ASKED & ANSWERED Why the city should invest in worker skills PAGE 10
CRAINSNEWYORK.COM
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SEPTEMBER 7, 2020
OFF THE TABLE? Indoor dining might not come back anytime soon PAGE 3
HALL 2020
of
FAME
PEEBLES says building in New York is more capital-intensive than other places.
BUCK ENNIS
Saluting five New Yorkers who’ve helped define the city’s key industries PAGE 13 REAL ESTATE
INEQUITABLE EQUITY
Black developers often face hurdles in obtaining capital to get their projects off the ground BY BRIAN PASCUS
BUCK ENNIS
W FROM THE LEFT: Dr. Steven Corwin, Katherine G. Farley, James Gorman, Marcus Samuelsson and Jerry I. Speyer
NEWSPAPER
VOL. 36, NO. 29
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hen real estate developer Don Peebles was in negotiations with the New York Economic Development Corp. in 2013 to buy two office buildings for $250 million, his private-equity partner changed the terms of the deal at the last minute. “They wanted to bring in a white developer who was a partner of theirs on other deals to develop this project,” said Peebles, who is African American. “Naturally, I wasn’t
going to have someone take the lead on that, and I wasn’t going to accept a less-favorable deal economically after taking more of the risk.” Peebles eventually found alternative funding for both projects, but when he looks back on this failed partnership, he can’t help but wonder how much race played a part in the actions taken by his would-be investors. “These allocators of capital are See CAPITAL on page 19
A BROOKLYN DOCTOR FIGHTS THE VIRUS AND VIOLENCE
Comptroller lays out extreme budget scenarios for city, state
PAGE 23
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GOTHAM GIGS
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ECONOMY
WEBCAST CALLOUT
BY GWEN EVERETT
T
he allure of New York’s venerable and secretive private clubs has always been exclusivity. But with the old-school benefits and rituals members pay for becoming impracticable during the pandemic, clubs have reduced their workforce as they figure out a new business plan. The Racquet and Tennis Club— one of the city’s most exclusive institutions—notified the Department of Labor it would lay off or furlough 33 workers. The University Club has fared similarly, laying off 243 workers, while the Century Association laid off 81, the Colony Club, 60, and the Harvard Club, 299. Clubs aren’t struggling just because of shutdown orders. The typical avenues that draw the elite into the halls of a private club—dinner after a play, say, or after-work drinks—are on indefinite pause too. Remote work means many members aren’t in the city at all, experts pointed out to Crain’s. Patrons are turning to country clubs in lieu of city clubs, the experts said. “I’m almost using the club to find other ways out of the city,” said Kwame Campbell, a real estate con-
ference producer who is a member of the Cornell Club. His membership grants him reciprocal access to country and other private clubs in places such as Westchester County and Rhode Island, he said. Country clubs have seen a bump in interest amid the pandemic, with their sprawling outdoor spaces and golf amenities, experts told Crain’s.
Value proposition Meanwhile for city clubs, their cosmopolitan appeal is waning. “The value proposition is changed because of not going to the office in the city. We’re not having in-person meetings. We’re not having conferencing or business meetings,” said Frank Vain, president of the McMahon Group, a consulting firm whose clients include the Yale Club and the Century Association. That becomes an issue for the city’s private clubs, whose revenue relies on a mix of dues collection and income related to in-person events, which largely can’t happen right now. And the clubs can’t recruit new members, said Joe Trauger, vice president of government relations at the National Club Association, which represents private clubs. “It is sort of an existential moment,” Trauger said.
BLOOMBERG
Elite clubs laying off hundreds of workers as members stay out of city
The publicly filed layoffs are a sign of that distress—and a rare one, given that the club circuit is a part of New York society that is willfully tight-lipped. The Racquet and Tennis Club, the Century Association and the Colony Club all declined to comment for this story. The Yale Club, University Club, Harvard Club and Penn Club, which all have laid off staff, did not respond to requests for comment. The Cornell Club, which has not filed with the Department of Labor, did not immediately respond to a request for comment. Like virtually every business, private clubs have gone virtual, even offering online dating events. But it’s a far cry from the benefits members signed up for. “Online events are not going to
REAL ESTATE
be enough to keep them,” Campbell said. “Old school, you pay for that membership, you meet people, you network, and you write it off as a business expense. And now it’s like you can’t write it off as a business expense.” Much of the value of the Cornell Club lies with whom you happen to bump into when you’re there, Campbell said. “It’s the randomness,” he said, “of running into, like I said, the ambassador of this country or somebody who works at Saturday Night Live.” For Campbell, unimaginable random meetings have happened. He met the ambassador of Morocco, an SNL set designer and the maker of Mozart in the Jungle at the downstairs bar of the Cornell Club. That type of gathering won’t happen anytime soon. The Cornell Club has offered deals and breaks on dues in the meantime, Campbell noted. He said he’d consider freezing his membership but never canceling it. It has been too valuable to him over the years: “I feel like I’m part of a legacy.” ■
SEPT. 16 CRAIN’S BUSINESS FORUM WITH DERMOT F. SHEA, COMMISSIONER, NEW YORK CITY POLICE DEPARTMENT How safe is New York City during the pandemic? Police Commissioner Dermot Shea will discuss the uptick in violent crime and how businesses can partner with the police to help keep the city a safe and desirable place to live, work and thrive.
Virtual event: Sept. 16, 4 to 5 p.m. CrainsNewYork.com/ sept16businessforum
RFR seals $350M deal for Midtown office tower
BY NATALIE SACHMECHI
BY EDDIE SMALL
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ewmark Knight Frank, one of the world’s largest commercial brokerages, says it never got its $1.4 million cut from negotiating leases at five of APF Properties’ buildings, according to a lawsuit filed last week in state Supreme Court in Manhattan. Newmark is also going after APF’s founders, Kenneth Aschendorf and Berndt Perl, who made the
fork over the second half, which became due when each of the tenants paid their second month’s rent at the properties under the agreement, the complaint said. Newmark demanded payment, but no money has come in. The series of deals in question began in 2018, the complaint said, and continued through January of this year, all while the commissions went unpaid. They included four WeWork leases: one signed in 2018 at 1156 Sixth Ave. and three others signed the following year at 28 W. 44th St., 25 W. 45th St. and 183 Madison Ave. The leases came with a $2.4 million cut-in for the brokerage. Only half of that was paid. APF disputes Newmark’s claim to the money. “Newmark’s lawsuit is without merit and an attempt to circumvent our agreement with them,” Perl said. “Newmark has chosen a liti-
“NEWMARK HAS CHOSEN A LITIGIOUS PATH TO STRONG-ARM A TENANT” brokerage their exclusive leasing agent at their Class B office properties across Manhattan. APF’s portfolio is worth $1.4 billion, according to its website. The building owner paid its broker the first half of the commission earned for each deal but has yet to
gious path to strong-arm a long-standing client with an impeccable payment history instead of working toward a resolution of a dispute.” He added that the firm is confident the issue will be resolved in the coming days. No individual broker was named in the suit, but Andrew Sachs, an executive managing director at Newmark, is listed as the leasing agent on APF’s website for the properties in question. Sachs did not respond to a request for comment. APF is collecting monthly rent because of the work that Newmark did, the complaint said, and has been “unjustly enriched,” the brokerage alleged in the complaint. Showing office space, negotiating term sheets and working on expansions and relocations for existing tenants were among the tasks the firm was hired to do for APF, according to court papers. Newmark and its attorneys did not respond to requests for comment. ■
ABY ROSEN’S RFR Realty has closed on its $350 million purchase of 522 Fifth Ave., even as the pandemic has caused other major deals planned for this year to fall apart. RFR went into contract to buy the 23-story Midtown office tower from Morgan Stanley in March. The firm hopes to find one tenant to occupy the 575,000-square-foot building, and Rosen said he will help lead the search. “We acquired 522 Fifth Ave. with the vision of working with a single user to create a custom, marquee headquarters in the premier Midtown location,” he said in a statement, describing the property as “a remarkable blank canvas.” Rosen had been searching for a five-year, $300 million loan with a lease-back guarantee to finance the deal. Representatives for RFR declined to comment on whether
COSTAR
APF Properties stiffed Newmark broker on $1.4M in commissions, lawsuit says
the company had received the financing. The Fifth Avenue tower is the latest addition to RFR’s portfolio of prominent Manhattan office properties. It owns the Chrysler Building and the Seagram Building. Large-property sales have fallen apart this year despite being under contract, including SL Green’s planned $815 million sale of the former Daily News Building on East 42nd Street and Ray Yadidi and Eli and Isaac Chetrit’s planned $115 million sale of 15 W. 47th St. ■
Vol. 36, No. 29, September 7, 2020—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for bimonthly in January, July and August and the last issue in December, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: call 877-824-9379; fax 313-446-6777. $3.00 a copy; $129.00 per year. (GST No. 13676-0444-RT) ©Entire contents copyright 2020 by Crain Communications Inc. All rights reserved. 2 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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BUCK ENNIS
CORONAVIRUS ALERT
BELLA BLU on Lexington Avenue on the Upper East Side
Off the menu—for now Here’s why indoor dining in the city might not happen anytime soon
BY GWEN EVERETT
T
here might be good reason to make city restaurants play by different rules than other eateries around the state. The inherent risks of transmitting or contracting Covid-19 while dining indoors paired with New York City’s potential for accelerated community spread justifies the city’s delay, even as eateries in other parts of the state have partially reopened, experts told Crain’s. “I think it’s a mix of complexity along with caution,” said Troy Tassier, a professor of economics at Fordham University who specializes in epidemiology. Indoor dining poses an inherent risk because people have to take off their mask to eat, Tassier said. That risk is present in any restaurant, but the ramifications could be the most dire in New York City because its dense, massive population heightens the potential for the rapid transmission of disease, he said. Because the city once was the nation’s coronavirus epicenter, it makes sense for officials to proceed with caution, he added. That affirms the line Mayor Bill de Blasio is taking on the matter. Despite calls last week by City Council Speaker Corey Johnson to allow indoor dining, the mayor has refused to offer
a timetable for when restaurants, among the industries hardest hit by the pandemic shutdown, may offer indoor dining. Top advisers say that’s because indoor dining is one of the riskiest activities the city can allow, pointing to instances in Hong Kong and other places where it was the source of Covid-19 outbreaks. Restaurant owners, however, say it’s unfair to hold city eateries back from indoor dining when restaurants around the state have been allowed to do it, albeit at reduced capacity. “Fifty percent capacity is 50% capacity,” said George Constantinou Fernandez, owner of three Brooklyn restaurants, including Bogota Latin Bistro. “Location shouldn’t make any difference on whether you can appropriately social distance at a 50-seat restaurant. If you can do it in Westchester, then we can most certainly do it safely in Brooklyn.” A group of more than 300 restaurants have filed a lawsuit against the city and state, claiming their refusal to allow indoor dining is discriminatory.
What about the cafeteria? Whether social distancing is possible indoors is likely not the city’s only concern, said Dr. Waleed Javaid, director of infection prevention at Mount Sinai. If it were, he said, the city
could have allowed just those eateries with ample space to open their doors. It’s likely the threat of maskless gathering inside that is hard to stomach, Javaid said, adding that he won’t be eating in a restaurant anytime soon. But indoor dining is no more dangerous than other practices the city has already green-lighted, some observers say. With outdoor dining, for example, tables can sometimes be densely packed, noted Jack Caravanos, a public health professor at New York University. Caravanos said he sees no difference between city restaurants and restaurants in Saratoga or Troy, which can serve some customers indoors. Another risk profile that looks similar to indoor dining that the city has OK’d is lunchtime in schools. Children would need to take off their mask to eat in an indoor dining hall. De Blasio defended his schools plan. Public education, he said, is a greater imperative than indoor dining. In fact, the two might be connected. “Both restaurants and schools are relatively big risks,” Tassier said. “If you think about knobs that you can turn to kind of slowly reopen, my guess is they don’t want to turn both of those knobs on at the same time and have sort of two risks simultaneously.” ■ SEPTEMBER 7, 2020 | CRAIN’S NEW YORK BUSINESS | 3
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REAL ESTATE
BY NATALIE SACHMECHI
T
he TV company responsible for Shark Week is trying to slip from the jaws of its Midtown East office lease while still owing its landlord, the Chetrit Group, nearly $1 million, according to a lawsuit filed last week in state Supreme Court in Manhattan. Discovery Communications, which owns the Discovery Channel, stuck around in its 850 Third Ave. offices for two months after its lease expired at the end of May but paid
prevented the company’s move, it should not have to pay, according court papers. “The complaint is without merit, and we will defend the matter vigorously,” Discovery spokesman Nathaniel Brown said.
Force majeure Discovery’s lease stipulates that a force majeure doesn’t excuse it from paying rent, according to the landlord’s complaint. The TV company paid its June rent but then demanded the $834,000 payment back, claiming it was “made in error,” according to the suit. No rent was paid for July, and Discovery remained in the building through the last day of that month, Chetrit said. The landlord drew down on an $830,000 line of credit for July—which Discovery also wants back. “Discovery is the worst type of nonpaying commercial tenant,” Chetrit said in the suit. “At a time when many people and companies were really suffering, Discovery was
“THIS WAS AN ATTEMPT TO TAKE ADVANTAGE OF THE PANDEMIC TO GET OVER” for only one of those months, according to the suit. The cable TV producer, which also airs Naked and Afraid, blamed Gov. Andrew Cuomo’s pandemic executive orders for not being able to leave by May 31, the suit says. It also told the landlord that because an act of nature—the pandemic—
NG
RICI P D R Y BI EPT. 17 L R EA ILL S T
using the pandemic as an excuse to chisel money from its landlord and pad its bottom line.” Chetrit inherited the media company as a tenant last year, when it purchased the 21-story building from the HNA Group, a Chinese conglomerate, for $422 million. Discovery has been there for the past 16 years, the suit said, and was slated to leave the building in May, when its lease ended, to relocate to the Helmsley Building, at 230 Park Ave. South. Renovations at the Helmsley Building were delayed because of the pandemic, and Discovery was negotiating a two-month extension to avoid putting its things in storage before it could move, the suit says. Given Cuomo’s eviction moratorium, Discovery stopped negotiating a formal extension, and the company decided to stay while its new office was being built “for what it believed would be for free,” the complaint says. “This was a well-thought-out, planned business decision that Discovery made, and was an attempt to take advantage of the pandemic and pending executive orders to get over on the landlord,”
BLOOMBERG
Shark Week producer on the hook for nearly $1M in back rent, lawsuit says
Chetrit said, adding that Discovery was more than able to pay its rent.
Financial woes Discovery has lost nearly a third of its value since mid-February. Profits for the first half of the year came in at half of what they were last year, according to company financial statements.
The executive orders made it impossible to vacate, Discovery’s inhouse attorney, Savalle Sims, told Chetrit in a letter, adding that as soon as the city began reopening June 8, the firm started getting its things out and was gone by July 31. “Any provisions in the existing lease relating to holdover rent … do not apply,” Sims said. ■
VIRTUAL EVENT
Thursday, September 24 | 4-5 p.m.
Examining racial disparities during the pandemic
Crainʼs will examine how Covid-19 has disproportionately affected minority communities and businesses across New York City. Keynote Speaker: Wellington Z. Chen, Executive Director, The Chinatown BID/Partnership Panelists: Jonnel Doris, Commissioner, NYC Department of Small Business Services (SBS) Randy Peers, President and CEO, Brooklyn Chamber of Commerce Jessica Walker, President and CEO, Manhattan Chamber of Commerce Melba Wilson, Founder and Owner, Melbaʼs Restaurant in Harlem, President of the NYC Hospitality Alliance
Register today at www.crainsnewyork.com/SeptNYCSummit For event questions: Ana Jimenez | 212-210-0739 crainsevents@crainsnewyork.com For sponsorship opportunities: Lisa Rudy | lrudy@crain.com 4 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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HEALTH CARE
As more patients pick at-home treatment, ambulance companies feel the pain
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ocal commercial ambulance providers are used to a small number of calls during which they treat patients at home who don’t need or want to be taken to the hospital. However, such instances have skyrocketed during the pandemic, and the companies aren’t being reimbursed for them. In the early days of the public health crisis, commercial ambu-
Members of the United New York Ambulance Network note that the cost of business already exceeded the rate of reimbursement for Medicaid and Medicare services. The pandemic and the lack of reimbursement for treating and releasing patients only have compounded the financial strain. Hanan Cohen, mobile integrated health administrator of Empress Emergency Medical Services, based in Yonkers, says treating and releasing certain patients without reimbursement has historically been an “irritant but tolerable.” But now it’s taking a tangible financial toll, as the number of treat-inplace patients is “significantly higher” than at any other time, he said. Comparing a 30-day period in March and April with the same time frame last year, Empress saw 1,400 versus 175 treat-and-release patients, Cohen said. The initial financial hit was about $700,000.
MANY OPT TO STAY HOME, EVEN AFTER CALLING FOR EMERGENCY HELP, FOR FEAR OF EXPOSURE TO COVID-19 lance providers moved to help ease the burden on local hospitals by treating and releasing patients when it was possible to avoid a transfer. And many individuals opted to stay at home, even after calling for emergency services, for fear of exposure to Covid-19.
Since then the number of cases at any given time has been up nearly 300% year over year. Mordy Lax, community paramedicine program director and training and education manager at SeniorCare Emergency Medical Services in the Bronx, said his company’s experience has been similar to that of Empress in recent months. The goal in health care consistently has been higher-quality, lower-cost treatment that improves outcomes for people, Lax said. Commercial ambulance providers are helping to achieve that with new ways of attending to patients but are being penalized instead of recognized for doing so, he said.
‘Not a money grab’ Some of the potential inroads to addressing the lack of reimbursement include the Centers for Medicare and Medicaid Services and Congress, both Lax and Cohen noted. (Congress may need to give CMS the go-ahead to alter reimbursement.) A pilot program through CMS to test reimbursement for emergency
COURTESY OF SENIORCARE EMS
BY JENNIFER HENDERSON
medical transportation to alternative destinations, such as a primary care doctor’s office or urgent-care clinic, as well as for treatment in place, was scheduled to begin in May. However, it was delayed due to the pandemic. Reimbursement help also could come at the state level through Medicaid waivers or discussions with insurers to develop alternate
payment models, Cohen said. In reality, Cohen said, commercial ambulance providers are treating the same group of patients as they always had. “It’s not a money grab for a larger chunk of the Medicare–Medicaid pie,” he said. “It’s just, quite frankly, the world is changing, and more and more patients are desiring to be treated at home.” ■
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September 7, 2020 | CRAIN’S NEW YORK BUSINESS | 5
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IN THE MARKETS
As taxi lender Melrose Credit Union sank, CEO sought $8M payday
THE $8 MILLION PAY PACKAGE “IS SENSATIONAL IN ABSOLUTE TERMS”
MICHAEL GANNON/QUEENS CHRONICLE
A
s Melrose Credit Union great business until Uber came sank down the drain, along. Melrose was coming off a Chief Executive Alan $176 million annual loss and had just received a criminal Kaufman tried subpoena from state regfor one last big score: He wanted to pocket an extra ulators when its board $8 million that he’d semet in May 2016 with attorneys from the Dechert cretly negotiated with the law firm to discuss an inQueens-based nonprofit, which was one of the ternal investigation. city’s largest taxi-medalThe investigation uncovered that Kaufman lion lenders before it was had secured an $8 milseized by regulators three years ago and liquidated. lion package payable Kaufman, who was AARON ELSTEIN upon retirement without charged with bribery last the approval of the full year by federal prosecutors, is now board—a violation of state law. trying to make sure his secret cash Melrose directors were urged to stash is never talked about at his tri- reverse the package because “apal, scheduled to begin Sept. 29. proval of a plan of this magnitude The $8 million pay package “is now would be a point of scrutiny sensational in absolute terms,” his for regulators,” according to minattorneys said in a recent filing. utes of the meeting filed in federal “There is much about [it] that a jury court. But the directors elected to take no action. They also discussed matters that showed up later in Kaufman’s indictment concerning his relationship with Tony Georgiton, the could consider ‘more sensational president of Queens Medallion than the evidence of the charged Leasing, who controlled a fleet of more than 500 cabs and who had crime.’” Melrose was a family-run busi- borrowed $60 million from Melness. It was founded in 1922 by the rose. Many of the loans were made grandfather of Kaufman, who suc- under sweetheart terms personalceeded his father when he became ly approved by Kaufman over the CEO in 1998. objections of Melrose’s chief loan The heir built the credit union officer. Kaufman and Georgiton up to $2 billion in assets and were friends who vacationed to25,000 members. Its specialty was gether, according to court docuwriting taxi-medallion loans, a ments.
Georgiton rented a house in Jericho, Long Island, to Kaufman for no money, saving the CEO an estimated $36,000 in rent. Georgiton also loaned Kaufman $240,000 so he could buy the house, and he wasn’t paid back, according to the board minutes.
Gifts In a filing, an attorney said Kaufman “did not accept with corrupt intent or in exchange for any [Melrose] loans, but as a (temporary) gift from a close, and very wealthy, friend.” Directors also were told that
Kaufman had accepted lavish gifts from CBS and the Jets to attend Super Bowls and other games. Melrose directors appeared to have been shocked. One observed that “over the years, there was never a word that something was not going right,” according to the minutes. A Dechert lawyer replied, “There’s a saying that when the tide goes out you see who is swimming without shorts on.” Credit union board members typically are volunteers drawn from the membership. They often have little experience overseeing financial institutions.
A Melrose executive mentioned that employees were upset by cost-cutting and the freezing of the pension plan. “Employees are feeling attacked because they are losing benefits and have noticed that Alan Kaufman is not at work,” the executive said, according to the minutes. The board president said a “narrative” was needed that would “satiate the employees.” “The narrative that ‘Alan Kaufman has decided to take a personal leave of absence’ may be the best they can do,” the directors concluded. ■
REAL ESTATE
Concierge health care could be the next luxe must-have amenity BY EDDIE SMALL
R
oof decks and gyms are standard in many of New York’s luxury residential buildings. In the wake of the Covid-19 pandemic, concierge health care services might be the next amenity added to the list. The Related Cos. is leading the way through its new partnership with Sollis Health, which provides tenants in Related’s luxury rental
ommended, but walk-ins are available, and test results usually arrive within 24 hours, said Related Executive Vice President Bryan Cho. Related started its program in early June, and it has been going well and proving popular so far, Cho said. A spokesman for Sollis said more than 1,000 residents have been tested. The real estate giant had been looking for ways to collaborate more with the health care industry even before the pandemic hit, given the amount of change taking place within the sector, Cho said. “Health care is very dynamic right now— how people consume it, how providers charge for it, all of it,” he said. “It definitely is a space in need of a lot of innovation, and we as landlords need to be part of that.” Sollis, founded in 2016, has stand-alone centers in Tribeca and
THE RELATED COS. IS OFFERING COVID TESTING AT SOME RENTAL BUILDINGS buildings with regular access to onsite Covid-19 testing. Sollis nurses typically show up at least once each week, set up in a public area of the building, and administer diagnostic or antibody tests to tenants who request them. Appointments are rec-
on the Upper East Side, in addition to making house calls. Individual memberships cost $3,000 to $5,000 per year, but tenants in the buildings where Related has teamed with Sollis do not need to purchase memberships to access on-site Covid testing. Related covers the costs of its partnership with Sollis; its tenants are responsible only for any testing fees their insurance provider charges.
Focusing on landlords Sollis aims to serve as a comprehensive provider for all types of medical emergencies, but it has been focusing on working with landlords, especially amid the pandemic, according to company co-founder Andrew Olanow. “Increasingly with Covid, you’ve seen building owners or managers be more interested in providing health care services to their residents and offering them ways to ensure the health and safety of their
families,” Olanow said. Landlord-backed Covid-testing initiatives are still relatively scarce, but multiple real estate brokers said they would not be surprised to see companies follow in Related’s footsteps as long as its partnership with Sollis proves fruitful. “They’re the first domino to fall,” Compass broker Clayton Orrigo said of Related. “They’re the ones that have the money to do this out of the gate and push proof of concept.” Landlords of luxury residential buildings are rethinking how best to use their common spaces, Orrigo said. The pandemic forced them to at least temporarily close facilities. Even as the facilities start to reopen, the ongoing coronavirus threat has made mingling with other tenants at a fitness center or on a roof deck seem less appealing. Owners might end up looking to health care facilities to fill the void, Orrigo said. “There’s definitely a trend,” he
said. “It hasn’t crystallized yet, but we’ve got a lot of clients figuring out how they’re going to program their buildings, as a lot of amenity spaces have been shut down.” Agent Kristin Hurd of Brown Harris Stevens said one of the main appeals of moving into a luxury residential building is exclusivity, and concierge health care services could easily end up being the next step in New York. “I could see that exclusivity being a service that residents would want, especially if you think about the amount of people who travel in and out of New York City and the amount of these people who have pieds-à-terre,” Hurd said. “It would make sense, especially for Covid.” Related buildings participating in the Sollis partnership include 1 Carnegie Hill, 1214 Fifth Ave. and 261 Hudson St. “We have people who can afford it, so why not?” Hurd said. “People want to feel safe.” ■
6 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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SPONSORED CONTENT
T
How the Northeast’s industrial real estate market stacks up he industrial real estate market in the U.S. is undergoing major changes thanks to long-term trends such as the move toward online purchases, as well as recent economic shocks like the supply chain disruptions brought by the global pandemic. Demand for logistics real estate spaces has increased as businesses focus on improving order fulfillment and making supply chains more efficient.
To learn how the Northeast’s industrial real estate market is responding to these changes, Crain’s Content Studio turned to Art Makris, Duke Realty’s senior vice president of the Northeast region. He recently relocated from the Midwest, and he shared his observations on the similarities and differences between the two markets.
CRAIN’S: Since relocating to New Jersey, what have been the most striking differences you’ve noticed between the Northeast and Midwest industrial real estate markets? ART MAKRIS: The primary difference between the two markets is the availability and cost of land sites. In Ohio and other Midwest markets, greenfield sites for both small and large industrial facilities are available. In the Midwest, entitlement periods are typically between six and 12 months, and land costs average between $75,000 and $150,000 per acre. Conversely, in New Jersey very few greenfield sites are available. Development is
growing each year both in the Midwest and Northeast, as well as the rest of the country. CRAIN’S: The rise of e-commerce, boosted further by social distancing practices and supply chain disruptions, has kept industrial vacancies low through the pandemic. Is one region benefiting more than the other from the shifting market forces? MAKRIS: Both the Midwest and Northeast are enjoying low vacancy rates due to pandemic protocols and companies making changes in their supply chains to more efficiently serve their customers. However, the Northeast region is
I anticipate an uptick in large distribution centers that house the inventory and safety stock and provide “just-in-time” delivery to last-mile locations. largely the redevelopment of brownfield sites. Entitlement periods in New Jersey range from 18 to 24 months, and land costs are approximately $1 million to $2 million per acre depending on the submarket. CRAIN’S: What holds true of both markets? Has comparing the Northeast with the Midwest reinforced any “universal laws” of industrial real estate? MAKRIS: The shift toward e-commerce fulfillment centers and last-mile distribution facilities is skyrocketing in both markets. Of course, the pandemic has had an impact on the shift, but it was happening even before Covid-19. The percentage of net absorption related to e-commerce users is
experiencing greater pricing power due to the lack of supply, longer entitlement periods and proximity to a dense population. CRAIN’S: Has the current situation affected rents in the two regions differently? MAKRIS: Both regions have experienced positive rent growth. Rent increases are greater in the Northeast, however. Limited availability, new development opportunities, land costs and proximity to a large base of consumers are all factors contributing to higher rents in the Northeast. CRAIN’S: While the ongoing crisis is accelerating trends that were already present in the industrial real estate markets, do you expect to see further market
changes once the pandemic subsides? MAKRIS: Logistics real estate users are always fine-tuning their supply chains and I expect that to continue even after the pandemic subsides. I also expect to see the recently announced bankruptcies of traditional brick-and-mortar retailers to have an impact on Midwest markets. Based on usage data, the Midwest has a higher concentration of distribution centers dedicated to retail store fulfillment compared to Northeast markets. CRAIN’S: With demand for industrial real estate projected to increase by 1 billion square feet by 2025, do you expect to see a boom in new construction? And is the Northeast positioned to meet that increase in demand, or are we going to see the Midwest reap more of those benefits? MAKRIS: I think both areas of the country will benefit from the projected increase for logistics real estate facilities. More specifically, the Northeast is likely to benefit from the need for last-mile facilities near population centers as users seek to accelerate delivery times. In addition to last-mile development, I anticipate an uptick in large distribution centers that house the inventory and safety stock and provide “just-in-time” delivery to last-mile locations. I think there will be mini hub-andspoke models developed by users in each major metropolitan area. With this type of model, there are new development opportunities for logistics real estate developers in both
the Midwest and Northeast. As discussed previously, new construction has been and will continue to be more challenging in the Northeast than in the Midwest due to land availability and costs, as well as entitlement periods. However, Duke Realty has successfully developed several new logistics facilities in New Jersey and other Northeast markets, and today our logistics real estate portfolio in New Jersey stands at 7.8 million square feet. An excellent example of a recent project is Steel Run Logistics Center,
Art V. Makris, Senior Vice President, Duke Realty
a 1.3 million-square-foot, two-building built-to-suit development for Home Depot in Perth Amboy. We remediated a site that had been home to various industrial and manufacturing operations over the last 150 years and had been sitting vacant for nearly 10 years. Other examples include Legacy Commerce Center in Linden; 5 Ethel in Wood-Ridge; 429 Delancy in Newark; and 150 Old New Brunswick Road in Piscataway.
president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer
EDITORIAL
associate publisher Lisa Rudy
Diversifying who gets real estate capital will help the whole city thrive who is African American. “They allocate capital to who they know and who they are comfortable with, and they allocate it to the same people over and over again.” Local real estate development would benefit from a diverse assortment of perspectives. If you grew up in, say, Harlem, you might be more inclined to consider the needs of that area than you would be if you hadn’t. Including more voices in the discussions about what is built where could help ensure that no communities across the boroughs fall into disrepair and lack necessary amenities. It costs a lot of money to build in New York, where, as Peebles noted, a small deal can take $100 million. Generational wealth is a major source of capital for many developers, but Black Americans have not generally had the opportunity to amass large-scale wealth thanks to institutional racism. Black developers who can put up capital to build often hit roadblocks in acquiring investment funds to carry them across the finish line. The only way to make New York a city where all neighborhoods
FINANCIAL INSTITUTIONS NEED TO WEED OUT THE INHERENT BIASES AND CRONYISM lucrative local industries. But as Brian Pascus reported in this week’s page 1 feature “Inequitable Equity,” the decisions about who will be given the financing to build often leave minority developers out in the cold. “These allocators of capital are almost 100% white men,” said real estate developer Don Peebles,
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PEEBLES
flourish is to demolish these roadblocks once and for all. Financial institutions need to weed out the inherent biases and cronyism that keep minority developers on the sidelines. They can start by diversifying their employees and dedicating groups to green-light capital for projects in underserved neighborhoods (as at Goldman Sachs). In addition, pension funds must hire asset managers who reflect the backgrounds of the workforce that contributes to them.
“Until those they invest in look like those who contribute their money, we’re not going to get there,” said Craig Livingston, managing partner at Exact Capital and chairman of the New York Real Estate Chamber, of pension funds. Roughly 65% of city residents are people of color, according to 2010 statistics from the Furman Center. It’s time for those who control the city’s capital to acknowledge this and give everyone a seat at the table. ■
BUCK ENNIS
W
hen New Yorkers list what they love most about the city, they often mention its diversity. The city’s status as a melting pot is usually cited as one of its greatest assets. However, as protests demanding racial justice continue to dominate headlines across the country, New York also must pay attention to what’s happening in our own backyard. The population is diverse, yes, but we have to acknowledge that the playing field is not level for all New Yorkers. To help illustrate the issue, think of the buildings dotting the city’s storied skyline. Real estate development is one of the most
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OP-ED
Small businesses need a rent lifeline
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Simone Pryce
BY BRIAN KAVANAGH, YUH-LINE NIOU, BRAD LANDER AND KEITH POWERS
N
ew York City small businesses are slowly reopening, but the months of closure, reduced capacity, added costs and now lower revenues make it hard for many business owners to imagine catching up on the bills, which continue to pile up. We’ve spoken with dozens of small-business owners, business associations and commercial landlords during the past few months, and we’ve heard over and over again that rent remains one of the biggest challenges. Evictions are on hold for now, but businesses are desperately asking for rent relief. Some commercial landlords have been willing and able to renegotiate leases, but most have not wanted or been able to. Just 20% of businesses in Brooklyn have been able to negotiate any kind of rent adjustment, according to a survey last month by the Brooklyn Chamber of Commerce. We are proposing a policy ap-
proach to bring landlords to the table with tenants to address pastdue rent and enter into new “recovery leases” with limits on rent increases. By offering property-tax abatements to landlords, we can make it possible for mortgage holders to continue making their payments while giving a lifeline for small businesses trying to rebuild after the crisis. Pandemic recovery leases, along the lines of what we are proposing in Albany and the city, would be a win-win for tenants and landlords.
Rising rent Even before the Covid-19 crisis, sky-high rents were pushing small stores and restaurants out of business. During the past decade, commercial rents have risen by at least 20% and as much as 50% in some neighborhoods, outpacing the growth of small businesses. Vacant properties sat empty, leaving our neighborhoods pockmarked by shuttered storefronts. Now, with months of lost revenue and an uncertain fu-
ture, many small businesses are facing permanent closure. Rent forgiveness or cancellation have been proposed, but without state or federal aid to help make it work and with the bills mounting now, another approach is urgently needed. Our recovery lease proposal would bring tenants and landlords together to make a plan for addressing past-due rent via mutual agreement (through some combination of rent cancellation, rent forgiveness, a one-time payment and additional monthly rent payments for a period of time), and then lock in stable, lower rates for the rebuilding and recovery yet to come. Small businesses make up the best of our communities, providing jobs, places to buy necessities, and food options that make each of our neighborhoods lively and unique. Starting a neighborhood small business is a long-standing path to economic opportunity in immigrant neighborhoods and communities of color. Families invest their life savings, their labor and their dreams in the business,
in the hopes of building something to provide for their children and their future. When we lose small businesses, we lose the diversity and creativity of our communities, and we further marginalize those who are historically cut out of economic opportunities. We must act urgently to ensure their survival. By providing tax relief for commercial property owners, we can help small businesses lock in rents at stable, lower rates. It won’t solve every challenge, but it will offer a path forward for both the landlord and tenant to get through this pandemic economy together. This legislation is an important first step in supporting our businesses before it is too late for any recovery. ■ State Sen. Brian Kavanagh and Assemblywoman Yuh-Line Niou have introduced legislation to authorize New York City to create the program, and Councilmen Brad Lander and Keith Powers are working on city legislation.
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8 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 7, 2020
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OP-ED
Covid-19 might save the office BY JUSTIN STEWART
C
ovid-19 has led many to make dire predictions about the fate of the office, leading New York’s commercial real estate industry to tremble. Is the commute to a Midtown headquarters a thing of the past? What of the longterm lease commitments in our city’s most iconic skyscrapers? The real problem, however, is that for far too long many companies have been stuck on the idea that the office is a utility. Those employees who were dissatisfied with the office experience long before the pandemic have no desire to return to a workplace that’s distracting, inconvenient and crowded now that they’re allowed to seek alternatives.
before the outbreak, 20% of remote workers said they struggled most with collaboration and communication, while another 20% said loneliness. Today those feelings of isolation have been amplified. What 74% of workers miss most about the office, according to Gensler’s new U.S. work-from-home survey, is other people. Offices also help us establish critical physical and psychological boundaries between the professional and the personal. Even the simple acts of getting dressed for the day and commuting allow us to switch in and out of work mode. What’s more, the office is where we become professionals and have firsthand experiences that lay the foundation for our career development and advancement. The good news is that businesses have plenty of incentives to deliver an office their employees genuinely like. People are happier when they see other people at work, and the energy from being around others can increase productivity. Research shows coworkers who sit near each other and communicate frequently can complete projects faster than those who don’t.
PEOPLE ARE HAPPIER WHEN THEY SEE OTHER PEOPLE AT WORK At the same time, the pandemic has shown us just how essential the office is to our personal and professional lives. Working remotely has serious drawbacks, starting with the fact that it isolates employees. According to Buffer’s 2020 State of Remote Work survey,
BUCK ENNIS
The pandemic has shown how essential the workplace is to our personal and professional lives
That is typically referred to as social facilitation, a theory positing that individuals work better when surrounded by others. It holds true whether employees are actively working together or simply in proximity to one another. In addition, 80% of employees say they’re more productive when they change locations. Having an enjoyable office is also a smart move for talent attrac-
tion and retention—something Silicon Valley companies, with their luxurious campuses, recognized long ago. The transformation toward office spaces that people actually want to visit began long before Covid-19 and will continue long after. In the short term, companies might continue giving their employees the option to work from home, as they wait and see what
happens with the pandemic. But it is merely a pause in what’s proving to be an immutable trend. When employees do eventually return, they hopefully will find that their office has fundamentally changed for the better—and perhaps just in the nick of time. ■ Justin Stewart is co-founder and president of Industrious, a workplace provider.
OP-ED
Bill exposes ugly side of beauty industry BY MEAGAN FORBES AND DARYL JAMES
R
eading the instructions on a bottle of shampoo takes about one second: Apply, lather, rinse. Yet New York regulators apparently think salon assistants need 500 hours of training before attempting the three-step process. Despite the absurdity, the special interests who have captured New York’s regulatory process want to turn this so-called reform into reality. If passed, the measure would be great news for beauty schools. Besides charging expensive tuition, these programs require students to work for free while offering services to the paying public. The regulatory board pushing for the change knows firsthand about the revenue that each new student represents. Three of the four panelists own beauty schools, and board member Anthony Civitano also serves as executive director of the lobbying group for cosmetology schools. That leaves just one panelist without a clear conflict of interest. Rather than moving forward with the rigged bureaucracy, a better approach would be to go in the opposite direction with legislation that removes barriers to work in beauty
careers. Many positions in the industry are safe and do not involve strong chemicals, dyes or hair cutting. Besides shampoo assistance, examples include natural hairstyling, hair braiding, makeup application and eyebrow threading. New York currently regulates all of those services to some extent, making it harder for people on the fringes of the economy to find legitimate work. People who cannot afford beauty school go underground instead, where they face exploitation. Fortunately, many states have taken steps to relieve the regulatory burden, like a bipartisan measure in Minnesota that exempts hairstylists and makeup artists from cosmetology licensing. Passage of the bill in May has created opportunities for hundreds of service providers, including shampooers, who previously worked in the shadows—avoiding self-promotion for fear of steep fines and criminal prosecution. Lawmakers in Massachusetts are working to exempt hair braiders from cosmetology licensing. Overall, 28 states already have made the same change, including Connecticut and Vermont. More broadly, Florida and other states have passed comprehensive occupational licensing reform that
GETTY IMAGES
Salon jobs would disappear, consumer prices would go up under shampoo-assistant measure
greatly reduces regulatory requirements in a variety of industries. Research shows particular benefits for immigrants and people of color when the government removes needless barriers to earning a living. States that require hair-braiding licensure, for example, have fewer braiders relative to their Black populations than states that do not license braiders. The disparity is clear in Mississippi and Louisiana. Mississippi requires no training and had more
than 1,200 registered braiders. At the same time, Louisiana requires 500 hours of training to work as a braider and had only 32 licensed braiders—despite having a larger Black population. Something similar would happen in New York if the state were to crack down on shampoo assistants. Salon jobs would disappear, and consumer prices would go up as overqualified cosmetologists spent their time doing tasks better suited for entry-level assistants.
Shampooing, braiding, threading and makeup application are safe and common practices that people do every day. Paying customers, not government bureaucrats, should decide for themselves who is qualified to perform them. Like washing hair, some processes simply do not need extra steps. ■ Meagan Forbes is a lawyer and Daryl James is a writer at the nonprofit Institute for Justice in Arlington, Va.
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ASKED & ANSWERED
MELINDA MACK New York Association of Training and Employment Professionals INTERVIEW BY SUZANNAH CAVANAUGH
T
he touchstone of Melinda Mack’s career has been helping New Yorkers get ahead. Under former Mayor Michael Bloomberg, she served as acting executive director and senior vice president of the city’s Workforce Development Board for three years. As project director at Graduate NYC, she sought to raise community college graduation rates. Now, as executive director of the New York Association of Training and Employment Professionals, Mack heads a roughly 165-member coalition, including the YMCA of Greater New York and the state Commission for the Blind, striving to improve job training and policies. With the city unemployment rate at 20% in July, the work has gained urgency.
How has the pandemic affected the workforce?
It highlighted symptoms of the economy we’ve been trying to get people to pay attention to. Workers in occupations paying minimum wage or just above, New Yorkers who have limited skills and individuals with a high school diploma or less—which in New York City is about 45% of people—just don’t fare as well in the labor market.
A lot of jobs, such as retail work, are now in short supply. How is your agency offering support?
A lot of our members, especially in the city, have pivoted
DOSSIER WHO SHE IS Executive director of the New York Association of Training and Employment Professionals and co-founder of Invest in Skills New York EDUCATION Bachelor’s in urban and public policy, SUNY at Buffalo; master’s in public administration and regional planning, SUNY at Albany; business certificate, Columbia University AGE 38 ALL OVER THE APPLE Mack grew up in Buffalo and lived in the city for 10 years—in Sunset Park, Brooklyn, and Forest Hills, Queens—before settling down in Albany, where the association is based. NEW YORK STATE OF MIND The association, where Mack has worked for eight years, represents the workforce interests of the entire state, and city organizations make up its largest contingent, she says. FAMILY TIME Mack is married with three children, ages 3, 6 and 9.
potentially find a better job when they’re able to go back to work. It’s really supporting those typically in low-wage employment and moving them into sectors that are currently in demand or growing.
What sectors are growing right now?
We’re sort of seeing a growth in manufacturing and a growth in transportation and logistics. There’s always a huge demand for short-haul truckers and people who can deliver goods. But we’re also seeing a huge growth in tech. Especially in the city, there are biomedical and tech positions that are always going unfilled.
You’re also the co-founder of Invest in Skills New York, an advocacy group that offers resources so residents can land better jobs. What does a skilled workforce look like? The more people you have employed in good jobs, the better off a community is. Yet we often put most of the focus on economic development and how many jobs we create. For me, it’s turning that on its head postpandemic to say, “Let’s not just count the jobs. Let’s count how many good jobs we’re creating—how many have family-sustaining wages and benefits attached.”
Can a larger skilled workforce speed the city’s recovery?
to providing direct relief. They’re also providing individuals who probably aren’t going back to work because their job doesn’t exist anymore a leg up on the ladder so they can
If the city made a huge investment in worker skill recovery, especially from sectors that are likely going to be stagnant—like those 800,000 people in retail accommodations and services—the city would recover much faster than other areas once the economy started to boom. ■
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POLITICS
DiNapoli outlines extreme budget scenarios for city and state
W
ithout tens of billions of dollars in federal aid, there are no good budget options for New York City and the state, state Comptroller Thomas DiNapoli said during a recent Crain's business forum. “It’s very clear if we don’t get the additional federal help, the options are limited,” DiNapoli said. “The options are very severe.” The comptroller painted a grim picture of the choices that city and
economy is in a fragile condition.” DiNapoli noted that the state anticipates a further decrease in expected receipts by $1 billion, with a total budget gap for this year projected to be $14.5 billion. He said out-year budget gaps are $70 billion for the next four years. New York City’s finances are in no better shape, he said, adding that he expects a $9.6 billion revenue loss during the next two years and a budget gap of $4.2 billion next year that could grow as high as $6.5 billion. “These are very uncertain times, and it’s very critical, from my perspective, that we get additional help from Washington,” he said. “It’s unfortunate that that hasn’t been dealt with yet.” State and local governments have received money from Washington in the form of reimbursements for Covid-19 expenses, but additional money has not been provided to fill revenue gaps and cover recovery expenses. DiNapoli said the state has paid
THE STATE AND CITY ARE FACING BILLION-DOLLAR BUDGET GAPS state officials will have to make in the event Washington does not provide significant financial aid. “It’s even more significant cuts in services,” he said. “It’s more reliance on borrowing, which, long term, is not a smart strategy. Or it’s taxes increasing at a time when the
close to 9%—some $4.6 billion. “We went from enjoying the longest economic expansion in history to a virtual shutdown of the economy,” DiNapoli said. NY STATE COMPTROLLER OFFICE
BY BRIAN PASCUS
THANK YOU Crain’s acknowledges the presenting sponsors of the business forum, Hornblower Cruises & Events and United Airlines, as well as its corporate members, Brown & Weinraub, BTEA, Cozen O’Connor, GCA, George Arzt Communications, Greenberg Traurig, Kasirer, Nicholas & Lence Communications and Patrick B. Jenkins & Associates. Without their support, this business forum would not have been possible.
out $40 billion in unemployment benefits so far this year. The state paid out $2 billion all of last year. Other revenue issues are sales tax collections experiencing a 27%
drop in the second quarter, compared to last year. Sales tax revenue is down $3 billion year over year, and personal income tax revenue in the state is projected to drop by
Return of the control board? The comptroller took aim at Mayor Bill de Blasio’s administration, mainly for growing the city’s government over the course of his administration and not planning budgets for an eventual downturn. “That was only sustainable with a robust city economy,” DiNapoli said. “We need to look at all these issues of spending in a very different way.” DiNapoli said the Financial Control Board—an independent agency used to solve the city’s 1970s fiscal crisis—could eventually be instituted if the mayor is unable to get a handle on the matter. The board would take over the city’s budget, he said. “The mechanism is there, if the state Legislature would so decide,” he said. “Sometimes that’s one of the arguments: Let the control board be the bad person in the room.” ■
NOMINATIONS OPEN Redefining Crain’s New York Business will highlight Notable Women in Financial Advice, which will publish as a section within Crain’s New York Business in the November 30 issue. This feature will highlight women who work as financial advisers, in a role substantially related to financial advice and those in leadership positions at advisory firms. Nominate today at crainsnewyork.com/notablefinadvice2020
what you should expect from your accountant. grassicpas.com
Nominations must be completed by the deadline, October 1, to be considered. Questions? Contact notables@crainsnewyork.com
September 7, 2020 | CRAIN’S NEW YORK BUSINESS | 11
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INSTANT EXPERT
New York’s borrowing conundrum THE PLAYERS
1
2
The city is desperate for money, as it faces a $8.5 billion budget deficit over the next two years. Mayor Bill de Blasio said he will be forced to find deep cuts to jobs and services on in the event the city does not receive at least $5 billion in federal aid or the authority from the state to borrow that much on the municipal bond market. With federal money unlikely to come anytime soon, the long-term borrowing request is at the heart of the city’s current fiscal nightmare. Veterans of the 1970s fiscal crisis blame rampant borrowing as the primary cause for the harrowing financial situation the city experienced then. Other economists have argued the city’s recent budgetary practices were actually responsible prior to the pandemic. They say the mandated Covid-19 shutdown created a fiscal emergency, in which borrowing billions of dollars would be an appropriate, if not necessary, response.
First and foremost, there is de Blasio, who has pushed for budget flexibility since May, when he asked for $7 billion in borrowing authority before lowering his demand to $5 billion a month later. City Council Speaker Corey Johnson signed off after initially rejecting the idea, while Comptroller Scott Stringer said he would support borrowing as a final option in the event the mayor cannot find the savings in the budget. Albany holds the keys, though. Gov. Andrew Cuomo, Senate Majority Leader Andrew Stewart-Cousins and Assembly Speaker Carl Heastie would need to support the plan in order for legislation to pass and the authority to be granted. So far only Heastie has expressed support. Also, there are the bankers the city would hire to manage the selling of debt on the municipal bond market. The debt would then be rolled over and converted into long-term bonds that would be used to fund operating expenditures at the discretion of the mayor and comptroller. The bonds would need to be paid back each year going forward via interest payments of millions of dollars, money excluded from servicing the city and subject to the whims of interest rates.
THE MAYOR HAS DELAYED JOB CUTS, BUT IT’S CLEAR THAT WITHOUT FEDERAL FUNDING, SOMETHING WILL HAVE TO GIVE
5
BLOOMBERG
The city and state are taking a wait-and-see approach. It’s unclear if the House can agree with the Senate and President Donald Trump on a new Covid-19 relief bill. The Democratcontrolled House has passed a $3 trillion measure that includes $915 billion in aid to states and local governments. The Republican-controlled Senate then passed a $1 trillion bill that included zero aid to states and local governments. It remains to be seen if the gulf is merely pre-election posturing. For now New York is in limbo. The mayor has delayed his plan of cutting 22,000 jobs, but it’s clear that without extra funding, something will have to give. Cuomo is likely to continue lobbying Washington for relief money, but he might need a Joe Biden victory in November to receive anything from D.C. If Trump wins re-election, all bets are off.
YEAH, BUT…
3
Borrowing carries with it a dangerous risk for the city and future generations of New Yorkers. The city borrowed $1.5 billion from bond markets after finding itself in a $6 billion hole following the 9/11 terrorist attacks, and it is still paying back that money nearly 20 years later. De Blasio’s initial request aimed to pay off $7 billion over 30 years. Then there is the issue of de Blasio budgetary practices. Since taking office in 2014, the mayor has grown the city budget by $20 billion and added 32,000 municipal jobs. Some budget experts, including those at the Citizens Budget Commission, have called on the mayor to find $5 billion in savings in his newly adopted budget before taking drastic borrowing steps. Before saddling the city with generations of debt, they argue, his team should renegotiate costly labor contracts, cut thousands in administrative staffing positions and use attrition to help reduce the city payroll.
SOME BACKGROUND
4
The last time the city found itself in a significant fiscal crisis was the late 1970s, when the Financial Control Board emerged. Back then, the city had been overborrowing for years and, once the debt became too large to manage, independent mechanisms were created to bring financial trust back to the city and calm investors of its bonds. The Municipal Assistance Corp. allowed the city to borrow money on the state’s credit, while the Financial Control Board managed the city’s budget and contracts, effectively giving an independent agency veto power as Mayor Ed Koch cleaned up the mess. The Financial Control Board eventually was declawed in 1986, but it remains in place in the event the city fails to pay its debt service or incurs an operating deficit of $100 million in a year. The current fiscal crisis has renewed calls for its re-emergence in the event borrowing is granted.
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WHAT’S NEXT
ISTOCK
THE ISSUE
GOVERNORANDREWCUOMO/FLICKR
BY BRIAN PASCUS
12 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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HALL 2020
of
FAME
This year’s inductees have been instrumental in leading New York through one of its darkest periods by running health care institutions, keeping financial staff employed, feeding frontline workers and fundraising for the city’s cultural landmarks PHOTOGRAPHS BY BUCK ENNIS crainsnewyork.com/HOF2020
DR. STEVEN CORWIN
JERRY I. SPEYER
JAMES GORMAN KATHERINE G. FARLEY
MARCUS SAMUELSSON September 7, 2020 | CRAIN’S NEW YORK BUSINESS | 13
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HALL of FAME
DOSSIER
Dr. Steven Corwin
TITLE President and chief executive officer, New York–Presbyterian
BY JONATHAN LAMANTIA
WHAT’S NEXT? “We’ll learn lessons from this and prepare,” Corwin said of the health system’s response to Covid-19. “We have a lot of work in front of us.”
President and CEO, New York–Presbyterian
D
CIVIC ACTIVITIES Trustee at the New York Academy of Medicine; member of the Citizens’ Committee for Children of New York’s corporate advisory council; member of the Association for a Better New York’s census 2020 committee; member of the Mayor’s Fund Board of Advisors; past chair of the health care systems council of the American Hospital Association; past chair of the Healthcare Association of New York State; past chair of the Greater New York Hospital Association
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“WE WILL HAVE TO RETHINK WHAT THE HOSPITAL OF THE 21ST CENTURY NEEDS TO ACCOMPLISH”
The nonprofit health system had $9 billion in revenue last year and earned more than $300 million in operating income. Five years earlier, the system’s revenue was half that amount, and it reported about $220 million in operating income. The system has come a long way from the 1980s and ’90s, when Columbia-Presbyterian was routinely losing tens of millions a year. “I lived through that period where people were wondering whether, metaphorically, the hospital was going to fall into the Hudson River,” Corwin said The hospital leaned on the Columbia College of Physicians and Surgeons and its faculty to persevere through that time, and its merger with the well-heeled New York Hospital (now Weill Cornell Medical Center) helped engineer the turnaround. The change in fortune also has allowed the hospital to construct new facilities, including the $1.1 billion David H. Koch Center, which includes ambulatory care offices, as well as the just-opened Alexandra Cohen Hospital for Women and Newborns, both made possible by considerable fundraising efforts. As Corwin leads NYP into a new decade, he will be responsible for ensuring that the health system’s workforce, about half of which is nonwhite, feels the system is doing enough to combat racism and inequality for its staff and patients. Part of that is diversifying the institution’s senior management and board, Corwin said. “We have a profound role to play,” Corwin said. “If we’re not in the lead on this, then we’re not who we say that we are.” The city is now in the recovery stage of the Covid-19 crisis. To prepare for NYP’s next test—whether that be the resurgence of Covid or something completely new—Corwin said the health system is working to improve its supply chain, reduce its dependency on China for protective equipment and train workers across disciplines so they’re ready to respond. After a desperate effort to increase hospital capacity, the focus has turned to testing, contact tracing and safely reopening city institutions. Corwin said New York–Presbyterian will be part of the city’s effort to rebuild. “I think we will have to rethink what the hospital of the 21st century needs to accomplish to achieve its community mission, its social mission and its mission of safeguarding the health of the public,” Corwin said. “We have to be a necessary part of the fabric of the city.” ■
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r. Steven Corwin, president and CEO of New York–Presbyterian, has never faced a crisis quite like Covid-19. He rose through the health system’s ranks during the crack epidemic, HIV/AIDS, 9/11 and Superstorm Sandy. But the way Covid-19 swiftly overwhelmed hospitals and tortured the city through March and April stands out. NYP nearly doubled the capacity of its intensive-care units, navigated a crumbling supply chain to acquire masks and ventilators, and spent millions to reconfigure its facilities and recruit staff. At the crisis’ peak, in April, its hospitals were caring for more than 2,000 Covid-19 patients. “I’ve never seen anything like this in 40 years in medicine in terms of the overwhelming nature of what we saw,” Corwin said. Corwin has spent his entire career at NYP. Born in White Plains, he graduated from a six-year combined bachelor’s and medical degree program at Northwestern University and completed his residency and cardiology training at the then–Columbia-Presbyterian Medical Center. In 1990 Corwin was appointed to oversee the intensive-care units at Columbia’s Milstein Hospital Building. Around that time, he got advice from hospital executive Kevin Dahill that would guide him through his career. “Kevin told me one of the most important things in my life, which was, ‘Just remember: You’re a doctor who happens to be a good administrator, not a good administrator who happens to be a doctor,’ ” Corwin said. In 1997 Columbia-Presbyterian merged with the New York Hospital on the Upper East Side, which was partnered with Cornell. The combined entity now has more than 47,000 employees and affiliated physicians and 4,046 beds. Corwin became senior vice president and chief medical officer in 1998 and was promoted to executive vice president and chief operating officer in 2005. He took over as CEO in 2011 following the retirement of Dr. Herbert Pardes. In the decade since, Corwin has overseen the broad expansion of NYP into Brooklyn, Queens and Westchester County through the acquisition of hospitals and the growth of its medical groups. When NYP acquires a hospital and puts its name on it, Corwin said, that facility needs to meet the same high standards of the flagship hospitals in Manhattan. His goal is that physicians interested in working for NYP will be willing to work for any of its campuses because they won’t view one as better than another. “That’s going to take us a while,” he said, “but I think we’re well on our way toward doing that.”
Change of fortune
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Katherine G. Farley
Chair, Lincoln Center for the Performing Arts BY GWEN EVERETT
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atherine G. Farley loves New York because it is the center of finance, art and the industry she made her name in: real estate. During Farley’s 40-year tenure in real estate development, the range of projects she was involved in knew few geographic boundaries. Her work took her to Brazil, Germany, India and elsewhere. In the early years of her career at Turner Construction Co., Farley oversaw East Asian marketing and sales for its subsidiary, Turner International Industries. In 1984 she moved to Tishman Speyer, the real estate powerhouse chaired by her husband, Jerry I. Speyer, who is also a Hall of Fame inductee this year. There her global focus continued, as she led the New York City developer’s expan sion into Asia and Europe. She also managed the firm’s Brazil and India businesses. But it’s through her nonprofit work that Farley has had the greatest impact on the city she loves. She has served in leadership roles at some of New York’s most iconic arts and philanthropic institutions including the New York Philharmonic, the Andrew Mellon Foundation and Lincoln Center, where she is now chairwoman. Her nonprofit career tells a development story of its own, one with a distinct New York focus.
“I’M A GREAT BELIEVER IN NEW YORK OVER THE LONG TERM”
Giving back To her, working with the nonprofits was a natural fit. She has cultivated a love for the arts—in fact working in real estate after concentrating in studio art at Brown University. Despite her art background, it was her reputation in real estate that made premier Manhattan performing arts institutions come calling. The Philharmonic was the first major arts institution to seek her help, in 1999, when the orchestra was planning to embark on a renovation of Avery Fisher Hall, which has since been renamed after David Geffen. “Ironically, the reason they thought I might be interested is because I’m an architect, and I had experience in the development world,” Farley said. “They thought I might be able to contribute something.” Her real estate expertise is what drew Lincoln Center to enlist her assistance for the $1.2 billion redevelopment of its 16-acre campus, a project that spanned several years and enlisted her former firm, Turner. It’s one of the greatest examples of how Farley’s development background has fed into her nonprofit work. As chairwoman, she’s responsible for helping to plan for Lincoln Center’s long-term financial health. It’s a different challenge from the deals-driven world of real estate. “The business side of it is a funny business,” Farley said, “because your bottom line is measured by your ability to keep performing at a certain level—to keep providing cultural and performing arts to the widest number of people. It’s not measured in a dollar bottom line.”
Tackling challenges From the start of her tenure, Farley has helped Lincoln Center pull in revenue from a diversity of sources beyond traditional donations. That includes consulting services, municipalities and institutions looking to open cultural centers. It also opened up the center to host New York Fashion Week. The Covid-19 pandemic has changed the parameters at Lincoln Center, whose stages are shut down for the foreseeable future. It’s in talks with the state on how the arts mecca can be a part of the economic recovery, Farley said. It already has opened as a polling center and food collection center during the pandemic, she noted. It held memorial services for families of people lost to Covid-19, and it held an outdoor concert for the families of first responders, she said. “Symbolically, Lincoln Center is so important. But it’s also the heart of the economic engine,” she said. “We’ll be focusing on the role Lincoln Center can play in restimulating the tourist and hospitality industry.” Farley formally retired from Tishman Speyer in 2016. Rebuilding New York City through Lincoln Center seems like a fitting next step for her, not just because of her résumé but also because she has faith in the city at a time when naysayers are forecasting its demise. Farley shot down those grim predictions, saying, “I’m a great believer in New York over the long term.” ■
DOSSIER TITLE Chairwoman, Lincoln Center CIVIC ACTIVITIES Co-Chair, International Rescue Committee MOST IMPORTANT EARLY ACCOMPLISHMENT In the summer of 1973 Farley worked as a carpenter in the construction of a single family home in Floral Park, N.Y. WHAT’S NEXT? Rebuilding New York and its economy through Lincoln Center
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HALL of FAME
DOSSIER
James Gorman
TITLE Chairman and CEO, Morgan Stanley
BY AARON ELSTEIN
MOST IMPORTANT EARLY ACCOMPLISHMENT Advising global financial institutions as a senior partner at McKinsey gave Gorman a world view that he said is very hard to get.
n the first decade of the 21st century, Morgan Stanley was constantly at war with itself. The trouble started with its misbegotten 1997 merger with brokerage firm Dean Witter, whose “stocks and socks” branches in Sears stores rank as one of Wall Street’s all-time worst ideas. The merger culminated with a brutal Game of Thrones–style war in the management suite and the defenestration of the CEO, who hailed from the house of Dean Witter. The new guard, which was really the Morgan Stanley old guard, introduced new problems. To catch up to archrival Goldman Sachs, the firm made big bets on mortgages—which blew up massively. It was spared Lehman Brothers’ fate thanks only to a taxpayer-funded rescue and a big investment by a Japanese firm. Into the dumpster fire stepped James Gorman, a management consultant by training who had shown his theories could produce results. He’d revamped Merrill Lynch’s “thundering herd” of financial advisers before joining Morgan Stanley in 2005 to fix the Dean Witter mess. In 2010 he was handed the keys to the Morgan Stanley CEO’s office. His mandate: stabilize a respected but unstable firm. “I didn’t think we had a choice coming out of the financial crisis but to make radical change and do it quickly,” he said.
WHAT’S NEXT? “For the next few years, I remain committed to my current role as chairman and CEO of Morgan Stanley and am working closely with our next generation of leaders to ensure that when I do leave, we will have a number of talented leaders to take the firm to the next level,” he said. “After Morgan Stanley, I would like to do something to give back to my native Australia, and to the U.S., where I have spent the vast majority of my adult life. But how best to do that and in what capacity remains to be seen.”
Chairman and CEO, Morgan Stanley
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CIVIC ACTIVITIES Director of the Federal Reserve Bank of New York and the Council on Foreign Relations; member of the Board of Overseers of the Columbia Business School, the Business Council and the Board of the Institute of International Finance; formerly president of the Federal Advisory Council to the U.S. Federal Reserve Board, co-chairman of the Partnership for New York City, chairman of the Board of the Securities Industry and Financial Markets Association, and co-chairman of the Business Committee of the Metropolitan Museum of Art
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Leading a turnaround Gorman revamped Morgan Stanley by turning it into a leading financial adviser while keeping it a top-shelf investment bank that leads most of Wall Street’s major initial public offerings. The former is a less volatile business than the latter, and today Morgan Stanley’s market value is $80 billion. For those keeping score, that’s $10 billion more than Goldman Sachs’ value. And then there are the mergers. The first big one, which set the tone for Gorman’s tenure, was the 2011 acquisition of Smith Barney from Citigroup. Such mergers often end in tears, but this one didn’t. “You need to respect the people you’re merging with,” Gorman said. “If you make sensible, practical decisions, where one side isn’t feeling like the winner or the loser, you’re much more likely to be successful.” Morgan Stanley is in the process of buying discount broker E-Trade, which Gorman said will push his firm’s market value to $90 billion. It took a long time for Wall Street to buy into Gorman’s vision. The darkest moment came in 2012, when Moody’s threatened to cut Morgan Stanley’s credit rating to junk. The headlines would have been awful, and clients would have bolted. But in the end the Moody’s grandees agreed Gorman had made Morgan Stanley a less risky firm and they could wait for the Smith Barney deal to pay dividends. Since then Morgan Stanley has had a powerful wind at its back. “Love it when a plan comes together,” Evercore ISI analyst Glenn Schorr wrote after the firm recently reported unexpectedly strong second-quarter results. “Clearly Morgan Stanley’s client franchise is stronger than ever.” From its position of strength, Gorman is tangling with new questions. Does Morgan Stanley need less office space in a postCovid world? (He doesn’t envision a “radical shift” in its real estate needs.) How does the economy look? (“A slow recovery.”) How does Gorman feel about the potential of a Biden administration? (“I never opine on politics.”)
“TO BE IN THIS INDUSTRY NOW IS A GIFT”
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Industry change Another challenge is finding more senior jobs for women and hiring more people with diverse backgrounds. “We need to do a better job,” he said, “and I’m committed to that.” Gorman came to New York at age 27 to attend Columbia Business School after serving as a litigator in his native Australia. He landed a job at McKinsey and spent a dozen years there before Merrill Lynch CEO David Komansky brought him aboard in 1999. His kids aren’t the least bit interested in Wall Street, he said, but young people who enter the field will find a place that’s never been more challenging or rewarding—intellectually or remuneratively. “To be in this industry now is a gift,” he said. One last thing: Don’t call him Jim. It’s James. “That’s what my mother called me,” he said, “and I’ve always respected that.” ■ 16 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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Marcus Samuelsson Chef and founder, Red Rooster and Samuelsson Restaurant Group BY AARON ELSTEIN
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arlem’s revival began in 1989 with the creation of Abyssinian Development Corp., a church-based group that renovated neglected buildings. The arrival of a full-service supermarket on 125th Street in 1997 was another milestone, as was 2004’s opening of Thurgood Marshall Academy, the first public high school built in the neighborhood in 50 years. Harlem’s second renaissance culminated in 2010, when Marcus Samuelsson opened Red Rooster. For the first time the neighborhood had a restaurant that drew not only locals but foodies from all over the city and the world. They were lured in by the lively decor created by local artists while music evoking Harlem’s past and present hummed in the background. The food was great too. “It is that rarest of cultural enterprises,” a New York Times critic marveled. “One that supports not just the idea or promise of diversity but diversity itself.” As a business, Red Rooster was ambitious and innovative. Samuelsson’s goal was to create a place where African-American chefs and hospitality workers could learn the restaurant trade close to home so maybe one day they could go on to start their own venture. “I wanted them to see they didn’t have to go downtown to get great work,” he said. Samuelsson’s success in Harlem has spawned a global enterprise. Samuelsson Restaurant Group now operates a dozen restaurants, including Red Roosters in London and Miami as well as three in his native Sweden. Samuelsson is a full-fledged media star, regularly appearing on NBC, the Food Network and PBS. He voiced himself in the animated movie Scooby-Doo! and the Gourmet Ghost. He has written six cookbooks and a memoir, including a version adapted for young readers. In short, he is the very model of a modern major restaurateur. Of course, it’s tough to be one when most of your customers are sheltering in place. During the lockdown, Samuelsson turned his flagship restaurant into a kitchen that has provided 200,000 meals for the Harlem community. He describes that as his most important work. He also is using his fame to press Congress to give unemployed restaurant workers more assistance. To help fill his days, he is writing a book about the history of Black chefs, to be titled The Rise, and he launched the This Moment podcast with Swedish hiphop artist Timbuktu. He also changed his diet in the past few months— eliminating meat and fish and focusing on vegetarian meals—because, he said, he got tired of waiting in long supermarket lines.
“I WANTED THEM TO SEE THEY DIDN’T HAVE TO GO DOWNTOWN TO GET GREAT WORK”
Neighborhood ties Samuelsson was famous in the food world before Red Rooster opened. He’d started as an apprentice at Aquavit, a chic Midtown restaurant, and became executive chef when his predecessor died unexpectedly. Applauding Samuelsson for “delicate and beautiful” food that melded Swedish traditions with modern cuisine, the Times in September 1995 awarded Aquavit three stars. Samuelsson, then 24, was the youngest chef ever to earn such praise. In 2009 he served as executive chef for President Barack Obama’s first state dinner, which honored the prime minister of India. Samuelsson opened Red Rooster knowing people would travel a long way for his food. The key was making uptown residents feel welcome in a place with downtown prices. To get the decor right, he spent hours in the Schomburg Center for Research in Black Culture and the New York Public Library studying Harlem history. “We didn’t think about the kitchen so much as how we could let the neighborhood come into the room,” he said. He keeps close ties to the neighborhood that made him famous. He produces the Harlem EatUp food festival, which raises money for area nonprofits. This summer’s event, the Harlem Serves Up TV show, brought in more than $200,000, plus a $150,000 grant from health insurer Humana. Although he personifies the term “celebrity chef,” before the city shut down for Covid-19, Samuelsson could still be found in the Red Rooster basement giving pep talks to the staff ahead of the evening rush. “He hired a lot of people locally with no restaurant experience—which definitely made things harder,” said Richard Martin, a business associate. “We’d be in meetings with powerful people, but if a staffer had to talk to him, he’d stop everything to listen.” Samuelsson hopes the pandemic will change the country in a positive way. “We have to get better as a nation and a city to work toward equality,” he said. How? “It all comes down to two things,” he said. “Find a vaccine, and vote in November.” ■
DOSSIER TITLE Chef and founder, Red Rooster and Samuelsson Restaurant Group CIVIC ACTIVITIES Co-Chair of Careers Through Culinary Arts Program; founding member of the Independent Restaurants Coalition MOST IMPORTANT EARLY ACCOMPLISHMENT Samuelsson is proud of the time he was first able to roll meatballs faster than his sisters. “That’s when I knew I was on my way.” WHAT’S NEXT? “Take a look at talents like pastry chef Mame Sow, chef Paul Carmichael at Momofuku Seiobo in Sydney and chef Adrienne Cheatham right here in New York City,” he said. “They are what’s up ahead.”
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HALL of FAME
DOSSIER
Jerry I. Speyer Chairman, Tishman Speyer
TITLE Chairman, Tishman Speyer CIVIC ACTIVITIES Chairman of New York-Presbyterian Hospital; chairman emeritus of the Museum of Modern Art MOST IMPORTANT EARLY ACCOMPLISHMENT In 1982 he completed construction on 520 Madison Ave., which was the first office building to display contemporary art. RISING SON His son, Robert Speyer, now leads the company as its president and chief executive.
BY NATALIE SACHMECHI
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man who owns nearly 80 million square feet of real estate around the world has largely been sheltering in his Upper East Side townhouse in recent months, riding out the pandemic like the rest of us. Jerry Speyer is a founding partner of global real estate development company Tishman Speyer, which he started with his late father-in-law, Robert Tishman, in 1978. More than four decades later, Speyer has passed the torch to his son, Robert, and serves as the firm’s chairman—which he says is “a nice title for an old guy.” Speyer began working with Tishman when the business was a publicly traded company called Tishman Realty. It was difficult for Speyer to choose not to work for his own father, who owned a chain of shoe stores. But he chose real estate and never looked back. “I knew when I worked there that if I did a good job, I could run the company at some point—which was my goal,” Speyer said. Ten years later, he became its president. At 37, he and Tishman liquidated the business to start a private development company. Speyer asked for his name to be on the door, and Tishman agreed.
Soaring growth Today the company’s portfolio includes Rockefeller Center, Yankee Stadium and 520 Madison Ave. If you ask Speyer to name his favorite building, he’ll tell you that’s like picking a favorite child: impossible. He thinks fondly of 520 Madison Ave., however, because it was the first big project he worked on after forming the company with Tishman. It also was the first Manhattan office building to display contemporary art in the lobby, he said. “When we first talked about doing it, people thought it was a crazy idea,” Speyer said. In 1982, when the building was completed, the popular sentiment was that art belonged only in museums. “I didn’t agree with that view,” he said, “so I took some paintings out of my personal collection and put them up in the building.” Speyer’s love for art dates back to his college days at Columbia University, where he earned a bachelor’s degree and an MBA. A friend introduced him to an art collector, and he began going to gallery openings. After graduating from business school in 1964, he bought his first painting at a Greenwich Village art show. He still has it. Art, in its many forms, is embedded in the Speyer family. Speyer was chairman of the Museum of Modern Art for 11 years until he stepped down in 2018. His wife, Katherine G. Farley, also a Hall of Fame inductee this year, is the chairwoman of Lincoln Center. Speyer can’t hum or whistle a tune, he said. But viewing the performing arts is a favorite pastime of his. Now that the Metropolitan Opera, the New York Philharmonic and similar institutions are closed due to the Covid-19 pandemic, Speyer has been streaming concerts online from different parts of the world. “People become much more attuned to things that are online,” he said. “The digital world has opened up a lot of opportunities to enjoy the various arts.”
“I HAD A LOT OF FUN BUILDING AN INTERNATIONAL COMPANY”
Many hats Speyer’s interests extend beyond the art world. He served as chairman of the Federal Reserve Bank of New York and is the only person to have served as chair of the Partnership for New York City two different times. He sits at the helm of the New York–Presbyterian Hospital board. He has led two $1 billion capital-raising initiatives—to bring advanced technology to the hospital and for the newly opened Alexandra Cohen Hospital for Women and Newborns atop the facility’s Koch Building. Working with the hospital takes up much of his time, Speyer said. He first became involved in the medical field while serving on the board of his alma mater. There he began working with Columbia-Presbyterian Medical Center. Later, he was asked by Dr. Herb Pardes, then president of New York–Presbyterian, to help out on the board. That was 20 years ago. Speyer looks back on his career with a smile. “I had a lot of fun building an international company,” he said. With his son now running the business, Speyer isn’t worried. “He’s going to take it places I’ve never dreamed of,” he said. ■ 18 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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FROM PAGE 1
almost 100% white men. If I said 99%, it wouldn’t be an exaggeration,” he said. “They allocate capital to who they know and who they are comfortable with, and they allocate it to the same people over and over again. That disparity is just patently unfair, and it’s worse than it was in 1968.” Access to capital is an issue that transcends economics and lies at the forefront of the national fabric. It’s been given heightened importance in recent months following the death of George Floyd, subsequent nationwide protests and ongoing discourse about racial inequality. “Economic empowerment is the last civil rights frontier,” said Craig Livingston, managing partner at Exact Capital and chairman of the New York Real Estate Chamber, a group that promotes minority participation in the real estate industry. He said intractable issues for Black Americans, such as poverty, education gaps, home ownership numbers and wealth creation—or lack thereof—are all driven by an inability to access capital. “If we could have equal access to capital, a lot of the ills that occur in African American communities would be solved,” he said. “We’d have higher home ownership, ap-
“IF THE MANAGERS OR THE GATEKEEPERS DON’T KNOW YOU, THEN YOU DON’T KNOW THEM” preciating homes, and this would create a large tax base to fund education properly.”
What developers know Black real estate developers are uniquely suited to understand and explain the disparities in capital access. Financial capital is the foundation of their business. “It’s very tough,” Peebles said. “Real estate is a capital-intensive business.” Peebles, who has a footprint in Washington, D.C., Miami, Las Vegas and the Bay Area in California, noted that New York is even more capital-intensive than other places. Here, development deals cost hundreds of millions, if not billions, of dollars, depending on the neighborhood. “A small deal in New York is $100 million,” he said. “It’s very difficult for us to guarantee our own projects, and there are very few of us who do guarantee our own projects,” said Thomas Campbell, founder and principal of Thorobird, a firm developing a 236unit mixed-use project in Brooklyn. “Because of this, we have to accept deal terms that are counter to our mission or building capacity.” Crain’s spoke with more than a half dozen Black American developers in New York, and even the most successful could provide examples of how their race has hindered certain projects. As they see it, they compete in an environment where it is tough to
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get third-party financing. marily funded by governIndividual family wealth ment subsidies and is among the main sourclow-income tax credits, a necessary part of the es of capital for most deTOTAL assets market but one without velopments, but the under managenearly the same return on Black community does ment controlled investment as privatenot possess a representaby minority- and women-owned tive share of wealth in the capital projects. hedge funds, U.S. according to a What must be done? A 2017 study by the 2017 study Knight Foundation found The Black developers women- and minorityCrain’s interviewed all agree the federal and owned hedge funds constate governments can trol less than 1% of total provide greater incenassets under managePORTION of ment. Minority-owned tives for institutional inprivate equity mutual funds control less vestors to provide Black assets controlled businesses with necesthan 0.5% of their total by minorityasset class; minoritysary capital. But the owned firms, greater, more substantive owned private-equity according to the changes must come from firms control less than 8% same study the institutional investors of their asset class. themselves, in how they Regardless of the size, all deals follow the same pattern. hire and what they aim to do with After the primary loan from a bank, their money. One guiding light can be found at which covers a majority of the cost, all developers seek mezzanine- Goldman Sachs’ Urban Investment equity capital to fund their projects. Group. Led by Margaret Anadu, A developer may put up a few mil- one of the few Black American lion dollars of his or her own mon- women in finance, the fund managey, but an equity fund must bridge es a $4 billion portfolio and invests the rest of the divide. It is the lack of $1.5 billion each year. access to these equity funds that is Marshall first tapped Anadu’s Urproblematic for Black real estate ban Investment Group for $20 mildevelopers. lion in 2007. Since then his firm has been able to source $1 billion from Institutional investors her team. “We raised $10 million from a Institutional ready: It’s a phrase mentioned over and over in real es- family office, but I don’t think we’d have the trajectory we’ve experitate development. But what does it enced without Margaret Anadu’s mean to be institu- Urban Investment Group,” Martional ready, who shall said. “It would’ve been quite are these institu- difficult, quite frankly.” tional investors, Anadu’s group has been empowand what is the in- ered by her firm to invest capital stitution seeking? where it sees fit. But not enough By and large, they major firms create targeted are family offices, social-impact funds that seek to dehedge funds, en- ploy capital in underserved comdowments and asset managers of munities. And not enough firms pension funds for states’ and work- have Black women in charge of bilers’ unions. They are a tiny, insular, lions in capital. highly connected community—one Pension funds are another part of that is overwhelmingly white. And the equation. Peebles, Livingston it is white real estate developers and others stress that the funds, who reap the rewards in an indus- which are financed in part by the try where only a few thousand play- contributions of minority workers, need to hire asset managers who ers compete. “They are no smarter than any- reflect their constituency. Last month Blueprint Capital Adone else; they just have access to capital,” Peebles said. “[Institution- visors, an investment firm founded al investors] allocate that capital to by African Americans, sued New whom they are comfortable, which Jersey, alleging racial bias. The firm is generally people who are like accused the state’s pension office of them. That is why you have such lit- stealing its investment ideas and hiring mega-firm BlackRock to imtle diversity.” This buddy-buddy system is fu- plement them instead. eled primarily on a personal relaThe lawsuit alleges that board tionship basis, one that shuts out members supervising the pension’s minorities. investment said they were not likely “If you’re not connected with the to approve a minority-owned managers or the gatekeepers, then asset-management firm. Livingston called for a paradigm you have no window to the actual equity capital,” said Meredith Mar- shift in how the heads of pension shall, co-founder of BRP Develop- funds and their asset managers ment and a successful developer in make decisions. “Until those they invest in look the New York area. “If they don’t know you, then you don’t know like those who contribute their money, we’re not going to get them.” “Somehow we deserve greater there,” he said. More than anything, Peebles scrutiny,” Peebles said. “Instead of looking at the deal first, as an inves- stressed, it comes down to the tor, they look at the sponsor first, white institutional investors choosand if they aren’t batting 900 to a ing to do business with Americans thousand, they move on.” of different backgrounds, and then As Marshall noted, Black devel- choosing investment projects reopers not personally linked to these flective of the demographics of the money managers have no access to markets where their capital is going equity capital. As a result, they are to operate. relegated to the affordable-housing “Wouldn’t that be what a fair dedevelopment cycle, a universe pri- mocracy is?” Peebles asked. ■
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HEALTH CARE
Rate of workforce drug use hits 16-year high, Quest analysis finds BY JENNIFER HENDERSON
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new analysis from Quest Diagnostics found that last year the percentage of workers testing positive for drug use nationwide had climbed to its highest rate in 16 years. The data comes as addiction treatment experts sound the alarm that the pandemic could spur an uptick in substance-use disorder. The commercial laboratory provider released data showing an overall workforce positivity rate of 4.5% in 2019 across its labs in all 50 states. The figure is the highest since 2003 and 28% higher than the 30-year low of 3.5% recorded between 2010 and 2012. In a relative bright spot for New York, the overall workforce positivity rate has held steady since 2016, hovering around 3.5%, according
ence and technology at Quest. “Certain drugs are continuing to go up.” Marijuana remains the primary driver in positivity rate changes, Sample said.
Lost productivity Quest noted in releasing its data that the negative effects of employee drug abuse on businesses and industries range from lost productivity and injuries to an increase in health insurance claims. The retail trade industry as well as the category that includes grantmaking, advocacy and personal services had relatively high positivity rates—5.5% each—in 2019, according to the data. Sample noted that Quest’s analysis has important implications for employers. “It helps inform them as to what may be happening within their workforce and potential workforce,” Sample said. “They can use this data to help guide the design of their program and have an assessment of what is happening that may be impacting them.” Though it is too early to tell what effect the pandemic is having on workforce drug positivity, looking at data collected during the current crisis and long after it subsides will be critical, he said. “Particularly as people start to return to work—hopefully very much so in the near future—there’s a question as to what impact drug use while they were at home may have,” Sample said. “Employers should be thinking about these things as they return to work.” Quest reported revenues of nearly $8 billion last year, up 2.6% from 2018. ■
“WHAT IMPACT WILL DRUG USE WHILE WORKERS HAVE BEEN HOME HAVE?” to Quest's data. Marijuana positivity ticked up to 2.2% in 2019. Opiate positivity trended down and remained under 1% as of last year. And methamphetamine positivity continued on a slight upward trend but remained under 1%.
Weed use up Nationwide, marijuana positivity rose by double digits across nearly all employee testing categories, Secaucus, N.J.–based Quest said, while opiate and heroin positivity declined. Cocaine and meth positivity surged across the Midwest. “Our data informs us that drug use is still a problem,” said Dr. Barry Sample, senior director of sci-
September 7, 2020 | CRAIN’S NEW YORK BUSINESS | 19
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Advertising Section
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PUBLIC & LEGAL NOTICES Notice of formation of Limited Liability Company. Name: Joy Twin Parks Developers LLC (â&#x20AC;&#x153;LLCâ&#x20AC;?). Articles of Organization filed with the Secretary of State of the State of New York (â&#x20AC;&#x153;SSNYâ&#x20AC;?) on May 15, 2019. NY office location: New York County. The SSNY has been designated as agent of the LLC upon whom process against it may be served. The SSNY shall mail a copy of any process to Joy Twin Parks Developers LLC, 40 Fulton St., Fl. 21, New York, NY 10038. Purpose/character of LLC is to engage in any lawful act or activity. Notice of Formation of FRIENDSHIP SC PRESERVATION GP, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/31/20. Office location: NY County. Princ. office of LLC: 60 Columbus Circle, 19th Fl., NY, NY 10023. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Any lawful activity. Notice of Qualification of 5703 Hudson Yards, LLC. Authority filed with Secy. of State of NY (SSNY) on 06/ 02/20. Office location: NY County. LLC formed in Delaware (DE) on 05/ 08/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 2532 Dupont Dr., Irvine, CA 92612. Address to be maintained in DE: GKL Registered Agents of DE, Inc., 3500 S DuPont Hwy., Dover, DE 19901. Arts of Org. filed with the DE Secy. of State, 401 Federal St. #4, Dover, DE 19901. Purpose: any lawful activities. Notice of formation of Limited Liability Company. Name: Joy Twin Parks Managers LLC (â&#x20AC;&#x153;LLCâ&#x20AC;?). Articles of Organization filed with the Secretary of State of the State of New York (â&#x20AC;&#x153;SSNYâ&#x20AC;?) on May 15, 2019. NY office location: New York County. The SSNY has been designated as agent of the LLC upon whom process against it may be served. The SSNY shall mail a copy of any process to Joy Twin Parks Managers LLC, 40 Fulton St., Fl. 21, New York, NY 10038. Purpose/character of LLC is to engage in any lawful act or activity. Notice of Qualification of EIGHTEEN LLC, FICTITIOUS NAME: 18 CONSULTING LLC. Authority filed with Secy. of State of NY (SSNY) on 07/21/20. Office location: NY County. LLC formed in Delaware (DE) on 05/04/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Eighteen LLC, 94 Grand St., Fl. Three, NY, NY 10013. Address to be maintained in DE: c/o Corporation Service Company, 251 Little Falls Dr., Wilmington, DE 19808. Arts of Org. filed with the Secy. of State, Division of Corporations, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: any lawful activities.
NOTICE OF FORMATION OF LIMITED PARTNERSHIP (LP) The name of the LP is: RIVERVIEW APARTMENTS REDEVELOPMENT COMPANY, L.P. Certificate of Limited Partnership was filed with the Secretary of State of New York (SSNY) office on: 05-22-2020. The county in which the Office is to be located: NEW YORK COUNTY. The SSNY is designated as agent of the LP upon whom process against it may be served. The address to which the SSNY shall mail a copy of any process against the LP is: 200 Vesey Street, 24th Floor, New York, NY 10281. The name and address of the General Partner is: HVPG RIVERVIEW GP, LLC, 200 Vesey Street, 24th Floor, New York, NY 10281. Purpose: any lawful activity. 11 HOYT STREET 29L, LLC. Arts. of Org. filed with the SSNY on 06/25/20. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 1270 Avenue of the Americas, Suite 1808, New York, NY 10020. Purpose: Any lawful purpose. IL FIORISTA MANAGER LLC, Arts. of Org. filed with the SSNY on 07/ 29/2020. Office loc: NY County. SSNY has been designated as agent upon whom process against the LLC may be served. SSNY shall mail process to: Pryor Cashman LLP, Richard S. Frazer, Esq., 7 Times Square, NY, NY 10036. Purpose: Any Lawful Purpose. Notice of Qualification of Intergate. Manhattan Office 31 LLC. Authority filed with Secy. of State of NY (SSNY) on 06/12/20. Office location: NY County. LLC formed in Delaware (DE) on 06/02/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: C T Corporation System, c/o Intergate.Manhattan Office 31 LLC, 28 Liberty St., NY, NY 10005. Address to be maintained in DE: C T Corporation System, 1209 N Orange St, Wilmington, DE 19801. Arts of Org. filed with the DE Secy. of State, 401 Federal St, #4, Dover, DE 19901. Purpose: any lawful activities. Entity Name EZ-Build, LLC with fictitious name EZB NYC, LLC. filed with SSNY on 08/06/2020. Office: Albany County. SSNY designated as agent for process & shall mail copy to: 347 Fifth Avenue, Suite 1402-183, New York, NY 10016. Purpose: Any lawful.
Notice of Formation of NEWBERRY SC PRESERVATION, L.P. Cert. of LP filed with Secy. of State of NY (SSNY) on 08/03/20. Office location: NY County. Princ. office of LP: 60 Columbus Circle, 19th Fl., NY, NY 10023. Latest date on which the LP may dissolve is 12/31/2119. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. Name and addr. of each general partner are available from SSNY. Purpose: Any lawful activity. Notice of Formation of JDB Special, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 11/18/19. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: the Company, 163 W. 74th St., NY, NY 10023. Purpose: any lawful activities. Notice of Qualification of IKEGUCHI HOLDINGS LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/20/20. Office location: NY County. LLC formed in Delaware (DE) on 03/31/16. Princ. office of LLC: 109 Greene St., Apt. 4A, NY, NY 10012. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, Attn: Edward Ikeguchi at the princ. office of the LLC. DE addr. of LLC: Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity. Notice of Qualification of AIG FUND GP HOLDINGS, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/02/20. Office location: NY County. LLC formed in Delaware (DE) on 06/01/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of DE, Div. of Corps., The John G. Townsend Bldg., PO Box 898, Dover, DE 19903. Purpose: Any lawful activity.
Notice of Formation of EDWARDS PEARL BEACH LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/24/20. Office location: NY County. Princ. office of LLC: 420 E. 64th St., Apt. W3D, NY, NY 10065. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, c/o Richard W. Stone II at the princ. office of the LLC. Purpose: Any lawful activity.
Notice of Qualification of NEWHOUSE REAL ESTATE PARTNERS LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/31/20. Office location: NY County. LLC formed in Delaware (DE) on 04/04/06. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, P.O. Box 448, Syosset, NY 11791. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
NOTICE OF FORMATION of NYCHA Harlem River PACT LLC. Art. of Org. filed with NY Secy. of State (SSNY) on 6/ 8/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c /o NY City Housing Authority, Gen. Counsel, Law Dept., 90 Church St. NY, NY 10007. Purpose: All lawful purposes.
Notice of Formation of VW On The Shelf, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/ 25/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: the Company, c/o John Massoni, Van Wagner Group, LLC, 800 Third Ave., NY, NY 10022. Purpose: any lawful activities.
KENNETH STILES ADVISORY, PLLC, a Prof. LLC. Arts. of Org. filed with the SSNY on 07/14/2020. Office loc: NY County. SSNY has been designated as agent upon whom process against it may be served. SSNY shall mail process to: The LLC, 111 N. Gardner Ave., Charlotte, NC 28216. Purpose: To Practice The Profession Of Legal Services & Consulting Services. Notice of Formation of 1559 Boone Avenue L.P. Certificate filed with Secy. of State of NY (SSNY) on 8/ 12/20. Duration: 8/31/2180. Office location: NY County. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to: 1559 Boone Avenue L.P. c/o The Bridge, Inc., 290 Lenox Ave., 3rd Fl., NY, NY 10027. N ame/address of each genl. ptr. available from SSNY. Purpose: any lawful activities. Notice of Qualification of STONEBRIAR JL IRONDEQUOIT 1252, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/28/19. Office location: NY County. LLC formed in Delaware (DE) on 08/26/19. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c /o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity. Notice of Qualification of APQ 933 BROADWAY NY, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/23/20. Office location: NY County. LLC formed in Delaware (DE) on 07/20/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity. Notice of Formation of MBB Holdings, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/17/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 400 E. 56th St., Apt. 11L, NY, NY 10022. Purpose: any lawful activities. Notice of Qualification of LONG ARC CAPITAL LP Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/24/20. Office location: NY County. LP formed in Delaware (DE) on 04/15/16. Princ. office of LP: 250 W. 55th St., 25th Fl., NY, NY 10019. NYS fictitious name: LONG ARC, L.P. Duration of LP is Perpetual. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. Name and addr. of each general partner are available from SSNY. DE addr. of LP: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with DE Secy. of State, 401 Federal St., #4, Dover, DE 19901. Purpose: Any lawful activity.
Notice of Formation of PRINCETON LONGEVITY MEDICAL OF NEW YORK, P.L.L.C. Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/22/20. Office location: NY County. Princ. office of PLLC: One World Trade Center, NY, NY 10007. SSNY designated as agent of PLLC upon whom process against it may be served. SSNY shall mail process to David T. Harmon, Esq., Norris McLaughlin, P.A., 7 Times Sq., 21st Fl., NY, NY 100366524. Purpose: Provision of medical services. Notice of Qualification of NEW YORK CITY PROPERTY FUND II (C) LP Appl. for Auth. filed with Secy. of State of NY (SSNY) on 06/23/20. Office location: NY County. LP formed in Delaware (DE) on 12/19/19. Princ. office of LP: 730 Third Ave., NY, NY 10017. Duration of LP is Perpetual. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to the Partnership at the princ. office of the LP. Name and addr. of each general partner are available from SSNY. DE addr. of LP: Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with Secy. of State, 410 Federal St., #4, Dover, DE 19901. Purpose: Any lawful activity. Notice of Qualification of Bioenergy Devco, LLC. Authority filed with Secy. of State of NY (SSNY) on 06/15/20. Office location: NY County. LLC formed in Delaware (DE) on 10/08/18. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 1001 Avenue of the Americas, Ste. 1224, NY, NY 10018. Address to be maintained in DE: 251 Little Falls Dr., Wilmington, DE 19808. Arts of Org. filed with the DE Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: any lawful activities. NOTICE OF FORMATION of CAMBODIA VET PROGRAM, LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 5/15/20. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 153 E 106th St, Apt 4E, New York, NY 10029. Purpose: any lawful act. NOTICE OF QUALIFICATION of Distinguished Prize Indemnity LLC. Fic. Name: Distinguished Prize Indemnity Services LLC. Application for Authority filed with the Secretary of State of New York (SSNY) on 6/22/2020. Office location: New York County. LLC formed in DE on 9/19/2017. SSNY designated agent upon whom process may be served & mailed to: Harker & Associates, PLLC, 6 Clement Avenue., Stga Spgs., NY 12866. Principal business address of the LLC is: 1180 Avenue of the Americas, 16th Floor, NY, NY 10004. DE address of LLC is: 1201 N. Orange Street, Suite 710, Wilmington, DE 19801. Certificate of LLC filed with Secy. of State of DE located at: 401 Federal St #4, Dover, DE 19901. Purpose: Any lawful activity. SOMERSTONE CAPITAL LLC. Arts. of Org. filed with the SSNY on 06/22/20. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 480 Park Avenue, New York, NY 10022. Purpose: Any lawful purpose.
20 | CRAINâ&#x20AC;&#x2122;S NEW YORK BUSINESS | SEPTEMBER 7, 2020
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PUBLIC & LEGAL NOTICES
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To place a classified ad, Call 212-210-0189 or Email: jbarbieri@crainsnewyork.com
9/4/20 2:16 PM
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CLASSIFIEDS
To place a classified ad, Call 212-210-0189 or Email: jbarbieri@crainsnewyork.com PUBLIC & LEGAL NOTICES
NOTICE OF FORMATION of O’Neil Enterprises, LLC. Arts of Org filed with Secy. Of State of NY (SSNY) on 6/23/20. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 455 Central Park W, Apt 7D, New York, NY 10025. Purpose: any lawful act. Notice of formation of FLATIRON DENTAL, PLLC. Arts of Org filed with Secy. of State of NY (SSNY) on 4/30/20. Office location: NY County. SSNY designated agent upon whom process may be served and shall mail copy of process against PLLC to 44 W 24TH ST. APT 22B, NEW YORK, NY 10010. Purpose: any lawful act. Notice of Formation of D & B/Ebrani LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 1/29/20. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 19 Drury Lane, Great Neck, NY 11023. Prin. bus. addr: 50 W 47th St, NY, NY 10036. Purpose: any lawful act. CARLEIGH’S SWEET TREATS, LLC, Arts. of Org. filed with the SSNY on 0 6/17/2019. Office loc: NY County. SSNY has been designated as agent upon whom process against the LLC may be served. SSNY shall mail process to: Johniece D. Erby, 502 West 177th St., Apt. 2D, NY, NY 10033. Purpose: Any Lawful Purpose.
NOTICE OF FORMATION of TOIV CONDO LLC. Art. of Org. filed with the Secy of State of NY (SSNY) on 4/ 16/2020. Off. Loc.: NY County. SSNY has been desig. as agent upon whom process against it may be served. The address to which the SSNY shall mail a copy to is: 28 Liberty, New York, NY 10005. Reg. Agent: National Registered Agents, Inc., 28 Liberty, New York, NY 10005. Purpose: Any lawful act Notice of Formation of TWJ Ventures LLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 8/17/2020. Office location: New York County. SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process the LLC served upon him/her is: JoAnne Kao. The principal business address of the LLC is: 305 Columbus Ave., #51 NY, NY 10023. Purpose: any lawful act or activity Notice of Formation of MEDICAL WELLNESS PRACTICE, PLLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/23/20. Office location: NY County. Princ. office of PLLC: 133 E. 58th St., NY, NY 10022. SSNY designated as agent of PLLC upon whom process against it may be served. SSNY shall mail process to the LLC, P.O. Box 103, Hillsdale, NJ 07642. Purpose: Medicine.
NOTICE OF QUALIFICATION of KYNECT HOLDINGS, LLC. Authority filed with Secy. of State of NY (SSNY) on 3/ 23/2020. Office loc: NY County. LLC formed in TX on 2/7/05. SSNY designated agent upon whom process may be served & mailed to: CT Corp. System, 28 Liberty St., NY, NY 10005. Principal business address: 14675 Dallas Parkway #150, Dallas, TX 75254. Cert. of LLC filed with Secy. of State of TX loc: PO Box 13697, Austin, TX 78711. Purpose: Any lawful activity. Notice of Formation of Baked to Order LLC. Arts of Org filed with Secy. of State of NY (SSNY) On 5/4/2020. Office location: NY County. SSNY designated as agent upon whom Process may be served and Shall mail copy of process Against LLC to 620 W 143 St, #9C, NY, NY 10031. R/A:US Corp Agents, Inc. 7014 13th Ave, #202, BK, NY 11228. Purpose: any lawful Act Notice of Formation of JVR ART ADVISORY, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/23/20. Office location: NY County. Princ. office of LLC: 156 E. 79th St., #6A, NY, NY 10075. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: Art advisory.
Notice of Qualification of PETRIDES & CO. LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/03/20. Office location: NY County. LLC formed in Delaware (DE) on 02/05/14. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o George Petrides, 900 Park Ave., Apt. 21A, NY, NY 10021. DE addr. of LLC: c/o Corporation Trust Co., 1209 N. Orange St., Wilmington, DE 19801. Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St. - Ste. 4, Dover, DE 19901. Purpose: Any lawful activity. Notice of Formation of PAB Special, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 11/18/19. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: the Company, 163 W. 74th St., NY, NY 10023. Purpose: any lawful activities. Notice of Formation of Selected by Elisa, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/07/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 9100 Wilshire Blvd., Ste. 1000W, Beverly Hills, CA 90212, Attn: Corey Barash, CPA. Purpose: any lawful activities.
Notice of Formation of MINH HOLDINGS II, LLCArts. of Org. filed with Secy. of State of NY (SSNY) on 08/04/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Any lawful activity. FOREX NURSERY LLC, Arts. of Org. filed with the SSNY on 04/20/2020. Office loc: NY County. SSNY has been designated as agent upon whom process against the LLC may be served. SSNY shall mail process to: Corporate Filings of NY, 90 State St., Ste 700, Office 40, Albany, NY 12207. Purpose: Any Lawful Purpose. NOTICE OF FORMATION OF BEDNERS ACCOUNTING AND TAXES LLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 04/ 27/2020. Office Location: NEW YORK County. The principal business address of the LLC is 17 STATE ST 40TH FLOOR, NY, NY, 10004. Purpose: any lawful act or activity. COLOR BY LAISAM BOWEN LLC, Arts. of Org. filed with the SSNY on 03/ 02/2020. Office loc: NY County. SSNY has been designated as agent upon whom process against the LLC may be served. SSNY shall mail process to: Laisam Bowen, 30-62 12th Street Apt 2R, Astoria, NY 11102. Purpose: Any Lawful Purpose.
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REAL ESTATE
Appellate court overturns decision blocking Two Bridges towers SHOP ARCHITECTS
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lans from major developers to bring towers with about 3,000 housing units to Two Bridges in Lower Manhattan can move forward. The Appellate Division of state Supreme Court last week unanimously reversed a lower court’s ruling that had blocked the projects from moving ahead. Borough President Gale Brewer and the City Council had brought the challenge forward, arguing that the City Planning Commission should not have approved applications from JDS Development Group, Starrett Development, L&M Development Partners and CIM Group to build four large towers in the neighborhood, and the council first needed to review the projects. Judge Arthur Engoron of the Supreme Court in Manhattan had ruled in favor of Brewer and the council in February, nullifying the City Planning Commission’s approvals and saying that city planners needed to review the projects more thoroughly before granting them the necessary permits. The higher court disagreed, however, ruling that the proposed towers “did not conflict with applicable zoning requirements” despite being more than twice as tall as surrounding buildings, and the City Planning Commission had correctly determined the projects did not require a special permit or need to go through the city’s often-contentious landuse review. The higher court acknowledged
concerns that locals had a limited amount of input into the potential impact of the Two Bridges projects, “including increased density, reduced open space and the construction of a large number of luxury residences in what has been primarily a working-class neighborhood of low- and medium-rise buildings.” But it noted that the projects still went through a public hearing process as part of state and city environmental reviews, and New York law “simply does not support” the result Brewer and the council had sought. “We applaud the court’s decision, which makes clear that these projects were lawfully approved and comply with zoning that’s been in place for more than 30 years,” James Yolles, a spokesman for the developers, said in a statement. “Private investments in affordable housing and essential community infrastructure are even more critical as the city emerges from the Covid-19 crisis.”
Weighing options The judge’s reversal was a blow to the council and Brewer. They told Crain’s they are now evaluating their options.
“We, the City Council and the Manhattan borough president, sued the administration here because we believed that the community needed a seat at the table for a proposal which would add close to 3,000 units of majority luxury housing within a three-block radius in a historically affordable and diverse waterfront neighborhood, and will pierce through a low-income senior building,” Brewer said in a joint statement with Council Speaker Corey Johnson and Councilwoman Margaret Chin. The Two Bridges projects consist of three developments that city planners grouped together and ruled could be constructed as-ofright. That let the developers bypass the city’s land-use review, where the projects typically have little chance of getting approved. The developers gained the support of the de Blasio administration by promising to include about 700 affordable units in the towers, committing $40 million to improving the East Broadway subway stop and $15 million to upgrade three neighborhood playgrounds. They also are pledging $12.5 million in repairs to Two Bridges Houses, a nearby public housing complex, Yolles said. The Appellate Division’s decision comes on the heels of its recent reinstatement of the Inwood rezoning plan—another ruling that the real estate industry cheered. Opponents of the Inwood rezoning are appealing that decision. It is harder to successfully appeal an Appellate Division ruling when its verdict is unanimous. ■
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Anchin, a leading accounting and advisory firm based in NY, is pleased to announce that Joseph Molloy has joined its Architecture & Engineering and Construction Industry Groups as a tax partner. Joseph has 20 years of experience in public accounting, working with all types of business entities, individuals, and trusts. He has an especially strong understanding of code section 460, which he uses to help clients create and maintain tax deferral strategies, thus enhancing their financial positions.
Laurie Caplane has joined transatlantic legal recruiting firm Macrae, Inc. in New York as Chief Operating Officer. As COO, Caplane is responsible for overseeing recruiters firmwide and will help direct Macrae’s strategic expansion. She brings more than 25 years of leadership experience in professional services and corporate settings to the newly created role including, most recently, as Senior Executive Director and Managing Partner of Law Firm Partner Search at Major, Lindsey & Africa.
NPower - one of the country’s largest nonprofit tech training programs - is proud to announce that Roland Selby, Jr. will serve as the new Vice President of Strategic Partnerships for NPower. In this role, Selby will cultivate and manage NPower’s top 25 corporate partner accounts and help expand and deepen those 360 degree relationships to ensure seamless implementation of partnership integration within the operations of NPower’s footprint nationwide.
NYCMAYORSOFFICE/FLICKR
BY EDDIE SMALL
DE BLASIO
POLITICS
Homeless advocates threaten to sue over ‘racist NIMBYism’ BY NATALIE SACHMECHI
T
he Legal Aid Society is pressuring Mayor Bill de Blasio not to move the city’s homeless population from hotels back into shelters before it’s safe. Nearly 10,000 New Yorkers experiencing homelessness were relocated to 60 of the city’s virtually empty hotels at the height of the pandemic to protect them from exposure to Covid-19 in shelters, according to data from the Department of Homeless Services. Many of those hotels are on the Upper West Side and in Midtown. Businesses and residents in those areas say the program has brought drug activity and loitering to the neighborhoods. “If his administration caves to the racist NIMBYism from some residents of the Upper West Side and forces vulnerable New Yorkers from their hotel rooms back to congregate shelters before it is safe to do so,” Legal Aid lawyer Judith Goldiner said, “Legal Aid will immediately file litigation seeking a temporary restraining order.” Nearly 86% of the single adult homeless population in New York shelters is Black or Hispanic, according to city data. The de Blasio administration wasn’t on board with the hotels program when City Councilman Stephen Levin pushed it forward. Now that local Covid-19 infection rates have dropped, the mayor said he will start moving the homeless population back into shelters. Advocates for the homeless say it’s too soon and add that the homeless are at high risk of contracting Covid-19. “All New Yorkers should understand that this is a life-or-death situation for homeless New Yorkers,” Peter Malvan of the Urban Justice Center said. “Sending people back to deadly situations, such as congregate shelters, will lead to needless deaths and can only backfire for New York City’s ability to survive this pandemic.” Given that the majority of the single adult shelter population is living with a disability or serious health
need, it isn’t safe to go back, Legal Aid lawyer Joshua Goldfein said. Those sheltering in hotels are mostly single adults and the elderly, Homeless Services spokeswoman Arianna Fishman said. They’re the most vulnerable to exposure. Among homeless New Yorkers, 1,442 total cases of Covid-19 were reported during the past five months, DHS said. Those cases resulted in 104 deaths, or a 7.2% fatality rate, the department said. The citywide fatality rate for confirmed virus cases is 8.3%. The city has been using hotels to shelter New Yorkers without homes since before the pandemic. Currently a total of 139 hotels are sheltering homeless people citywide, according to DHS, and 3,500 homeless people were already sheltering in a hotel before Covid-19 hit. DHS has been pulling back on its use of hotels recently, Fishman said, and the agency has “no plans to continue using emergency relocation hotels on an ongoing basis.”
Planning for tourists Higher-end inns, including the Dream Hotel chain and the Bowery Hotel, declined to work with the city on the program, partially because they figured it would delay their reopening, Crain’s reported. As travel restrictions ease, hotels will be more inclined to take tourists rather than business from DHS, said Vijay Dandapani, chief executive of the Hotel Association of New York City. “If both the city and state take initiatives that are more businessfriendly and yet safe for the public, that would help restore jobs and taxes,” Dandapani said. Any hotels currently renting rooms to the city for the homeless would have to wait for the people to move back into a shelter before they could begin allowing other guests to stay. The timeline for the move is unclear. The mayor’s office said safety is its top priority. “We’re following the lead of our public health experts to determine when it will be safe to relocate people back to shelters,” spokeswoman Avery Cohen said. ■
22 | CRAIN’S NEW YORK BUSINESS | September 7, 2020
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GOTHAM GIGS
BUCK ENNIS
GORE’S nonprofit, Kings Against Violence Initiative, offers support and mentoring for young Brooklynites.
DR. ROBERT GORE GREW UP Fort Greene and Flatbush, Brooklyn
Keeping Brooklyn safe, healthy
A doctor strives to combat Covid-19 and gun violence in his community
RESIDES Bedford-Stuyvesant EDUCATION Bachelor’s in biology, Morehouse College; M.D., SUNY at Buffalo PANDEMIC PAD Gore and a fellow doctor stayed in an Airbnb for 10 weeks during the pandemic to avoid getting their pregnant wives sick. GLOBAL EXPERIENCE Working on antiviolence initiatives in Haiti and training locals in first aid with Emedex International made Gore want to take a similar approach in Brooklyn. “We were looking at it as an academic exercise at the hospital level,” Gore said. BRANCHING OUT Gore is looking to expand the violenceprevention initiative to other neighborhoods and cities, but he wants to find locals to helm the effort in those places. “I see the world from a very Brooklyncentric space,” Gore joked.
BY JONATHAN LAMANTIA
A
s an emergency medicine physician and community activist, Dr. Robert Gore is battling two public health crises at the same time. In his work at SUNY Downstate Medical Center and NYC Health and Hospitals/Kings County, Gore spent the spring desperately trying to keep people breathing during the worst pandemic in generations. And at his nonprofit, Kings Against Violence Initiative, he’s spent the last decade working to thwart a rise in gun violence. The organization offers support and mentoring to young people of color in central Brooklyn through school-based programs and interventions in the emergency room. “Why do people have to become a patient in order for us to treat them and ensure survivors don’t then become victims of violent trauma?” Gore asked.
Mentoring youth came naturally to Gore. His mom is a retired teacher, and his dad is also an activist. Gore started peer mentoring when he was in middle school and continued working with students as his education brought him to Atlanta, Buffalo and later Chicago, where he completed his medical residency. His nonprofit has received grants from the Mayor’s Fund to Advance New York City and the Fund for New York City Health and Hospitals, among others. Gore is now a finalist for the David Prize, which offers $200,000 annually to five New Yorkers working to improve their community. The project he’s nominated for would create a virtual training program on trauma-informed response for police officers, firefighters, health care workers, educators and other frontline personnel. Gore has adjusted the nonprofit’s programming as schools have gone virtual. He said Covid-19 has only
added to the problems facing the young men he works with, who live in areas where residents often struggle to pay for food and rent. “You add in a new variable like Covid-19 that is evolving and that you don’t understand and you’re even more stressed out,” Gore said. After George Floyd was killed in Minneapolis, Gore and his hospital colleagues participated in protests in Brooklyn and brought medical supplies to provide care as needed. The issue was familiar to Gore. “I’m a 6-foot-3 Black man, and whenever I leave my house, I leave with my hospital ID badge,” Gore said. “I travel with a stethoscope in my backpack and a Police Benevolent Association card, which says I’m a doctor.” He’s been reflecting more on his work with young Black men since the birth of his son July 6. He and his wife named him Araya. “It means to lead by example,” Gore said. ■
“ADD IN A NEW VARIABLE LIKE COVID-19 THAT YOU DON’T UNDERSTAND AND YOU’RE EVEN MORE STRESSED OUT”
SEPTEMBER 7, 2020 | CRAIN’S NEW YORK BUSINESS | 23
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