Crain's New York Business, March 4, 2024

Hochul’s housing incentive program may not lead to many more homes

Towns that have signed up for it have good things to say, but advocacy groups argue the initiative won’t make a big difference in increasing the region’s supply

Like many suburban o cials, Paul Pereira, mayor of Mineola, a village on Long Island, was not a fan of the housing-growth mandates that Gov. Kathy Hochul proposed last year.

“We were in opposition because it was a top-down approach,” he said. “It was yet another mandate without really any knowledge of the local needs.”

Pereira is a much bigger fan of the governor’s Pro-Housing Communities Program, a $650 million initiative she launched over the summer that’s meant to incentivize cities and towns throughout the state to increase their housing supply. When she announced the rst 20 places to receive

BY THE NUMBERS $650M

The cost of the Pro-Housing Communities Program

By | Eddie Small

the designation in early February, Mineola was the only spot on Long Island to be included. e incentive program in many ways marks a sharp about-face for Hochul in less than a year’s time. When the Legislature pushed back on her mandates last year and offered up a similar incentive program as an alternative, Hochul rejected it outright, opting to take no housing deal at all rather than one she viewed as ine ective.

“Merely providing incentives will not make the meaningful change that New Yorkers deserve,” she said at the time.

POWER BREAKFAST

Kathy Wylde backs calls for state to give NYC control over housing density, property tax breaks.

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Outdoor dining steams ahead with new rules

Owners worry as applications open for new sidewalk and street setups

By Nick Garber

New York City’s outdoor dining program will take its rst steps into the future this month, when the city starts allowing restaurant owners to apply for street setups governed by new, stricter rules than pandemicera regulations. But it will take time for businesses to get a handle on the complex new policies.

e new program, dubbed Dining Out NYC, will allow for both sidewalk cafés and instreet tables. A product of lengthy negotiations between the restaurant industry, the City Council and Mayor Eric Adams’ administration, the new rules represent a compromise between those who wanted to preserve the redtape-cutting freedom of the pandemic program and opponents who objected to the proliferation of “sheds” that led to complaints of lth and noise.

Starting March 5, restaurant

REAL ESTATE

A seldom-used property tax break could help solve two of the city’s biggest problems.

Paul Pereira, mayor of Mineola, Long Island, has long worked to welcome new residential buildings like the one shown behind him. His town recently opted into the governor’s $650 million Pro-Housing Communities Program. | BUCK ENNIS

Kathryn Wylde backs calls for state to give NYC control over housing density, property tax breaks

By Nick Garber

New York City should seize control over its own land-use policies, the influential business leader Kathryn Wylde said Feb. 27, arguing that state lawmakers have failed to take action on the region’s crushing affordability crisis.

Wylde, president and CEO of the Partnership for New York City, made the comments at a Crain’s Power Breakfast, where she was interviewed alongside Rob Speyer, CEO of the real estate firm Tishman Speyer and a co-chair of the Partnership. The discussion also touched on congestion pricing, the office market and the business world’s apprehension about this year’s presidential election.

quite the opposite,” Wylde told the audience, which included Metropolitan Transportation Authority chief Janno Lieber and First Deputy Mayor Sheena Wright. “We really need to take control of that destiny.”

Housing is the biggest challenge facing the city, agreed Speyer, whose family firm owns Rockefeller Center and more than a dozen other office buildings. Neither he nor Wylde would say whether they support a potential statelevel housing deal that would pair a new property tax break like 421-a with “good cause eviction” protections sought by tenant advocates — although Speyer said any reforms should focus on boosting construction.

“The mayor has fought for fiscal responsibility, which is something we missed for the eight preceding years.”

Kathryn Wylde, president and CEO of the Partnership for New York City

Pointing to the state-imposed limits on residential density and property tax breaks that city leaders have unsuccessfully begged Albany to change, Wylde endorsed calls for the state Legislature to pass a law ceding its authority over those issues.

“New York City wants to welcome more people and greater density. The surrounding suburbs,

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“I don't think more regulation of housing is going to incentivize investment," Wylde added. Minutes earlier, she drew applause from the packed room at the New York Athletic Club when she said that the city’s economic prospects remained strong — “unless we screw it up by over-regulating and over-taxing.”

Speyer had much praise for the city and state’s business-friendly leaders — describing "this extraordinary moment where we have both a centrist mayor and a centrist governor." Wylde largely concurred, although responding to a question from Crain’s editorin-chief Cory Schouten, she admitted to disagreeing with Adams over the city’s new lawsuit against social media companies which accuses them of harming youth mental health.

“I have known that the mayor felt strongly on this issue for several years,” Wylde said, adding that the federal government was better fit to oversee the industry. “We don’t think New York City or New York state should be acting like they're a regulator of the world.”

Still, Wylde said she had no qualms about Mayor Adams’ fiscally-restrained budget approach and his notable reversals on spending cuts after last year’s dire warnings about the migrant crisis. She compared him favorably to exMayor Bill de Blasio, a frequent foil of the business community.

Fiscal responsibility

“The mayor has fought for fiscal responsibility, which is something we missed for the eight preceding years,” Wylde said. Late last year, Adams asked Wylde to convene a panel of experts to advise him on the budget, and the group appears likely to support the mayor’s belt-tightening approach during negotiations with the City Council.

Although data shows stagnation in the city’s key pandemic recovery indicators such as office swipes, Speyer said his company’s own numbers show “an incremen-

tal, steady rise in return-to-office.” For that trend to continue, Speyer said office landlords will need to spend money on amenities — pointing to his own new rooftop attractions at Rockefeller Center.

“It’s a tough road if you’ve got an older building,” Speyer said. “But if you’ve got the ideas and the energy and the capital to put behind it, magic happens.”

Despite her bullishness about New York City’s economy, Wylde noted that much recent job growth has been concentrated in health care, construction and education — all of which are reliant on government spending. That raises the stakes of this fall’s expected presidential election matchup between Joe Biden and Donald Trump.

“It’s going to be very bad for New York City if you-know-what happens,” Wylde said, apparently alluding to a Trump victory.

Speaking of the presidency, Schouten asked Speyer and Wylde what they make of the perennial effort to draft JPMorgan Chase CEO Jamie Dimon — a Partnership board member — for a White

House run. Speyer gushed about the possibility.

“I think Jamie would be an incredible president,” Speyer said. “He is decisive.”

Wylde said a Dimon bid remained unlikely.

“Business leaders would like to be president. They really don’t want to run for president,” she said. “Look at Mike Bloomberg’s experience.”

Other event highlights

Wylde, a supporter of congestion pricing who helped decide its toll structure, said she disagrees with Mayor Adams’ recent calls for more exemptions from the program. Wylde hopes the groups filing lawsuits against congestion pricing “will lose quickly,” she said, drawing nods from Janno Lieber in the audience.

The downstate casino sweepstakes is commanding much attention in the real estate world, but neither speaker had much to say about it. Speyer’s firm is not a bidder, and Wylde said flatly that she has no interest. “Who wins,

who loses? Somebody else’s problem,” she said.

Although the Partnership has long supported tax breaks for businesses, Wylde acknowledged the recent state study casting doubt on the effectiveness of New York’s film tax credit. But she noted the same study found positive results for the Excelsior Jobs Program, which the Partnership helped shape.

Wylde touted her group’s work on the migrant crisis, which has included enlisting CEOs to press Washington politicians for more aid. Weeks after the Partnership issued an August open letter signed by more than 100 business leaders, the White House eased work restrictions for thousands of Venezuelan migrants, she noted.

Wylde criticized federal Securities and Exchange Commission rules that limit how much people in the financial services industry can donate to state or local politicians. "It's very hard to build a relationship with your local legislator” with such donations capped at $350, she said.

Barbara Blair Tom Harris

From left: Crain’s Editor-in-Chief Cory Schouten, Tishman Speyer CEO Rob Speyer and Partnership for New York City President and CEO Kathryn Wylde at Feb. 27th’s Crain’s Power Breakfast, which took place at the New York Athletic Club. BUCK ENNIS

At the event, Rob Speyer, speaking, had much praise for the city and state’s business-friendly leaders, describing “this extraordinary moment where we have both a centrist mayor and a centrist governor.” | BUCK ENNIS

Crain Communications celebrates opening of Grand Rapids Business

By Crain’s Staff

Crain Communications celebrated the opening of its newest City Brand, Crain’s Grand Rapids Business, at an open house for business and civic leaders held Monday, Feb. 26.

KC Crain, president and CEO of Crain Communications, hosted the leaders at an open house in the new office of Crain’s Grand Rapids Business in the Waters Center in downtown Grand Rapids.

Crain Communications entered the West Michigan market in late summer 2022 when it ac-

“A great business market deserves an equally strong news organization to keep it informed.”

KC Crain, president and CEO of Crain Communications

quired the Grand Rapids Business Journal. Four months later, Crain purchased another Grand Rapids-based business publication, MiBiz.

Nursing home chain facing negligence suit demands state release public records

By Amanda D'Ambrosio

A nursing home chain at the center of a state investigation for fraud and patient harm is asking the court to help it mount a defense, claiming that state officials have withheld information that could be relevant to its case, court filings show.

Nursing home operator Centers Health Care filed petitions against

office and the DOH told Crain’s on Feb. 26 that they could not comment on pending litigation.

James filed a lawsuit against Centers Health Care last June, claiming that operators misused more than $83 million in taxpayer dollars to line their own pockets and caused significant harm to residents. In a 300-page complaint, the attorney general alleged that residents were forced to sit in their own urine and feces for hours, suffered malnutrition and dehydration and faced a higher risk of dying at Centers facilities.

In a petition, Centers alleges that state officials have kept most records hidden and denied parts of its freedom-of-information requests.

Attorney General Letitia James, Gov. Kathy Hochul and the state Department of Health in the New York County Supreme Court requesting that the officials turn over public records detailing nursing home policies at the start of the Covid-19 pandemic.

Centers claims that records outlining policy changes and conditions in nursing homes at the start of the pandemic — such as staffing requirements, availability of protective gear and concerns about the state’s handling of nursing homes — could help the firm explain its challenges in providing patient care.

In the petition, Centers alleged that the state officials have kept most records hidden and denied parts of its freedom-of-information requests, “leaving petitioners to face the AG’s sprawling summary proceeding . . . without access to documents relevant to their defense.”

The attorney general’s office, the governor’s office and the health department have not yet responded to the motion in court. Representatives from the governor’s

After merging the two operations, Crain’s Grand Rapids Business was launched in April 2023. The newly combined newsroom and sales staff moved into their new downtown office in November.

Grand Rapids joins Crain’s Chicago, Cleveland, Detroit and New York in the stable of Crain City Brands.

“A great business market deserves an equally strong news organization to keep it informed,” Crain said. “The official opening of our doors in Grand Rapids marks a significant milestone in the Crain’s Business expansion.”

While Centers’ nursing homes provided poor care, nursing home owner Kenneth Rozenberg used the profits to buy an Israeli airline, according to the attorney general’s complaint. Co-owner Daryl Hagler spent $130 million on property in Brooklyn and Manhattan.

Attorney general crackdown

The case against Centers Health Care is part of the attorney general’s crackdown on a dubious business practice that has become widespread in the nursing home industry called related-party transactions. Nursing home operators create a web of linked companies with similar owners, in the most common cases creating a company that collects rent from the home. This practice is not illegal, but can be used to hide profits in the network of companies.

Centers Health Care operates 40 nursing homes in the U.S. The chain operates four homes in New York, including the Beth Abraham Center in the East Bronx, the Holliswood Center for Rehabilitation and Healthcare in Queens, the Martine Center for Rehabilitation and Nursing in White Plains and the Buffalo Center for Rehabilitation and Nursing upstate.

KC Crain, president and CEO of Crain Communications (bottom left) and Jim Kirk (bottom right), group publisher and executive editor, speak to business and civic leaders during an open house at Crain’s Grand Rapids Business’ offices. | SETh ThOMPSON

Centers Health Care, which operates 40 nursing homes in the U.S., filed petitions demanding that New York Attorney General Letitia James, Gov. Kathy Hochul and the state Department of Health turn over public records to help it mount its defense in a negligence suit. GETTY IMaGES

Annie Leibovitz’s Central Park co-op sells quickly and for a much higher price than she was asking

But she still appears to have taken a slight loss on the property, for which she paid $11.3M in 2014.

By C. J. Hughes

With the speed of a shutter click, photographer Annie Leibovitz has sold her co-op on Central Park. And she got a lot more than she was asking for.

The apartment, No. 5N at 88 Central Park West, was listed in October for $8.6 million and closed in February, a quick four months later, for $10.6 million. But despite the nearly 25% premium, Leibovitz still appears to have taken a slight loss on the prewar property, for which she paid $11.3 million in 2014, according to the city register.

The light-filled and minimalistic

formal dining room. The large living room offers treetop views of the park.

The buyers of the 3,500-squarefoot pad, Gregg Zehr and Kim Cooper, have deep Silicon Valley roots. Zehr was the founder and former president of Lab126, a research entity that develops technology for Amazon and claims to have invented the Kindle e-reader, according to online biographies. Cooper, meanwhile, has for decades worked as a lawyer for Apple.

Whether a bidding war erupted for the property, which was featured in several media outlets when it went live, is unknown. Leibovitz could not be located by press time. And her real estate agent, Deborah Kern of the Corcoran Group, had no comment. But the strong result bucks trends in a way.

The light-filled and minimalistic four-bedroom duplex is on the fifth and sixth floors of the building, called the Brentmore.

four-bedroom duplex, which is located on the fifth and sixth floors of the building, called the Brentmore, features dark-stained parquet floors, original molding and a

Several spacious and historic co-ops on desirable Central Park West have sold, but only after years of effort and at large discounts to their original prices, including some homes that benefited from celebrity cachet.

One of the most successful pho-

tographers in the world, Leibovitz is perhaps best known for her pictures of rock-and-rollers including Mick Jagger, John Lennon and Fleetwood Mac, though she has also shot a long list of movie stars, business leaders and presidents.

Financial struggles

Still, she faced well-documented financial struggles in the Great Recession and had to shed some of her considerable real estate

portfolio, including three interconnected townhouses in the West Village, at Greenwich and West 11th streets. Ralph Lauren executive David Lauren paid $29 million for the compound in 2014.

Leibovitz has said that she bought her Central Park home to be closer to her daughters’ school but now spends more time in a different West Village property.

Completed at West 69th Street in 1910 and turned into a co-op in 1959, the Brentmore has been

home through the years to high-wattage types who would be naturals for a Leibovitz shoot, including musicians Sting, Paul Simon and Billy Joel. Its two-dozen apartments rarely turn over, though a four-bedroom duplex similar to Leibovitz’s but requiring more work traded in December 2022 for $9 million. The buyer of that unit, which had been on and off the market since 2016, was private equity executive Jeffrey Greenberg.

Skin care brand Sol de Janeiro takes 57,000 square feet at 1 Grand Central in modest gain for Manhattan market

By Eddie Small

Trendy skin care company Sol de Janeiro has inked an 11-year office lease for about 57,000 square feet at Empire State Realty Trust’s 1 Grand Central Place, providing a modest boost to Manhattan’s still struggling office market.

stories tall and offers in-building access to Grand Central Terminal’s Metro-North, Long Island Rail Road and subway trains.

Part of ‘great start’ to year

1 Grand Central Place stands 55 stories tall and offers in-building access to Grand Central Terminal’s Metro-North, Long Island Rail Road and subway trains.

The luxury brand is a subsidiary of L’Occitane, the French beauty company that recently extended and expanded its lease at Empire State Realty Trust’s 111 W. 33rd St.

The real estate firm’s property at 1 Grand Central Place stands 55

Empire State Realty Trust, run by the Malkin family, announced the Sol de Janeiro lease at the end of the day Feb. 21, just a few hours after the firm’s earnings call for the fourth quarter of last year. Thomas Durels, executive vice president of real estate, briefly mentioned the lease on the call as well, citing it as part of the company’s “great start” to 2024, according to a transcript.

The firm, which most famously owns the Empire State Building, inked about 135,000 square feet of

Manhattan office deals during 2023’s fourth quarter. Its occupancy rate dropped slightly, falling from 87.8% in the third quarter to 87.3% in the fourth quarter, but it has overall enjoyed fairly strong demand for its office properties despite the older age of some of them.

Sol de Janeiro was founded in 2015 and offers skin and hair products as well as perfumes. One of its offerings, the Delícia Drench body butter, became the subject of a bizarre rumor late last year when multiple online reviews claimed that its scent attracted wolf spiders. Sol de Janeiro and multiple scientists refuted the claim.

Companies leased roughly 1.3 million square feet of space in Midtown in January, a significant drop month over month and year over year, according to data from Colliers. Its availability rate rose to 16%, and its average asking rent dropped to $78.61 per square foot.

Nassau County leader’s anti-trans crusade re ects rank transphobia and hands Dems a gift

Bruce Blakeman’s order banning transgender girls from sports teams drew immediate condemnation from Democrats

As Republicans have stormed to victory on Long Island, seizing almost every local o ce of note, some have argued that their success can be attributed to their relative moderation on social issues. Nassau and Su olk Republicans, for the most part, strongly support Donald Trump, but they’ve been able to distance themselves from the anti-abortion national Republicans and the hard-right evangelicalism of Mike Johnson, the new House speaker.

Long Island Republicans have been happy to blast Democrats for the migrant crisis, in ation and perceptions of rising crime in New York City while downplaying, to a degree, culture war issues. But that all changed when Bruce Blakeman, the Nassau County executive, announced last month he was banning female transgender athletes from competing on girls’ teams. Blakeman, citing the need to protect girls from “too much bullying going on of biological males trying to inject themselves in women and female sports,” said female sports teams and leagues would be forbidden

from using any of Nassau County’s 100 ball elds and athletics facilities if they permit transgender athletes to compete.

e executive order drew immediate condemnation from Democrats, including the governor, Kathy Hochul. Attorney General Letitia James hinted that she might challenge the legality of the policy.

Over the last decade, Republicans have moved on from decrying samesex marriage to targeting an emergent and very small transgender community. Ron DeSantis, the Florida governor who ran a disastrous campaign for the presidency, made his battles against transgender athletes a centerpiece of his bid. While there have been concerns that athletes like Lia omas, the transgender University of Pennsylvania swimmer who won an NCAA championship against cisgender female competitors, would upend girls’ sports nationally, there has been no mass inux of omas-like athletes onto high school teams.

And there’s certainly no evidence transgender athletes are

changing, to any noticeable degree, how girls sports’ operate in Nassau County. Blakeman’s executive order amounts to rank transphobia and discrimination against a minority group.

Political gift

In the meantime, Blakeman has handed Long Island Democrats a political gift. Part of Democrats’ challenge, as Republicans have seized local legislatures and town governments, was convincing voters that the Long Island GOP is no di erent than the far right of their party. It seemed like Republicans were far better at tagging moderate Democrats as too aligned with the Squad and New York City socialists.

at might all change. Blakeman, who lost several elections before unseating Democrat Laura Curran in 2021, will have a tough ght on his hands next year. e GOP’s obsession with the culture war has cost them local elections across America.

ough Blakeman’s transgender ban has nothing to do with abortion rights, savvy Democrats can tie them together, casting the Nassau GOP as too retrograde for a county that still votes for Dem-

ocrats in presidential elections. ere’s evidence, at the minimum, that Democrats will be able to reclaim some of the turf that was theirs until the 2020s. Tom Suozzi comfortably defeated Mazi Pilip in the race for George Santos’ House seat on the North Shore of Long Island, and Democrats are in good position to drive out Republican Anthony D’Esposito on the South Shore, in part because Joe Biden won the district by so much in 2020.

e greater challenge, for Democrats, will be retaking the county executive and district attorney o ces they lost on Long Island. e Democratic party organizations in both counties are weak. Blakeman will be tough to oust. But if he’s content to be a culture warrior, Democrats will have plenty of fodder for what will be a erce countywide election in 2025.

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

NYC Ferry parent company les for bankruptcy protection

By Caroline Spivack

San Francisco-based cruise operator Hornblower, the company that runs the NYC Ferry system, has led for bankruptcy.

e company said in nancial lings on Feb. 21 that one of its businesses, overnight cruise line American Queen Voyages, has failed to rebound from the e ects of Covid-19. Private equity rm Strategic Value Partners now plans to acquire majority ownership of Hornblower as part of a larger restructuring deal and will invest

ruptcy isn’t expected to impact the city’s ferry operations.

“ is will not a ect NYC Ferry service whatsoever — in fact, this deal injects new capital into the parent company, while eliminating debt unrelated to ferry operations, which will allow the system to continue its record growth across the ve boroughs,” said Hornblower chief executive Kevin Rabbitt in a statement.

Debt to be reduced

“There will be no disruptions to the system and NYC Ferry riders will continue to receive the same exceptional service, reliability, and convenience when riding.”

Jeff Holmes, spokesman for the Economic Development Corp., in a statement

“signi cant equity” in the company, said Hornblower.

Hornblower, which has operated the NYC Ferry service since 2016, told Crain’s that the bank-

e agreement with SVP will enable Hornblower to receive $121 million in new nancing from SVP-managed funds and Crestview Partners, which is maintaining its minority stake in the company. e company has about $1.2 billion in debt, up from $630 million in 2019 prior to the pandemic. Hornblower says the company’s total debt will be reduced by $720 million as a result of the new arrangement. American Queen Voyages will either be sold or its operations will

be wound down to strengthen Hornblower’s nancial foundation and position the company for success, said the company.

e city’s Economic Development Corp., which oversees the NYC Ferry system, said it received advance notice of Hornblower’s

restructuring and is con dent the bankruptcy will not impact ferry commuters.

“Hornblower Group’s business decision to restructure a separate part of their organization will have no impact on NYC Ferry operations or any commitments made in the

NYC Ferry contract,” said Je Holmes, a spokesman for the Economic Development Corp., in a statement. “ ere will be no disruptions to the system and NYC Ferry riders will continue to receive the same exceptional service, reliability, and convenience when riding.”

Ross Barkan

Nassau County Executive Bruce Blakeman signed an executive order banning trans girls from competing on girls’ sports teams. KEVIN P. COUGHLIN/OFFICE OF THE GOVERNOR

Hornblower and the city say the company’s bankruptcy ling will not affect NYC Ferry operations. | BUCK ENNIS

Financial tech firm sublets Chelsea office space from X

By Eddie Small

A financial technology firm has subleased some of the Chelsea office space that once belonged to X, formerly known as Twitter.

MoneyLion, a personal finance app offering services including loans and tax prep, has taken 35,384 square feet at 245-249 W. 17th St., according to an announcement from CBRE, which represented X in the deal. The sublease comprises the entire fourth floor of the 12-story property, an interconnected two-building complex spanning 281,000 square feet and owned by Columbia Property Trust.

Twitter had leased 215,000 square feet of space in the building and signed a five-year extension for the space with Columbia in November 2018. However, the

As of September 2023, X had not paid rent at the property since October 2022.

firm listed almost 200,000 square feet of its space in the property for sublease last winter.

The sublease marks a bit of good news for the building, which underwent a full renovation in 2014 but has been struggling in recent months. As of September 2023, X had not paid rent at the property since

October 2022, and the building was no longer home to First Republic Bank, a former tenant that the government seized in May. Moody’s recently downgraded the security holding the building’s mortgage.

Rent questions

By press time, a representative for X did not respond to questions about whether X was still not paying its rent and how many square feet it continued to occupy in the building, and a representative for Columbia declined to comment. However, it would be unlikely for a sublease to get approved if the sublandlord were not paying its rent.

X had subleased a bit more than a quarter of its footprint as of September but continued to occupy 76% of the space and use the building as its New York headquarters.

Columbia bought the property and a nearby office building in 2017 for $514 million. Asset manager Pimco acquired Columbia in 2021 for $3.9 billion.

The building is 100% leased, with estimated asking rents of between $49 and $65 per square foot, according to the commercial real estate database CoStar. The only tenant the database lists is Family Leisure magazine, which occupies about 73,000 square feet. High-end furniture chain Room & Board has space on the ground floor, according to CBRE.

Mayor’s plan seeks to grow a ‘green economy’ workforce

By Caroline Spivack

The city plans to launch jobtraining facilities in every borough to develop a pipeline of talent for the city’s burgeoning green economy by 2030, according to an action plan Mayor Eric Adams’ administration unveiled Feb. 28.

The training initiative is among 63 new and existing commitments the city is embarking on to support climate-conscious industries that are key to reducing New York’s carbon emissions. Much of the plan is focused on workforce development for what the city projects will be nearly 400,000 jobs — 7% of all jobs in the city — and contribute $89 billion to the city’s GDP by 2040.

“The green economy action plan is about building for the future,” Mayor Eric Adams said a press conference in Sunset Park. “From building resiliency projects and retrofitted apartment buildings to installing solar panels, [electric vehicle] charging and wind turbines, these green collar jobs are already in demand. We must put people in the pipeline to fill the jobs.”

with companies that can take apprentices, have them doing real work on the job, but then also this classroom piece [is] critical.”

The city did not share a timeline or cost estimate for the pilot. Over three quarters of the city’s existing green economy jobs, some 133,000, are in the core sectors of buildings, resilience infrastructure and financing and consulting, according to the action plan. Currier said another potential site to advance these industries is the Climate Innovation Hub planned for the Brooklyn Army Terminal in Sunset Park.  EDC says it plans to issue a request for proposals in March for an operator of the Climate Innovation Hub.

“I think we all know that we need a paradigm shift to renewable energy that is rooted in racial and social justice.”

Eunice Ko, deputy director of the New York City Environmental Justice Alliance

Job training will be led by the Mayor’s Office of Talent and Workforce Development alongside the Economic Development Corp. The agencies aim to partner with companies, schools and other training organizations.

One site will launch at Governors Island, called the “Green Building and Construction Workforce,” which will train more than 100 workers annually for at least two years. Some of the industries the city says it intends to focus on include the installation of new heating, ventilation and air conditioning technology, such as heat pumps, in buildings.

“Space is an advantage when you’re training folks on that new equipment,” Tim Currier, with the Mayor’s Office of Talent and Workforce Development, told Crain’s “We’re definitely trying to work

Some environmental justice and labor groups say they’re skeptical the administration can turn its plans into action. City officials committed to creating the green economy action plan in PlaNYC: Getting Sustainability Done, which was published in April 2023. Yet another climate-oriented city plan, Power Up NYC, was released in September 2023.

“I almost would say that we don’t need another plan, we just really need to work on the implementation of the previous plans,” said Theodore Moore, executive director of the Alliance for a Greater New York, a coalition of community and labor organizations.

“We see plan after plan after plan but we don’t actually see the shovels in the ground. We don’t see the jobs created,” said Moore. “We don’t see the infrastructure

being upgraded, and quite frankly, we don’t really see the transition to turn this city into a sustainable city.”

Not consulted

Eunice Ko, deputy director of the New York City Environmental Justice Alliance, said she was frustrated that the 12 grassroots community and labor groups in her alliance weren’t among the dozens of entities the city consulted in creating the action plan.

“I think we all know that we need a paradigm shift to renewable energy that is rooted in racial and social justice,” said Ko. “That requires shifting the economy to new types of jobs and skills, and part of cultivating that workforce needs to be consulting with communities on what they need and what they have been asking for.”

Within the renewable energy sector the Adams administration said it is working to add 16,000 new jobs by 2030, both through direct investment and by making it easier for the private sector to invest in clean-energy infrastructure. This includes new tax incentives for battery storage.

EDC officials plan to use NYC Industrial Development Agency tax incentives to activate 500 megawatts of battery storage systems across the city. Nse Esema, senior vice president of EDC’s green economy team, said such incentives are key to ensuring the city and state can reach its renewable energy targets.

“Throughout the renewable landscape whether, we’re talking about battery storage or even with offshore wind, we’re seeing that there’s some major financing challenges,” Esema told Crain’s. “Why the [tax] incentives are so crucial is that it’s literally impacting what has become such a bottleneck issue … to make sure that these are projects that can actually get deployed.”

Workers install solar panels on the roof of a building. | BLOOMBErG

City serves up a balanced approach to permanent outdoor dining program

The city’s rollout this month of a complex new outdoor dining program calls to mind the Platoattributed proverb, “Necessity is the mother of invention.”

e pandemic, by necessity, inspired a renaissance of al fresco cafes and in-street dining setups across the city, which injected energy to our streetscapes and delivered a lifeline for restaurateurs. But an “invention” is rarely birthed in nal form.  e loose regulation of early outdoor dining setups led to plenty of slapdash structures, which hogged street space and doubled as winter storage sheds and rat havens. Neighbors complained, and elected o cials took notice.

e city's new regulatory approach — the product of lengthy negotiations between the restaurant industry, the City Council and Mayor Eric Adams’ administration — represents a reasonable and thoughtful compromise between those who wanted to preserve the freedom of the pandemic program and opponents who objected to lth, noise, eyesore structures and so many street takeovers.

While we have some concerns about

implementation — from potentially time-consuming regulatory review and which agencies are responsible, to the costs restaurants face to acquire permits and to build compliant dining spaces — there’s plenty to like in the new plan.

New rules

e new rules limit on-street dining to warm-weather months, detail the materials and furnishings that will be allowed, and require that roadway structures be “open-air” — spelling the end of the enclosed sheds that became symbols of the pandemic program, as Nick Garber reported in his cover story this week. Future structures must also be certain distances away from curbs and subway entrances, and they cannot stay open past midnight.

e city will start accepting applications on March 5, and restaurants with existing setups under the old program must submit by Aug. 3 if they want to transition seamlessly. All existing dining structures built under the old program must come down by November if they don’t comply with the new rules.

Restaurant owners will also need to start paying under a tiered system that will charge di erent fees by neighborhood, along with a license fee of $1,050 every four years for sidewalk or roadway seating.

ward, many of the 13,000 restaurants that have participated in outdoor dining since its 2020 inception should be able to maintain an outdoor presence.

If the city runs the program e ciently, keeps the fees low and its rules straightfor-

at would be a good thing for the city. And, as Plato also said, “ ere is no harm in repeating a good thing.”

Make better use of vacant office space for more housing

Pretty much everyone agrees there isn’t enough housing in New York City to meet demand, especially the a ordable kind. Albany can help. Lawmakers need to create a new 421-a program, raise the oor-area ratio cap and streamline the environmental review process. I'm not saying it would be easy. But with political will, it can be done.

Take Lower Manhattan as an example of what's possible. e 5 World Trade Center development site was outside of the normal land use process. But, local representatives, Albany leadership and the community came together and proved that we can forge a way forward. rough negotiation and compromise, a large-scale development was approved with substantial a ordability included. Albany lawmakers can make it easier for projects like this to happen across the city.

Here are three ways to move the needle:

City o cials put forward a plan to incentivize new construction of mixed-income, multi-family rentals. Programs like this are helpful, but we need a more substantial program with the state’s backing.

Raise NYC’s residential FAR cap. NYC policy makers and community leaders need the ability to determine where more density is appropriate. is would be especially helpful in Lower Manhattan, where buildings ripe for conversion already exist and can't be fully converted under the current oor-area ratio cap.

Streamline the environmental review process. e current process can take years and cost millions of dollars, deterring the creation of new development.

Mayor Eric Adams recently proposed the Green Fast Track plan to help speed the city’s environmental review for some a ordable housing projects. But only Albany can address broader problems.

A new state-enacted city tax incentive. Since the expiration of the 421-a tax exemption in 2022, residential building lings in New York City have steadily declined, and the legislature has yet to agree on a replacement.

Last year, average rent prices in Manhattan soared, while nearly 100,000 New Yorkers slept in the city’s shelters on any given night. Rising construction costs, high interest rates and cost of living increases continue to worsen the city’s housing crisis. Moreover, the

Scarpetta lled up every night for outdoor dining during summer months. BUCK ENNIS

Jessica Lappin is the president of the Downtown Alliance, the business improvement district that oversees Lower Manhattan, including the Financial District.

Lawmakers need to create a new 421-a program, raise the oor-area ratio cap and streamline the environmental review process to boost affordable housing in the city, writes Jessica Lappin of the Downtown Alliance. BUCK ENNIS

To address the housing crisis, increase homeownership

The legislature is back in Albany, and the ongoing housing crisis is taking center stage after little was accomplished last year. In her State of the State address and subsequent budget proposal, Gov. Kathy Hochul rightfully introduced tax incentives, anti-discrimination measures and continued funding for new home construction. But as the housing debate rages on, we cannot lose sight of the need for increasing and retaining homeownership, particularly among our disenfranchised communities. According to a 2022 report by the New York State Comptroller’s Office, New York has some of the lowest homeownership rates in the country.

ing costs, making home retention difficult and wealth-building through homeownership nearly impossible. The attorney general’s office estimates that this costs Black and Latino New Yorkers more than $200 million collectively over the course of their mortgages.

Homeownership drives wealth and economic stability and is a core part of achieving “the American Dream.” This means that racial disparities in homeownership also widen the racial wealth gap. A 2023 report by the New York Attorney General’s Office found that homeownership in the state is concentrated among white households and neighborhoods. White households are more than twice as likely to own their home as compared to Black or Latino households.

New Yorkers of color are more often denied mortgages and face higher borrow-

PERSONAL VIEW

The lack of accessibility to sustainable homeownership contributes to the housing crisis and exacerbates racial inequities in wealth, community investment, incarceration, job creation and more. If we’re going to address these issues, our leadership in Albany needs to do more to make achieving and retaining homeownership status possible, with a focus on narrowing these gaps. One place to start is by fully funding the Homeowner Protection Program, which provides support for homeowners facing foreclosure, along with the First Time Homeowners program and the Land Bank Initiative, which transforms vacant or underutilized property into affordable homes.

These programs work if the proper support and funding are put behind them.

For example, LISC teamed with the Wells Fargo Foundation on The Wealth Opportunities Realized Through Homeownership BIPOC Initiative, a program that aims to create and preserve 5,000 BIPOC homeowners

Caregivers for older adults need affordable housing

Recent data about New York's housing crisis highlights one disastrous impact — a concerning exodus of low-income New Yorkers who are priced out of the city they once called home. Since 2022, the people who have moved out of New York have had a median wage of $49,000, which is 18% lower than those that left in the prior year.

This concerning trend threatens the very fabric of diversity that makes New York special. And it also highlights the unique ways in which our city’s housing crisis particularly impacts New York’s 1.1 million older adults.

New York needs to build 400,000 more units of senior affordable housing by 2040 in order to meet the needs of a growing number of low-income older adults. But older adults don’t just need more senior affordable housing — they also need the people who care for them and love them to be able to afford to stay here too.

neighborhoods.

Kathryn Haslanger is the CEO of JASA and serves on the board of the Human Services Council.

Aging New Yorkers rely on the assistance of thousands of human servicesector workers. These folks are the heart of the nonprofit industry, and they deliver vital support to the city’s most at-risk populations, but they are being priced out of their

For example, at JASA, a nonprofit that provides critical services to 40,000 older adults each year, human service workers are on the frontline of our mission of to ensure access to resources such as Meals on Wheels, older adult center programming and health services, which are lifelines for vulnerable older adults. However, the very workers responsible for delivering these crucial services are leaving the city in record numbers. The impact of this loss is felt not only in the departure of the workers themselves but has a ripple effect on the older adults who depend on them.

This comes at a time when the human service industry is already struggling; poverty wages are driving people out of the industry as living costs far exceed job pay, and nonprofits are suffering from high job vacancy rates as a result. As the senior population in New York grows in the coming years, we need to focus on interconnected solutions: increasing the production of senior affordable housing and making it more affordable for low-income front-line human service workers to stay in the city.

We need to build more senior affordable housing, units specifically designed to help

in New York City by 2025. With the support of Worth, we established the New York City Homeownership Network, which has preserved more than 1,100 BIPOC homes and supported 153 BIPOC homeowners to purchase 132 homes since its launch in 2022. Over 75% of these homes were in the Bronx, Brooklyn or Queens, representing areas most affected by racial disparities in wealth, income and homeownership.

The Worth initiative’s success in a short time proves that bridging these gaps is attainable with proper intention and focus. The new legislative session in Albany represents an opportunity to unlock the benefits of homeownership for more New Yorkers and for our state collectively.

When BIPOC New Yorkers feel secure in their homes and can build generational wealth from their investment, their community and our economy also feel the benefits. With homeownership comes more opportunity to reinvest in your community, create economic stimulus for lo-

cal businesses and successfully raise a stable family. Studies show that children raised by homeowners are more likely to own homes themselves.

New York’s housing debacle is complicated, as there are countless voices trying to provide solutions to the problem. But we cannot allow the issue of homeownership to get lost in the shuffle. The tools, resources and interest in addressing our shortcomings are there, but we need leadership in Albany to fund and streamline more formal efforts if we’re to truly bridge these gaps and create meaningful change.

older adults age with dignity. JASA is the largest nonprofit manager of senior affordable housing in NYC, and has a more than 800 new units in the pipeline. Housing is not just about having a roof — to age in place with dignity for many older adults requires apartments built with features such as walkin showers, and ready access to critical services like food, social interaction, health education and home care.

We also must ensure our city’s approximately 80,000 human services workers can afford to remain in New York. That means more housing for all New Yorkers, and we know that won’t be an easy or quick fix.

What we can do now for the frontline human service workers is make New York more affordable for them by paying fair wages. Currently, annual wages for human service workers are the secondlowest of any industry in the city. The Human Services Council has outlined its

#JustPay demands, recognizing that fair compensation is fundamental to retaining dedicated human service workers.

The city, as the funder and determiner of pay rates, has a crucial part in supporting these workers. While the nonprofit sector has limited control over worker pay, collaboration with the city is essential to creating a sustainable and equitable compensation structure that reflects the value of the services provided and allows our aging neighbors to remain in their homes.

As New York’s older adult population continues to grow, the housing and affordability crisis presents a range of challenges specific to older adults and the people who care for them which haven’t gotten enough attention. Together we must take concrete steps to transform New York into a better place to age in place with dignity, and safeguard its diversity, its workers and its older adults.

Valerie White is the senior executive director of LISC New York, a community development financial organization.

Homeownership brings more opportunity for those owners to reinvest in their communities, create economic stimulus for local businesses and successfully raise stable families, according to Valerie White of LISC New York. | BLOOMBErG

As New York City’s senior population grows in the coming years, we need to focus on interconnected solutions: increasing the production of affordable housing for seniors and making it more affordable for low-income front-line human service workers to remain in the city, writes Kathryn Haslanger, CEO of JASA. | PIXaBaY

Manhattan leasing ticks up at Empire State Realty Trust

By Caroline Spivack

Leased Manhattan office space at Empire State Realty Trust properties continued a gradual upward trajectory this past quarter, according to the company, despite a slight dip in occupancy.

The trust, owner of the Empire State Building, leased roughly 164,000 square feet of commercial space across 19 sites during the fourth quarter of 2023, closing out the year with more than 950,000 square feet leased, it said during a quarterly earnings call Feb. 21. Within its Manhattan office portfolio, the company signed about 135,000 square feet over 14 leases in the fourth quarter.

Leased Manhattan office space was 92.1% by the end of the quarter, up modestly compared to the third quarter of 2023, but occupancy slipped to 87.3%, compared with 87.8% quarter over quarter. Overall, the company’s office occupancy

and commercial spaces overall remains up compared to the fourth quarter of 2022, in what amounts to a positive indicator for the year ahead.

“We have a healthy leasing pipeline for 2024 and saw an uptick in tour volume [at the Empire State Building] in the fourth quarter, reaching our second-highest level since 2019,” said Thomas Durels, executive vice president of real estate, during the earnings call. “That should drive leasing activity in the year ahead.”

The bulk of the company’s commercial leasing activity in 2023 came from the firm’s Manhattan office portfolio, with 862,000 square feet leased in 2023. It marked the company’s highest annual volume since 2019, before Covid-19 shook up the market. The average lease duration in the company’s Manhattan office portfolio has increased to 11.9 years, which is the highest it’s been in the last two years, the company said.

“We have a healthy leasing pipeline for 2024 and saw an uptick in tour volume [at the Empire State Building] in the fourth quarter, reaching our second-highest level since 2019.”

Thomas

Durels, executive vice president of real estate, Empire State Realty Trust

rate slid to 86% by the end of the quarter, down from 86.7% in the third quarter of 2023. Despite the marginal backslide, the trust’s occupancy rate for its Manhattan offices

City’s

Notable Manhattan office leases for the firm in the past quarter include a new, full-floor, 17-year agreement with Greater New York Mutual Insurance Co. for 52,000 square feet at the Empire State Building and a 10-year, full-floor office lease with Hanover Street Capital for 13,000 square feet at 250 W. 57th St. The trust also inked full-floor renewal deals with Ingram Content Group,

Anaplan and Fairfield Maxwell.

The Empire State Building is just shy of 92% leased, according to the company.

Famous observatory

Meanwhile, the Empire State Building’s famed observatory generated $36.9 million in net operating income during the fourth quarter. The observatory’s net operating income for 2023 overall landed at $94.1 million — a 26% increase year over year and on par with revenue generated in 2019.

Christina Chiu, the newly appointed president of the Empire State Realty Trust, said the company expects observatory revenue to climb as high as $102 million for 2024.

Chief Executive Anthony Malkin said during the call that the company has about 190,000 square feet of additional leases in some sort of negotiation, most of which are within its Manhattan office portfolio. Malkin added that the company also has “probably a few hundred thousand square feet” of proposals primed for negotiation.

“Now, not all of those will transition into leases, but it gives you an indication that we have a good, healthy pipeline of activity,” said Malkin. “I think we’re incredibly well positioned to improve our lease percentage in 2024.”

Empire State Realty Trust has continued to enjoy relatively strong demand for its Manhattan office portfolio despite owning a mix of older properties. Aside from the Empire State Building, its office portfolio includes 1 Grand Central Place, 501 Seventh Ave. and 1400 Broadway.

proposal to clear up to $2 billion in medical debts won’t eliminate

By Amanda D’Ambrosio

A city proposal to clear up to $2 billion of New Yorkers’ medical debts will not relieve patients who owe the city’s public hospital system or municipal ambulance network, according to a city filing published last month.

The plan, which was announced by Mayor Eric Adams in January, aims to invest $18 million in city funds to clear up to $2 billion in medical debts. The city intends to contract with the nonprofit RIP Medical Debt to purchase outstanding bills from hospital systems and debt buyers. The organization will ultimately erase those debts at no cost to New Yorkers.

Targets 500,000

Elisabeth Benjamin, vice president of health initiatives at the nonprofit Community Service Society, said that while the city’s proposal is a good attempt to knock out medical debt, it lacks a targeted approach to the providers and patients who are most vulnerable.

“There’s a lot of low-income

NYC H+H or FDNY ambulance bills

people in New York City who have medical debt,” Benjamin said. “And a lot of those folks go to true safety-net hospitals, like New York City Health + Hospitals, and you

know, use ambulances.”

The mayor’s relief plan aims to clear the debts of 500,000 New Yorkers and targets individuals with low incomes who are most at

risk of incurring medical debt, according to a notice in the City Record. The city’s proposal targets people with lower incomes up to 400% of the federal poverty thresh-

“There’s a lot of lowincome people in New York City who have medical debt.”

Elisabeth Benjamin, vice president of health initiatives at the nonprofit Community Service Society

old, as well as people with incomes up to 1,000% of the threshold whose debts make up 5% of their annual income.

The mayor’s office and the Department of Health and Mental Hygiene did not answer a question from Crain’s on Feb. 22 about the exclusions.

Stephanie Buhle, a spokeswoman for H+H, said that the health system does not report outstanding medical debts to credit agencies or sue patients, nor does it permit its vendors to do so. She added that the health system provided $1.7 billion in charity care during the 2022 fiscal year, which includes forgiven debt.

The city’s plan to wipe out New Yorkers’ medical debts, which was proposed by Mayor Eric Adams, excludes outstanding bills to New York City Health + Hospitals and Fire Department of New York ambulance services. | GETTY IMaGES

Empire State Building | BLOOMBErG

Engineer who inspected a Bronx apartment building that partially collapsed agrees to two-year suspension

By Nick Garber

The independent engineer who inspected a Bronx apartment building months before its partial collapse has agreed to a two-year suspension from examining facades in New York City, Mayor Eric Adams announced Feb. 22.

The engineer, Richard Koenigsberg, had already been temporarily suspended days after the Dec. 11 collapse at 1915 Billingsley Terrace, which took a large chunk off the 6-story building and left multiple families homeless. Koenigsberg had been hired by the build-

belt. His firm’s website lists offices in Manhattan and Chicago, and highlights past work on buildings including the iconic Hotel Chelsea and Ansonia apartments. He previously told Crain’s he was cooperating with investigators following the collapse, including by sharing a batch of photos of the building.

Separate investigations into what caused the partial collapse are being conducted by the city’s Buildings and Investigations departments, as well as the Bronx district attorney, and could result in more enforcement actions, the mayor’s office said.

Richard Koenigsberg is a Columbia-educated industry veteran with hundreds of projects under his belt.

ing’s landlord to inspect it in June, but he allegedly mistakenly described a load-bearing column as decorative rather than structural, the city has said.

Now, in a legally binding agreement, Koenigsberg has agreed to a voluntary two-year suspension and will pay a $10,000 fine, City Hall announced. The term is less severe than the permanent ban Adams initially said he would seek.

Koenigsberg, reached by phone, said he was unaware that the agreement had been announced and declined to comment until he learned more.

Koenigsberg is a Columbiaeducated industry veteran with hundreds of projects under his

As part of the agreement, Koeningsberg will need to wind down his work in the city over a four-month period, during which he can complete already-active jobs — although any facade inspections he produces will be reviewed by a third-party engineer and then given “enhanced scrutiny” by the Buildings Department.

The agency has also audited all 368 facade inspection reports that Koenigsberg submitted in 2023, the city said, although it did not say what that audit found. A copy of the settlement that the mayor’s office shared with Crain's states that Koenigsberg is not admitting to any guilt as part of the deal, and that the Buildings Department will agree to limit its future charges against him.

The city said it agreed to the settlement rather than pursue a case through the Office of Administrative Trials and Hearings, as it had initially planned to do.

Property owners sued

Fallout from the collapse goes beyond Koenigsberg. The Buildings Department is also looking at how it regulates the private experts who handle facade inspections through Local Law 11 to determine whether registration requirements could be strengthened.

“Public safety in our city relies heavily on the competence and expertise of state-licensed private engineers, especially their ability to properly diagnose building conditions,” Buildings Commissioner

James Oddo said in a statement.

“When a private engineer fails to demonstrate this competency, our construction professional disciplinary team will not hesitate to take quick action to curtail their ability to work in our city.”

Somewhat miraculously, the December collapse caused no fatalities and only a handful of minor injuries, although about 150 people were left temporarily homeless after the city issued a vacate order. All but a handful of households have since moved back, but the families that remain displaced were among the

tenants who filed a lawsuit against the building’s owners this month, saying the landlords had left the property in shambles.

The main owners named in the suit included David Kleiner and his associate Yonah Roth. Another name that appears in public records as an owner of the property is Jacob Zanger, who is considered one of the city’s worst landlords by the public advocate’s office because of numerous violations at his buildings.

C. J. Hughes contributed to this reporting.

Brooklyn-based Vice Media to no longer publish content on its website, plans to cut ‘several hundred’ positions

By Caroline Spivack

One-time digital journalism darling Vice Media plans to lay off several hundred employees and will no longer publish content on its website, according to a memo sent to staff by chief executive Bruce Dixon on Feb. 22.

The Brooklyn-based company’s decision to restructure comes less than a year after Vice was acquired

company profitable, leadership now intends to pivot to “a studio model” and rely on established media outlets to distribute its content, Dixon explained in the memo.

“It is no longer cost-effective for us to distribute our digital content the way we have done previously,” Dixon wrote. “Moving forward, we will look to partner with established media companies to distribute our digital content, including news, on their global platforms, as we fully transition to a studio model.”

Vice leadership intends to pivot to “a studio model” and rely on established media outlets to distribute its content.

Bruce Dixon,

chief executive of Vice Media, said in a memo

out of bankruptcy by a group of lenders led by Fortress Investment Group, Soros Fund Management and Monroe Capital in a roughly $350 million transaction. As part of a plan to make the embattled

Refinery29, the company’s women lifestyle-focused website, will continue to run as a stand-alone digital publication, Dixon said in the memo. Vice is in advanced talks to sell Refinery 29, and Dixon said the company expects to announce more on the sale in the coming weeks.

“With this strategic shift comes the need to realign our resources and streamline our overall operations at Vice,” Dixon wrote. “Regrettably, this means that we will be reducing our workforce, eliminating several hundred positions.” Staff will be notified (this) week, said Dixon.

A long fall

The financial strife marks a long fall for a company that at its peak in 2017 was valued at $5.7 billion. The business began as a music and culture magazine in Montreal in 1994, before raising capital from highprofile investors including Walt Disney Co. and Fox Corp.

Over the last decade Vice vastly expanded its digital, television and film operations across the globe with an emphasis on ambitious, immersive storytelling, and

even shared a Pulitzer Prize in the 2020 audio category for stories about immigrants in Latin America. But the company struggled to generate consistent revenue.

In documents filed as part of the company’s bankruptcy last

year, Vice’s chief restructuring officer said the company “invested significant capital in content, operations and infrastructure that did not provide an immediate return and resulted in significant losses.”

Richard Koenigsberg, who inspected 1915 Billingsley Terrace months before its December partial collapse, has agreed to a two-year suspension, according to the mayor’s office. | BUCK ENNIS

Nashville-based seafood chain Captain D’s signs lease in Harlem for one of its rst New York City locations

By Nick Garber

Fast-casual seafood chain Captain D’s will drop anchor in Harlem for one of its inaugural New York City locations, brokers involved in the transaction told Crain’s e chain, headquartered in Nashville, has signed a 15-year lease for a 1,400-square-foot space at 342 Lenox Ave., between West 127th and West 128th streets.

building is HPH Milano, listed elsewhere as NG Realty. e ground- oor commercial space until recently was home to another seafood restaurant.

Batter-dipped sh

Captain D’s bills itself as the nation’s largest fastcasual seafood restaurant, operating more than 530 locations across 23 states — primarily in the South.

Captain D’s will pay $120 per square foot and expects to open in the next six months, said Dov Bleich of Tri State Commercial Realty, who represented both the tenant and the landlord in the transaction, along with Daniel Sharabi.

e o cial owner of the 5-story

Known for its batter-dipped sh, Captain D’s bills itself as the nation’s largest fast-casual seafood restaurant, operating more than 530 locations across 23 states — primarily in the South. e chain announced last year that it was planning an expansion into New York City and Long Island, eyeing as many as three new locations. The planned New York City-area locations all will be run by longtime restaurant franchisees

Kelly Moughal and Muhammad Saleem, who own multiple Subway and Little Caesars locations and first brought the burger chain Checkers to Manhattan.

Captain D’s has been owned since 2022 by the private equity rm Centre Partners, based in New York and Los Angeles.

Captain D’s has signed a lease for the 1,400-square-foot commercial space at 342 Lenox Ave., formerly home to another seafood restaurant. | BUCK ENNIS

Related Cos. planning high-end retail, hotel and condos for 625 Madison site

By Eddie Small

The Related Cos. is planning to construct a retail, hotel and condo development at 625 Madison Ave., the site of the Midtown office tower it went under contract to buy from SL Green late last year, according to a source familiar with the deal.

identify the buyer in its announcement, multiple sources later confirmed to Crain's that it was Related.

The current tower, located between East 58th and East 59th streets, dates back to the 1950s and has struggled with high office vacancy rates. Manhattan's retail, hospitality and residential markets have all enjoyed much stronger recoveries from the pandemic than its office market, which may help explain Related's plans for the property.

The current tower dates back to the 1950s and has struggled with high office vacancy rates.

The retail portion of the project will be on the ground floor. The company is still determining how many hotel rooms and condos the project will have, and it is speaking with multiple high-end luxury brands about occupying the hotel and retail spaces, the source said.

A spokesman for Related declined to comment on the firm's plans for the site.

The Real Deal was the first to report the news.

SL Green announced in early December that it was in contract to sell the 17-story, block-long building at 625 Madison Ave. for $632.5 million. Although the firm did not

The property also spent years embroiled in a contentious legal battle between SL Green and Ashkenazy Acquisition Corp. SL Green bought the building itself in 2004 for $102 million, while Ashkenazy bought the land under the building nine years later for $400 million. SL Green ultimately won control of the entire property through an August foreclosure auction prompted by Ashkenazy falling behind on its loan payments.

Related recently filed plans with the city that reveal more details about its casino proposal in Hudson Yards on Manhattan's Far West Side. The plan includes a trio of skyscrapers, an office tower and more than 1,500 housing units, a roughly $12 billion investment overall.

625 Madison Ave. in Midtown | BUCK ENNIS

Mayor cancels next round of city budget cuts in another reversal

By Nick Garber

Mayor Eric Adams on Feb. 21 canceled a long-expected round of city agency spending cuts he had previously forecast for April.

The announcement was the latest in a round of budget reversals that he said have been enabled by strong tax revenues and slimmed-down spending on the migrant crisis.

In a hastily announced interview on ABC7, the mayor said his administration would no longer impose an across-the-board 5% cut to most city agencies as part of the executive budget for Fiscal Year 2025 that City Hall must release in April. Adams had warned for months that the city’s heavy spending on migrants would necessitate the April cut, on top of two prior rounds of cuts he imposed in November and January — but the mayor began to change his tune earlier this year, saying the April cuts might be canceled if the city gets enough state aid for migrants.

Adams’ decision to cancel the April cuts will spare him more political blowback and prevent a further erosion of city services, like the elimination of Sunday library service that resulted from his November reductions. But it is also sure to fuel further accusations that his administration was exaggerating New York’s fiscal peril last year in a bid for more federal aid.

City Hall officials said on Feb. 21 they avoided the need for further cuts by reducing their planned spending on migrant care by another 10%, on top of the 20% reduction they said they had achieved in January. Besides canceling the April cuts, Adams said the city will ease the hiring freeze he imposed last year as well as other restrictions on agencies’ small-scale spending.

“The combination of our tough, but necessary financial management decisions, including cutting asylum seeker spending by billions of dollars, along with betterthan-expected economic performance in 2023, is allowing us to

cancel the last round of spending cuts, as well as lift the near total freezes on city hiring and other than personal spending,” Adams said in a statement on Feb. 21.

Andrew Rein, president of the fiscally hawkish Citizens Budget Commission, called Adams’ decision “ill-advised.”

“The city has yet to be fully transparent about whether it will fund the current level of housing vouchers, pre-K special education, and other underbudgeted programs,” Rein said in a statement. “While it’s good that the City is loosening the hiring freeze, there still should be more flexibility to allow agencies to fix staffing shortages that affect important services.”

Major concession

In backing off the April cuts, Adams made a major concession on the coming year’s budget before negotiations have even begun in earnest with the City Council. Council leaders including Speaker Adrienne Adams criticized his initial cuts and expressed qualms about the subsequent reversals. She called last month for an approach to budgeting “that is based on a more accurate and shared set of facts.”

“As the council’s economists forecasted, New York City’s economy has proven durable and resilient, and blunt cuts that had a disproportionately negative impact on vital programs were never necessary,” the speaker said Feb. 21 along with council finance chair Justin Brannan, adding that they were “relieved” by the mayor’s turnabout.

Some observers have questioned the math that Mayor Adams relied on when he released a harsh November budget update that threatened to shrink cherished services like the police force and the number of trash cans on city streets.

Last month, the news site The City reported that Adams’ administration had taken the unusual step of

Health startup raises $60M to automate clinical tasks with AI

By Amanda D'Ambrosio

Health care startup Fabric raised $60 million in a series A funding round Feb. 21 to expand its AI software, which aims to automate clinical and administrative health care tasks.

The Chelsea-based firm, founded in 2021, plans to use the funding to grow its tech platform, which provides services to patients at several points of the care continuum from start of symptoms to an emergency room visit. The funding round was led by General Catalyst, with participants including Thrive Capital, Google Ventures, Salesforce Ventures, Vast Ventures, Atento Capital and Box Group.

not revising its projections for revenues and spending to reflect the improving economy in New York and nationwide when it released that November plan, leading to eye-watering future-year budget gaps that appeared larger than they really were.

In the ensuing months, Adams has not received the federal aid for the migrant crisis he has long sought — but the city has finally revised its tax and revenue forecasts in a more optimistic direction. Gov. Kathy Hochul also improved the city’s outlook by pledging $2.4 billion in aid in her latest budget proposal.

Meanwhile, Adams’ approval rating reached a record low in the weeks following his November cuts, with polls showing that voters widely disapproved of his budgeting. By January, Adams announced that he was undoing many of the planned cuts to police, sanitation and public schools, although reductions to most city agencies were left in place. City Hall has said the migrant crisis will cost the city some $10.6 billion between fiscal years 2023 and 2025.

Although more than 178,000 asylum seekers have now passed through the city since early 2022 and about 65,000 remain in the city’s care, the Adams administration says it has managed to drive down spending by encouraging migrants to leave shelter more quickly through caps on shelter stays. Migrants were not the only contributor to New York’s budget woes, which also came from new contracts with unionized city workers and the drying-up of federal pandemic relief money.

Anticipating criticism, City Hall pointed on Feb. 21 to an analysis published last week by the ratings agency Moody’s, which praised the city’s “successful implementation” of spending cuts in response to the migrant crisis. In all, the city’s spending cuts have saved about $7 billion between the current and next fiscal years, City Hall said.

CEO of Fabric, said that the firm’s approach is an attempt to integrate different health care technologies that have “historically been fragmented point solutions.”

Fabric, which was formerly named Florence, launched from stealth last March with $20 million in seed funding. Since then it has changed its name and acquired the telehealth company Zipnosis and conversational AI firm GYANT to build out its digital platform.

Reduced provider workload

Fabric’s virtual care platform includes an AI-powered chatbot that can intake patient symptoms and connect them to a telehealth provider directly on the platform. It also offers in-person administrative assistance in emergency

“I think there’s an opportunity for us to touch every patient in the country.”

Aniq Rahman, Fabric CEO and founder

rooms and other health care settings, aiming to reduce the time clinicians spend on paperwork. The company provides digital intake and discharge forms that patients can access directly from their phone, allowing them to input clinical information, control prescription fulfillment and even self-discharge when appropriate.

Aniq Rahman, founder and

Fabric works with 70 health systems including Luminis Health, Intermountain Health, OSF Healthcare and the Cleveland Clinic, Rahman said. Its telemedicine platform has seen 5 million visits and 13 million chatbot conversations to date.

The average patient wait time for a virtual visit is seven minutes, the company said. Virtual intakes have reduced provider workload to 89 seconds — as much as 10 times faster than the typical telehealth or in-person appointment, Rahman said.

Rahman added that the new funding will continue to boost the company’s growth. Fabric plans to continue investing in technology, planning acquisitions of other tech companies and growing its workforce. The company currently employs 130 workers, but Rahman said it's possible that the company could double its headcount in the next year.

“I think there’s an opportunity for us to touch every patient in the country,” Rahman said, noting that he hopes to grow the usage of the company’s conversational AI chatbot and telehealth platform.

Mayor Eric Adams said that additional across-the-board 5% budget cuts in April would no longer be needed, thanks to improving tax revenues and lower spending on migrant care. | ED rEED/MaYOraL PhOTOGraPhY OFFIcE/FLIcKr

NYPD floods subway with more cops in crime crackdown

By Caroline Spivack

After a January uptick in crime on the subway, Mayor Eric Adams is again relying on overtime spending to beef up the police presence underground, with 1,000 additional officers assigned to the subway since the start of February, according to the NYPD.

The latest wave of police is on top of the roughly 2,500 officers in the NYPD’s $250 million transit bureau. Their deployment comes after 221 major crimes occurred in

on the subway so far this year potentially put the city on track to surpass the five killings in 2023.

“These cops are out there and highly visible stationed at turnstiles on mezzanines and platforms and riding the trains,” said NYPD Chief of Transit Michael Kemper during a Feb. 26 Metropolitan Transportation Authority committee meeting. Kemper called the January crime uptick “concerning and unacceptable” and said the strategy of hundreds of additional officers assigned from elsewhere in the city to the subway is the same method relied on last year.

“These cops are out there and highly visible stationed at turnstiles on mezzanines and platforms and riding the trains.”

the subway in January, up from the 152 that took place during the same period in 2023 — a 45.4% increase.

NYPD transit officials say a rise in grand larcenies — property theft without force — on trains is driving the upward trend. Grand larcenies make up about 50% of the January crimes. Three murders

Past surges of police in the subway have come at a high cost: The NYPD went from spending $4 million on overtime for subway security in 2022 to spending $155 million in 2023.

The overtime spending in 2023 arguably produced a 2% drop in major crimes in the subway, including murder, rape and robbery. There were 2,089 major crimes in the subway in 2023, reduced from 2,137 in 2022, NYPD data shows.

During the first three weeks of last month, the crime uptick appeared to be reversing, with a 17.7% decrease in subway crime so far compared to the same

period in February 2023, according to the NYPD.

Lack of details

The NYPD declined to say precisely how many officers are currently assigned to patrol the subway system.

Police officials and the Adams administration didn’t immediately respond to questions about how much the initiative is expected to cost taxpayers and where funds for the additional subway shifts will come from. The mayor said in an unrelated press conference last month that he is in talks with Gov. Kathy Hochul about potentially receiving state dollars to pay for more NYPD overtime for extra subway patrols.

Adams said funding for the city and state’s subway safety plan, which supported 1,200 additional overtime shifts of police in the subway, has “sunsetted.” Kemper added, “it was funded by overtime and, you know, that overtime was used.”

In the meantime, the mayor said the NYPD is extending officers’

tours in the subway to 12-hour shifts. He described the change as “good for morale.”

“We get a greater level of visibility and we’re finding that the officers rather have more days off where they’re able to do a longer tour while they are in [the subway],” Adams said.

Kemper noted that the majority

of people arrested in the subway are serial offenders; he called for lawmakers to consider steeper penalties.

“We find ourselves far too often arresting the same individuals over and over and over again,” said Kemper. “Why are we forced to arrest a guy like this 55 times? There needs to be consequences.”

Michael Kemper, NYPD chief of transit

A NYPD police officer walking on a subway station platform. | BENJAMIN KANTER / MAYORAL PhOTO OFFICE

Developer Yellowstone eyes hotel development for Times Square site that currently houses migrants

By C. J. Hughes

A developer wants to build a hotel at a former McDonald’s turned migrant shelter in Times Square.

Yellowstone Real Estate Investments filed plans on Feb. 26 to create a 265-room offering at 220 W. 42nd St., a mixed-use building near Seventh Avenue currently housing nearly 1,100 migrants.

The hotel, though, would occupy the upper floors of the historic, 24-story site, which once contained offices for media companies but appears to have been vacant for years, according to the filings with the Department of City Planning.

Yellowstone, which also owns the Watson Hotel on West 57th Street, did not specifically spell out its proposal for the groundlevel space, which from 2002 to 2020 contained a McDonald’s that

asylum seekers who have flooded into New York since spring 2022.

But the priority of the firm, whose chief executive is Isaac Hera, is likely getting the Planning Department to approve the hotel first. Since 2021, new hotels can no longer be developed without first securing a special approval to gauge their possible adverse effects on neighborhoods, a rule that critics call an attempt to protect unionized hotel employees. New hotels tend to hire non-union workers.

Market hasn’t recovered

Few new hotels have broken ground since the rule was established, though the hotel market is not back to its prepandemic self.

Hera did not return an email seeking comment. But in an attempt to prove that 220 W. 42nd is an ideal place for a hotel, Yellowstone argues in its filings that the 1913 building can’t possibly compete with the heavily amenitized office towers of nearby Hudson Yards and would be much better off if converted.

The plan “would revitalize a vacant office building with an active hotel and retail use that would enliven this block of West 42nd Street and contribute to the economic vitality of the area,” the filing says.

was considered one of the busiest in the fast-food chain. The city, which has a “right to shelter” policy, converted the former eatery to a relief center a year ago to help house the more than 180,000

The plan “would revitalize a vacant office building with an active hotel and retail use that would enliven this block of West 42nd Street and contribute to the economic vitality of the area,” the filing says.

Developed by Coca-Cola founder Asa Candler and called the

City seeks $100M anchor tenant for life sciences campus

By Jacqueline Neber

The New York City Economic Development Corp. on March 4 will release a request for expressions of interest to find an anchor tenant for the Kips Bay Science Park and Research Campus, it an-

for 60 CUNY degree programs, a New York City Health + Hospitals ambulatory care center, a health and sciences focused public high school and lab space, is set to begin in 2025. The EDC is looking for a tenant to occupy one of the commercial towers on the western side of the nearly 2 millionsquare-foot campus.

The EDC is looking for a tenant to occupy one of the commercial towers on the western side of the nearly 2 million-square-foot campus.

nounced Feb. 26, which will create a life science innovation center. The corporation will support the development of the center with up to $100 million in city capital. Construction on the $1.6 billion campus, which aims to offer buildings

Candler Building, 220 W. 42nd was acquired by Manhattanbased Yellowstone in 2022 in lieu of foreclosure from previous owner Epic Cos. in a deal valued at $161 million. A year earlier Yellowstone had purchased the site’s $150 million mortgage from M&T Bank, paving the way for the sale.

The through-block site, whose official address is 221 W. 41st St., has been functioning as a shelter since March 2023 and currently

houses 1,070 migrants, one of 217 sites to do so, according to the mayor’s office. A melee outside its front doors last month led to the stabbing of a teenager.

Yellowstone has shown an appetite for hotels throughout the pandemic and recently. In 2021 it paid $175 million for the 600room Watson Hotel on West 57th Street, a Holiday Inn turned boutique hotel that, as did many accommodations, struggled when

tourism plummeted. It now houses migrants. And in September the firm reportedly purchased M&T’s $106 million mortgage for the Eighth Avenue’s New Yorker hotel.

Though the hotel market isn’t expected to rebound to pre-Covid levels till 2025, the city is expected to have a shortage of 52,000 rooms by 2035 if supply doesn’t begin to grow, according to Planning Department data.

Cecilia Kushner, the EDC’s chief strategy officer, said the tenant could be a nonprofit research institute, a corporate innovation campus, a life science accelerator program or a philanthropic organization. The economic development agency will evaluate how each prospective tenant envisions the intersection of the technology industry and the life sciences, whether each organization can lead a project of this scale, and

how each could partner with the city’s Office of the Medical Examiner, H+H and CUNY schools, she added.

The organization selected will be responsible for helping the local life science sector grow, Kushner said, which has long been a goal at both the state and city level. According to the Partnership

Fund for New York City, the sector has added 17,000 jobs to the workforce in the last decade.

Kushner said more than 200 organizations have met with the corporation ahead of the request’s release but declined to share their names.

The EDC will select a private developer to build out the space

in 2025, Kushner said. CUNY will occupy the eastern side of the campus, and the corporation will manage its construction, which is also set to begin in 2025.

According to the EDC, the life science campus is expected to create 15,000 jobs and generate $42 billion in economic impact over the next 30 years.

220

The $1.6 billion life science campus was first announced in 2022. | GETTY IMaGES/ISTOcKPhOTO

Ex-Silverstein CEO launching new real estate company Investment firm to pay $160M for office tower in Midtown

By Eddie Small

Marty Burger, the longtime CEO of Silverstein Properties whom the company abruptly replaced late last year, is starting his own firm.

Burger has partnered with Andrew Farkas’ Island Capital Group to launch Infinity Global Real Estate Partners, he announced Feb. 28. The company will be based in New York and focus on development, purchases, financing and fund management throughout the country, with a particular emphasis on office-toresidential conversions and large mixeduse projects. The company will also build a debt platform to help fund its develop-

family members in recent years over its direction. His preference was to broaden its portfolio instead of focusing on its current properties.

Silverstein Properties is one of New York’s highest-profile real estate firms and likely best known for its redevelopment of the World Trade Center after the 9/11 attacks. The company is also vying for one of New York’s downstate casino licenses with a proposal for a complex by the Javits Center. It recently announced plans to convert the office building at 55 Broad St. into a 571-unit residential property.

Infinity Global Real Estate Partners will focus on development, purchases, financing and fund management throughout the country.

ments, and it is “already putting deals in motion,” Burger said.

Burger had been the CEO of Silverstein Properties since 2014, but the firm replaced him with Lisa Silverstein, daughter of company chairman Larry Silverstein, in October. Burger started at the firm in 2009 but reportedly clashed with some

Infinity Global is not Burger’s first time starting a company; he founded Artisan Real Estate Ventures in 2006 (the firm closed when he joined Silverstein Properties). He has also worked at major firms including The Related Cos., Blackstone and Goldman Sachs.

Farkas is an industry veteran as well. In 1990 he founded the real estate services firm Insignia Financial Group, which merged with CBRE in 2003, the same year he founded Island Capital Group, a Midtown-based investment bank focused on real estate.

By Eddie Small

A major Midtown office tower is trading hands for $160 million, according to a source familiar with the deal.

International investment manager Barings is purchasing 1370 Sixth Ave., located by the corner of West 56th Street, from Principal Real Estate Investors. Principal, based in Des Moines, had purchased the tower in 2005 for $217 million, according to a report in Crain’s at the time. Barings was one of many interested finalists for the building, according to the source.

Quiet market

A Newmark team of Doug Harmon, Adam Spies, Adam Doneger, Josh King and Marcella Fasulo brokered the deal. Representatives for Newmark and Barings did not respond to requests for comment by press time, and a representative for Principal declined to comment.

The office tower stands 35 stories tall and spans 342,000 square feet, according to the commercial real estate database CoStar. The property is currently 92.9% leased, with estimated office rents of $77 to $94 per square foot. Its tenants include Canyon Partners Real Estate and Eliant Trade Finance, according to CoStar.

Barings is a subsidiary of Massachusetts Mutual Life Insurance Co. with offices across the globe, including on Madison Avenue near Grand Central Terminal. The firm provided a roughly $120 million loan for Tavros Capital and Charney Cos.’ residential project at 251 Douglass St. in Gowanus last year.

Midtown’s office market had a relatively quiet January, with firms leasing about 1.3 million square feet of space, according to statistics from Colliers. The availability rate increased to 16%, and the average asking rent fell to $78.61 per square foot.

Janno Lieber

Marty Burger

MELISSA h AMBURG

owners will be able to apply online to build sidewalk or curbside seating. Restaurants with existing setups under the old program must submit their applications by Aug. 3 if they want to transition to the new program. All existing dining structures built under the old program must come down by November if they don’t comply with the new rules, or else owners will face penalties.

“It’s much more liberal than the restrictive pre-pandemic sidewalk café law, but much less liberal than the pandemic-era Open Restaurants system,” said Andrew Rigie, head of the New York City Hospitality Alliance, which represented the restaurant industry in shaping the new program. The industry has credited outdoor dining with saving some 100,000 jobs during the pandemic, not to mention transforming New York’s streetscapes and bringing street seating to outer-borough neighborhoods that had little before.

New design rules released last fall detail the materials and furnishings that will be allowed in the future setups; they notably require that roadway structures be “openair” — spelling the end of the enclosed and often creatively designed sheds that became symbols of the pandemic program. Future structures must also be certain distances away from curbs and subway entrances, and they cannot stay open past midnight.

The first new structures will start appearing on city streets this summer. Here’s what else to know.

‘Tough predicament to be in’

The most controversial changes in the permanent program include limiting on-street dining to warmweather months, from April through November, which some owners have said will discourage restaurants from participating. Restaurant owners will also need to start paying for their setups under a tiered system that will charge different fees by neighborhood — starting at $5 per square foot in most of the outer boroughs and

running as high as $25 per square foot in Manhattan south of Harlem.

Restaurants must also pay $1,050 every four years for a license for sidewalk or roadway seating. With only days to go before applications opened up, some restaurant workers remained unsure how they would proceed.

“It’s a tough predicament to be in,” said Patrick Fromuth, an employee at the Prospect Heights bar Branded Saloon, whose colorful streetside structure has won acclaim and saved the business from closing, he said. Fromuth wants to replace the enclosed setup, which is not compliant under the new rules, but is unsure where he would store the enclosure off-season.

Fromuth is also confused by the city’s stated plan to introduce a “marketplace” of private companies offering design, construction or storage services for outdoor dining setups. No companies or prices were listed online the week before applications opened, leaving the Brooklyn bar “in a holding pat-

tern” about its next steps, he said. (Owners will still be free to buy their own equipment and build their own structures.)

company charges when deciding whether to list them online.

Separate from the marketplace, the department will publish a “setup menu” instructing owners about how to set up four different kinds of compliant roadway seating. That page will launch along with the application portal on March 5, Correa said.

“The community has embraced those structures in the neighborhood. I’ve seen teachers bring the kids there to test them on colors and shapes and seen them film videos for their school projects.”

Patrick Fromuth, an employee at the Prospect Heights bar Branded Saloon

A Transportation department spokeswoman did not say when the marketplace would launch but said “dozens of companies” have expressed interest in joining it. The city will not sign contracts with the companies that register, spokeswoman Anna Correa said, nor will the city consider the prices each

A sort of preview came Feb. 27, when the Transportation department gave reporters a tour of four airy, outdoor-dining prototypes in Manhattan and Queens, designed by architecture firm WXY and built by Brooklynbased SITU.

Testing the bureaucracy

The dining rules will test many parts of city government. Although officially under the auspices of the Transportation department, the police, health, sanitation and homeless services departments will also have a role in enforcement, according to the city.

And unlike the temporary pandemic program, the new rules will require that neighborhood community boards review outdoor dining structures and recommend that the Transportation department reject the setup or demand modifications. Law firms have already begun advertising their services to building co-op boards or condominium owners hoping to oppose “poor operators” that apply for licenses.

Other new rules will require rat-resistant, water-filled barriers instead of plywood, preserve pedestrian sightlines by keeping structures at least 8 feet from marked crosswalks, and mandate that roadway setups have a ramp or be level with the curb to be wheelchair accessible.

More than 13,000 restaurants have participated in outdoor dining since its 2020 inception. Initially proposed in a May 2020 Crain’s op-ed by Rigie and then-Council Speaker Corey Johnson, the program took shape and rapidly expanded under Mayor Bill de Blasio — then became permanent through a City Council bill last May. The bill passed over the objections of some residents of restaurant-heavy neighborhoods who wanted the program scrapped.

Plenty of political sniping surrounded the May legislation. The mayor’s office said it pushed successfully to keep outdoor dining under the Transportation department, as restaurant advocates had sought, against the City Council’s effort to move it elsewhere. And the council said it had opposed the administration’s effort to impose higher fees on restaurants.

Restaurant advocates accused the council, especially Speaker Adrienne Adams, of being hostile to year-round roadway dining, as the pandemic program allowed.

Mayor Adams’ administration has downplayed fears that the new restrictions will limit participation in outdoor dining. At minimum, the administration said, far more businesses are likely to join Dining Out NYC compared to the number that participated in the pre-pandemic sidewalk café program, which cost up to $40 per square foot and was mostly confined to Manhattan.

But Fromuth said he will miss his own bar’s colorful structure and the similar setups along Vanderbilt Avenue, which enjoyed a vibrant outdoor dining culture starting in 2020.

“The community has embraced those structures in the neighborhood. I’ve seen teachers bring the kids there to test them on colors and shapes and seen them film videos for their school projects,” he said. “It just has become such an integral part of the community, and to see that we have to take it down is a little tough.”

The city revealed a prototype for a new style of outdoor dining structure last week, outside the Lower East Side restaurant Sunday to Sunday. Its open-air setup is in keeping with the program’s new rules. BUcK ENNIS

Enclosed “sheds” that proliferated under the temporary pandemic-era Open Restaurants program starting in 2020 will be banned under new rules that go into effect this month, and must come down by November. | BUcK ENNIS

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Plenty of New York housing advocacy groups still believe this, arguing that this new incentive program, however well intentioned, will not make a major difference in increasing the region’s housing supply. And although even Hochul herself is still calling for a statewide approach to address the housing shortage, this has not stopped her from effusively praising her program, if only out of recognition that there is not much of an appetite for anything more aggressive.

“I was told last year that there’s something else that could get all the communities on board. They said, ‘We don’t want any sticks, but we do want [carrots], all right?’” she said at a Feb. 7 press conference about the program.

“I’m told this is what you are willing to eat to help build more housing. And I’ve got 600 million carrots out there on the table.”

But given that the main benefit for communities in the program is priority funding for projects meant to improve transportation, downtowns and the like, it may turn out to be more of an economic development program than one that gets more homes built, said Moses Gates, vice president of housing at the Regional Plan Association. This is especially true given that relatively few areas near New York City, which is in the throes of a housing crisis, have joined the program so far.

“It does look like there’s a mismatch between who gets a prohousing designation and who has a real housing crunch in their municipality,” he said, “and I think that, in order to be an impactful program, that mismatch has got to be rectified.”

Lack of impact

The effectiveness of housing incentives in general has typically depended on the type of policy they target, says Matthew Murphy, executive director of New York University’s Furman Center. Ones like New York’s now expired 421-a

can be fairly popular, but this has not been the case with programs aiming to persuade towns to change their zoning laws, which dictate what can be built where.

“Places that have been built on the premise of only allowing certain kinds of housing, like single-family-zoned suburbs or the higher-income parts of Manhattan, having them volunteer or react to incentives on the land-use

still quick to note that incentives were clearly not Hochul’s first choice for addressing New York’s housing crisis. They are rather just a sign that she is accepting the political reality of the moment after the failure of her broader plan last year.

“That is as far as the Legislature is willing to go right now. I don’t want to put that on the governor,” Gates said. “We can give this a shot and see if it works, but if the program trends the way it started and continues on this path, I don’t think it’s going to be very effective.”

“I think people legitimately believe that incentives could make a difference, and so now we’ll see how it plays out. We don’t believe that they will.”

Andrew Fine, policy director of the pro-housing group Open New York

side has been understandably unsuccessful,” he said. “Offering an incentive to somebody who

An ineffective incentive program may even turn out to be a necessary pit stop on the way to more impactful housing changes, as people will need to see for themselves that it doesn’t work before supporting more

“It may be important for the political conversation in New York for the incentive program to move forward,” he said. “I think people legitimately believe that incentives could make a difference, and so now we’ll see how it plays out. We don’t believe that they will.”

Gauging interest

The Hochul administration has proudly trumpeted the 20 communities that have joined its pro-housing program so far and said 81 have expressed interest. In particular, Hochul has singled out leaders on Long Island and in Westchester County, two areas that have been infamously resistant to building new homes, as showing a strong amount of interest in the program, which gives downstate communities that meet a 1% annual growth target and upstate communities that meet a one-third of a percent target top priority for receiving discretionary state budget funds.

But most of the municipalities that have received the designation so far are smaller ones in upstate and western New York that are not facing particularly severe housing shortages, at least in comparison to the city and its surrounding areas, noted Gates. The state did classify seven of the towns as being in the Mid-Hudson region, but many are still well over an hour’s commute to Midtown. Poughkeepsie, for instance, is roughly two hours to Midtown by car or train.

Some towns in the program do offer easier commutes, including Mineola, which is about a 40-minute train ride from the city. One of the main reasons Pereira, the Mineola mayor, decided to join the pro-housing program was to show other towns that adding homes was not something they needed to be afraid of.

“It really was for me to tell other communities that, ‘Hey, this is not a bad thing. You can do it,’” he said. “‘You can do it on your own

terms; you can do it with community input; you can do it where it makes sense for you.’”

Mineola has been working on revitalizing its downtown and increasing its housing supply dating back to the early 2000s, Pereira said. The town did not need an official designation from the state to validate what it has been doing for about 20 years, but it also did not make sense for Mineola to pass up a chance to receive more state funds, he said.

“We are pro-housing, so why wouldn’t we do it?” he asked. “If you’re running a marathon, why wouldn’t you cross the finish line and receive your medal?”

Croton-on-Hudson Mayor Brian Pugh similarly said his Westchester village, which is a roughly hourlong train ride from Grand Central and was also among the first 20 to receive the pro-housing designation, has been working on addressing its shortage since the early 2000s. He described the new state program as a good way to get support and keep up momentum.

“Our vacancy rate is within the margin of error of being zero,” he said. “Until we address that, it’s going to be a very bad time for a huge section of our population.”

Pugh and Pereira were both very complimentary of the prohousing program overall. However, the fact that both of their villages had been working to build more homes long before its existence also highlights one of the criticisms of it: Though the program may provide a boost to towns that were already trying to add housing, it is unlikely to change much in towns where this is not the case.

“I think communities that already have plans to build are likely to take measures to reform their zoning and be rewarded, and that part is great,” said Rachel Fee, executive director of the New York Housing Conference. “But I don’t think this is going to convince communities who oppose any change to act any differently.”

A housing development under construction in Westchester County’s Croton-on-Hudson | BUCK ENNIS

Gov. Kathy Hochul announced and signed an executive action on the housing crisis on July 18, 2023, to increase supply, create affordable housing and promote broader housing growth. GOVERNOR KAThY hOChULOFFICE/FLICKR

Seldom-used property tax break could help solve two of the city’s biggest problems

Of cials received only 32 applications during the rst year of a new abatement program to make child care centers more accessible and affordable

A property tax break the city launched a year ago to incentivize landlords to build or expand child care centers is attracting much less interest than Mayor Eric Adams’ administration had prepared for.

In February 2023 the city launched the program, which provides an abatement of up to

“It was a pleasant surprise that the city was actually trying to do something to help us out.”

Victor Sismanoglou, Vima Property Group

$225,000 each to any landlord whose work on a building leads to either a new child care center or the expansion of an existing one, part of the Adams administration’s e ort to make such centers more accessible and a ordable. e law allows for up to $25 million worth of tax abatements over the rst seven years of the program, but the city is on pace to give out just $7.5 million during

that period, Benjamin Williams, an attorney at Rosenberg & Estis who specializes in property tax law, told Crain’s. e city had about 2,200 center-based child care facilities overall as of Jan. 30, and 149 were newly permitted between February 2023 and February 2024, according to the Department of Health and Mental Hygiene. But o cials received just 32 applications for the child care tax credit during its rst year and approved 19 of them, equating to 22 sites, according to the mayor’s o ce (some applications were for more than one site).

e tax abatement could help developers o set some of the high costs of erecting buildings, ideally enticing more of them to put shovels in the ground.

And more day care centers in general would almost certainly help alleviate the city’s a ordability crisis around child care costs.

Roughly 80% of city families with children under the age of 5 are unable to a ord care, according to

By | Eddie Small and Amanda Glodowski

the nonpro t Citizens Committee for Children of New York. Savings that landlords get from tax credits tend to trickle down to their tenants, and for retailers and service providers, those can in turn be passed along to customers, although this can be di cult to track, noted Sean Campion, director of housing and economic development studies at the Citizens Budget Committee.

Lack of publicity

e low number of landlords taking part in the incentive program could be because not enough landlords know it exists.

Jay Martin, executive director of the Community Housing Improvement Program, a landlord advocacy group, praised the program itself but criticized the city for the lack of publicity around it.

“ e city has done virtually nothing to advertise it, unfortunately,” he said. “It’s always a constant educational e ort to get people to sign up for it.”

The mayor’s office defended the outreach the administration has done so far on the tax

abatement, saying it shared information about it with the City Council, state legislators and congressional members in March 2023 and has reached out directly to almost 300 new or expanded child care centers. Information about the credit is also available in the Department of Health’s borough offices and as part of the Small Business Services boot camp, the Adams administration said.

Victor Sismanoglou, whose rm Vima Property Group manages about 30 buildings across the city, found out about the tax break through his membership in CHIP and has used it at one of his Upper West Side buildings, home to the day care center Sequence for Cidz. He echoed Martin’s comment that he has not seen much of a push to get people to know about the program, which has worked out very well for him.

“It was a pleasant surprise that the city was actually trying to do something to help us out,” he said. “I wish they did more of this stu , because they’ve de nitely done a real number on what we can collect.”

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The day care center Sequence for Cidz recently opened in an Upper West Side building, allowing the property to take advantage of a tax credit that launched a year ago. BUCK ENNIS