburg location slated to open in the spring and sees these types of locations as key going forward, he said.

“With hybrid work, distributed workforces and work from anywhere, folks are looking for places that are shorter commutes,” he said. “We’re seeing larger companies saying, ‘Let’s use the city as a network.’ We want to bring those locations closer to where people are residing.”

In some cases, this might mean developing more coworking options outside of the city entirely. Some flexible office space locations in the suburbs have already proved to be a bright spot for commercial landlords, said Michael Cohen, president of the tristate region for the brokerage Colliers.

“The office suite operators are finding that some of the suburban locations that are near transportation hubs are outperforming their expectations,” he said, “because it’s not quite work from home, but it’s not quite schlep on the train into the city for an hour and a half back and forth every day.”

Back to basics Cohen was blunt about which types of coworking sites will and won’t do well in the current market: large spaces are in trouble, while small ones that leave a landlord or coworking firm less dependent on one company for rent are better off.

“The enterprise model of coworking has failed,” he said. “The model everybody seems to want to pursue these days is the office-suite model.”

And some of those larger spaces, particularly the ones WeWork is aiming to leave now that it has filed for bankruptcy protection, will likely end up being used in the traditional way: companies will sign a standard lease for them with an office owner.

“A lot of landlords are saying, ‘We think these spaces will appeal to conventional tenants,’” said Cohen. “’Thank you very much, WeWork, for putting your infrastructure in place. Sorry you couldn’t make a go of it, but now it’s our turn.’”

Of course, the market for traditional office leases is not exactly booming right now. The city has been facing a massive supply-and-demand imbalance for office space since the start of the pandemic, and smaller companies in particular are likely not going back to signing leases in which the landlord just gives them the space and checks out, Van Nieuwerburgh said. Part of coworking’s appeal was the additional services the providers would offer, and amenities will play a much bigger role in virtually all types of office leases moving forward.

“The days where we’re going to be signing 10-year leases for small companies are over,” he said. “We’re moving quickly toward a future where the landlord is much more actively involved in managing the tenant, and that’s in some sense a part of the DNA of coworking spaces — not just offering a more flexible contract, but also providing programming and other auxiliary services.”

The moon rises behind the Empire State Building and the under-construction Spiral office tower as the sun sets in 2020. | GETTY IMAGES

Remote work continues to shape the city What politicians and leaders have been saying as offices remain alarmingly empty

By Aaron Elstein

F

or many years developing an office tower in Manhattan was a matter of “build it, and they will come.” Sure, it would take years to line up financing and do the construction, but once a tower was built, the reasoning went, it would fill up with tenants and generate an ever-growing pile of cash for a long time.

Those economics don’t work anymore.

Although New York has bounced back from the pandemic in most every way, office buildings remain alarmingly empty.

Attendance has hung around 50% for bet-

“We think that what’s going on with office space has kind of settled out.”

— CBRE CEO Bob Sulentic ter than a year, and many employers have seemingly given up on nudging workers back. This change in where work is done has profound implications for the city, its tax base and the way people live.

Here’s what industry experts and political leaders have been saying.

Let more workers work from home.

When he called back city employees to the office five days a week last year, Mayor Eric Adams described his policy as only fair to workers who couldn’t do their job from home. But like a lot of employers, he eventually came around to this inconvenient truth: A lot of white-collar workers refuse jobs that can’t be done from home. With roles at city agencies sitting unfilled, Adams changed his tune and last month even said 16,500 nonunion city employees could work remotely.

“Public servants deliver for New Yorkers through the city’s most urgent crises, and now it’s time for us to support them as they have supported us,” he said. Deputy Mayor Sheena Wright added, “Retaining top talent continues to be a priority for the administration and is foundational to our ability to deliver services.”

Doom loop not so gloomy?

Columbia University Business School professor Stijn Van Nieuwerburgh is the co-author of the famous “doom loop” study that forecast a 40% decline in the value of Manhattan office buildings.

He thinks the pain from this drop will soon cause property tax collections to decline, which could require cuts in city services.

“Because of the way the tax code is structured, declines in [office rental income] are only gradually phased in and only gradually lower tax assessments. I think we will begin to see this play out in the next year and could easily drag on for five-plus years,” he told Crain’s.

Yet an analysis by City Comptroller Brad Lander suggests a 40% drop in office values wouldn’t necessarily be dire. In a June report, the comptroller determined that such a decline would translate to a 17% fall in assessed values and trigger a $1.2 billion shortfall in tax collections in 2027 — equal to 3.2% of projected property tax collections or about 1% of the city’s budget.

“While not a small amount, it is well within the range in which tax revenues can ordinarily vary,” the comptroller wrote.

As bad as it gets Some think the office market has gotten as bad as it will get. Consider the words of CBRE CEO Bob Sulentic on an October conference call: “We think that

what’s going on with office space has kind of settled out. . . .People that want premium office space for the experience side of things for their employees are going after it, and we think they’ll continue to go after it into next year.”

Steve Roth, CEO of Vornado Realty Trust, the city’s second-largest commercial landlord, agrees. He said on an Oct. 3 conference call, “We believe in the great American cities and especially New York.

We believe that the future of work will principally be in the office. I can’t imagine millions of American office workers working at home alone at their kitchen tables.”

‘About halfway there’ Cohen & Steers, which has been investing in commercial real estate for nearly 40 years and manages $75 billion in client assets, reckons prices have further to fall.

It is raising money for a distressed-asset fund, but management says now isn’t the time to invest.

“Our expectation has been that prices need to decline 25% to 30%, and to generalize, we believe we’re about halfway there,” CEO Joe Harvey said on a conference call last month. “Real estate, in our view, had already priced in a 4% Treasury yield environment but clearly struggled with the 10-year pushing closer to 5% by the end of the quarter.”

Myers Mermel, managing partner at developer Mermel & McLain Management, said 15% to 25% of leased space is unneeded because working from home is accepted, so every lease going forward will be leased at 15% to 25% less than before. The work from home “bite” in office space is analogous to the bite online retailers have taken out of big-box stores, he said.

“Earlier centuries moved people to work; now technology moves work to people,” he said. “It translates to an upcoming massive restructuring of assets and capital in the office-space sector.”

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Durst, MTA quietly settle lawsuit over properties in path of upcoming Second Avenue subway extension

By Nick Garber

The Metropolitan Transportation Authority and the real estate developer Durst Organization quietly settled a lawsuit earlier this year over control of three East Harlem properties in the path of the upcoming Second Avenue subway extension.

Durst had sued the MTA in 2021, accusing the transit authority of blocking it from building on the vacant lots it owned on both sides of Park Avenue at East 125th Street.

The MTA delayed Durst’s plans by repeatedly changing its mind, the

Durst, said the deal was confidential.

But some property has changed hands. The MTA has now “acquired all the property on the eastern side of Park Avenue, between 124th and 125th streets,” MTA spokesman Mike Cortez said in a statement.

Those parcels include two of the three disputed former Durst sites, at 1801 and 1815 Park Ave. Now, they will become home to a new station entrance and ancillary facility for the Q train extension, Cortez said. It’s not clear whether Durst got any more than the $40.7 million the MTA initially offered.

Durst first agreed to the amount but later blasted it in the lawsuit as part of a “coerced” deal.

Property records show the MTA seized both 1801 and 1815 Park Ave. via eminent domain in December 2022. Durst still has control over the third property, a 36,000-square-foot lot across the street at 1800 Park Ave., but has not filed plans to build on it. Documents from 2020, which were included in the lawsuit, include drawings of a multi-story tower on the site designed by the architect Bjarke Ingels Group.

Whether those plans remain on the table is unclear—Durst did not respond to requests for comment.

It is also not clear whether the MTA still wants a so-called “ease-

Durst had sued the MTA in 2021, accusing the transit authority of blocking it from building on the lots it owned. suit alleged — initially saying it needed to use portions of two of the sites, then saying it would need all three, and finally concluding it would seize two of the sites via eminent domain, while paying Durst $40.7 million.

After about 18 months of litigation, the two parties settled the case in April, although that outcome has not previously been reported. Whether any money was exchanged as a result of the settlement is unclear — Lori Anker Nott, an attorney who represented

The Durst Organization is keeping control of 1800 Park Ave., one of three vacant lots that were the subject of its lawsuit against the MTA. The MTA has taken over the remaining two sites, on the avenue’s east side. | GOOGLE IMAGE

ment” granting it access to part of the 1800 Park Ave. site. Durst complained in its lawsuit that the MTA was demanding an increasingly large portion of the site to use for an emergency stairway and construction equipment.

Three-station extension The developer initially purchased the three sites for a combined $126 million between 2016 and 2017 for “residential, retail, and commercial development,”

according to the suit. Both blocks are part of the 2017 East Harlem rezoning, which allowed for taller and denser buildings and has led to a surge in development.

The MTA has filed plans to seize nine sites so far along Second Avenue and East 120th Street to build the three-station extension. Landlords fought back in a lawsuit last month, saying the offers made by the MTA were too low — but the dispute is not expected to delay any construction, since a judge has already approved the MTA’s

seizures.

The MTA says it will ultimately need to seize parts or all of more than two dozen other properties and will need temporary easements at more than 50 others.

Awaited for decades, the Second Avenue Subway’s extension into East Harlem is now tantalizingly close to getting underway.

The federal government signed off this fall on $3.4 billion in funding — about half of its full price tag — which could allow construction to start before the end of 2023.

Times Square BID looks to take over more of Midtown’s plazas

By Nick Garber

Times Square’s business improvement district is seeking to take over day-to-day management of a large swath of pedestrian plazas in Midtown more than six times the size of its current coverage area, which City Hall says would help enliven an underused stretch of Broadway.

The Times Square Alliance filed plans in recent weeks to expand its

south to 41st Street — multiplying the zone’s coverage more than six times to 214,000 square feet.

The proposal needs to move through a monthslong land-use review and be approved by the City Council. A similar plan by the Alliance in 2013 fizzled after the local community board and the Manhattan borough president raised objections, saying the city needed to develop a plan to prevent private events from encroaching further on the popular plazas.

But the Alliance describes its current plan as simply codifying how the plazas along Broadway are managed. The concession deal will allow the BID to charge fees to the organizers of events held along the plazas — a more favorable arrangement than the current one, in which only the city gets money from permits.

But the Alliance says it has no plans to add more “commercial activities” to the expanded concession area.

“Our plan is to expand the smallscale programming and add tables, chairs, and umbrellas as well as plantings to the plazas,” Times

“This expansion is not about profit — it is about activating and energizing the public spaces . . . .”

— Times Square Alliance spokesman TJ Witham in an email longstanding agreement with the city that lets it operate concessions, such as kiosks and pop-up markets, in the pedestrianized blocks that surround the thoroughfare. The concession area presently covers about five blocks, but the plan would greatly expand it six blocks north to 53rd Street and further

Square Alliance spokesman TJ Witham said in an email.

“This expansion is not about profit — it is about activating and energizing the public spaces and codifying the existing management scheme.”

Brighten up blocks The Times Square Alliance is one of the city’s best-funded BIDs, receiving $14 million annually from The Times Square Alliance wants to take over day-to-day management of a much bigger swath of the assessments it charges Midtown’s pedestrian plazas, helping it generate revenue. | BLOOMBERG local property owners for services. But the Alliance currently the expanded pedestrian space in argued at the time that an increase manages the plazas under its pur- Crossroads of the World,” said Vin- in commercial events comproview at a financial loss, Witham not- cent Barone, a spokesman for the mised the original, public intent of ed, like many other BIDs in the city. Department of Transportation, in the Times Square Plazas that were Mayor Eric Adams’ administra- a statement. “This concession pro- spearheaded by Mayor Michael tion, which is working with the Alli- posal will allow the Times Square Bloomberg starting in 2009 — a ance on the proposal, says the ex- Alliance to more comprehensively change that the board said was expansion would brighten up the manage the space, bringing more emplified by the 2014 Super Bowl blocks of Broadway north of Times activities for New Yorkers and visi- held in New Jersey, during which Square, which, unlike the busy pla- tors walking through the area — 13 blocks of Broadway were conzas around 42nd Street, are now like pop-up markets, kiosks with verted into an NFL-themed “bou“underutilized by pedestrians and seating, and other events — as levard.”

The proposal would not change often empty,” according to plan- well as improved maintenance the overall boundaries of the area and cleanliness.” ning documents.

It’s unclear whether the propos- supervised by the BID, which in“The Adams administration is committed to creating vibrant, al will face any pushback, as the cludes most of the blocks between clean, and welcoming public previous expansion effort did a 40th and 53rd streets, from Sixth to spaces across the city, including in decade ago. Community Board 5 Eighth Avenue.

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The Downtown Manhattan Heliport aims to be a hub for electric air taxis and also support maritime freight

By Caroline Spivack

Chief Executive Andrew Kimball during an event at the Downtown The Adams administration Manhattan Heliport on Nov. 13. wants to transform the Downtown “We’ve been talking to FAA offiManhattan Heliport into a hub for cials and we fully expect that quieter, more sustainable electric [eVTOLs] will be operational commercially in 2025 or 2026, so withaircraft and maritime freight.

The Economic Development in the next five-year contract for Corp. is betting on the electric avi- this heliport.”

Saker Aviation Services’ conation sector with a new request for proposals for an operator to up- tract to operate the Downtown grade the city-owned heliport by Manhattan Heliport expired earliadding infrastructure for electric er this year. Adding new requirevertical take-off and landing ments for charging infrastructure (eVTOL) aircraft. The Federal Avi- and facilities to support maritime ation Administration is still in the freight would help reduce New process of certifying models for York’s reliance on gas-fueled trucks to transport cargo, Kimball commercial use. said.

The quieter electric aircraft would also help address persistent quality-of-life issues generated by choppers, though the heliport would also — EDC President and chief executive Andrew Kimball continue to cater to exWould-be heliport operators isting, deafeningly loud models of would also be tasked with build- helicopters.

Melissa Elstein, board chair of ing facilities to “support secondary maritime freight usage and Stop the Chop NY/NJ, who has micro-distribution,” such as cargo long-advocated for quieter skies told Crain’s she is “cautiously optibikes, according to the RFP. “What’s exciting is that things mistic” about the electric aircraft are moving very fast on both but stressed that the Adams’ adfronts,” said EDC President and ministration should not solely pin

“What’s exciting is that things are moving very fast on both fronts.”

its hopes on eVTOLs to replace raucous, fossil-fuel helicopters.

“We support anything that will make the current situation better with some caveats,” said Elstein.

“We don’t know at the moment how many of these eVTOLs would be allowed, what their flight paths would be, how low they would be flying — so there’s still a lot of unanswered questions.”

Grant money possible EDC aims to enter into a new heliport contract with an operator by roughly the second quarter of 2024 for a five-year period with an option to renew for another five years. Grant dollars may be awarded to an operator to make upgrades to the heliport though funds aren’t guaranteed, according to the RFP. The added focus on marine shipping follows an initiative announced earlier this month by the city Department of Transportation and EDC. The agencies issued a request for expressions of interest for a “blue highways” initiative to increasingly move goods through the waterways.

As part of their proposal, firms must detail how they would incen-

Joby Aviation demonstrated its electric air taxis at the Downtown Manhattan Heliport last week. | NYCMAYORSOFFICE/FLICKR

tivize the use of quieter helicopters and eVTOLs, once such models are certified by the FAA. “It’s our responsibility to ensure that we’re positioning New York at the forefront of this exciting new industry,” said Kimball, “and preparing our assets to be ready to capitalize when this technology has widespread adaptation.”

As part of the announcement at the Downtown Manhattan Heliport, city officials were joined by

executives at aviation startups Joby Aviation and Volocopter, which each gave demonstrations of their electric air taxis.

Both companies are in the process of securing FAA certification.

Beta Technologies, another company in the aviation field, showcased a hulking charger that can be used to juice up electric aircrafts.

Submissions to the RFP are due Jan. 12.

From top talent to top employers, Crain’s Career Center is the next step in your hiring process or job search.

Connecting Talent with Opportunity.

Get started today CrainsNewYork.com/CareerCenter

20 | CRAIN’S NEW YORK BUSINESS | November 20, 2023

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CLASSIFIEDS

Advertising Section

Contact Suzanne Janik at 313-446-0455 or email: sjanik@crain.com

PUBLIC & LEGAL NOTICES Notice of Formation of GARANCE - DOULA SERVICES LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/23/23.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to THE LIMITED LIABILITY COMPANY, 11 STUYVESANT OVAL, APT 4E NEW YORK, NY 10009 regd.agent upon whom and at which process may be served.

Purpose: Any lawful activity.

Notice of Qualification of DLJ BUILDING CO 70 LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/03/23.

Office location: NY County. LLC formed in Delaware (DE) on 11/02/23. Princ. office of LLC: c/o DLJ RECP Management, L.P., 1123 Broadway, 2nd Fl., NY, NY 10010. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity

Notice of Qualification of RUNNER MUSIC GROUP LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/11/23.

Office location: NY County. LLC formed in Delaware (DE) on 08/16/22. 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: 200 Bellevue Pkwy., Ste. 210, Wilmington, DE 19809. Cert. of Form. filed with Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity

Notice of Qualification of ZENDABLE CARDS, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 09/29/23. Office location: NY County. LLC formed in Delaware (DE) on 04/26/23.

SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

To place a classified ad, Call 313-446-0455 or sjanik@crainsnewyork.com

Notice of Formation of Nicol Furniture, LLC Arts of Org filed with the Secretary of State of NY (SSNY) on 8/4/23.

Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 64 E. 111 St. Unit 609, NY, NY 10029. Purpose: any lawful act

Notice of Qualification of DLJ BUILDING CO 60 LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/03/23.

Office location: NY County. LLC formed in Delaware (DE) on 08/03/23. Princ. office of LLC: c/o DLJ RECP Management, L.P., 1123 Broadway, 2nd Fl., NY, NY 10010. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste 4., Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation of BOUNDLESS IMAGINATIONS, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/11/23. Office location: NY County. Princ. office of LLC: 400 E. 90th St., 12D, NY, NY 10128.

SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office.

Purpose: Film production.

Notice of Formation of WORLDS GREATEST ENTERTAINMENT LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/6/23. Office location: NY County. Princ. office of LLC: 228 PARK AVE S #340569, NEW YORK, NY 10003. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ office. Purpose: Any lawful activity

Notice of Qualification of MUZINICH DIRECT LENDING ADVISER, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 09/28/23.

Office location: NY County. LLC formed in Delaware (DE) on 07/06/23. Princ. office of LLC: 450 Park Ave., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of the State of DE, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity

POSITIONS AVAILABLE Notice of Formation of 204 FORSYTH HOLDINGS LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/16/23.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207, regd. agent upon whom and at which process may be served.

Purpose: Any lawful activity.

Notice of Formation of KIERAN ANDREW BOTH, ATTORNEY AT LAW PLLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/06/23.

Office location: NY County. Princ. office of LLC: 225 BROADWAY, SUITE 2018, NEW YORK, NY 10007-3739. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office.

Purpose: Any lawful activity.

Notice of Formation of XPRESS SERVICE SYSTEMS, LLC Arts of Org filed with Secy. of State of NY (SSNY) on 9/25/2023.

Office Location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against to 2266 Fifth Avenue, Unit #584, NY, NY 10037. Purpose: any lawful act

Notice of Formation of SPECIAL WICKAPOGUE LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 11/03/23.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Barnes & Thornburg LLP, 390 Madison Ave., 12 Fl., NY, NY 10017-2509. Purpose: Any lawful activity

Senior Developer (Pacific Investment Management Company, LLC [PIMCO] – New York, NY); Mult. pos. avail. Devlpng operations and data mgmt pol, strategies, and operational guidelines for various fin prod related to the analysis, tracking, and reporting of risk metrics. Work with lg, complex data sets and apply adv analytical methds to solve diff, non-routine analysis problems. F/T. Salary range $170,000 to $200,000/yr. Apply w/ resume to Lupe.Rubalcaba@pimco.com.

Ref. Job ID: 6958518.

Business Analyst (Citadel Enterprise Americas Services LLC – New York, NY); Mult. Pos. Avail.

Evaluate current tactical issues, lead sm/mid-size initiatives, and contribute to the design and solution of enterprise-wide strategic initiatives.

Design both tech solutions & data modeling solutions for new & existing fin products & entities while also managing the delivery tracks of larger strategic initiatives F/T. Sal is $190,000 to $280,000/yr. Resumes: citadelrecruitment@citadel.com.

Job ID: 6876059.

REQUEST FOR PROPOSAL The New York Racing Association, Inc. (“NYRA”) is inviting qualified bidders to submit proposals for the redevelopment of Belmont Park, located in Elmont, NY. The Successful Bidder will provide (i) full-scope preconstruction services (and certain early construction work) and (ii) administer, manage, supervise, direct, and coordinate, through its subcontractors or forces; all work labor, materials, equipment, tools, and general conditions required for the complete construction of the Project (the “Full Project CM Services”). Interested parties should request the RFP at BelmontRedevelopmentBids@nyrainc.com.

PUBLIC & LEGAL NOTICES Notice of Qualification of PALISADE CAPITAL MANAGEMENT, LP Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/17/23.

Office location: NY County. LP formed in Delaware (DE) on 02/08/23. NYS fictitious name: PALISADE CAPITAL MANAGEMENT, L.P. Duration of LP is Perpetual. SSNY designated as agent of LP upon whom process against it may be served.

SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543.

Name and addr. of each general partner are available from SSNY. DE addr. of LP: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808.

Cert. of LP filed with Secy. of State, 820 N. French St., 10th Fl., Wilmington, DE 19801.

Purpose: Any lawful activity.

Notice of Qualification of EGMF GP LP Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/16/23.

Office location: NY County. LP formed in Delaware (DE) on 03/11/14. Princ. office of LP: 230 Park Ave., 8th Fl., NY, NY 10169.

NYS fictitious name: EGMF GP L.P. Duration of LP is Perpetual.

SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. Name and addr. of each general partner are available from SSNY. DE addr. of LP: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with Secy. of State, State of DE, Dept. of State, Townsend Bldg., 401 Federal St., Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Formation of WISNIEWSKI PSYCHOLOGY SERVICES, PLLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 09/26/23.

Office location: NY County. Princ. office of PLLC: 2900 E. Overlook Rd., Cleveland Heights, OH 44118.

SSNY designated as agent of PLLC upon whom process against it may be served. SSNY shall mail process to c/o C T Corporation System, 28 Liberty St., NY, NY 10005. Purpose: Psychology

Notice of Formation of KINDERBROOK HOME LLC Arts. of Org. filed with Secy of State of NY (SSNY) on 10/11/23.

Office: NY 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, 80 State St., Albany, NY 12207.

Purpose: Any lawful purpose.

NOTIFICATION OF PUBLIC DISPOSITION OF COLLATERAL PLEASE TAKE NOTICE THAT, for default in payment of a debt and performance of obligations owed by Nicole Gallagher (“Pledgor”) to Churchill Funding I LLC (“Secured Party”), pursuant to Section 9-610 of the Uniform Commercial Code, at 1:00 p.m. (prevailing Eastern Time), on December 14, 2023, at the law offices of Polsinelli PC, 600 Third Avenue, 42nd Floor, New York, NY 10016 and offered virtually via online video conference, Secured Party shall cause the following property to be sold by public auction to the heist qualified bidder: 100% of the membership interests in 2524 Noyack Road, LLC, which is the owner of certain real property located at 2524 Noyack Road, Sag Harbor, New York 11963. The membership interests are being offered as a single lot on an “as-is, where-is” basis with no express or implied warranties, representations, statements or conditions of any kind made by Secured Party or any person acting for or on behalf of Secured Party, without any recourse whatsoever to Secured Party or any other person acting for or on behalf of Secured Party.

Secured Party reserves the right to reject all bids and terminate or adjourn the sale to another time or place or effectuate a private sale instead of a public sale, without further publication, and further reserves the right to bid for the Collateral at the sale and to credit bid by applying some or all of its secured debt to the purchase price.

Interested parties who would like additional information concerning the items to be sold at the sale and the terms and conditions of the sale, including the eligibility requirements to be a qualified bidder, should contact Amy E. Hatch, Polsinelli PC, 600 Third Avenue, 42nd Floor, New York, NY 10016; Tel.: (816) 753-1000; Fax: (816) 753-1536; ahatch@polsinelli.com.

SHE SHED PRODUCTIONS, LLC. Arts. of Org. filed with the SSNY on 06/05/23. 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, c/o Chapman Consulting, 770 Lexington Avenue, 11th Floor, New York, NY 10065.

Purpose: Any lawful purpose.

Notice of Formation of SUTTON GROWTH ADVISORS LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/12/23.

Office location: NY County. Princ. office of LLC: 20 Sutton Pl S, Apt. 20C, NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Andrew J. Byrne at the princ. office of the LLC. Purpose: Any lawful activity

NOVEMBER 20, 2023 | CRAIN’S NEW YORK BUSINESS | 21

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SAFETY

747 10th Ave.

road salt carried in on tires in the winter, according to some engineers.

But the fact that a single damaged building can snarl the city’s transportation network so dramatically will likely direct fresh attention to all types of buildingsover-tracks projects, they say, even though these kinds of buildings can be difficult to regularly inspect because of passing trains.

“Any time there is a failure like this, a community takes a lot of notice,” said Debra Laefer, a civil and urban engineering professor at New York University. “It will probably lead to investigations.”

On Nov. 10, the city’s Department of Buildings shut down the garage after the discovery of two small holes on the entrance ramp.

On Nov. 12, while installing protection over the tracks, inspectors noticed cracked steel beams under the garage, prompting Amtrak to suspend service while repairs were made.

Trains were supposed to start running again on Nov. 16 on a normal schedule.

Platform toppers Two of the largest and most high-profile West Side projects to take advantage of above-railroad sites are Manhattan West, an

COSTAR

From Page 1

8-acre offering from Brookfield and partners, and Hudson Yards, a 28-acre version nearby from a group led by The Related Cos. Portions of both mega developments, which are mixed-use sites lined with skyscrapers, rise on platforms that stand above storage areas for Long Island Rail Road trains but also active Amtrak and New Jersey Transit lines. Related and Brookfield had no comment.

Nearby are similar if smaller projects. Facing Hudsonview’s hazardous parking garage, which is operated by Icon Parking Systems, is Avalon Clinton, a threeblock-long residential development with two parking garages that’s also perched above the Amtrak trench.

Developed in the mid-2000s by the Dermot Co. and initially known as Clinton Green, the red-brick complex offers nearly 650 apartments in a series of buildings between West 51st and West 53rd streets. The least-expensive apartment there last week, a studio, was $3,265 a month.

Real estate investment trust AvalonBay Communities, which did not return an email for comment, controls the site today.

Other platform-topping examples include 516 W. 47th St., a courtyard-hugging, blockthrough condo, and 505 W. 47th St., a 108-unit version across the street. The condo 505 W. 43rd St., a two-towered complex developed about a decade ago by Elad Group and partners, also sits above tracks.

In fact, the Amtrak trench is now so thoroughly covered that among the only places one can glimpse trains pass is on the northern side of West 48th Street. That strip, stretching to West 49th Street, is part of a massive, city-owned property that for years contained an access shift for a water tunnel project but is supposed to soon add a 160-unit affordable housing residence from Douglaston Development.

Of course, New York City is no

stranger to putting tall and heavy buildings above train lines. Parts of the subway system, for example, slice beneath skyscrapers, though most subway tunnels are burrowed through rock and earth and not topped by platforms, engineers say.

Yet some building-supporting infrastructure is showing its age.

The massive shed holding up some of Midtown to allow Grand Central-bound trains to pass, is riddled with corroded metal and concrete, and requires repairs, transit officials say.

Garage improvements For their part, parking garages could be in better shape going forward. Local Law 126, which took effect last year, requires parking garages to be regularly inspected for the first time ever, a move that is long overdue, some engineers say. Owners can be fined if they don’t.

“No one ever took care of garages, and there was too much concrete falling,” said architect Howard Zimmerman, who has worked on garage projects for decades, including ones over Long Island Rail Road tracks in Queens. “Better late than never.”

But owners are often loath to repair a garage because it can mean taking several spaces out of commission and losing revenue, Zimmerman added.

Proper inspections should also include examining the underside

of garages — which constitute the roofs over the tracks — but that can mean shutting down train service for several hours to accommodate special equipment, which officials are often reluctant to do, he said.

In April a car-filled garage on Ann Street in the Financial District that officials had cited for crumbling concrete collapsed, killing a man.

The operators of garages and the owners of the structures are usually two different entities, and the responsibility for repairs would typically fall on landlords.

At Hudsonview, the ownership is difficult to untangle in city records. But a person who answered the phone Nov. 13 at its leasing and management company, Lineage Properties, said messages could be left for owners there. No one returned the messages by press time.

For its part, Icon, Hudsonview’s garage operator, said it has struggled for months to get Lineage to inspect the garage, which presumably dates to the opening of Hudsonview in the mid-1970s. The garage, which has about 100 cars stuck in it, was shut down on Nov. 10 and was not expected to reopen until Nov. 18, Icon said.

“We’re the ones who are hurting financially. The garage is closed, and our team there is out of work,” said John Smith, Icon’s chief executive. “But what’s paramount here is the safety of the public.”

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22 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2023

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GOTHAM GIGS

CrainsNewYork.com President and CEO KC Crain Group publisher Jim Kirk (312) 397-5503 or jkirk@crain.com Publisher/executive editor Frederick P. Gabriel Jr. Editor-in-chief Cory Schouten, cory.schouten@crainsnewyork.com Managing editor Telisha Bryan Assistant managing editors Anne Michaud, Amanda Glodowski Director of audience and engagement Elizabeth Couch Audience engagement editor Jennifer Samuels Digital editor Taylor Nakagawa Opinions: opinion@crainsnewyork.com Creative director Thomas J. Linden Associate creative director Karen Freese Zane Digital design editor Jason McGregor Art directors Kayla Byler, Carolyn McClain, Joanna Metzger Senior digital news designer Stephanie Swearngin Photographer Buck Ennis Notables coordinator Ashley Maahs SENIOR REPORTERS Aaron Elstein, C.J. Hughes, Eddie Small REPORTERS Amanda D’Ambrosio, Nick Garber, Mario Marroquin, Jacqueline Neber, Caroline Spivack CONTACT THE NEWSROOM editors@crainsnewyork.com www.crainsnewyork.com/staff

Melanie Hartzog, president and CEO of The New York Foundling. | BUCK ENNIS

New York Foundling CEO wants to see people ‘reach their full potential’ Melanie Hartzog, who draws on her own experience with poverty to empower others, wants those who interact with her organization to feel a sense of community and hope | By Caroline Spivack

M

elanie Hartzog knows what it means to have one’s world upended. She had grown up in a stable, middle-class household on Long Island until one day, the necessities of life so often taken for granted — a consistent roof overhead, food on the table — weren’t there.

She recalls bouncing from place to place, moving from school to school, not having a sense of stability until her family moved into a motel for two years.

“I didn’t realize then that I was homeless,” said Hartzog. Her family eventually moved in with Hartzog’s grandmother when she was in sixth grade.

At school, it was Hartzog’s basketball coach, Coach Hill, who emerged as a mentor. “He gave me that outlet,” she said, “that place where all of those things didn’t matter.”

Hartzog’s first-hand experience with poverty is what led her to a career in human services.

In 2022 she became the president and CEO of The New York Foundling, a 154-year-old organization based in Manhattan that offers youth programs, supportive housing, foster care support and juvenile justice services, among other things.

The Foundling’s reach is immense, with more than 40 programs in all five boroughs, the surrounding counties, and Puerto Rico that reach over 30,000 people annually.

Even today, despite her success and years after her experience with homelessness, Hartzog said the

thought of “I could lose it” still lingers in the back of her mind. In recognition of that anxiety, Hartzog wants people who interact with The Foundling to feel a sense of community and hope — that they have a network to help see them through tough times and grow when they’re more settled.

“We’re not here to take on charity,” she said. “We’re here to have people supported to reach their full potential, to recognize all that they can do and stretch to see that they can have more.”

That sentiment is, again, mirrored in Hartzog’s personal journey.

Phone call changed life As a graduating college student, Hartzog was determined to work in California, but then she got a phone call that changed her life. Her brother, who was 16 at the time, had been arrested. She quickly returned to New York to support her family.

Her brother was charged, and eventually incarcerated, as an adult. He served nearly a decade in detention.

“In my 20s, to go and visit him in prison and see that everybody looked like me, it was just shocking,” said Hartzog. “It was a wake-up call that this is not just.”

In 1998 Hartzog worked as a social policy and budget analyst within the office of the Bronx borough president. Her two-plus years in the Bronx served as a launchpad. She moved on to roles at the Human

Services Council of New York, New York City’s Administration for Children Services and the Mayor’s Office of Management and Budget.

For three years, beginning in 2013, she served as the executive director of the Children’s Defense Fund, where she helped launch the Raise the Age campaign to lift the age of criminal responsibility to 18.

The state’s budget finally included legislation that increased the age.

That same year, former Mayor Bill de Blasio appointed Hartzog as the director of the Mayor’s Office of Management and Budget — making her the first woman of color to oversee the largest municipal budget in the U.S. Only two years later she found herself in the thick of the city’s response to Covid-19. In 2020 she oversaw the city’s social service agencies and helped coordinate New York’s response to the virus as de Blasio’s deputy mayor for health and human services.

But after a little over a year working at a break-neck pace to address multiple citywide crises, Hartzog was burnt out and in need of a change. That change was to The Foundling, where she relishes deepening ties with the people her organization serves.

“It’s a different type of reward for me, personally,” said Hartzog. “I knew why I was coming here. But I didn’t anticipate how much I needed that constant connection to those we serve and how fulfilling it is.”

Melanie Hartzog GREW UP Hartzog was born in Brownsville, Brooklyn, and grew up in towns throughout Long Island.

RESIDES Bushwick, Brooklyn EDUCATION Bachelor’s in human development, Eckerd College; master’s in urban policy analysis and management, The New School ROOTS Hartzog’s mother’s side of the family is originally from Guyana. Her father, meanwhile, had moved from South Carolina to Brooklyn with hopes of a brighter future.

MOM LIFE She’s devoted to her 9-year-old and 12-yearold daughters as well as her 15-year-old son.

FITNESS BUFF In her free time, Hartzog enjoys staying active and trying out various classes. Most recently, she and her kids did a zipline course together. “I can tell you, after the leap of faith off the tree, I was done,” said Hartzog.

THE TAKEAWAY “Do not sell yourself short” is perhaps the biggest lesson of Hartzog’s career.

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NOVEMBER 20, 2023 | CRAIN’S NEW YORK BUSINESS | 23

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Crain's New York Business is looking to recognize influential women and workplaces that are inspiring change in New York City.

Nominate by January 12 CrainsNewYork.com/WomenOfInfluence

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11/17/23 1:25 PM