Crain's New York Business, January 8, 2024

CRAINSNEWYORK.COM I JANUARY 8, 2024

Hochul’s stance on business sets tone for fight on housing Governor rejected, weakened a number of bills passed by the state Legislature

By Nick Garber

See OUTLOOK on Page 19

See BUSINESS on Page 22

CRAIN’S COMPOSITE/GETTY IMAGES/BLOOMBERG

kets is purely coincidental. Weingarten agrees astrology is never the only reason for market movements, but insists it’s always a reason.

His track record seems pretty good. In 2016 he forecast the election of Donald Trump and the market rally that followed. In 2021, he correctly predicted the market would fall by the autumnal equinox. He called the top in Bitcoin, too. Weingarten has been pretty bearish over the last few years, so when we met for breakfast in November at his favorite Theater District bistro I wondered what he was thinking the stars hold now.

“I’m feeling bullish,” he said. “Things are looking good in the near-term.”

Why is that?

“The solar eclipse.”

Gov. Kathy Hochul sided unapologetically with New York’s business world over the holidays by rejecting and weakening a slew of bills passed by the more left-leaning state Legislature — setting a confrontational tone as lawmakers returned to Albany in search of an elusive housing deal.

As the clock ran out for New York’s Hochul to act on the bills housing that reached crisis will her desk at rank at the the end of 2023, the govtop of the ernor vetoed legislative legislation agenda. that would have banned employers from using non-compete agreements. She rejected other bills that would have expanded wrongful death liability and made it easier to sue corporations in New York. All had been supported by a range of good-government groups and advocates but strongly opposed

by New York’s leading business interest groups, insurers and medical providers.

The governor also signed but scaled back a bill that sought to reveal the owners of limited liability companies. Hochul proposed a change that would provide ownership information only to law enforcement instead of to the general public.

OUTLOOK 2024:

FORECASTING CITY’S KEY ISSUES What our crystal ball says about the year ahead, from housing to casinos, office space to tourism, banking to the city budget

By Aaron Elstein Weingarten, in his words, is a Legend holds that celebrity astrolBY THE “cosmic value investor” who makes oger Evangeline Adams advised NUMBERS investment decisions by charting John Pierpont Morgan more than a the movements of stars and plancentury ago. Because Morgan’s ets. His presentations are faithfully namesake bank holds $4 trillion in Number of attended by institutional money assets today, I reckoned what was visitors to New managers and wealthy individuals good enough for him is good enough York in 2023, who want something more than for me and Crain’s readers. So I according to discounted cash-flow analysis or called Wall Street’s leading astroloprice-to-earnings ratios. ger, Henry Weingarten, to hear NYC & Co. By now you’re probably thinking what’s in store for 2024 as I handicap the big issues facing the city in the months astrology is bunk and any correlation between the movements of heavenly bodies and marahead.

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GOTHAM GIGS Sanitation messenger won’t let you stop ‘trash revolution.’

CRAIN’S LIST See our list of the largest executiverecruiting firms

CHASING GIANTS Startup thinks AI can help brands avoid stereotypes.

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1/5/24 5:32 PM

Mayor’s schedule: CEOs, casinos, Bloomberg check-ins Eric Adams’ newly released personal calendars show constant dealings with high-powered executives

By Nick Garber

Mayor Eric Adams’ unannounced meetings have included confabs with top business leaders, dealings with prospective casino bidders and a prospective Penn Station developer and frequent chats with Michael Bloomberg, according to more than a year’s worth of his personal schedules that the mayor’s office released through a public records request.

The personal schedules, released to Crain’s and other news outlets in late December, cover 14 months from July 2022 through August 2023 (an initial batch covering the may-

continue an unspecified “transit conversation.”

In April 2023, just as the Italian developer ASTM was wooing elected officials to build support for its dark-horse plan to renovate Penn Station, the company’s CEO, Chris Larsen, had dinner with Adams along with the mayor’s chief advisor Ingrid Lewis-Martin and Carlo Scissura, head of the influential New York Building Congress.

The April 4 meeting took place at an Italian-American foundation building on the Upper East Side.

Finance executives also got lots of face time with the mayor.

Hedge fund magnate Bill Ackman met with Adams in September 2022, then invited the mayor to dinner two months later at his home on West 57th Street’s Billionaires Row. Fellow hedge funder Ken Griffin had an introductory call with the mayor in January 2023 along with Partnership for New York City leader Kathryn Wylde — followed days later by a public appearance with the mayor at a Partnership CEO roundtable.

Eva Moskowitz, the former City Council member-turned charter school executive, had at least three meetings with Adams between August 2022 and April 2023. Arianna Huffington, the media executive who now runs health startup Thrive Global, had at least four meetings scheduled with Adams, including three dinners and a November 2022 City Hall get-together.

In the entertainment sector, David Zaslav, the controversial CEO of Warner Bros. Discovery, met with Adams at City Hall in July 2022, well before last year’s writers’ and actors’ strikes thrust Zaslav into the spotlight. The mayor also showed an interest in “Saturday Night Live” — he had dinner in January 2023 with longtime showrunner Lorne Michaels and cast member Michael Che, and spoke on the phone in October 2022 with Chris Redd, the SNL actor who portrayed Adams in sketches.

As for the sports world, the International Cricket Council, a force behind Adams’ failed proposal to host a global cricket tour-

Much is still left out of the latest disclosures, such as the mayor’s likely meetings with lobbyists and his non-government activities. or’s first six months in office was released in 2022). Adams’ personal calendar is far more extensive than the public schedule his office releases each day; the mayor’s notes include not only public appearances but also dinners, phone calls and briefings with his own administration officials.

Much is still left out of the latest disclosures, such as the mayor’s likely meetings with lobbyists and his non-government activities.

Still, the more than 400 pages of schedules shed light on Adams’ interactions with high-powered people, some of whom were actively trying to do business with the city and state. Here are some of the most notable tidbits.

A sea of CEOs Dozens of meetings with business executives litter the pages of Adams’ 14 months of calendars.

Among them are figures from the real estate world: The mayor had dinner on March 13 of last year with Gary Barnett, CEO of Extell Development, at a bistro in Midtown East. He also met in September 2022 with Two Trees Management, a developer that has helped reshape the Brooklyn skyline, to

nament at Van Cortlandt Park in 2024, held an unspecified meeting with the mayor in July 2023, days before the plan became public.

Brett Yormark, commissioner of the Big 12 college athletics conference, met with Adams last February, and NASCAR President Steve Phelps spoke with Adams at City Hall in November 2022. (The topic was unspecified, but Nascar held a much-publicized race through Chicago’s streets last summer and is reportedly pursuing other cities.)

Other executives in Adams’ rolodex: JetBlue CEO Robin Hayes (an April 2023 phone call), Morgan Stanley CEO James Gorman (a September 2022 meeting at the company’s headquarters) and Caryn Seidman Becker, CEO of the security company Clear (an October 2022 City Hall meeting along with Wylde, of the Partnership for New York City).

Casino intrigue Although state officials are handling the bidding for a lucrative New York City casino license, Adams will play a key role as one of six officials to vote on each proposal within the city. Although everyone expects him to support the projects, at least two of the likely bidders still sought out some oneon-one time.

Richard Baker, CEO of Saks Fifth Avenue parent firm Hudson’s Bay Company, hosted Adams for lunch at the department store’s upscale French restaurant in September 2022. (The company is proposing a luxe casino atop its flagship store.)

One week later, K.T. Lim, chairman and CEO of the Genting Group, had his own meeting with Adams. The Malaysian corporation owns Queens-based Resorts World, which is widely seen as a front-runner for one of the licenses and formerly employed top mayoral aide Timothy Pearson.

Clues about obscure business office Adams’ schedules shed a tiny bit more light on the functioning of his obscure “Office of Innovation and Emerging Markets,” whose existence was first reported by Crain’s

More than a year’s worth of Mayor Eric Adams’ personal schedules reveal frequent meetings with business executives, including people seeking to influence the city and state. | MICHAEL APPLETON/MAYORAL PHOTOGRAPHY OFFICE/FLICKR

in August. City Hall has been unwilling to say much about the purpose of the never-announced office, which is supposed to screen business pitches from the private sector. It is led by Jonathan Salomons, an NYPD lieutenant, and Denise Felipe-Adams, a longtime friend and aide to the mayor.

In an October 2022 meeting with the innovation office, Adams was set to discuss a firm called MSA Security, which “has been utilizing canines to detect firearms on persons around the country, mostly in malls,” according to the listing on his calendar. The company does not appear to have any contracts with the city, according to public records.

Salomons, the office’s co-executive director, has spoken to the mayor at least five times since mid-2022, about topics including “new technology” and “tech companies.” Adams was also slated to “call Jonathan” in September 2022 to discuss something called a “Stable City Coin.” (The office has explored cryptocurrency and related technologies.)

He likes Mike Mayor Adams has not been shy about his affinity for former mayor and billionaire businessman Michael Bloomberg. The newly released schedules show how deeply their ties run: Adams had at least four phone calls with Bloomberg

since mid-2022, plus six others with an unspecified “Mike.”

Influence abroad In light of the federal investigation into whether Adams’ campaign conspired illegally with the Turkish government, it’s natural to wonder what the mayor’s schedules show about his well-documented ties to the country.

A handful of Turkey-related events do appear, including an Oct. 21, 2022 City Hall event led by Gyoder, a Turkish real estate company. (Only days later, Politico reported, Gyoder hosted Adams chief of staff Frank Carone at an event in Istanbul at which Adams himself spoke virtually.)

Adams also spoke in January 2023 at an event for the “Turkish Anatolian Lions Businessmen’s Association.”

Representatives from other nations are also keen on gaining a foothold in New York City. James Kim, CEO of the American Chamber of Commerce in Korea, met Adams multiple times in 2022, as did Korean Air CEO Walter Cho — leading to an October 2022 announcement of a partnership focused on minority- and womenowned businesses.

Adams also met twice, in August and September 2022, with Chey Jae-won, executive vice chairman of the huge South Korean conglomerate SK Group.

Matthew Flamm, longtime Crain’s reporter, dies at 70 Matthew Flamm, a longtime reporter at Crain’s New York Business who covered transportation, technology and cannabis with unsurpassed flair, passed away Jan. 2 after a nearly two-year battle with brain cancer. He was 70 years old.

Flamm wrote for the New York Post and the New York Observer before joining Crain’s in 2004; he stayed until his retirement on Feb. 7, 2020. In addition to his formidable talents as a storyteller, he was

an accomplished Aikido practitioner and poet.

Most of all, he was a guy colleagues loved working with. He got a kick out of asking people to guess his age, which no one ever got right because he went bald in his 40s and never looked any older.

“I loved how he always seemed to be on the verge of a chuckle,” said Elisabeth Butler Cordova, deputy managing director at CNBC and a Crain’s alumna.

“Matt was always warm and kind and inclusive even while be-

ing a classic no-BS reporter,” said Kira Bindrim, an editor at Bloomberg News and another Crain’s alumna.

“I have never met a reporter more obsessed with getting every single fact right,” said Telisha Bryan, managing editor of Crain’s New York Business. “I would often joke with him that he would drive me crazy with his last-minute changes, but I secretly loved his edits because they showed how truly dedicated he was to Crain’s readers.”

Flamm is survived by as well. A feature he his wife, Diane Keating, wrote in January 2022 and daughters, Gabrielle about the city’s chronic Flamm of Dillingham, housing shortage was Alaska, and Allegra Flamm one of the articles that of Washington, D.C. He is earned Crain’s the award also survived by his brothfor general excellence er, Eric Flamm of Washingfrom the Society for Adton, D.C. vancing Business Editing After retiring, Flamm Matthew Flamm and Writing. His cancer devoted much of his writdiagnosis came in March ing time to poetry. His work ap- 2022.

Three months ago a collection peared in The New Yorker and other esteemed publications, and of his poems was published. It is he took on freelance assignments called Grieving for Beginners.

BUCK ENNIS

By Aaron Elstein

2 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

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CHASING GIANTS

Founder and CEO Larry Adams’ work as a senior adviser for Michael Bloomberg’s presidential run inspired him to start X_Stereotype. | BUCK ENNIS

Can AI help brands avoid marketing stereotypes? This startup thinks so X_Stereotype’s platform analyzes insight from focus groups to predict how messages will be perceived by different audiences The upstart: X_Stereotype

W

ly,” says James. But the analysis revealed that some audiences felt it relied on cultural appropriation.

“It was very eye-opening,” says James. “We know that we’re well intentioned. . . .But in doing the research with X_Stereotype, it was helpful for us to get even sharper and understand where some watchouts might be that weren’t immediately obvious to us.”

Based on this feedback, the brand team discarded one of the ad ideas and is tweaking another for further feedback.

X_Stereotype which has four employees, declined to provide revenue figures, but Adams says the company is operating at an 85% profit margin.

hen digital marketing veteran Larry Adams served as a senior adviser on billionaire and former mayor Michael Bloomberg’s 2020 presidential campaign, he had nearly unlimited funding at his disposal. But there was one thing money could not buy: the data needed to reach audiences of color with messages that would resonate. “When the stakes are this high, how could the information not be there?” he wondered.

His Hudson Yards-based startup, X_Stereotype, aims to fill that gap. The platform employs AI-powered software trained on more than 100,000 focus group interviews. It analyzes marketing content, including words and images, and The reigning Goliath: Nielsen predicts how it will be perceived by different audiences based on factors including race and gender.

New York-based Nielsen, the global leader in audience It can evaluate anything from a political speech to an Ins- measurement, data and analysis, operates in 55 countries. tagram post, email message, television commercial or mov- Now privately held, it reported $3.5 billion in revenue in ie poster, says Adams.

2021.

Charging about $1,000 per campaign, X_Stereotype’s AI technology analyzes the client’s marketHow to slay the giant ing content to produce a scorecard rating the performance on measures including perceived racial The first challenge for Adams, who had a 35-year bias, inclusivity (does it appeal to a diverse audicareer leading digital strategy for companies inence?) and purchase intent. It also flags potential cluding AT&T and WarnerMedia, was to develop problems. the AI technology and consumer panel data to “You’re not going to make everybody happy, but train it on. you certainly don’t want to trigger people in a negHe tapped his retirement savings to do so, ative way,” says Adams. spending in the “mid six-figures” to hire neurosciAnne Kadet The company, which launched in February 2022, entists and psychologists to write surveys, transhas 23 clients, most of them major brands such as late them into variables and create equations. He SC Johnson, Procter & Gamble and American Express. and co-founder Phil Alexander also paid developers and Its very first customer, the Bob Evans brand, says working designers to create the software and platform interface. with X_Stereotype has sharply reduced the time it takes to “I felt like, if I didn’t do it, why would anyone else do it?” vet new ideas and creative. It has also flagged potential is- he says. “I put my chips on the table and put myself on the sues, says Ciare James, Bob Evans’ VP of Brand Marketing. line.”

The brand is currently using the service to help shape a He aimed high targeting his first clients. The biggest new national marketing campaign for its full line of grocery brands have the biggest budgets, he figured, and serve as products ranging from fresh sausage to heat-and-eat pasta leaders in the marketing world. If they adopted his technoldishes, for example. An analysis of a set of proposed televi- ogy, the rest would follow. sion ads produced a poor score for perceived bias.

Adams cold emailed chief brand officers at hundreds of “It was a hilarious spot, it showcased the food quite nice- companies to explain what his software could do. He priced

the service on a per-campaign basis so clients wouldn’t worry about committing to a novel technology.

The company was soon profitable but ran into a cash flow problem because its large clients typically pay on 180-day cycles. Adams set out to raise VC funding to give his company a cushion, and expected an easy go of it: “We had AI, which everyone was talking about, and the company is Black-run, Black-owned—this should be a no-brainer, right?”

He got a lot of meetings — and a lot of nos. The most common objection? “It’s really cool, but we don’t understand it.”

He turned to angel investors — marketing types who had experience with the same problems that spurred him to launch his company in the first place. He closed on a $2 million seed round in June.

Investor Brandon Davis, founder of political media strategy firm Technicolor Political, says his interest in X_Stereotype was spurred by his own frustration with the dearth of racially focused analysis tools on the market — he’s also a customer. “We’ve integrated it into some of our standard campaign offerings,” he says, “to make sure our content is not just relevant, but culturally intelligent.”

“X_Stereotype’s work predates what I think has been a boom in conversation about how to reduce bias in AI,” he adds. “When you have a business that is in a growing sector, in an important sector, and ahead of the curve, that’s a pretty good investment.”

The next challenge At the end of January, X_Stereotype will launch a subscription service, starting at $1,500 a month, that will allow clients to host the platform on their desktops and run their own analyses. It’s also planning to introduce the service in Spanish and Portuguese.

But the most exciting challenge ahead, to Adams’s mind, is to get the AI generating culturally inclusive ad copy, images and videos. “We have the data, we have the insights, we have the people’s voices and how they speak,” he says.

“That’s where the technology is headed.”

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

January 8, 2024 | CRAIN’S NEW YORK BUSINESS | 3

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RESIDENTIAL SPOTLIGHT

New owner of former Vanderbilt mansion wants to restore it to a single-family home The 18,000-square-foot Upper East Side property, which sold for $52.5 million in 2022, was built for Virginia Graham Fair Vanderbilt and later used as an embassy and school. The owner wants to restore “its original use as a single-family residence.”

By Nick Garber

the top floor as an apartment for the school’s director.

The school sold the home for he anonymous new owner $10.6 million in 2002 to of an Upper East the antiques dealer Side mansion Carlton Hobbs, who built for the Vanderbilt lived in the top-floor family wants to convert Sale price in 2022 apartment and used it back to a single-fami- for 60 E. 93rd St. the rest of the extravaly residence after it gant space to showcase spent decades as an embassy and school building, ac- his wares to moneyed clients. One cording to plans filed with the decorator described a visit to the home as “breathtaking” in a 2008 city.

The 18,000-square-foot home at New York Times article.

60 E. 93rd St., between Madison and Park avenues, was built in Owner seeking permit 1930 to house the family and servants of Virginia Graham Fair Hobbs sold the home for $52.5 million in July 2022 to a buyer listed under an anonymous LLC. That buyer is now asking the city for a special permit to renovate the home and restore “its original use as a single-family residence,” the application reads.

As part of the project, the unVanderbilt. After 1957, the limestone home became the Roma- named owner pledged to bring the nian Permanent Mission to the now-vacant home back “to a United Nations, then was pur- sound first-class condition.”

The owner needs no permission chased in the 1970s by the Lycée Français de New York, which used for the residential expansion,

T

$52.5M

The mansion was designed by the architect John Russell Pope, known for the Jefferson Memorial and main entrance hall to the American Museum of Natural History.

The 18,000-square-foot building at 60 E. 93rd St., between Madison and Park avenues, was built in 1930 to house the family and servants of Virginia Graham Fair Vanderbilt. | BUCK ENNIS

since it is already zoned as a home.

But since the building is both an individual landmark and sits in a historic district, the City Planning Commission must sign off on aspects of the 93-year-old building that do not comply with current zoning for single-family homes,

like its shallow rear yard.

The mansion was designed by the architect John Russell Pope, known for the Jefferson Memorial and main entrance hall to the American Museum of Natural History. Its street frontage measures 57 feet, an unusually large width

for a residence in the middle of Manhattan.

Its $52.5 million sale was among New York City’s biggest in 2022, trailing only two other Upper East Side townhomes and a handful of high-rise apartments and penthouses.

Manhattan apartment sales drop at the end of 2023

By C. J. Hughes

Manhattan buyers were squeezed as 2023 came to a close, according to new data from Douglas Elliman. But relief seems in sight.

In the fourth quarter, the borough’s median sale price hit $1.16 million, a gain of more than 5% in a year and the second-highest fourth-quarter median ever, the brokerage said.

Likewise, inventory tumbled nearly 12% year over year, as sellers

man, the number of signed contracts climbed last month following the news that the Federal Reserve would hold the line on interest rate hikes for now, boosting hopes that stability could be around the corner.

Cash deals soar “We seem to be exiting the Covid housing-boom era and all the distortions in the metrics that came with it,” said Jonathan Miller, the CEO of the appraisal firm Miller Samuel, which prepared the Elliman data. “This year should be the year of modest change, as unsexy as that may sound.”

Continuing a monthslong pattern, interest rates weighed on the market as 2023 wound down, even at the high end. Indeed, cash deals for co-ops and condos in Manhattan soared in the October to December period, accounting for a hefty 68% of all deals, an all-time high, according to the data.

To put that figure in perspective, buyers paid in cash only about half the time on average over the past

appeared to postpone moves over worries about high loan costs for their next homes. As the supply of co-ops and condos fell, sales did too, plummeting 6% since the same period in 2022, according to Elliman.

But the market seemed to thaw a bit in December. According to Elli-

BLOOMBERG

The fourth quarter had just 2,406 sales transactions, a decline of about 16% from the third quarter.

decade, Miller said.

But despite a willingness to reach deep into pockets, there weren’t as many deals to go around. The fourth quarter had just 2,406 sales transactions, a decline of about 16% from the third quarter.

Still, the fall’s sales total is similar to that from the fourth quarter

of 2019, a few months before the pandemic slammed New York, a sign that the topsy-turvy pandemic era is fading, Miller said. Prices, though, have been slower to come back down to earth and still remain above pre-Covid levels, he added.

And yet in the past few weeks,

sidelined buyers began inching back into the market, seemingly convinced that they will be able to refinance loans down the road even if they’re stuck with elevated interest rates for the time being.

“This last quarter sort of laid the groundwork for what to expect going forward.,” Miller said.

4 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

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Vornado sells another 220 Central Park South luxury condo

By Eddie Small

Vornado has sold what appears to be one of the last remaining sponsor units in its ultra-luxury condo tower 220 Central Park South.

The real estate firm closed on the sale of No. 22A at the tail end of 2023 for about $10.6 million, property records show. The buyer was a limited liability company repre-

The building is also believed to be home to the priciest-ever residential sale: hedge fund billionaire Ken Griffin’s $238 million purchase of a triplex. sented by attorney Justin Marques of the Midtown-based law firm Becker Glynn. Marques specializes in serving wealthy individuals and previously represented the buyer of No. 22B at 220 Central Park South, which sold in March for about $14.8 million.

No. 22A is a two-bedroom, two-bathroom unit spanning about 2,400 square feet, according

220 Central Park South | BUCK ENNIS

to the project’s offering plan.

Vornado has been facing several headwinds since the pandemic upended New York’s office market, most notably pausing plans to build new commercial towers around Penn Station, but 220 Central Park South has remained a bright spot in

its portfolio. The 117-unit development, designed by Robert A.M. Stern Architects, saw several high-profile deals in 2023, including the $80 million sale of a duplex villa to an entity linked to Suna Said’s Midtown-based investment firm Nima Capital and the $75 million

sale of No. 45A, a three-bedroom, 3,100-square-foot unit, to an LLC. The building is also believed to be home to the priciest-ever residential sale: hedge fund billionaire Ken Griffin’s $238 million purchase of a triplex.

A Crain’s analysis from summer

2022 found that 220 Central Park South only had 10 sponsor units left that were generally smaller apartments on lower floors. A Vornado spokesman declined to comment on the sale of No. 22A and on how close the building was to selling out.

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January 8, 2024 | CRAIN’S NEW YORK BUSINESS | 5

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ON POLITICS

3 big ideas to solve New York’s crises in 2024 How about turning over the MTA to foreign experts and bringing back single-room occupancy housing?

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here are no simple policy poor and destitute found refuge in fixes for New York, a nice SROs — very cheap single rooms place to live that could be so in apartment buildings or hotels that offered week-to-week or much better.

But there are solutions for some month-to-month housing.

Old movies and novels still offer of the state’s greatest challenges, if only the political will can emerge. a window into this New York: a There are still far too many home- young person, down on their luck, less and mentally ill people on city blows into the city and finds an streets. The working class and affordable room in a “boarding poor, forced to endure distant house” or hotel. SROs fell into disrepair in the second half commutes because rents of the 20th century, and remain stubbornly high, some attracted drugs and must navigate an anticrime. Locals, particularly quated subway and comin Manhattan, resented muter rail system. living near SROs, and All of this is vexing and their construction was it will take years to rectieventually outlawed. fy. The good news is that The remaining SROs, the governor, the mayor, from the 1970s onward, the state Legislature and were converted into marthe City Council can start Ross Barkan ket-rate hotels and apartthe work now to solve ments or demolished althese crises and make New York a true national exem- together. This pleased voters but had dire consequences for the city. plar.

Homeless would not have to sleep Here are the three steps to take.

1. Aggressively build single-room in train stations or subway cars if they had low-cost rooms to retreat occupancy housing There are few, if any, more effec- to and store their belongings.

Over time, with new SROs, the tive ways to cut down on street homelessness in the five boroughs city would not have to rely on exthan building safe, functional pensive private shelters, either.

SROs. Luckily, both Mayor Eric The migrant crisis would be less of Adams and Gov. Kathy Hochul a strain. SROs could truly change support the concept, and the Ad- the direction of the state.

2. Aggressively add psychiatric ams administration is attempting a rezoning that would pave the beds and build new mental health hospitals way for more SRO construction.

It would be wrong to call the Both Democrats now understand the story of homelessness in demolition of SROs well-intenNew York is rather straightfor- tioned, but the crusade for deinstiward. Until the 1980s, it was rare to tutionalization came from an find homeless encampments or understandable place. Launched overcrowded shelters. Most of the during the Kennedy administra-

tion and catalyzed over the next few decades, deinstitutionalization was the successful movement to close a large number of mental hospitals and asylums throughout the country.

In New York, this took the form of closing down scandal-plagued facilities like the Willowbrook State School on Staten Island. The hope was that the closure of dehumanizing facilities, portrayed with some accuracy in novels and films like “One Flew Over the Cuckoo’s Nest,” would lead to the mentally ill entering community-based facilities and spending time with family. The rise of psychiatric medication was supposed to make these asylums less necessary.

But those community facilities lacked the capacity of the old hospitals. The reality was that many mentally ill people ended up homeless or in prisons. The proverbial baby was thrown out with the bathwater.

Hochul has started to add new psychiatric beds, which is a step in the right direction, but New York state must do far more in the coming years. Humane, well-functioning hospitals and asylums must be reopened so people struggling with mental illnesses can have safe housing and regular access to effective medications. Our status quo is untenable.

3. Let foreigners run the MTA Andrew Cuomo, the disgraced former governor, let Andy Byford, a British transit expert, oversee the city subway system for several years. Byford initiated a reform plan for the subways that included

New York needs bold action on housing, transit and mental health care to resolve its overlapping crises. | BLOOMBERG

much-needed signal modernization. Ultimately, Byford was driven out by Cuomo, who resented the amount of media attention Byford received and the authority the subway chief required to do his job. Crucially, Byford did not oversee the MTA itself, and his power was always limited.

The MTA wastes profound amounts of money. Infrastructure projects run billions over budget.

The extension of the Second Avenue Subway to East Harlem will cost many billions more than similar projects in Tokyo, Rome or London.

By American standards, the MTA is well run, but by global standards, it’s a disaster. In the near future, Hochul should turn the transportation authority over to Japanese or European transportation experts who can cut through

the fat, simplify a quasi-corrupt contracting process, and build out new subway and commuter lines to finish a job that should have been done, quite literally, one hundred years ago.

A Tokyo-style subway system would have sent subway lines to Staten Island, New Jersey, eastern Brooklyn and eastern Queens, and made commuting north-south in Queens easy. Hochul’s Interborough Express is the right idea, but it needs to be completed in a timely fashion. She can be the governor who makes a real difference, especially since congestion pricing is coming.

If congestion pricing isn’t accompanied, in the long run, by any transportation upgrades, it will be a failure.

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

How much does it cost to miss the MLB playoffs?

Ask the New York Yankees’ ticket office

By Jack Grieve

Missing out on October baseball is not something the New York Yankees do often. The team has made more playoff appearances than any other franchise in Major League Baseball, including six consecutive postseason berths between 2017 and 2022.

But when the Yankees do fail to clinch, like last year’s lackluster 82-80 team did, it’s not just a disappointment to players and fans.

it to the American League Championship Series only to be swept by the Houston Astros, the team brought in $344.7 million in ticket sale and suite license proceeds.

That included collections of $72.6 million from the five home games the team hosted during the postseason.

When the Yankees last won the World Series in 2009 — which resulted in eight additional postseason home games — the team brought in a whopping $397 million. (That would be more like $564.5 million today when adjusted for inflation.)

Last year, however, when the Yankees played their final regular season home game on Sept. 25 and watched at home as the Texas Rangers won it all, Hal Steinbrenner’s team brought in just $279.2 million in ticket and suite sales—down about $65.5 million from 2022 and $117.8 mil-

Despite last year’s short season, the Yankees remain the most valuable team in baseball.

Failing to make the playoffs also costs the front office tens of millions of dollars in potential ticket and suite proceeds.

In 2022, when the Yankees made

holders of the bonds it used to pay for the construction of their stadium. In 2020, when no fans were buying tickets or suites, the team refinanced those bonds to lower interest expenses by $40 million.

Top value

Missing the playoffs last year meant the New York Yankees lost out on tens of millions of dollars in potential ticket and suite proceeds. | GETTY IMAGES

lion from the 2009 World Series year.

In 2016, the next-most recent time the Yankees failed to make

October ball, ticket and suite proceeds were just $230 million.

Those numbers are according to disclosures the team makes to

The team historically has generated about half its total revenue from ticket and suite sales, although ticket sales matter less to teams than they used to because the value of media rights has soared.

Despite last year’s short season, the Yankees remain the most valuable team in baseball, with Forbes valuing the club at $7.1 billion, followed by the Dodgers at $4.8 billion. The team is the second-most valuable franchise in all of sports, sitting just behind the Dallas Cowboys. The Yankees ranked No. 49 on Crain’s 2023 list of the largest privately held companies in New York.

6 | CRAIN’S NEW YORK BUSINESS | JANUARY 8, 2024

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1/5/24 2:35 PM

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EDITORIAL

M

ayor Eric Adams for months has begged the federal government for help with a migrant crisis orchestrated by red-state governors including Texas Gov. Greg Abbott. Meantime, the city has spent billions to house and care for the influx and has ordered budget cuts in an attempt to make the numbers work.

Now Adams is taking the fight to Abbott, hoping to slow the stream of migrants by suing the private companies cashing in on the Texas governor’s gambit.

The city last week filed suit in state court against 17 charter bus and transportation companies it says have helped Abbott bus migrants into New York City in one of its most ambitious attempts yet to get a handle on the crisis and recoup some of the $3 billion taxpayers have spent to house and feed asylum-seekers since 2022.

The suit, which some experts have handicapped as a legal long shot, nonetheless is a creative and necessary step aimed at protecting taxpayers from footing an ever-steeper bill for a problem only the federal government can solve.

Alongside its own lawyers, the city has

enlisted the high-powered law firm Paul, Weiss, Rifkind, Wharton & Garrison to handle the case, with a team that includes Steven Banks, a former commissioner of the city’s Department of Social Services.

Gov. Kathy Hochul said in a statement that she supports the mayor’s suit, although the state has not signed on as a party.

Demands $708 million The suit accuses the bus companies of violating an obscure state law that bars abandoning “needy” people in the state for the purpose of making them “a public charge.” The suit demands the companies pay $708 million to help pay for the care of about 34,000 migrants they have dropped off in the city after picking them up in Texas (a fraction of the 164,000 asylum-seekers who have arrived since 2022).

“New York City has and will continue to do our part to manage this humanitarian crisis,” Adams said in a statement. “But we cannot bear the costs of reckless political ploys from the state of Texas alone.”

Abbott, who in a statement called the

lawsuit “baseless,” citing the Commerce Clause in the U.S. Constitution, has regularly bragged of sending more than 95,000 migrants to so-called sanctuary cities, including New York and Chicago, in protest of federal immigration policies.

The suit says the charter bus companies receive about $1,650 per person to transport migrants, far more than a standard bus ticket, demonstrating the companies’ “bad faith” involvement. Adams previously issued an executive order limiting when buses carrying migrants can arrive in the city, but within days the mayor accused Abbott of getting around the policy by ordering the buses to drop off migrants in New Jersey, which swiftly ushered migrants onto public transit into the city.

BLOOMBERG

City’s suit against bus companies bringing migrants is a creative and necessary step

At a minimum the suit puts charter-bus companies on the defensive and may make it harder for Abbott to keep up the pace — while giving the city more time to persuade Congress and the Biden administration to address a crisis that should not fall so heavily on the shoulders of New York City.

PERSONAL VIEW

Insurance prices are bankrupting affordable housing cannot buy cheaper insurance, because it doesn’t provide the coverage required in their financing agreements. These housing providers have no other option but to cut costs from elsewhere, usually opting to defer maintenance, which reduces the quality of housing for renters.

So what is the solution?

Some lawmakers may advocate for regulating the insurance industry and forcing them to lower premiums.

The downside of that approach is that they could just stop writing policies, eliminating all insurance options for buildings and forcing them to default on their loan obligations.

We have already seen this happen in California.

A better approach would be a state-run insurance product for the buildings in these geographic areas. Similar to when insurance companies failed to write policies for homes in flood zones or housing in areas of high fire threat, state governments can step in to fill the void. In this instance, they would be preserving low-income housing by helping housing providers balance their budgets.

GETTY IMAGES

W

hile the banks may no longer be subsidies, and in low-income neighborredlining communities, the in- hoods, are reporting the highest increases surance companies continue to in insurance coverage premiums. The undiscriminate against privately run, afford- derwriting processes are unfairly labeling able multifamily housing in lower-income buildings in low-income neighborhoods neighborhoods. If you are an affordable as riskier, and the companies are imposing housing provider, insurance companies higher premiums. Some companies are are punishing you. And they have been for pulling coverage from these buildings altogether. Owners who have never years. had claims against their building The Rent Guidelines Board’s are being dropped from coverage. data from 2021 (the most recent While the Bronx is the epicenthey have collected) shows the ter of this crisis, the rising insuraverage insurance costs for a ance rates are hurting affordable rent-stabilized unit in the Bronx housing across the city and the at $89 a month, per apartment. country. A recent survey by the That’s more than 8% of the averNational Multifamily Housing age rent, which was $1,100.

Council found that 29% of apartFast-forward to today, two ment buildings in the country saw years after this data was collect- Jay Martin is their premiums increase by more ed, and the situation is signifi- the executive than 25% last year. Building owncantly worse. In 2022, owners director of the ers report that they are deferring saw double-digit increases in in- Community maintenance and raising rents to surance costs. In 2023, owners Housing offset the massive spike. were seeing the same. But the Improvement Rent-stabilized buildings are lags in RGB reporting means Program, the primary housing for low-inowners will be paying five to six representing times more in insurance costs, the owners and come New Yorkers. They are currently operating on razor-thin per apartment, before the RGB operators of margins, many already seeing opeven gets around to consider a roughly erating costs outpace rent collecrent increase to pay for them.

400,000 tions. They cannot raise rents to It’s even worse when you look rent-stabilized offset such dramatic increases in at how insurance companies are apartments in determining who to raise premi- New York City. insurance costs, or any of the other cost increases these buildings ums on. Owners of rent-stabilized buildings, with tenants receiving are experiencing. In most instances, they

If crafted correctly, a government-run insurance product would help maintain the quality of housing. Every dollar matters. Building maintenance is always first on the chopping block, which is why rent controls historically have reduced the quality of housing.

What we can’t do is nothing. Unsubsidized affordable housing will continue to be gouged — by insurance companies, by property taxes, by utility costs — and housing quality will continue to decline.

The government must act next session to address this growing problem, before it’s too late.

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.

8 | CRAIN’S NEW YORK BUSINESS | JANUARY 8, 2024

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PERSONAL VIEW

O

n yet another of those rainy weekends this past October, dozens of visitors filed into a parking garage in Williamsburg to see something out of the ordinary. In a corner of the garage, parked cars had been replaced by a bed, a couch and coffee table, a dining room and even the makings of a kitchen.

The day-long demonstration, hosted by livability advocates Open Plans in one of Slate Property Group’s apartment buildings, left attendees convinced a New Yorker could comfortably live in the square footage of two parking spots.

That was the point.

New York has a parking problem. And no, it has nothing to do with finding a space on street-cleaning days.

At Slate, we’ve increasingly found that New York City’s longstanding requirements to build off-street parking with each new development are reducing the amount of housing we can build — or making it impossible to build any housing at all at some sites.

David Schwartz is the principal at Slate Property Group.

Sara Lind is the co-executive director at Open Plans, a non-profit that advocates for making city streets livable.

That means our parking problem has actually become a housing problem — a crisis. The cost and the space required to build parking garages at new buildings is making New York’s housing shortage worse.

The blame falls squarely on local laws, originating more than 50 years ago, requiring parking to be built in almost all new development, whether or not its residents own or drive cars. Ever since the 1950s, planners and communities held the belief that most, if not all, newcomers to the city would have cars. And they set fixed ratios for how many parking spots every new unit of housing needed to provide.

The assumption was never true, and much of the parking that developers were forced to build has sat vacant. Today, fewer than half of households in the city own cars (and only half of those use their cars for commuting). All that extra, unneeded parking comes at a cost. At Slate Property Group, we estimate every newly built parking spot adds $50,000 to $100,000 to the cost of

new buildings.

That’s driving up the overall cost of new housing, both for renters and owners. Those resources would be better spent building more apartments, or improving people’s quality of life with amenities they would actually use.

Some of those dollars could even be reinvested to help people get around better without a car, by building in bike storage or e-micromobility charging. Instead, we waste money on mandated parking spots that often go unused.

And that’s just the cost in dollars. In certain parts of the city, we encounter areas where housing can’t be built at all because we can’t cobble together lots big enough to fit both apartments and parking.

This reform works All this means that just when we need to make housing more affordable and abundant, our city is facing self-imposed rules that make new housing both more expensive and harder to build.

It’s time to fix our parking problem.

Last year, Mayor Eric Adams announced

GETTY IMAGES

To successfully build more housing, build less parking

a slew of plans to make it easier and faster to build new housing, and eliminating mandatory parking requirements was on the list. Our friends at Open Plans had been advocating for that for months. We all need the City Council to back those reforms, even if it means standing up to local voices.

We know this reform works, because New York City took a first step in this direction back in 2016 when it eliminated parking mandates for affordable and senior housing developments built near subway lines. It was a small change with a big impact.

An independent study conducted a few years later showed that new affordable housing construction in these areas shot up — including new housing for the very poorest New Yorkers who need apartments the most right now.

Getting parking right — and building less of it — will help move us in the right direction.

PERSONAL VIEW

Patent office proposals are a threat to small businesses

GETTY IMAGES

N

I feel compelled to speak out against the ew York City is built on small businesses. From the offices of promis- USPTO’s proposed rules that now threating high-tech startups to beloved en small- and medium-sized businesses. neighborhood storefronts, small business- The proposals outlined in the office’s Ades represent the creativity, grit and diversi- vance Notice of Proposed Rulemaking would severely weaken the USPTO’s proty that make our city unlike any other. cess for striking down invalid patI represented New York’s 14th ents. congressional district, including The Patent Trial and Appeal my hometown of Woodside, Board review — where specialist Queens, in the U.S. Congress for judges within the USPTO deternearly two decades. Supporting mine the validity of patents — small business owners and entreprotects small and medium busipreneurs was always a top priority. nesses by serving as a less Throughout my tenure, I spoke expensive alternative to patent with countless small business infringement lawsuits. PTAB is an owners about their frustration important shield for businesses over excessive regulation and red Joe Crowley against attacks by non-practicing tape. When I led the New Demo- represented crat Coalition — the pro-business, New York in the entities (often referred to as patent trolls), that come in the form pro-economic growth wing of the U.S. House of House Democratic Caucus — we Representatives of patent infringement lawsuits relying on shoddy patents. worked hard to advance policies from 1999 to Over the past decade, patent that created opportunities and re- 2019. He was trolls have brought hundreds of moved barriers to success. chair of the cases against small- and mediumOne of the most critical govern- House sized businesses in New York ment agencies affecting busi- Democratic courts — and that is to say nothing nesses is the U.S. Patent and Caucus from of the suits brought against New Trademark Office. In its ideal 2017 to 2019.

York-based businesses in courts form, the USPTO incentivizes innovation, protects assets, stimulates eco- across the country. Most recently, they’ve nomic growth and encourages competi- taken aim against our leading financial intion. At the office’s worst, patents are used stitutions by weaponizing patents related to data caching, messaging and network as a tool to exploit businesses.

security. This is a common phenomenon: Patent trolls were responsible for almost 60% of all patent litigation in the United States last year, and they cost businesses an estimated $29 billion annually.

The USPTO’s proposed changes would make it harder for businesses to access PTAB review, removing it as a tool for resolving frivolous claims and opening the patent system to more abuse.

Don’t threaten growth Included in the rules package are new standing requirements that restrict who is able to petition for review, new timelines for when review is accessible, burdensome standards for initiating review, and changes that would force targets of lawsuits to choose between making arguments at the PTAB or in court. These are at odds with the process that Congress de-

signed and its intention to make PTAB an accessible alternative to wasteful litigation. These limitations would harm smaller businesses, which lack the resources to fight legal battles, and would rule out the right to contest invalid patents for many legitimate challengers.

The advance notice from USPTO drew 14,500 comments from stakeholders.

More than 95% of the comments were declared in opposition. Additionally, a recent economic analysis found that over the next decade the proposals would result in a net decrease in U.S. business activity of $482.1 million in gross product and $230.4 million in personal income.

The story of small businesses in New York City has always been one of resilience. Small businesses should not have to fight meritless patent litigation. The USPTO needs to support growth, not threaten it.

January 8, 2024 | CRAIN’S NEW YORK BUSINESS | 9

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14

CRAIN’S LIST LARGEST EXECUTIVE-RECRUITING FIRMS Ranked by number of New York-area recruiters

amanda.glodowski@crainsnewyork.com

NY-AREA RECRUITERS U.S. RECRUITERS 2024/ 2024/ 2023 2023

% OF BILLINGS FROM YEAR RETAINED FOUNDED 1 SEARCHES AREAS OF SPECIALIZATION

15

16

COMPANY/ ADDRESS

PHONE/ WEBSITE

TOP LOCAL EXECUTIVE(S)

1

THE BACHRACH GROUP 1430 Broadway New York, NY 10018

212-279-7777 bachrachgroup.com

Anthony Fanzo President

198 198

325 325

1974

55% Technology, construction, engineering, financial services, accounting, real estate, human resources, hospitality, office support, manufacturing, medical, corporate services, legal and energy

1 17

2

ATLANTIC GROUP 19 W. 34th St. New York, NY 10001

212-271-1181 atlanticrecruiters.com

John Ricco Founding partner

142 138

195 184

2006

50% Accounting, finance, tax, investor relations, quantitative analysis, health care, information technology, construction, administrative/corporate services and payroll services

2 18

3

ATLAS SEARCH 1540 Broadway New York, NY 10036

212-655-5477 atlassearchllc.com

Robert Parks Peter Riccio Scott Stenzler Founding partners

118 118

123 123

2015

51% Accounting, finance, front office, tech, creative, health care, clinical research, legal, human resources and office support

4

FORUM GROUP 550 Seventh Ave. New York, NY 10018

212-687-4050 forumgrp.com

Frank Fusaro President

110 110

120 120

1974

50% Accounting, regulatory reporting, compliance, advertising and market research, human resources, information technology and health care

4 20

5

HOWARD-SLOAN SEARCH 555 Fifth Ave. New York, NY 10017

212-704-0444 howardsloan.com

Mitchell Berger Chief executive

105 98

118 109

1957

60% Health care, legal, financial, risk, human resources, publishing, tech, compliance, sales, marketing, life sciences, cannabis, real estate, data science, supply chain and insurance

5

5

OPTIONS GROUP 121 E. 18th St. New York, NY 10003

212-982-0900 optionsgroup.com

Michael Karp Chief executive

105 105

110 110

1992

75% Financial services, investment banking, risk management, quantitative analysis, information technology, hedge funds, private wealth management, data science, predictive analytics, artificial intelligence and machine learning and crypto

5

7

SOLOMON PAGE 260 Madison Ave. New York, NY 10016

212-403-6100 solomonpage.com

Scott Page Lloyd Solomon Founding partner, managing directors

75 82

128 126

1990

10% Financial services, health care, life sciences, fashion, consumer products, creative and marketing, technology and human resources.

7

8

JW MICHAELS & CO. 441 Lexington Ave. New York, NY 10017

212-922-2844 jwmichaels.com

Jason Wachtel Managing partner

71 71 2

n/d

2010

n/d Legal, compliance, risk, quantitative trading, information technology, accounting and finance, front office and human resources

8

9

CAREER GROUP COMPANIES 1156 Sixth Ave. New York, NY 10036

212-750-8188 Susan Levine careergroupcompanies.com Chief executive Michael Levine President

70 70

115 115

1999

60% Corporate services, accounting, finance, IT, hospitality, marketing, fashion, tech, family office, creative and Clevel executives

9

RANK

10 RUSSELL REYNOLDS 3

Ne res oth list

Pascal Becotte Managing director, hub leader

68 68

272 272

1969

92% Board/CEO succession planning, leadership assessment, executive search, sustainability, digital, private equity, diversity, equity and inclusion

10

212-922-1001 tandymgroup.com

Byrne Mulrooney Chief executive

65 65 2

80 80 2

1985

n/d Hedge funds, private equity, investment banking, accounting, health care, legal, life sciences, technology, digital and human resources

11

212-867-9876 heidrick.com/en

Sarah Payne Chief human resources officer Tracey Heaton Chief legal officer and corporate secretary

62 62

214 214

1953

84% Financial services, technology, cyber, health care and life sciences, industrial, consumer markets, energy, private equity and social enterprise

12

Stephen Viscusi Chief executive

61 56

61 61

1985

100% Furniture, architectural products, textiles, floorcoverings, tile, fixtures, lighting, kitchen and bath and luxury goods

13

646-407-3900 codasearch.com

David Cooperman Chief executive Chris DeGasperis President/partner, staffing

59 59

93 93

2011

52% Financial services, accounting, technology, technology sales, creative, digital, marketing, human resources and office support

14

646-992-8362 arrowsearchpartners.com

Billy Merva Managing partner

55 53

57 54

2018

50% Accounting, financial services, information technology, corporate services, office support and front office

15

212-687-1834 kornferry.com

Anthony LoPinto Managing partner, New York region, and global sector leader, real estate

50 4 50 4

n/d

1970

n/d Financial services, CEO/board, consumer, life sciences, health care, technology and nonprofits

16

Richard Wolf President, chief executive

45 45

49 49

1990

100% Pharmaceuticals, insurance, financial services, consumer products, consulting, waste management, automotive, medical devices, hospitals, higher education and retail

17

Kristin Wait Office manager

42 42

229 229

1961

New York, NY 10017 & 12 HEIDRICK STRUGGLES

19 3

212-351-2000 russellreynolds.com

ASSOCIATES 277 Park Ave. New York, NY 10172 GROUP 11 TANDYM 675 Third Ave.

RAN

INTERNATIONAL INC. 1 Vanderbilt Ave. New York, NY 10017 VISCUSI GROUP 212-979-5700 13 THE viscusigroup.com 1185 Sixth Ave. New York, NY 10036 SEARCH | 14 CODA STAFFING 530 Fifth Ave. New York, NY 10036 SEARCH 15 ARROW PARTNERS 530 Fifth Ave. New York, NY 10036 FERRY 16 KORN 200 Park Ave. New York, NY 10166

RESEARCH 212-980-3800 17 GLOBAL globalresearchnet.com 201 E. 77th St.

10 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

New York, NY 10075

18 90 Park Ave.

P010_P011_CN_20240108.indd 10 SPENCER STUART

212-336-0200 spencerstuart.com

n/d Consumer goods and services, financial services, 1/4/24 5:44 PM industrial, health care and technology

18

com

es,

ve

fice

, e

1185 Sixth Ave. New York, NY 10036 SEARCH | 14 CODA STAFFING

viscusigroup.com

Chief executive

56

61

646-407-3900 codasearch.com

David Cooperman Chief executive Chris DeGasperis President/partner, staffing

59 59

93 93

2011

52% Financial services, accounting, technology, technology sales, creative, digital, marketing, human resources and office support

646-992-8362 arrowsearchpartners.com

Billy Merva Managing partner

55 53

57 54

2018

50% Accounting, financial services, information technology, corporate services, office support and front office

212-687-1834 kornferry.com

Anthony LoPinto Managing partner, New York region, and global sector leader, real LOCAL estateEXECUTIVE(S) TOP

50 4 n/d 4 50 NY-AREA RECRUITERS U.S. RECRUITERS 2024/ 2024/ 2023 2023

1970

n/d Financial services, CEO/board, consumer, life sciences, % OF BILLINGS health care, technology and nonprofits

530 Fifth Ave. New York, NY 10036 SEARCH 15 ARROW PARTNERS 530 Fifth Ave. New York, NY 10036 FERRY 16 KORN 200 Park Ave. New York, NY 10166 RANK

COMPANY/ ADDRESS

PHONE/ WEBSITE

BACHRACH 212-980-3800 GLOBAL RESEARCH 212-279-7777 1 17 THE bachrachgroup.com GROUP globalresearchnet.com 201 E. 77th St.

325 49 325 49

1974 1990

55% Pharmaceuticals, Technology, construction, engineering, financial services, 100% insurance, financial services, accounting, real estate, human resources, hospitality, consumer products, consulting, waste management, office support, manufacturing, medical, corporate automotive, medical devices, hospitals, higher education services, and retail legal and energy

212-271-1181 212-336-0200 atlanticrecruiters.com spencerstuart.com

John KristinRicco Wait Founding partner Office manager

142 42 138 42

195 229 184 229

2006 1961

24 SEVEN INC. 19 SEARCH 105 Maxess Road 3 ATLAS 1540 Broadway Melville, NY 11747

212-966-4426 212-655-5477 24seventalent.com atlassearchllc.com

Anthony Donnarumma Robert Parks Chief executive Peter Riccio Celeste Gudas Scott Stenzler Founder, board Founding member partners

37 118 37 118

143 123 143 123

2000 2015

50% finance, investor relations, quantitative n/d Accounting, Consumer goods andtax, services, financial services, analysis, technology, industrial,health healthcare, care information and technology construction, administrative/corporate services and payroll services n/d Staffing and project-based work in marketing, creative, 51% Accounting, office, creative, health digital, tech, finance, fashion, front beauty and tech, advertising care, clinical research, legal, human resources and office support

FORUM GROUP SEARCH 4 20 GLOCAP 550 Seventh 20 W. 33rd St.Ave.

212-687-4050 212-333-6400 forumgrp.com glocap.com

Frank Adam Fusaro Zoia President Chairman, founder

110 33 110 33

120 34 120 34

1974 1997

1430 Broadway New York, NY 10075 New York, NY 10018 GROUP SPENCER STUART 2 18 ATLANTIC 19 34th St. 90 W. Park Ave. New York, NY 10001 10016 5

New York, NY 10036

New New York, York, NY NY 10018 10001

Annette Krassner Chief executive Mitchell Berger Chief executive

5

otherwise noted. Recruiter figures are as of Jan. 1. In the case of a tie, firms are ordered alphabetically by company name. n/d-Not disclosed. 1. New York-area office. 2. 2022 figure used. 3. Previously 212-982-0900 Michael Karp 105 110 1992 75% Financial services, investment banking, risk OPTIONS GROUP listed as The Execu|Search Group. 4. Crain's estimate based on research from the company's website. 5. Crain's estimate. optionsgroup.com Chief executive 105 110 management, quantitative analysis, information 121 E. 18th St. technology, hedge funds, private wealth management, New York, NY 10003 data science, predictive analytics, artificial intelligence and machine learning and crypto

5

WANT MORE OF CRAIN’S EXCLUSIVE DATA? VISIT CRAINSNEWYORK.COM/LISTS.

on

8

JW MICHAELS & CO. 441 Lexington Ave. New York, NY 10017

212-922-2844 jwmichaels.com

y,

9

CAREER GROUP COMPANIES 1156 Sixth Ave. New York, NY 10036

212-750-8188 Susan Levine careergroupcompanies.com Chief executive Michael Levine President

gs, ds

y nd

y,

s,

ion

50% regulatory reporting, compliance, 34% Accounting, Private equity, venture capital, hedge funds, asset advertising and market research, human resources, management, investment banking and technology information technology and health care

212-704-0444 105 118 1957 60% Health care, legal, financial, risk, human resources, HOWARD-SLOAN howardsloan.com 98 109 publishing, tech, compliance, sales, marketing, life SEARCH sciences, cannabis, real estate, data science,uses supply 555 area Fifth includes Ave. New York New York City and Nassau, Suffolk and Westchester counties in New York, and Bergen, Essex, Hudson and Union counties in New Jersey.

Crain's New York Business staff chain and insurance New York, NY 10017 research, extensive surveys and the most current references available to produce its lists, but there is no guarantee that the listings are complete. Information was provided by the companies unless

7

life e

FROM RETAINED SEARCHES AREAS OF SPECIALIZATION

198 45 198 45

212-403-6100 solomonpage.com

gy,

YEAR FOUNDED 1

Anthony Fanzo Richard Wolf President President, chief executive

SOLOMON PAGE 260 Madison Ave. New York, NY 10016

gy

tile, fixtures, lighting, kitchen and bath and luxury goods

10 RUSSELL REYNOLDS 3

75 82

128 126

1990

10% Financial services, health care, life sciences, fashion, consumer products, creative and marketing, technology and human resources.

Jason Wachtel Managing partner

71 71 2

n/d

2010

n/d Legal, compliance, risk, quantitative trading, information technology, accounting and finance, front office and human resources

70 70

115 115

1999

60% Corporate services, accounting, finance, IT, hospitality, marketing, fashion, tech, family office, creative and Clevel executives

NOTABLE

212-351-2000 russellreynolds.com

Pascal Becotte Managing director, hub leader

68 68

272 272

212-922-1001 tandymgroup.com

Byrne Mulrooney Chief executive

65 65 2

LEADERS IN FINANCE 80 80 2

1985

n/d Hedge funds, private equity, investment banking, accounting, health care, legal, life sciences, technology, digital and human resources

212-867-9876 heidrick.com/en

Sarah Payne Chief human resources officer Tracey Heaton Chief legal officer and corporate secretary

62 62

214 214

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Lower rates in 2024 could boost condo sales, cut rents

A drop in interest costs might finally prompt people to make offers, which some economists say should create desirable effects

By C. J. Hughes

Those who blamed higher-than-normal interest rates for the troubles of the residential market in 2023 — sluggish sales, reduced inventory, big discounts — might have had something to cheer about as the year came to an end.

The Federal Reserve announced in mid-December that it was essentially done raising rates and, in fact, was preparing to possibly cut them in 2024, a bit of news that sparked a massive pre-Christmas stock market rally.

If (or likely, when) rates drop, people clinging to coveted 4%-rate loans like they’re Taylor Swift tickets and thus removing themselves from the market might be finally tempted to put down an offer. And that should have a cascade of desirable effects, some economists say.

More buyers, conversely, means more people putting their co-ops and condos up for sale, boosting supply after a 2023 when a lack of inventory locked the market.

Rents for apartments are also expected to come down in 2024, as some people who had been leasing decide to purchase, easing demand. Landlords may not like the reduced revenue, but tenants will probably breathe sighs of relief.

In some respects, 2023 seemed robust, as Manhattan median sale prices flirted with records. But still those medians never quite sur-

passed the $1.25 million record from the second quarter of 2022, according to data from Miller Samuel and Douglas Elliman, in a sign of the upcoming softening.

To be sure, there were plenty of eye-popping deals. Tied for the largest residential transaction of the year as of mid-December was one where an unnamed buyer plunked down $66 million for a five-bedroom apartment at the supertall condo 432 Park Ave. But the 8,100-square-foot spread initially asked more than twice as much, or $135 million, when it first came on the market in 2021.

In the end, the unit traded for slightly more than the $59 million the owner paid in 2016.

And despite big deals at new condos, such as the Upper East Side’s 109 E. 79th St., from Victor Sigoura’s Legion Investment

November’s median rent in Manhattan was $4,000 a month, the lowest in two years. | BUCK ENNIS

sort of retro vibe, with mainstays of the last condo boom — 15 Central Park West, 220 Central Park South and the Plaza — all seeing significant trades.

Fortis Property Group’s condo Olympia Dumbo in Brooklyn, which scored the priciest weekly contract several times in 2023, however, showed the appetite for new construction is not limited to Manhattan.

Overall, buyers in 2023 signed 1,198 contracts for homes priced $4 million and above, a decline from the 1,304 who did so in 2022, according to the Olshan Luxury Market Report,

The Federal Reserve announced in mid-December that it was essentially done raising rates and, in fact, was preparing to possibly cut them in 2024.

Group, and the Bellemont, at 1165 Madison Ave., from Sigoura’s former colleague Miki Naftali, the heftiest transactions of 2023 had a

which tracks the luxury sector in Manhattan.

On the ownership side, co-ops continued to fare worse than condos. Escalating operating costs may have been scaring away buyers. It’s also possible that buyers failed to pass muster at elite buildings because of elevated loan costs. Their debt-to-income ratios may just not have penciled out. Whatever the case, sales at some well-known coops last year suggested just how hard it can be to market them.

Few new, green construction fences went up in 2023. Indeed, developers were expected to build just 10,000 new apartments in 2023, far below the 50,000-a-year target that Mayor Eric Adams has called for to meet lofty housing

goals.

And when there were significant projects, they were often found in the outer boroughs and filled with affordable housing, including what appears to be 2023’s largest planned development, in East Tremont, the Bronx. Although trendy Manhattan neighborhoods may be missing out on housing production, the below-market-rate offerings are expected to help ease the city’s affordability crisis.

This year’s assumed dip in residential rents had already begun as 2023 wound down. November’s median in Manhattan was $4,000 a month, according to Elliman, which was higher than prepandemic times but still the lowest in two years. Lease signing picked up as a result.

Of course, other and sometimes less tangible forces shape real estate markets. The shell companies that shield so many buyers have won praise from the trade group Real Estate Board of New York as a way to preserve privacy. But as the collapse last month of a Bronx apartment building suggested, hiding identities behind limited liability companies can make it difficult to assign responsibility when something goes very wrong.

Whether pressure builds to unmask LLCs in the New Year, something lawmakers favor but Gov. Kathy Hochul seems indifferent about, remains to be seen.

New York City’s housing crisis won’t improve soon

By Eddie Small

The bad news is that 2023 was a disappointing year for housing production by just about every measure. The other bad news is that the outlook for 2024 is not shaping up to be much better.

Gov. Kathy Hochul has already indicated that she does not have the appetite for a major housing policy fight in 2024 and any comprehensive housing package will have to come from the Legislature. Although some legislators have said housing will be a priority for them regardless, skepticism still abounds, with Real Estate Board of New York President James Whelan saying at a Decem-

affordable housing tax break, “good cause” eviction protections for tenants and some type of requirement or incentive for localities to increase their housing supply. And though this is not impossible, it emphatically did not happen in 2023.

The past year did start off on a promising note. At the tail end of 2022, Mayor Eric Adams announced a moonshot goal of building 500,000 new homes in the city over the next decade, and Hochul quickly followed suit with a goal of building 800,000 new homes in the state over the next decade.

But these announcements were followed by a bruising state bud-

Gov. Kathy Hochul has already indicated that she does not have the appetite for a major housing policy fight in 2024 and any comprehensive housing package will have to come from the Legislature. ber Crain’s event that his expectations are very low.

For a broad housing package to actually pass the Legislature and get Hochul’s signature, the two branches would need to reach a compromise on multiple longstanding and contentious issues.

These would likely include a new

get fight, where Hochul’s housing plan faced staunch resistance from the state Legislature. The component that would have imposed three-year growth targets throughout New York of 3% downstate and 1% upstate proved particularly controversial, and housing policies were ultimately left

out of the budget and legislative session almost entirely.

Hochul will almost certainly continue to act on housing through her administration where she can. Over the summer she launched a tax-incentive program for Gowanus projects meant to replace 421-a, the now-expired tax incentive that aimed to spur developers to include affordable housing in their projects, and established a $650 million fund to support localities that want to increase their housing supply. And she recently announced a pair of major affordable housing projects in Harlem and eastern Queens. But barring a surprise breakthrough in 2024 that proved elusive in 2023, the governor and the Legislature coming to a far-reaching agreement on housing reform still seems unlikely.

The outlook might be a bit better at the city level, where 2024’s main housing issue should be a push to pass the zoning reforms that the mayor detailed in September, dubbed the City of Yes for Housing Opportunity. The plan aims to build “a little more housing in every neighborhood” via efforts including constructing more accessory dwelling units, bringing back single-room occupancy units and getting rid of parking requirements.

City Council members have al-

Gov. Kathy Hochul and Mayor Eric Adams have both pitched ambitious housing agendas, but it remains unclear what could pass this year. | OFFICE OF GOV. KATHY HOCHUL

ready shown an appetite for approving major housing projects under Speaker Adrienne Adams’ leadership, so there is reason to believe they will find much in the mayor’s plan to support. But there are still plenty of reasons for caution.

Possible hurdles The surprise defeat of Bronx Councilwoman Marjorie Velázquez after she supported a controversial housing project in her district, for instance, could make members warier of voting for changes meant

to increase their neighborhoods’ housing supply. And the mayor already does not enjoy the best relationship with the City Council, so ongoing issues like his unpopular proposed budget cuts and the federal investigation into his campaign fundraising could end up hampering the housing push in unexpected ways.

The one thing that is clear about the city’s housing crisis is that it will not be getting better anytime soon. But whether this leads to actual policy changes at the state or city level is still very much up for debate.

12 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

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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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Congestion pricing clears final hurdles as launch nears

By Caroline Spivack

It’s fair to say 2023 was an exceptionally busy year for transportation in New York: a much-anticipated LIRR connection to Grand Central Terminal launched, construction on a long-delayed rail tunnel under the Hudson River is advancing, and the MTA went from teetering on the edge of a fiscal cliff to projecting five straight years of balanced budgets.

What promises to make 2024 even more momentous is the imminent launch of congestion pricing, and the impact it promises to have on movement in and around the city. The central business district tolling program will likely charge most motorists $15 to enter Manhattan below 60th Street as soon as May. The toll, of course, has its detractors. An eleventh-hour lawsuit filed by New Jersey could still upend the program. So too could a lawsuit filed by the mayor of Fort Lee, N.J. Other last-minute challenges loom large over the program’s timeline.

The Trucking Association of New York is none too pleased with the daily fees of as much as $36 on trucks, and Mayor Eric Adams’ administration is angling for exemptions for taxis and people heading to medical appointments. Still, congestion pricing feels less of a question of if but when.

The MTA certainly hasn’t lifted its foot off the gas. The authority’s contractor has installed toll gantries along the perimeter of the

congestion pricing zone, and the final public engagement period, including four hearings, is underway ahead of one last vote by the MTA’s board.

In less than six months New York is expected to become the first U.S. city to join London, Stockholm, and other international peers in tolling drivers to reduce gridlock and air pollution, while encouraging the use of mass transit. The day tolling begins will be a historic one, and will pave the way for other U.S. cities that are mulling their own congestion pricing plans.

What comes next promises to reshape how motorists travel and how goods are transported into and out of Manhattan’s core. The MTA and city intend to study traffic patterns as the months progress and, as needed, may tweak the program to address any unintended outcomes.

Congestion pricing, under state law, is required to generate $1 billion in annual tolls, which MTA officials plan to bond to $15 billion, to support sorely-needed infrastructure upgrades for the city’s subway, buses and commuter rails — think repairs to aging structures, accessibility projects and megaprojects to expand to neighborhoods that are underserved by mass transit.

Collision course On somewhat of a collision course with congestion pricing is the city’s decision to enable a

A congestion pricing toll gantry at 61st Street and West End Avenue in Manhattan | BUCK ENNIS

surge of new electric rideshare vehicles on New York’s streets. In October, the Taxi & Limousine Commission said it would issue an unlimited number of new licenses to Uber, Lyft and other for-hire vehicle drivers behind the wheel of an electric ride.

In other words, while the MTA is working to reduce the number of cars on Manhattan’s streets, the city is potentially permitting thousands of four-wheelers that weren’t previously on the road.

Of the 9,730 applications the TLC said it has received, it’s un-

clear how many would enable new drivers to enter the city’s rideshare industry, since the city says some drivers are swapping out existing gas-powered vehicles for electric ones.

The New York City Taxi Workers Alliance, which represents 25,000 drivers including rideshare and yellow cabs, filed a lawsuit in November seeking to block the additional licenses. Chief among the TWA’s concerns is the potential impact the policy change could have on driver pay and congestion.

A court-ordered pause prevents the TLC from accepting new applications until the lawsuit is settled, likely in the coming weeks. The city, however, can process the 9,000-plus applications it has already received.

The timing of the city’s push for electric rideshare vehicles couldn’t be more controversial with congestion pricing in the wings, but how it will ultimately affect traffic remains an open question that likely won’t begin to be answered until well into this year.

law firm Davis Polk & Wardell signed the largest office lease in the city since 2022, expanding its footprint to 700,000 square feet at 450 Lexington Ave. near Grand Central Terminal.

The law firm was the third to take more than 220,000 square feet last year and edged out the Department of Citywide Administrative Services’ lease for 630,000 square feet at 110 William St. for the title of largest lease of the year.

Office property sales and new construction, on the other hand, have been beset by lower valuations and an overall decline in credit availability. But the outlook for office sales and new construction may be more positive this year if the Fed chooses to bring rates down and institutional investors choose to deploy some of the dry powder they have accumulated for real estate.

Albany and City Hall are likely to continue promoting new initiatives that will allow some office landlords to repurpose their buildings for other uses such as residential, but these initiatives are unlikely to be viable for a significant fraction of owners of commercial space in the city.

By Mario Marroquin

The Federal Reserve’s decision to leave interest rates unchanged through the second half of last year and its projection for lower rates in 2024 has brought the holiday spirit to the real estate industry after two consecutive years of largely deteriorating conditions.

The longest string of interest rate hikes in two decades has had a profound effect on the office market in the city as landlords and tenants have found it harder to secure financing and the prospect of earning higher returns in other asset classes has moved institutional capital out of the sector.

Overall demand for office is also down, but the prospect of lower borrowing rates as a result of declining interest rates and inflation may bring good news for office landlords in the city, who continue to be beset by uncertainty three years after the pandemic.

Commercial real estate firm CBRE projects that landlords of underperforming office buildings across the country will find it more financially viable to repurpose or convert these buildings as inflation

eases and interest rates decrease this year. All the while a forecast from the trade group Mortgage Bankers Association projects that interest rates will remain constant through the first quarter of this year before slowly decreasing approximately three-fourths of a percentage point by the end of the year.

Commercial sales, leasing and new construction in the city slowed by double digits in 2023 as property values declined, institutional in-

ed roughly 96.8 million square feet, was only 5% higher than in November 2022, according to real estate brokerage Colliers.

The slowdown in new leasing is attributed to the widespread adoption of hybrid work, which is also reflected in the 27.5 million square feet of office space available for sublet in the city at the end of the year, real estate research firm CoStar said. That trend is not expected to let up this year, the firm said, and when combined with persistently high borrowing costs and overall uncertainty, it may result in market values declining by as much as 30%, as it already did last year.

Good news for office landlords was hard to come by last year as bankruptcy petitions and foreclosure auctions dominated the news cycle. But some of the largest office leases and property sales in recent years closed in the second half of the year and broke up an otherwise steady stream of challenges for the sector.

In August, Midtown East-based

Good news for office landlords was hard to come by last year as bankruptcy petitions and foreclosure auctions dominated the news cycle. vestors retreated from real assets and debt servicing costs rose with interest rates.

Office availability in Manhattan was up by 80% at the end of November when compared to March 2020, when the pandemic first started taking a toll on New York, but that portion, which represent-

BLOOMBERG

Why New York’s office sector sees a glimmer of hope for 2024

Citadel leases Hedge fund Citadel signed the next two largest deals of the year at 350 Park Ave. and 40 E. 52nd St., where it leased 585,460 and 384,142 square feet, respectively.

14 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

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New York faces huge migrant crisis questions

By Nick Garber

As Mayor Eric Adams tells it, the next year of the migrant crisis will essentially make or break New York City.

Critics say the mayor, who called migrants “destructive” in a Crain’s interview last month, is exaggerating the city’s fiscal peril. And they say he overlooks the potential benefits that the shrinking city could realize from the more than 157,000 asylum seekers that have entered New York since 2022.

But there is no doubt that the city’s obligation to care for the migrants has contributed to its budget strain, and will likely force further, multibillion-dollar cuts this year that would be widely felt — and could further imperil the already embattled mayor.

How the migrant crisis progresses in 2024 may well determine Adams’ fate when he seeks another term in 2025, and it will have tangible effects on everything from the cleanliness of the city’s streets to the future of its right-to-shelter mandate. Here are the biggest questions heading into 2024.

Will the state and federal governments chip in more?

The single biggest question facing the city in 2024 is whether it will receive financial support from the state and, especially, the federal government. The mayor and other city leaders have been demanding financial assistance for months.

Thus far, the city has gotten about $2 billion from the state and just $156 million from the Biden administration to pay for a crisis that City Hall says will cost as much as $12 billion. If those projections are accurate, Adams will almost certainly need to cut spending more deeply than the painful $4 billion cut he already ordered in November and the additional 5% reduction he plans to impose in January.

Further cuts would touch more New Yorkers’ daily lives and risk more serious political blowback.

Even the limited cuts already announced will reduce the number of trash cans in outer-borough neighborhoods and parks, curtail library service and eliminate five police academy classes.

Gov. Kathy Hochul has promised to keep helping the city, but she also echoed her budget director’s warning that providing constant aid would be fiscally “unsustainable.” As for the federal government, Adams’ icy relationship with the White House has left him with little hope — he returned from a trip to Washington last month “with the cold reality that help is not on the way in the immediate future,” the mayor said.

The city wants more than just money from higher levels of government. Adams has pleaded with Hochul to resettle migrants in upstate towns and cities, a step she has refused. And the mayor has called for a “decompression strategy” at the U.S.-Mexico border to more closely evaluate asylum claims and distribute migrants to

has barred the city from turning away any person seeking a shelter bed.

While the mandate has prevented generations of New Yorkers from sleeping on the streets, it is a principal cause of New York’s heavy spending on migrants, of whom some 67,000 are now in city shelters.

In October, Adams’ administration formally requested that the mandate be relaxed, asking a judge to suspend it in emergency cases when the city “lacks the reHow the migrant crisis progresses in 2024 may well determine Mayor Eric Adams’ political future, and it sources and capacity” to will have tangible effects on everything from the cleanliness of the city’s streets to the future of its maintain shelter sites, right-to-shelter mandate. | MICHAEL APPLETON/MAYORAL PHOTOGRAPHY OFFICE staffing and security. A slew of local officials have con“reticketing center.”) a wider array of cities.

Critics of the mayor’s response demned Adams’ request, but the It’s unlikely that President Joe Biden can get any significant immi- have focused on his administra- governor supports it, and the city gration reform through the Republi- tion’s reliance on emergency con- entered court-ordered mediation can-controlled House, although the tracts, which tend to be more ex- in October in hopes of resolving its than typical city dispute with advocates. present GOP effort to tie Ukraine aid pensive Softening the mandate would to new border restrictions could re- procurement and come with transparency concerns. Now that almost certainly result in more misult in changed policies.

City and state leaders have also city Comptroller Brad Lander has grants being forced to sleep on the pressed the Biden administration stripped Adams of his emergency street, and fundamentally change to speed up work authorization for dealmaking powers, those critics, a policy that many have credited asylum seekers, who must now including City Council leaders, with preventing New York from wait 150 days before applying for will be watching to see whether experiencing the level of visible homelessness seen in some other permits. Biden took that step for costs go down.

Otherwise, City Hall officials U.S. cities.

Venezuelans in September, beneNotably, however, the mandate fiting some 22,000 people in New have all but guaranteed that they York City, but has not done so for will impose another 5% cut in Jan- has already been eroded even tens of thousands of other mi- uary to nearly all agencies — with without court action. The city has grants in the city from other coun- only the police, fire and sanitation reportedly taken days to find new departments spared — in order to placements for migrants who tries. close the $7 billion gap that the re-apply to shelter after hitting administration estimates for the their 30-day limits, forcing untold Can City Hall get a handle on next fiscal year. Yet another 5% cut numbers to spend those nights on its own spending? the street. And thousands of miThe city is not entirely helpless. may come in April. grants are sleeping in large conIn addition to the across-thegregate shelters whose conditions board cuts City Hall has ordered Will the city raise taxes?

Adams has stood strongly against do not meet the specific guideagencies to carry out, budget director Jacques Jiha announced raising taxes since he took office, a lines set out in the original court plans to cut all migrant-related hard-line stance that has won him case, Callahan v. Carey.

“We have not been suing the city spending by 20% in the current plaudits from the business world.

But forgoing new revenues is a for those shelters not being Callaand next fiscal years.

Jiha said achieving that goal will harder position to maintain in the han-compliant,” said Dave Giffen, require the city to reduce its stub- face of widening budget gaps. In- executive director of the Coalition bornly high spending rates — now deed, the mayor has softened his for the Homeless, in an interview position in recent weeks, last month. “We recognize that telling Crain’s last month this is a crisis.” that “everything’s on the table” — including, it How will the crisis affect the seems, raising property elections?

In case anyone forgot, 2024 is an taxes.

Other forms of tax in- election year. City officials like Adcreases — such as in- ams won’t be on the ballot, but come taxes or more out- New York’s state and federal offiof-the-box options like cials will be, from the state Assemlevies on luxury homes bly up through the U.S. Senate.

— would need to be done There’s little doubt the migrant at the state level. City crisis will appear in campaign adleaders including Comp- vertisements and stump speeches troller Lander have across the region, but how exactly averaging about $400 per day per pushed for raising taxes on the it will be weaponized remains to migrant — and also reduce the wealthy, but Hochul has likewise be seen.

Election years tend to discouroverall number of people in its opposed raising taxes, and Adams shelter system. The city thinks it has not given any sign that he will age bold decision-making, howcan achieve that in part by forcing ask for it during this year’s Albany ever. That could even further foreclose the possibility of the migrants to reapply for shelter af- session. governor forcing upstate localiter set time periods — 30 days for ties to accept migrant shelters, for adults and 60 days for families Will the right to shelter be example, given the backlash that with children — which has thus far weakened?

Among the most pressing ques- could ensue. And lawmakers at caused a majority of people who received such notices to leave the tions for migrants themselves is the state level will think twice beshelter system entirely. (Those whether the city will weaken its fore wading into any controverright-to-shelter sial topic — whether it’s the miseeking to stay must line up out- longstanding side an East Village church that mandate: A consent decree stem- grant crisis, public safety, or the city has fashioned into a ming from a 1980s court case that housing.

Gov. Kathy Hochul has promised to keep helping the city, but she also echoed her budget director’s warning that providing constant aid would be fiscally “unsustainable.”

BUCK ENNIS

Here are the biggest issues for the city this year as it struggles to cope with the influx

Officials foresee ‘continued weakness’ in office sector

By Aaron Elstein

Many investors bet that the worst is over for commercial real estate, especially the beaten-up office sector, thanks to falling interest rates and signs that demand for space is perking up.

But in the eyes of the Federal Reserve the glass remains half empty.

Policymakers see “continued weakness” in the office sector, according to the minutes of last month’s meeting released Jan. 3.

Properties in need of new mortgages must find them against a backdrop of higher interest rates while banks lend less to buildings, Fed officials observed, while delinquency rates continue to creep up.

“The large volume of loans scheduled to mature over the next few quarters suggested that delinquencies would likely surge again,” the minutes read.

The Fed has been cautious about the office market for at least a year. Last February it warned that overvalued commercial real estate poses a systematic risk to the financial system. In November, policymakers described commercial real estate valuations as “stretched” and said fundamentals “remained weak” for office buildings in central business districts and coastal cities.

The Fed isn’t too concerned about the well-being of any particular office landlord but cares a lot about whether bank loans will be paid back. Banks hold about $3 trillion worth of commercial real estate debt on their balance sheets, according to the Congressional Research Service. About half that amount is held by the largest banks.

In October the superintendent of the New York State Department of Financial Services, Adrienne Harris, told Bloomberg News she remains concerned about bank exposure to commercial real estate. She said regulators wanted to make sure risk is managed “proactively” before office loans come due.

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Statewide ‘crisis-level’ health care worker shortages, high labor costs aren’t likely to let up in 2024 nician jobs including nurses, behavioral health providers and After a year of ongoing staffing even dentists. The low supply of troubles, hospitals and health care health care workers and rising insystems aren’t likely to see clini- flation rates have made for steep cian shortages — and the endur- increases in labor costs this past ing expenses that come with them year — increases that have dragged down hospital margins — let up in 2024.

Health care industry leaders, and slowed pandemic recovery.

Staffing shortages caused upunions and state legislators have called attention to a statewide heaval in New York’s health care “crisis-level” health care worker sector in 2023, as labor moveshortage that continues to plague ments took force across the city hospitals and long-term care facil- and state. In January, more than ities. Bea Grause, president of the 7,000 New York City nurses at industry group Healthcare Associ- Montefiore and Mount Sinai Hosation of New York State, said at a pital went on a three-day strike, calling for better wages and safe staffing practices. The nurses, represented by the labor union New York State Nurses Association, emphasized that many hospitals weren’t scheduling enough nurses and support staff to safely care — Bea Grause, president of the industry group for patients, putting Healthcare Association of New York State staffing levels at the center of negotiations.

The new contracts included evlegislative hearing in early December that “we must acknowl- erything that nurses asked for — edge that we do not have the work- including 19% multi-year wage force necessary to meet either increases, staffing ratios and entoday’s or tomorrow’s care de- forcement processes to ensure that the hospitals comply with safe mands.”

Hospitals and nursing homes staffing protocols. Some nurses have struggled to hire enough staff have exercised those enforcement in the wake of the pandemic, with procedures since then. In one inshortages impacting a range of cli- stance, an arbitrator said Mount

“We must acknowledge that we do not have the workforce necessary to meet either today’s or tomorrow’s care demands.”

Sinai Hospital was on the hook for $221,000 over violating the safe staffing rules included in the new contract.

The nurses’ strike did more than improve conditions for those who went on strike — it galvanized other health care workers to demand better conditions at their own hospitals. There was a growing unionization effort among resident physicians this past year, with 160 residents going on strike at New York City Health + Hospitals/Elmhurst in May — the first doctor strike in the city since 1990.

Greater investment needed But the growing labor movement has come at a tough time for health care systems. Hospitals and nursing homes say they have to balance pressures to meet new staffing ratios with the rising cost of labor and medical supplies. The industry has also called attention to dismal Medicaid payments, which they say pay approximately $0.70 for every dollar they spend on care. Those rates, they say, make it impossible to invest in the workforce.

Industry grievances about the lack of Medicaid payments come after last year’s historic health care budget agreement. Gov. Kathy Hochul included a 7.5% Medicaid reimbursement rate increase for hospital inpatient services and

BLOOMBERG

By Amanda D’Ambrosio

tive hearing that Medicaid rates previously remained flat for 15 years.

Health care industry groups are lobbying to close the Medicaid gap in the upcoming budget season, calling on state officials to commit a multi-year investment that fully covers the costs of care for hospitals and health care facilities. These higher payments will allow health care facilities to invest in recruiting and retaining a clinician workforce, they say.

nursing homes, as well as a 6.5% bump for hospital outpatient care and assisted living providers — what the administration equated to a $1.2 billion investment.

While health care providers lauded the Medicaid rate bumps, they say a much greater investment is needed to close the gap between government payments and the cost of care. Tim Johnson, a senior vice president at the Greater New York Hospital Association, said in December’s legisla-

These New York companies are poised to IPO in 2024 The IPO market is expected to improve in 2024 over last year, but that’s not saying much. There were just 94 exits in New York during the first three quarters of 2023, a 24% drop from the same period in 2022, according to data from PitchBook, and less than half of 2021’s deal-making bonanza.

“There’s a pretty low bar” to beat, said Aman Singh, a partner in the capital markets and public companies practice at Fenwick & West.

The first companies that debut in 2024 will set the tone for the rest

metro area. The city’s promising firms are a mini economic engine all their own with a combined valuation of more than $106 billion, $15 billion in collective equity funding and a total workforce of nearly 36,000 employees.

About four in 10 of the companies in the city are enterprise technologies — tools to make businesses run smoother, such as marketing and data management platforms. Financial services had the second highest share, comprising a quarter of the companies, followed by health care, which was 13% of the companies.

Notably absent from the prediction were any crypto firms, many of which are housed on the East Coast. That’s not surprising after what Per Chilstrom, a partner in the capital markets and public companies practice at Fenwick & West, called a “spectacular collapse.”

Regulatory pushback, SEC scrutiny and plummeting asset value transformed the once-darling industry into a sector that is not “something that public company investors are all that excited about putting money into, right now,” Chilstrom said.

Luckily there’s a new kid on the

According to an analysis from CB Insights, 257 startups are waiting in the wings globally, and 31 of them are based in the New York metro area. of the year, dictating how bullish other companies will be, Singh predicted.

According to an analysis from CB Insights, 257 startups are waiting in the wings globally, and 31 of them are based in the New York

PitchBook.

Many investors will take a waitand-see approach, according to Harrison, noting that the first half of 2024 “will just be a lot of observation from market players,” and that things will not “turn around on New Year’s Day.”

A shift from ‘growth at all costs’

DANIEL FOSTER/FLICKR

By Amanda Glodowski

block to bring back the buzz: AI. “There’s just so much excitement about what that potentially will bring in terms of transformation that will bring, notwithstanding the fact that there’s regulatory uncertainty associated with it,” Chilstrom said.

Hope for a better 2024 The Fed’s signal that it will stop hiking interest rates, the recent public market rally and excitement about AI spells a more promising 2024 for IPOs. But investor optimism is stunted by disap-

pointing debuts at the end of 2023, uncertainty around the Israel-Palestine war and the upcoming November election.

The handful of 2023 IPOs did not inspire confidence: Instacart and Klaviyo — both profitable and high-profile outfits — had downround debuts in September. Instacart, once valued at $39 billion in 2021, plummeted to $11.3 billion on its first day on the market.

“That definitely does not send a good signal to startups and their investors that were thinking about an IPO,” said Vincent Harrison, a venture capital analyst at

As more companies remain private and competition for venture capital grows fiercer, investors are shifting how they assess companies.

“It used to be ‘growth at all costs,’” Chilstrom said, explaining that in previous years, consistent revenue growth each quarter was most attractive to investors.

Cooler markets have ushered in a “tempered view of growth,” he said, as investors put more weight into cost management and if there is a path to profitability, though “growth is still important, and that’s what drives valuations.”

But companies that have proven they can manage costs and have a path to profitability will lead the return to the public market, he said.

“Not just any company that’s exciting,” he said “but companies that are disciplined in managing their cost structure.”

16 | CRAIN’S NEW YORK BUSINESS | January 8, 2024

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New York’s legal weed market hits $150 million in sales

By Amanda D’Ambrosio

New York’s legal cannabis market generated more than $150 million in sales in its first full year, according to data released by the state’s Office of Cannabis Management Dec. 29.

More than 6,900 businesses have filed applications to sell cannabis products since the state opened its first legal dispensary in December 2022. But to date, just 40 dispensaries have been approved to sell adult-use products, the data shows. The state’s 40 legal dispensaries sold 3.5 million units of cannabis last year.

“We have a lot of work to do, and we have much to be proud of,” Chris Alexander, executive director

follows a slow rollout of legal cannabis across New York. High taxes on marijuana products and unclear regulations for new retailers have created difficult conditions for legal businesses to survive — especially as unlicensed retailers continue to dominate the market.

Array of products Analysts estimate that New York’s weed market could be worth as much as $7.5 billion. But most of those sales take place at unlicensed retailers. New York City has attempted to crack down on unlicensed weed sellers, imposing fines on landlords who house unlicensed cannabis businesses.

Additionally, Gov. Kathy Hochul signed new legislation in May allowing the Office and the Department of Taxation and Finance to close stores engaged in illegal cannabis sales and increase civil and tax penalties for those violations. The state conducted 369 inspections of illicit cannabis operations in 2023, and seized products worth $56 million, according to the Office of Cannabis Management.

The state of New York brought in $16.3 million in tax revenue from cannabis sales in the 2023 fiscal

“We have a lot of work to do, and we have much to be proud of.”

— Chris Alexander, executive director at the state’s Office of Cannabis Management at the Office of Cannabis Management, said in a statement. “Now that the core market architecture is in place, my team at OCM is ready to scale and help this industry thrive across New York state.”

Data on the market’s first year

Customers browse at Union Square Travel Agency, one of New York City’s licensed dispensaries. | BLOOMBERG

year, and expects to bring in $16.6 million in the first half of 2024.

John Kagia, director of policy at the Office of Cannabis Management, said in a statement that New York has a diverse array of

products on the legal market that are drawing consumers away from illegal operations. There are more than 500 unique strains sold legally in the state, Kagia said, including the top sellers:

Blueberry Muffin, Gas Face and Sour Diesel.

Kagia added that the Office of Cannabis Management expects to issue “hundreds more” adult-use licenses.

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City’s public health system reinstates mask mandate for staff, visitors amid rising rates of Covid, flu and RSV

By Amanda D’Ambrosio

New York City Health + Hospitals, the city’s public health system, issued a mask mandate for all employees amid rising rates of Covid-19, flu and respiratory syncytial virus, H+H confirmed.

H+H staff and visitors are required to mask up at all 11 of New York City’s public hospitals, as well as at community health centers and post-acute care facilities, said Chris Miller, spokesman for H+H. The requirement went into effect shortly after Christmas.

The new masking requirements follow rising rates of Covid-19 across New York City. During the

ple have been hospitalized for Covid in the city each day as of Dec. 25, the most recent data available.

‘Makes a lot of sense’ Covid hospitalizations have increased statewide as well. There were more than 3,400 people hospitalized with Covid in New York as of Jan. 2 — more than double the hospitalizations reported at the beginning of last month.

Dr. Ashwin Vasan, New York City health commissioner, said on NY1 Wednesday that Covid, flu and RSV has been up in recent weeks, although RSV cases have started trending downward. Vasan said that putting masks back on in specific settings, such as hospitals, “makes a lot of sense.”

“It’s not inevitable that we’re all just going to get sick,” Vasan said in a statement to Crain’s.

“We’re all more observant of symptoms in the post-emergency Covid era, but we also have a lot of tools to keep ourselves and each other safe.”

The city’s Department of Health

— Dr. Ashwin Vasan, New York City’s health commissioner, in a statement to Crain’s week leading up to Christmas Day, the city health department recorded an average of 1,400 daily Covid cases — up from around 900 daily cases at the beginning of December. An average of 50 peo-

GETTY IMAGES

“It’s not inevitable that we’re all just going to get sick.”

and Mental Hygiene recommends that people wear a mask in crowded indoor settings, as well as if they have a high risk of getting se-

verely ill from Covid. The health department also recommends getting an updated Covid-19 and flu shot.

H+H employs 45,000 health care professionals, and sees more than 1 million patients each year.

News | Analysis | Events

Cultivating the top cannabis business news GreenMarketReport.com

18 | CRAIN’S NEW YORK BUSINESS | JANUARY 8, 2024

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Casinos hit the jackpot Because a license to run a casino is the closest thing there is to a golden ticket, it’s no surprise that top Manhattan developers are behaving like Veruca Salt’s daddy, who spent huge sums buying Willy Wonka chocolate bars.

Related Cos. President Jeff Blau said at a recent conference that, should Blau his firm get one of three downstate licenses from the state, it is prepared to spend $12 billion developing a casino at Hudson Yards. The project would include a 1,700-room hotel, a 2 millionsquare-foot office building and a public school. Lavish but plausible, considering Related Cos. Chairman Steve Ross’s net worth is $10 billion.

Even so, Ross’s bid could easily be topped by some even bigger whales at the table. They include Las Vegas Sands, controlled by Miriam Adelson with a fortune of $30 billion, which wants a casino in

750 Third Avenue | COURTESY SL GREEN

Slow progress on housing The city’s lack of affordable housing is like global warming: Everyone agrees it’s a big problem but solutions are expensive. One good way to build it would be to convert old office buildings, but in most cases the economics don’t work without bushels full of subsidies.

How much support the state and city are willing to give out will be a battle royale during budget season in Albany, even as Gov. Kathy Hochul has already indicated she won’t be as ambitious on housing as last year.

SL Green, the city’s largest commercial landlord, recently offered to convert the mostly empty tower at 750 Third Ave. to 543 apartments, 20% affordable, in return for a waiver of the building’s $10 million annual property tax bill. Think of that as the opening bid. The state legislature has lots of members who dislike the real estate lobby, but expect a deal to get done because the city needs more housing and converting obsolete offices is a way to get it quickly.

A refinance race for commercial real estate For the first time in nearly two years, commercial real estate owners have an ally instead of an enemy in the Federal Reserve. The Fed has signaled it’s finished raising interest rates, and investors bet the first rate cut will come by mid-2024.

That means the borrowing costs that took increasingly big bites out of landlords’ cash flows should rise at more manageable levels.

That’s vital because demand for

The Rockefeller Center ice skating rink | BLOOMBERG

Chinese tourists return Tourism snapped back nicely in 2023 and could strengthen further.

In August China, the city’s secondbiggest source of tourists in 2019, lifted the pandemic-era ban on citizens taking group tours. New York welcomed 61.8 million visitors in 2023, according to the city’s marketing arm NYC & Co., which forecasts 64.5 million will come in 2024. That’s not far from 2019’s record of 66.6 million.

The big issue is finding an affordable place to stay. Hotel rates have soared, and nearly 20,000 listings were knocked off Airbnb after the city began requiring hosts to register their homes. In addition, about 15,000 hotel rooms are being used to house migrants. Some of the removed inventory should be replaced when more than 10,000 new hotel rooms come online and bring the city’s total to 130,000, according to NYC & Co. But all of those rooms won’t be ready for another three years.

cials will finally decide how to remake the heart of Penn Station, which is bursting at the seams again with travelers. One choice is to extend the station by building additional tracks; another could be to eliminate a platform and widen the rest so travelers can change trains more easily. No reconstruction can happen until that basic issue is resolved. And until then Penn Station will remain a stain on a great city.

White-collar crime takes center stage Crime came down this year, and you seldom hear TV talking heads describing New York as a hellscape.

That said, we’re heading for a bumper crop of white-collar sentencings, especially in the cryptocurrency space, because Sam Bankman-Fried wasn’t that industry’s only crook.

The big question is what will become of the investigation into Mayor Eric Adams. Some history that may be helpful while we endlessly

City budget City spending has gone up every year since 2009 and has risen 75% over that time period, according to the Independent Budget Office.

This is the year the streak comes to an end. Falling assessments for office buildings will start to affect property tax collections.

It’s not all gloomy. Two key pillars of the city economy that were quite troubled only a few years ago, hotels and retail, are performing much better and could offset weakness in the office sector.

Moynihan Train Hall at Penn Station

Penn Station

Banking on banks A good year for Wall Street bonuses could make a big difference for the city. With interest rates trending down lately, a robust market for initial public offerings, corporate mergers and the rest is a distinct possibility. Morgan Stanley reckons its forever-rival, Goldman Sachs, will see a 13% revenue jump in 2024 after last year’s estimated 3% decline, thanks to the healthier dealmaking environment.

Wall Street

BLOOMBERG

Oh. When is that?

“Sometime in the spring.”

I summoned NASA’s website on my phone and, sure enough, in the mid-afternoon of April 8 a total solar eclipse will darken the skies from Texas to New York. Sounds intriguing, I said.

“It’s positive. Eclipses connote change and that’s around the time the Federal Reserve will start cutting interest rates,” Weingarten predicted.

I checked the Fed’s calendar and, sure enough, policymakers meet in mid-March and the beginning of May. I guess that’s pretty close to the eclipse. When Weingarten told me all this in November it seemed like a bold call, but in the last few weeks investors have whole-heartedly embraced his view and several rate cuts are predicted starting by mid-year at the latest.

I consulted him again in midDecember. “Yeah, I don’t know about that,” Weingarten said of the optimism about the Fed. “There’s still inflation. But I’m bullish in the spring.”

However, he advised that his outlook isn’t so rosy for the rest of the year. That’s because around August and December the business planets Jupiter and Saturn will be in a square aspect, or 90 degrees apart in an astrological chart. The pattern is a sign of tension between expansion and limitation that will have consequences here on Earth.

“That’s a biggie. You’ll likely want protection then,” he said.

“Squares connote conflict, things pressing against each other, whereas with triangles things slide off pretty easily.”

Weingarten’s advice to be wary of squares and welcoming of triangles makes as much sense as anything I’ve heard from a strategist or economist. I’ve tried to keep it in mind while preparing this year’s Crain’s economic outlook. No celestial bodies were harmed during production.

office space remains soft. Indeed, big employers here don’t expect many more workers to return to the office, according to a study this past fall by the Partnership for New York City.

“Fundamental occupancy and [rental income] headwinds for office and retail persist,” Morgan Stanley said in a recent report, which explains why shares in office landlords trailed the market significantly last year, rising 2% compared to a 26% gain for the S&P 500.

Two key buildings to watch in 2024: 280 Park Ave. and 51 W. 52nd St., the former CBS headquarters known as Black Rock. If these topshelf buildings can’t refinance their mortgages at attractive rates, it will signal trouble for every other highly indebted office landlord in the city.

At 280 Park, the $1.2 billion floating-rate mortgage matures in the fall and although it has bluechip tenants paying-top-of-themarket rents, it loses nearly $20 million a year for co-owners SL Green and Vornado because borrowing costs exceed rental income.

Also, tenants who rent 24% of the space will depart in 2024, according to Fitch Ratings.

As for Black Rock, former anchor tenant CBS has said that it will fully vacate the property in November.

The building’s $420 million mortgage also matures in 2024, and Moody’s has warned that refinancing could be challenging because cash flow is falling. Landlord Harbor Group International has invested in $128 million worth of upgrades since buying the tower in 2021 for $760 million, but prospective tenants seeking Class A space have plenty of choices on the market these days.

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From Page 1

Nassau County. Weighing in at $20 billion is Steve Cohen with a casino bid for the land next to Citi Field.

No doubt, the sums spent to justify the love of state officials will be something to see, though we probably won’t know where the casino actually lands until late this year if then. After all, why should the state move quickly when there’s so much campaign funding to be raised from these ultra-rich bidders?

Because money talks, I foresee a license for Nassau County and another for Hudson Yards. The third goes to the racino at Aqueduct and the one in Yonkers will be out of luck. But that’s just a bet.

BLOOMBERG

OUTLOOK

The hemisphere’s busiest commuter hub is going to remain a “hellhole,” to quote Gov. Hochul, for at least a few more years. Hochul says rebuilding the basement train station is one of her top priorities, and the governor still seems to hope that the massive project can be paid for using money produced by developing 18 million square feet worth of supertall buildings around the station, even though the market for such a massive undertaking doesn’t seem to be there. A private equity firm has offered to rebuild the station in return for running it for 50 years but Metropolitan Transportation Authority Chairman Janno Lieber, the governor’s point man on the project, doesn’t like that idea now and still won’t in 2024.

One positive thing should happen this year: Transportation offi-

speculate: Every mayor since Ed Koch has been subject to corruption investigations, but no mayor has actually been indicted since the five boroughs unified in 1898. Mayor Jimmy Walker resigned while being investigated in 1932 but was never charged. I’m not saying the past is prologue, but Adams would have to have been reckless on a historic scale in order to get indicted.

Gold in them hills Finally, Weingarten recommends buying gold in 2024. The precious metal’s price has already ticked up to $2,000 an ounce and has more room to run thanks to disappointed cryptocurrency speculators buying in. That said, Weingarten acknowledges he pretty much always likes gold.

“Because I’m a Leo,” he said, one of three astrological signs that gold is said to bless with good fortune.

January 8, 2024 | CRAIN’S NEW YORK BUSINESS | 19

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PUBLIC & LEGAL NOTICES SLICKBRANDS LLC filed Arts. of Org. with the Sect'y of State of NY (SSNY) on 9/20/2023.

Office: New York County. SSNY has been designated as agent of the LLC upon whom process against it may be served and shall mail process to: 1070 E. 17TH STREET, BROOKLYN, NY 11230 Purpose: any lawful act.

Notice of Formation of NCOURAGE ARTS MOBILE STUDIO LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 7/14/23. Office location: NY County. Princ. office of LLC: 228 PARK AVE S #612179, 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 formation of AC City Construction LLC Articles of Organization filed with the Secretary of State of New York (SSNY) 10/17/2023 Office in BRONX Co. SSNY designated for service of process.

SSNY shall mail a copy of any process served against the LLC to 300 E 151St Street Apt 1 Bronx, NY 10451, USA. Purpose: Any lawful purpose

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DE addr. of LLC: c/o United Corp.

Services, 800 N. State St., Ste. 304, Dover, DE 19901. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901.

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SSNY shall mail copy of process to the PLLC, 301 W. 57th Street, 45D, New York, NY 10019.

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Associate (Pacific Investment Management Company LLC (PIMCO) – New York, NY); Mult. pos. avail. Assist in the execution of the firm’s strategic, operational, fin, and corp dev initiatives under the guidance of Head of Corp Dev. Leverage extensive knowledge of co apps and data infrastructure to dev presentations, invstmt memos, and recurring mgmt reports req critical analysis of large int and ext datasets for sr stakeholders and int committees. Sal range $100,000 - $130,000/yr. F/T. Apply w/ resume to Lupe.Rubalcaba@pimco.com. Ref. Job ID: 6969036.

Associate, Climate Equity (Apollo Management Holdings, L.P. – New York, NY); Mult. pos. avail. Offering salary of $175,000 to $200,000/year. Perform company & industry due diligence, including risk assessment & quantitative & qualitative analysis of business & market trends. Monitor exist’g portfolio companies in order to evaluate potential acquisitions or exit options. F/T. Position based in New York, New York; telecommuting permitted 1 day per week. Domestic and international travel required for up to 10% of working time. Apply w/ resume to pkotakonda@apollo.com. Ref Job ID: 7366472.

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BUSINESS From Page 1

Touting the governor’s actions, Hochul’s communications director Anthony Hogrebe also took aim at state lawmakers. In a Dec. 23 statement, Hogrebe said that the governor had to veto “a number of extreme legislative proposals that would have put public safety or the state’s economic recovery at risk.”

Hochul’s vetoes “Governor Hochul has been clear: She will always do what’s right for New Yorkers, even if it’s unpopular in the halls of Albany,” Hogrebe said. He noted that the Legislature had passed hundreds of bills in the final days of last year’s legislative session, a common Albany practice but one that is derided by government watchdogs.

controversial bills.

“The business community feels we got a fair hearing that we did not have during the legislative session,” Wylde said in an interview. Other fans of Hochul’s vetoes include the conservative editorial board of the Wall Street Journal, which hailed the governor in an editorial on Dec. 29 for stopping lawmakers’ “insanity.”

In limiting the Legislature’s reach in 2023, Hochul looked much like her predecessor, Andrew Cuomo, who also positioned himself as a bulwark against law- Gov. Kathy Hochul, pictured delivering last year’s State of the State Address, vetoed and scaled back a makers’ more pro- slew of bills passed by the Legislature in 2023 that were opposed by business groups. gressive impulses. Governorkathyhochuloffice/flickr Wylde credited Hoall 20 million New Yorkers,” said chul with being more said.

She was among the lawmakers Krueger, an influential Democrat “consultative” toward both business who saw her legislation vetoed by who chairs the state Senate’s figroups and lawmak- the governor in the name of busi- nance committee.

Lawmakers regrouped Jan. 3 in ers than Cuomo was. ness interests — in her case, a bill Liz Krueger, a combating deforestation, which Albany for their six-month legislaManhattan state sen- Hochul rejected citing its poten- tive session, in which solutions for New York’s housing crisis will ator, said Hochul’s tial impact on small businesses.

“We’re very often out-lobbied rank at the top of the agenda given actions point to a philosophical differ- by business concerns that will in- the state’s woeful construction ence between the Legislature and vest a huge amount of their own numbers and sky-high rents — the governor: “We feel that stron- money to try to stop regulatory major contributors to the state’s ger regulation is needed, and the changes that my conference and I population loss. Many observers governor, not so much,” Krueger believe are in the best interests of expect a potential housing deal to

“We feel that stronger regulation is needed, and the governor, not so much.”

— Liz Krueger, a Manhattan state senator Kathryn Wylde, president of the Partnership for New York City, lauded Hochul for taking the time “to hear from all parties” on the

involve some combination of a new affordable housing tax break for developers and a tenant protection along the lines of “good cause” eviction.

Ties to business world Hochul’s strong ties to the business world will be deeply felt in that debate. Powerful real estate groups, especially the Real Estate Board of New York, have long opposed good cause eviction, which would cap annual rent increases and bar landlords from evicting tenants without pointing to a specific, permissible reason. Hochul, too, opposed the policy last year, contributing to the collapse of a potential last-minute housing deal with the Legislature.

James Whelan, REBNY’s president, criticized good cause at a Crain’s event last month, arguing that it would impose burdens on landlords and even lead to increased homelessness.

Hochul’s opposition to new business regulations, combined with her admission that she will scale down housing plans this year, have not inspired confidence that a major package will come together before June. But Krueger, like other lawmakers, insisted that the Legislature would not give up on finding a deal this year.

“I guarantee you, we, the Legislature, are going back to revisit the housing issue,” she said.

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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

Joshua Goodman, the Sanitation Department’s deputy commissioner for public affairs and customer experience, next to two anti-littering mascots the city promoted in the mid-20th century. Goodman coined a phrase that became the tagline for an anti-littering campaign. | BUCK ENNIS

New York City’s sanitation messenger won’t let you stop ‘trash revolution’ Joshua Goodman wants to improve how New Yorkers experience garbage | By Nick Garber

S

anitation has stood out as a bright spot in the somewhat chaotic reign of Mayor Eric Adams. His administration has won plaudits for expanding composting and finally taking steps to containerize the city’s trash — all while attracting attention for its witty public statements about fighting rats and getting garbage bags off sidewalks.

The man behind much of that messaging has been Joshua Goodman, the Sanitation Department’s deputy commissioner for public affairs and customer experience.

When the convertible-driving Chinatown resident joined the agency in 2020, it had spent years preoccupied by the Herculean task of closing Staten Island’s Fresh Kills landfill and replacing it with smaller transfer stations — an undertaking that distracted from the public-facing part of its mission. “[Communicating] the thinking about what it means for the average New Yorker to be around the trash was just not the department’s priority,” he said.

Goodman, who began his career as an aspiring diplomat, got his start in politics as a campaign staffer and developed a reputation as a crisis-communications specialist, working for private firms and then joining City Hall in 2019 to defend the embattled ThriveNYC mental health initiative led by then-first lady Chirlane McCray. When Goodman moved over to Sanitation in 2020, the agency’s morale had been hampered by pandemic budget cuts

that had forced service reductions.

“The answer to ‘It’s dirty out here,’ was ‘What do you expect?’ We were very open about our limitations,” he said. “‘No’ was an acceptable answer at the time, and it is not an acceptable answer.”

Now, under Commissioner Jessica Tisch, Goodman strives to put customer service at the center of the agency’s outlook. His staff of about 25 people handles virtually all of the department’s public work, from mailings to speeches to door-todoor outreach about new policies.

Says levity serves a purpose Several of the administration’s signature initiatives fit into his goal.

Pushing back the trash set-out time from 4 p.m. to 8 p.m. ensured that millions of pounds of garbage were not landing on New Yorkers’ sidewalks “right as you were trying to go home from work or school,” he said.

A $15 million program to clean up peripheral “no man’s lands” near parks and highways showed promise in improving the department’s public perception, although the mayor’s recent budget cuts will bring it to a premature end.

Goodman is also proud of smaller changes he helped introduce, such as the small sticky notes he designed for Sanitation workers to leave on a piece of garbage they were unable to pick up for a particular reason — for example, a mattress not placed in a required bedbug-blocking plastic bag.

“Now people know why their

stuff wasn’t picked up, and they don’t just feel like, ‘Oh, those jerks didn’t take it,’” he said.

Then there are the jokes. Ahead of one 2022 press conference, Goodman wrote a series of anti-rodent slogans that Tisch, his boss, rejected as not aggressive enough.

Finally, in a brainstorming session, Goodman spat out “The rats don’t run this city; we do.” The phrase was an instant hit after Tisch uttered it last fall, achieving internet virality and even taking on new life as an all-purpose TikTok meme.

Other phrases coined by Goodman include the “trash revolution” that the Adams administration brags about ushering in, and another that became the tagline for an anti-littering campaign: “If you see a litterer, tell them where to stick it.”

All that humor runs the risk of trivializing the department’s critical work, Goodman acknowledges, and not every city agency could get away with the same levity. But he says it serves a real purpose. “You need to get people engaged,” he said. “You need to get people to understand their roles and responsibilities.”

Goodman takes a broad view of what qualifies as public engagement. He’s been known to snipe online at people who knock the Sanitation Department’s efforts, directing derisive tweets at critics of trash-bin pilots in Harlem and Times Square.

But he said hitting back at the haters is in service of a greater good.

“That person started it by being an enemy of the trash revolution — by taking the side of, ‘I want black

Joshua Goodman AGE 37 GREW UP White Plains RESIDES Chinatown, Manhattan. Living in Chinatown was his “childhood dream,” and he relishes the cheap, fresh produce.

EDUCATION Bachelor’s in international relations, American University; master’s in urban studies, CUNY School of Labor and Urban Studies TOP DOWN Goodman drives a two-seat Fiat 124 Spider convertible, which he purchased while living in Los Angeles in hopes of making sitting in traffic more bearable.

LITERARY LAPDOG Goodman refers to his dog, Virginia Woof, not as his child but as his “friend and roommate.”

PLANT-BASED Goodman has been proudly vegan for 10 years. “If you love animals, you shouldn’t eat them,” he said. bags on the curb,’” Goodman said. “I was standing up for everybody else in the city who’s tired of the trash.”

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Crain’s New York Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice chairman Mary Kay Crain President and CEO KC Crain Senior executive VP Chris Crain Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 685 Third Ave., New York, NY 10017 (212) 210-0100 Vol. 40, No. 1 Crain’s New York Business (ISSN 8756-789X) is published weekly, except for no issue on 1/1/24, 7/8/24, 7/22/24, 8/5/24, 8/19/24, 12/2/24 and the last issue in December by Crain Communications Inc. at 685 Third Ave., New York, NY 10017-4024. Periodicals postage paid at New York, NY, and additional mailing offices. © Entire contents copyright 2024 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited. ©CityBusiness is a registered trademark of MCP Inc., used under license agreement.

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