Crain's New York Business, January 15, 2024 by crains-new-york-business

CRAINSNEWYORK.COM I JANUARY 15, 2024

Hochul’s agenda: Housing, mental health care, transit By Nick Garber, Jacqueline Neber and Caroline Spivack

Gov. Kathy Hochul laid out a policy agenda for 2024 focused on mental health care, crime and housing, including proposals to extend and replace the 421-a tax break for housing construction, advance two new train lines in New York City, and

buy out flood-prone properties. The plans included in Hochul’s “State of the State” speech, delivered Jan. 9 in Albany, will guide her upcoming budget proposal as she and state lawmakers pursue deals on a wide range of laws in the coming weeks. Despite fiscal headwinds and political pressure, Hochul reiterated her opposition to raising taxes.

“Working together, we will provide a better life to New Yorkers, with a commonsense agenda focused on fighting crime, fixing our mental health system, and protecting New Yorkers’ hard earned money,” Hochul’s prepared speech reads. At the same time, she alluded to diminishing federal pandemic aid and vowed that the state “won’t spend money we don’t have.”

After taking a big swing on housing last year, both Hochul and the Legislature’s ambitions may be constrained this year by an upcoming election and looming budget deficits. The state must close a $4.3 billion gap this year, followed by bigger gaps of $9.5 billion and $7.7 billion in fiscal See AGENDA on Page 19

Pfizer is one of a few pharmaceutical companies developing a weight-loss pill, but setbacks have slowed its progress. | BUCK ENNIS

Bloated Pfizer missing out on weight-loss drug craze Investor optimism that the company’s pill could be the next big thing is dwindling as the firm fails to join the $100 billion anti-obesity market. | By Amanda D’Ambrosio Pfizer defied the odds when it invented the world’s first Covid-19 vaccine in under a year, saving millions of lives and generating billions in revenue. Now, there’s a new challenge the health care titan can’t seem to crack: a weight-loss pill. The Hudson Yards-based pharmaceutical giant is clamoring to get a piece of the estimated $100 billion anti-

obesity market. The class of weight-loss drugs, GLP-1 agonists, that includes blockbuster products like Ozempic, Wegovy, Mounjaro and Zepbound are currently only offered in an injectable format, and a handful of companies, including Pfizer, are racing to develop an oral version of See PFIZER on Page 22

Pfizer CEO Dr. Albert Bourla. | BLOOMBERG

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Floating public pool slated to become a reality next year.

As residential listings linger, auctions are slowly becoming a mainstream way to sell in New York.

GOTHAM GIG Engineer working to make passenger experience better at JFK Airport’s Terminal 1.

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Upper West Side church puts controversial demolition plan on hold for now until resolution of tenant lawsuit By Nick Garber

The nearly two-year-long battle over an Upper West Side church’s plan to demolish its dilapidated building and sell it to a developer is likely to drag on for months more. The church’s congregation has paused its request for the city to sign off on the demolition. The congregation of West Park Presbyterian Church, on the corner of West 86th Street and Amsterdam Avenue, said Jan. 5 it was withdrawing its application to the Landmarks Preservation Commission, which had been scheduled to vote Jan. 9 on the demolition. The congregation said it will renew its request after it settles an ongoing lawsuit against a nonprofit performing arts center that

But preservation-minded neighbors opposed to the plan have enlisted celebrities like Mark Ruffalo and elected officials including City Council member Gale Brewer to pressure the city against it. They have proposed alternate visions for repurposing the building which the congregation has called unrealistic.

The court will decide “Our congregation remains wholly committed to a future for the West Park Presbyterian Church that will be made possible by the sale of property and a permit from the Landmark Preservation Commission to demolish the existing building on the grounds of hardship,” the congregation said in a statement on Jan. 5. “We have faith that the court will decide in the congregation’s favor as it evaluates the lease litigation, and we plan to resubmit our application to the LPC when the litigation is resolved so that we can finally invest in the modern, accessible worship and community space that the Upper West Side deserves and further support our mission in our neighborhood and across New York City.” The fight over West Park underscores the difficulty of building new housing in the city, especially in dense neighborhoods like the Upper West Side. The neighborhood has added few new apartments in recent years as the city faces a desperate

“We need affordable housing on the Upper West Side. We don’t need condos. — Gale A. Brewer, City Council member occupies the church as a tenant and has opposed the development plan. The landmarked church, completed in 1890, is in severe disrepair and would cost some $50 million to restore, according to its congregation, which has dwindled to about 12 people. The congregation wants to sell the church for $33 million to Alchemy Properties, which would construct a new 210foot apartment building on the site with space reserved for the church.

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housing shortage. Brewer, who represents the Upper West Side, supported the City Council’s recent plan that will pressure wealthier neighborhoods like her own to build more housing. But she said in an interview that she is “absolutely thrilled” that West Park is pausing its demolition plan, since the new building would have contained highend condominiums rather than affordable housing. “We need affordable housing on the Upper West Side. We don’t need condos,” Brewer said. “There’s nothing for the community in this deal. Nothing at all.” It would be a rarity for the commission to allow the teardown of

an individual landmark — a status it gained in 2010 with Brewer’s support but opposition from its own pastor and congregation. Just 14 applications to demolish individual landmarks based on socalled “hardship” have been submitted to LPC since the landmarks law took effect in 1965, of which six were granted, an agency spokeswoman said. No hardship applications to demolish individual landmarks have been submitted in the last decade. Only one individual landmark has been demolished at all in recent years: the Beth Hamedrash Hagodol Synagogue on the Lower East Side, which was damaged by a fire in 2017.

Churches across the city have emerged as sought-after development sites in recent years, given their often shrinking congregations, large footprints and considerable air rights. Mayor Eric Adams’ wide-ranging zoning reforms call for using sites like church parking lots for new development. West Park’s eviction suit against its tenant, filed in August 2022, shows no signs of being resolved soon. In a letter to a judge last month, the congregation’s attorneys argued that a decision by LPC was “imminent” and complained that the lengthy litigation was “materially impacting the pending application” before the city.

Real estate giant TF Cornerstone files demolition plans for 254 W. 23rd in Chelsea By Eddie Small

Kathryn Wylde

A landmark built in 1890, West Park Presbyterian Church has a crumbling façade and has been forced to surround the building with a sidewalk shed since the early 2000s. | GOOGLE MAPS

Real estate giant TF Cornerstone appears to be laying the groundwork for a new development in Chelsea. The Midtown-based firm, run by the Elghanayan family, recently filed demolition permits for 254 W. 23rd St., located between Seventh and Eighth avenues in the trendy Manhattan neighborhood. TF Cornerstone purchased 254

stone did not respond to a request for comment about the firm's plans for the site by press time. The company paid about $4.8 million for 254 W. 23rd St., which spans 4,650 square feet and stands 3 stories and 45 feet tall. The larger portion of the purchase was 250 W. 23rd St., a roughly 16,000-square-foot building that TF Cornerstone bought for $14.5 million. Both properties are commercial buildings built during the first half of the 20th century, with Apple Bank leasing all the space at 250 W. 23rd St., according to the real estate database CoStar.

TF Cornerstone is best known for several luxury rental towers that helped transform a Queens neighborhood into a residential hotspot. and 250 W. 23rd St. in 2019 for about $19.3 million, although the company has not filed demolition permits for 250 W. 23rd St., city records show. A representative for TF Corner-

Massive project

TF Cornerstone is likely best known for its vast portfolio in Long Island City, where the firm has several luxury rental towers that helped transform the Queens neighborhood into a residential hotspot. The company

250-254 W. 23rd St. | BUCK ENNIS

landed $725 million in financing last year for a massive project it is planning in the neighborhood at 2-20 and 2-21 Malt Drive that will span more than 1.4 million square feet with about 1,400 residential units in total. But a project in Chelsea would not be a completely new endeavor

for the company. Its holdings also include Chelsea Centro at nearby 200 W. 26th St., an 18-story building where rents at currently available apartments range from $4,975 per month for a one-bedroom to $7,775 per month for a two-bedroom, according to the TF Cornerstone website and StreetEasy.

2 | CRAIN’S NEW YORK BUSINESS | January 15, 2024

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A rendering of +Pool as it would appear floating off the Lower East Side. This location was announced in 2021, but officials would not say where the new pool prototype would be built. | FRIENDS OF + POOL

A floating city public pool is slated to become a reality for the public next year

A version of the so-called +Pool, envisioned for the East River since 2010, is to get funding in time for testing this summer By Nick Garber

A floating swimming pool in one of New York City’s rivers, the subject of a more than decade-long political and fundraising push, will finally be built this year as part of a state and city push for improving swimming access, Gov. Kathy Hochul said Jan. 5. The so-called +Pool, which would be filled with water filtered from the river, will receive $4 million from the city and $12 million from the state in time for testing this summer. The exact location hasn’t been specified, and it would open to the public in 2025. Conceived in 2010, the concept of a self-filtering East River pool has been shepherded for years by the nonprofit Friends of Plus Pool. After its initial buzz, and some $314,000 raised via online Kickstarter campaigns, the project stalled for years as its backers said they were working to build support within government.

Soliciting bids Finally, by 2019, the city’s Economic Development Corporation began soliciting bids for a floating pool. Two years later, +Pool’s managing director Kara Meyer said the nonprofit had gotten the go-ahead to build the pool in an East River spot just north of the Manhattan Bridge on the Lower

lion state investment in swimming that HoEast Side. Some details remain unclear: The gover- chul announced Jan. 5 as part of her State of nor’s office did not say where the pool the State agenda, which was to be revealed would be built, and Hochul spokesman Avi in full in a speech on Jan. 9. Hochul said the Small said that “multiple options [are] being investments focus on reducing drowning explored.” After initially referring a reporter deaths among young people and better preto City Hall for further details, the gover- paring the state for extreme heat caused by nor’s office later shared an additional state- climate change. Hochul referred to +Pool as a “longment saying the state “look[s] forward to working with the City and +Pool to facilitate stalled, much-debated” project in her speech at a Harlem community center. this multi-faceted project.” Public records show +Pool has enlisted “Testing this summer is the current primary focus,” Hochul spokeswoman Katy the lobbyist George Fontas since at least 2019 to pitch public officials on the project. Zielinski said. Fontas, who is also The pool’s backthe nonprofit’s ers also previously board chair, has not said the pool would reported taking any cost between $20 compensation for million and $25 milhis work, which in lion to build, seem2023 involved lobingly exceeding the bying city Deputy $16 million an- — Kara Meyer, managing director of +Pool, in an email Mayor Anne Wilnounced Jan. 5. liams-Isom and HoThe +Pool organizers said in a statement that the version chul’s policy director Micah Lasher. Mayor Eric Adams publicly shouted out being built this year would be a smaller-scale, 2,000-square-foot pool, to be fol- Fontas in his own remarks on Jan. 5, in lowed at some point in the future by a full- which the mayor dwelled on the dearth of sized version. The demonstration would swimming options available in low-income test the viability of building similar pools in and minority communities. Officials on Jan. 5 only briefly alluded to waterways around the state, the governor’s the severe lifeguard shortage in the city that office said. The pool money was part of a $150 mil- forced widespread pool closures last sum-

“It’s been a long journey but things are about to move much faster.”

mer. Hochul’s office said the state would begin offering grants to reimburse municipalities for lifeguard compensation.

Raising the money Meyer, of +Pool, said in an email that the money it raised through early online fundraisers has gone toward feasibility studies and testing in the river. The nonprofit has raised additional money to do more engineering work, patent the design and “drive the regulatory changes required to be able to move forward with construction.” “It’s been a long journey but things are about to move much faster,” Meyer said. First envisioned by four architects in 2010, +Pool’s other backers have included architect Marc Kushner and Joshua David, a co-founder of the High Line. Its current board members include former city transportation commissioner Janette Sadik-Khan and Joseph Mizzi, president of Sciame Construction. The plus-sign-shaped pool would be designed to filter water through its walls — “like a giant strainer dropped in the river,” according to its website. The full-sized, 9,000-square-foot pool would clean about 1 million gallons of river water each day, and could be configured into different shapes to suit lap swimming, water sports and children’s activities, organizers say. January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 3

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RESIDENTIAL SPOTLIGHT

Wall Street honcho’s penthouse at elite 740 Park Ave. sells after 5 years on market Private-equity executive John Thain sells Lenox Hill duplex co-op for $28 million By C. J. Hughes

hat took a while. John Thain, a private-equity executive with deep ties to Wall Street, sold his penthouse at clubby 740 Park Ave. last month after five years of trying. The sale price for the three-bedroom duplex co-op was $28 million, according to a tax filing. Thain and his wife, Carmen, a trustee of the Massachusetts Institute of Technology, had paid the same amount John Thain | BLOOMBERG for it in 2006, records show. The buyer in the deal, which of the toughest co-op boards on closed Dec. 18 and appeared in the Upper East Side and perhaps the city register Jan. 8, was finan- citywide. Also, purchasers must cier Kevin Luzak and his wife, pay in cash, further limiting its buyer pool. Hampton, an entrepreMarket conditions neur. could have also played The chairman of Pine a part. Many Manhattan Island Capital Partners, Sale price for No. co-op listings have a firm that invests in 17PHD at struggled in the past military contractors, 740 Park Ave. few years, even though Thain appears to have had much higher hopes for the there seemed to be a bit of a reapartment, No. 17PHD. In 2018, bound at the end of 2023, accordafter a two-year renovation, Thain ing to market data from Douglas listed the prewar home for $40 Elliman. Indeed, the fourth quarter had million. But despite several price cuts, the unit could not find a taker 1,417 co-op sales, up from 1,392 a year earlier, the firm said, though for years. The exclusivity of its address the number of discounts required might have been a factor. Home to to get deals across the finish line billionaire-class financial execu- also grew during that time frame. tives such as Stephen Schwarzman, Manhattan’s median co-op sale Israel Englander and Ezra Merkin, price in the October-to-December No. 740 is considered to have one period was just under $1.4 million.

$28M

740 Park Ave., No. 17PHD | SOTHEBY’S INTERNATIONAL REALTY

Meredyth Hull Smith, the Sotheby’s International Realty agent who had marketed Thain’s home since 2019, had no comment. And an email sent to a spokeswoman at Pine Island’s Fort Lauderdale office was not returned by press time.

Thain’s career path Thain was at the helm of the investment bank Merrill Lynch when it collapsed in the Great Recession, though he did manage to coordinate a sale of the historic institution to Bank of America. Thain later served as the chief ex-

ecutive of the financial services firm CIT Group. Pine Island, his current employer, a six-year-old private equity group that invests in midmarket companies making components for missiles and tanks, has close connections to the Biden White House. U.S. Defense Secretary Lloyd Austin worked there before rejoining the public sector. Firm partners also include former senators, ambassadors and generals. Thain, who currently lives on an

estate in Rye, in Westchester County, also sits on the board of Uber. For his part, Luzak appears to be no stranger to big-ticket Upper East Side real estate trades. In 2015 he sold a townhouse at 167 E. 71st St. for $10.1 million, records show. The five-bedroom, 5-story property cost him $6.3 million in 2005.

By Aaron Elstein

The beaten-down office market ended last year on the upswing thanks to rising expectations for falling interest rates and major law firms agreeing to lease large amounts of space. But in spite of the hopeful headlines, leasing activity remains “muted,” and Manhattan office landlords won’t see a return to 2021’s occupancy levels — never mind 2019 — for another three years, Evercore ISI analyst Steve Sakwa said in a new report. Sakwa, who is regularly rated by institutional investors as the best real estate analyst on Wall Street, added that shares in office landlords could relinquish their recent strong gains. “We need to see better leasing activity and have more confidence in the Fed’s intent to cut rates throughout ’24 & ’25 in order to believe the rally is sustainable,” he wrote.

Sakwa’s caution is shared by the Fed, whose policymakers foresee “continued weakness” in the office sector, according to minutes of December’s meeting released this month. On Jan. 8 Fitch Ratings said commercial real estate loan refinancing prospects are expected to “materially deteriorate” in 2024, leading to higher delinquency rates across all major property sectors.

The right properties Landlords and brokers prefer, understandably, to look on the brighter side. They say demand remains strong for the right properties. Vornado Realty Trust, for instance, said it has teamed up with Cushman & Wakefield to market space in Penn 2, a redeveloped Midtown tower aimed at prospective tenants who might normally prefer an office near Grand Central Terminal. “The reimagined Penn 2 appeals

directly to innovation-oriented companies seeking an ultra-premium, hospitality-infused office environment that offers a one-seat ride for workers throughout the metropolitan region,” Vornado leasing chief Glen Weiss said. Developments like that, along with the 20% jump in all REIT shares since Oct. 1, help explain why analysts like BMO Capital Markets’ John Kim said in a report Jan. 7 that commercial real estate is “off to the races” in 2024. Sakwa expects most office landlords will continue this year to see falling funds from operations, a proxy for cash flow. Vornado’s FFO will come in 10% below last year’s figure and 30% below 2022, he estimated, while SL Green and Boston Properties should see smaller declines. Empire State Realty Trust’s FFO should rise by 3% over 2023 but come in a penny a share below 2022. The fundamental difficulty, Sakwa said, is that work from home

BLOOMBERG

Office leasing activity remains ‘muted’ despite headline-grabbing deals, analyst says in new report

has become a fact of life and he assumes occupancy rates will stabilize below pre-pandemic levels. He expects occupancy at most office landlords to improve little until 2027 and even then will remain lower than landlords grew accustomed to before Covid came along.

For example, he expects Vornado’s occupancy rate to reach 90.0% in 2027, compared to 91.3% in 2021 and 96.7% in 2019. At SL Green, Sakwa anticipates occupancy rates of 92.2% in 2027, compared to 92.1% in 2021 and 94.1% in 2019.

4 | CRAIN’S NEW YORK BUSINESS | January 15, 2024

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Hochul unveils plan to improve maternal and infant health, including a paid prenatal leave program in New York state By Amanda D’Ambrosio

Gov. Kathy Hochul has proposed a six-point policy plan that aims to address infant and maternal mortality in New York state. The plan, which Hochul unveiled Jan. 4 at Wyckoff Heights Medical Center, addresses several facets of the maternal-infant care system, striving to improve paid leave time, expand access to doulas and eliminate out-of-pocket costs for pregnancy care. Hochul proposed to establish a paid prenatal leave policy in New York, which would be a first for the nation. The proposal would ex-

“Consistent medical care in the early months makes all the difference,” Hochul said in a Jan. 4 briefing. “We hope what we are doing here in New York will raise the bar for the rest of the nation . . . so every mom in this country has a shot at having a healthy birth and a new baby.”

Covering doula service Hochul’s plan also aims to expand access to doulas, nonclinical providers who advocate for patients throughout pregnancy and during delivery. The governor plans to include legislation in her executive budget that would make doulas available to pregnant people even without a referral from their physician, building on recently implemented policies that cover doula services through Medicaid and help New Yorkers find care. Additionally, the governor’s policy proposal includes legislation that would eliminate co-pays and out-of-pocket costs for pregnancy care for the 1.3 million New Yorkers enrolled in the state’s public health insurance option, the Essential

Hochul’s maternal-infant policy plan comes on the heels of rising infant mortality rates in the U.S. pand New York’s current paid family leave policy to expecting mothers, allotting them 40 hours of paid time off to attend medical appointments. Under current family leave law, short-term disability benefits aren’t available until a month before a child is born.

Plan, as well as in qualified health plans that New Yorkers can purchase through the state insurance marketplace. The executive also aims to provide oversight for unnecessary C-sections by creating a state database on Caesarean rates and offering financial incentives that encourage providers to avoid unnecessary surgeries. The final proposal will address mental health by training counselors on the state’s 988 mental health hotline in maternal mental health, postpartum depression and anxiety. Hochul’s maternal-infant policy plan comes on the heels of rising infant mortality rates in the U.S. for the Gov. Kathy Hochul’s proposal includes a first-in-the-nation paid prenatal leave program. | GETTY IMAGES first time in over a deThe maternal-infant policy plan cade, according to data from the likely to die of pregnancy-related Centers for Disease Control and causes than white women, Hochul was the third proposal of Hochul’s 2024 State of the State, which outPrevention. Infant mortality rates said. “It’s shocking,” Hochul said. “No lines the governor’s budget prioriare compounded by high maternal mortality rates and stark dis- woman in this country should fear ties in the coming year. The State of parities – Black women in New getting pregnant because it could the State address was scheduled for Jan. 9. York are three to four times more be her death sentence.”

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ON POLITICS

Legislature should pass the LLC, non-compete laws again and force Hochul to make a choice Democrats should make the governor decide whether she wants to side with businesses over workers in an election year

here is nothing new about a islature. High-powered banks rely governor waiting until the on non-compete clauses to preend of the year to veto or vent top employees from taking weaken bills. This is one of those clients and intellectual property to Albany traditions that should go rivals, and they furiously lobbied away but never does. In theory, the governor’s office over the last there is no reason that legislation few months. Hochul and the Legislature tried passed in May or June must die in to negotiate an agreement late December; like the that would have exempted Legislature’s practice of employers at a certain incobbling together a state come threshold, in order budget full of unrelated to preserve non-competes policy changes in the on Wall Street but keep dead of night, it’s a mode other kinds of workers, of being that won’t go like hairstylists and engiaway, no matter how neers, from being trapped much the world actually in the same sort of bind. changes. But rather than trying to At the end of 2023, Gov. Ross Barkan thread this needle, which Kathy Hochul, a moderate Democrat, made several dubi- ultimately failed, Hochul should ous vetoes or dilutions of bills she have banned the clauses altogethdid ultimately sign. The first was er. They’ve proliferated wildly in shooting down the Legislature’s the private sector. Between 18 perreasonable attempt to ban cent to 45 percent of workers may non-compete clauses. Many be bound by them, according to states, including California, al- some surveys. President Joe ready disallow employers from Biden’s Federal Trade Commisstopping their employees from sion is even exploring a national working for a competitor for a set ban on companies requiring workamount of time. The clauses are ers to sign the agreements. Hochul’s weakening of the LLC anti-worker and, in most instancdatabase bill is even more indees, unnecessary. Hochul, bowing to pressure fensible. Passed with large majorifrom Wall Street and other influ- ties in both houses, the legislation ential industries, vetoed the legis- aimed to reveal the identities of lation that was overwhelmingly the operators of limited liability passed by the Democrat-run Leg- companies, which can be used to

hide landlord abuse, wage theft and money laundering. Had Hochul signed the legislation as passed, any member of the public could have accessed the database.

LLC law shuts out public Instead, only law enforcement will be able to see it. Members of the public will be shut out. In weakening the bill, Hochul made a dubious argument about invading the personal privacy of LLC owners, aligning herself with the real estate groups who like to operate in secrecy. A truly transparent LLC database would have helped tenants figure out the identity of their landlord and hold them accountable for any problems in their building. In siding with landlords over tenants, Hochul showed, in this instance, there wasn’t much daylight between her and her disgraced predecessor, Andrew Cuomo. Cuomo enjoyed a very close relationship with the real estate industry and proved to be a tireless opponent of tenant activists. Democrats in the Legislature have more leverage now than they did in the Cuomo years. This year, they should use that advantage to enact the full LLC database and once again pass the non-compete ban — and force Hochul to decide

The Legislature should use its considerable leverage to pass a full version of its LLC Transparency Act and a ban on non-compete clauses, writes columnist Ross Barkan. | MIKE GROLL/OFFICE OF GOVERNOR KATHY HOCHUL

if she really wants to side with businesses over workers in an election year.

Quick takes ◗ In one month’s time, the 3rd Dis-

trict on the North Shore of Long Island will have a new representative. Tom Suozzi, the district’s old representative, remains the front-runner to replace George Santos, who was expelled from Congress over his lies and legal troubles. But Suozzi, a Democrat,

will have to battle hard against Republican Mazi Melesa Pilip, who is going to benefit from the region’s rightward tilt. ◗ Homicides and shootings fell from 2022 to 2023, which is good news for Mayor Eric Adams. If criminal investigations weren’t swirling around his staffers and allies, this would be a rather straightforward and beneficial story for Adams to tell: “I took office and lowered violent crime.” Ross Barkan is a journalist and author in New York City.

Why New York has spent $27M on snow before any flakes have fallen By Nick Garber

As of early this month, New York City had not had a signficant snowfall in some 700 days, but that hasn’t stopped the city from spending tens of millions of dollars on snow removal in its recent snowless winters. The city has already spent about $27 million on snow removal during the current fiscal year that began in July, according

removal budget using a charter-mandated formula that experts say is unique among city services, as Crain’s reported last year. For decades, the amount set aside for snow removal has been calculated by averaging the actual snow-removal costs from the previous five fiscal years. That backward-looking approach means the amount of money reserved for snow is likely to be in the ballpark of a typical season’s needs. In snowless Fiscal Year 2023, the city spent just $49.7 million on snow removal, well short of the $96.2 million it had reserved for that purpose. That’s less than half of the $105.8 million the city spent in fiscal 2018, which included a March 2018 storm that dumped more than a foot of snow in some neighborhoods. In this fiscal year’s $107 billion budget, the city reserved $97.7 million for snow removal, based

“The mayor has been very clear with us that as far as fighting snow is concerned and opening the city back up, there really is no budget.” — Jessica Tisch, Sanitation Commissioner to an analysis done for Crain’s by the Citizens Budget Commission. Most of that spending was for supplies and automotive parts, as well as hourly pay for workers. New York sets its annual snow

on its average snow spending for 2018 through 2022. Sanitation Commissioner Jessica Tisch said in a television interview Jan. 5 that if needed thousands of department workers would be out on the streets over the weekend, primarily spreading salt on “every block of the city.” “The mayor has been very clear with us that as far as fighting snow is concerned and opening the city back up, there really is no budget,” Tisch said. “On paper there is one, but if we have to spend more, we can and we will.”

Labor costs In a typical year, more than half of the city’s snow-removal costs go toward labor — “the personnel that run the vehicles,” Ana Champeny, vice president for research at the Citizens Budget Commission, told Crain’s last year. Still, given the practically impossible task of predicting the weather months in advance, the city has swung between over- and underbudgeting snow-removal

Even in dry winters like this year, which is a far cry from snowy seasons like the past one pictured, New York City must still spend millions on snow-removal supplies and worker salaries. | BUCK ENNIS

costs in recent years, according to a 2020 report by the Independent Budget Office. If a potential storm proves to be a dud, the set-aside snow money won’t go down the storm drain. Whatever is left over by springtime gets absorbed by the city’s general fund, where it can be used by any city agency to cover costs this year or rolled over into the next budget. The Fiscal Year 2025 budget that Mayor Eric Adams and the City Council will set in June will be the first to take into account the snowless winters of 2022-2023

and (so far) 2023-2024, presumably lowering the amount needed to be set aside and providing the tiniest bit of breathing room in a financial plan expected to include tough cuts to help close out-year gaps. The Citizens Budget Commission has called on the city to split up snow-removal duties among more agencies than the Sanitation department alone, arguing that it would help save on overtime costs and allow the department’s workforce to be trimmed without threatening snow removal.

6 | CRAIN’S NEW YORK BUSINESS | JANUARY 15, 2024

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EDITORIAL

The Legislature should embrace Hochul’s approach to let the city lead on housing G

ov. Kathy Hochul showed political savvy in her State of the State speech, hitting important notes and making headline-worthy promises around transit, health care and technology, without renewing her big-swing, controversial ideas on the critical issue of housing. But the governor posed one, rather simple housing approach to the Legislature: let New York City take matters into its own hands. “What are we waiting for?” Hochul asked during her Jan. 9th speech in Albany. “Let’s unleash New York City’s potential, beginning this session. Do you agree with this, Mayor Adams?” (Adams responded with an enthusiastic thumbs-up from the audience). The state Legislature should work with Hochul to significantly reduce policies that stymie housing construction in the city. Then, council members would be wise to also take Hochul up on her challenge. While a 421-a replacement and office-to-residential conversions have proven to be tricky, a good start is for the

“What are we waiting for?” Let’s unleash New York City’s potential, beginning this session.” — Gov. Kathy Hochul Gov. Kathy Hochul | DARREN MCGEE/OFFICE OF GOVERNOR KATHY HOCHUL

state to lift its cap on city residential building density. The regulation, known as the FAR cap, measures density by dividing a building’s square footage by the size of the lot it sits on. The city has been banned from constructing apartments with a FAR higher than 12 by state law since the 1960s. At the time the law was enacted, policymakers thought that such “vertical slums” would be rampant with

health hazards and overrun cities. Since then, however, public health has improved and such risks have declined significantly. Mayor Adams, City Council Speaker Adrienne Adams and Comptroller Brad Lander have rallied in favor of the change as a way to construct new housing in desirable neighborhoods that have access to transit. However, local lawmakers like

Assemblymembers Jo Anne Simon of Brooklyn and Deborah Glick and Grace Lee of Lower Manhattan sided with preservation groups last March, arguing that lifting the cap would ruin the character of historic neighborhoods. Liz Kreuger, chair of the Senate Finance Committee, also made her opposition known, telling Crain’s at the time that the move would escalate “the movement to Manhattan becoming Dubai.” Other major cities have put New York to shame in constructing new housing units. Washington, D.C., has built 72 new units per 1,000 residents from 2011-2020, while Boston has built 47. New York City’s figure is just 27, Hochul pointed out during her address. Hochul is not the only official who has the power to improve the housing situation in the city. Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie should lead their respective houses toward this deal. By having the state government take a step back, the city can get to work as the architect of its own future.

PERSONAL VIEW

New age of convenience, equity beginning on transit

ver the last four years, OMNY has commitment to accessibility and equity become an indispensable part of for all riders. The vending machines proriding on public transit. Follow- vide another option for riders to buy an ing the examples of other global transit OMNY card with any payment method hubs, New Yorkers quickly became ac- they desire, including cash or coin — a milestone for equity and accescustomed to the convenience of sibility across the entire system. tapping onto the subway and As nearly 10% of New York bus, with more than 40% chooshouseholds are unbanked, these ing to do so daily. Gone for many machines allow anyone without are the days of frantically looka smartphone or chip-enabled ing for a MetroCard only to enbanking card — or who simply counter the dreaded “please prefers to pay in cash — to load swipe again” as the departing up their OMNY card and pass train doors close. through the turnstiles without OMNY also recently expanded to the Roosevelt Island Tram Anthony Louh having to sacrifice speed and convenience. and JFK AirTrain, giving riders is the director the ability to get where they of business need to go more seamlessly no development Advantage for reduced fares matter where they’re headed. at Cubic This is particularly consequen- Transportation Recent technological upgrades tial for the millions of tourists Systems. have also made OMNY more acwho arrive in New York City. cessible to reduced-fare riders. And, reflecting the ubiquity of open pay- With the help of an AI digital assistant, rements to match the diversity of our glob- duced-fare riders can go online to link al city, of the 195 countries that issue their personal bank card to their benefit bank cards, OMNY has processed a card and take advantage of reduced fares with from every single one of them. each tap of their preferred payment methJust a few weeks ago the Metropolitan od. Transportation Authority rolled out the OMNY is also the first and only major much-anticipated OMNY vending ma- transit system in the United States to imchines as another testament to the MTA’s plement automatic fare-capping. Now,

More than 40% of public transit riders use OMNY daily. | BUCK ENNIS

any rider using the same payment method more than 12 times in a rolling seven-day period is automatically awarded free rides for the rest of that period. Finally, since October 2021, more than 4,000 retail networks have been equipped to sell and reload OMNY cards, including bodegas and pharmacies. Cubic is proud to partner with the MTA to bring OMNY — One Metro New York — to life and increase accessibility and equity for New York City’s public transit users.

Our work with the MTA began more than four decades ago. Cubic’s relationship with the MTA, and creation of OMNY, is a model for how the private and public sectors are strongest when they collaborate. Soon, OMNY will expand to the Westchester Bee Line and the Nassau NICE bus. But we are not stopping there. This is the beginning of a new chapter of convenience, equity and accessibility for public transit, and we’re proud to help lead the way.

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 15, 2024

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PERSONAL VIEW

Public transit is a public safety problem

The alarming situation in New York City s we celebrate the life of a civil rights hero who called on us to fight mirrors a national crisis. Stop AAPI Hate’s for justice for all, we also commem- records from March 2020 to March 2022 orate the loss of two Asian American and indicate that, nationwide, 67% of the Pacific Islander women who were mur- 11,500 reported incidents involved harassdered in early 2022: Michelle Alyssa Go, ment, with 9% occurring on public transit. Witnessed and documented frewho was pushed off the subway quently by bystanders, the haplatform in Times Square, and rassment on public transit further Christina Yuna Lee, who was folunderscores the urgency of the lowed home and stabbed to issue. Regardless of the motives of death in her own apartment. the perpetrators, AAPI commutSince its launch, The Asian Amerers have been compelled to take ican Foundation has documentadditional precautions each time ed continued reports of unwarthey use buses or subways. ranted harassment, and in some cases, worse, against AAPIs in public spaces, and especially on Eugena Oh is Must focus on solutions public transportation in New the regional York City. director, New Further illustrating this issue, Despite the return to pre-Covid York, at The the National Asian Pacific Ameriroutines for most Americans, the Asian can Women’s State of Safety surAAPI community remains vul- American vey reports that nearly 75% of nerable, facing persistent attacks Foundation, Asian American, Native Hawaiian and a pervasive sense of insecu- which is and Pacific Islander women have rity. These incidents of harass- dedicated to experienced racism or discrimiment and violence stem from en- building a nation, with almost half of these trenched racist stereotypes, safer, more instances occurring in public ignorance and xenophobia. Such inclusive future spaces. These disturbing figures occurrences on public transpor- for AAPIs. indicate a critical public safety tation are especially traumatic, as problem that demands immedieach incident profoundly impacts the ate attention and action. As it becomes community’s collective sense of safety and clearer that AAPI women are particularly belonging in public spaces. vulnerable to a special mix of racist and

misogynist violence, we must focus specifically on uplifting solutions to protect from and prevent harm. Reliance on public transportation is a necessity for many New Yorkers. The suggestion to avoid it as a safety measure is unrealistic and unjust, burdening those who rely on it the most and worsening the long-term impact on the mental well-being of the AAPI community. The 2023 STAATUS Index highlights that 52% of Asian Americans feel unsafe due A vigil in January 2022 for Michelle Alyssa Go, who was killed to their race or ethnicity, with pub- after she was pushed off a subway platform | NYCMAYORSOFFICE/ lic transportation being their lead- FLICKR ing source of unease. Disturbingly, my foundation tracked more than 25 inci- solutions ensuring safety, including initiadents of anti-AAPI harassment and vio- tives like volunteer networks offering eslence on New York public transit in the last cort assistance for seniors and training programs for transit staff. However, adfive months of 2023. Launched in May 2021, TAAF strives to dressing the underlying xenophobia and instill a profound sense of belonging within prejudice fueling anti-Asian hate and viothe AAPI community, recognizing that this lence requires sustained efforts and partissue transcends ethnic lines and impacts nerships among leaders and allies to fosall New Yorkers. And, we must call attention ter a safer and more inclusive New York for to the fact that, Arab American, Muslim everyone. In the new year, as we approach the anAmerican and South Asian communities, as well as the Jewish American community, niversaries of two violent deaths of AAPI continue to experience deep and profound women in New York, we call upon our bigotry and discrimination impacting their elected officials to step up to ensure that this city continues to be a welcoming, vifeelings of safety while in public. Collaborating with public officials and brant community that anyone can safely community leaders, TAAF advocates for call home.

PERSONAL VIEW

Spending the opioid billions: How New York can learn from tobacco settlement to change trajectory of crisis

itigation against companies for their ities to set up a solid process for opioid setrole in the opioid public health crisis tlement dollars. One: Spend money to save lives has ultimately resulted in New York New York has followed this principle. A State being awarded more than $208 million, with state and local authorities re- state law requires that New York allocate sponsible for deciding where the funds all litigation proceeds to eight different funds, including 36.39% to an opioid setshould go. It’s imperative that investments be in- tlement fund, 17.5% to the state, and the remaining 46.11% for formed by the best evilocalities and local subdence — and hard-won divisions. All funds must experience. be spent on prevention, These lawsuits recall treatment, harm reducanother major event in tion and recovery serpublic health litigation: vices related to subthe Tobacco Master Setstance use disorders tlement Agreement, in and co-occurring menwhich 46 state cases tal illnesses. None of the were settled for $206 settlement funds will go billion paid out over 25 Sara Whaley is senior practice years. associate and Joshua Sharfstein, into the general coffers. Two: Use evidence to In the ensuing de- M.D., is distinguished professor of guide spending cades, however, less the Public Health Practice and Here, New York’s efthan 3% of annual reve- Community Engagement at Johns fort is a work in prognues from the settle- Hopkins Bloomberg School of ress. On Nov. 1, 2022, ment and tobacco taxes Public Health. This essay first ran the advisory board for went to state tobacco in VitalCityNYC.org. New York’s opioid setprevention and cessatlement spending retion programs. For many states, the proceeds have been used leased its first annual report, which ento reduce existing state debts, fund large dorsed, among other recommendations, infrastructure projects, and even subsi- funding for overdose prevention centers. This is a proven approach to preventing fadize tobacco farming. To avoid a repeat, here is how the cur- tal overdoses while not increasing crime. The board’s second annual report inrent process in New York matches up with five guiding principles for states and local- cluded investment recommendations

across the continuum of care including harm reduction, recovery, treatment and prevention, along with funding overdose prevention centers. Soon after last year’s report was released, however, Gov. Kathy Hochul told reporters that she is not supportive of overdose prevention centers. The final decisions for the next round of funding have yet to be announced. Three: Invest in youth prevention New York’s opioid settlement advisory board is on the right track with prevention by prioritizing programs for young people. These include education on the biology of substance misuse and increasing programs that foster connections with trusted adults. As opposed to fear-based prevention strategies, these programs increase the likelihood of young people feeling empowered to make healthy choices. Four: Focus on racial equity New York is on the right track here. Both the 2022 and 2023 annual reports’ recommendations are centered around two overarching priorities that address the changing landscape of substance use and overdose disparities. The 2023 report outlines the need to focus on equity by funneling dollars specifically to communities of color and those suffering from especially high overdose rates. Five: Develop a fair and open process for deciding where to spend Here, New York can make improve-

New York can become a model for using the proceeds of opioid litigation to change the trajectory of the overdose crisis. | GETTY IMAGES

ments. The advisory board for New York’s opioid settlement spending consists of 21 members, primarily with health and human service and government backgrounds — which is less diverse than the boards in other states. Recipients of settlement funds are required to report their spending plans to the state addiction agency and are required to meet the guidelines for “proper use” as outlined in the New York Opioid Settlement Sharing Agreement. To improve transparency, the state can make these spending decisions public. Our bottom line: New York is off to a generally good start, and with some additional focus, the state can become a model for using the proceeds of litigation to change the trajectory of the overdose crisis. January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 9

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As some residential listings linger, auctions are slowly becoming a mainstream way to sell in New York Advocates say putting homes up for bid can be quicker and more transparent than traditional marketing lion in 2023. Then came the auction, when the victorious bidder paid $3.6 million, records show.

By C. J. Hughes

A chandelier twinkled as the auctioneer unleashed his rat-a-tat pitch for a condo at the Plaza hotel. “Whaddaya think? Whaddaya think?” said Peter Kiko to the small group huddled around a table Jan. 3 at the swanky Midtown address. “It’s no fun being the runner-up.” Soon he had an answer. The low-floor one-bedroom was sold for $2.5 million, plus a $250,000 fee paid by the buyer, a Floridian who bid online and asked to remain anonymous, to the auction house. (The seller had to fork over the customary broker’s commission as well.) Long the domain of art and antiques, auctions are slowly becoming a mainstream option for unloading real estate in New York, prized for their speed and transparency, even if their ability to produce sale prices that are better than those from conventional methods can be tough to know. The seller of the Plaza unit, Tim Smucker, an heir to the Smucker’s jam conglomerate and an ex-chief executive of the company, had purchased it for $2.9 million just three years ago. After a few weeks of marketing, and 10 minutes of live bidding, the real estate transaction was essentially complete. “We’re pleased,” Smucker said. “This is really the most efficient way to sell an apartment.”

A changed view

The Plaza, Midtown | BLOOMBERG

vice Concierge Auctions in fall 2021. Similarly, CoStar Group snapped up commercially focused Ten-X in 2020 for $190 million. Last year, meanwhile, the brokerage Compass teamed up with Sense of urgency 15-year-old Paramount Realty Industry players seem to be USA to “instill urgency into the coming around to the idea. In the sale process for certain properpast couple of years, major broker- ties,” according to its press release. Even Elegran, the smaller-scale ages have partnered with upstart auction houses, including Any- brokerage that marketed the Plaza condo in advance of its auction, is mulling offering them more regularly as a tool for sellers, executives there said. Other auctioneers more used to selling — Misha Haghani, founder of Paramount Realty USA country estates are also inching where Real Estate (the former Re- in. The Plaza sale was handled by alogy, which includes brands Kiko Auctions, the first of its kind Corcoran Group and Coldwell for the decades-old Ohio compaBanker), which bought a con- ny in New York. Similarly, Interluxe, an 11-yeartrolling stake in home-selling ser-

“The landscape has completely changed. People are contacting us now for auctions, which shows that there’s been a major shift in consumer sentiment.”

Auctioneer Peter Kiko; 1 Central Park South, No. 508 | C. J. HUGHES; ELEGRAN

Tim Smucker (left) and Richard Smucker in 2004 | GETTY IMAGES

old firm that regularly dispenses trophy homes in Texas and Florida, handled last spring’s auction of 351 E. 51st St., No. PH1, a former residence of the British consulate, in one of Interluxe’s few city sales. (The four-bedroom sold for $5.2 million after failing to connect at much higher prices for years.) Their timing may be right, as apartments seem to be sitting on the market for longer and longer periods. In fact, it took nearly three

months on average to sell a home at the end of last year, a 4% increase since 2022, according to Douglas Elliman, which found that luxury homes are lingering even longer, at about four months, before finding a taker. And long market times can mean steep carrying costs, of course. “The landscape has completely changed,” said Misha Haghani, Paramount’s founder, who first worked in the auction business in 1998 before starting his company. “People are contacting us now for auctions, which shows that there’s been a major shift in consumer sentiment.” Paramount, which takes between a 2% and 12% auctioneer’s fee, recently helped Compass sell 342 Bowery, a prewar building once owned by Andy Warhol that today contains a well-received omakase joint. In October 2022 Compass listed the 4-story building for $5.7 million before lowering its price to $4 mil-

Selling real estate with patter and paddles hasn’t always been a shoo-in, Haghani says. For years the practice suffered from negative associations because home auctions traditionally have involved foreclosures and other court-ordered transactions. Properties put on the block can carry a whiff of desperation. But advocates for auctions say they are becoming more common with non-distressed real estate and especially luxury properties, as the Plaza deal suggests. Indeed, Smucker, whose family-run conglomerate has a more than $13 billion market capitalization (it bought Hostess of Twinkies’ fame last year in a nearly $6 billion deal), was not under any financial pressure to sell and did so simply to upgrade, he said. He and his wife, Jennifer, bought a slightly larger condo at the Plaza several weeks ago, though less-affluent owners perhaps could not have as easily stomached a loss. For his part, Smucker said he became an auction convert after using Kiko Auctions to sell his 80acre Ohio farm when the spread couldn’t find a buyer the traditional way. Richard Kiko, Peter’s brother, told Smucker “When you stop fiddling around, you should call me,” which Smucker did. The property had originally been asking $7 million; Kiko split the farm into two parcels and sold them for a combined $8.7 million. Kiko also promotes “absolute” auctions, ones that don’t have a set starting price, something of a rarity in the industry, so far. In the case of the Plaza unit, which has a long terrace and view of the Plaza’s courtyard fountain, that $1 offer, unveiled in December, didn’t last for long (which Smucker probably appreciated). In the days leading up to the auction, Kiko began accepting preevent bids online, and by the time about 500 of them had rolled in, the apartment’s price had soared to $1.3 million, the threshold at which Jan. 3’s live bidding began. Still, the shock of coming across a home that conceivably could be had for a single greenback, especially a home at a luxury address famous for teas and black-tie balls, may have generated enough buzz to justify the initial fire-sale-level pricing. The new owner of the apartment, No. 508 at 1 Central Park South, still seems to have gotten a bit of a discount. But the 780-square-foot unit is probably not for the light of wallet all the same. The heavily amenitized building requires the apartment’s owner to cover common charges and taxes of $3,827 every month. January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 13

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Law firm King & Spalding swaps SL Green for Vornado as its landlord with a lease for 175,000 square feet By Eddie Small

The city’s law firms are continuing to provide a boost to its struggling office market. Midtown-based King & Spalding has become the latest firm to ink a six-figure office lease, landing a deal for 175,000 square feet at Vornado Realty Trust’s 1290 Sixth Ave. The law firm’s current New York office is at SL Green’s 1185 Sixth Ave., where it has been since 2005 on a roughly 129,000-square-foot lease, according to the commercial real estate database CoStar. That lease

ing to the New York Post, which first reported the news. Representatives for Vornado and SL Green declined to comment on the lease.

Pandemic recovery Manhattan’s office market had a strong fourth quarter to close out 2023, with companies leasing roughly 8.2 million square feet of space — a healthy total even by pre-Covid standards. However, it has yet to fully recover from the pandemic, with a stubbornly high availability rate of about 18% and supply continuing to far outpace demand. But law firms were a fairly bright spot for the market throughout the past year. The firm Paul, Weiss, Rifkind, Wharton & Garrison gave it a huge boost at the end of 2023 with a lease for more than 750,000 square feet at Fisher Bros.’ 1345 Sixth Ave., the largest Manhattan office lease in four years. Davis Polk & Wardwell also renewed its lease and expanded

Manhattan’s office market had a strong fourth quarter to close out 2023, with companies leasing roughly 8.2 million square feet. expires in January 2025, according to CoStar, when King & Spalding will presumably move to the Vornado building. King & Spalding will move to the 13th through 15th floors of 1290 Sixth, where the asking rent was $105 per square foot, accord-

1290 Sixth Ave. | BUCK ENNIS

to 700,000 square feet at 450 Lexington Ave. near Grand Central Terminal, while Quinn Emanuel Urquhart & Sullivan inked a lease

for 132,000 square feet at 295 Fifth Ave. Vornado’s property at 1290 Sixth Ave. spans the entire block

between West 51st and West 52nd streets. The tower stands 43 stories tall and spans about 2.1 million square feet.

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Kushner Cos. parts with six East Village buildings By Eddie Small

Turbines at an offshore wind farm off of Rhode Island | BLOOMBERG

Offshore wind farm developers cancel contract in possible bid to get better terms from state By Caroline Spivack

The developers behind a planned offshore wind farm south of Long Island have canceled a contract with the state, in what may be a bid to pressure the Hochul administration for more favorable terms. British Petroleum and its project partner Equinor, based in Norway, issued a press release on Jan. 3 saying they were scrapping a 2022 agreement to sell power to the New York State Energy Research and Development Authority.

“The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” said Molly Morris, president of Equinor Renewables Americas, in a statement.

Offshore contracts The termination pressures Gov. Kathy Hochul’s administration as it proceeds with a rebidding process for offshore wind contracts in New York. NYSERDA announced the new process in November after the Public Service Commission rejected petitions from four companies to pay them at least $12 billion more to generate wind power in the state. The developers cited rising costs due to inflation, soaring interest rates and supply chain challenges. In response, the Hochul administration reopened the bidding process for existing contracts with an accelerated timeline. Equinor and BP declined to comment on their rebidding strategy on Jan. 3 but told Crain’s they

“The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward.” — Molly Morris, president of Equinor Renewables Americas, in a statement A number of observers read the announcement as the death of the Empire Wind 2 project, a proposal to build more than 140 wind turbines 15 miles off of Long Beach. In reality, the developers are positioning themselves for more favorable terms from NYSERDA.

are “carefully assessing” the state’s sped-up solicitation process and are “encouraged by the state’s commitment to offshore wind.” Bids for the new contracts, which sell what’s known as Offshore Wind Renewable Energy Certificates to NYSERDA on behalf of the state’s electricity ratepayers, are due Jan. 25. Winners are expected to be announced by the end of February — a pace that indicates the state’s urgency to ensure New York’s offshore wind projects advance. Empire Wind 2, proposed for a swath of 80,000 acres of open ocean, promises to generate enough energy to power one million New York homes and move the needle on New York’s climate target of generating 70% of its electricity from renewable sources by 2030. The arrangement the companies ripped up on Jan. 3 had agreed to sell energy credits at a strike price of $107.50 a megawatt hour — a figure the developers say is no longer feasible. “Commercial viability is fundamental for ambitious projects of this size and scale,” Morris said in the statement. Last summer the European energy developers, which are behind three of the four offshore wind

projects in active development in New York, petitioned for more money for the energy their projects generated. For Empire Wind 2, specifically, Equinor and BP sought to increase their contract’s strike price to $177.84 per megawatt hour. State regulators shot down the request in October. The Public Service Commission said it wanted to hold the companies to their contractual agreements and avoid a precedent for other developers to seek revised rates.

Unlimited piggy bank PSC Chair Rory Christian said at the time that the denial signaled to companies that “ratepayer funds are not an unlimited piggy bank.” But with NYSERDA’s solicitation due later this month, developers now have a path to seek better terms. “NYSERDA remains committed to advancing clean energy at the best value for New Yorkers,” Doreen Harris, president and chief executive of NYSERDA, told Crain’s in a statement. “And we are encouraged that Equinor and BP continue to be committed to developing the offshore wind industry and New York’s green economy as they reset this project.”

Developer Kushner Cos. has sold off a sextet of East Village apartment buildings for more than $50 million, property records show. The firm has parted with 118, 120, 199, 201 and 203 E. Fourth St. and 315 E. 10th St., selling them to a limited liability company linked to David Gleitman’s Targo Capital Partners. Kushner purchased the Manhattan properties, located between Second Avenue and Avenue B, in 2013 for $51.6 million and sold them at the tail end of 2023 for roughly $57.5 million, appearing to earn a tidy profit on the deal, according to property records. Representatives for Kushner and Targo did not respond to requests for comment by press time. The buildings contain 112 apartments total, ranging from nine each at 199 and 201 E. Fourth to 48 at 120 E. Fourth. There are only two active listings across the portfolio, according to StreetEasy: a four-bedroom unit at 203 asking $5,000 per month and a studio at 120 asking $3,306 per month.

Multifamily properties Targo’s portfolio focuses on multifamily properties in trendy Manhattan neighborhoods including the Lower East Side and the East and West Village, according to its website. The firm, based near Union Square, has recently purchased several Manhattan multifamily properties, including 225 and 227 W. 20th St. in Chelsea for $13.8 million, 5 Spring St. in SoHo for $10 million and 110 Reade St. in Tribeca for $9 million. It also owns 184 Bleecker St. in Greenwich Village, a former Bob Dylan hangout spot where Targo is in the middle of a legal dispute with its restaurant tenant Cafe Figaro. Kushner Cos., based in Midtown, also sold a 22-unit mixeduse property at 156 Sullivan St. in SoHo last year to an unidentified buyer for $12 million.

118 E. Fourth St. (left), part of the East Village portfolio Kushner Cos. recently sold. | COSTAR January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 15

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Prada buys a pair of Midtown high-rises for $822 million By Mario Marroquin

Luxury retailer Prada Group is betting big on a high-profile Manhattan retail corridor. Public records recently revealed that the Italian company acquired the 15-story 720 Fifth Ave. from Midtown-based real estate firm Wharton Properties as part of an $822.4 million two-building acquisition that closed in mid-December. Wharton sold 720 Fifth for $397.4 million Dec. 19, records

Real Deal, was $19 million. Both high-rises have 0% vacancy, according to real estate research firm CoStar. They are home to retailers Abercrombie & Fitch and apparel and accessories maker Herbert Gladson as well as fitness group Gym on Fifth, to name a few.

Roughly 0.3 acres Prada’s board said in the Hong Kong filing that decreased vacancy along Fifth Avenue and a significant influx of recent investments in real estate in the vicinity of the building made the purchase ideal. The combined lots, using estimates from Prada’s filing to the stock exchange and public disclosures from the city Department of Finance, total 12,553 square feet or roughly 0.3 acres. Wharton Properties acquired 724 Fifth Ave. in 2012 for $244 million as part of a venture with SL Green and Stonehenge Partners. The building at 720 Fifth Ave. last traded in 2006 for $153 million, records filed to the city register show. Though brands such as Macy’s and Louis Vuitton have made sizable investments in buying and

The luxury retailer bought 720 Fifth Ave. and 724 Fifth Ave. from Wharton Properties. made public by the city register show. The sale took place just a week after Prada reported in a public filing to the Stock Exchange of Hong Kong, where the company is listed, that it was also buying the 12-story office building at 724 Fifth Ave. from Wharton for $425 million. The retailer has been leasing more than 22,000 square feet of retail and office space space at 724 Fifth since 1997. Its annual rent, according to a report in The

The Prada store at 724 Fifth Ave. in the Plaza District | BUCK ENNIS

renovating their flagship stores in Manhattan in the past two decades, Prada’s acquisition appears to be its first in the Big Apple. Prada saw a 17.7% increase in net retail sales from January to June 2022, according to an inter-

im report it filed in September. The firm said it earned approximately 18% of the $2.2 billion it generated in worldwide sales during that time period in the Americas. Prada spokesman Alberto Bell-

ini declined to comment on the acquisition of 720 Fifth Ave. and what the company intends to do with the properties. Wharton Properties did not return a request for comment about the transactions by press time.

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Original Barneys New York in Chelsea set for makeover into luxury condominiums by Flushing development group By Mario Marroquin

A Flushing development group is looking to reinvent the 7-story building that used to house the original Barneys New York department store in Chelsea. NoMad-based financial services firm Argentic Investment Management recently sold the property at 115 Seventh Ave. to a limited liability firm affiliated with architect and developer Raymond Chan for $22 million. Argentic, which took control of the site in the first quarter of 2023 through a foreclosure proceeding against the previous owner, devel-

Josh Goldflam, a co-founder and principal at brokerage firm HighCap who represented Chan in the acquisition, told Crain’s that the new owner intends to finish the redevelopment, but the project will consist of luxury condominiums and ground-floor retail instead.

Including air rights The site includes 15,000 square feet of air rights, which Chan intends to develop, according to Goldflam, but plans have not been filed yet with the city Department of Buildings. When completed, Goldflam said, the project will span 55,000 square feet of total space. Argentic put the unfinished building on the market for $30 million in early 2023 and was keen to sell the property before the end of the year, Goldflam said. Records from the city Department of Buildings show there is an active partial stop work order at the site in addition to 21 open violations. The project was halted in September 2020 due to the construction superintendent withdrawing from the project. Open DOB violations also cite problems with the elevators, but no additional information was disclosed by the department.

The owner intends to finish the redevelopment, but the project will consist of luxury condominiums and groundfloor retail instead. oper Ben Ashkenazy, sold the property Dec. 22, records filed to the city register show. Ashkenazy purchased the building in 2014 for $57 million and intended to redevelop it into office and retail space. Argentic provided a loan for $46.2 million in 2017, but Ashkenazy reportedly defaulted on the debt in 2020, which led to the lender taking over the building.

115 Seventh Ave. in Chelsea | BUCK ENNIS

A 2014 report in the New York Post said the Pressman family, which founded Barneys in 1923, sold the company and the building to Isetan of America, which then sold the building to the Rubin

Museum of Art for $20 million as part of the department store’s bankruptcy proceedings. The board of the museum thought of attempting to redevelop the site into additional exhibition space,

according to the Post, but decided to sell the property to Ashkenazy instead. Argentic and Chan did not respond to Crain’s requests for comment by press time.

100-room hotel in Brownsville trades for $23 million By Mario Marroquin

Joseph Brunner’s Williamsburg-based real estate firm Bruman Realty recently sold a 100room hotel at 313 Powell St. to a limited liability company for $23.3 million. The 5-story property, which sits on a 15,790-square-foot lot, was sold Dec. 19, public records made public by the city register this month show. The buyer, Midwood-based 313 Powell Holdings LLC, financed the transaction with a $20 million mortgage from Popular Bank. Brunner filed plans with the city Department of Buildings to convert the former manufacturing facility into a hotel less than six months after it acquired the property in 2015, public records show.

the project would cost approximately $3.1 million. The hotel generated a net operating income of over $1.3 million in 2022, according to real estate research firm CoStar. It has been operating as a homeless shelter since at least February of that year, according to a report in the New York Business Journal.

Repurpose buildings Brunner’s acquisition appears to have been part of a specific strategy that involved repurposing commercial buildings in Brooklyn for alternative uses. Crain’s 313 Powell St., Brooklyn | COSTAR reported in February 2015 that Brunner they intended to convert to office and Joe Tabak, chief execu- and retail space. The developers tive of Princeton Holdings, sold the building for $31 million in purchased a 100,000-square- December 2020 before completing foot industrial facility at 121 Mor- the project, according to CoStar. Brunner is also actively investgan Ave. in East Williamsburg that

The property has been operating as a homeless shelter since at least February 2022, according to a report in the New York Business Journal. Bruman paid $5.1 million for the property and at the time estimated

ing in apartments in Brooklyn and Queens. The developer secured a $75 million loan for a 165-unit rental project in Halletts Point in November, according to a report in The Real Deal.

Bruman Realty did not return a request for comment by press time. A representative for 313 Powell Holdings did not return a request for comment by press time. January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 17

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Council threatens to sue Adams administration over refusal to implement housing voucher laws By Nick Garber

The City Council and the Legal Aid Society both threatened to sue Mayor Eric Adams’ administration over its refusal to implement three laws expanding low-income housing vouchers that lawmakers passed over the mayor’s opposition last summer. The laws, enacted in July after the council overrode Adams’ veto, greatly expand access to cityfunded vouchers known as CityFHEPS that cover rent for people who are homeless or at risk of being evicted. They would loosen

But Adams’ administration opposed the bills due to their potential cost, which City Hall estimated at $17 billion over five years. The administration told the council in December that it would not implement the laws, citing “substantial financial, operational and legal issues,” City Limits reported.

Suing the administration Now, with the laws supposed to have taken effect this month, both Council Speaker Adrienne Adams and the nonprofit Legal Aid Society announced separately Jan. 9 that they would sue the administration to compel it to enforce the package. The speaker gave the Department of Social Services until Feb. 7 to show it has taken “concrete, verifiable steps” to implement the laws, while Legal Aid did not set a specific deadline. “These local laws provide critical solutions to our unprecedented homelessness crisis, and time is of the essence,” Speaker Adams wrote. “Every day DSS delays in implementing the laws is a day that more New Yorkers need-

“These local laws provide critical solutions to our unprecedented homelessness crisis, and time is of the essence.” — Adrienne Adams, speaker, NYC Council income restrictions, end work requirements, and allow people to apply for vouchers by showing rent-demand letters from their landlords to prove they are at risk of losing their homes.

lessly end up or remain in homeless shelters, and the city faces unnecessary legal liability.” City Hall spokeswoman Kayla Mamelak pointed to other steps the administration has taken to expand the use of CityFHEPS vouchers, but repeated a claim that the council’s expansion could make it harder for shelter residents to move into permanent housing by creating new competition. “We always seek to work collaboratively with the City Council, and look forward to identifying more areas of common ground to support New Yorkers experiencing homelessness, including an aggressive, citywide effort to build more housing in every neighborhood,” Mamelak said in a statement. The administration has also claimed it lacks the legal authority to expand the vouchers since they are technically administered by the state — an argument the council has rejected, pointing out that it has amended CityFHEPS numerous times in recent years. Both the council and outside advocates have argued the bills would cost far less than the administration estimates. The coun-

Mayor Eric Adams last year signed an order eliminating a rule requiring people to stay in shelter for 90 days before applying for rental aid, but he vetoed council bills that greatly expanded those aid programs. The council overrode his vetoes. | NYCMAYORSOFFICE/FLICKR

cil projects $10.6 billion over five years, with 47,000 new households qualifying for vouchers each year and both include expected savings from reducing costly shelter stays. The dispute over the voucher bills, which culminated in the council’s 42-8 vote to override the mayor’s veto, represented its biggest clash yet with Adams after months of increasing tensions.

Although the two sides were in negotiations on the legislation, talks broke down for reasons that remain in dispute: the Council said City Hall never made a real attempt to compromise, while the administration offered evidence that it tried to negotiate and accused the council of concocting a “false and sad rewrite of history” for suggesting otherwise.

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AGENDA From Page 1

years 2026 and 2027. Still, lawmakers and other advocates pushing for more ambitious spending are sure to point out that strong tax revenues have already caused Hochul’s budget office to shave billions of dollars off its outyear deficit projections, leaving the state on “solid fiscal footing,” as her budget director wrote in an October memo.

Housing: 421-a extension and replacement, density cap As expected, Hochul is not proposing mandates for new housing construction like those she presented last year, which roiled the suburbs and got little support in the state Legislature. But the governor’s housing agenda is more substantive than some had feared, as she pointed on Jan. 9 to a “massive shortage of housing of all kinds” stemming from “a policy failure at both the state and local level” that has driven up housing costs statewide. Several of the proposals were part of her failed housing package last year, including replacing a tax incentive for affordable housing, incentivizing office conversions and lifting a decades-old cap on residential density in New York City. As she did last year, Hochul will ask the Legislature to work with her on a replacement for 421-a, whose expiration in 2022 has

has banned the city from constructing apartment buildings with an FAR greater than 12 — a cap initially designed to discourage slum-like housing but which now hampers much new construction, especially in dense neighborhoods close to transit. Some city lawmakers opposed lifting the FAR cap last year, claiming the change would lead to more supertall skyscrapers. Advocates in favor of lifting the cap reject that argument, noting that city officials would retain the ability to reject any new project that goes beyond existing zoning. Hochul will also again propose creating a new incentive for office-to-residential conversions, which her office says could apply to some 120 million square feet of property. Mayor Eric Adams’ city-level housing plan would include measures to encourage more conversions, but both he and Hochul say action at the state level is needed to achieve any widespread change. Although Hochul proposed a couple of tenant protection measures, conspicuously absent from her agenda is any form of “good cause” eviction — the policy capping rent increases and limiting grounds for evicting tenants that has been at the center of New York’s recent housing battles. Hochul has aligned with the real estate industry in opposing the policy, but more progressive lawmakers are likely to push for it as part of any housing deal. Mayor Adams, who rarely bucks the real estate industry, made news last month when he told Crain’s he would support a deal that paired “good cause” with a new version of 421-a. “New York has vastly more regulated housing stock than any other state, but it still hasn’t meant more homes for people,” Hochul said Jan. 9, touting her supplyfocused approach and implicitly criticizing further tenant protections. At the same time, she seemed to hint at a future revival of her more ambitious Housing Compact, saying New York still needs “an effective statewide approach to encourage new construction.” Hochul has pointed openly to this year’s election as one reason she is scaling back her housing agenda. State Democrats will be keen on avoiding hot-button issues that may antagonize voters, especially in areas like Long Island and the Hudson Valley, which are home to swing districts that could alter the narrow Republican control of the U.S. House of Representatives.

“For 50 years we’ve been hemorrhaging families who no longer can raise their children in the same communities where they were born.” — Kathy Hochul, governor caused housing production to plummet in the city. Coming up with a replacement will be no easy sell, as lawmakers long assailed the old 421-a as an annual billion-dollar giveaway to developers that produced relatively little affordable housing. In what could be a lighter lift, Hochul also wants to extend the old 421-a program’s deadline to benefit projects already approved and financed that are now in jeopardy of never being built — amounting to at least 33,000 units as of last year, according to industry estimates. “For 50 years we’ve been hemorrhaging families who no longer can raise their children in the same communities where they were born,” Hochul said Jan. 9. “Let’s be honest with New Yorkers: The only thing that will solve this problem is building hundreds and hundreds of thousands of new homes.” Hochul will also try for the third straight year to persuade the Legislature to lift New York City’s sixdecade-old cap on floor-area ratio: a measure of density that divides a building’s total square footage by the size of the lot it stands on. Since 1961, state law

Health care: coverage expansions, Medicaid waiver The governor’s health care proposals center on preventing New Yorkers with mental illness from falling through the cracks, increasing the resilience of the state’s health care system and expanding insurance coverage to widen access. Her plans for addressing mental illness include establishing a law enforcement and mental health

ate crucial uptown interconnectivity across the 1, 2, 3, A, B, C, and D lines, as well as dozens of high-ridership bus routes,” Hochul’s remarks read. The new line is estimated to serve as many as 240,000 people per day. Similarly, the Interborough Express, a light rail line project set to run from Bay Ridge, Brooklyn to Jackson Heights, Queens is moving forward. The project is entering the formal design and engineering process, Hochul announced Jan. 9. Gov. Kathy Hochul laid out a 2024 policy agenda on Jan. 9, including another shot at housing reforms. | MICHAEL APPLETON/MAYORAL PHOTOGRAPHY OFFICE

coordination team at the state Office of Mental Health which will focus on the relatively small number of individuals known to cycle between hospitals, shelters, jails and prisons. The team will monitor data from law enforcement offices, hospitals, providers and correctional facilities to help individuals reach services, including housing. To further keep people from slipping through the cracks, hospitals will now be required to screen patients with mental health conditions for their risk of suicide, violence and substance use, make sure people with complex needs are connected to an aftercare provider upon leaving the hospital, and schedule a follow-up psychiatric appointment within seven days. Hochul also will provide funding for 200 new psychiatric inpatient beds, building on the 150 state-operated beds added last year. The governor’s plans for bolstering New York’s health care system hinge on improving access for patients while increasing financial stability for providers. She will launch a Healthcare Safety Net Transformation Program, which will offer financial resources and regulatory flexibility to struggling institutions that often care for vulnerable New Yorkers. The state is also pursuing a waiver from the federal government to secure billions of dollars in multi-year funding to support safety-net providers and help more patients receive quality care, according to her State of the State agenda. Further, Hochul aims to increase access to care through expanding insurance coverage options for vulnerable populations. New York is pursuing a federal waiver to unlock billions of dollars so the state’s Medicaid program can “significantly” widen coverage for health-related social needs such as housing support and food. State officials are submitting another waiver request so that New York can provide continuous Medicaid or Children’s Health Insurance Program coverage for newborns through age 6. In a similar vein, the governor aims to require commercial insurance companies to increase their reimbursement rates for mental health services, promote network adequacy regulations for both commercial and Medicaid insurers, and boost Medicaid reimbursements for mental health services in Department of Health facilities and private practices. All of the governor’s plans depend on also strengthening the

state’s health care workforce, which is still struggling post-pandemic. Hochul said the state will pursue a federal waiver to secure hundreds of millions of dollars in funding, over multiple years, for initiatives to recruit and retain workers, such as new training and education programs.

Climate: property buyouts, scrapping gas-hookup subsidies Hochul set a sweeping agenda on climate and energy. The governor seeks to curtail the expansion of gas infrastructure by ending what’s known as the 100-foot rule, which requires utility customers to subsidize new gas hookups. The Affordable Gas Transition Act would not impact existing gas hookups. The measure supports portions of the Senate-backed NY Heat bill — a legislative priority for progressives — which would limit what low-income residents pay for utilities. Other green proposals would protect New Yorkers from extreme weather resulting from global warming. A voluntary buyout program, called Blue Buffers, would acquire properties in flood-prone communities at their pre-flood market value and restore the land as a natural flood barrier. A similar proposal, called the Resilient and Ready Program, aims to finance efforts to fortify housing and critical infrastructure in areas where flooding is routine. Hochul is also seeking to create a Comprehensive Adaptation and Resilience Plan. Under the proposal, the Department of Environmental Conservation, with other agencies, would create a blueprint to “ensure state entities and localities can equitably adapt to climate change, including assessing impacts on disadvantaged communities, ecosystems, infrastructure, and vulnerable economic sectors,” according to the State of the State text.

Transit: extending Second Avenue Subway even further The governor is throwing her weight behind an eventual westward expansion of the Second Avenue subway along 125th Street. If built, the project would piggyback on a forthcoming expansion of the Q line, with three new stations at Lenox Avenue, St. Nicholas Avenue and Broadway. The new eastwest connection would benefit residents of Upper Manhattan and the Bronx. “Extending the line would cre-

Shoplifting, weed stores Hochul, who has spent much of her two years in office pushing to toughen New York’s criminal justice laws, said Jan. 9 that she will roll out a “comprehensive plan” to address property crime and retail theft. Despite declining in much of the country, shoplifting has increased in New York City in recent years and was blamed for high-profile retail closures such as a Target superstore in East Harlem. The governor said she will also deploy the State Police to build cases against organized retail theft rings, fund dedicated retail theft teams in local prosecutors’ offices, and propose a tax credit that would let business owners offset the costs of some security measures. As for the proliferation of unlicensed cannabis shops, which has confounded New York’s efforts to set up a legal market, Hochul said she will propose legislation to empower state and local governments to more easily shut down illicit retailers. Mayor Adams has said in recent weeks that he wants Albany to give him the authority to close down more such shops.

Luring AI to NY As she previewed earlier this month, Hochul pledged $275 million toward creating a $400 million fund to attract artificial intelligence development to New York. The so-called Empire AI Consortium would encompass seven universities, including Columbia and the SUNY system. Additional funding would come from those institutions as well as the private sector. At the same time, Hochul said she will issue a new policy directing agencies to use AI for tasks such as identifying cyber threats and matching people with jobs, all while staying attuned to potential risks and privacy violations. Notably absent from Hochul’s prepared remarks was any mention of the migrant crisis, which she said she will discuss this week in her executive budget address. Mayor Adams has requested much more from the state than the roughly $2 billion it has allotted so far, but Hochul made no funding promises on Jan. 9, and her budget staff warned last fall that continued aid to the city would be fiscally “unsustainable.” Adams traveled to Albany to attend Hochul’s speech. In a press conference earlier in the week, the mayor said his top requests include “a real housing agenda,” stepped-up cannabis enforcement, and an extension of his control over city schools. Nick Garber reported from Albany, and Caroline Spivack and Jacqueline Neber reported from New York City. January 15, 2024 | CRAIN’S NEW YORK BUSINESS | 19

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GIANNI MEDICAL IMAGING PLLC. Arts. of Org. filed with the SSNY on 07/27/23. Office: New York County. SSNY designated as agent of the PLLC upon whom process against it may be served. SSNY shall mail copy of process to the PLLC, 301 W. 57th Street, 45D, New York, NY 10019. Purpose: For the practice of the profession of Medicine.

Software Engineer (Citadel Enterprise Americas Services LLC – New York, NY); Mult. Pos. Avail. Offer’ng salary range of $130,000 - $170,000 / year. Dsgn, dvlp, test & dply next gen. sftwr solutions for various business ops activities across the firm. Work closely w/ bus and tech leadrs to define priorities & dlvr tech solutions. Resumes: citadelrecruitment@citadel.com. Reference JobID: 7472759.

Vice President, Account Manager (Pacific Investment Management Company LLC (PIMCO) – New York, NY); Mult. pos. avail. Duties incl: Foster, grow, & strengthen existing client rltnshps. w/ lrg. inst. investors such as pension funds, endowments, foundations, & govt. entities, as well as w/ fin. intermediaries to retail investors. Int’l. travel req’d. up to 20% of working time. Offering a salary range of $165,000 to $240,000/yr. F/T. To apply, send resume to Lupe.Rubalcaba@pimco.com. Ref. Job ID: 6969023.

PUBLIC & LEGAL NOTICES Notice of Formation of SONCATA PRESS LLC Arts of Org filed with Secy of State of NY (SSNY) on 12/2/23. Office Location: NY County. SSNY designated as agent upon whom process may be served against LLC to: The Limited Liability Company 340 W. 57th St #2, NY, NY, 10019, USA, RA: United States Corporation Agents, Inc. 7014 13th Ave, Ste 202 BK, NY, 11228, USA. Purpose: any lawful act.

NOTICE OF FORMATION of RANGAL PACT COLLABORATIVE, LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 11/14/23. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 745 Fifth Ave, Ste 500, NY, NY 10151. R/A: Filejet Inc.,41 Broadway, Fl 12, Ste 12-300, NY, NY 10004. Purpose: any lawful act.

Notice of Formation of SILK INDUSTRIES LLC Arts of Org filed with Secy. of State of NY (SSNY) on 7/13/2023. Office Location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against to 228 Park Ave S #845281 NY, NY 10003, USA Reg Ag.: United States Corp Agents, Inc. 7014 13th Ave Ste 202. BKLYN, NY 11228. Purpose: any lawful act

Notice is hereby given that a license number NA0340-23151409 for a Restaurant on Premises Liquor License has been applied for by LAYSLAYS NYC LLC under the Alcoholic Beverage Control Law for premises located at 237 Madison Avenue, New York, New York 10016-2818, County of New York, for on-premises consumption.

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 Qualification of VICI CP PROPCO LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/16/23. Office location: NY County. LLC formed in Delaware (DE) on 10/04/23. Princ. office of LLC: 535 Madison Ave., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

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PFIZER From Page 22

the drug to unlock further revenue. But Pfizer has had a rocky start getting its weight-loss pill, danuglipron, off the ground, putting it steps behind competitors Eli Lilly and Novo Nordisk that have already cemented their place in the market. The R&D shortcomings come at an inconvenient time: Withering demand for Covid products caused Pfizer’s revenues to fall far below expectations in 2023, threatening the shareholder optimism cultivated during the pandemic. The company’s Covid franchise — which includes the vaccine Comirnaty and antiviral medication Paxlovid — previously sent earnings through the roof,

cancer biotech Seagen as well as 19 new drug launches. But despite initial research obstacles, the company is still banking on weight loss to boost its revenues, CEO Dr. Albert Bourla said at J.P. Morgan’s 2024 health care conference in San Francisco on Jan. 8. “Pfizer will play in the market,” Bourla said. “I think we have the capabilities, and the right, to play and win.” Pfizer declined to comment on this story. Pfizer has spent the past few months trying to explain its recent financial missteps to the public. In December, it unveiled 2024 revenue projections that were flat with last year’s estimates and far below investors’ hopes, a result of lowerthan-anticipated demand for Covid therapies. Covid revenue projections for 2024 are $8 billion — significantly lower than the $13.8 billion expected by Wall Street. Bourla said the conservative estimate was an attempt to avoid creating uncertainty among investors, as it did in 2023. “Pfizer is really the only company who is still driving the story of Covid,” said Evan Seigerman, senior biopharma research analyst at BMO Capital Markets. “Companies have moved on. Pfizer hasn’t.” There is a disconnect between the company’s post-Covid narrative and what investors want to see in its pipeline — which as of now, lacks drugs that excite Wall Street, said Seigerman. This exciting endeavor could come in the form of danuglipron, but persistent clinical hurdles have stymied investor optimism. Pfizer

“Pfizer will play in the market. I think we have the capabilities, and the right, to play and win.” — Dr. Albert Bourla, Pfizer CEO driving total revenue past $100 billion in 2022. Pfizer’s stock price, which reached its all-time high of $59.48 in December of 2021, has since tumbled. Following the company’s 2024 revenue guidance, which it released in December of 2023, its stock price dipped to a 10-year low of $26.63, a 45% decrease from its 52-week high of $48.39. Pfizer shares closed the year at $28.79. Pfizer has shifted its focus to new therapies to fill the Covid gap, touting a $43 billion acquisition of

halted the development of its weight-loss pill in early December after several clinical trial participants dropped out due to gastrointestinal issues. The disappointing trial was the second setback since the summer, when a once-daily version of the pill resulted in worrisome liver enzyme side effects.

WEIGHT LOSS LEADERS VS. VACCINE LEADERS

Continue to focus

15%

Bourla has acknowledged the company’s shortcomings in the weight-loss pill studies, but said at J.P. Morgan that the anti-obesity market is an area that Pfizer “will continue to focus on.” Bourla’s tone was a departure from his exuberant predictions at the same conference last year, where he said that Pfizer was racing with competitor Eli Lilly to create the first oral weight-loss drug. “We have done in eight months what others did in eight years with Covid, and this is the same clinical development machine,” Bourla said last year. “I wouldn’t underestimate that.” Pfizer needs a product to fill the revenue hole left by fizzling Covid sales to rescue its plummeting share price. So, despite underwhelming trial data and initial investments, the company is going back to the drawing board yet again on danuglipron, the only weight-loss drug in its pipeline. It plans to reformulate a once-daily version of its weight-loss pill, expecting to release data in the first half of this year, Bourla said. Competitors, on the other hand, have made significant strides. Eli Lilly has already advanced its oral weight loss candidate, orforglipron, to Phase 3 clinical trials — the final stage before they can get ap-

Change in share price relative to Jan. 1, 2023 Pfizer

Novo Nordisk

Moderna

Eli Lilly

JNJ

60.7%

75% 45%

55% -9.5% -15%

-41.3% -45%

-44.8%

-75%

Jun. 2023

Dec. 2023

Source: Yahoo Finance

proval from the U.S. Food and Drug Administration. Eli Lilly has established itself as a major player in the weight-loss drug market. Eli Lilly’s injectable GLP-1 agonist Mounjaro, which was approved to treat type 2 diabetes in 2022, earned the company $3 billion in revenue through the third quarter of 2023. The company’s weight loss-specific drug Zepbound, another injectable therapy approved in November, is expected to bring in even more. Sales of Ozempic and Wegovy represented more than half of drugmaker Novo Nordisk’s total revenue in the first nine months of 2023, the company reported. Lilly’s stock has soared as its GLP-1 agonists continue to gain steam, reaching an all-time high of $626.03 on Jan. 8. Novo Nordisk’s share price has also climbed

with the rise of its weight-loss drugs, hitting a 52-week high of $107.63 on Jan. 4. Pfizer’s ability to compete in the anti-obesity market depends on whether it can pull off the once-daily weight-loss pill that it initially promised, Seigerman said. “That not only makes it a better, more convenient drug, but it also could make the drug more tolerable.” A weight-loss pill isn’t going to be a panacea for Pfizer’s tough year, Seigerman noted, nodding to the significance of the Seagen acquisition for future revenues. But getting to market will be an important development for Pfizer’s future, he added. “I don’t think that they are out of the running,” Seigerman said. “I think that they have a lot of work to do.”

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Sarrah Khan. | BUCK ENNIS

Engineer works to make passenger experience better at JFK Terminal 1

The co-founder of engineering and architecture firm Agencie wants her daughter and others to see her field as viable for women | By Aaron Elstein

arrah Khan, principal engineer and co-founder of Agencie, helped introduce Urban Umbrellas, the attractive white sidewalk sheds that go up whenever a building is under construction or renovation and protect pedestrians from falling debris and rain. Commonly seen in Midtown and SoHo, Urban Umbrellas provide a welcome alternative to the traditional ugly pipe-and-wood sheds that entomb 300 miles’ worth of city sidewalks.

letting the sun shine through the translucent roof with skylights providing additional illumination. “It’s about making the passenger experience better,” said Khan. Khan launched the engineering and architecture firm Agencie 17 years ago with her husband, Andres Cortes. She handles the engineering side; he’s the designer. In addition to the JFK canopy, the couple and their 15 employees are working on a ballpark at Princeton University and a whaling museum on Long Island. Khan’s other projects have included the Gucci flagship store in Miami and the AKA Times Square Hotel. Agencie’s most prominent work, Urban Umbrella, shook up the somnambulant sidewalk shed industry when it won a contest sponsored by the city in 2011. Mayor Michael Bloomberg said at the time that the structure would “complement the city’s architectural beauty rather than take away from it.” The sheds are used by landlords who can afford a premium product, but Khan said her firm has proposed a new design to the city that would cost less to install.

Khan is working to make things better for travelers flying into or out of John F. Kennedy International Airport. Now Khan is working to make things better for travelers flying into or out of John F. Kennedy International Airport. She is the lead structural and enclosure engineer for a canopy rising outside the new Terminal 1, a project expected to cost a total of $9.5 billion and be completed next year. The new canopy, designed by architecture firm Gensler, will offer protection between the curb and terminal while

It isn’t easy for women to break through in the male-dominated engineering world — only 17% of civil engineers are women — but Khan’s groundbreaking work with Urban Umbrella won the attention of the engineering firm helping redevelop Terminal 1, Thornton Tomasetti. Although JFK is Khan’s first aviation assignment and she reckons no more than 15 minorityor women-owned firms would be capable of handling the complex JFK project, she said Thornton officials have welcomed her staff into the fold. “They saw us as the engineers we are,” she said.

Rebuilding contracts A spokesman for the Port Authority of New York and New Jersey said more than $2 billion in contracts for rebuilding LaGuardia Airport went to minority- and women-owned firms, and the agency expects to “dramatically exceed” that figure at JFK. Khan taught at Columbia University for seven years before she and Cortes started their business. Their office today is in Westbeth, a West Village complex of buildings that originally housed Bell Labs but has been an artists’ compound

Sarrah Khan From: Sarnia, Ontario Resides: Jersey City Education: Bachelor’s in civil engineering, McGill University; master’s in civil engineering and architecture, Columbia University Big job: Khan has helped engineer some of the most complex structures in the world, including the roof at the U.S. Institute of Peace and the 2002 Winter Olympics Medal Arch. Meet cute: She met her husband at Columbia while they were waiting in line to use the computer printer.

for many years. Agencie’s office used to be Lou Reed’s rehearsal space, said Khan, who’s pleased her daughter sees she’s part of something big happening at New York’s largest airport. “It’s important for her to see engineering as a career path for women,” she said.

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