Crain's New York Business

ASKED & ANSWERED Sustainability chief on handling green-buildings backlash

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MORE INSIDE

CORONAVIRUS ALERT WHERE’S THE MONEY? Businesses still waiting for SBA loans to be approved PAGE 2

SETTING THE STAGE Cuomo makes first moves to reopen the city PAGE 3

DIFFERENT PLAYBOOK Galleries explore new ways to market art

FRESH FUNDING Venture capital still available for the right companies

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TOO TIMID Mayor’s budget isn’t aggressive enough to deal with the pandemic PAGE 6

Q&A EDC director on what the city is doing to help businesses recover PAGE 15

BUCK ENNIS

BECAUSE OF Covid-19 restrictions, real estate agents have resorted to virtual tours and meetings with clients.

REAL ESTATE’S SILENT SPRING NEWSPAPER

VOL. 36, NO. 14

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Some agents try going virtual, but few new transactions are getting done

BY RYAN DEFFENBAUGH

GOTHAM GIGS

LANDSCAPE ARCHITECT SOWS HISTORY INTO PUBLIC PARKS PAGE 19

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t may be spring, but the real estate industry is facing a deep freeze the likes of which it has never seen as the coronavirus pandemic devastates a business more reliant than most on personal contact.

In-person showings are banned, part of the state-imposed lockdown to curb the spread of Covid-19. But even before Gov. Andrew Cuomo barred See SPRING on page 14

INSTANT EXPERT

What you need to know about the 2020 state budget PAGE 12 4/17/20 3:04 PM

CORONAVIRUS ALERT

BY BRIAN PASCUS

has received any money in their account,” she said. “The SBA is not sending out confirmation emails that they have received your loan.”

Last week the Brooklyn Chamber of Commerce took a survey of 350 small businesses that have applied for either the EIDL or the PPP. Only 3% of respondents said they received PPP funds and 4% EIDL funds. Chamber chief Randy Peers qualified the survey results by noting that his team never asked respondents if their loan had been approved or not.

“What is clearly emerging, however, is a picture of underfunded programs, chaotically rolled out, that seem to be favoring larger, more well-established businesses with existing ties to lenders over the little guys,” Peers said.

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ity small-business owners are losing patience with the federal government, which promised $349 billion in pandemic-relief funds but so far has delivered little.

Last week the Small Business Administration and the Treasury announced that the Paycheck Protection Program and the Economic Injury Disaster Loan program have effectively run out of funding.

“We didn’t get the EIDL. We didn’t get the PPP. There’s no money,” said Joe Rojas, a business development coach at Red Sapiens in Manhattan. “We’re in a bad situation, man.”

“I have applied like everyone else and have not received anything yet,” said Stavros Aktipis, an owner of four restaurants in Manhattan. “Nothing has come up with the loans, and we’re all waiting.”

“They haven’t even given out the money,” said Helana Natt, executive director of the Greater New York Chamber of Commerce, which oversees 40,000 small businesses and civic leaders. “I keep on asking them, ‘Please tell me if you’re getting money.’ ” Natt said her team began filling out loan applications three weeks ago, guiding more than 2,000 small-business owners through the process. When asked how many of those businesses had received federal money, Natt answered, “None.

Zero.”

“I have not talked to anyone who

Red tape Other business owners have found that even after filling out the EIDL and PPP loan applications, their paperwork was null and void due to sudden loan requirement changes made by the SBA. In some cases the administration did not even notify business owners of the application overhaul.

“We’re constantly emailing, ‘Did anybody get anything?’ Because we want to know,” Rojas said. “Nobody else has said anything.”

Rojas is losing faith that the money will even appear at all. “I’m not hopeful. I’m concerned.”

After promising borrowers up to $2 million in loans—including an immediate grant of $10,000—the

SBA has pulled back and changed the terms of the EIDL, capping the funds between $25,000 and $35,000, with the immediate grant changed to $1,000 for each small-business employee, maxing out at 10 employees. Demand has been overwhelming, with one report pegging loan requests at more than 3 million applications.

The PPP loan was funded by $349 billion in taxpayer money and was supposed to keep businesses with fewer than 500 employees afloat during the extended economic shutdown caused by the coronavirus pandemic. The program was set up to distribute the funds through a national network of SBA-approved banks and nonbank lenders.

“For the most part, none of this [relief ] money, or very little, has been flowing,” said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council.

Messages from small-business owners and community leaders have severely undercut the message put forth by the Trump administration.

President Donald Trump declared on April 4 that the program is “way ahead of schedule,” while Treasury Secretary Steve Mnuchin said the funds would be distributed within weeks after the legislation passed.

Instead, the Treasury and the SBA said that unless Congress passed legislation to increase funding for the two small-business loan

City will produce its own Covid-19 tests by May AFTER MONTHS OF PLEADING with the federal government and searching for a private-sector supplier, the city is taking matters into its own hands. The New York City Economic Development Corp. will begin producing Covid-19 test kits this May, Mayor Bill de Blasio announced last week.

The city will be able to produce 50,000 tests per week, the mayor said. De Blasio also announced that it will buy 50,000 test kits a week from Aria Diagnostics, a biotechnology firm in Indiana. That will bring the total weekly testing capacity in the city to 100,000 tests by next month.

“For the first time, we’re going to have a truly reliable major supply of

GETTY IMAGES

BY GWEN EVERETT

testing,” the mayor said.

The Covid-19 outbreak began amid a shortage of testing kits nationally, and the city struggled to secure adequate testing capacity throughout the crisis. The EDC and the partnership with Aria change that. Sufficient testing will help the city into its next phase of Covid-19

management—out of crisis mode and into a containment approach, de Blasio said.

Local manufacturers and 3D printers will produce the tests made by the EDC, and academic and commercial labs will produce the viral transport medium needed for the tests, the mayor said.

The city is also working with 13 companies to produce face shields and surgical gowns.

De Blasio did not reveal the names of those firms, but he said the city is on track to be a self-sufficient producer of face shields. ■

DOWN TO BUSINESS: Trump and Mnuchin made big promises. programs, they would not be able to continue.

“How do you run out?” Natt asked. “Congress approved it. The banks have the money. Either Congress is holding onto it or the banks have the money. Are they making money before they give it out?”

“I’m not surprised because I didn’t think they had the infrastructure to move,” Rojas said. “I used to work for the [Department of Defense], and I’ve seen some of the changes that have happened in the federal government. I didn’t have high hopes.”

Unknown future Even with these dismal expectations from business owners, at least one bank in New York said it is allocating PPP funds: M&T Bank re-

BLOOMBERG

Small-business owners blast SBA over federal loan programs

ported that 1,264 loans from the PPP program have been approved thus far, for $375 million.

“While we’re proud of our team’s hard work and their passion for our customers and communities—including in the hard-hit New York metro region—who are still struggling, there is more work to be done,” said M&T’s head of commercial banking, Gino Martocci. “More businesses still need help.”

Others are left wondering what it will take to finally receive the much-needed federal loan money from any bank.

“I don’t know if it’s requiring connections to have with the banks to be able to get some priority to receive loans,” Aktipis said. “The businesses are closed, and the near future is unknown.” ■

NOMINATIONS

SUBMISSION DEADLINE FOR NOTABLE LGBTQ LEADERS AND EXECUTIVES EXTENDED TO APRIL 24 Crain’s is seeking notable LGBTQ leaders and executives in New York for a list that will honor those making an impact in the local business community. The deadline has been extended to April 24.

CrainsNewYork.com/NotableLGBTQ

CRAIN’S WINS AWARD Crain’s New York Business won first place in the 2020 Neal Awards for Best Art Direction for a Cover. The front page “Return to Sender” ran in the Feb. 18, 2019 issue days after the news broke that Amazon would no longer set up its second headquarters in Long Island City.

The Neal Awards are the most prestigious in specialized journalism.

Vol. 36, No. 14, April 20, 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.

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SMALL BUSINESS

CORONAVIRUS ALERT

GOVERNORANDREWCUOMO/FLICKR

SAKOUTIS AND HUSS are betting on consumers seeking immunity-boosting options.

CUOMO

Cuomo, interstate council to plan economic reopening

BY GWEN EVERETT

G

BUCK ENNIS

ov. Andrew Cuomo said last week that he would coordinate the economic reopening of New York with five other states.

Connecticut, Delaware, New Jersey, Pennsylvania and Rhode Island will join New York to form an 18-member council, staffed with an economic development official, a public health official and the chief of staff from each governor’s office.

“The optimum is to have as coordinated a regional plan as you can,” Cuomo said. “I understand intergovernmental coordination can be somewhat of an oxymoron, but to the extent we can work with Connecticut and New Jersey and Rhode Island and Delaware and Pennsylvania, I want to.”

Businesses will have to wait at least another month before getting back to work, though. Last week Cuomo extended virus restrictions to May 15.

MUSHROOMS’ NEW MAGIC Brooklyn entrepreneurs see added potential for their immunity-boosting business

BY TIM STRUBY

F

‘Stay the course’

or the past two years, entrepreneurs Erica Huss and Zoe Sakoutis have been meeting in what they call their laboratory—the kitchen of Sakoutis’ home in Fort Greene, Brooklyn.

They have been working on what they hope will become the basis of a health food empire: a range of mushroom-infused cold-brew beverages that they See MUSHROOMS on page 17

The plan will involve easing isolation regulations, expanding those workers deemed essential and applying more testing precautions, Cuomo said, adding that he would coordinate with the other governors to incorporate schools, transportation and the broader economy.

“While we’re doing this, we have to remember to stay the course and not jeopardize what we have achieved,” he said. ■

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CORONAVIRUS ALERT

Painting a new future

Art galleries find different business paths as Covid-19 upends old playbook

Caregiver benefits gaining traction

BY GWEN EVERETT

BY JENNIFER HENDERSON

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Changing an industry It’s not just Gagosian making changes.

Pace Gallery in Chelsea lists prices for all works in its online viewing room, which it opened to the public in the wake of Covid-19, said Samantha Rubell, a senior director.

Previously the viewing room was used only in private sales to individual clients.

David Zwirner, another behemoth gallery in the city, has been ahead of the pack. It has listed prices for all pieces in its online viewing rooms since it launched them in 2017. It acknowledged that listing prices online is more important than ever.

“Many times new collectors can

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EFE/DAVID ARQUIMBAU SINTES; COURTESY GAGOSIAN

s Covid-19 deals a financial blow to the historically secretive art world, dealers have rushed to reinvent themselves in ways they have largely resisted for decades.

These new efforts have included flash sales for fine art, online viewings and auctions that include price tags for works—a practice the industry has long sneered at.

Nowhere is that more noticeable than at powerhouse gallery Gagosian, which has replaced in-person shows with virtual viewing rooms.

It decided to highlight one artist a week in an online program called Artist Spotlight. In its biggest departure yet, Gagosian is putting a single work from each show up for sale for 48 hours and listing its price.

That program started April 8 with a show featuring works by Sarah Sze. On April 10 Gagosian made Sze’s Picture Perfect available to buyers for $275,000.

“To anyone who’s not familiar with how the art market works, it’s literally the most counterintuitive way to do business,” said Sam Orlofsky, Gagosian’s director. “That's how Gagosian started experimenting with being more forthright on pricing for certain works.”

ARTIST STANLEY WHITNEY, whose exhibit in Gagosian’s Artist Spotlight went live April 15.

How businesses are adapting to the coronavirus crisis whose markets we’re pretty opaque and very discreet about,” Orlofsky said.

Valerie Carberry, a partner at the Richard Gray gallery, said Covid-19 has pushed her firm into more online programming.

It’s hard to post a work online without a price, Carberry said.

“That information is now there, it’s public, and I don’t see that changing,” she said.

The next step for gallery owners appears to be the auction house business—a notable shift because galleries and auction houses have long seen themselves as diametric opposites, Orlofsky said. That line of thought saw the primary market, defined as works being sold for the first time, as the purview of galleries. The secondary market, which involves works being resold—often at a hefty premium—and historical works, was seen as exclusive to auction houses.

At Gagosian, the 48-hour time limit imposed on Artist Spotlight

“WE SEE PRICE TRANSPARENCY AS A CRITICAL TOOL FOR STARTING CONVERSATIONS” find pricing to be an opaque and off-putting process,” said Julia Lukacher, a spokeswoman for David Zwirner. “So we see price transparency as a critical tool for starting conversations.”

While Gagosian has disclosed offer prices for certain works shown online since 2018, its latest moves push that further along. Those works were usually from large shows or art fairs. Artist Spotlight features a single work by a new artist each week, including “artists

sales intentionally mimics the sense of urgency of an auction, Orlofsky said. The hope, he explained, is to drive buyers to make quicker decisions.

“We are sort of jealous of how well the auction mechanism works in terms of attracting buyers,” he said, “which is to say that because the prices are out in the open, they don’t have any barrier to entry.”

It’s part of a trend at Gagosian: The gallery partnered with the Pace and Acquavella galleries to broker the sale of Donald Marron’s art collection. The collection, worth more than $450 million, would typically have been brokered on the secondary market.

Welcoming change David Zwirner will create an online secondary-market sales platform to “address the lack of auction-market and art fair activity” during the Covid-19 pandemic, said Julia Lukacher, the gallery’s communications director.

The crisis has transformed online viewing rooms. Where they were once a sideshow to a gallery’s main business—dealers with sales in excess of $10 million made only 1% of them online last year, according to a report from UBS and Art Basel—they are now center stage.

“Once the infrastructure is there, I think online viewing is something all galleries will continue to program,” Carberry said. ■

s millions of employees are faced with balancing work with caregiving responsibilities at home, companies are increasingly prioritizing benefits to help them do so.

The trend started before the Covid-19 pandemic, according to a new survey by the Northeast Business Group on Health. However, additional efforts are needed to help employers avoid higher health care costs and lower productivity.

Nearly 80% of survey respondents said they believed caregiving would be an increasingly important issue for the foreseeable future. The survey compiled feedback from 117 mostly large U.S. employers and was conducted in late 2019 and early 2020. About one-third of participants were organizations based in or near the city.

Though close to half of respondents felt they were on par with similar organizations in developing caregiving benefits, about a quarter viewed themselves as below or well below average—“a clear sign there is much room for improvement,” the business group said.

“Caregiving is becoming an increasingly important issue, and it will become even more important over the next five years,” said Candice Sherman, CEO of the business group. That’s due in part to a rapidly aging population, millennial workers who take care of both parents and children, and gaps in the health care system for people who are ill and aging but not yet ready to enter a nursing home or other facility.

“I do think the current crisis has underlined the need for employers to be thinking about how to support their employee caregivers,” Sherman added.

strong business case for caregiving benefits would be needed to secure leadership buy-in.

Other findings from the survey were that more employers are providing paid leave specifically for caregiving. Increasing leave for caregiving and implementing flexible work arrangements were at the top of benefit managers’ wish lists.

The environment for recruiting and retaining valuable employees is competitive, Sherman said.

“People are really looking to see the kinds of benefits companies are offering,” she said. “I also think it’s helpful to understand that, even in an environment in which companies are stressed financially, there certainly are things they can do to help employees balancing caregiving.”

Those may include low-cost offerings such as flexible work hours, the ability to work from home, virtual employee support groups to exchange tips and best practices, and even simple guidance as to what resources are available in the community, Sherman said.

“The crisis has socially distanced people, and that means that more people are trying to figure out how to get care for loved ones who they cannot physically get close to,” she added. “I would imagine there are innovators who would really be thinking about more tools and technology to help people do that.”

Robert Stephen, vice president of caregiving and health at AARP, also

“CAREGIVING WILL BE MORE IMPORTANT OVER THE NEXT FIVE YEARS”

Support for policies Data show that employees who shoulder caregiver responsibilities are more likely to have chronic illnesses, such as diabetes, obesity and cardiovascular disease, as well as mental health issues, including anxiety and depression, Sherman said. And companies are more often recognizing that it is difficult for people to care for themselves while caring for others, which can lead to burdens on employers, such as higher health care costs.

The vast majority of survey respondents—91%—recognized that caregivers may abandon self-care, a 17% increase from a study in 2017, the business group said.

At the same time, although more than half of respondents thought their C-suite-level executives were supportive of caregiving policies—a 14% increase from 2017—nearly 40% were not sure how supportive the C-suite actually was. The latter group believed that building a

noted the importance of employer support for caregivers, particularly during the Covid-19 pandemic.

Employers are a valuable source of information for caregivers to stay connected to and a source of potential benefits, he said.

AARP provided financial support for the survey and earlier this month launched a portal for caregivers looking for additional resources during the pandemic.

Although AARP has focused on support for caregivers for decades, when the coronavirus outbreak hit, it realized things were going to shift a great deal, Stephen said.

Some of the areas of work have involved guidance about self-care, loved ones in nursing homes and long-term-care facilities, and the telehealth services temporarily covered in part by Medicare, he said.

Additionally, he said he believes the pandemic may lend greater awareness to the day-to-day challenges caregivers face. Those can include feeling isolating and experiencing financial woes during normal times, Sherman said. ■

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CORONAVIRUS ALERT

As Covid-19 hospitalizations trend down, facilities ‘cautiously optimistic’

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s the number of people admitted to city hospitals for Covid-19-like illnesses has fallen from nearly 700 a day at the beginning of the month to a little more than 300, capacity could be less strained going forward.

At New York City Health and Hospitals, “we’ve been cautiously optimistic that we’ve hit the peak and are plateauing,” said Dr. Eric Wei, an emergency department physician and the health system’s chief quality officer.

The health system is seeing a decreasing number of patients showing up in its emergency departments, he said, comparing the trend to “an overnight plummet.”

However, those who are still coming in are critically ill, highacuity patients in respiratory distress, Wei said. “We still do have a lot of patients in our intensive-care units who require ventilators to support their breathing,” he noted.

Those patients who do require

ventilators typically need the support for a long period of time—up to three weeks.

The number of patients—including those with Covid-19 and other ailments—in critical care at Health and Hospitals facilities remains around 850, according to city data.

At the same time, Wei said, “I worked a shift Monday, and compared to just a week ago, the Kings County emergency department was unrecognizable to me in terms of a significant decrease in the number of Covid-related patients.

It was the first time in over a month that I could see myself feeling optimistic and hopeful that we’re through the worst of it and that there may be a light at the end of the tunnel.”

Elmhurst Hospital—which quickly became the epicenter of the Covid-19 outbreak—seems to be over its peak, Wei said. Now Queens and Coney Island are the most stressed.

“But the general trend across all 11 hospitals, including Elmhurst, is that volume is down in the emer-

gency departments,” he said.

Social distancing has made the difference.

“The virus needs to be able to jump from host to host to be able to survive and keep replicating,” he said. “New Yorkers have been doing their part … to stop the spread of the virus.”

Although there remains some transmission in the community, it’s not near the point it was when subway cars, bars and restaurants were full.

Flattening the curve Elsewhere in the city, a spokeswoman for Mount Sinai said the health system is seeing a plateau in Covid-19 hospitalizations. It is experiencing a flattening in the number of deaths per day, she added, including a general decline since April 6.

“Based upon the trends we are seeing over the past eight days, we have enough beds to manage the pandemic,” the spokeswoman said, “but not enough to return to normal operations.”

GETTY IMAGES

BY JENNIFER HENDERSON

NYU Langone Health also has seen Covid-19 hospitalizations drop across all facilities, a spokeswoman said. It had recently embarked upon expansion efforts to meet Covid-19 demand, even receiving expedited approval from the state Department of Health to grow the emergency department at its flagship hospital in Manhattan.

In recent weeks the health system also opened spaces for emergency and inpatient care to help decrease overcrowding. And it expanded its number of

intensive-care-unit beds.

Wei of Health and Hospitals said that, in addition to stabilizing numbers, the health system has gained new clinical insight into caring for Covid-19 patients. That has included maneuvers to help shift the fluid in patients’ lungs, keeping them off ventilators for as long as possible and participating in clinical trials for treatment.

“This is the best-case scenario we were hoping for,” Wei said. “We were preparing for a much higher peak.” ■

Home care agencies struggle to be paid for outbreakrelated telehealth services care is not reimbursing for telehealth services.

“We are trying to negotiate a rate with our close to 30 managed-care payers, but this is a time-consuming and uncertain backand-forth, and they are not mandated by CMS to pay an adequate rate,” she said.

“Medicaid, which is BERNSTEIN a fraction of our business, is reimbursing at a lower rate.”

Recently VNSNY began accepting Covid-19 referrals from local hospitals.

“We want to do everything possible to alleviate the strain on the New York metro area’s hospital system,” Michael Bernstein, executive vice president and chief administrative officer at VNSNY, said.

To that end, the organization has invested hundreds of thousands of dollars in new technology and personal protective equipment.

In addition to the reimbursement issue for telehealth services,

“WE NEED REGULATORY RELIEF TO SUPPORT HOSPITALS AND PHYSICIANS” telehealth services the same as in-person visits, CMS lacks congressional authority to allow home health agencies to do the same.”

Annie Miyazaki-Grant, chief compliance and privacy officer at VNSNY, said that traditional Medi-

Terese Acampora, chief operating officer at MJHS Hospice and Home Care, said that home care providers are struggling to obtain required paperwork to bill Medicare for home health services.

“We need written physician orders and a signed faceto-face form to bill Medicare for home health services,” Acampora said.

“We are finding that physicians are either redeployed at the hospitals or are overwhelmed with the direct care needs of their patients. We need regulatory relief to support hospitals and physicians in making referrals to community-based services so that safe and timely care can be provided for patients in their homes.”

A new report from the National Association for Home Care and Hospice and the Partnership for Quality Home Healthcare also called for reducing regulatory barriers to allow home health care providers in hard-hit states, such as New York, to help ease the burden of Covid-19 on hospitals and physician offices.

— J. H. VNSNY/LINDA FARWELL

AS THE VISITING NURSE SERVICE of New York and other home health care providers assist overwhelmed hospitals during the Covid-19 outbreak, getting paid for certain services remains a challenge.

VNSNY is seeking Congress’s assistance with reimbursement so it and other home health agencies can provide more telehealth services, which can help them take on high volumes of patients and reduce virus spread.

“The Centers for Medicare and Medicaid Services recently lifted certain regulatory burdens for home health agencies in the fight against Covid-19,” VNSNY said in a statement provided to Crain's.

“However, while virtually all other provider groups have been granted authority by CMS to perform and be reimbursed by Medicare for

Our top priority is your bottom line.

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IN THE MARKETS

Despite Covid-19, there’s still VC money for the right companies Choco funding shows startups that pivot get rewarded

ISTOCK

tional Venture Capital Association.

The cash must be deployed during the life of the VC fund, which is typically 10 years or less. If the money isn’t spent, it will be returned to investors, who presumably would wonder why they bothered.

Put those incentives together and it becomes apparent there’s a pot of gold at the end of the rainbow for startups that successfully navigate through the Covid-19 storm.

BUCK ENNIS

C

Onfido, a London-based startup hoco, a startup that helps restaurants manage in- developing technology for virtual ventory, announced last identity verification, also on ThursThursday that it had raised day announced it had raised $100 $30 million in venture capital—a million. The week before, SoFi, a platform, rare fundraising success story in financial-planning agreed to acquire payment procesthese trying times.

The cash influx, led by tech-in- sor Galileo for $1.2 billion. Even Airbnb has been able to vestment firm Coatue raise $2 billion in the past Management, will enable few weeks by issuing new New York–based Choco, debt, albeit at a hefty inwhich assists restauraterest rate. teurs in placing online Still, many startups are orders with suppliers, to fighting for survival, and start offering its platform last month giant VC firm to consumers so they can Sequoia Capital warned buy groceries. its companies to hunker “The direct-to-condown for hard times. sumer product is a reacYelp laid off 590 people tion to Covid-19,” said AARON ELSTEIN in New York two weeks Choco founder and CEO ago, according to a filing with the Daniel Khachab.

Choco raised $33.5 million in VC state Department of Labor. Button, funding in October, and its ability to a Manhattan-based software develdraw from the well again suggests oper, laid off 44.

WeWork, which has been shedinvestor cash remains available for ding employees for months, has let adaptable companies. go of an additional 25 in the city, and management warns of more grim news ahead.

That said, there are plenty of VCs itching to spend their money.

More than $105 billion was poured into VC funds in the past two years, according to the Na-

‘Bankruptcy bonuses’ for Fairway Market executives A bankruptcy judge has approved Fairway Market’s decision to award more than $1 million worth of bonuses to top employees who are steering the company through Chapter 11, although he added the grocer’s workers also probably deserve some extra cash.

“The work of the folks on the firing line, at cash registers and loading docks, clearly has been outstanding,” Judge James Garrity of the U.S. Bankruptcy Court said at a hearing last week. “All employees deserve merit and consideration.”

But most of Fairway’s nearly 3,000 employees aren’t getting awarded bonuses, at least not under the supervision of a bankruptcy court. About two dozen senior employees and executives were awarded nearly $1 million shortly before the supermarket filed for bankruptcy protection in January, and the company asked that they be award-

ed an additional $1.1 million for seeing the company through Chapter 11.

“We think this is more than justified under the circumstances,” said Sunny Singh, an attorney for Fairway, citing the difficulty of operating a supermarket in the age of Covid-19.

He called the payments “very important” to Fairway’s future.

The United Food and Commercial Workers Local 1500, which represents most Fairway employees, called the bankruptcy bonuses unjustified. So did the federal government. At last week’s hearing, Justice Department official Greg Zipes highlighted the unfairness of management getting awarded bonuses.

“To the extent bonuses are used this way, they should be for all Fairway employees,” Zipes said.

Garrity described Zipes’ point as “very well taken” but determined

Fairway’s survival depends on keeping its management team together, even if it means paying them extra to stick around.

“Debtors have demonstrated ample cause” for the bonuses, the judge said.

At the hearing, the judge approved the sale of four Manhattan Fairways and one in Pelham Manor to Village Super Market for $76 million, or $8 million more than the original offer.

Village, which operates more than 30 stores under the ShopRite and Gourmet Garage banners, agreed to buy the parking lot to Fairway’s Harlem store but not the store itself. The store will remain open, a person familiar with the situation said, and the Red Hook location is expected to survive.

The stores’ fate was not addressed directly at the hearing. ■

ON NEW YORK

Mayor’s budget too timid for coronavirus De Blasio has failed to make the tough choices demanded by declining tax revenue

W

hen it comes to the year. He said revenues will decline city’s fiscal health, by $7.4 billion in the current fiscal Mayor Bill de Blasio year and for 2021. He dipped into has led a charmed reserves for about $4 billion, somelife. Each year, when it came time thing like two-thirds of the inadeto put together his budget for the quate funds he had put away for next year, he had more tax revenue hard times. And he ordered $2 bilto spend than expected. lion in cuts to programs.

But mostly he put the onus on Now, with virtually no experience in dealing with tough choices, Washington and his—and most he confronts a challenge that re- city voters’—archenemy, President Donald Trump, saying sembles the traumatic whether the city would fiscal crisis of the 1970s. need to lay off a major And last week he deportion of the workforce cided his best option was depended on a bailout a prayer that Washington from Washington. He was would come to his resimmediately echoed by cue. Until then he’ll rely Comptroller Scott Stringon money he had put er and Public Advocate away for a rainy day. The Jumaane Williams. only problem is, that is “Things we would love most likely an inadequate GREG DAVID to focus on in peacetime response.

The mayor’s plan for the fiscal we don’t get to focus on in waryear that begins July 1 starts by time,” de Blasio said during one of spending $89.3 billion, some $3.5 his daily briefings. “And this is, in billion less than last year and $6 effect, wartime.” billion less than what he proposed This is not a wartime budget.

His revenue estimate is likely to in a preliminary budget earlier this

be much too optimistic. The Independent Budget Office last week predicted the city would see tax revenues plunge by $9.7 billion from projections for the fiscal year ending June 30 and by the same amount in 2021. Adding 2022 to the equation, the Citizens Budget Commission estimated the city would lose $14 billion in revenue.

And the mayor didn’t plan for reductions in state aid, almost certain to come next year given the state’s even more dismal outlook.

“The extent to which tax revenue will fall short of expectations is also almost certainly greater than at any two-year period since the end of the city’s fiscal crisis,” the IBO said.

His budget cuts are too little and, even now, too late.

Remember, this is the mayor who has presided over a 30% increase in the city’s budget.

That’s three times the rate of inflation. The payroll is now 327,000—a record. Unlike other mayors, he resisted requiring agencies each year

to make their operations more efficient. A tough-minded mayor could wring billions in savings out of the budget.

For example, he could force a merger of the city’s welfare funds to provide benefits for its unions or combine the city’s five independent pension boards to oversee

Corp. essential at the moment? Or that of the Department of City Planning, which has been put on hold?

The city will probably get some aid from Washington. It is almost certain not to be enough.

Now facing the crisis will be up to the City Council and especially Speaker Corey Johnson, who desperately wants to succeed de Blasio.

Like the rest of this generation of New York politicians, he has built a career in expanding city government and spending money. But when he faces a Democratic primary in a little over a year from now, New Yorkers may be looking for something else: a mayor willing to make difficult decisions to rebuild the city— someone the opposite of Bill de Blasio. ■

HIS BUDGET CUTS ARE TOO LITTLE AND, EVEN NOW, TOO LATE separate pension plans.

He has already spent hundreds of millions of dollars he didn’t need to because he could have furloughed nonessential city workers, as the private sector is doing. The workers would receive about $1,000 a week under the enhanced unemployment benefits, and for many that would replace much of their pay. For example, is the work of the Economic Development

Greg David writes a regular column for CrainsNewYork.com.

6 | CRAIN’S NEW YORK BUSINESS | APRIL 20, 2020

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SPONSORED CONTENT

T

How Covid-19 is changing M&A

he Covid-19 virus has ushered in unprecedented and challenging times. Despite the pandemic and the social distancing being used to slow the spread of the virus, many business transactions have continued as companies have tried to sustain their operations.

Companies that are in the middle of mergers or acquisitions must cope with many unanticipated challenges.

For insight into how acquiring companies can navigate the current environment, Crain’s Content Studio recently spoke with Daniel Avery, a Director and senior M&A lawyer at Goulston & Storrs PC and a resident in the firm’s Washington, D.C., and Boston offices. Avery is a nationally known expert on market trends in private company M&A, and regularly speaks and writes on these and related M&A topics, including through his 25 article series on M&A trends published with Bloomberg law.

CRAIN’S: What are the key considerations private companies should take into account in their legal due diligence when making acquisitions in today’s environment?

AVERY: Some concerns are industry-specific, but there are some questions every acquiring firm should ask.

First, in today’s environment, acquirers need to know about any events that will affect cash flow. Buyers need to know if their target has issued or received force majeure notices to excuse nonperformance of contractual obligations due to business interruptions or losses caused by the Covid-19 virus. Another consideration is whether a company has received any notice claiming breach or default. Similarly, acquirers will want to ask about any supply chain disruptions or delays.

At the same time, it is critical to ask if the target has received any complaints or claims for failing to provide a safe working environment and to determine if there have been any refusals by employees to work—or whistleblower complaints.

We recommend inquiring about any policies that allow employees or independent contractors to work remotely in compliance with public health protocols for the Covid-19 virus.

With many companies experiencing difficulty meeting cash-

flow requirements, it is important to know if a company’s benefit plans allow extended coverage for employees on furlough. Buyers may wish to inquire about what guidelines have been created to guide their team on what questions and information can legally be asked of employees with respect to health-related aspects of Covid-19.

Scrutinizing business continuity plans is essential.

Acquirers need to know what plans and policies companies have put into place with respect to employee absences or reductions in workforce related to the Covid-19 virus, including any based on the Family Medical Leave Act and the Americans with Disability Act. We recommend seeking a summary of any workers’ compensation claims relating to the Covid-19 virus made to date.

On the financial side, buyers need to find out if the target company’s deferred compensation plans allow cancellation of deferrals and/ or unscheduled distributions due to Covid-19. Also significant is if the company has delayed or accelerated any deferred compensation payments due to Covid-19 or taken any actions to cancel or reprice equity awards due to changes in value.

Buyers also need to know what kind of stress testing, if any, the target has done with respect to its information

Daniel R. Avery, director of Goulston & Storrs PC

technology systems and cybersecurity functions, including protections against fraud.

When it comes to the physical premises of the target company, we advise buyers to find out what has been done to protect third-party entrants, such as customers and suppliers, from health risks. Reviewing the provisions in real estate leases related to the timing, deferral or abatement of lease payments and confirmation as to whether any claims have been made or will be made to the landlords can provide further insight into these risks.

Finally, every potential buyer should know if a target company has assessed potential coverage under its insurance policies for losses related to Covid-19 and made any claims.

CRAIN’S: What changes are you seeing to M&A agreements reflecting Covid-19 and its consequences?

AVERY: One key area of change within M&A agreements is in the material adverse change provisions, which describe events with significant negative impact on the target’s ability to conduct business in the ordinary course. We are already starting to see material adverse change language exclude Covid-19 and its consequences. However, buyers may want to push to include Covid-19 either as a MAC event, or a separately stated “trigger,” that gives them a termination right if Covid-19 consequences get materially worse.

Other areas that may need new review are the target representations and disclosures as to, for example, supplier and customer relationships, operation in the ordinary course of business, legal compliance, labor and employment matters, financial statements, undisclosed liabilities, and IT and tech infrastructure.

stresses resulting from the Covid-19 virus.

Earnout terms, purchase price adjustments, outside closing dates, interim operating covenants and choice of law provisions also should be revisited to ensure they reflect current conditions.

AVERY: Known risks, such as industry risks or other specific known matters included in a target’s disclosure schedules, are routinely excluded from RWI. Covid-19 is, of course, now well known. As a result, RWI underwriters are now expressly including Covid-19-related exposures and losses as known risks outside of the scope of a normal RWI policy. All of this is happening, of course, in real time in response to fast-changing circumstances on the ground. n

CRAIN’S: How are material adverse change provisions triggered in current agreements?

AVERY: The typical MAC clause is unlikely to provide a buyer with an easy “out” from its agreement due to post-signing, preclosing

CRAIN’S: Many companies rely on representation and warranty insurance to cover unknown risks that may trigger a breach of an insured target company’s representations. How will Covid-19 affect RWI?

C o c e o m c w ti

president K.C. Crain senior executive vice president Chris Crain

EDITORIAL

group publisher Mary Kramer

Economic revival will have to wait until pandemic has run its course

Frederick P. Gabriel Jr.

editor Robert Hordt assistant managing editors

Christine Haughney (special projects), Janon Fisher, Gabriella Iannetta (digital) senior editor Telisha Bryan

of turning down economic activity has its own hazards and could jeopardize public health as well.

We aren’t there yet. Despite the lines outside supermarkets and delays in food deliveries, there’s still enough to eat. Those that need to travel still can. Garbage is still being picked up.

We may not agree with the governor on many things, but he is 100% right when he says nobody knows when this will end. Other countries have eased up on restrictions and reopened their economy only to see the contagion resurge. There are long-term implications to that too. If public confidence remains permanently shaken, New York City’s hospitality and tourism industry could be permanently damaged. Real estate will remain depressed if home buyers and companies fear that the density of the city could be dangerous for workers and disruptive to businesses.

That doesn’t mean we should not plan for the future. It’s time to start thinking about what the other side of this pandemic looks like. Some may be able to return

THE GOVERNOR IS RIGHT WHEN HE SAYS NOBODY KNOWS WHEN THIS WILL END hovers around 700. Hundreds of new cases are reported every day.

You think you have it bad? Think of the doctors and nurses who go into city hospitals to fight an invisible enemy that could leave them debilitated or dead. The danger is still out there.

Some have argued that the cost

EDITORIAL

associate editor Lizeth Beltran (digital) art director Carolyn McClain photographer Buck Ennis data editor Gerald Schifman senior reporters Aaron Elstein,

Jonathan LaMantia reporters Ryan Deffenbaugh, Gwen Everett,

Jennifer Henderson, Brian Pascus columnist Greg David contributors Tom Acitelli, Ronald DeCicco,

Cara Eisenpress, Cheryl S. Grant, Steve Krupinski, Danielle McManus Sladek, Mark Yawdoszyn to contact the newsroom:

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N

ew Yorkers are not house cats. We weren’t made to stay inside. The home confinement forced on us by this horrific pandemic was hard to swallow from the beginning, but now it’s becoming downright intolerable.

It’s spring. This is the season to hang up the winter coat and enjoy the fresh air. Even more urgent, New Yorkers feel the relentless drive to get back to work.

But we can’t. As much as the hard-charging population in the tristate area wants to throw open the front door and rush out to business as usual, we have to play the long game.

Covid-19’s daily death toll still

publisher/executive editor

ADVERTISING

www.crainsnewyork.com/advertise senior account managers Rob Pierce,

Stuart Smilowitz, Tori Weil account executive Devin Cavallo

to work after they’ve cleared the infection and their body has built an immunity to the disease, but testing for those workers is still in development. More emphasis, money and all-around resources should be focused on widespread testing.

The effort by Cuomo to work with other governors on the Eastern Seaboard to plan reviving the economy is a good beginning.

Let’s hope it works. The coronavi-

rus does not recognize state boundaries, and what may work for Delaware will almost certainly not work for New York, but it must be coordinated so that when things reopen, they will stay that way.

Politicians will bicker over who is in charge, and New Yorkers will grumble about getting back to work. But for the time being, it seems that the virus is still calling the shots. ■

integrated marketing manager Jonathan Yan,

212.210.0290, jyan@crainsnewyork.com people on the move manager Debora Stein,

dstein@crain.com CUSTOM CONTENT director of custom content

Patty Oppenheimer, 212.210.0711, poppenheimer@crainsnewyork.com senior manager, custom content

Sophia Juarez, sophia.juarez@crainsnewyork.com EVENTS

www.crainsnewyork.com/events manager of conferences & events

OP-ED

Ana Jimenez, ajimenez@crainsnewyork

Covid-19 will revolutionize where we work

REPRINTS director, reprints & licensing Lauren Melesio,

212.210.0707, lmelesio@crain.com

Studies show benefits for employers and employees

M

any companies are learning what those in the remote-work world already know: Work doesn’t have to mean commutes and cubicles.

My company’s philosophy always has been “work wherever, whenever,” and Covid-19 has forced almost 60% of the workforce into a similar ideology.

While remote work is not possible for everyone, the global situation has mandated that companies enable this shift for those who can—forever changing the world of work. For these employees, gone are the 9-to-5 days, the taxing commutes and the unnecessary in-person meetings. For employers, no more clock-watchers or office-space overhead.

Welcome to the modern workforce. For those of you just arriving, you’re in for a treat.

For employees, the benefits are obvious.

Morale skyrockets. Multiple stud-

ies have concluded that remote workers have a more positive, trusting attitude, less work exhaustion and less attrition.

The work-life balance improves.

Working remotely arguably causes employees to work more as the 9-to-5 structure evaporates, but working less isn’t the end goal here. It’s about having more control over how you choose to spend your time.

Finances benefit. Compared to office employees, remote workers saved an annual average of more than $4,500 on fuel and $3,000 on coffee and lunch.

Employers, take note: Productivity jumps.

A recent report saw a 13.5% increase in productivity when employees worked from home, whereas office workers spent 14% more of their time doing unproductive tasks.

Overhead decreases. Unsurprisingly, the fewer people you have in your office, the less space you need to account and pay for. A

two-year study found that by reducing the amount of office space, employers saved almost $2,000 per employee on rent.

Even if the morale, productivity and lifestyle benefits don’t jump off the page for an employer, surely the positive effect on the bottom line does.

Society also reaps the rewards.

In addition to the less tangible effects, such as an improved level of satisfaction and contentment, remote work provides specific environmental benefits.

The future becomes more sustainable. More than 110 million cars commute each day in America, but strip much of the workforce of a commute and the result is a cleaner environment.

This isn’t just a hypothesis; we’re in the midst of a real-life experiment. It’s estimated that Covid-19 has reduced carbon emissions 25% in China and 60% in New Delhi, triggering the largest annual fall in carbon dioxide emissions.

production and pre-press director

Simone Pryce media services manager Nicole Spell BUCK ENNIS

BY WILL RUSSEL

PRODUCTION

SUBSCRIPTION CUSTOMER SERVICE

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Besides the need in certain jobs for staff to be physically in a location, the main reason companies maintain a 9-to-5 regimen comes down to one simple thing: a lack of trust.

Once employers can get past that, it’s a win-win.

Two-thirds of workers want to maintain the freedom to work remotely in the post-Covid-19 world. If a business can apply a remote-work culture, it must. The world of work has seen the other side, and the grass is indeed greener.

Employers must adapt or die. ■

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chairman Mrs. G.D. Crain Jr. [1911-1996]

8 | CRAIN’S NEW YORK BUSINESS | APRIL 20, 2020

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OP-ED

Force insurers to pay up

To save the city’s bars and restaurants, business-interruption claims must be paid

BY ROBERT CARROLL AND JEFF KATZ

BUCK ENNIS

W

hen the day comes that it’s safe for businesses in New York to reopen, many small businesses won’t be around.

Even seemingly stable and successful restaurants and cafés will almost certainly shutter because of either the cost of restarting operations or less-than-average sales as residents transition to a new normal.

But the main reason small businesses won’t reopen is that insurance companies refuse to pay legitimate claims under business-interruption insurance policies.

Business property insurance policies typically include businessinterruption coverage intended to subsidize the cost of losses in the case of an unanticipated cessation of operations because of a natural disaster.

Business-interruption plans are intended to help businesses cover payroll, pay utility and rent bills, and replace lost income when an unforeseen event forces them to close temporarily.

A business such as Crown Shy, a decorated 120-seat restaurant in downtown Manhattan, pays insurance premiums of almost $10,000 per month to protect it in the unlikely event of a natural disaster—if proverbial lightning strikes. On March 16, two days before the restaurant marked its first year in business, Gov. Andrew Cuomo mandated that full-service restau-

of Mayor Bill de Blasio—used in executive orders mandating business closures around the country explicitly states the virus has a propensity to attach to surfaces and, therefore, causes physical damage. Not for nothing, recent science substantiates this reality.

Last month the state Legislature passed a $177 billion budget that fails to address the needs of small businesses such as restaurants.

In the first days of the outbreak, the Legislature granted the governor vast new emergency-management powers to oversee the crisis response effectively and efficiently.

rants halt operations.

As a result, Crown Shy closed, and revenue fell to zero. Without a reliable timeline to reopen, ownership had no choice but to furlough its entire workforce indefinitely.

Insurance companies deny that forced closures related to Covid-19 are covered by policies like Crown Shy’s, which are ostensibly intended for instances of temporary closure outside the business owner’s control. Insurers claim that the coronavirus does not cause damage to physical property and, therefore, does not trigger payouts.

But the language—including that

As a result, Cuomo has questioned whether it’s necessary for lawmakers to return to Albany.

But now more than ever, it is important that the Legislature support state businesses.

In March Assemblyman Robert Carroll introduced legislation that mandates that any insurance policy that protects against lost business because of property damage must include closures related to the novel coronavirus. It is essential for all small businesses that the Legislature reconvene to pass this bill.

In New York City alone, more than 25,000 sit-down restaurants have closed because of the coronavirus. It’s estimated that in just four weeks, those restaurant owners— often independent operators—lost a cumulative $2 billion.

The federal stimulus bill provides billions of dollars in loans for small-business owners, but a loan is significantly different than a check from an insurance company to cover a loss.

For Crown Shy and similar busi-

nesses to restart operations, owners will need a runway. Before starting to serve diners, restaurant owners will have to rehire staff, clean the premises, purchase inventory and settle debts not paid during the mandated shutdown. Local governments may require a depressed level of business to slow the spread of the virus.

Without cash reserves or the safety net of insurance payouts, independent restaurants will simply be unable to reopen. The immoral campaign of misinformation waged by insurance companies is unconscionable, and the state must play a role in ensuring that any entity that contracts here be held to the intention of an agreement.

The state needs to step in to protect business owners. The insurers who now claim their policies don’t cover the novel coronavirus made the same argument about not covering losses after 9/11. America may be facing multiple 9/11s, and the insurers are sitting on $900 billion in reserves.

It’s time they pay up, and if they don’t, the state should make them.

If it doesn't, when once again we are allowed to congregate, there won’t be anywhere to go. ■ Assemblyman Robert Carroll represents Park Slope, Windsor Terrace, Kensington and other neighborhoods in the state Legislature. Jeff Katz is co-owner and general manager of Crown Shy, a restaurant in downtown Manhattan.

OP-ED

BIDS keep watch over the city’s retail spaces

BY NUR ASRI

B

usiness improvement districts have long played an integral role in delivering public services to the city’s commercial districts.

Now more than ever these organizations are engaged in problem-solving and tackling unprecedented business environment challenges alongside their collaborators in city government and the private sector.

Beyond structuring easy-to-access and flexible grant and loan programs that will support the financial recovery of retail stores and restaurants post-Covid-19, BIDs are quickly thinking of creative strategies that will help their neighborhood commercial districts continue to be perceived as safe and vibrant places.

After all, if there’s one thing being stuck at home has done for customers, it has raised their awareness of and appreciation for in-person retail and dining experiences in brick-and-mortar locations.

Despite the overall drop in foot

traffic, sanitation efforts remain critical to maintaining the cleanliness levels expected by customers (especially amid a health pandemic) and will really set the stage for local businesses to easily return to operations later and the eventual reopening of commercial districts.

Although it is important that individual businesses take their own measures to clean/ sanitize storefronts, at a districtwide level, BID clean teams and contractors around the city are maintaining and in some cases even stepping up their efforts to ensure the robust sanitation of public surfaces and streets. The SoHo BID, for example, continues to empty trash receptacles, sanitize them (per Centers for Disease Control and Prevention guidelines) and remove graffiti tags daily.

As retailers move into another week of closures, many have quite understandably taken added precautions to secure merchandise and storefronts by boarding up windows. In response to this, BIDs are continuing to do what they have to and are engaging local artists to

SAMANTHA MCELANEY

Business improvement districts also will be there to return commercial strips to normal

ing, many have instead turned to sales via takeout and delivery orders.

BIDs have stepped up to support the marketing of this alternative dining option and are elevating the visibility of local restaurants (with delivery services) to customers by THE MEATPACKING BID commissioned an artist to brighten up a g g r e g a t i n g business lists on the protective plywood on windows in the commercial district. existing digital commission murals on boarded-up marketing platforms including windows with the permission of newsletters (e.g., that of the Union Square Partnership) and websites property owners.

For example, the Meatpacking (e.g., that of the Myrtle Avenue District responded quickly when Brooklyn Partnership).

Given that most states are today national chain store Sephora boarded up its windows and enlist- practicing social distancing, BIDs ed Brooklyn-based artist Theresa in other parts of the country have Rivera to paint a mural—all within also jumped a step further by bringing their public events online the span of 24 hours.

While restaurants and cafés are through free video streaming. Centemporarily shut for in-person din- tral Square in Cambridge, Mass., is

soliciting ideas for stand-up comedy performances, book readings, fitness classes and other entertainment as part of its public programming efforts during the pandemic.

It will pay a small stipend to local entertainers and entrepreneurs.

Even as we wait to see how stopgap financial measures roll out in the coming weeks for small businesses in the city, our business improvement district leaders have once again stepped up to the plate and engaged in incredible work to help save our commercial districts and prepare them for life after Covid-19.

As for what comes post-recovery, BIDs will need to spend time and resources to carefully diagnose the short- and long-term impacts of the pandemic on the small-business environment and begin to develop strategic plans focused on retail and hospitality business resiliency. ■ Nur Asri is the senior research strategist at Streetsense, an experience-focused strategy and design collective.

APRIL 20, 2020 | CRAIN’S NEW YORK BUSINESS | 9

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THE LIST HAVE LARGEST RESIDENTIAL SALES City deals between Q2 2018 and Q1 2019, ranked by price

MARKET HEADED FOR A FALL Luxury units still for sale will now be hard to move

T

1 2 3 4 5 6 7 8 9 10 11 12 13

The first quarter of this year marked the start of prolonged market time for Manhattan units.

As compared with a year ago, dwellings in the borough averaged an additional two weeks on the market in the first three months of 2020.

Average number of days on the market

150

he city’s residential sales have recently been dominated by a single property: 220 Central Park South. The site of the world’s most expensive housing purchase—the $240 million shelled out

by Chicago hedge fund manager Kenneth Griffin—claimed more than half of Manhattan’s 30 largest sales in the past four quarters.

The newest edition of Crain’s residential sales list was led by the Columbus Circle building’s Penthouse 73, which became the third-most-expensive sale in the city’s history in December. The acquisition came from Daniel Och, a hedge fund magnate with a Forbes-estimated net worth of $3.1 billion. Not all of the skyscraper’s homes went to finance titans, as units were also bought by Police frontman Sting and media entrepreneur Byron Allen last year.

In previous months, buyers moved aggressively on apartments at 220 Central Park South in a robust luxury market. But the few remaining units may not be quick to find takers. The Covid-19 epidemic and shutdown has forced all non-essential employees to work remotely. The mandate requires real estate agents to undertake a virtual sales process, a daunting assignment sending shockwaves through the industry. Though uncertainty will long percolate in the sector, the time at home has given some real estate leaders reason to look forward.

“Every pimple in my apartment, I am seeing,” said Halstead CEO Diane Ramirez, who hopes that business normalizes by the fourth quarter. “So I think if you were primed to move, you are absolutely going to be like, ‘Get me out of here.’”

In recent conversations with prospective buyers, Ramirez has noted a surge in demand for more square footage. If working from home becomes a long-term norm, buyers could prioritize residential workspace.

“I really do think that consumers are going to reevaluate their home differently, and that’s going to bode well for us,” Ramirez said. — Gerald Schifman

RANK

WAITING GAME

STREET ADDRESS/ UNIT/ NEIGHBORHOOD

PROPERTY TYPE

Q1 2019

Q2 2019

19.3

%

PORTION of Manhattan homes sold at a loss in January and February, an increase of 6.7 percentage points from the same period in 2019

Q3 2019

Q4 2019

Q1 2020

UPTOWN WORLD A slight majority of sales closed below 59th Street in the first quarter of 2020. But Upper Manhattan and the Upper West Side picked up substantial market share as compared with last year.

Portion of sales

UPPER MANHATTAN

19.2%

UPPER EAST SIDE 5.0% UPPER WEST SIDE

20.4%

MIDTOWN 18.5% BETWEEN 14TH AND 34TH STREETS 8.2% SOUTH OF 14TH STREET

28.7%

SOURCES: Halstead, Streeteasy

TOTAL PRICE

TOTAL SQUARE FOOTAGE

NUMBER OF ROOMS

DATE SOLD

220 Central Park South PH73 Columbus Circle

Condo

$92.7

9,817

Total rooms: 7 Bedrooms: 4 Bathrooms: 6.5

Dec. 5, 2019

14 E. 67th St. n/d Lenox Hill

Townhouse

$77.0

30,000

Total rooms: n/d Bedrooms: n/d Bathrooms: n/d

June 4, 2019

220 Central Park South PH16 Columbus Circle

Condo

$65.8

5,807

Total rooms: 8 Bedrooms: 3 Bathrooms: 5.5

July 16, 2019

220 Central Park South 49A Columbus Circle

Condo

$64.1

6,591

Total rooms: 9 Bedrooms: 5 Bathrooms: 7.5

Oct. 31, 2019

220 Central Park South 47A Columbus Circle

Condo

$61.0

6,591

Total rooms: 8 Bedrooms: 5 Bathrooms: 7.5

Sept. 26, 2019

220 Central Park South 46A Columbus Circle

Condo

$59.6

6,591

Total rooms: n/d Bedrooms: 5 Bathrooms: 6 1

Nov. 15, 2019

220 Central Park South 48A Columbus Circle

Condo

$59.1

6,591

Total rooms: 9 Bedrooms: 5 Bathrooms: 8

Dec. 13, 2019

220 Central Park South 45A Columbus Circle

Condo

$55.5

6,591

Total rooms: 8 Bedrooms: 5 Bathrooms: 8

Oct. 17, 2019

220 Central Park South 66 Columbus Circle

Condo

$54.5

5,935

Total rooms: 8 Bedrooms: 4 Bathrooms: 5

Dec. 19, 2019

834 Fifth Ave. 7/8A Lenox Hill

Co-op

$53.0

n/d

Total rooms: 20 Bedrooms: 7 Bathrooms: 8.5

Aug. 27, 2019

212 Fifth Ave. PH NoMad

Condo

$51.6

10,079

Total rooms: 20 Bedrooms: 5 Bathrooms: 6.5

June 4, 2019

220 Central Park South

Condo

$51.4

5,935

Total rooms: n/d Bedrooms: 4 Bathrooms: 5

Feb. 24, 2020

Co-op

$47.0

n/d

Total rooms: 13 Bedrooms: 5 Bathrooms: 6

Nov. 7, 2019

61 BUSINESS | APRIL 20, 2020 10 | CRAIN’S NEW YORK Columbus Circle 960 Fifth Ave.

10A 10 P010_P011_CN_20200420.indd

Upper East Side

RAN

CITY HOME listings in the second half of March, a 75% decline from the same period last year

135

120

90

541

7 8 9 1 1 1 12 13 14 15 16 17 18 29 21 21 21 21 21 21 21 21 21 31 2 2 2

4/16/20 4:52 PM

f ne d

r th

ales

8.7%

7 8 9 10 11 1 12 2 13 3 14 4 15 5 16 6 17 7 18 8 19 9 20 10 21 11 22 12 23 13 24 14 25 15 26 16 27 17 28 18 29 19 30 20 21 22 RANK

220 Central Park South 48A Columbus Circle

Condo

$59.1

6,591

Total rooms: 9 Bedrooms: 5 Bathrooms: 8

Dec. 13, 2019

220 Central Park South 45A Columbus Circle

Condo

$55.5

6,591

Total rooms: 8 Bedrooms: 5 Bathrooms: 8

Oct. 17, 2019

220 Central Park South 66 Columbus Circle

Condo

$54.5

5,935

Total rooms: 8 Bedrooms: 4 Bathrooms: 5

Dec. 19, 2019

834 Fifth Ave. 7/8A Lenox Hill

Co-op

$53.0

n/d

Total rooms: 20 Bedrooms: 7 Bathrooms: 8.5

Aug. 27, 2019

212 Fifth Ave. STREET ADDRESS/ PH UNIT/ NoMad NEIGHBORHOOD

Condo

$51.6

10,079

TOTAL PRICE

TOTAL SQUARE FOOTAGE

Total rooms: 20 Bedrooms: 5 Bathrooms: 6.5 NUMBER OF ROOMS

220 Central Park South PH73 61 Columbus Circle

Condo

$92.7 $51.4

9,817 5,935

Total rooms: Total rooms: n/d7 Bedrooms: 4 Bathrooms: Bathrooms:6.5 5

Dec. 24, 5, 2019 Feb. 2020

14 E.Fifth 67thAve. St. 960 n/d 10A Lenox Hill Upper East Side

Townhouse Co-op

$77.0 $47.0

30,000 n/d

Total Totalrooms: rooms:n/d 13 Bedrooms: n/d Bedrooms: 5 Bathrooms: n/d Bathrooms: 6

June 7, 4, 2019 2019 Nov.

220 Central Park South PH16 V-14 Columbus Circle

Condo

$65.8 $46.5

5,807 4,340

Total rooms: 38 Bedrooms: 13 Bathrooms: Bathrooms:5.5 1

July 16, Nov. 21, 2019 2019

220 Central Park South 49A 56A Columbus Circle

Condo

$64.1 $41.7

6,591 4,814

Total rooms: 59 Bedrooms: 45 7.5 Bathrooms: 5.5

Oct. 31, Sept.

24,2019 2019

220 Central Park South 47A V-6 Columbus Circle

Condo

$61.0 $39.0

6,591 4,994

Total rooms: 68 Bedrooms: 5 Bathrooms: 6.5 7.5

Sept.7,26, 2019 June 2019

220 Central Park South 46A 54A Columbus Circle

Condo

$59.6 $38.2

6,591 4,814

Total rooms: n/d Total rooms: 8 Bedrooms: 45 Bathrooms: Bathrooms: 4.56 1

Nov. 15, Sept.

19,2019 2019

Central 8220 E. 75th St.Park South 48A n/d Columbus Upper EastCircle Side

Condo Townhouse

$59.1 $38.0

6,591 13,000

Total rooms: Total rooms: n/d9 Bedrooms: Bedrooms: n/d5 Bathrooms: Bathrooms: n/d8

Dec.3,13, 2019 Jan. 2020

220 Varick CentralSt. Park South 100 45A PHN Columbus Circle Hudson Square

Condo

$55.5 $36.5

6,591 6,734

Total rooms: 8 Bedrooms: 45 Bathrooms: Bathrooms: 4.58

Oct. 17, Aug. 15, 2019

220 Central Park South 66 59A Columbus Circle

Condo

$54.5 $36.1

5,935 3,814

Total rooms: Total rooms: n/d8 Bedrooms: 34 Bathrooms: Bathrooms: 3.55

19,2019 2019 Dec. 6,

834 Central Fifth Ave. 220 Park South 7/8A V-5 Lenox Hill Circle Columbus

Co-op Condo

$53.0 $34.4

n/d 4,994

Total Totalrooms: rooms:20 6 Bedrooms: 57 Bathrooms: Bathrooms:8.5 61

Aug. 4, 27,2019 2019 April

212E.Fifth 11 68thAve. St. PH PHE NoMadHill Lenox

Condo

$51.6 $34.2

10,079 7,058

20 Total rooms: 10 Bedrooms: 65 Bathrooms: Bathrooms:6.5 6

June23, 4, 2019 July 2019

220 Central Park South 61 V-4 Columbus Circle

Condo

$51.4 $33.3

5,935 4,994

Total rooms: n/d Total rooms: 6 Bedrooms: 54 Bathrooms: 75

Feb. 24, June 21, 2020 2019

960 Park Fifth Ave. Ave. 610 10A PH16E Upper Hill East Side Lenox

Co-op Condo

$47.0 $32.0

n/d 7,700

Total rooms: 10 13 Bedrooms: 45 Bathrooms: Bathrooms: 4.56

Nov. 14, 7, 2019 Feb. 2020

220 Charles Central Park 150 St. South V-14 PHB Columbus West VillageCircle

Condo

$46.5 $31.9

4,340 4,610

Totalrooms: rooms:113 Total Bedrooms: 51 Bathrooms: Bathrooms: 5.51

Nov. 21, June 20, 2019

220 Park Central 432 Ave.Park South 56A PH94A Columbus Turtle Bay Circle

Condo

$41.7 $31.5

4,814 3,952

Total rooms: 65 Bedrooms: 34 5.5 Bathrooms: 3.5

Sept.21, 24,2019 2019 June

Central Park South 1220 Central Park South V-6 1809 ColumbusWest Circle Midtown

Condo

$39.0 $31.3

4,994 6,050

Totalrooms: rooms:126 Total Bedrooms: 45 6.5 Bathrooms: 4.5

June7,7,2019 2019 Oct.

220 Central Park South 54A 34A Columbus Circle

Condo

$38.2 $31.0

4,814 3,703

Total rooms: 68 Bedrooms: 4 Bathrooms: Bathrooms:4.5 4

Sept.3,19, 2019 Dec. 2019

8 E. Park 75th Ave. St. 520 n/d 35 Upper Hill East Side Lenox

Townhouse Condo

$38.0 $30.5

13,000 4,628

Total rooms: n/d Total rooms: 8 Bedrooms: n/d Bedrooms: 4 Bathrooms: n/d Bathrooms: 5

Jan. 3, June 27,2020 2019

100 W. Varick 320 12thSt. St. 2PHN Hudson Square West Village

Condo

$36.5 $30.0

6,734 9,615

Totalrooms: rooms:208 Total Bedrooms: 54 Bathrooms: Bathrooms:4.5 5

Aug.13, 15,2019 2019 May

PROPERTY TYPE

June 4, 2019 DATE SOLD

220 Central Park South Condo $36.1 3,814 Total rooms: n/d Dec. 6, 2019 59A Bedrooms: 3

 � � 1-� � ­ € ‚ ƒ   Columbus Circle Bathrooms: 3.5 ­  „€ … „ „� ­†€„ „ „ „ „‡ „€  220 Central Park South V-5 Columbus Circle 11 E. 68th St. PHE Lenox Hill

P010_P011_CN_20200420.indd 11

220 Central Park South V-4

Condo

$34.4

4,994

Total rooms: 6

WANT MORE OF CRAIN’S EXCLUSIVE DATA? VISIT CRAINSNEWYORK.COM/LISTS. Bedrooms: 5

April 4, 2019

Bathrooms: 6 1 APRIL 20, 2020 | CRAIN’S NEW YORK BUSINESS | 11

Condo

$34.2

7,058

Total rooms: 10 Bedrooms: 6 Bathrooms: 6

July 23, 2019

Condo

$33.3

4,994

Total rooms: 6 Bedrooms: 5

June 21, 2019

4/15/20 5:37 PM

INSTANT EXPERT

What you need to know about the 2020 state budget THE PLAYERS

1

2

New York’s 2020 state budget was approved in Albany, with the final spending number coming in at $177 billion. The product of a give-andtake process marked by the novelty of negotiating via video conference calls, the approved budget ultimately centered around adjustments made to manage the ongoing response to the Covid-19 pandemic.

Chief among the factors taken into consideration by state officials is an expected tax revenue loss of $10 billion to $15 billion. To this end, legislators waived the legal debt cap meant to control spending in order to borrow money for this budget. Another change is the allowance of rolling budget cuts. Gov. Andrew Cuomo will be able to cut spending at his own discretion during the year in order to address revenue shortfalls.

All in all, the 2020 state budget includes CAPITOL BUILDING substantial changes and legislation that will have an effect on all residents of the Empire State.

BUCK ENNIS

THE ISSUE

The budget was negotiated primarily by the offices of HEASTIE CUOMO STEWART-COUSINS the “big three” in Albany: Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie. Each leader was able to muscle into the budget specific provisions on issues that have been priorities. For one, Cuomo gave no ground on his long-planned Manhattan congestion-pricing legislation, which is awaiting final approval from the Trump administration’s Department of Transportation.

Steward-Cousins’ priorities included a $3 billion bond measure to finance environmental protections across the state. But the Senate majority leader was unable to finalize an item her caucus has advocated for: new taxes on the wealthy.

Although Heastie allowed some changes to be made to his bail-reform law, which has drawn criticism since its implementation at the start of the year, the Assembly leader was able to keep the reform law’s basic tenets intact, mainly the restrictions on a judge’s ability to jail defendants before trial based on a perceived level of danger to the public.

FLICKR, AP PHOTO

BY BRIAN PASCUS

WHAT’S NEXT

AP PHOTO

NEW YORK’S FISCAL SITUATION IS UP IN THE AIR AS LONG AS THE CORONAVIRUS AFFECTS THE COUNTRY

YEAH, BUT…

3

There are numerous complications that make this budget a work in progress. First is the unknown of how long social-distancing measures will continue and what effect they will have on the larger economy of the state (and the country). The state will draw on nearly $11 billion in debt to address the huge revenue shortfall brought on by the new coronavirus, including $8 billion that will cover the gap in tax revenue but won’t be collected until July 15 this year, because the April 15 deadline was pushed back.

There is also the ongoing battle over Medicaid funding, which the budget addressed but did not resolve.

Earlier in the year the state sought to shift the burden of Medicaid funding to municipalities, which New York City said will cost it $1.1 billion. Although the greater cost issue was not resolved in this budget, Cuomo was able to gain concessions for making some Medicaid eligibility rules more restrictive.

SOME BACKGROUND

4

The 2020 budget includes multiple projects and laws that had been in the pipeline for Democrats. Most important for the caucus was expanded paid sick leave. Almost every business in New York will have to offer at least four days of paid sick leave per year for each of its employees. Also, gestational surrogacy is now legalized, an issue the LGBTQ community lobbied for.

Republicans, led by outgoing leader John J. Flanagan, were able to keep new taxes on the wealthy at bay. In addition, increased economic protections for gig-economy workers, the sale of alcohol in movie theaters and the legalization of marijuana were all left out of the 2020 budget.

FLANAGAN

AP PHOTO

5

The state’s fiscal situation is up in the air as long as the coronavirus affects the country.

For instance, the Metropolitan Transportation Authority may need to request additional funding for its operating budget, even after receiving nearly $4 billion in federal funding and an additional $5 billion in financing from the state. The 2020 budget also includes a clause that gives the governor the right to expand the physical space of Penn Station by eminent domain. The impending fight for the transportation hub is something New Yorkers could hear more about once the virus passes and business returns to normal.

The budget addressed some concerns with the bail-reform law, but this will not be the last time it is evaluated by legislators. Even as bail restrictions have been eliminated for a majority of misdemeanors and nonviolent crimes, interest groups and city Police Chief Dermot Shea have been critical of the reform measure.

And Covid-19 will continue to put increased strains on the public safety of New York City.

SHEA

12 | CRAIN’S NEW YORK BUSINESS | APRIL 20, 2020

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ASKED & ANSWERED

MARK CHAMBERS

DOSSIER

Mayor’s Office of Sustainability

WHO HE IS Director of the Mayor’s Office of Sustainability AGE 41

INTERVIEW BY CARA EISENPRESS

T

hree reports guide how Mark Chambers leads the Mayor’s Office of Sustainability, an agency focused on the environment.

First is 80x50, a commitment to reduce greenhouse-gas emissions by 80% through 2050.

Second is an executive order affirming that the city will stick with the commitment to limit global temperature increase to 1.5°C. It had been part of the Paris Agreement, which the U.S. pulled out of in 2017. Last is OneNYC, which ties climate change to equity. In his day-to-day endeavors, Chambers looks to the reports to get local businesses and the city itself to adhere to climate science using policy, regulation and legislation.

How has your office responded to the Covid-19 crisis?

We’ve coordinated with the utilities, making sure that we are all aligned as everyone pivots to the response. We’re responsible for the management of the city’s regulatory structure around utilities, and we continue to be the direct coordinators with grid operators and public service providers in terms of energy supply.

What tools do you have to help New Yorkers?

Every two to three years, there’s a negotiated settlement about what the utilities are doing: how we’re pushing them to deliver on our priorities for energy. It lets us

BORN Silver Spring, Md. LIVES Washington Heights EDUCATION Bachelor’s in architecture and master’s in public policy management, Carnegie Mellon GREEN, NOT MEAN Chambers is cautious not to be overly judgmental about how green others are. “We sometimes ask the wrong question. Whether someone is invested in taking a plastic bag is a different question than why a plastic bag is an option. Why isn’t everything recyclable? It’s not making people feel guilty but rather making sure they have choices that meet their needs.”

OUT IN NATURE For the past six summers, Chambers and his brother have hiked a section of the Appalachian Trail.

PANDEMIC PARALLELS He finds similarities in the Covid-19 and climate crises.

“Listening to science and acting early matters.”

advocate for all New Yorkers because we have the ability to advocate for low-income ratepayers.

What about policy?

The city is constrained in terms of power. When

there’s policy for offshore wind or access to Canadian hydropower, that lets us access low-carbon power that’s faster and enables the city to become low-carbon more quickly. There’s also policy that helps to make offshore wind more attractive, like contributing $200 million to the South Brooklyn Marine Terminal to get it to take supply-chain work for offshore wind energy.

What’s been introduced so far from the Climate Mobilization Act, passed last year?

Local Law 97 is our building mandate. It targets the largest buildings and makes them reduce greenhousegas emissions. We are developing a platform to allow flexibility for buildings with significant carbon output that need to be dramatically retrofitted and allow them to mine additional carbon elsewhere.

How do you deal with the backlash from developers and management companies about having to reduce energy use by 2024 for the top 20% of buildings in terms of carbon usage and 2029 for the rest?

We’ve been practicing incrementalism for a long time—buildings slowly working at efficiency. That focuses on the wrong thing. If we look at the source of energy and make that cleaner, then it moves further along a path to compliance. It puts the focus on carbon. That’s what we’re after; that’s what we need to be focused on. We have asked building owners to embrace what’s absolutely necessary for striving in the future and to save money along the way. The majority have 10 years to begin the process of planning and implementation.

They have to start now, but it’s not a fast deadline. ■

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APRIL 20, 2020 | CRAIN’S NEW YORK BUSINESS | 13

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FROM PAGE 1

the practice in mid-March, most sellers weren’t allowing prospective buyers to walk through their homes.

While many agents have turned to virtual tours of properties, to some, they’re just not the same.

“If you were spending a million dollars on a home, would you buy it without seeing it?” said Frederick Warburg Peters, CEO of Warburg Realty. “There’s not a lot of that going on.”

But that hasn’t deterred agents from trying. Whether they’re using Zoom, FaceTime or an old-fashioned phone call, many of the city’s 26,000 licensed real estate agents are doing whatever it takes to try to generate business.

A recent pitch for Rose Hill, a 123-unit NoMad condo building under construction, illustrates the new normal.

“This is walking out onto the 37th floor, prime space that hosts some of our resident amenities,” accord-

ment leases sank 46% and 34%, respectively.

New home sales listings fell 72% in the last weeks of March, StreetDROP IN new Easy found, as apartment leases sellers decided in Manhattan in to simply wait March compared out the market. with the same Residential month last year real estate firms, such as Compass, Warburg and Elliman, DECLINE in have cut adminconfidence rating istrative staff and among real marketing estate agents spending. Brobetween now and kers and agents the end of last are independent year. contractors, not employees.

While they won’t be laid off, their commission-driven income could fall to nearly nothing.

“We are essentially planning that we will have zero income,” said Ben Willig of Anchor Associates. “Anything else is a bonus, so we have to keep expenses as low as humanly possible without cutting off what you need to run a brokerage.”

The federal rescue package approved by Congress in March allows independent contractors to apply for unemployment benefits if they lose wages because of Covid-19. But real estate salespeople are struggling along with everyone else to get through to the state Labor Department amid a deluge of new claims.

SOBERING STATS

38%

46%

“WE ARE ESSENTIALLY PLANNING THAT WE WILL HAVE ZERO INCOME” ing to an online tour narrated by John Harrison, a broker with CORE Real Estate.

Harrison was working from home, far from the luxury condo tower. The sales-office setting behind him was a backdrop superimposed by the video-chat app Zoom.

Confidence collapses

By March it was clear the industry had started to crater, according to a survey of real estate agents by the Real Estate Board of New York.

Real estate brokers rated their confidence, on average, 3.72 out of 10, a 46% drop from the end of last year and the lowest since the survey began in 2012.

Market data confirms their concerns. New apartment leases fell 38% in Manhattan in March, compared with a year earlier, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate reported. Brooklyn and Queens apart-

VIRTUAL tours can give buyers a glimpse of a new building’s amenities.

Digital deals The meaning of the term “virtual showing” varies by listing. The number of homes on StreetEasy with 3D self-guided tours has doubled since March, the company said. In some cases, agents walk through the apartment alone while their clients watch on FaceTime.

But state guidance released at the beginning of April stressed that agents should conduct virtual showings from home instead.

To keep in touch with clients, the real estate industry has embraced

BUCK ENNIS

SPRING

Zoom just as the videoconferencing platform has spread rapidly into businesses and most homes during the crisis.

“The visual is so important in sales,” said Kristin Hurd, a broker with Brown Harris Stevens. “The face-to-face through Zoom has become absolutely essential.”

The Rose Hill condo tower, developed by Rockefeller Group, is supposed to open for occupancy in the fall, although construction is on pause.

Shaun Osher, the CEO of CORE, said it had become clear in late February that the sales team would need to prepare an online option if the office were forced to close.

In a digital sales market, Osher said, a new development has advantages over resale homes.

“You are already selling the dream,” he said.

In a demo showing of Rose Hill, agents Harrison and Nicole Grandelli played short videos highlighting the lobby, fitness room and views of the Empire State, Chrysler and New York Life buildings from the upper level of the 600-foot tower.

Harrison showed the images and videos through screen share, with him and Grandelli set off in boxes to the side. They walk through floor plans and highlight nearby businesses.

“There is nothing that beats that in-person experience,” Harrison said. “But here we are at least able to tell the story we want, face-to-face.”

Whether that will be enough to land buyers is not yet clear. Osher said some virtual tours have led to negotiations, but nothing has closed yet.

Most closings during the Covid-19 shutdown have come through negotiations that started before the crisis, agents reported.

The state has allowed many former pen-and-paper tasks to move online during the pandemic. They include conducting final walkthroughs, having board interviews and signing closing documents.

Neither buyers nor brokers have experience navigating these efforts online, however.

Allison Chiaramonte, an agent with Warburg Realty, said much of her time is spent “playing defense” to guide deals already in progress.

“The sky is not falling, but it is a major slowdown,” Chiaramonte said. “Business is still getting done, just at a much slower pace than we are all used to.”

What’s next Veteran city agents weathered real estate slowdowns following the Sept. 11 attacks and the 2008 financial crash. This crisis is particularly

difficult because there is little sense of how the economy will fare once Covid-19 cases slow and social distancing measures end.

It’s hard for brokers to tell anxious clients when to expect a return to normal.

Some agents are keeping an eye on the market in China, which is further along in containing the virus than the U.S. A StreetEasy blog post at the start of this month noted that sales activity bounced back to normal in Hong Kong following the SARS outbreak in 2003.

“You can lean toward prices and activity eventually reaching levels before the pandemic,” said Eric Rosen, a broker with Halstead. “But one of the smarter things I’ve heard is that anyone who says they know what happens when this is over is lying. This is something no one has ever seen.”

Not all of the city’s agents are expected to survive the slowdown.

Anchor’s Willig compared his work in the next few months to the famous scene in Forrest Gump in which a storm wipes out most of the shrimp boats and leaves Tom Hanks’ character in a position to cash in once the swells settle.

“There will be only a few shrimp fishermen able to keep going,” Willig said. “We need to be one of those boats.” ■

ARTS & CULTURE

BY GWEN EVERETT

T

he Brooklyn Academy of Music expects a $7.4 million hit to its ticket revenue after saying last week that it will cancel programming and events through June.

Executive staff will see a 30% pay cut in light of that shortfall. The academy's president, Katy Clark, will cut her compensation by 40%.

BAM reported $56.1 million in revenue in 2018, $18.1 million of which was earned revenue.

The $7.4 million hit represents just under half of that. Clark earned $398,378, according to the same filing.

BAM, which employs 1,085 peo-

ple, according to its most recent filing with the IRS, will consider layoffs, furloughs and more pay cuts to cover the budget shortfall.

“Along with many of our peer arts institutions, BAM is experiencing a period of financial loss, uncertainty and extraordinary challenge,” said Adam Max, chairman of the board.

Vanishing point Arts institutions across the city are facing financial distress.

Nowhere is that clearer than at performing arts programs, which make a large share of their yearly revenue from ticket sales for programs that cannot continue amid a new era of social distancing.

Besides pay cuts and layoffs, institutions have scrambled to save revenue in new ways.

Many, including BAM, have asked ticket holders to donate their tickets instead of seeking a refund for canceled programs, and they’ve asked donors to allow restricted grants to be put toward operating expenses.

BAM is the oldest performing arts center in the country and a member of the Cultural Institutions Group, the alliance of arts institutions that are in city-owned buildings.

Composer Phillip Glass and visual artist Laurie Anderson are among the artists the academy represents. ■

BUCK ENNIS

BAM expects $7.4M loss; executive pay slashed

BAM! POW! BIF! The Brooklyn Academy of Music has asked ticket holders to donate.

14 | CRAIN’S NEW YORK BUSINESS | APRIL 20, 2020

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CORONAVIRUS ALERT

EDC boss talks about saving lives and creating jobs James Patchett

working with on sterilization.

What about in terms of working with the private sector?

N.Y. City Economic Development Corp.

Across-the-board, we were asked to help with the flood of responses coming from the private sector for all matters related to personal protective equipment. This has mainly come from the manufacturing sector. We’ve received over 2,500 responses to the website application we put up. Ten percent of those that come in are things we are looking for and are credible.

We are augmenting the traditional procurement mechanism of the city to vet the sourcing of ideas, and those that pass screening get passed on to DCAS or the Department of Health.

INTERVIEWED BY BRIAN PASCUS

T

he head of the New York City Economic Development Corp, James Patchett, talked to Crain’s about the public health and economic crisis brought on by the coronavirus pandemic.

So what is the EDC’s broader plan to help the New York City economy?

What about in terms of the broader strategy to open up the economy?

The broader strategy in the aggregate is to advocate for federal resources to get us through this [and] to use city resources to the extent possible to bridge the federal resources and supplement them.

What is the key to all this?

The key to reopening the economy is having a sufficient amount of testing and hospital capacity to address these health concerns.

Flattening the curve is about making sure hospitals have enough resources to treat people.

It’s important to remember that the EDC’s production of face shields, surgical gowns, test kits is creating a ... number of jobs.

By producing gowns we have already created 1,200 jobs. And that was with the initial scale, and [since then] the mayor announced doubling that scale. We expect to bring in a significant number of additional jobs

On a granular level, what else is the EDC doing with this plan?

We have entered into contracts with eight different New York City-based companies that are manufacturing face shields in New York. That is getting us close to 250,000 face shields per week.

We have identified two additional NYC-based companies we will contract with as part of that effort.

One is Custom Consortium, a meatpacking-based company that produced custom clothing. They have changed their workflow to produce face shields There are others. One is Maker Space, a nonprofit based in the Brooklyn Army Terminal. They are producing 5,000 face shields per week. Also, Garment Center is building gowns. They are one of the larger manufacturers in the Garment District. We are also working with Open Jar, a Broadway relief project. There are people who were doing costume gowns for Broadway shows, and who are now working with us in the collective to put these hospital gowns together. Another company, Course of Trade, based in Sunset Park, Brooklyn, has the capacity to make 60,000 gowns per week. That

What other economic plans is the EDC working on?

BUCK ENNIS

To start with, as the mayor has ,said, the focus is now on trying to address the health issue first. We are highly aware of the fact that the last month has been an extraordinarily challenging time for businesses in New York City. The city and state are trying their best to balance their health concerns with the economic ones.

Only by successfully addressing health issues can we successfully bring economic activity back at the scale that is necessary for long-term success.

So we have a three-pronged approach. The first is we have been working closely with federal elected officials to advocate for federal policy on this. The city simply does not have the financial resources to address the magnitude of this financial crisis. In particular, we’ve been communicating with Sen. [Charles] Schumer’s office to emphasize priorities that are necessary for small businesses in New York City.

We’ve also worked with [the Small Business Administration] to make sure there were as few strings attached as possible to funding, and [that] the interest rate for the Paycheck Protection Plan loan is as low as possible. From our perspective, the most important thing is making sure businesses can get cash in the near term to ride this out and employees are supported, as are workers who have lost their jobs. That’s why unemployment benefits are so important.

In the near term we’ve been working with the Department of Small Business Services on the setup of their grant-and-loan program. These grants and loans are not sufficient in scale to address the magnitude of the challenges, though. The city’s collective goal with this program was getting people through the approval process as quickly as possible.

is produced by 400 people across six factories.

Besides gowns and shields, what else is the EDC working on today?

Our major focus over the last 96 hours has been test kits. A shortage has developed in the city. We have regular relationships with people in our biotech community. We are in close communication with universities, 3D printing organizations and biotech labs to produce components necessary for test kits. You need a swab to put in the nose and the viral transport medium. We’ve identified a design that will address the needs, and we are finalizing with the Department of Health, with whom we also are

Testing capacity is key to reopening the economy.

It’s going to take a significant amount of strategic planning. We are in regular communications with corporate leaders [on] how they can do staggered starts once the economy returns. We stay in touch with the business community. Some companies can work really well remotely and some cannot. For instance, with restaurants, the only thing we can do until we reopen the economy is to give [them] cash. But we’re advocating for substantially more financial resources.

PPP has that opportunity. We reached out to every tenant across 60 million square feet to make sure they had a hotline. We called all of the businesses in our network to make sure they were aware of and [knew how] to apply for the PPP loan.

We have reached out to thousands and thousands of businesses.

And as for our EDC workers, I just want to say one thing: They’re saving heath care workers' lives and creating jobs at the same time. ■

Crain’s Business

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Crain’s Business

The tools you need now to navigate the crisis With small businesses needing to adjust during these uncertain times, Crain’s Business Toolbox offers critical information and resources to help businesses not only survive, but thrive.

CrainsNewYork.com/crains-business-toolbox

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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 Qualification of PQOZ SPE JV, L.P. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/11/20.

Office location: NY County. LP formed in Delaware (DE) on 11/29/18. Princ. office of LP: 75 Broadway, Ste. 230, San Francisco, CA 94111. 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: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with Secy. of State, DE, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation of Aggregate Power Infrastructure LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/09/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Nick Knapp, Sr. Managing Director, 420 Lexington Ave., Ste. 2533, NY, NY 10170. Purpose: any lawful activities.

Notice of Qualification of 1FBBK OWNER LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/19/20.

Office location: NY County. LLC formed in Delaware (DE) on 02/ 05/20. Princ. office of LLC: Goldman, Sachs & Co., 200 West St., NY, NY 10282. 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. 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., PO Box 898, Dover, DE 19903.

Purpose: Any lawful activity.

LLC – New York, NY) Lead a team of VFWU GDWD DVVRFLDWHV DQDO\VWV LQ GYOS¡J anlytcl mdls based on alt data to spprt invstmnt & portfolio mgmt activities. F/T. 5HTV 0VWU¡V GHJ RU IUJQ HTY LQ &RPS6FL 6WDW (QJ 3K\VLFV RU UHO TXDQW à G \UV exp in job offrd or in data sci or analytics.

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Notice of formation of RENHUB GROUP, LLC. Arts of Org filed with Secy of State of NY (SSNY) on 2/ 26/20. Office location: NY County.

SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to: 260 W. 54th St., NY, NY 10019 Purpose: any lawful act.

Business Response Engineer (Citadel

Enterprise Americas LLC – New York, NY)

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Notice of Formation of ROUTE 20 HOLDINGS LLC Arts of Org filed with SSNY on 2/13/2020. Office loc: NY County. SSNY has been designated as agent upon whom process may be served. SSNY shall mail process to 201 E 12th St, Apt 204, New York, NY 10003. Purpose: Any lawful activity.

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PUBLIC & LEGAL NOTICES NOTICE OF QUALIFICATION OF O3 Partners LLC. App. for Auth. filed with the Sec’y of State of NY (SSNY) on 2 /11/20. Office location: New York County. LLC formed in DE on 10/ 25/18. SSNY has been designated as agent upon whom process may be served. SSNY shall mail a copy of any process against the LLC served upon him/her to 787 11th Ave, 6th Floor, NY, NY 10019. The principal business address of the LLC is 787 11th Ave, 6th Fl, NY, NY 10019. DE address of LLC: 3616 Kirkwood Hwy, Ste A #1070, Wilmington, DE 19808.

Certificate of LLC filed with Sec’y of State of DE located at 401 Federal St #4, Dover, DE 19901. Purpose: any lawful act or activity.

To place a classified ad, Call 212-210-0189 or Email: jbarbieri@crainsnewyork.com

NOTICE OF QUALIFICATION of STOCHASTICO LLC. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 12/9/19. Office location: NY County. LLC formed in Delaware (DE) on 1 1/12/19. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o LEGALINC CORPORATE SERVICES INC, 1967 WEHRLE DRIVE SUITE 1-086, BUFFALO, NY 14221.

DE addr. of LLC: 651 N BROAD ST SUITE 206, MIDDLETOWN, DE 19709. Cert. of Form. filed with DE Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of VESTA ASSET MANAGEMENT LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/02/20. Office location: NY County. LLC formed in Delaware (DE) on 10/16/19. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c /o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543.

DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808.

Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St., Dover, DE 19901. Purpose: Any lawful activity.

NOTICE OF FORMATION of Bored Button LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 3/2/20. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 35 West 9th St, 5A, New York, NY 10011. Purpose: any lawful act.

Notice of Formation of NYC WATCHMAKER, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/06/20. 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 Vincent Brasesco, 25 E. 67th St., 14C, NY, NY 10065. Purpose: Watchmaking and watch repair.

Notice of Formation of C&E Realty Holdings LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/ 10/20. 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 Sachs Companies, 155 East 55th St., Ste. 5F, NY, NY 10022. Purpose: any lawful activities.

Notice of Formation of Aggregate Power Infrastructure LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/09/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Nick Knapp, Sr. Managing Director, 420 Lexington Ave., Ste. 2533, NY, NY 10170. Purpose: any lawful activities.

Notice of Formation of Hugh Love, PhD, Psychological Services, PLLC. Arts of Org filed with Secy. of State of NY (SSNY) on 10/22/19. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against PLLC to 421 W 162nd St, APT A, NY, NY 10032. Princ. Bus. Addr: 6 E 39th St, Ste 800, Ofc J, NY, NY 10016. Purpose: any lawful act.

NOTICE OF FORMATION of Logic Pallet, LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 2/13/2020.

Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 80 Maiden Ln, Ste 1004, New York, NY 10038.

Notice of formation of Data Veritas LLC: Art. of Org. filled 11/18/2019 with SSNY. Office: New York County.

SSNY designated as agent of LLC upon whom process may be served.

SSNY shall mail process to: Data Veritas, 133 2nd ave. #4, New York, NY, 10003. Purpose: any lawful activity.

Notice of Qualification of Papa Al Productions, LLC. Authority filed with Secy. of State of NY (SSNY) on 02/25/20. Office location: NY County. LLC formed in California (CA) on 02/04/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: c/o eResidentAgent, Inc., 99 Washington Ave., Ste. 805A, Albany, NY 12210, also the registered agent upon whom process may be served. Address to be maintained in CA: 2029 Century Park East, Ste. 1750, Los Angeles, CA 90067. Arts of Org. filed with the Secy. of State, 1500 11th St., Sacramento, CA 95814. Purpose: any lawful activities.

Notice of Formation of SENIOR YEAR THE FILM LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/03/20. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 301 E. 78th St., 11C, NY, NY 10075. Purpose: Any lawful activity.

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FROM PAGE 3

plan to market.

Their company, Earth & Star, is one of a growing number of businesses betting big on the magic of mushrooms.

These are not the psychedelic variety; they’re medicinal mushrooms. The fungi kingdom contains thousands of them, some of which have properties that help relieve physical, chemical and biological stress and improve cognitive function. These mushrooms— lion’s mane, chaga and reishi—are known as adaptogens or nootropics. They have been used in non-Western cultures for centuries.

Despite their experience and plans to roll out their mushroom-infused beverages in retail stores nationwide this month, Earth & Star’s owners realized they were launching their business during a global pandemic. With customers now focusing more on finding health-preserving foods,

when their website debuts May 1.

Their products include an oat milk cold-brew latte with lion’s mane and chaga, a cocoa with reishi and a 72% dark chocolate bar with lion’s mane and chaga.

“Entrepreneurs are pretty used to being tested by unexpected challenges in the eleventh hour,” said Huss, 44. “We’re just doing what we can to be flexible and keep things moving forward.”

Healthy competition Mushrooms appear to be part of a new direction consumers are ready to follow. In 2018 retailer Whole Foods named medicinal mushrooms a “top food trend.” According to market-intelligence firm Mordor Intelligence, the nearly $6 billion functional mushroom market, of which medicinal mushrooms are part, is projected to grow 6.4% annually through 2024.

“Trend isn’t even the right word.

It’s a movement,” said Elly Truesdell, a partner at Almanac Insights, a food-focused venture capital fund founded by Michelin-star restaurateur David Barber, co-owner of Blue Hill. “[The mushroom market] has seen such exponential growth over the past few years.

People talk about kale and quinoa as the most incredible single plantbased movements of the past decade. Mushrooms absolutely could rise to that level.”

The progress of two major players in this space offers hope for Earth & Star.

Sheldon, Wash.–based Fungi Perfecti was founded in 1981 by leading mycologist Paul Stamets.

The company now sells more than 200 medicinal mushroom products and boasts 70% of the market share.

Stamets also has made a name for himself as a leading expert in the industry, delivering TED Talks and appearing on sports commentator and comedian Joe Rogan’s hugely

“TREND ISN'T EVEN THE RIGHT WORD. IT'S A MOVEMENT” Huss and Sakoutis quickly saw that Earth & Star might have more potential than they had imagined.

“We found that internet searches with key terms like ‘how to boost my immunity’ had skyrocketed,” said Sakoutis, 41. “The monthly searches went from 10,000 to nearly 200,000.”

Although the pandemic has forced the co-founders to shift to online sales, their Earth & Star offerings have not had to change at all. They have six plant-based, dairy-free and organic products locked in. Three will be available

MEDICINAL MUSHROOMS have been named a top food trend. popular podcast.

The other mushroom magnate, Tero Isokauppila, hails from centuries of Finnish farmers. In 2012 Isokauppila launched Four Sigmatic, a Hong Kong–based business that sold mushroom extracts primarily in Europe and Scandinavia.

Three years later he relocated Sigmatic to Los Angeles.

“When we came here, no one was really doing anything with mushrooms and adaptogens,” said Isokauppila, 35. “But in order to change the world, you have to get American consumers on board.”

He initially sold his teas, chocolates and instant coffees online. But

BUCK ENNIS

MUSHROOMS

as of this year, Four Sigmatic has a staff of 40 in three locales—New York City, Los Angeles and Denver—and eight-figure revenues. Its products are available in more than 5,000 U.S. retail stores and 60 countries.

“The growth continues to be rapid,” Isokauppila said, “and we’re just scratching the surface.”

A long history Earth & Star might be the new kid on the block, but Huss and Sakoutis, who met 20 years ago while “slinging drinks” as servers at the Hudson Hotel, aren’t intimidated.

In 2007, with a $5,000 starter loan

from Sakoutis’ brother, they founded BluePrint, one of the earliest cold-pressed juice cleanses. It helped create a multibillion-dollar industry.

The BluePrint concept wasn’t complicated: “Get people to swap out their normal routine for a few days and consume only freshpressed fruit and vegetable juice,” Huss explained, “and make it more accessible, make it a little sexier and present it to a more mainstream audience.”

In 2012 they sold BluePrint to Hain Celestial in a deal valued at more than $26 million.

Their plans for Earth & Star largely mirror the blueprint of their former juice business.

Convenience is a part of their strategy.

“The vast majority of medicinal mushrooms are powders, tinctures, pills and supplements,” Sakoutis said.

Those types of extracts require adding powders to coffee or smoothies and remembering to swallow a pill with breakfast. Not so with Earth & Star.

“We’re taking things people are already consuming regularly,” Huss said of their grab-and-go drinks, “and supercharging them with incredible ingredients and benefits without more work or adding to their routine.”

Bringing the message of medicinal mushrooms to the masses is the other part of their strategy. They want to disseminate what they have learned to consumers who don’t think of themselves as wellness people, Huss explained.

The two women try to do just that on their weekly wellness podcast, “HTW [Heal the World] with Zoe and Erica.”

But it’s not easy to break cultural paradigms. In the U.S., Huss said, it’s thought that something found in the forest can’t possibly be as effective as what a doctor prescribes.

“That’s bullshit,” she said. ■

RETAIL

BY RYAN DEFFENBAUGH

R

etail sales in the U.S. have sunk at a record pace, new data show, as the Covid-19 crisis keeps shoppers home. The value of overall retail sales fell 8.7% in March from February, the biggest decline in records dating back to 1992, according to Commerce Department data released last week.

The number reflects how social-distancing measures have frozen most consumer spending.

Gov. Andrew Cuomo ordered most of New York’s businesses shut down March 19, after California and Washington state began similar policies. Now almost every state has issued a stay-at-home order, and many businesses have been forced to close.

Sales at clothing and accessories stores fell by roughly half compared to March 2019 numbers.

Grocery sales provide a rare bright spot. Food and beverage retailers posted a record 25.6% surge as Americans stocked up on essen-

tial goods.

But restaurants have been crushed by the order. By the end of March, a survey by the NYC Hospitality Alliance found that nearly 70,000 workers at restaurants, bars and nightclubs had lost their jobs.

Low on leases In New York City’s commercial-leasing market, the Covid-19 pandemic has struck hardest in the sectors that had been signing the most new deals before the crisis.

“Food, fitness, entertainment— that’s where the majority of deals have been,” said David Firestein, a partner at SCG Retail. “They have been the stars of retail leasing here since the recession. They are hurting, and we know we are going to lose some of them.”

Food and beverage businesses led all other retail categories in leasing in 2019, according to CBRE data, eating up 670,000 square feet across 208 deals.

The crisis hit the city’s retail market at a time when it was already

struggling, with major retailers such as Barneys, Dean & DeLuca and Forever 21 closing most stores. Average asking rents dropped last year by 9.3%, to $617 per square foot, across 16 shopping corridors in Manhattan, according to CBRE. Now leasing has come to a virtual standstill.

“There may be discussions on growth for some essential-service businesses,” said Patrick A. Smith, vice chairman of JLL Retail Brokerage. “But this is a time of massive indecision and disruption, so any tenant or company will be postponing its decisions.”

Smith said he’s an optimist who believes opportunities for retailers will come up in the longer term.

“But in the short term, their decisions are based on a climate that is pretty bleak,” he added.

Much of the city’s retail industry—both landlords and tenants— has spent the past weeks negotiating on rent. Major corporate chains such as Cheesecake Factory, Urban Outfitters and Calvin Klein have de-

BLOOMBERG

‘Pretty bleak’: Record drop in consumer spending

clared they won’t be paying.

“Smaller tenants and mom-andpops are not usually well-financed, and even some smaller local chains are going to have a hard time coming out of this,” Firestein said. “A shut-down restaurant business is going to have big startup costs. They are trying to hold on to whatever cash they can.”

Even with the record decline, it’s

possible the new national spending numbers are offering a view of retail that is overly positive.

“The March data is bad, but the April data is likely to be even worse because for a good half of March things were still open,” said Michael Gapen, chief U.S. economist at Barclays Plc. ■ With Bloomberg wire reporting

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CORONAVIRUS ALERT

Readers show off their masks New Yorkers have been advised to cover their nose and mouth when out in public to stop the spread of Covid-19. With medical masks in short supply, many have turned to making their own. Crain’s asked readers to send in photos of their homemade masks. Email yours to CNYBEdit@CrainsNewYork.com

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18 | CRAIN’S NEW YORK BUSINESS | APRIL 20, 2020

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GOTHAM GIGS

BUCK ENNIS

WOLTZ’S firm created the public square and gardens at Hudson Yards.

THOMAS WOLTZ AGE 52

Green space fit for the Big Apple

BORN Mt. Airy, N.C.

Hudson Yards’ landscape architect sows history into public parks

RESIDES The West Village and Charlottesville, Va.

BY DIANE HESS

EDUCATION Bachelor’s in architecture, bachelor’s in architectural history and fine arts, and master’s in architecture and landscape architecture, all from the University of Virginia MIX OF WORK Sixty percent of NBW’s work is on public parks. The rest is an even mix of institutional/education, residential, conservation agriculture and hospitality/ mixed-use spaces.

GREEN THUMB Woltz grows beets, radishes, kale, carrots and potatoes in his home garden.

CONSERVATION CONCERN He developed a passion for conservation agriculture in grad school. He realized he could apply lessons learned in the classroom to the crises of pollution and land scarcity.

R

aised on a farm at the foot of the Blue Ridge Mountains in North Carolina, Thomas Woltz looked after his family’s chickens and vegetables. In those formative years, he gained an appreciation for the distinctions in his natural surroundings: the cultivated terrain in the foreground and the woodlands, ponds and rivers in the distance.

“It was a great place to be a child with daily chores and a responsibility to animals,” said Woltz, head of Nelson Byrd Woltz, an awardwining landscape architecture firm with headquarters in New York City and Charlottesville, Va. NBW has worked on several large-scale projects. The firm created the public square and gardens at Hudson Yards and is set to begin work on the Western Yards when it can. NBW was selected as the landscape architect for the planned de-

velopment of Sunnyside Yard in Queens, where it will create neighborhood-scale public parks on the 180-acre site. The firm also transformed a former cemetery at the Brooklyn Navy Yard into a flower-filled park.

Years after taking a job at the practice of his graduate school professor Warren Byrd, Woltz bought half the business in 2004. When Byrd retired, in 2013, Woltz purchased the remaining shares. Since then, revenue has grown 77%. NBW has been responsible for preserving more than 200,000 acres of agricultural land. Woltz has worked all over the U.S. and in countries as far as New Zealand. More than half of the 50-person firm’s business is public parks.

“Our mission is to use design as a way to steward the fragile ecologies that shape our world,” Woltz said.

NBW spends months reviewing primary resources and oral histories on each of its projects. In his re-

search for Hudson Yards, Woltz looked at the Pennsylvania Railroad papers. He found a photo of the drilling of the first hole for the tunnel beneath Hudson Yards, which showed a demolished building on West 32nd Street and 11th Avenue.

The image led Woltz to the idea for a 6-story tower in the middle of the plaza. British artist Thomas Heatherwick designed the Vessel.

NBW conceived of a series of elliptical forms at the tower’s base.

By city mandate, half of Hudson Yards’ 28 acres was required to be landscaped. The challenge for Woltz was to connect his designs to the neighboring High Line and parks.

He envisioned contrasting hues in the pavement, curving walls and places where trees could grow.

“Landscape architecture is so easily reduced to a decoration of the outdoors,” Woltz said, “but it is about parks, public space and agriculture—all the things that keep our societies healthy.” ■

“OUR MISSION IS TO USE DESIGN TO STEWARD THE FRAGILE ECOLOGIES THAT SHAPE OUR WORLD”

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THANK YOU T

o everyone at the frontlines of the pandemic, from health care employees to food services, words cannot begin to express our gratitude.

You selflessly take care of others, putting their needs ahead of your own. In times like these, your strength and resiliency are an inspiration to all.

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