Crain's New York Business, February 5, 2024

CRAINSNEWYORK.COM I FEBRUARY 5, 2024

TRANSPORTATION

Long-awaited ‘open-gangway’ subway cars make MTA debut A $3.2 billion deal for 1,175 new cars will upgrade an aging fleet amid manufacturing and supply-chain backups | By Caroline Spivack Step onto a subway car and it’s very likely you’re hit with the stale, unpleasant odor that comes with thousands of riders passing through a decades-old train. That is not the case for the new R211T open-gangway train, the system’s first, which rolled onto the rails Feb. 1 with what can

BY THE only be described as a new train smell.

The Metropolitan Transportation Authority NUMBERS and Gov. Kathy Hochul launched the first of two 10-car trains on the C line in Inwood. Its rubbery, accordion-style connectors link each car Average age as if the entire train was one long subway car. of MTA’s The new design gives riders the freedom to fleet of train move through the train without having to hop in cars and out of stations or precariously step between cars.

“You can actually move seamlessly from one car to the other,” said Hochul, in unveiling the train at the 207th Street Train Yard in Inwood. “You’re not trapped. If you want to have a different experience, you can get up and move

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See SUBWAY on Page 18 Gov. Kathy Hochul and MTA Chair and Chief Executive Janno Lieber show off an accordion section of the R211T train. | CAROLINE SPIVACK

New city portal rings up $17M tab for outsourced work Mayor Adams’ signature ‘MyCity’ website, which began as a mostly in-house project, has enlisted 26 contractors to date

By Nick Garber

Mayor Eric Adams’ administration has doled out nearly $17 million in contracts to outside vendors that are building his signature one-stop website for city services, in a continued reliance on outsourcing that some policy experts criticize as costly and duplicative.

Adams made the idea a pillar of his 2021 mayoral campaign, envisioning an app New Yorkers could use to access every-

thing from food stamps to rental aid. After delays, he launched a limited web version of the portal last year, offering eligibility screenings and applications for child care benefits, as well as information on business licensing and an artificial intelligence chatbot that can discuss the city’s services for business owners.

Although administration officials initially said that MyCity was being developed largely in-house, the rollout that began last year relied mostly on outside

contractors. Records show that pattern has continued in recent months: Since 2022, the city has registered 54 contracts worth a combined $16.6 million to 26 different vendors charged with working on MyCity, according to records kept by the comptroller’s office.

Experts in civic technology have criticized the administration’s approach. Several told the publication Gotham Gazette last year that outsourcing the development of MyCity risks racking up higher

costs compared to in-house work, wastes the personnel the city already has, and squanders an opportunity to build more tech expertise inside city government.

“We’re at a moment where we could be building this amazing tech capacity in our city,” said Hana Schank, a writer and former senior fellow at the think tank New America who studies government tech procurement, in an interview with Crain’s.

See MYCITY on Page 22

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CHASING GIANTS Midtown startup streamlines work of property management into single platform.

WHO OWNS THE BLOCK Right-wing event puts spotlight on neighborhood’s Czech past.

GOTHAM GIGS New York Liberty CEO makes fan experience the MVP.

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By Jacqueline Neber

The latest data on the city’s Behavioral Health Emergency Assistance Response Division shows that the pilot program responded to more than 5,000 calls between January and June of 2023, the program’s largest number of responses within a six-month period since its launch.

However, any future expansions of the program are on hold; Mayor Eric Adams’ preliminary fiscal 2025 budget includes a nearly $7 million cut to Health + Hospitals’ budget for the initiative, Crain’s has learned.

Cuts to the program that delayed expansion were already implemented at the New York City Fire Department under the city’s November 2023 financial plan, said Laquisha Grant, the deputy executive director of mental health access at the Mayor’s Office of Community Mental Health. The H+H cuts and the FDNY slashes are the same, she said, but needed to be implemented over two plans.

Grant did not answer questions as to why the city would choose to delay B-HEARD expansion or whether it would be reevaluated in the future, but emphasized that the decision would not impact the current scope of the program or cut any personnel.

B-HEARD, launched in June of 2021, sends FDNY paramedics and emergency technicians and H+H mental health professionals instead of police officers to 911 calls where New Yorkers are experiencing mental health crises. The

EVENTS CALLOUT

APRIL 17 POWER BREAKFAST Mark your calendar to hear from Janno Lieber, the head of the Metropolitan Transit Authority and one of our most popular Power Breakfast guests. Lieber, who leads one of the city’s largest employers and biggest drivers of the local economy, will be interviewed live on stage by Crain’s New York Business Editor-in-Chief Cory Schouten.

DETAILS Location: 180 Central Park South, NYC CrainsNewYork.com/pb_lieber

No New Yorkers invited to join Airbnb’s newly formed housing council

By Amanda Glodowski

B-HEARD covers parts of Upper Manhattan, Queens and Brooklyn, and all of the Bronx. | BLOOMBERG

program is run by five agencies: the Mayor’s Office of Community Mental Health, the FDNY, H+H, the city Department of Health and Mental Hygiene and the New York City Police Department. It aims to reduce unnecessary use of police resources and increase connection to community-based care.

Areas being served Teams currently serve 31 precincts including some in Upper Manhattan such as Harlem, some high-needs areas of Brooklyn such as East New York and East Flatbush, parts of Queens and all of the Bronx. It expanded to cover the whole of the Bronx this past October, and those precincts are not included in the latest data brief from the MOCMH. The halt comes at a time when the latest data shows improvements on nearly all key metrics.

Just under 21,000 mental health 911 calls were made in those six months within the pilot’s coverage areas, the brief, released on Jan. 31, shows. According to the MOCMH, B-HEARD teams respond where violence or weapons are not a primary concern. To that end, about 45% of those 21,000 calls, or just over 9,000, were deemed eligible for a B-HEARD response.

Teams were dispatched to 55% of eligible situations, a slight uptick over the first half of fiscal 2023, when the program responded to about 53% of the eligible emergencies. According to MOCMH, many mental health 911 calls do not get the additional triage attention they need from dispatchers to determine whether they are eligible for a B-HEARD response because volumes are growing and more people are needed to take calls.

Grant told Crain’s that the agencies that run the program together are trying to change that.

It can be challenging to assess whether calls are B-HEARDeligible as they can be “chaotic” and lack enough information, she said. In light of this, B-HEARD launched a new protocol to make sure teams reach more calls. In addition to sending B-HEARD teams to calls dispatchers determine are eligible, the program has also begun sending B-HEARD responders to situations that have not been triaged yet as long as there is no indication of violence or a

weapon, according to Grant.

Once B-HEARD teams reach the situation they could take over even if police or EMS responders were also dispatched, she added, which has resulted in a greater number of New Yorkers receiving a mental health-focused response to their crises. It has also allowed her office to determine that more calls are eligible for B-HEARD. “If this is a mental health crisis call, we want to get a mental health professional to as many of these calls as possible,” she said. “We do so in a way that puts the team’s safety first because again, we won’t really know what’s happening on the ground until we get there.”

According to the MOCMH, the city is monitoring the success of the new protocol to inform how to implement system-wide changes in the future and hiring more individuals to take 911 calls in fiscal 2024.

The data also shows that B-HEARD kept 42% of the callers they reached in the community for treatment, whether on-site or at neighborhood-based locations.

However, 58% of callers were transported to the hospital, an 8% increase from the first six months of fiscal 2023.

Grant attributed that increase to the potential lack of communitybased resources or alternatives in individuals’ neighborhoods or their potential need for specialized assessments.

“It’s worth noting that the lack of same-day resources throughout the city is a limiting factor, particularly if medication is needed,” she said. According to city Department of Health and Mental Hygiene data from January 2022 only 17% of 356 outpatient programs in the city accepted immediate referrals or walk-ins.

When asked about the options available for New Yorkers in neighborhoods the pilot hasn’t reached yet, Grant said individuals can access local services such as mobile crisis teams or crisis counselors they can reach through calling the 988 mental health hotline. For now, the future of their access to B-HEARD is unclear.

“No decisions have been made regarding the next phase of expansion, including which additional neighborhoods would be covered,” she said. “There are currently no plans to expand B-HEARD at this time.”

Airbnb has launched a housing council to convene experts from across the country to help spur housing supply and “better balance the benefits of home sharing with the needs of communities.”

The group, composed of 10 housing experts, is chaired by Stephanie Rawlings-Blake, the former mayor of Baltimore, and includes leaders based in California, Virginia and Washington D.C. While the experts come from organizations that operate on a national scale — such as Nikitra Bailey, executive vice president of the National Fair Housing Alliance; Mike Kingsella, CEO of Up For Growth; and Clarence Anthony, CEO and executive director of National League of Cities — none of the leaders are New Yorkers and none of the organizations are headquartered in the city.

New laws went into effect in September which require all hosts that offer short-term lodging, which is defined as less than 30 days, to apply for a license to ensure their property is compliant with the city’s stringent housing rules. Airbnb has characterized the regulations as a death knell to their business in the city.

Some view the newly formed housing council as a way for Airbnb to put political pressure on lawmakers in Albany.

“Make no mistake, Airbnb is not walking away from New York,” said a person familiar with the regulatory landscape. “Their strategy is to overrule city law with a state law and to have as generous a program as they can,” they speculated.

Expansion in the future However, Airbnb said that the members of the housing council represent national organizations, and it is possible that Airbnb will expand the number of members on the housing council in the future.

“We are lucky to have some of the leading national housing organizations and experts advising us on the Airbnb Housing Council, and we look forward to working with them to identify new policy ideas and initiatives we can support to help drive housing solutions in communities across the country,” said Amanda Diamond, a spokesperson for Airbnb.

New York once represented one of Airbnb’s largest markets, but a requirement to register with the city has put the kibosh on once abundant short-term rent-

als in the city. Once legislation went into effect, the number of short-term rentals in the city plummeted, according to data from research firm AirDNA. In August of 2023, there were 22,247 short-term rentals and 25,808 long-term rentals. In September, the number of short-term rentals nose-dived to just over 8,000 options. As of January 2024, there are only 3,011 short-term listings in the city.

Legislation in the city now requires short-term rentals to register with the mayor’s Office of Special Enforcement. As of Jan. 22, there have been 5,582 registration applications, of which 5,232, or 94% have been reviewed, according to data from the OSE. But just under a quarter of the reviewed applications have been approved. More than half of applications have been returned for corrections, which tend to relate to inadequate proof of occupancy or identity, outdated documents, and uncorrected violations that endanger the occupants of the

BLOOMBERG

B-HEARD expansion delayed despite signs of improvement

unit, OSE spokesperson Camille Adolphe explained.

About 17% have been flat out denied, according to OSE. Typically, a full denial occurs when the unit applied for is rentregulated, on the prohibited buildings list — which can include co-ops and condos — or if there is a duplicative application, Adolphe said.

Vijay Dandapani, president and CEO of the Hotel Association of New York City and vocal critic of Airbnb, was “unsurprised” that New York was not accounted for on the housing council.

“It’s a bit rich that [Airbnb] is suddenly concerned with housing,” he said. “They’re the ones who have disrupted housing in every major metropolitan city around the world, whether it’s Paris, London, Melbourne, Sydney, you pick it.”

The city has yet to see any housing relief as a direct result of the new regulations. According to data from StreetEasy, rental inventory in the city has decreased by 6.3% since August. Real estate firm Douglas Elliman reported that average rent in Manhattan has decreased by about 6% since December of 2022, decreased by 2% in Brooklyn, and increased by almost 10% in Northwest Queens.

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CHASING GIANTS

Daisy co-founder Yotam Cohen has expanded the company’s platform to serve buildings in Manhattan, Brooklyn and Queens since launching in 2020. | BUCK ENNIS

Property management is a slog.

This Midtown startup may have the answer.

Daisy streamlines building finances, maintenance requests and communication into a single platform The upstart: Daisy

W

In her search for a new management company willing to work with a small building, she found Daisy. “I liked the idea of using technology to automate as much of the work as possible,” she says. “And it was a transformative experience.”

Her building is paying $1,100 a month—ten percent more for its contract with Daisy than with its previous management company, she says. “But it was the most reasonable quote we got. Some people quoted us double.”

Daisy employs 75, including an operations team of 50 in New York City and a product and R&D team in Tel Aviv. Investors include VC firms and real estate executives including Danny Fishman, CEO & cofounder of Gaia Real Estate, and Gil Rushinek, chairman of the board at Electra Real Estate. The company declined to disclose revenue figures; Cohen says the company is profitable on an operating basis.

hen Yotam Cohen volunteered to serve on his apartment building’s co-op board to address issues ranging from a badly managed budget to a malfunctioning elevator, he soon discovered what was behind the mess.

Communication between board members, residents and the building’s management company was mired in a barrage of phone calls and email; records were maintained on paper files and Excel sheets. No one had access to real-time information.

“I saw the pain first-hand,” he says. “And I saw an opportunity to disrupt this industry.”

A year later, at the start of 2020, he and co-founder Nir Hemed launched Daisy, a Midtown-based startup that seeks to integrate all apartment building management operations and communications on a single platform.

Reigning Goliath: FirstService Corporation Using the Daisy app, residents can report mainteAnne Kadet nance issues around the clock and get a response, on FirstService is North America’s largest manager average, within three minutes. They can also use the of residential communities, overseeing 8,700 propapp to pay bills, get package delivery notifications and receive erties ranging from master-planned communities to singlereal-time project updates. The newest feature, Groups, allows family homes and high-rise buildings. It is also the largest in neighbors to connect with each other and arrange, say, pet- New York City, with 92,700 units under management. Its 2022 sitting swaps and playdates for kids. revenues surpassed $4.3 billion.

The building’s board, meanwhile, can use the app to see updated financials, review and vote on items such as in- How to slay the giant voice approvals, digitally sign documents and communicate directly with their account manager.

Cohen’s first startup was Wibbitz, an automated video “We fell in love with what they are doing,” says Gareth Jones, creation platform acquired by Vimeo in 2021. He was still managing partner of FinTech Collective, the Union Square- living in Israel when he got the idea for Daisy but decided to based VC firm that lead Daisy’s $20 million Series A round launch in New York. in 2022. “We knew there was a massive market that was When Cohen moved to the city, he launched a massive highly fragmented, and there was a chance to build a really big research project, interviewing hundreds of co-op board business with a technology approach.” members, property management executives, real estate Since going live in March 2021, Daisy now manages 127 brokers, developers and building superintendents. buildings in Manhattan, Queens and Brooklyn ranging in size His conclusion? He couldn’t just develop a technology from four to nearly 200 apartments, for a total of 2,500 units. platform for existing property management companies.

The company says it is adding about two buildings every week. “Property management, the way it’s being done today, is When Darlene Lee joined the board of her 12-unit co-op in completely bogus,” he says. “It’s really dependent on people Spanish Harlem, she became frustated with the dismissive and on paper. There’s one point of contact who needs to nature of the building’s management company. remember everything and interact with everyone. They’re

overwhelmed and can’t really provide great service.”

Cohen decided to position Daisy as a full-service property management company, offering its services to co-op and condo boards.

“I don’t come from this industry, and I think this was a disadvantage in the beginning,” he says. “But actually, I believe it became an advantage as we moved forward. It enabled me to completely rethink everything.”

Co-op board members interviewed in his initial research efforts shared his outlook and were among the first buildings to sign on with the new service. Some even asked to invest in the company.

Daisy also attracts business by providing educational materials through its newsletter, LinkedIn and Instagram feeds to the many people volunteering on condo and co-op boards who have little expertise in building management or the city’s arcane building laws.

When Daisy launched, Cohen assumed that many processes would have to be customized to suit each client’s quirks and preferences. But building boards have been surprisingly willing to adopt a standardized approach to everything from bid reviews to the sales and leasing process.

“When you standardize things, it helps everyone,” says Cohen. “It helps the customers, because then you can accomplish things faster. It helps us to run our operation better.”

This streamlining also allows Daisy to profitably manage smaller buildings that most companies won’t bother with.

“In the beginning, we thought small buildings didn’t make sense,” says Cohen. “But our technology has evolved so much that we’re like, ‘If nobody wants to work with them, maybe we can come up with a solution.’”

The next challenge New York is hardly the only city with lousy building management. “We had people reaching out to us from Singapore, saying, ‘You gotta come over here, it’s the same thing,’” says Cohen.

Daisy will expand to Miami this year and has an eye on other U.S. cities including Chicago, Boston and Los Angeles.

Anne Kadet is the creator of Café Anne, a weekly newsletter.

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WHO OWNS THE BLOCK

Not quite a Bohemian rhapsody on the Upper East Side

321 E. 73RD ST.

A vestige of the neighborhood’s Czech past is in the spotlight over a contentious right-wing event

By C. J. Hughes

311-313 E. 73RD ST.

1402 SECOND AVE.

These side-by-side walk-up rental buildings, which have a total of 34 apartments, were owned for decades by the Manocherian family, whose patriarch Fraydun Manocherian founded the New York Health & Racquet Club chain in the 1970s; it closed for good during the pandemic. In 2003, the Manocherians, through their Primrose Company, sold the site to Aimco, a Denver-based real estate investment trust for $5 million, at a time when national companies began ramping up their investment in many classes of city real estate.

But in 2021, Aimco unloaded the buildings to the firm Hubb NYC for $9.5 million, according to the city register; JPMorgan Chase provided $5.5 million in acquisition funding. Founded in 2011, Manhattan-based Hubb, which invests mostly in rental properties in the metro area, owns 80 sites, according to its website.

A studio last listed for $2,425 found a taker in October, according to StreetEasy.

A testament to the realignment of the area’s ethnic mix, perhaps, this storefront has been home since 2017 to a branch of the popular downtown taco joint La Esquina, Spanish for “the corner,” which opened its first location in 2005 on Kenmare Street in SoHo. For years before that, the restaurant sat empty, during a time when Second Avenue was a clattering construction zone for an extension of the Q subway line. Similarly, the restaurant Mission Ceviche, which since 2019 has served Peruvian-style marinated fish dishes, is at next-door 1400 Second Ave. Originally in a stall at the nowshuttered Meatpacking District food hall Gansevoort Market, Mission Ceviche reportedly signed an 11,000-square foot lease last year for its second sit-down location near Union Square at 5 E. 17th St.

300 E. 74TH ST. The demolition of elevated subway lines in the neighborhood — Second Avenue’s came down in the 1940s, and Third Avenue’s disappeared in the 1950s — opened up once loud and shadowy streets to real estate development, naturally.

Sherman, Eddie and Mortimer Cohen, of the Cohen Brothers Realty Corp., led the charge by adding tall rental towers with air conditioning and balconies that were considered fancy for their time. One of their last projects appears to be No. 300, a 36-story, 230-unit tower from 1967 that features one of the firm’s signature details, a car-friendly porte-cochere.

Later, under a plan declared effective in 1982, the tower went co-op with the help of investor Jay Rachmani, a frequent coop converter. Part of the property includes Alan Associates Plaza Park, a 6,000-square-foot bench-dotted area reached from East 73rd Street. It’s technically privately owned public space, a type of concession to taxpayers in exchange for officials permitting a taller building than what zoning would have normally allowed. The park’s gates close at night.

315 E. 72ND ST. When this 21-story tower went up in 1958, nearby First Avenue was known for its lively nightlife. Indeed, entrepreneur Alan Stillman opened the first-ever TGI Friday’s at 1152 First Ave., at East 63rd Street, in 1965 to give young people, including the many female flight attendants who seemed to live in the neighborhood, a place to meet, he said in interviews. The idea essentially kicked off the trend of “singles bars.” In the 1980s, No. 315 was swept up in another movement: the widespread conversion of city rental buildings to co-ops. Today, the 219-unit building features a landscaped roof deck, a doorman and live-in superintendent, and a gym. That pioneering TGI Friday’s? It’s still a bar, Baker Street Irregulars, but more focused on sports.

321 E. 73RD ST. Bohemian National Hall has occupied this site since the late 1800s. The 5-story, 42,500-squarefoot landmark is where Czech, Slovak and Moravian residents of the Lenox Hill neighborhood once gathered, but the address seems more specifically focused on Czech culture today; its facade flies the flags of the Czech Republic and the European Union. (The larger Czechoslovakia was in existence for most of the 20th century and was under Soviet control for many decades before dissolving in 1992.) A library, 70-seat theater and ballroom are inside, as well as the Czech consulate general’s office, though the country’s United Nations mission is at 1109 Madison Ave. Also onsite is the schnitzel-serving Bohemian Spirit Restaurant. The nonprofit building has a market value of about $3.5 million, according to the city’s Department of Finance, though the agency’s estimates tend to be about half of what sites actually sell for.

1361 FIRST AVE.

334 E. 73RD ST. The block’s ties to Central Europe were stronger decades ago. This modest 5-story, storefront-lined rental building with zigzagging fire escapes was owned by a group with the non-economical name of the Slovak Community House of the Independent National Slovak Society of New York into the early 1970s, according to the city register. Around that time, Czech, Slovak and Moravian butcher shops slicing liverwurst, bars pouring Pilsner Urquell and travel agencies selling plane tickets were still operating along First Avenue, according to newspaper stories from the time. In 1993, Elliana Properties bought No. 334 for $720,000, according to the register. That business appears to be a kin of the Hakim Organization, a major residential owner on the Upper East Side run by Kamran Hakim, a relative through marriage of the Manocherians, who used to own 311 E. 73rd St. (The similarly named Hakimian Organization is a different firm.) For a few years, No. 334’s storefront offered an outpost of the Casa de Montecristo cigar bar chain, though it appears to not have survived the pandemic.

Tim Finnegan, the drunken bricklayer of James Joyce’s stream-of-consciousness classic Finnegan’s Wake, springs back to life at his funeral after someone spills whisky on him. This four-story building, which is occupied by the 52-year-old bar Finnegan’s Wake where liquor has also presumably been sloshed, seems to have won a new lease on life as well. The walkup building, which also has 16 apartments, was reportedly in contract in 2016 to sell to developer Cheskie Weisz’s CW Realty for a larger project, but the Kadvan family, which has owned the corner property for decades, never ended up closing the deal.

Today No. 1361, which also goes by 355 E. 73rd St., has a market value of about $1.7 million, according to the city. That value is down from a recent high of about $3.2 million in 2021, tax records show. The most recent apartment to lease was a studio in August; it was last listed at $2,200 a month. Downstairs, the staple Hibernian dish bangers and mash goes for $15.

BUCK ENNIS, GOOGLE MAPS

A

highly controversial January event by a right-wing bookbanning group has inadvertently drawn attention to the last traces of a once-dominant Upper East Side enclave­: immigrants from the Czech Republic and other Central European countries.

The Jan. 18 gathering of Moms for Liberty, which pushes for removing books with LGBTQ and racial themes from schools, took place at Bohemian National Hall, a Victorian-era archedwindowed edifice at 321 E. 73rd St. that spent decades as the cultural hub for local Czechs before falling into disrepair in the late 20th century as the population drifted away.

Constructed in 1897 in part with funds raised by composer and native son Antonín Dvorák, who lived on ˇ East 17th Street for several years, the hall once served as a meeting spot for 80 Czech community groups, according to its history. At the time, Czechs and Slovaks packed the blocks from Second to York avenues, roughly between East 60th and East 80th streets, according to historical accounts.

But by the 1980s, some of the fivestory Renaissance Revival structure was in such poor shape that occupancy was forbidden. Architect Jan Hird Pokorny, who grew up in Prague, came to the rescue of the facade in 1995.

But it wasn’t really until the Czech government swooped in to buy the 42,500-square-foot structure in 2001 for $1 from the Bohemian Benevolent and Literary Association (Bohemia is an older name for the Czech region) that a wide-ranging and sustained rehab could begin. The $10 million, multi-phased plan rolled out from 2002 to 2008, and it became an individual landmark in 2009.

In recent years, Bohemian National Hall, tucked in the middle of a quiet block, has perhaps become most lively while hosting some of its many weddings. But that all changed a few weeks ago when the 100 people inside were met by 100 protestors outside who held signs reading “Moms for bigotry” and “Keep NYC fascist-free.”

Hall president Joseph Balaz, in the face of condemnation by neighbors, local politicians and even the Czech foreign minister, maintained he was legally obligated to let the event go forward under the terms of its contract. But he also said that he opposes Moms for Liberty’s ideology.

“This particular group clearly does not fit our strong non-political stance," Balaz said in a statement.

“Furthermore, as a first-generation immigrant who years ago escaped a dictatorship and absolute censorship, I am personally very sensitive to concepts like book banning, thought and expression controls.”

He added that he would donate the group’s fee and a matching sum of his own to support “young, future leaders.” Balaz was not available for further comment by press time.

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SPONSORED CONTENT

JPMorgan Chase finances $1 billion for affordable housing in NYC The firm’s historic partnership has rehabilitated over 6500 units and counting

By Tim Karp

T

here are a few things every single New Yorker has an opinion on: Times Square. The fate of the $1 pizza slice. Housing in NYC. Regardless of your feelings on the cost and availability of housing in the city, there’s no denying the importance and scale of the New York City Housing Authority (NYCHA), a vital institution in the city’s fabric. The largest public housing authority in North America has operated for over 88 years, housing one in 17 New Yorkers or approximately 400,000 people. If NYCHA were a city, it would be the thirty-fifth largest in the country — larger than the populations of Atlanta, Miami or Sacramento.

But right now, the agency is at a pivotal point. More than 66% of its properties were built over 50 years ago.

“Modernizing NYCHA’s portfolio is no small task, but it is considerably less daunting when working in tandem with partner institutions like JPMorgan Chase,” said NYCHA Executive Vice President for Real Estate Development Jonathan Gouveia.

“We are extremely grateful to Chase for their generous investment in the PACT program since 2021, and their ongoing commitment to New Yorkers and enhancing the quality of life for NYCHA residents.”

Total transformation After modernization, many of the properties’ interiors are nearly unrecognizable. For example, when construction is complete on the Williamsburg Houses in Brooklyn, residents will have:

government, the National Park Service, Government-Sponsored Enterprises Fannie Mae and Freddie Mac, and more.

Not to mention the work done before a project even closes: For development to undergo the PACT program, resident approval is needed.

Developers connect with tenants to make sure they’re comfortable before funding is allowed to move forward.

Audubon Houses and Bethune Gardens Borough: Harlem 575 apartments These two buildings, located just a few blocks from each other in Upper Manhattan, serve a mix of families and seniors. Both buildings were put on the National Register of Historic Places in 2022, paving the way for HTC equity use.

The development team is comprised entirely of Minority Business Enterprises (MBEs) and led by Dantes Partners, a JPMorgan Chase client.

“Our collaboration with NYCHA and financial partners like JPMorgan Chase has been pivotal in empowering us to deliver a vision that resonates deeply with the community,” said Buwa Binitie, founder and CEO of Dantes Partners, the development division of Dumas Collective and developer for the PACT Modernization Project at Audubon Houses, Marshall Plaza

“You transform these NYCHA properties, you’re transforming lives. We’re using the power of the firm to drive real change. Stakeholders for these projects range from individual tenants all the way up to the federal government, a testament to the power of public-private partnership.”

Rendering of new common space at Audubon Houses and Bethune Gardens.

Credit: preserveabm.com

- Tim Karp, Head of Historic Tax Credits at JPMorgan Chase

Harlem River Houses was one of the first federally financed public housing developments in the country. The construction project included John Wilson Jr., the first Black graduate of Columbia University’s School of Architecture and one of the few licensed Black architects in New York City in the 1930s.

A “historic” way of funding

• Upgraded units with brand-new bathrooms and kitchens • Upgraded elevators and common areas • Upgraded security and heating/ cooling systems • Enhanced open spaces with new basketball courts, playgrounds and a community garden

One of NYCHA’s efforts to modernize and make the buildings sustainable for the long term is the Permanent Affordability Commitment Together (PACT) program. Through PACT, properties are gut-renovated and equipped with improved property management and on-site social services.

In addition to the construction upgrades, PACT program developments receive enhanced property management services — meaning shorter wait times for repairs, and more timely and proactive maintenance — and on-site social services for residents.

The PACT program involves partnerships with private developers who need financing, and JPMorgan Chase is one of the largest providers.

The firm has financed $1.3 billion to modernize over 6,500 units through PACT since 2021. This financing is provided through Historic Tax Credit (HTC) equity combined with bridge and construction financing.

“I’m excited for the renovations at Audubon Houses,” said Audubon resident Anna J. “I’ve been a tenant for 18 years and I value this community, but our homes need upgrades. The tenants have been part of this process from the very beginning. These updates are going to mean a safer, cleaner building, daily residential activities and modernized elevators that work! I’m grateful for this program and all of the partners coming together to improve our community.”

Buildings this old need to be updated to stay functional for tenants. After decades of insufficient funding and deferred maintenance, NYCHA now needs approximately $78 billion to modernize its property portfolio. An undertaking this large needs partners.

New York City’s public housing units might not initially appear eligible for HTCs, as they are not highly ornate buildings. However, as long as a public housing structure is over 50 years old and historically or culturally significant, it’s eligible to use HTC equity for updates. This significant financing vehicle is allowing JPMorgan Chase to show up for the city and NYCHA in a new way where it’s most needed.

The right people, the right approvals and lots of time While this is a creative way to finance public housing updates, it’s not easy.

These projects require coordinated effort between the city, state, private lenders and investors, the federal

and Bethune Gardens. “We are deeply embedded in the neighborhoods we serve, and our journey has been marked by the unwavering commitment of our team and the invaluable support of JPMorgan Chase. Their understanding of the unique challenges and opportunities in minority-led development has been crucial in revitalizing communities.

This partnership transcends mere business; it’s a shared commitment to enact lasting, positive change for the residents we serve.”

With over $1.3 billion financed, there aren’t many institutions stepping up like JPMorgan Chase.

JPMorgan Chase & Co. is a leading financial services firm based in the United States of America, with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $328 billion in stockholders’ equity as of December 31, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management.

Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally.

Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

Harlem River Houses Borough: Harlem 691 units

Renderings of the planned new kitchens and bathrooms in Harlem River Houses.

Credit: NYCHA

Williamsburg Houses Borough: Brooklyn 1,621 apartments Built in 1936, Williamsburg Houses was the first NYCHA property in Brooklyn and is a designated Historic Landmark. When completed, on-site social services will be provided by nonprofits St. Nicks Alliance and Grand Street Settlement, both with a long history of serving residents in the neighborhood.

Before and after images of kitchens and bathrooms in Williamsburg Houses.

Credit: JPMorgan Chase

CRAIN’S CONTENT STUDIO

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ON POLITICS

A peculiar probe of the DSA’s New York chapter raises questions of neutrality The state Board of Elections’ action against a socialist political group reeks of a partisan hit job

F

or those longing for the crip- inence in the late 2010s and startpling or outright defeat of the ed sending socialists to Albany, Democratic Socialists of this is a cause for celebration.

But whether they care or not, America’s New York chapter, the news that broke last month was something peculiar is happening.

The State BOE, which rarely tries heartening.

The New York Times reported to enforce election-related penalthat the State Board of Elections’ ties on any campaigns or commitchief enforcement counsel, Mi- tees, is seeking an enormous judgchael L. Johnson, is asking a ment against a political rival for court to help enforce more than what amounts to a paperwork violation. $300,000 in penalties Here’s what happened: against a group called DSA set up a multicandiDSA for the Many. The date committee to coordigroup is a special camnate with its candidates paign committee for the for office and spend alslate of socialist candimost unlimited funds to dates who ran for office boost their campaigns, over the last few years. If like a typical political parthe court sides with the ty committee. The candiBOE, DSA’s New York dates themselves had to chapter would have to Ross Barkan explicitly authorize the cough up not just the total cash they spent on those elec- committee to do so in writing.

DSA for the Many filed papertions but about seven times the work stating it was authorized to group’s cash reserves.

Such a penalty would severely support several candidates, inhamper DSA’s ability to aid its can- cluding incumbents like state didates and elected officials, as Sens. Julia Salazar and Jabari Briswell as its capacity to organize port. Johnson’s investigation around cherished causes like found that the group never prostrengthening tenant protections duced the documentation required to prove the authorizaand combating climate change.

For the many moderate Demo- tions, either a sworn affidavit from crats, real estate professionals, the candidate or a signed form. strong supporters of Israel, and Lacking those documents, Johnvarious others who have tangled son found the group had no spewith DSA since they rose to prom- cial status, meaning it had raised

and spent beyond the legal limits.

Leaders in DSA have fought back against these findings, pointing to guidance in writing they received from the BOE in the past that contradicted Johnson. The DSA candidates themselves all wrote to Johnson telling him they had signed off on the coordination at the time.

The BOE argued after-the-fact confirmation isn’t sufficient. Now the ultimate decision will be in the hands of a judge.

Election enforcement None of this would be unusual if the BOE, like the New York City Campaign Finance Board, had a long history of election enforcement. Unlike the CFB, the BOE is a partisan agency, stuffed with Democratic and Republican patronage appointees. It has struggled, in the past, to properly administer local elections, and has allowed sitting politicians to blatantly commit campaign finance violations such as not making their campaign finance reports publicly available.

Johnson himself is not a neutral enforcer. He’s a longtime Democrat who was a member of Andrew Cuomo’s administration and spent more than a decade as a counsel to the Assembly Democrats. He is

Jabari Brisport is among the socialist state lawmakers supported by a Democratic Socialists of America committee that is now under scrutiny by regulators. | NYS SENATE MEDIA SERVICES

close to the body’s leadership and has never attempted to extract enormous penalties from any members of the chamber.

DSA has been a thorn in the side of the Assembly for a half decade.

They’ve run repeated primaries against Democratic incumbents.

Emily Gallagher, an insurgent socialist from Brooklyn, defeated Joe Lentol, who had served in the Assembly since the 1970s. Two other Brooklyn socialists, Marcela Mitaynes and Phara Souffrant Forrest, unseated veteran Democrats, including a top ally of Hakeem

Jeffries. Zohran Mamdani in Queens felled Aravella Simotas, another lawmaker well-liked by the Democratic leadership.

It’s plausible Johnson doesn’t care about any of this. But why battle so hard to assess such an unprecedented fine for what amounts to a small mistake, an alleged failure to secure written permission from candidates who plainly wanted to coordinate with a campaign? It’s all quite strange and reeks of a hit job.

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

Superiority Burger, a James Beard semifinalist, faces grilling for allegedly owing on construction bill

By C. J. Hughes

Call it a case of every silver lining having a cloud?

On Jan. 24, as Superiority Burger was celebrating a coveted James Beard nod as one of the country’s top eateries, the vegetarian hot spot was also hit with a lawsuit from the firm that constructed its quirky East Village home.

cording to the complaint. And the conflict comes a year after Bellwood tried to recoup some of the money by slapping a mechanic’s lien on the business.

“Superiority Burger never disputed or timely rejected said invoices,” says the suit, which adds that “plaintiff duly performed all of its obligations under the contract.”

Superiority Burger has not yet filed a legal response in the case, which is in Manhattan Supreme Court. And restaurant co-owner Ashwin Deshmukh, who is named in the suit because he personally guaranteed much of the debt, the filing shows, could not be reached through the restaurant by press time.

It’s not the first time Superiority Burger has felt the heat over unpaid bills. The restaurant, which was based in a tiny berth on East Ninth Street from its founding in

The restaurant owes $140,000 of its $754,000 bill for the remodeling of 119 Ave. A, where Superiority Burger reopened last spring.

— The lawsuit says Brooklyn-based Bellwood claims the restaurant owes $140,000 of its $754,000 bill for the remodeling of 119 Ave. A, where Superiority Burger reopened last spring after relocating from around the corner, ac-

119 Ave. A, East Village | BUCK ENNIS

2015 until 2021, has battled in court with its ex-landlord over missed rent payments, documents show. The most recent case, brought by its landlord in June and not yet resolved, alleges Superiority Burger owes $52,100 plus legal fees.

Praised for its chickpea, quinoa, carrot and walnut patties, among other dishes, Superiority Burger has also won raves for the Avenue A location, the former home of longtime neighborhood mainstay Odessa Restaurant.

Awash in retrospective tributes

to classic diners, including paper place mats lined with local ads, the casual, 70-seat space also offers offbeat touches such as a jingle from the Tokyo subway system that plays in its restroom.

Bellwood, founded by Yogi Suziki, typically creates high-end interiors for stores, hotels and restaurants, including trendy omakase joints, and often works with major developers such as Two Trees Management, SL Green Realty Corp. and Heatherwood, according to its website. Bellwood could not be reached directly, and attorney Melanie Wasserman, who filed the suit on the company’s behalf, had no comment.

Superiority Burger, whose head chef (and co-owner) is Brooks Headley, is the only one of the 20 semifinalists in the “outstanding restaurant” category on the 2024 James Beard list located in New York City. The winner will be announced April 3.

6 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 5, 2024

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AG Letitia James urges New York-Presbyterian to rethink midwifery program shutdown at Allen Hospital with Crain’s, pressed board of trustees chair Jerry Speyer and chief exThe state attorney general is ecutive Dr. Steven Corwin for anpushing New York-Presbyterian swers about why they decided to executives to reconsider their de- shut down the program and how it cision to close the midwifery pro- will impact access to maternal gram at Allen Hospital in Inwood, health care for communities in stating that the shutdown could Inwood, Washington Heights and cause significant harm to birthing the Bronx.

James said that she was particupeople and women of color.

Allen Hospital is planning to larly concerned by “the lack of a close its midwifery program on meaningful explanation for the March 3, just a few months after closure and the dearth of time leadership first notified midwives available to implement even the that the program would cease to semblance of a replacement reexist in early December. The hos- gime.”

A representative from New Yorkpital has not outlined its reasons for the closure, stating that the Presbyterian did not immediately respond to a request for comment.

New York-Presbyterian’s plan to close the midwifery program at Allen Hospital comes as New York City sees persistent racial disparities in maternal and infant health care.

— Letitia James, New York state attorney general Black women face nine shutdown is part of a process to times the risk of dying in childbirth than white women, city data show. “evolve” its perinatal care model.

New York State Attorney General Puerto Ricans are twice as likely to Letitia James expressed “profound experience infant mortality.

James said that expanding, not concern” about that closure in a letter sent to New York-Presbyterian reducing, access to midwives is executives Jan. 30. The letter, shared the “single best tool” the state has

By Amanda D’Ambrosio

“I believe that the elimination of Allen’s midwifery program is a step in the wrong direction.”

New York State Attorney General Letitia James sent a letter to New York-Presbyterian executives requesting more information on the planned closure of the midwifery program at Allen Hospital and urging them to rethink the decision. | BUCK ENNIS

to combat maternal and infant mortality in vulnerable communities and reduce racial disparities.

She noted that the widespread closure of midwifery programs in the U.S. in the 1900s was tied to immigrant quotas and Jim Crow laws. Allen Hospital’s midwifery program, which started in 1955, has a history of “inclusion and de-

fying the historical bigotry against midwives” — a history that James said ought to be preserved.

“I believe that the elimination of Allen’s midwifery program is a step in the wrong direction,” James said, instead urging executives “to reconsider this decision and look instead at expanding the program.”

James noted that her office is re-

sponsible for evaluating the fiduciary duties of charitable organizations, and requested that New York-Presbyterian provide records around the decision-making associated with the planned closure, alternatives to closure that executives considered, impacts to the community and the timeline for replacing midwifery services.

NOTABLE LEADERS IN SUSTAINABILITY Nominate a leader who leads sustainability initiatives at an organization and makes an environmental impact.

NOMINATE BY FEB. 16 CrainsNewYork.com/ NotableNoms

February 5, 2024 | CRAIN’S NEW YORK BUSINESS | 7

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EDITORIAL

The city should rethink its scare campaign against social media giants M

ayor Eric Adams has launched a broadside against the social media behemoths including Facebook, YouTube and TikTok in a campaign that calls to mind the crusade former Mayor Michael Bloomberg fought a decade ago against Big Gulps.

As with Bloomberg’s ban on big sodas, the intentions of Mayor Adams’ campaign are honorable, and the public-health ramifications are real. Mounting evidence shows that social media use can be harmful to children, fueling loneliness and depression. The industry’s CEOs are facing a well-earned grilling in Congress.

But Adams’ adversarial approach — unveiled in his State of the City speech last month — is overwrought. The city’s campaign uses graphics that liken social media services to cigarettes. Contrary to cigarettes, and the ubiquitous vapes the city correctly warns about, there are plenty of constructive and healthy ways to use social media in moderation, to connect, learn and spread important messages.

Case in point: Adams and his health commissioner Dr. Ashwin Vasan are using

social media to amplify their warnings about social media.

“Social media companies are fueling a mental health crisis, especially for our young people,” the mayor posted on Instagram. “Just as past U.S. Surgeon General did with tobacco and guns, we’re treating social media like other public health hazards and ensuring that tech companies take responsibility.”

A message of moderation Suggesting social media is irreparably toxic is an odd stance for a city that has embraced legalized marijuana, was caught flat-footed by hundreds of unlicensed marijuana stores, and is courting developers to open a casino in the city for the first time. Perhaps a message of moderation would make more sense?

Mayor Adams, who is admirably sensitive to youth health and mental health issues, should refocus his social media campaign on education encouraging responsible usage, prod parents to more closely monitor their kids’ social media,

Mayor Eric Adams and his Instagram post | BENNY POLATSECK, MAYORAL PHOTOGRAPHY OFFICE / INSTAGRAM

and partner with tech companies to implement constructive solutions that reduce toxicity and minimize harm. These companies employ thousands of New Yorkers and, even if reluctantly, have of late shown a willingness to improve parental controls, encourage social media use in moderation, and engage construc-

tively with government regulators.

Mayor Bloomberg’s soda ban failed in a legal challenge, but not before critics of the policy pilloried him as “Nanny Bloomberg.” Adams would be wise to pivot back to pressing quality-of-life issues in his mayoral wheelhouse, starting with affordable housing.

PERSONAL VIEW

No time to waste: New York’s urgent transition to zero-emission vehicles requires actionable sales data

N

Unfortunately, traditional auto dealers ew York’s environmental movement is at a critical juncture. In or- have not done their part to help the state der to meet the ambitious goals meet its goal of getting 850,000 zeroestablished by the Climate Leadership emission vehicles on the road by 2025. In and Community Protection Act, the state fact, we are nowhere near meeting it, while California is exceeding its transimust take action. tion goals. The biggest difference Gov. Kathy Hochul has made between the two states’ approach strides by advancing large-scale toward ZEVs is that California currenewable energy projects rently allows electric vehicle manthroughout the state. New Yorkers ufacturers to sell directly to conbegan to realize the benefits of sumers throughout the state while these projects in December as the New York only allows for five “difirst offshore wind turbines began rect sales” locations, which are powering homes on Long Island mostly located downstate. Unforwith clean, renewable energy. tunately, the New York State legisHowever, clean power generation Julie Tighe is is only one part of the solution. the president of lature continues to oppose legislation that would allow for the The state must also reduce carbon the New York expansion of new “direct sales” emissions in economic sectors League of locations out of concern of its imsuch as transportation.

Conservation pact on traditional auto-dealers.

One of the largest sources of Voters.

Recently Sen. Pete Harckham greenhouse gas emissions in New York is the transportation sector — ac- introduced legislation that offers a comcounting for nearly one-third of the state’s promise. The bill would require the state total emissions. Confronting this sector is to track the sale of ZEVs in New York. Varikey to addressing the climate crisis and ous state agencies, including the Departserves as a critical step toward creating a ment of Environmental Conservation, the cleaner, greener New York. To be success- New York State Energy Research and Deful, we need to sell many more electric velopment Authority, the Department of vehicles and begin transitioning vehicles Motor Vehicles, and the Department of with combustion engines, especially Transportation, would be required to provide regular reports on the sales of new trucks and buses, to renewable fuels.

Traditional auto dealers have not done their part to help the state meet its goal of getting 850,000 zeroemission vehicles on the road by 2025. | ISTOCK

zero-emission vehicles by car dealers in the state. These reports would begin in December 2024 and continue bi-annually until December 2034. If the initial report shows that less than 35% of vehicle sales in 2026 will be zero-emission vehicles, the Department of Motor Vehicles must issue up to ten registration certificates for entities that manufacture or assemble ZEVs without franchised dealers in New York.

The legislation is a well-crafted solution.

It gives traditional auto dealers the opportunity to help the state meet its goals and only changes the status quo if New York continues to fall behind. Further, in a time

of economic uncertainty, Harckham’s plan has no impact on state taxpayers, making it an economically responsible approach to an environmental challenge. The bill’s focus on actionable data will provide legislators with concrete metrics to adjust policy while ensuring that environmental strategies are rooted in reality and effectiveness.

The New York League of Conservation Voters, along with other like-minded environmental groups, are urging the legislature to pass this bill. It’s time for New York to take the driver’s seat in the journey towards a cleaner, greener and sustainable future.

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 | FEBRUARY 5, 2024

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PERSONAL VIEW

N

ewburgh just kicked off the pro- rent-stabilized apartments cannot be macess required to launch rent stabi- terially raised after vacancies occur; good lization, making it the third locality cause eviction would allow for that.

Good cause eviction would apply to all in New York to implement such measures properties except owner-occuafter Kingston and New York pied 1- to 4-unit properties; rent City. Elected officials’ move tostabilization only applies to propward rent regulation reminds us erties with six or more apartments of the “good cause” eviction bill that were built prior to 1974. The that looms large for property coverage areas of the laws are difowners. ferent too. The Housing Stability Good cause eviction would and Tenant Protection Act (HSTforce owners of multifamily PA) of 2019 gave individual locales properties to renew leases with the rights to pass rent stabilization tenants unless there was a good on their housing stocks, which cause for not doing so, such as Romain means small coverage areas. Good non-payment, or breaking claus- Sinclair is the cause eviction, on the other hand, es in the lease contract. Good director of can only be voted in at the state cause eviction first surfaced in investment level, per the NYS Supreme the 2019 legislative session, in- sales at troduced by Sen. Julia Salazar of Greysteel and a Court’s response to Albany’s good cause law in summer of 2022. That Brooklyn. Besides forcing own- multifamily ers to keep tenants in place, the investor in New means good cause would apply to almost all investment rental propbill would also cap rent increases York. erties in the state. to the greater of 3%, or 1.5 times Cities like Albany and Rochester have the percentage change in the Consumer taken steps, like Newburgh, toward rent Price Index.

There is much overlap between rent sta- stabilization through emergency declarabilization, as it currently exists in New tions. Given the great similarities between York, and the proposed good cause evic- the policies, it’s possible to imagine that tion law. Both laws restrict rent increases the calls for good cause soften once rent and force landlords to renew leases to stabilization is passed. In New York City, their tenants. The laws also differ. Rents on rent stabilization covers 45% of the apart-

ment stock. If that ratio is similar in Albany and Rochester, for instance, those cities and their officials could feel less urgency to pass a good cause measure because they will have solved half the problem — capped rents and quelled tenant displacement fears. To rally the troops for another legislative battle might be redundant. The energy and enthusiasm for good cause eviction could slow.

How to run buildings efficiently No good cause eviction in 2024 – that’s one way to define a win for NYC landlords.

Governor Hochul didn’t include a single mention of the phrase “good cause eviction” in her 2025 NYS Budget Resolution, even though the word “housing” appeared 67 times. Perhaps it really is possible to avoid good cause.

On the other hand, landlords may consider how they can “win,” or run their buildings effectively, if a form of good cause does pass. There are a few areas of the law that are important to get right.

BLOOMBERG

Local rent-control initiatives may soften the push for ‘good cause’ bill

These are:

◗ The circumstances under which owners can

remove tenants

◗ Enforcement mechanisms behind rent in-

creases

◗ The percentage rent increases

Ideally, owners win on all three counts: preserving the ability to vacate their buildings during property sales, flexible enforcement protocols on good cause, and high ceilings on rent increases each year. If not all three are possible, owners should focus on obtaining higher rent increases.

The other two provisions are intrinsic features behind good cause, and it’s unlikely that tenant advocates budge on those. But if owners can get ample rope on yearly rent increases, that could make things more palatable. That would be a small, but reasonable win in the face of this strong regulatory headwind.

PERSONAL VIEW

Improving the environment is key to small-biz success

S

mall businesses are the lifeblood tivity related to a sick day.

Pollution doesn’t just reduce productivof local communities. To that end, there’s good news when it comes to ity, it also impacts profit. A study from Yale the Bronx: According to a report from the found that “that consumers spent signifiCenter for an Urban Future the number of cantly less — about $50 million less, in fact new business applications are increasing — on days when ozone pollution was faster in the Bronx, which saw a 66% in- higher even by just 10%.”

And catastrophic climate events, like crease, than any other borough. But small businesses are also fragile; their success is Superstorm Sandy, pose existential threats to small businesses. A study out deeply tied to a wide range of of the C. T. Bauer College of Busicommunity level circumstances, ness at the University of Houston including the environment. The found that, “in every sector, esBronx Economic Development tablishments in the smallest size Corporation, in partnership with quartile experience large reducthe New York Power Authority, is tion in sales, modest reduction in doing something about it. employment, and significant inClearly climate challenges, like crease in likelihood of exit followincreased flooding, and environing exposure to [catastrophic enmental factors, like pollution, afvironmental events].” fect everyone. But not everyone is Marshall A. As Bronx Borough President Veequally impacted. Small business Strawbridge owners are disproportionately is the director of nessa Gibson often says, “the burdened by higher costs and outreach for the Bronx is open for [small] business.”

We intend to keep it that way and lower profits as a result of envi- Bronx therefore know we must also adronmental adversities.

Economic dress the borough’s growing enviAir pollution, for example, Development ronmental and climate problems. leads to significant employee sick Corporation.

In November we took our first days. The National Institute of Health raised this as a concern in a study step, announcing a $1 million grant, more than two decades ago and multiple through our Green Action Challenge, to studies out of Europe, including one that Bronx Community College to invest in imfound the U.K. lost 6 million work days a proving the environment and climate reyear at the cost of over $22 billion, contin- silience. NYPA is funding the work as part ue to confirm the link. Small businesses, of its environmental justice program that with few employees to cover for a sick em- supports under-served communities.

BCC, which was selected from a pool of ployee, pay a higher cost for lost produc-

Wildfire smoke engulfed the New York City skyline in June 2023. | BLOOMBERG

seven Bronx-based colleges and universities that also applied for the Green Action Challenge, will use the award to launch the BCC Sustainability Hub.

Green workforce The hub will address environmental issues on campus and create a green workforce training program. Specifically, the funding will be used to save an estimated 2 million gallons of water; create rain gardens to address flooding and erosion; compost nearly 900,000 pounds of food waste and keep nearly 180,000 plastic utensils out of landfills, significantly reducing the number of garbage trucks on the road; and develop a solar roof demon-

stration, potentially offsetting nearly 100 metric tons of carbon dioxide annually — the equivalent of taking about 40 gasolinepowered cars off the road.

That’s just the start. We hope to run the Green Action Challenge program yearly.

Furthermore, we are committed to addressing all the roadblocks that prevent Bronx-based small businesses from thriving. These businesses are the backbone of communities and residents. They contribute to thriving “main streets” which create safer, more vibrant communities. And, they create jobs for local residents, contributing significantly to our labor force.

Supporting them is not just good for them, for their neighborhoods, and the borough — it’s good for the whole city.

FEBRUARY 5, 2024 | CRAIN’S NEW YORK BUSINESS | 9

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.crainsnewyork.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

ACCOUNTING

CONSTRUCTION

LEGAL

NONPROFIT

CBIZ Marks Paneth

Hertz Herson CPA LLP

Clune Construction

Benesch

YAI

Jessica Greenhouse was promoted to Managing Director in the Real Estate Group at CBIZ Marks Paneth and is a Shareholder in Mayer Hoffman McCann P.C. (MHM). A CPA, she specializes in accounting, auditing, and tax services for complex real estate entities, including commercial, residential, industrial, and hospitality properties and new construction and developments.

Jessica is based in the New York City office.

Hertz Herson CPA LLP is proud to announce Philip Pasmanik, CPA, MST and Peter Blumkin, CPA, CGMA have been admitted Pasmanik as Partners, solidifying their roles as esteemed members of the firm’s leadership team.

This is a significant milestone in the Blumkin firm’s continued growth and commitment to delivering excellence in accounting and advisory services. Philip Pasmanik has extensive experience in Federal, International, and State and Local taxation. Peter Blumkin manages tax compliance for various privately owned and closely held businesses.

Providing unparalleled expertise and service to its clients, Hertz Herson continues to expand its capabilities and solidify its position as a leading accounting and advisory firm. hertzherson. com/watch-us-grow/

Clune Construction is pleased to announce the promotion of Sean Clune to President of the New York office.

With 20 years of construction management experience, he is known for his ability to establish strong partnerships.

He has played a pivotal role in establishing Clune’s presence in the region and in shaping the culture of their New York office.

A registered LEED AP, Clune holds a Bachelor of Arts from Tulane University.

Douglas DiMedio has joined Benesch as a Partner in the firm’s Corporate & Securities Practice Group and Co-Chair DiMedio of the Private Equity Practice Group.

Doug advises on various corporate transactions and matters, including acquisitions, Andoh divestitures, joint ventures, equity financings, corporate restructurings and general corporate governance.

Rena Andoh has joined Benesch as a Partner in the firm’s Litigation Practice Group. Rena has substantial trial and arbitration hearing experience, including acting as lead counsel/first chair trial counsel in complex commercial, employment, IP and trade secret theft litigation matters, and routinely handles expedited litigation such as restraining orders, attachments, and injunctions.

Anand Shah has joined YAI, one of New York’s largest healthcare nonprofits, as General Counsel.

In this role, Shah serves as the principal legal officer for YAI’s mission and has overall responsibility for the leadership and direction of YAI’s legal functions. He was most recently Senior Vice PresidentDeputy General Counsel at HBC LP, a holding company of Saks Fifth Avenue, Saks OFF 5TH, and Hudson’s Bay Company.

ACCOUNTING

CBIZ Marks Paneth Jessica Strom was promoted to Managing Director in the Commercial Business Group at CBIZ Marks Paneth and is a Shareholder in Mayer Hoffman McCann P.C. (MHM).

A CPA, she serves clients across a wide range of industries, including restaurants, retail, manufacturing, and professional services. She oversees all aspects of audit, review, and compilation engagements and advises clients on all facets of accounting issues. Jessica is based in the New York City office.

COMPANIES ON THE MOVE To place a listing, visit newyorkbusiness.com/ companymoves or contact Debora Stein at 917.266.5470 / dstein@crain.com MERGERS & ACQUISITIONS

CONSTRUCTION

CM&B CM&B, a Boston and New Yorkbased construction management firm and general contractor, proudly welcomes Mark Skawinski to the firm’s NYC office as a Project Executive. Mark’s dedication to excellence aligns with the values and traditions of CM&B. He has a reputation for trustworthy project management, giving clients confidence in his capabilities while delivering successful projects. Mark’s industry knowledge and connections will continue to propel CM&B’s growth in the New York Metro Area.

P010_CN_20240205.indd 10

Cumming Group cumming-group.com Cumming Group is pleased to announce its merger with Zubatkin Owner Representation (Zubatkin). Zubatkin will expand Cumming Group’s NYC headquarters headcount to more than 200 team members, while also growing the firm’s presence in Florida. Zubatkin’s unique experience in the institutional sector will enhance Cumming Group’s ability to serve the cultural and educational markets in the United States and Europe.

Zubatkin specializes in managing the planning and implementation of capital construction projects for not-for-profit institutions, including museums, performing arts centers, educational facilities, and religious organizations, and currently oversees some of New York City’s most prominent private developments.

CONSTRUCTION

Clune Construction Clune Construction is pleased to announce that Nancy Chin has been promoted to Executive Vice President of their New York office. In her 12year tenure, she has been instrumental in growing Clune into a prominent New York general contractor. She has been integral in training new talent and taken a leadership role in establishing continuous improvements at Clune. Chin has a Bachelor of Science degree in Civil Engineering from the New Jersey Institute of Technology.

ENGINEERING

Syska Hennessy Group Syska Hennessy Group, the international engineering firm, has appointed Darren Alfano, CPA, as chief financial officer. He is based in the firm’s New York City headquarters. Alfano has more than 25 years of experience in all aspects of financial management, accounting, analysis, and controllership.

Most recently, he served as chief financial officer at Eastern Communications, Ltd., LLC, a telecommunications equipment distributor based in Long Island City.

Contact Debora Stein dstein@crain.com

CrainsNewYork.com/POTM

LEGAL

Benesch Kevin J. Kiley Jr. has joined Benesch as an Associate in the firm’s Real Estate Practice Group.

Kevin represents clients in a wide variety of complex commercial real estate transactions. He focuses his practice on commercial real estate finance, including the representation of investment banks, commercial banks, family offices and private equity clients in the structuring and restructuring of mortgage and mezzanine debt, construction financing, preferred equity investments and joint ventures.

TECHNOLOGY

TransPerfect Jin Lee has been promoted to CoCEO of TransPerfect, the world’s largest translation services firm, alongside the company’s Founder, Phil Shawe.

As Co-CEO, Jin will focus on Production, Client Services, and incorporating new technologies, such as AI, to create efficiencies for the firm’s global client base.

Jin started at TransPerfect as a Project Manager in 2003 and worked his way up, most recently serving as Senior Vice President of Global Production, where he managed the company’s translation, desktop publishing, and Strategic client services team. Jin also led the company’s proprietary AI platform, DataForce, the legal review division, and the services side of Trial Interactive, TransPerfect’s proprietary eTMF technology.

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2/2/24 1:50 PM

Embattled Roosevelt Island leader put on leave from state post while allegations are reviewed

By Nick Garber

The embattled leader of the state body that controls Roosevelt Island was placed on administrative leave last month, along with a top associate, over concerns about workplace management.

It’s the latest instance of dysfunction that has gripped the organization for months.

Shelton Haynes, the president and CEO of the Roosevelt Island Operating Corp., was put on leave after the corporation’s board of directors “received notice of several employee concerns about the RIOC workplace,” according to a Jan. 16 statement. Haynes will be placed on paid leave along with RIOC’s general counsel, Gretchen Robinson, while the board hires an outside investigator to review the unspecified allegations.

The workplace allegations, apparently brought by current RIOC employees, appear distinct from the claims of corruption and mismanagement that three former employees lodged against Haynes and Robinson in a lawsuit last year. Haynes and Robinson, in turn, filed their own lawsuit months later against their own bosses, Gov. Kathy Hochul’s administration, alleging that the state had prevented them from responding more forcefully to the claims against them. Both Haynes and Robinson are Black and said they were victims of racial discrimination.

Public corporation Created in the 1980s, the public corporation controls the roads, buildings, police force and transit for the 12,000-person island that sits in the East River between Manhattan and Queens. The unelected body is ultimately con-

Shelton Haynes, president and CEO of the Roosevelt Island Operating Corporation (inset), was put on administrative leave in January amid dueling lawsuits that point to dysfunction within the state-run authority. | CORCORAN MARC A. HERMANN / MTA (INSET); BUCK ENNIS

trolled by the governor, and expects to take in $39 million in revenues in the coming fiscal year — mostly through rent payments from private developers that have built housing on the island. (Most of that development has been done by Related Cos. and Hudson Cos., thanks to a 1997 deal with RIOC that provided for nine new mixed-income rental buildings.)

Haynes, a former housing official in Georgia, took over as RIOC’s leader in 2020 after the unceremonious ouster of his predecessor in

an unrelated scandal. Milt Williams, an attorney for Haynes and Robinson, said in a statement that the board’s decision in December was “yet another in a long line of baseless investigations initiated to harass and attack” the two officials.

Haynes and Robinson were never put on leave when initial allegations were made against their leadership last year, Williams noted.

“After Mr. Haynes and Ms. Robinson were forced to sue to vindicate their rights by filing this lawsuit, the attacks against them increased,”

The Roosevelt Island Operating Corporation forecasts $39 million in revenues in the coming fiscal year, mostly through rent payments from housing developers. | BUCK ENNIS

Williams said.

Hochul’s office declined to comment on the administrative leave,

the results of an outside investigation it commissioned. The September 2023 report from the law firm Greenberg Traurig largely backed Haynes’ version of events, but he and Robinson claimed that Hochul administration officials removed another section that would — Milt Williams, attorney for Haynes and Robinson have confirmed their claims of raciting pending litigation. Both cial discrimination.

Haynes and Robinson’s suit and the Krueger said in a statement in case against them remain pending.

December that she was not privy Last April, three former RIOC to the board’s reason for putting employees said in a lawsuit they Haynes and Robinson on leave. were fired after they raised objec- But she added that RIOC “is a pubtions to the corporation’s leader- lic benefit corporation, and it is ship. Among their claims were the responsibility of each of its that Haynes selected a personal employees, from top to bottom, as friend to run a Covid-19 testing public servants, to act in the best site using public money and that interest of the community.” officials covered up details of a The leave was first reported by drowning death at a public pool. the website Roosevelt Islander.

The Roosevelt Island Operating Corporation is a quasi-private enRange of grievances tity akin to the Empire State DevelHaynes denied the allegations, opment Corp. or the Metropolitan and in turn alleged in September Transportation Authority, and that five members of Hochul’s of- such corporations have long been fice subjected him to unfair scruti- targets of ethics concerns. Indeed, ny and stopped him from publicly RIOC’s recent history is tarred defending himself against the alle- with scandal: A 2014 state probe gations. Haynes laid out a broad uncovered criminal kickbacks, range of grievances, alleging that nepotism and other misconduct a local blogger had conspired by three RIOC executives, leading against him with two elected offi- to a prison sentence for its former cials who represent the island and vice president. Haynes’s predecesManhattan: state Sen. Liz Krueger sor as CEO, Susan Rosenthal, was and Assembly member Rebecca fired by Gov. Andrew Cuomo in 2020 after being accused of makSeawright.

Haynes and Robinson also al- ing “racially and sexually offensive leged that the state “sanitized” remarks.”

“After Mr. Haynes and Ms. Robinson were forced to sue to vindicate their rights by filing this lawsuit, the attacks against them increased.”

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2/1/24 4:10 PM

TransPerfect, language translation company infamous for epic squabble among its co-founders, names co-CEO

By Aaron Elstein

Phil Shawe, a founder of TransPerfect, one of the nation’s largest language translation companies, has decided to share the CEO title with a longtime deputy, six years after Shawe prevailed in an infamous, drawn-out, $250-million legal battle with his longtime business partner and former lover.

Midtown-based TransPerfect, launched in a New York University dorm room in 1992, provides translation services in more than

information. The company generated $1.2 billion in revenue last year, a 3% increase.

Shawe, 54, said he’s ready to hand some of the reins over and anointed Jin Lee as co-CEO. A Crain’s 40 Under 40 in 2021, Lee, 42, has worked at TransPerfect for more than 20 years and is senior vice president for global production.

“He’s the person with whom I feel most comfortable sharing duties,” said Shawe. “I’ll be sharing decision-making in ways I have not in the past.”

Shawe and NYU classmate Liz Elting co-founded TransPerfect with a borrowed computer and $5,000 in credit card loans.

The two got engaged but didn’t marry and together built a highly successful business before a bitter falling out burst open in 2014. The feuding partners spent four years and $250 million suing each other and various business associates, plus Shawe’s mother and Elting’s husband. Shawe was represented by Alan Dershowitz, an honored guest at an office

“He’s the person with whom I feel most comfortable sharing duties. I’ll be sharing decision-making in ways I have not in the past.”

— Phil Shawe, founder of TransPerfect 200 languages with more than 9,000 employees and 115 offices globally. In 2020, Mayor Bill de Blasio recognized the company for donating services early in the pandemic to keep New Yorkers informed of the latest Covid-19

Phil Shawe (left) and Jin Lee | BUCK ENNIS

party Shawe put on in 2017 at the 1 Hotel Brooklyn Bridge in which Snoop Dogg entertained into the wee small hours of the morning.

The feuding partners didn’t stop fighting until a Delaware judge in 2018 ordered Elting to sell her 50% share of TransPerfect to Shawe for $385 million. She left business to focus on philanthropy. In 2020 her support of the American Heart Association was recognized. She’s a trustee at alma mater Trinity College and member of the Sandy

Hook Promise Leadership Council, which is dedicated to protecting children from gun violence.

Throughout all the turmoil at the top, TransPerfect continued to grow and branched into new lines of business, such as subtitles and dubbing for movies.

“Half the movies released in Europe we have some role in,” said Shawe.

In his reduced role, Shawe said he’ll focus on sales and technology and leave much of the rest to Lee, who he described as a “a great

grower and operator of businesses.”

Shawe said he’ll keep his 99% stake in the firm – his mother has the other 1%. Giving Lee the coCEO role could help “let loose” executives keen to grow the company via acquisitions and selling clients additional services, he said. One promising line of business is helping companies make better “how-to” videos for customers in a variety of languages.

“I’m pleased for the opportunity and excited about TransPerfect’s future,” Lee said.

CRAIN’S NEW YORK BUSINESS

Gain a Competitive Edge To learn more, email Andy Cooper at andy.cooper@crain.com

12 | CRAIN’S NEW YORK BUSINESS | February 5, 2024

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2/1/24 4:13 PM

Repair work for Cross Bronx Expressway’s surrounding neighborhood division gets $150M federal grant

By Nick Garber

New York will advance an infrastructure project repairing some of the harms wrought by the Cross Bronx Expressway thanks to a new $150 million White House grant, Gov. Kathy Hochul announced on Jan. 25.

The money will go toward a connector road running parallel to the notorious six-mile highway for about one mile in the Central Bronx between Rosedale Avenue and Boston Road. It would include pedestrian and bicycle access as well as dedicated bus lanes, in response to longstanding complaints about the area’s inaccessibility to everyone other than drivers.

The roadway, currently in its early engineering phase, would be one of the most significant steps taken thus far toward re-imagining the Cross Bronx: A Robert Moses-era expressway that cuts through multiple working-class neighborhoods of color, spewing air pollution into communities that have some of the highest asthma and respiratory disease rates in the country. Like other highways of its era, it also severed formerly interconnected neighborhoods from one another.

The city is in the midst of its own

$2 million federally-funded study looking at how to improve conditions along the highway, which will release its findings at the end of this year. The most ambitious idea, championed by U.S. Rep. Ritchie Torres and U.S. Sen. Chuck Schumer, would “cap” several miles of the highway with a deck that could be covered with parkland or housing.

‘Undo damage of the past’ The connector road announced Jan. 25 would follow the Cross Bronx east-west, along a stretch where it runs both above street level and below-grade. Its exact route was not specified and it would not open before around 2030, but the state transportation department will discuss the project this spring and summer with Bronx community boards and environmental groups.

It would also cross the Bronx River, creating new connections between neighborhoods like West Farms and Soundview and a direct link to the newly expanded Starlight Park, Hochul’s office said. Both the road project and the city’s study were funded by the 2021 Bipartisan Infrastructure Law. Rachel Weinberger, chair for

transportation at the Regional Plan Association, called the project an exciting sign of policymakers’ interest in tackling the Cross Bronx quandary, although the road pales in comparison to the ultimate task of redesigning or capping the highway.

“This is a fabulous first step on the journey to knit that neighborhood back together and undo the damage of the past,” she said.

“We’ve been having this conversation a long time in New York.”

The road would also bring some immediate benefits. The state will begin work in 2026 on a separate project to replace five aging bridges spanning the expressway in the same area, and the new connector could serve as a temporary diversion that would eliminate the need to close one lane in each direction along the Cross Bronx itself, the state said. The roadway would also speed up the bridge project from six years to four, and eliminate the need to divert traffic onto local streets. The temporary roadway would be converted into the new pedestrianand bike-friendly route after the bridge project is done.

“While this is a first step in a long process, it is an important one that will advance our goal of reconnecting communities by re-

A rendering of the connector road that would run alongside the Cross Bronx Expressway, improving access for pedestrians and buses. | NEW YORK STATE DEPARTMENT OF TRANSPORTATION

imagining critical infrastructure to benefit the people to live there, while helping to ease the negative impacts of vehicle traffic and pollution,” Hochul said in a statement.

The homes of about 40,000 residents were bulldozed in the 1950s and ’60s to make way for the Cross Bronx Expressway.

An average of 300 diesel trucks travel the highway every hour, and tens of thousands of cars pass through each day. The 220,000 New Yorkers who live along the

corridor suffer from high air pollution and noise levels.

The Cross Bronx is not the only highway in the city being eyed for change. Mayor Eric Adams’ administration is pursuing a potential rebuild of the crumbling Brooklyn-Queens Expressway, but its plans have run into criticism from elected officials and transportation advocates for widening the highway rather than seeking to shrink it.

Caroline Spivack contributed reporting.

Lost radio signal caused Manhattan subway derailment on the Upper West Side last month, federal report says “the second accident on New York City Transit property in 37 days.”

The first occurred on Nov. 29 The derailment of two trains that snarled Manhattan subway com- when a track worker was struck mutes for three days last month and killed by a D train near the was the result of a lost radio signal, 34th Street-Herald Square station. according to a preliminary report Then just a week after the Jan. 3 released Jan. 25 by the National derailment, another accident occurred when a Brooklyn F train Transportation Safety Board.

Federal officials said the seem- jumped the tracks in Coney Island.

Richard Davey, president of New ingly simple explanation lies at the heart of the Jan. 3 collision be- York City Transit, said during a Jan. tween two 1 trains near the 96th 25 media briefing that he’s not Street station on the Upper West “overly concerned” about radio or Side. The derailment left 25 pas- brake issues leading to repeat desengers with minor injuries and railments. In any given week, subdisrupted service for riders on the way trains are operated in a similar way to the disabled 1 train at least a 1, 2 and 3 lines. dozen times, said Davey.

“Look, an accident happened so we need to make sure that that doesn’t happen again,” said Davey.

“We’re also going to look at procedures and process; — Richard Davey, president of New York City Transit it’s not just about individual conduct The mid-day derailment marked but it’s also about ensuring that we a worrying uptick in mishaps in have the clearest processes, procethe subway system, which prompt- dures, and practices in place.”

Ahead of the collision on the 1 ed the NTSB to investigate. Jennifer Homendy, chair of the NTSB, line the NTSB said “an unruly passaid last month that she launched senger” had pulled the brakes of a review of the Manhattan subway the first five cars of the train, discollision out of concern that it was abling it. MTA workers managed to

By Caroline Spivack

“It’s not just about individual conduct but it’s also about ensuring that we have the clearest processes, procedures, and practices in place.”

reset all the brakes except for those in the third car and were taking it for further repair. The subway’s operation control center instructed the workers to cut out the brakes for the first five of the 10 train cars, and to push the train to the 240th Street Train Yard Facility.

Clearer warnings The MTA said it is exploring placing clearer warnings to the consequences of pulling an emergency brake in train cars — to deter straphangers from frivolously pulling the emergency brake — but that the authority does not plan on making those cords harder for riders to access out of a concern for passenger safety.

“There hasn’t been a real conversation internally that we should cut those all off,” Davey said, “because what I do worry about is those legitimate instances where a customer might need to pull that emergency cord to get attention for a medical issue or whatever else is happening.”

The tracks were equipped with what’s known as trip-stops, which activate a train’s emergency brakes if the train passes through a stop signal. The trip-stops should have kicked in after the miscommunication, but because the brakes on the first five railcars had been cut, the emergency

The scene of the Jan. 3 subway derailment in the tunnel just north of the 96th Street station in Manhattan. | MARC HERMANN / MTA

brakes could not be activated, and the train rammed into the in-service 1 train filled with passengers.

“In interviews with [NTSB] investigators, the flagger said he lost radio communications with the transit system supervisor near 96th Street Station,” the preliminary report states. The term “flagger” refers to the MTA employee in the first car serving as the eyes of an out-of-service train experiencing mechanical issues.

“The transit system supervisor did not receive the flagger’s instruction to stop, the train passed

by a signal requiring a stop at the end of the 96th Street Station platform, and the collision occurred,” according to the report.

The NTSB’s investigation into the collision is ongoing and will focus on NYCT’s procedures for moving disabled trains, its radio communication practices and the lack of modern cameras and equipment on the train that could have sped up the investigation, according to the agency.

The MTA’s investigation also remains ongoing and may ultimately result in policy and operational changes, Davey said.

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2/1/24 4:24 PM

Con Edison advances $1.2B project to boost electric grid capacity in southeast Queens at ratepayers’ expense Con Edison describes the current Jamaica network as its largest, New York ratepayers will be on serving more than 162,000 custhe hook for a $1.2 billion Con Ed- tomers, including transportation ison project to boost electric grid hubs such as John F. Kennedy Incapacity in southeast Queens. The ternational Airport, the Long Isutility said the new networks and land Railroad’s Jamaica Station substations will meet the area’s and at least four major MTA bus surging demand, partially driven depots. In the utility’s petition to by the Metropolitan Transporta- state regulators, it claimed that tion Authority’s efforts to electrify without the investment, demand during times of peak usage would its bus depots and fleet.

The state Public Service Com- exceed what the network was demission on Jan. 18 approved cost signed to handle by 2026.

In a statement, PSC Chair Rory recovery for Con Edison’s Reliable Clean City Idlewild Project. The ef- Christian backed the utility’s fort will divide the existing Jamai- project “to promote the transica network in two and build a pair tion to a clean-energy economy while ensuring the reliability of the electric grid overall.”

Typically, the need for major utility upgrades are hashed out as part of the regular rate case — Tim Cawley, Con Edison’s chairman and chief executive process for utilities, but beof substations so that the local grid cause Con Edison raised the need can meet a surge in demand for load relief at the end of last brought on by New York’s efforts year’s rate case, the utility was alto electrify its transportation and lowed to file a separate petition.

PSC commissioner Diane Burbuilding systems.

“As we work towards New York’s clean energy goals, we must think more boldly about ways to serve increased demand for electricity while maintaining a reliable grid.”

man, who voted against the expense, said the investment should have been scrutinized as part of the rate case process. She similarly took issue with the need for state customers to foot the bill for upgrades primarily supporting MTA and JFK projects.

Bulk of the costs “If these were customers that were private developers, we would probably be having a more detailed conversation on the cost allocation that they needed to pony up rather than being borne solely by the ratepayers,” Burman said during the vote. She added that it’s not “sustainable” for ratepayers to bear the bulk of the costs of electrifying New York’s economy moving forward.

In submitted comments, New York City questioned the project’s hefty cost and long-term effectiveness for meeting the growing demand for electricity. Some renewable energy developers urged the PSC to direct Con Edison to take a closer look at alternatives, such as battery storage and vehicle-to-grid solutions. Renewable developer NineDot Energy pushed for less costly infrastructure — the $1.2

BUCK ENNIS

By Caroline Spivack

billion for the Idlewild project represents roughly 3% of Con Edison’s electric assets.

“Given the size of this proposed expenditure and the burden it will pose to ratepayers, it should be thoroughly analyzed, and the assumptions regarding future load growth and options to meet that growth should be carefully evaluated,” wrote Linda Tatlow and Zach Tamen, a senior manager and an energy markets analyst, respectively, at NineDot, in November comments.

The PSC ordered that Con Edi-

son can recover “through a surcharge the depreciation expense, operating and maintenance expense, and return on investment” for the project until the commission addresses the utility’s next major electric rate adjustment.

“As we work towards New York’s clean energy goals, we must think more boldly about ways to serve increased demand for electricity while maintaining a reliable grid as customers transition away from fossil fuels,” said Tim Cawley, Con Edison’s chairman and chief executive in a statement.

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State ramps up capacity, but available beds at psychiatric facilities still lacking, report finds anywhere close to being adequate,” Dailey said.

The Treatment Advocacy CenNew York’s efforts to expand the number of available beds at state- ter, founded in 1998, has pushed run psychiatric facilities have to reform state civil commitment made it more prepared than most laws in an attempt to ensure that other states to address the mental people with severe mental illness health crisis, according to a report can be admitted before harming released last week. But some themselves or others. But not all groups say that the state’s inpa- behavioral health advocates agree tient psychiatric capacity is still that boosting inpatient capacity is the solution to the mental health inadequate.

New York’s state-operated psy- crisis, with some arguing that the chiatric hospitals have 3,491 beds state’s deinstitutionalization effort for adults with severe mental ill- has placed a greater emphasis on ness, equating to roughly 18 avail- community-based care.

“I don’t think there’s necessarily a able beds for every 100,000 residents, according to data from the shortage of state hospital beds,” said Doug Cooper, associate executive Office of Mental Health. director of the Association for Community Living. “Is it a good use of resources? Not necessarily.”

Cooper said — Lisa Dailey, executive director of the Treatment Advocacy Center that New York state pays anyNew York ranks fifth in the where between $300,000 and country for its available state- $400,000 per year for each inpaoperated inpatient psychiatric tient psychiatric bed, a figure he bed space, based on data from the said is “substantially more than first half of 2023, according to a what it would cost to treat somereport released by the Arlington, one in the community.” Although Virginia-based nonprofit Treat- inpatient psychiatric beds are a ment Advocacy Center in January. necessary facet of the mental But the report noted that the health care system, most people rankings are relative, citing a his- don’t need that type of care, and toric decline in inpatient psych would be better off recovering in beds across the country. Lisa Dai- community-based settings, he ley, executive director of the Treat- said.

“That’s really what I think is the ment Advocacy Center, said that research shows state-run inpa- most humane and appropriate tient capacity should total 50 open way to get services to people with beds per 100,000 people, far more mental health conditions,” Cooper said. He added that estimates than New York’s current capacity.

“There is no state that is actually totaling 50 available beds per

By Amanda D’Ambrosio

“Basically, we are choosing to invest in a system that withholds care until people have entered the criminal-legal system.”

100,000 residents would triple New York’s inpatient capacity — a volume he deemed unnecessary.

Gov. Kathy Hochul has cited a historic lack of funding as the reason for her $1 billion mental health plan, which she unveiled last year.

Inpatient psychiatric capacity has become a cornerstone of that plan, and the state touted the opening of 150 state-run psychiatric beds in 2023. This year the governor plans to expand inpatient capacity even further by opening 200 more beds in state hospitals, she said during her State of the State address in early January.

New and repurposed beds The governor’s plan also attempts to address the shortage of beds for patients in the criminallegal system. Approximately 25 of the new state psych beds will be slated for forensic patients, and 50 will be repurposed for patients with severe mental illnesses who are awaiting a trial.

Justin Mason, a spokesman for the Office of Mental Health, said that the agency “is fully committed” to boosting mental health care in the state, including by increasing civil and forensic capacity at state psychiatric centers.

Although New York has more open inpatient psych beds than most other states, forensic beds — which are slated for patients admitted through the criminal-legal system — account for a small portion. During the first half of 2023, New York had 757 forensic beds, less than a quarter of its total inpatient capacity at its 24 state-run facilities, according to the Treatment Advocacy Center.

Gov. Kathy Hochul unveiled a $1 billion mental health plan last year that included more inpatient capacity at state hospitals. | GOVERNORKATHY HOCHUL/FLICKR

“Basically, we are choosing to invest in a system that withholds care until people have entered the criminal-legal system,” Dailey said. “There has to be a victim, there has to be some sort of negative impact on the public … before we will even look at getting somebody into longer-term care.”

Dailey said that although inpatient beds are lacking across the board, New York should be commended for its efforts to restore inpatient psych beds at private hospitals that were converted to medical beds during the Covid-19 pandemic. Last year Hochul threatened to fine hospitals up to $2,000 a day for refusing to comply with orders to bring psych beds back online.

But the workforce to staff those beds is what’s lacking, Dailey said.

Although there might be physical bed space, hospitals are struggling to obtain the workforce to staff

them safely, she added. Dailey said that staffing solutions are the first step to addressing inpatient bed shortages, encouraging states to fund training programs and address pay disparities that affect the behavioral health workforce.

As New York state moves to boost inpatient psychiatric capacity, Cooper said, there has been increased attention from the governor on community programs too. The state has built up 42,000 units of mental health housing — yet there’s a need for further investment to adequately staff and resource those programs, he said.

Mason, from OMH, said that Hochul’s mental health plan includes the development of early intervention and youth programs, expanding community-based services and strengthening the workforce “to ensure that all New Yorkers have access to care when, and where, they need it.”

Dursts sue No Labels, accusing group of ‘bait and switch’

By Eddie Small

The Durst family has joined the ranks of fierce critics of the political organization No Labels, filing a lawsuit against the group for allegedly betraying its original goals by exploring a third-party presidential campaign for the 2024 election.

Douglas and Jody Durst, who respectively serve as chairman and president of their namesake family real estate firm the Durst Organization, sued No Labels in Manhattan state Supreme Court on Jan. 23. The cousins have been longtime donors to the organization but in court papers describe its plans to run a candidate in the upcoming presidential election— almost certain to be a rematch between Democratic President Joe Biden and Republican candidate Donald Trump—as “misguided actions that have left its original benefactors like the Dursts feeling bewildered, betrayed and outraged.”

No Labels first solicited donations from the Dursts almost 10

years ago, billing itself as an organization focused on bipartisan activism, the lawsuit says. The Dursts have given the group $145,000 over the years, including a $10,000 donation in November 2020, in support of this initial mission, but its current third-party effort runs completely counter to it, according to the lawsuit.

“No Labels’ ‘third party’ bid will plunge the organization into the very partisanship it supposedly abhors and obviously advantage the likely Republican candidate, whose core supporters never seem to waver, no matter the alternatives,” the suit reads.

No Labels essentially pulled a bait and switch on donors when it launched its “Insurance Policy 2024” initiative last year to prepare for potentially nominating a thirdparty presidential candidate, the lawsuit argues. The Dursts never would have given any money to the organization if it had given any indication of pursuing this, it says.

“No Labels has shifted seismically from its original mission, and its donors, like the Dursts, who be-

lieved in the mission and financially supported it, should not have to stand idly by while their dollars are used to threaten democracy,” the lawsuit reads.

Disenchantment The lawsuit points to late 2021 as the beginning of the Dursts’ disenchantment with No Labels, accusing the group of “doing the bidding of Republican-leaning donors” by working to water down Biden’s Build Back Better program to avoid tax increases on its benefactors, whom the suit notes remain largely anonymous. A few months later, the organization derided the House of Representatives’ committee investigating the Jan. 6 attack on the Capitol as a “partisan exercise” on its Twitter account, the lawsuit says.

The Dursts are suing No Labels on charges including breach of contract, unjust enrichment and not acting in good faith. They are requesting that the court award them $145,000 in damages to cover their donations, along with interest

and attorneys’ fees.

“The Dursts agreed to fund No Labels because it committed to promote bipartisanship and bridge the political divide,” their attorney, Randy Mastro of King & Spalding, said in a statement.

“They never imagined at the time that No Labels would pivot to becoming the organization behind a quixotic third-party candidacy that could skew the most consequential presidential election of our lifetime. The Dursts believe they were sold a bill of goods, and they want no part of it.”

Dan Webb, an attorney for No Labels, characterized the Dursts’ lawsuit against the group as frivolous. He stressed that it had been years since either one contributed and that the mission of the group had not changed since its founding.

“The one thing that has changed unfortunately is that a group of partisan operatives has launched a conspiracy to subvert No Labels’ ballot access work,” he said, “and the Dursts’ frivolous lawsuit now appears to be part of it.”

Douglas Durst | BUCK ENNIS

The Dursts, one of the most prominent families in New York real estate, are no strangers to politics. They have been significant donors to Mayor Eric Adams and Gov. Kathy Hochul, and have not shied away from feuding with elected officials or speaking out against policies they disagree with, such as the 2019 state law limiting how and why landlords could take apartments out of rent regulation.

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City forges ahead on $130 million plan to resurface buried stream in the Bronx despite MTA holdup

By Nick Garber

Mayor Eric Adams’ administration is pushing ahead with a $130 million plan to resurface a Bronx stream that has been buried underground for a century, but still hasn’t reached a deal with the Metropolitan Transportation Authority to acquire land that will be necessary for the project to become a reality.

The plan, in the works for years, would unearth or “daylight” Tibbetts Brook, a natural stream that was subsumed into the sewer system in the early 1900s. More than one mile of the brook would be

sure on the sewer system. Once the stream is brought above ground, about 216 million gallons of sewage overflow would be stopped from entering the Harlem River each year as a result of wet weather events, according to the Department of Environmental Protection.

Allowing access But a key portion of the project will require building a pipeline through an MTA-owned MetroNorth rail yard between 225th and 230th streets, near the Harlem River. Despite months of negotiations, the state-run transit authority has not given the city access to the site, and city officials said last year that they would be forced to pursue a lengthy land-use review if the MTA refused to allow access without charging a fee.

The city did just that last month, when DEP filed an application seeking a permanent “easement” to build the six-foot-wide concrete conduit through the MTA site. The review typically takes about seven months; the city says it hopes to break ground on the Tibbetts

“It’s so obvious what needs to be done and I’m not sure why there is even an issue here.”

— Jeffrey Dinowitz, local assemblyman brought back to the surface between a pond in Van Cortlandt Park and the Harlem River, with a pedestrian greenway to be built alongside it.

In addition to creating new green space, the project would prevent future flooding by reducing pres-

Brook project in winter 2025 and complete it by 2028.

Representatives for the MTA and DEP both confirmed in January that talks are ongoing and a deal has not been reached. Ted Timbers, a DEP spokesman, said the city still hopes to come to terms with the MTA, but the agency filed its easement application while still negotiating “to minimize any potential delays.”

“We remain hopeful that an agreement can be reached for an easement that will allow the daylight- A rendering of how a resurfaced Tibbetts Brook would appear looking north from 234th Street in the ing project to move for- Bronx. | DEPARTMENT OF ENVIRONMENTAL PROTECTION ward,” Timbers said in an “It’s so obvious what needs to be year ago, the Adams administraemail. Michael Cortez, an MTA spokesman, said only that Metro- done and I’m not sure why there is tion announced a $11.2 million North and the city “are in active even an issue here,” said Dinowitz, deal with freight rail company CSX a supporter of the Tibbetts Brook to purchase some of its property discussions.” needed for the project. That agreeThe MTA’s reticence is due in daylighting.

A design plan for the project was ment, which came after years of part to the authority’s plans to use the site as a new waste transfer fa- approved by the city’s Public De- stalled talks, is expected to close cility, the news site The City re- sign Commission in August, to the later this year.

“This is a very important project ported last year. Local Assembly- delight of environmental advoman Jeffrey Dinowitz told Crain’s cates who have pushed the idea in our community, and a very smart and sensible one as well,” on Jan. 26 that he believes the for decades.

The city has already needed to Dinowitz said. The MTA, he addMTA has “not been particularly overcome a similar obstacle. A ed, “needs to do the right thing.” helpful with regard to this.”

16 | CRAIN’S NEW YORK BUSINESS | February 5, 2024

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Affordable housing could replace Brooklyn hospital A massive affordable-housing project could replace a Brooklyn hospital as part of a “transformation” of the SUNY Downstate campus that Gov. Kathy Hochul called for last month.

Hochul has not publicly mentioned housing as a likely outcome of the plan, which is expected to include a major restructuring of hospital services, the relocation of inpatient care services to surrounding hospitals, and some layoffs. But housing has come up frequently in private discussions among key players, and SUNY Chancellor John King Jan. 26 confirmed in an interview with Crain’s New York that affordable housing units will likely be built on the state-owned land if the main hospital is shuttered.

“Our community needs quality health care AND affordable housing.”

— State Sen. Zellnor Myrie, who represents East Flatbush “It’s clear that there’s tremendous need in the community for housing,” King said. “We think it’d be particularly valuable to have additional housing options for employees.”

The proposed transformation involves moving inpatient hospital services from the East Flatbush academic medical center to surrounding hospitals, as well as

building a new, $300 million on-campus facility for outpatient care. The most controversial part of the plan is the possibility of closing a hospital that serves a population of primarily lowincome patients.

King said that the health system is considering building residences at the main hospital site at 450 Clarkson Ave. for both community members and hospital employees who struggle to afford housing close to work. The space could also be used as a public recreation or wellness facility, King said, noting that the property is large enough to accommodate multiple uses.

The main hospital building sits on about eight acres, according to CoStar, in an area where developers already are building new housing. In December, CAMBA Housing Ventures broke ground on the 328-unit Clarkson Estates, a $238 million affordable housing development built on a former SUNY-owned parking lot.

The project is a part of New York’s Vital Brooklyn initiative, a community development program that aims to address chronic housing, economic and social disparities in Central Brooklyn, pairing housing with a health screening center and other supportive services.

The state is trying to sustain the financially struggling hospital, which has experienced an annual $100 million operating deficit for several years, King said. Of the 340 available beds at Downstate, ap-

proximately 150 have been in regular use in recent years, he added.

The health system has also expressed concerns about the structural sustainability of its main building — a facility that experiences relatively frequent flooding and is in danger of having its HVAC system fail, King said.

Initial details of the transformation plan include relocating the majority of inpatient services to a new wing at New York City Health + Hospitals/Kings County, as well as laying off up to 20% of health care workers represented by the union United University Professions.

Shifting services SUNY Downstate has proposed building a new facility on a parking lot for outpatient care, which would include ambulatory surgeries, primary care and urgent care. The outpatient facility, funded by $300 million from the state, will also house a health care disparities institute, King said. Hochul has agreed to absorb SUNY Downstate’s annual operating deficit over the next two years — which totals $200 million — while the medical center shifts its services.

While local lawmakers support efforts to revitalize SUNY Downstate, some are skeptical that the proposed changes will further deteriorate health care services in Central Brooklyn — a region that has seen several hospital closures.

Sen. Zellnor Myrie, who represents East Flatbush, has pushed

COIURTESY OF SUNY DOWNSTATE MEDICAL CENTER

By Amanda D’Ambrosio

the state to release details on access to care and health care usage in the region via a legislature-mandated study.

“Our community needs quality health care AND affordable housing,” Myrie said in a statement to Crain’s. “We can’t expect to solve the housing crisis with a plan that reduces access to care.”

King said that the medical center intends to preserve access to all health care services that are currently available at Downstate, including maternal health care and the kidney transplant program — the only program at a public hospital in Brooklyn.

Assemblyman Brian Cunningham, who also represents the East Flatbush neighborhood, said that housing and health care in the neighborhood are “two important things that both need to happen,” noting that he is open to a conver-

sation about housing on the campus.

Gov. Kathy Hochul has floated the possibility of converting SUNY campuses into housing sites but has not specifically mentioned SUNY Downstate. In her State of the State address, Hochul proposed to build housing units on state-owned property including SUNY campuses — some believed that proposal was referring to the system’s upstate campuses.

The governor’s office did not immediately respond to an inquiry about the potential for housing on SUNY Downstate’s campus.

The SUNY Downstate campus has long been eyed as a potential site for affordable housing. David Schwartz, co-founder of Slate Property Group, said that there have been discussions about developing on the campus for at least a decade.

SL Green gives robust outlook after jaw-dropping deal to settle a past-due mortgage for 2 Herald Square

By Aaron Elstein

Quarterly cash flow dropped in half at SL Green, but the city’s largest commercial landlord gave an optimistic outlook for 2024 thanks to a little help from its banks.

The firm announced a deal to pay just $7 million to settle the $182.5 million mortgage for 2 Herald Square, a sign lenders were eager to part with the vacancyriddled property whose loan matured in November. The surprising transaction would produce a $90 million gain from purging debt from SL Green’s balance sheet and the developer forecast that this year a key performance metric would come in about 20% higher than previous estimates.

“It’s a great outcome for SL Green but a head scratcher for us,” said analyst Steve Sakwa of Evercore ISI, who described the developer as “pulling rabbits out of hats.”

Located on West 34th Street across from Macy’s, 2 Herald Square is a 370,000 square foot building with an occupancy rate of just 35% after losing such tenants as WeWork and Victoria’s Secret.

SL Green acquired a 51% stake in

the property six years ago in a joint venture with an unidentified Israeli investor. On Jan. 25 SL Green said it lifted its stake to 95% at a cost of zero.

For the long haul In a statement to Crain’s New York, CEO Marc Holliday said: “While others may throw back the keys, SL Green continues to work with our lenders and partners to restabilize assets and create value for us and our partners. We are in New York for the long haul and believe things will improve over time. Where others see challenges we see opportunity.”

The firm also benefited from last month’s sale of 717 Fifth Ave. to the parent of Gucci for $963 million. SL Green owned a 10.9% stake in the property and said it would reap $28 million in net proceeds from a property that most analysts thought had little to no value.

Unexpected gains from selling retail real estate helped dull the pain from continued weakness in the office market. Occupancy rates eroded to 89.2% last quarter from 89.4% in the third quarter and 90.9% in the prior-year period.

Fourth-quarter leasing activity, at 505,000 square feet, was nearly double that of the year-earlier period, but volume for all of 2023 came 17% lower than in 2022.

SL Green controls 29 million square feet of space across 58 Manhattan buildings. Its stock has lost nearly a third of its value over the past five years but performed better than rival Vornado Realty Trust, in large part because SL Green has maintained its dividend by selling office towers such as 625 Madison Ave. and 245 Park Ave. The developer announced Jan. 25 that it expects to start fundraising for a $1 billion pool to invest in distressed New York mortgages.

Quarterly funds from operations, a proxy for cash flow, fell in half to 72 cents a share. The figure was depressed by 27 cents a share due to costs associated with former President Andrew Mathias leaving the firm at the end of the year. SL Green lowered its total debt burden by nearly $1 billion last year, to $11 billion. Thanks to the 2 Herald Square deal the firm forecasts funds from operations this year will be around $6.05 a share, a big jump from its previous $5.05 estimate. The compa-

SL Green CEO Marc Holliday speaks during the grand opening of the Summit One Vanderbilt on Oct. 21, 2021. | BLOOMBERG

ny’s stock price rose 3% on Jan. 25.

Holliday described 2023 as “a challenging year” on an earnings call Jan. 25 but “we have turned the corner going into 2024.”

He indicated 2 Herald Square, which is home to Mercy University’s Manhattan campus, could be converted to residential use. Records filed with the city showed MUFG Union Bank served as ad-

ministrative agent for the loan, meaning it handled the bookkeeping. The bank was acquired two years ago by U.S. Bancorp. Analysts repeatedly asked Holliday how he persuaded banks to accept just $7 million for an overdue $182.5 million mortgage, or 4 cents on the dollar.

“I take that as kudos for getting a great job done on that deal,” he said.

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TRANSPORTATION

One of 10 gleaming new subway cars that make up the R211T train | CAROLINE SPIVACK

New-fangled displays show where riders are in the train in relation to the stairways of upcoming stations.

The first open-gangway R211T train rolled onto the subway system last week. | CAROLINE SPIVACK

| CAROLINE SPIVACK

SUBWAY From Page 1

around.”

The moment was one of palpable excitement when Hochul, MTA leadership and mass transit workers boarded the open-gangway train and departed the yard for the train’s inaugural run on the local track. Hochul described the launch as “the future of transportation in motion.”

The new-train moment is rare. Under federal law, the MTA must turn to companies that produce railcars in the U.S. The problem is there are just two that meet the authority’s requirements: Japan-based Kawasaki and France-headquartered Alstom.

Ongoing supply-chain challenges from the pandemic have caused at least 17-month backups in putting new trains on the tracks.

The result is an aging fleet: The MTA’s 6,500 train cars are an average of 26 years old, with the oldest having entered service in 1976 — 48 years ago — when Gerald Ford was president.

Subway riders expecting the usual fare

were impressed Feb. 1 as they walked onto the train and were visibly taken aback by the gleaming new cars tricked out with digital maps, sleek yellow- and navy-blue seats and the ability to meander.

“It looks like something out of a movie,” said one rider as he took in his surroundings. “I’ll definitely walk to another part of the train if it gets too crowded,” he added.

New-fangled displays One woman admired a new-fangled display showing where she was in the train in relation to stairways for the upcoming station. “I wish all the trains looked like this,” she said.

Nearby, another woman effortlessly rolled her cherry-red walker through an accordion-style portal between subway cars.

Quemuel Arroyo, the MTA’s chief accessibility officer, also rolled through an accordion connection, but in a wheelchair. “This is smooth,” he said. “Listen, I ride many different trains here in America. I don’t think I’ve ever had a transition this smooth.”

There are tradeoffs, of course. Open ac-

cess makes it easier for riders to avoid someone behaving erratically or any other threat, but there is no way to close off a single subway car if, say, a fire broke out.

“That is one of the issues we are certainly figuring out,” Janno Lieber, the MTA’s chair and chief executive, said in an interview.

“There are huge safety advantages but also you have to deal with different kinds of scenarios.”

service last week.

The effort to replace older train cars has been difficult. In June 2022, the MTA said that labor shortages at Kawasaki’s Lincoln, Nebraska factory, along with logistical issues for procuring parts, led to a 17-month delay for an initial batch of cars, which were expected to be in operation by July 2023.

An MTA contract with Bombardier, a Canadian-based company that has since merged with Alstom, resulted in additional costs of $35 million, according to an audit by then-city Comptroller Scott Stringer. The company was late in delivering 300 subway cars to the MTA by the deadline of January 2017.

The MTA is looking to qualifying new competitors abroad, likely from Europe or Australia, according to Richard Davey, president of New York City Transit. The companies would have to set up factories in the U.S. So long as they assemble and are staffed in America, they would comply with the Build America Buy America Act passed by Congress in 2021.

“We’re also not putting our eggs all in one

“It looks like something out of a movie. I’ll definitely walk to another part of the train if it gets too crowded.”

— Subway rider The MTA ordered the R211T train as part of a $1.7 billion contract with Kawasaki in 2018 for 535 subway cars. Twenty open-gangway cars were included in that order — enough to make up two trains of 10 cars each — including the train put into

18 | CRAIN’S NEW YORK BUSINESS | February 5, 2024

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TRANSPORTATION

Real estate market took $636 million bite out of transit authority’s budget

The decrease shows how the region’s fiscal health is intimately tied to the MTA’s finances

By Caroline Spivack

New York’s fragile real estate market has taken a bite out of the Metropolitan Transportation Authority’s revenue. The agency collected $636 million less through state real estate taxes in 2023 compared to 2022, new authority data shows.

The decrease is due to a dip in commercial sales and mortgage activity captured through the economically turbulent mortgage recording and real estate transaction taxes, which goes to the MTA’s operating budget. Transit officials mostly anticipated the revenue drop, which had revised down the authority’s projected real estate tax basket,” Davey told Crain’s. “At the end of the day, more robust competition is good for the taxpayer [and] is good for our customers.”

With so few subway car manufacturers, the MTA was compelled to expand the Kawasaki contract in 2022 with an order for another 640 next-generation subway cars, bringing the total value of the MTA’s contract with the company to $3.2 billion. The agency said it is embarking on a study to determine what measures it can take or advocate to grow the U.S. manufacturing market.

425 new subway cars Since last spring the MTA has managed to roll out six of the Kawasaki-produced R211 trains — each with 10 cars — which do not feature an open-gangway design. The MTA aims to put an additional 425 of the new subway cars, which undergo tests and adjustment at Kawasaki’s Yonkers plant, into circulation by year’s end.

The new trains can’t come soon enough for a city that’s been dramatically reminded in recent weeks of how infrastructure prob-

lems can mount due to older subway cars.

On Jan. 3, a rider pulled emergency brakes on a model of train built in the 1980s, leading to the collision of a pair of 1 trains on the Upper West Side. Dozens were injured, and widespread service disruptions lasted for more than three days. New cars feature coverings that make it harder for vandals to pull emergency brakes — some of which are simply a dangling cord.

Just days later, a train derailed in Coney Island. The MTA found that loose bolts on a model of F train that entered the system between 2006 and 2010 contributed to the accident. Thirty-seven people had to be taken off the train, but no one reported an injury.

The loose bolts in combination with a misaligned track caused the derailment, according to the MTA. Transit officials said the second opengangway train is expected to roll onto the rails in the coming days. In the meantime, straphangers will have to be lucky to catch the few shiny new cars in circulation.

“This is kinda exciting,” said one rider stepping onto the new train at 168th Street.

“I could get used to this.”

in early 2023.

To put the revenue loss in perspective, the $636 million drop is roughly on par with the fare and toll revenue the MTA missed out on in 2022 — $690 million — due to people skipping out on fees. Transit officials and advocates often point to fare evasion as a worrying hit to the authority’s bottom line.

“The governor and the legislature did a really good job of making sure we don’t have to look in the couch cushions, but we have to keep an eye on every revenue source,” said Lisa Daglian, the executive director of the Permanent Citizens Advisory Committee to the MTA, which was established by the Legislature to advocate for riders.

The MTA’s fiscal health is heavily dependent on the region’s economic vitality. This fact was especially clear when in July the MTA updated its tax revenue forecast to project weaker intake from real estate transactions and stronger collections from sales taxes.

“It’s a delicate balancing act,” Daglian added. “The system’s wellbeing and how it affects the regional economy is all contingent on the interconnectivity of the funding sources and their wellbeing. Everything is contingent upon each other.”

“The system’s wellbeing and how it affects the regional economy is all contingent on the interconnectivity of the funding sources and their wellbeing.”

— Lisa Daglian, executive director of the Permanent Citizens Advisory Committee at the MTA forecast, but the total $741 million collected last year is an alarming 46% drop compared to the $1.4 billion collected in 2022.

“It is a concern,” said Ana Champeny, vice president for research at the Citizens Budget Commission, a government watchdog. “It went down not quite half but that’s a pretty big decrease and a pretty big dollar gap. What that means is they needed to find $636 million from some other revenue source or they needed to reduce expenses to balance their budget.”

The MTA ended 2023 with balanced books, and projected five straight years of balanced budgets thanks to a fiscal rescue package approved by the state Legislature

$16 million in the red The MTA reduced its risk by anticipating a blow of at least $600 million to its real estate tax revenue last year. The authority, in the end, is $16 million in the red of what it budgeted.

“It shows how volatile that is,” said Kevin Willens, the MTA’s chief financial officer, during a Jan. 29 meeting on the authority’s finances. “We’re expecting a partial rebound in 2024 to gain back a couple of hundred million.”

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CLASSIFIEDS AUCTION

UCC ARTICLE 9 AUCTION

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

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PUBLIC & LEGAL NOTICES 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.

Notice of Formation of THOR & LOKI REALTY LLC Arts of Org filed with Secy. of State of NY (SSNY) on 1/16/24. Office Loc: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against to 502 Park Ave Apt 12E, NY, NY 10022 USA, apesce@pescelaw.com.

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Notice of Qualification of EnfraGen Management Services, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 12/18/23.

Office location: NY County. LLC formed in Delaware (DE) on 12/30/22. Princ. office of LLC: 292 Madison Ave., 19th Fl., NY, NY 10017. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., #4, Dover, DE 19801.

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SSNY shall mail a copy of any process served against the LLC to 3 Clinton Street #4 New York, NY 10002.

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

Notice is hereby given that a license number NA0340-23151409 for a Restaurant on Premises Liquor License has been applied for by LAYLAYS 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.

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

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MYCITY

style guide to “align style across MyCity services moving forward,” Legendre said.

But the administration has not always indicated it would rely so heavily on outside vendors. In an August 2022 City Council hearing before MyCity went live, Matt Fraser, the city’s chief technology officer, said all of the work was being done by city employees.

“Long-term, we’re not certain whether we would need a vendor to carry this forward,” Fraser said.

Mayor Adams, asked by Crain’s on Jan. 30 about why his administration revised its approach, said outsourcing had become necessary due to the hiring freeze he imposed in September, as well as an existing struggle to recruit tech industry workers amid the rise of remote work.

“We can’t hire right now because we’re dealing with some fiscal restraints,” Adams said at a City Hall press conference. “We would love to have done this in-house completely, but it’s a combination of not having those experts to get the qualitative product we’re looking for.”

“Matt [Fraser] has done a great job with the team that he has, but there’s a lot of expertise in the private market that we had to get,” the mayor added.

The city has already spent $12.8 million of the $16.8 million in MyCity contracts it has awarded, most of which remain active. The spending amounts to a small frac-

From Page 1

“Instead, we’re just throwing the money away to vendors who are going to squander it and not serve New Yorkers.”

Ray Legendre, a spokesman for the city’s Office of Technology and Innovation, strongly disputed the critiques, which he said are “directly contradicted by the services we’re already providing New Yorkers through MyCity.”

“Since March 2023, MyCity has saved thousands of working families substantial time and money by making child care subsidies easier to learn about, apply for, and receive,” Legendre said in an emailed statement. “In addition, MyCity is modernizing and simplifying the process for New Yorkers to interact with and access information from their government — and we expect the portal’s impact to grow as we add more services in the future.”

Adams’ administration has not announced what the next phases of MyCity will entail.

On Feb. 2, the city was scheduled to award the latest new MyCity contract, a $1 million deal with Manhattan-based website designer Blenderbox, but canceled the hearing due to a lack of requests from the public to speak.

The firm will create a design interface to be used as MyCity expands to cover more services, as well as a

CLASSIFIEDS

Mayor Eric Adams announced the first phase of the MyCity site in March 2023. The city has now enlisted 26 private vendors to work on the portal, through 54 contracts worth almost $17 million. | CAROLINE WILLIS/MAYORAL PHOTOGRAPHY OFFICE

tion of the city’s $111 billion total budget, but every dollar counts in today’s penny-pinching environment — by comparison, Adams’ controversial November budget cut that ended Sunday library service amounted to $24 million.

Among the most common criticisms of MyCity is that it duplicates Access NYC, an online screening tool launched in 2006 under Mayor Michael Bloomberg and redesigned under Mayor Bill de Blasio in 2017, which allows people to determine their eligibility for dozens of government benefits — one of MyCity’s key promises. And de Blasio signed a law in 2017 requiring the city to study creating “a single web portal” for permits and licenses.

Legendre, the city spokesman, disputed the comparison between MyCity and Access NYC, since the latter program is limited to screening and does not allow users to apply for benefits.

Multiple contracts Several companies have received multiple contracts to work on MyCity. The firm Innovative Business Concepts has won seven contracts worth a combined $2.8 million to handle the platform’s design, development and more.

New Jersey-based Rangam Consultants has scored eight contracts worth $2.9 million.

Of the 26 vendors working on MyCity, all but three are certified

as minority- or women-owned businesses, which can sometimes allow them to bid for contracts without competition. Mayor Adams has made boosting city contracts with MWBEs a priority of his administration.

Working with outside vendors can be especially harmful when it comes to highly technical projects, since government officials cannot fully understand the work they are commissioning, Schank said. That increases the risk of “vendor lockin,” in which the government is forced to rely on the same contractors to expand or change the project going forward rather than nimbly do the work on its own.

“Because the people who are making these contracts don’t really understand technology, they don’t fully understand what they’re signing on for,” Schank said.

As a counterexample, some experts have pointed admiringly to Planning Labs, created in 2017 within the Department of City Planning. The division has created popular tools like the land use map ZoLa and the Population FactFinder, and publishes its source code online so anyone can view it.

Sheena Wright, Adams’ first deputy mayor, argued in response to questions by Crain’s that the administration’s use of private vendors showed an effort to “leverage existing technology.”

“We don’t want to recreate the wheel,” she said.

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New York Liberty CEO Keia Clarke | BUCK ENNIS

New York Liberty CEO makes the overall fan experience the MVP Keia Clarke, who has been with the WNBA franchise for more than a decade, says the team can compete with all the city’s entertainment options. | By Eddie Small

T

he New York Liberty captivated a city desperate to celebrate another sports championship when they made the WNBA finals last season. And although they ultimately fell short to the Las Vegas Aces, the team’s CEO, Keia Clarke, feels the Liberty are primed to keep their fans excited.

“There will be quality, really competitive play on court always, right?

ing a job at the Basketball Hall of Fame right out of college, developing a career that combined the two became particularly intriguing for her. She went back to school to earn a master’s in sports business from New York University.

The decision not only brought her to New York but also helped her break into the WNBA, where she took a job working with the league’s marketing and business operations office.

“I met someone who was pretty influential and worked there and ended up several months later landing an entry-level role in their team marketing and business operations department,” she said. “So that was sort of day one in sports.”

One of the main initiatives Clarke has overseen since becoming the Liberty’s CEO was its move to Barclays Center ahead of the 2021 season. The team has moved relatively frequently during its short existence, playing its home games in Newark and Westchester before Barclays. Having a central Brooklyn location has played a key role in making the Liberty feel like a more essential part of the city’s

“What I am very focused on as a business leader is this as a destination that brings you all of that but also an entertainment factor.”

We have an amazing team,” she said. “What I am very focused on as a business leader is this as a destination that brings you all of that but also an entertainment factor.”

Clarke has been with the Liberty for more than a decade, serving as its marketing director and vice president of business development prior to taking the reins as CEO four years ago. She began her career more interested in marketing than in sports, but after land-

sports landscape, Clarke said.

“Playing in an NBA-caliber building in a professional atmosphere in the heart of Downtown Brooklyn, this is what resonates with the community that we serve,” she said. “There’s something special about this team in terms of what it brings in inclusivity, in accessibility, in women doing extraordinary things. That bodes really well at the heart of Brooklyn.”

Comparisons between the Liberty and the Knicks and Nets are perhaps inevitable, particularly given that the Liberty and the Nets now share a stadium, but Clarke stressed that she does not see the three basketball teams as being in competition for the same fan base.

Rather, she sees the Liberty as competing with the famously wide range of entertainment options New York has to offer and her job as making sure the team can hold its own against any of them.

“It’s typically not ‘Oh, I can go to the Nets or I can go to the Liberty.’

It’s actually going to be, ‘I can go to Six Flags or I can go to the Liberty,’ or ‘I can go to a Broadway show or I can go to the Liberty,’” she said. “This is a really fun thing to do. You will be entertained when you’re in our arena. We’re

Keia Clarke Age 42 Grew up Meriden, Connecticut Resides Fanwood, New Jersey Education Bachelor’s in marketing, Canisius University; master’s in sports business, New York University; advanced management program, Harvard Business School Family Clarke is married with two young children, an 11-year-old daughter and a 10-year-old son.

Drop the beat Clarke is also an aspiring DJ whose sets focus mainly on old-school R&B and hip-hop acts such as A Tribe Called Quest and Busta Rhymes. “I’ve played a couple of gigs: a retirement party, a Liberty season-ticket member holiday party, a paint party,” she said.

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very intentional about the experience you have.”

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