Crain's New York Business by crains-new-york-business

ASKED & ANSWERED How the pandemic brought Blue Apron back to good health

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SAFETY TECH A mix of apps, scanners and sensors is helping staff return to work PAGE 3

JUNE 15, 2020

CORONAVIRUS ALERT DURING THE lockdown, restaurants relied on takeout orders.

Construction rebounds, retail lags as pandemic rules ease Some businesses fear cost of opening will exceed revenue BY BRIAN PASCUS

Owner Robert Schwartz, who reopened his stores last week, said business was down 95% during the lockdown. “We’re living a new script ... and it’s fraught with land mines,” he said. “It’s going to force downsizing on a grand scale.” A whopping 76% of businesses saw revenue decline since the pandemic took hold in New York in

onstruction roared back last week during the first phase of the city’s reopening, but the rebound didn’t extend to small businesses, where sales were muted at best. Coronavirus restrictions in the city began to ease last Monday, allowing the construction, manufacturing, wholesale trade, non-food agriculture, forestry and fishing industries to resume operations. It’s up to Retail stores businesses also opened up, to enforce though they were reopening limited to curbguidelines. side service. Page 8 Construction jumped across the five boroughs, with 33,556 nonessential work sites breaking ground. “The reports I got back are that people are very encouraged,” said Lou Coletti, president of the Building Trades Employers’ Association. “Everyone is being completely cooperative in terms of the protocols that have been established.” Coletti said he has seen his onsite workers participate in social-distancing measures as well as take part in temperature checks and wear personal protective equipment. His union staggered start times throughout the day to keep density down at construction

See SURVEY on page 22

See PHASE ONE on page 2

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A LONG ROAD BACK

EDITORIAL

Covid-19 slashes revenue, shrinks workforce, Crain’s survey shows BY BRIAN PASCUS

ew York City businesses took the first small steps toward reopening last week, but the road back will be a long haul for many of them, according to a Crain’s survey that looked at the economic impact of the coronavirus outbreak. For example, the Covid-19 crisis has all but decimated Eneslow Shoes & Orthotics, a 111-year-old small business with four retail locations in Manhattan and Queens.

NEWSPAPER

VOL. 36, NO. 22

SURVEY SAYS

76%

PERCENTAGE of companies/ nonprofits that lost revenue since Covid-19 hit NYC

52%

MEDIAN DECLINE in revenue during the pandemic period compared to a year ago

FINANCE

A lender helps wounded firms find relief PAGE 3

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GOTHAM GIG

MEET A COVID-19 CONTACT TRACER

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CORONAVIRUS ALERT

he de Blasio administration won’t support a bill to provide struggling landlords with property tax relief because it threatens to curtail one of the city’s few remaining significant revenue streams just as it faces a $9 billion shortfall. But some lawmakers and property owners say the real estate industry could grind to a halt without that relief. “We have to help both sides of the equation in order to prevent a

staff and obviously pay the City of New York.” The council is considering a bill that would defer property tax payments for commercial owners struggling because of the pandemic. The move would provide cash to landlords, who are tasked with maintaining their properties without the same rental income. But it would be at the cost of the city’s tax revenue, the single largest source of income New York receives each year, at a time when other revenue shortfalls brought on by Covid-19 have sent the city into a fiscal crisis. The administration won’t support the bill, sponsored by Councilwoman Margaret Chin of the Lower East Side, unless it is narrowed to include fewer businesses, said Jeffrey Shear, deputy commissioner of the Finance Department. The properties eligible for relief currently are those assessed at $250,000 or more, whose owners collectively pay 70% of the city’s yearly property tax income, Shear said.

THE BILL WAS MEANT FOR SMALL LANDLORDS ONLY, SAID ITS SPONSOR collapse of the real estate market and the economy,” City Councilman Kalman Yeger said during a finance committee hearing. “If we are talking about doing something for the tenants, we have to be able to recognize that on the other side of that tenant is a landlord who has to maintain the building, pay their

WEBCAST CALLOUT

PHASE ONE FROM PAGE 1

JUNE 16 LIFE AFTER COVID-19: HOW THE PANDEMIC WILL CHANGE HEALTH CARE As New York wrestles with the most devastating outbreak in recent history, a question emerges: What longterm effects will Covid-19 have on healthcare in the tristate area? Top industry professionals will discuss their biggest takeaways from the pandemic, and what they foresee happening in the future.

CrainsNewYork.com/June16HPWebcast

sites. “Safety has always been our first priority,” he said. “We’re trying to recapture the work that has been lost.” With the thaw on the economy has come increased reliance on the city’s embattled transportation sector. The Metropolitan Transportation Authority has opened subway lines at near-regular daytime service. The authority anticipated 400,000 riders per day during week one. Instead, it reported that ridership hit 800,000 Monday, 17% higher than the previous week. There had been a 90% drop in service during the height of the pandemic in the city. “Here’s what it tells me: Customers are coming back,” MTA Chairman Patrick Foye said.

“The vast majority of businesses would qualify, regardless of the size of the property and the amount of taxes due,” he said. “Even if a fraction of eligible businesses opted into this program, the city’s cash position would likely be severely affected.”

Paying up Chin said the legislation was meant to help small landlords, not big ones. “A lot of these buildings depend

said, business has not approached typical sales. The store relies on neighbors and tourists dropping in and browsing. “We have many, many items in small quantities, so that’s been a challenge for launching an e-commerce platform," Parker said. “But we’re hoping this can offer a new way to present ourselves to customers.”

Getting back to normal Elsewhere on her stretch of Amsterdam Avenue, shoe stores have set up outdoor racks, and a fabric shop has hung out samples. “Everyone is just trying to find their way right now,” Parker said. Looking at car traffic as an indicator of business activity, the change last week was small. According to TomTom, traffic congestion levels were 10% higher than they were two months ago during the shutdown. Despite the positive atmosphere surrounding the long-anticipated reopening, city business owners remain apprehensive about many elements of the economy. The Brooklyn Chamber of Commerce last week surveyed 161 business owners in manufacturing, retail, restaurants, health care and nonprofits. Forty-five percent said the biggest hurdle they were facing was an inability to afford rent, utilities, licenses and

“HERE’S WHAT IT TELLS ME: ‘CUSTOMERS ARE COMING BACK”’ Many retail shops tried to get back into the swing of things. Sylvia Parker restarted Magpie, her 400-square-foot Upper West Side gift boutique, Tuesday. Even with an online presene, she

on commercial tenants’ rent to pay property tax,” Chin said, noting that many commercial tenants have shut down their business. But the city should not pass a bill that would provide relief to property owners who are able to pay their taxes, George Sweeting, deputy director of the Independent Budget Office, said. Michael Forrest, a landlord on the Lower East Side, testified that the bulk of his revenue came from a restaurant that has shut down.

other expenses. A quarter said staff not returning to work is their biggest concern. Thirty-five percent said they did not pay rent in June. Twenty percent said their landlord gave them a concession for rent this month. “A lot of them fear that the cost of reopening is going to be greater than revenue,” said Loraine Lowe, membership director at the Brooklyn Chamber of Commerce, who managed the survey. “To retool their business—to do less business than they had done before—is concerning to them. They are not really certain it is going to be worth it.” Even construction’s blistering reboot is at risk, stemming from revenue crunches in two of the city’s largest public agencies. The MTA received $3.8 billion from the federal government in the CARES Act and requested $3.9 billion more, which has yet to be approved. Many projects associated with the authority’s $53 billion 2020–24 capital improvement plan remain in doubt. Furthermore, the Port Authority of New York and New Jersey, which handles the region’s airports and bridges, recently said it will not be able to complete critical

Mark Miller, another landlord, said he has attempted to work with his commercial tenants on rent agreements, but he has received radio silence and still faces the same overhead costs he always has. Even if property taxes are deferred, landlords still would face additional interest charges for paying late, multiple lawmakers and property owners complained last week. Chin’s bill would cut the interest payments that property owners have to hand over for late taxes from 18% to 7.5%. Landlords said that fee was still too high. “The city is actually taking advantage of the pandemic to create a profit,” said Robert Altman, an attorney for the Queens and Bronx Building Association. The late fee is high, Shear said, because the city relies on properties worth a quarter of a million dollars to pay their taxes on time. It’s one of the last steady sources of income left for the city, Sweeting said. “IBO suggests treading carefully,” he said, “lest the city risk undermining its most important revenue source.” ■

THE MTA has installed footprints in subway stations to encourage social distancing.

GETTY IMAGES

BY GWEN EVERETT

BUCK ENNIS

Property tax relief would send city finances closer to the brink

upgrades without $3 billion in fedthe eral assistance. Carlo Scissura, president of the New York Building Congress, said that without federal funding, many of the city’s construction projects could grind to a halt. “The funding to the capital program from the MTA and Port Authority remains critical pieces of our future,” Scissura said. “The city of New York will be facing some challenges, but we have to ensure that the money continues to be there and that things move forward.” In Scissura’s mind, the fact that construction is off to such a great start in phase one shows the demand for brick-and-mortar business is still there. “The bottom line is, we need to build,” he said. “Getting this economy moving in New York and across the country is going to take building and infrastructure projects.” ■

Vol. 36, No. 22, June 15, 2020—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for bimonthly in January, July and August and the last issue in December, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: call 877-824-9379; fax 313-446-6777. $3.00 a copy; $129.00 per year. (GST No. 13676-0444-RT) ©Entire contents copyright 2020 by Crain Communications Inc. All rights reserved. 2 | CRAIN’S NEW YORK BUSINESS | JUNE 15, 2020

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CORONAVIRUS ALERT

COURTESY OF PURSUIT

THE TECH KEEPING WORKERS 6 FEET APART MACKRELL

Financial doc is in A lender helps wounded companies secure much-needed relief funds

BY AARON ELSTEIN

hen small-business owners can’t pay their banks, banks call Patrick MacKrell, the financial world’s critical care doctor. MacKrell is chief executive of Pursuit, a lender that helps wounded companies get back on their feet by dispensing loans and advice to a client base that’s more than a third women- and minority-owned businesses. The financial doctor has his hands full these days, but MacKrell insists it’s nothing he hasn’t seen already in his 19 years at the helm. “We’ve plowed these fields before,” he said. “One of our skill sets is running crisis programs.” TOTAL AMOUNT of Paycheck After SuperProtection storm Sandy, Program loans Ma c K re l l that alternative worked with lenders have city officials on helped secure, a program that according to started pumpSmall Business ing $25 million Administration into inundated data businesses a day after the rain stopped. More recently, AVERAGE his firm helped AMOUNT of run the city’s each individual $20 million business loan Small Business Continuity Loan program, which provided up to $75,000 in grants. Now Pursuit is one of several under-the-radar lenders that have mobilized to help get Paycheck Protection Program funding to businesses deemed by traditional banks to be too small or

A mix of apps, scanners and sensors is helping staff return to work safely BY RYAN DEFFENBAUGH

etting a little too close to your coworker? This device will let you know. In Newlab’s building at the Brooklyn Navy Yard, roughly 80 essential workers who reported to the office during the pandemic have tied on fabric harnesses and iPhone-size sensors that vibrate and flash when the employees are less than 6 feet apart—the transmission range for Covid-19. The device, from StrongArm Technologies, a startup at the Navy Yard, also logs how close and for how long the people came into contact. That information could be vital for understanding where and when a worker was exposed if he or she tests positive for Covid-19. See TECH on page 21

NEWLAB is using wearable sensors from StrongArm Technologies to warn workers when they get too close.

$18B

NEWLAB

$60K

See PURSUIT on page 19 JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 3

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As racial inequity takes center stage, museums confront their pandemic layoffs

useums looking to show solidarity with the Black Lives Matter movement now must reckon with cuts they made in the heat of the pandemic, which quietly made their already disproportionately white workforces even whiter. In a statement in support of the protests against the killing of George Floyd by police in Minneapolis, the Metropolitan Museum of Art said it would work on the diversity problem it has within its walls. It’s a problem made worse by the museum’s recent decision to lay off 84 security and visitor-services staffers. A far greater proportion of black, Latino and Asian people are employed in those roles than in the museum overall, a 2019 report by Southern Methodist University DataArts shows. There’s a similar story at the Whitney, the Museum of Modern Art and others across the city. Many put out statements in solidarity with Black Lives Matter but recently had scaled back parts of their workforce with better representation by people of color. Museums say cuts made during

satisfy advocates, who say art institutions have spent years sidestepping diversity within their own walls even as their mission statements laud inclusivity. And as the most elite art organizations pledge to re-examine their workforces, many will find racial divides. “Museums are very white spaces,” said Camilo Godoy, an educator at the Whitney.

Diversity problem Sixty-six percent of employees at New York City museums are white, more than double the proportion of white people in the city as a whole, the SMU report found. The few areas where that is not true are in the frontline staff, which includes museum educators, security, facilities and visitor-services employees. “It is very, very, very clear when you see, for example, who is curatorial and who is in leadership positions and who is in janitorial and who is in security. Those are very racial distinctions that are a product of living in a racist society,” said Godoy. It rings hollow to support the Black Lives Matter movement in a statement but not the jobs of black people and other people of color within the institution, he said. “Black Lives Matter is not just a political statement but also a hiring statement,” he said. It may also be a financial imperative. Last year the Department of Cultural Affairs required every member of the Cultural Institutions Group, the organization of 34 museums, including the Met, that are housed in city-owned buildings, to adopt equity and inclusion plans or risk a 10% cut to aid they get from the city, said Ryan Max, a spokesman for the department. All complied, and none saw that cut, he said.

“BLACK LIVES MATTER IS A POLITICAL STATEMENT AND A HIRING STATEMENT” the pandemic were out of financial necessity. With their buildings shuttered, they expected to lose millions of dollars. But as the nation shifts its attention from the pandemic to protests, institutions will need to answer for their staffing decisions, including those made at the height of the outbreak. The letters of solidarity have done little to

BUCK ENNIS

BY GWEN EVERETT

But museums clearly have a diversity problem. Some of the most sought-after jobs in the museum world overwhelmingly go to white hires—three-quarters of curators, for example, are white, according to the report. Meanwhile 80% of security staff at city museums are people of color, and around half are gift shop clerks, visitor-services staff and educators, according to the report. And those jobs were the first to go during the pandemic. Besides the Met’s layoffs, the Whitney cut 76 from visitor services in light of the pandemic, while the MoMA laid off as many as 85 educators. MoMA says it remains diverse and has more than 850 employees committed to rejecting racism, a museum spokeswoman said. At the Whitney, staff cuts became unavoidable even after reducing other parts of the budget, said director Adam Weinberg. At the Met, layoffs

to frontline staff were necessary because overall visitor numbers were down, Chief Communications Officer Ken Weine said. It’s true that the layoffs at MoMA and other museums constituted a fraction of the entire workforce. And some of the cuts were made to parts of the operation that were less relevant during the shutdown. Still, museums should recognize the racial and socioeconomic implications of any layoffs they make, said Alison Wade, chief administrator of the Association of Art Museum Directors, adding that most museums have been thoughtful. The AAMD, which sets standards of practice for museums nationally, also criticized the industry for not doing more to foster diversity. “As a community, I do not think museums have done enough,” said Chris Anagos, executive director of AAMD. “We have dabbled around the edge of the work, but in our

place of privilege, we will never live up to the statement that ‘museums are for everyone’ unless we begin to confront, examine and dismantle the various structures that brought us to this point.”

A long way to go The Whitney and the Met both pledged last week to look at their hiring practices as part of their anti-racism reforms. But former advocates and museum employees took to Twitter to say those institutions have a long way to go. “I remember going to HR at my last job to complain about my boss’s strategic move to only hire white candidates,” said Kimberly Drew, who previously ran social media for the Met. “The HR rep I spoke to was a person of color. She did nothing to help, took no notes. I wept in my office after.” She tweeted, “Ask me how many POC are on the team now.” ■

REBNY’s guidelines for in-person showings BY NATALIE SACHMECHI

ooking to rent or buy a home during the pandemic? Make sure you pass a health screening test before you schedule a viewing. The Real Estate Board of New York launched six sets of guidelines Tuesday for making commercial and residential real estate deals during the second phase of Gov. Andrew Cuomo’s reopening plan. Each one includes a nonmandatory health survey among other precautions agents and brokers should take when working with clients. The health questionnaire has just three questions, which are designed to determine if there is a

chance of contagion. If anyone has had contact with someone who had Covid-19, was infected or has been experiencing symptoms of the illness in the previous two weeks, an agent can refuse to schedule an in-person showing with that client.

Person to person “The ongoing coronavirus crisis has required our industry to rethink and retool to safely conduct business in the coming months,” REBNY President James Whelan said. Virtual showings are still considered the safest way to do business, though they aren’t much help for clients, who know that real estate listings do not necessarily reflect

the actual space. For in-person showings, agents who are REBNY members will be asked to sign a release form that warns them and clients coming to see a property of the risk of catching the virus. In-person showings are restricted to vacant or unoccupied units, and clients shouldn’t touch anything inside. After each showing, the unit must be cleaned by the agent to prepare for the next viewing party or a possible move-in. REBNY has issued guidelines for handling keys, too. They should be disinfected after being used, and agents should avoid touching keys that haven’t been cleaned. Lockboxes are a great way to reduce hand-to-hand contact when show-

ing units, the association suggests. Other guidelines for in-person showings: Minimize traffic in buildings and elevators and within units. Have alcohol-based hand sanitizer or hand soap and paper towels within the unit, provided by the landlord or superintendent for agents’ use. If these cleaning supplies are not available, agents should arrive prepared to clean the space. Do not leave any waste generated from PPE or cleaning supplies in any space or unit. Anyone may cancel or postpone a showing without penalty upon any indication of flulike symptoms. Anyone attending a showing must wear a mask during the entire

session, or it can be canceled. Prior to arriving at the building or unit, everyone’s temperature should be below 100.4° F. The agent, landlord or super should arrive before the client to open doors and cabinets and to turn on the lights so that clients don’t have to touch anything in the unit. Agents should open windows to bring in outside air. If a unit is too small for 6 feet of distance between the people inside, then only one person should be allowed in at a time. No one should be shaking hands. The second phase won’t begin until after the city has gone through two weeks for the first phase— which could be as soon as June 22, depending on Cuomo’s orders. ■

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CORONAVIRUS ALERT

Temperature checks authorized for office workers BY JANON FISHER

BUCK ENNIS

SAFETY CHECK: Subway workers will hand out 5.2 million masks and pairs of gloves.

MTA’s back-to-work plan emphasizes cleaner system BY BRIAN PASCUS

hey were scrubbed. They were rested. They were ready. The Metropolitan Transportation Authority unveiled a 13-point plan for phase one of the return to work in the city. Cleaning and sanitizing the notoriously grubby transit system has been the key to getting the city's economy moving again.

MTA CEO and chairman. Subways returned to regular weekday service, halting during the overnight hours. Buses—including express buses—were back to regular weekday services in all boroughs except Manhattan, which will have 75% of service.

Squeaky-clean wheels Commuters are encouraged to travel at off-peak hours to avoid overcrowding the system. The MTA made more than 2 million masks available in subway stations. Floor markings indicate where best to stand to promote social distancing and avoid further Covid-19 infections. Foye praised the MTA’s essential workers and highlighted new procedures, including more than 7,100 cleanings per day, 200,000 temperature checks, the distribution of

“OUR GUIDING PRINCIPLE ... HAS BEEN SAFETY ... OF CUSTOMERS AND EMPLOYEES” Subways, buses and transit trains will be sanitized regularly with UV light, antimicrobials and electrostatic applicators. Hand sanitizer will be available at stations and stops. Air filters will be replaced more frequently, said Pat Foye,

5.2 million masks and pairs of gloves, and rear-door boarding. “Our guiding principle throughout has been safety—safety of customers and employees,” Foye said. Even with the increased cleaning and use of protective equipment, there have been more than 130 MTA-wide Covid-19-related fatalities. Foye projects that by phase four subway ridership will come back strong. “Getting to 70% or 80% ridership beginning in phase four would be a dramatic increase in ridership and would address the precipitous drop in revenue,” he said. “Our obligation is to move those folks,” said Sarah Feinberg, the New York City Transit Administration’s acting president. “Our compact with riders is, for $2.75, we pick you up and take you from where you are to where you need to go,” she said. “We do it safely and efficiently.” ■

Massive apartment on Billionaires’ Row sells for $28M BLOOMBERG A FULL-FLOOR APARTMENT near the top of Manhattan’s One57 just sold for $28 million. The condo, on the 88th floor and featuring postcard views of Central Park, sold on May 29, according to city records. The seller paid $47.4 million for the unit when it was completed in 2014. The city’s records indicate the buyer and the seller may be related. That suggests the resale price, a 41% discount from the original price, is not necessarily indicative of the unit’s true market value. The seller was not a third party, according to a person familiar with the matter.

The recorded sales price would record that stood until last year. mark the biggest discount to date at Now buyers at One57 have inthe 1,004-foot skyscraper, once the creasingly been trading their homes icon of Manhattan’s at a loss as new projects ultra-luxury condo proliferate in Manhattan boom, said Jonathan and create a glut of highMiller, president of apend choices amid slackening demand. praiser Miller Samuel. In 2017, resales at the Extell Development THE AMOUNT tower averaged 25% less broke ground on One57 the apartment than their 2014 purchase in 2009 while many other was discounted prices, according to Millprojects were sidelined from its 2014 by the Great Recession. er Samuel data. sale price With little competition, Continued weakness the condo tower quickly in the ultra-luxury mardrew global investors, who paid ket has been amplified by the globlarge sums for homes they rarely al pandemic as well as the higher lived in. mansion and transfer taxes imA penthouse at the tower in 2014 posed by the state last year, Miller sold for $100.5 million, a city price said. ■

PRICE CHOP

41%

Mercury in retrograde The order also allows buildings to bar entry to anyone with a temperature above a level set by the state Health Department. High fevers have been one of the most consistent giveaways of Covid-19 infection, and the governor said he hopes to prevent a

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emperature checks could be required for all city office workers returning to the job during the first phase of reopening the economy. Under an executive order signed by Gov. Andrew Cuomo, commercial buildings can refuse entry to anyone who refuses to have their temperature taken. “We’re giving commercial buildings the right to take the temperature of everyone who walks in the building,” Cuomo said. "

spike in cases. “It’s not just your health,” the governor said. “It’s the people you could infect.” The edict also reopened houses of worship at 25% capacity during phase two. The governor’s order will allow bars and restaurants to use the street and sidewalk space around their location to serve food and drinks to patrons. Similar legislation is currently pending in the City Council. ■

Profit • ability (n): The advantage Grassi Healthcare Advisors brings to your healthcare business. grassihealthcareadvisors.com

JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 5

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IN THE MARKETS

Lemonade searches for insurance market sweet spot

The company tries to set itself apart as a purpose-driven organization

THE WORLD OF INSURANCE HAS BEEN ONE OF THE HARDEST TO DISRUPT

LEMONADE has captured more than 7% of the New York renters market.

ALAMY

Uber, WeWork and other fallen stars. “The S-1 feels a lot like Uber’s,” said Nick Colas, co-founder of DataTrek Research. His observations are worth heeding because ahead of the e-hailing app’s muchhyped IPO last year, he gracefully laid out how— contrary to the story told by well-wishers—Uber was no Amazon. Still, in a little more than three years, Lemonade says, it has captured 7% of the New York renters insurance market, and ELSTEIN 70% of its customers are younger than 35—giving it a client base it can serve for years. Like other unicorns, Lemonade tries to set itself apart by marketing the company as a purpose-driven organization. Specifically, it says that every year it will donate “excess premiums” to nonprofits such as Teach for America and UNICEF. The company said it believes doing good will help it do while net losses more than doubled, well by lowering its cost of claims. “We believe customers are less to $109 million. The company’s investors include SoftBank, backer of inclined to embellish claims, as ecause I can’t think of anything people love less than paying premiums or filing claims, I admire the folks at Lemonade, a SoHo-based startup whose goal is to create “the world’s most loved insurance company.” If Wall Street can sell the stock at a lofty price, investors have lost their minds. Then again, we all know love can do funny things. Lemonade’s plans for an initial public offering, spelled out in an S-1 form filed last Monday, hark AARON back to a kinder, gentler era when there was great excitement for IPOs in companies known as unicorns. Like others in the species, Lemonade grew fast last year, with revenue tripling, to $67 million,

they would be hurting a nonprofit they care about rather than an insurance company they do not,” Lemonade said. It’s worth a try. The world of insurance has been one of the hardest to disrupt, even though most insurers aren’t exactly dynamic companies and there’s a tremendous pile of money to attract upstarts, with $1.2 trillion in net premiums written in 2018, according to S&P Global. One of the most successful startups, Manhattan-based small-

business insurer CoverWallet, was acquired in January by Aon, a huge insurance broker.

Heavily regulated Insurance is a tough nut for startups to crack because it’s heavily regulated, with each state imposing different requirements. Generally speaking, the term “fintech” describes startups with businesses designed to sidestep most or all of the regulations governing banks and other financial

institutions. Insurance startups also struggle because the business is particularly difficult when interest rates are really low. Warren Buffett’s companies and a handful of other players can charge enough in premiums to cover costs—what the industry calls an underwriting profit—but many others price policies low and hope to make the money needed to pay claims by investing wisely in the markets. That’s an especially difficult balancing act when U.S. government bonds return close to zero. Unlike other “insuretechs” that specialize in marketing policies written by others, Lemonade plans to write its own and sell them to reinsurers to minimize its exposure to big claims. It’s also betting superior technology will help it operate more efficiently and attract customers more cheaply than the incumbents. Even so, DataTrek says there’s no clear break-even point for Lemonade’s business model. On the other hand, its prospects for growing into a sustainable enterprise look better than Uber’s. “At least you don’t need self-driving cars to make money selling insurance,” Colas said. ■

ON NEW YORK

New offices outside Manhattan depend on millennial lifestyle after Covid-19 Developers are building projects closer to where workers live

ater this year a new need to be where the talent is,” said 500,000-square-foot office MaryAnne Gilmartin, who spent building will open in Down- years working on the development town Brooklyn with the lat- of Brooklyn and is now part of the est technology, including finger- Queens consortium. “That talent is print scanning, options for predominately in the boroughs and especially Brooklyn and individual air-conditionQueens.” ing units for tenants, high Developers, brokers ceilings, no columns and and business leaders say no elevator buttons. One the pandemic has made Willoughby Square, said the case for relocating developer Morris Jerome, employees to Brooklyn is the perfect building for and Queens stronger than the post-pandemic world ever. The long-term trend in the perfect place. of some companies—esMeanwhile in Queens, a pecially so-called innovaconsortium of four devel- GREG DAVID tion economy compaopers working on a proposal for a Long Island City water- nies—moving to those two front property once planned for boroughs to tap the talented young Amazon’s second headquarters has professionals who live there has now become the best way for the city to develop additional business districts that can shorten comrevamped its plan to increase the mutes and allow many employees amount of office space to 5 million to walk or bike. Of course, the space or 6 million square feet in the belief is much cheaper than in Manhatthat the new normal will compel tan, and the renewal of the Relocacompanies to locate closer to where tion and Assistance Program incentive in the budget passed in the their employees live. “Companies need talent and spring cuts rents by an additional

THE BROOKLYN NAVY YARD AND INDUSTRY CITY HAVE MADE THEMSELVES DESTINATIONS

$10 to $15 a square foot. They don’t have any leases yet to prove their point. More important, their plans depend on two crucial assumptions. One is that working from home will not reduce the demand for office space so much that no new space is needed. The other is that the millennials and young families who have transformed Brooklyn and Queens remain committed to the city, and the pandemic and economic shutdown haven’t made the group more interested in moving to the suburbs or beyond. Brooklyn, in particular, had already established itself as a home to technology and media companies, with both online craft seller Etsy and Vice Media headquartered there. The Brooklyn Navy Yard and Industry City have made themselves destinations for a combination of innovative manufacturing companies, design firms, film studios and sports teams, including the NBA’s Brooklyn Nets. “Companies were discovering the waterfront, with affordable places, more green space and shorter commutes, before the pandemic,” said Andrew Kimball, chief executive of Industry City. “That is our leasing model.” Industry City says it is close to signing a lease with a firm that

had planned to move to the Hudson Square neighborhood before employees balked at returning to Manhattan. Cost remains a key to luring companies. Asking rents in Industry City are bracketed around $30 a square foot, with Downtown Brooklyn and Long Island City at about $50. The renewal of the REAP tax credit in the state budget provides an annual tax break of up to $3,000 per employee for 12 years, reducing the effective rate by anywhere from $10 to $15 a square foot. The average asking rent in virtually all of Manhattan in the first quarter was $75 a square foot, with tax incentives limited mostly to downtown and Hudson Yards.

Crowded commutes The pandemic has made this proposition more compelling, both because people are wary of crowded commutes into Manhattan and because the city’s stated commitment in both the Bloomberg and de Blasio administrations to a five-borough economy has become even more of a necessity. For example, the key selling point of Downtown Brooklyn is that so many people can walk to their job, said Brooklyn Partnership President Regina Myer. When businesses start

to look for space in Long Island City, added LIC Partnership President Elizabeth Lusskin, they discover many of their employees already live there. The outer boroughs can be the city’s best defense against a flight to the suburbs, Lusskin added. Landlords and developers have instituted a variety of strategies to pursue office tenants for Brooklyn and Queens. Industry City says it is open to leases of any length as companies want to make only short-term decisions while the long-term consequences of the pandemic are sorted out. “Tenants are asking, ‘Can we move somewhere for a year or two?’ ” said leasing director Kathe Chase, who allows companies to take more space or less as needed. However, if the work-from-home experience of the pandemic proves to be long-lasting and companies like Facebook remain convinced that eventually half the workforce will be doing that, there simply may be no need for additional office space. If the millennials and young families who have flocked to Brooklyn and Queens decide the city is no longer for them, the argument for being located where the talent is evaporates. ■

6 | CRAIN’S NEW YORK BUSINESS | JUNE 15, 2020

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CORONAVIRUS ALERT

Unemployment will put state Medicaid to the test

nrollment in New York’s Medicaid program could grow by hundreds of thousands of beneficiaries as workers lose their jobs—and their health insurance— as part of the economic shock waves generated by Covid-19. A new analysis from the United Hospital Fund found the state is better equipped to handle a spike in workers seeking Medicaid benefits than during the Great Recession of 2007 through 2009. “The infrastructure that’s in place to connect people to coverage right now is significantly more robust than it was in the Great Recession,” said Nathan Myers, director of UHF’s Medicaid Institute. Between February and April alone, New York’s Medicaid enrollment had a net gain of 136,000. That monthly growth rate would be four times as large as the monthly rate during the first 12 months of the Great Recession. Enrollment also tended to lag behind spikes in unemployment. “That suggests we might see a long tail in Medicaid enrollment growth,” said Emily Arsen, a senior research analyst and the lead author

of the report. “People will be more incentivized to seek health coverage because they’re concerned about their health in a way they weren’t in the Great Recession, and accessing Medicaid coverage is substantially easier than it was.” Since that financial crisis, New York created its New York State of Health marketplace to allow people to sign up for Medicaid, Child Health Plus, Essential Plan and Qualified Health Plan coverage. Plans are expecting more customers buying coverage for themselves after losing job-based insurance. Some who think they might have to shell out more than $1,000 a month for a family plan may find they qualify for subsidized products. The Essential Plan debuted in 2016 as an option for New Yorkers who aren’t eligible for Medicaid because of their income or immigration status. It’s an insurance product heavily subsidized by the federal government and could make coverage accessible to more people during the economic downturn. New York already covers about 6 million people under Medicaid, which is about 2 million more than its enrollment number in Decem-

136K

NET GAIN in New York’s Medicaid enrollment between February and April of this year alone

400K

INCREASE in Medicaid enrollment during the twoyear Great Recession ISTOCK

BY JONATHAN LAMANTIA

ber 2007. That figure is expected to grow. During the two-year recession, Medicaid enrollment grew by more than 400,000.

Projected increase The Urban Institute last month estimated changes in insurance status for each state based on how many people are unemployed. It projected an increase of 641,000 Medicaid enrollees in New York if the state unemployment rate is 15% and a 1.2 million increase if state unemployment reaches 25%.

The state’s unemployment rate rose to 15% in April, compared with 3.6% in the same month in 2019. The economic downturn comes as New York was already struggling to keep up with the costs of its $70 billion Medicaid program, in which it shares cost with the federal and local governments. It implemented a $2.2 billion savings program, reducing funding for hospitals and long-term-care providers, as part of the budget passed in April. Gov. Andrew Cuomo has warned that the state may need to reduce spending by 20% if it doesn’t receive addi-

tional federal support. New York is getting some help. One of Congress’s earliest coronavirus relief packages included a 6.2 percentage point increase in the federal government’s contribution to Medicaid costs. But the timing of the Covid-19 pandemic, which occurred just as the Trump administration was implementing its new public-charge policy in February, could adversely affect immigrants. The rule could make it harder for immigrants to obtain a green card if they access certain public benefits, such as federally-funded Medicaid. “There’s an equity aspect in access to Medicaid, particularly immigrant communities who might be concerned about public charge, and making sure they’re eligible to enroll in Medicaid,” Arsen said. More people are returning to work now that the city has entered phase one of the reopening plan and Long Island and Westchester County moved to phase two. Phase two allows for more office-based businesses to reopen as well as real estate services. But the state’s hardhit hospitality sector, which shed about two-thirds of its jobs in April, will remain closed. ■

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JUNE #1 15,Refresh 2020 | Print CRAIN’S NEW YORK BUSINESS | 7 Northwell_w352800_SABHH Ad_Crains HP_10.25x7 Size: 10.25” x 7”, HP, PC Publication: Crains New York Business P007_CN_20200615.indd 7

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president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer

EDITORIAL

associate publisher Lisa Rudy

Business owners should tread carefully when reopening

EDITORIAL editor Robert Hordt assistant managing editors

Christine Haughney (special projects), Janon Fisher, Gabriella Iannetta (digital)

It’s easy to forget our recent past, especially given the many signs that New York is on the upswing both medically and economically. We are past the dark moments when as many as 800 New Yorkers died in a single day from Covid-19. The economy, at the very least, seems to be heading in the right direction: The number of New Yorkers receiving unemployment peaked the week of May 16 and has since declined, according to data from the Bureau of Labor Statistics. Workers are returning to construction jobs, manufacturing sites and retailers as part of phase one. Phase two is expected to take place next month with the reopening of office-based jobs, real estate firms and full retail. But it’s also a key moment for New Yorkers not to forget what we all have gone through in the past few months. They sadly must remember not to hug old-time customers when they return to their sidewalk cafés. Bar owners can’t pack revelers into their establishments, and store owners must enforce requirements that shoppers wear masks or we could go back to square one.

IT’S IN EVERYBODY’S BEST INTEREST TO KEEP TAKING THIS SERIOUSLY nightlife establishments and cramming workers into construction sites to add yet another imposing tower to our skyline. It remains essential that businesses tread carefully when they reopen so they don’t face another outbreak that could hurt them even more in the long run.

Frederick P. Gabriel Jr.

senior editor Telisha Bryan

STORE OWNERS must enforce requirements that shoppers wear masks.

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, Natalie Sachmechi columnist Greg David contributors Tom Acitelli, Ronald DeCicco,

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

www.crainsnewyork.com/staff 212.210.0100 685 Third Ave., New York, NY 10017-4024 BLOOMBERG NEWS

s the city ticks through its phases of reopening, business owners here face one of the biggest responsibilities they’ve ever had in their careers. As the world watches, they will be New York’s ambassadors, appearing on news networks around the world as they reopen their doors and implement the practical realities that come with reopening our recovering metropolis. But with these new ambassadorial roles comes great responsibility. In the enthusiasm of reopening, it’s enticing to return to the old ways of before—packing crowds into the city’s hottest

publisher/executive editor

ADVERTISING

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

Stuart Smilowitz, Tori Weil account executive Devin Cavallo integrated marketing manager Jonathan Yan,

If that doesn’t convince you, here are the real financial costs of doing that: Crain’s previously reported that in March and April the city lost 870,000 jobs. That’s more than what it lost in the recession from 1969 to 1977. The drop in March and April also wiped out most of the 992,000 jobs added between 2009 and 2019. Let’s not

make these numbers any worse. Even though it is tempting to ramp up business to make up for lost time, New York will end up losing business this summer if everything has to close down again. It’s in everybody’s best interest to keep taking this seriously and make sure their customers do too. ■

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

OP-ED

www.crainsnewyork.com/events

Reject the rhetoric that demonizes police

manager of conferences & events

Ana Jimenez, ajimenez@crainsnewyork REPRINTS director, reprints & licensing Lauren Melesio,

212.210.0707, lmelesio@crain.com PRODUCTION production and pre-press director

BY PATRICK LYNCH

roken glass and merchandise in the streets. Burning trash barrels on corners. Block after block of plywood-covered storefronts. The sobering scene in SoHo and Herald Square and Fordham Road marked the return of an old enemy, especially for the police officers who patrolled the same streets in the 1970s, ’80s and ’90s. During the city’s decay years, our biggest foe was not just crime and disorder but the fear of crime and disorder. That fear is back. Owners of businesses large and small have been demanding answers from our city leadership: How did this happen? In the city with the nation’s largest and most sophisticated police department, why did we experience three consecutive nights of violent unrest and unchecked looting? From the perspective of the cops on the street, here is what happened: Our elected leaders and NYPD

management sent us out without a clear plan, adequate resources or a strong message of support. We were told to use a “light touch” in policing peaceful demonstrations—something we already do successfully, thousands of times each year. But when the bottles, bricks and Molotov cocktails started flying, there was no clear strategy to address the violence. And when the sun came up, leaders in City Hall and Albany demonized police officers as if we were the problem, as if we broke the windows and caused the violence. It was the same pattern we saw earlier this year, when New York state’s disastrous bail-reform law sent crime soaring. Many elected leaders responded by first pointing the finger at law enforcement, accusing us of fearmongering or manipulating statistics. Only after an overwhelming outcry from a worried public did the elected officials even attempt to fix the law itself. There is a fundamental disconnect between many of the calls for

“fairness” in policing and the criminal justice system, and the basic public safety our city needs to survive. They are not mutually exclusive, but too many of our lawmakers are treating them as if they are. Unfortunately, that disconnect is getting worse. In a knee-jerk reaction to the mob in the street, state legislators have passed a raft of bills that will have a chilling effect on law enforcement. And city elected officials are being led down an even more extreme path, under the vague “Defund the police” slogan.

Stakeholders not at table Common sense and democratic values have been in short supply. Law enforcement professionals are being barred from a seat at the table. So are leaders in business and finance, who are the engine of the New York economy. So are the small-business owners, who have been battered by the pandemic shutdown and now are pouring more money into protecting their businesses from property damage

and looting. In the absence of a rational conversation, fear takes hold. It will take all of us, working together, to change that. New York police officers brought our city back from the brink decades ago, but we didn’t do it alone. The renaissance was possible only because we had the backing of our elected leadership, support from the business community and support from regular New Yorkers in every neighborhood. We can do it again, but only if our city rejects the rhetoric that demonizes police officers and tries to separate us from our communities. We can do it again, but only if our city and state slow down the frenzied response to protests in which lawmakers are passing bills first and reading them later. We can do it again, but only if we have your support. ■

Simone Pryce media services manager Nicole Spell SUBSCRIPTION CUSTOMER SERVICE

www.crainsnewyork.com/subscribe customerservice@crainsnewyork.com 877.824.9379 (in the U.S. and Canada). $3.00 a copy for the print edition; or $129.00 one year, for print subscriptions with digital access. Entire contents ©copyright 2020 Crain Communications Inc. All rights reserved. ©CityBusiness is a registered trademark of MCP Inc., used under license agreement. CRAIN COMMUNICATIONS INC. chairman Keith E. Crain vice chairman Mary Kay Crain president K.C. Crain senior executive vice president Chris Crain secretary Lexie Crain Armstrong editor-in-chief emeritus Rance Crain chief financial officer Robert Recchia founder G.D. Crain Jr. [1885-1973] chairman Mrs. G.D. Crain Jr. [1911-1996]

Patrick Lynch is president of the Police Benevolent Association of New York.

8 | CRAIN’S NEW YORK BUSINESS | JUNE 15, 2020

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OP-ED

Commercial real estate has another public health problem Sharply reduced water flow is a recipe for bacterial amplification

AP PHOTOS

BY CHRISTOPH LOHR AND TERENCE O’BRIEN

Change the streets, change the city BY JOHN MASSENGALE

he protest marches on our city streets demand our attention. But with phase one of the economic reopening starting last week, we need to think about how to use those public spaces to survive the fallout of the pandemic. Even before the reopening, there were twice as many people driving into Manhattan than we saw at the lowest point in April. Mayor Bill de Blasio has put the responsibility for fixing that on New Yorkers. He said commuters will have to “improvise” how they get to work. “I really want to push back on the notion that we can solve everything all the time,” de Blasio said. That’s not good enough. We can’t mire the recovery process in regulations and bureaucracy. Here’s a multipronged plan that can help reopen and renew New York City. We need to act quickly, before out-of-town drivers reclaim city streets for their cars. Other American cities are already widening sidewalks and opening

must be closed to car traffic. Any cars or delivery trucks on the street will have to share the space with people. European experience shows, perhaps counterintuitively, that these shared-space streets are much safer for everyone than the standard New York street, where the center is reserved for moving cars as pedestrians are kicked to the side of the road.

Renew New York If we don’t help them immediately, many businesses will not come back. Restaurant and store owners and employees need to go back to work if they are going to survive. Even before the lockdown order, many storefronts in the city and across the state were empty. De Blasio and Manhattan Borough President Gale Brewer have proposed a tax on vacant storefronts to counter the problem. Another solution would make use of those vacancies. The city could help fill those shops by providing free space for three months. To get the storefront for free, the tenant moving in signs a contract agreeing either to begin paying rent after three months or to move out. They tried it in Australia, and many of the spaces have gone to makers and artists, who have successfully incubated new businesses.

WE NEED A NETWORK OF OPEN STREETS THAT PEOPLE CAN USE streets to restaurants. We need what tactical urbanists call lighter, quicker, cheaper strategies for opening our streets in new ways before a surge of drivers makes that impossible. We need a network of open streets that people can use to hike and bike around the city, and we need that network to connect to streets with retail businesses, so that stores and restaurants can reopen successfully. The open streets we have now are scattered here and there, in isolation, and they don’t support the needs of stores and restaurants. Cities, including Portland, Ore. and Philadelphia, are already working on such a plan.

Helping store owners If we allow restaurants to have widely spaced dining tables and stores to have display tables, social distancing will push pedestrians out into the streets, which

Positive changes Unless we act quickly, the most likely scenario for the future of New York is that cars will come back in higher numbers than before, local businesses will fail, storefronts will remain empty, and hundreds of thousands of New Yorkers will be unemployed. We can do better. For the health of New Yorkers and the planet, we don’t want to go back to the old status quo. Americans are marching in the streets to improve the future. Changing how we use those streets in everyday life would change how we live. Change the streets and change the city. ■

unique and unintended health hazard lies in wait for tenants of shuttered commercial buildings poised to reopen in the coming weeks: potentially harmful microbes in stagnant water systems. Because of stay-at-home orders, building water systems and the municipal supply lines that feed them have experienced dramatically reduced flow, even total stagnation, as

square feet of normally busy commercial space idle, creating the perfect breeding ground for waterborne microbes, the threat is exponentially worse. Building owners and managers must take the issue seriously.

Systemic failure The science behind the phenomenon is well documented. City water systems were designed for increasing volumes based on projected population growth trends. Drinking-water disinfectants, such as chlorine, depend on system-design calculated flows, which include a short time to consumption in order to be effective. A near-overnight shutdown of water flow in large buildings has increased “water age,” allowing chlorine and chloramine disinfectant levels to dissipate, thus causing a systemic failure of a building’s entire water network. Even if individual owners attempt to do the right thing by flushing systems, there is no guarantee they will return chloramine levels to where they need to be for safe operating. Because chlorine breaks down relatively quickly (think how often pH levels in a swimming pool must be checked), traditional drinking-water disinfection meth-

BUILDING OWNERS CAN SEIZE A RARE MOMENT TO MAKE IMPORTANT HEALTH AND WELLNESS UPDATES the offices, hotels, retail stores and other public spaces they service have been left vacant for months. Public health officials and plumbing experts know this is a recipe for dangerous, perhaps deadly bacterial amplification such as Legionella pneumophila, the microbe that causes Legionnaires’ disease. An almost annual outbreak already infects pockets of the city’s cooling towers during summer months. This year, with millions of

ods might contribute to a critical failure under these unique circumstances. A study by a water systems expert, Dr. Victor Yu of the University of Pittsburgh, finds that L. pneumophila is already prevalent in complex building water systems. Approximately 70% of 3-story and taller buildings regularly test positive for the bacteria, for instance. Given the ready-made conditions for microbial infection, obsolete guidance and conventional standard practices simply are not enough to properly ensure tenant and visitor safety. Water professionals including engineers, licensed master plumbers and contractors have a great opportunity to make a positive difference as New York City continues to reopen by improving the safety of critical water supply systems. Likewise, building owners can seize a rare moment to make important health and wellness updates, many for the first time in decades. The question is, will they? ■ Christoph Lohr is director of education and strategic projects at LiquiTech. Terence O’Brien is an executive vice president at the Association of Contracting Plumbers and senior director of the Plumbing Foundation City of New York.

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

John Massengale is an architect, urbanist and educator in New York City. JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 9

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INSTANT EXPERT

What you need to know about the MTA’s reopening BY BRIAN PASCUS

THE PLAYERS

After facing the gravest crisis in its multi-decade history, the Metropolitan Transportation Authority reopened last week. Subways are running at full service during the day in all boroughs except Manhattan, where service was expected to be at 75%, the MTA said. The subway system is continuing its overnight shutdown from 1 to 5 a.m. for cleaning and repairs. Express bus service is back. The Covid-19 pandemic created a huge challenge for the authority. Ridership fell 90% from pre-pandemic levels. Overnight service was canceled, and billions of dollars were lost. Moreover, MTA workers were at risk; 130 have died since March of Covid-related symptoms. The agency reopened in phase one—with a slew of new innovations to improve safety and efficiency for the estimated 400,000 New Yorkers returning to work—but problems still hang over arguably the city's single most important public benefit corporation.

WHAT’S NEXT

The MTA has announced a 13-point plan as it ramps up its service during reopening. The plan, which is focused on efficiency, safety and cleanliness, includes staggered bus hours, contactless payments and disinfectant procedures. Commuters are encouraged to travel during off-peak hours. It won’t be clear until later in the year what percentage of ridership returns to pre-pandemic levels—and what sort of revenue the MTA can collect.

EVEN WITH EMERGENCY FEDERAL FUNDING, THE MTA BUDGET IS STILL STARVED FOR CASH

The MTA is run by Chairman Pat Foye, who caught the coronavirus earlier in the spring. The gruff, straight-shooting CEO has overseen a monumental sanitizing campaign. He has been criticized, however, particularly by John Samuelsen, FOYE Transport Workers Union president, who has attacked Foye for the MTA worker deaths and for not offering hazard pay to frontline staff. Sarah Feinberg, interim president of New York City Transit, is the face of the MTA. Feinberg has been on the ground, overseeing the reopening of dozens of MTA stations across the city, ones that now include floor markings to help with social distancing, hand-sanitizer booths and free masks. She has been a lightning rod for criticism during her tenure, especially for her stance on homeless people’s use of the subways and the perception by the de Blasio administration that she is merely a surrogate for Gov. Andrew Cuomo. MTA’s chief development officer Janno Lieber, the capital-projects mastermind. During the pandemic, Lieber has overseen improvements. He now has an additional $2 billion from Cuomo; that is for constructing 11 ADA stations, rehabbing the 138th Street–Grand Concourse station, and making improvements to the F train’s Rutgers Tube.

PHOTOS: GETTY IMAGES

THE ISSUE

YEAH, BUT…

The most important point to remember about the MTA’s phased reopening is that the authority now faces a fiscal crisis. Plummeting ridership correlated to cratering revenue. The MTA lost about $125 million per week during the pandemic, and the authority expects to lose $6.5 billion on the year. Spending is not stable, as the MTA pays roughly $17 billion in operating costs per year and $1 for every $6 taken in to service its $53 billion outstanding debt. The MTA received $3.9 billion in federal funding from the Cares Act, and Foye has requested an additional $3.9 billion in emergency funding so operations can continue this year. Even with more federal help, though, the operating budget will be starved for cash. Fares, tolls, real estate taxes and city and state subsidies finance operations. With the city’s economy in a fiscal crisis itself, it’s unclear how much lower the MTA revenue pool will be.

SOME BACKGROUND

Things were not always so dire for the transportation authority. In fact, Cuomo was all smiles in January, when he signed off on a four-year, $53 billion capital improvement plan to run until 2024. The new capital plan would have paid $7.1 billion for modernized signals, $2.6 billion for track replacement and $4.1 billion for station improvements. Thousands of new subway and bus cars would have been purchased for the MTA. But now the ambitious improvement plan is in doubt, especially because it was to be financed in part by Cuomo’s $15 billion congestion-pricing plan, which is caught in federal limbo. The MTA also relies heavily on the municipal bond market to finance projects. But the yield curve has remained unpredictable. The MTA can’t afford improvements if investors abandon those bonds.

10 | CRAIN’S NEW YORK BUSINESS | JUNE 15, 2020

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6/12/20 1:25 PM

ASKED & ANSWERED

LINDA FINDLEY KOZLOWSKI Blue Apron

INTERVIEW BY RYAN DEFFENBAUGH

he meat shortages and restaurant closures brought on by Covid-19 left a lot of people thinking about how to get their food. Blue Apron CEO Linda Findley Kozlowski felt there was an opportunity for subscription meal kits to bring goods directly to people faced with bare supermarket shelves, and investors agreed. The Manhattan-based company’s share price climbed from a bargain-basement $2 on March 13 up to $16 five days later. By early June, its stock price hovered around $11. How did the demand for Blue Apron’s products change at the start of the pandemic?

We saw a 27% spike if you compare the first three weeks of March with the first three weeks of April. We couldn’t immediately fulfill all of that demand because we are a physical product company, we are manufacturing food, and we have a lot of safety requirements.

DOSSIER WHO SHE IS CEO of Blue Apron BORN Greensboro, N.C. LIVES Chelsea EDUCATION Bachelor’s in corporate communications and journalism, Elon University; master’s in journalism and public relations, the University of North Carolina at Chapel Hill BLUE APRON’S MARKET CAP $131 million CHIEF CUSTOMER A home cook since age 5, Kozlowski has scooped up more than 300 delivery boxes from Blue Apron, dating back to before she joined the company in April 2019. “I’m now up to three meals a week from two. I’m obviously cooking from home a lot more now.” TURNAROUND SPECIALIST Similar to the situation with Blue Apron, Etsy’s stock was nearing a record low when Kozlowski arrived as chief operating officer. The e-commerce website’s share price soared during her tenure. “I saw in Blue Apron a similar opportunity to leverage an incredible brand.”

How long did it take to catch up?

We hit about 22% of demand in the early stages, so we ramped up hiring and continue to hire. The history of Blue Apron means we have quite a bit of fulfillment center capacity, a lot of automation equipment and investment in real estate. It was mainly about getting the right labor. We hired about 450 people and were able to meet the demand within a few weeks.

Does all the new interest from customers signal that there could be a shift in how often people stay home to cook

versus how often they’ll go to restaurants moving forward? It will never be an all-or-nothing proposition. There are some days to order takeout, some to eat at a restaurant, and others you cook. But we are seeing that people are more comfortable than ever cooking from home.

How did you keep employees in the warehouse safe? We are FDA-regulated and a Safe Quality Food–certified facility, which is the world-class sanitation standard. We are able to use security footage to keep visuals on people in case we need any contact tracing. We are also implementing temperature checks and mandating mask usage.

When do you anticipate office staff returning?

We are not putting a timeline against it. We want to make sure we have the right transportation options, that everything is in place to work safely in the office. When are day care and schools accessible? Our time now is focused on keeping the essential workers in our fulfillment centers safe.

You’ve worked for Evernote in Silicon Valley and for Etsy and Blue Apron in New York. How are the two tech scenes different?

One thing I love about New York is the diversity—diversity of people as well as jobs. There are a variety of facets to the technology companies here. There are financial institutions, consumer businesses, artistic institutions. That pushes our thought process to look at problems from different angles. ■

What’s Next for New York? In the special “New York Next” issue on June 29, Crain’s New York Business will highlight the people and businesses who are helping the greatest city in the world get back on its feet after the Covid-19 pandemic. This highly read keepsake issue will include personal stories of tragedy and triumph from leaders across health care, real estate, hospitality, banking and other industries that call the city home.

Contact Lisa Rudy at lrudy@crain.com for more information. Don’t wait! Reserve your space by Thursday, June 18.

JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 11

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GROW YOUR BUSINESS AT

HARBORSIDE

The Waterfront renovation planned for 2020. Inset: Harborside in the 1980s.

SAVVY BUSINESS OWNERS CHOOSE THE WATERFRONT DISTRICT FOR ITS UNIQUE, LONG-TERM ADVANTAGES

A commuter’s dream. An architectural vision. A livable neighborhood. A city within a city. Harborside’s unique location; adaptable economic network; and eye-catching and walkable design makes it the ideal place to grow a business in challenging times.

with an array of carriages bound for Newark, Elizabeth, Trenton and Philadelphia. Today, ferries continue to make the five-minute trip across the Hudson, giving commuters and tourists an efficient and pleasant way to travel between Harborside and Manhattan.

Minutes from downtown Manhattan, the Jersey City waterfront has long held a geographic advantage for businesses who’d like to maintain access to the New York market (and New York employees) while paying New Jersey prices. The recently redeveloped Harborside adds to those benefits—commercial and residential neighborhood with gorgeous architecture, living spaces for every lifestyle, foot-trafficheavy retail spaces and destination eateries.

HARBORSIDE AT HOME . . . Harborside’s city-within-a-city design offers residents a range of living spaces and a unique urban lifestyle. At Urby, residents live in a stylish city apartment that feels spacious and well-designed. Urby residents enjoy a huge saltwater pool, their own pocket park made for summer barbecues and casual hangs, and the dog-friendly Woofgarden. Urby’s shared amenities emphasize sociability and fun, and a full calendar of special events ensures you’ll never be stuck with nothing to do when normal life resumes.

Harborside’s elements work so well together, because they’ve been built up organically—beginning with the community. “The MICHAEL J. DEMARCO, CEO OF first thing we did MACK-CALI REALTY CORPORATION was set up tables and chairs outside. Just tables and chairs. We wanted to see if people would sit outside, if they’d take the ferry. And they did in droves,” recalled Michael J. DeMarco, CEO of MackCali Realty Corp. “Then we added music. We added food vendors. We brought a food hall. More people kept coming. From the beginning it’s been about inclusivity, bringing people together. You feel good when you’re there.”

“WE REACT TO THE COMMUNITY … WE OPEN OUR DOORS TO LOCAL GROUPS.”

As social distancing measures relax and people hungry for human interaction (and something tastier than their own cooking) step out of their doors seeking community, Harborside is built to meet that demand. 100 YEARS OF HISTORY Harborside’s open, light-loving architecture strikes a contemporary figure and offers indoor views of the Hudson River and the New York skyline. But everywhere in the modern design you will find links to the district’s storied past. Dark metal finishes and natural wood elements celebrate a proud history as an industrial center and port. In the District Kitchen, a buzzing food hall, a tiled floor sports black and white stripes that recall the district’s historic food mart, while wall-size photos capture the complex’s industrial heyday. The oldest building in the complex goes back to 1930, when the Pennsylvania Railroad built it as a storage facility. Three years later, the building was repurposed as a railway distribution center and renamed Harborside Terminal. But the waterfront’s importance stretches back even further. The Jersey City Ferry began operations in 1764, long before any bridges or tunnels connected New Jersey to Manhattan. It became the first ferry service in the world to use steam power in 1812, and through much of the 19th century Jersey City was one of the busiest stations in the world. For generations, people and freight destined for New York got off a train at the Jersey City waterfront to board a ferry for the last leg of the journey. Passengers leaving New York and disembarking in Jersey City were met

The BLVD Collection comprises three high-rise buildings with more than 1,200 apartments and 30,000 square feet of curated lifestyle amenities, including full concierge service, state-of-the-art fitness centers, chic clubrooms, a heated outdoor pool, a community greenscape with outdoor seating and an exclusive sky bar and lounge. Offering studio, one-, two-, and three-bedroom residences, The BLVD Collection’s units feature hardwood floors, gourmet kitchens, top-of-theline finishes and appliances, walk-in closets, in-unit washer/dryers, floor-to-ceiling windows and spacious terraces in select units. Proximity to Manhattan is a strength, but you don’t need to leave the district to find excitement and inspiration. For residents, Harborside is more than a home base. It’s a home. . . . AND AT WORK Harborside’s prime office space, retail space, anchoring culinary hotspots and host of amenities make it a dream home for commercial space. Underpinning it all is the area’s ideal location. When Exchange Physical Therapy Group outgrew its first Jersey City location in 2018, owner and physical therapist Jaclyn Fulop moved the practice to Harborside. Since relocating, EPTG has seen a 30% increase in visits. Fulop credits the foot traffic at Harborside, as well as the new location. “I have clients from New York who come over on their lunch breaks from One World Trade Center because it’s so convenient,” she said prior to the coronavirus pandemic. “It was a game changer. Even though it was only a move of a few blocks, it was much more convenient to people who want to come in, get their physical therapy and get out.”

Lobby at Harborside. Photo by Ben Gancsos.

Since Harborside’s makeover began, the developers worked to cultivate a diverse ecosystem of retailers to drive foot traffic. Jersey City coffee roaster Modcup Coffee had already built a devoted following for its delicately roasted brews, when developers invited its mobile coffee truck, and flock of loyal customers, to Harborside. According to co-founder Travas Clifton, Modcup sold coffee outside what would become District Kitchen as the developers auditioned other vendors for the food hall. Once the makeover was complete, Modcup

Lobby at Harborside. Photo by Ben Gancsos.

Har

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JERSEY CITY BY THE NUMBERS There’s plenty happening on this side of the Hudson, and it’s all happening in Jersey City. A fast-growing city with a booming arts, food and lifestyle scene, Jersey City has become famous for its livability:

MOST LIVABLE CITY IN THE U.S. In 2016, a study by SmartAsset determined that Jersey City’s abundance of economic opportunities and affordable cost of living made it the most livable city in the country.

moved its operation indoors and is now an anchor business at Harborside. DESIGNED WITH FOOD IN MIND Harborside was designed as a destination for foodies, and the core of that identity lies in the District Kitchen, the food hall housed in a historic industrial warehouse. Inside, a curated selection of area restaurateurs offer travel-worthy fare of every variety. At District Kitchen, you’ll find fresh-roasted coffee with complex flavor notes, Neapolitan pizza baked in a traditional wood-fired oven, authentic North Indian comfort foods, Liege Belgian waffles and all-natural burgers, all under one roof. The culinary experiences extend beyond District Kitchen’s doors. DomoDomo, an award-winning Asian-inspired New York restaurant, opened its second location at Harborside’s Urby building. DomoDomo Jersey City serves the restaurant’s famous hand rolls, sushi and constantly changing “domokase” menu seven days a week. CULTURE MATTERS Far from simply being a commercial complex, Harborside is a place where people live as well as a destination for entertainment and enrichment. Before shelter-in-place orders, Harborside boasted a full calendar of cultural events, including community gatherings, yoga meet-ups, poetry slams and historical presentations. “We react to the community,” DeMarco said. “We open our doors to local groups. We’ve hosted ethnic events; beer, wine and whiskey tastings; craft fairs; and events for women’s rights groups and anti-drug alliances. And if the tenants want a Christmas party, we’ll do that too.”

Harborside waterfront.

LOCATION, LOCATION, LOCATION Underlying Harborside’s many advantages is one enduring strength: its unique and coveted location. Sitting just across the Hudson from

lower Manhattan, and served by multiple transit systems, Harborside is closer to New York than many parts of New York are to the other boroughs. And a light rail system puts the rest of New Jersey within reach. Crucially, it’s a strength that will outlast economic setbacks. Commuters can pick among several quick and convenient transportation options. By ferry, Battery Park is five minutes away. By PATH, it’s four minutes to the World Trade Center. Harborside makes it easy to travel by car as well, with discounted on-site parking and abundant Ubers and Lyfts. Bear in mind that it takes the average New Yorker 35.9 minutes to get from home to work and the benefit becomes clear. At Harborside, you spend less time commuting and more time living. Whether you’re a resident commuting to Manhattan or a New Yorker working in Harborside, you’re practically there already. But most importantly, Harborside isn’t just near the action—it’s a vibrant, beautiful place to live with a community and nightlife all its own. Residents and commuters alike gathered in Manny’s District Lounge to stretch out on leather couches, sip cocktails, play billiards and unwind in the kind of refined, industrial ambiance you can only find here. And when social distancing restrictions ease, they will do it once again. Harborside’s growth began long before the last recession, and it will continue after this one. “At Harborside, you’re minutes away from New York City and all the potential clients, customers and markets there, but you’re also in a prime location for Jersey City,” said Maria L. Nieves, president and CEO of the Hudson County Chamber of Commerce. “The waterfront on Jersey City has grown tremendously in the last 20 years. And Hudson County and Jersey City are the economic drivers for the entire state.”

MOST DIVERSE CITY IN THE U.S. Jersey City was ranked by WalletHub the most diverse among the 501 largest American cities in 2017, 2018 and 2020.

10TH GREENEST CITY IN THE U.S. NerdWallet looked at a range of factors including air quality, transportation, energy sources and housing density to determine the greenest cities in America in 2015, placing Jersey City in the top 10.

FASTESTGROWING TOWN IN NEW JERSEY. Jersey City gained 17,487 residents between 2008 and 2017, making it the fastest-growing town in the state, according to data from the U.S. Census Bureau.

We design for good. And build for better.

We weave together world-class living and working environments with local retail, dining, public spaces, and the arts, for results that are driving the Gold Coast forward. Our portfolio, strategically connected to New York City, offers everything from class A offices, to boutique flex spaces, and more. With thoughtful amenities, spacious floorplates, and immediate proximity to abundant outdoor spaces â&#x20AC;&#x201D; the well-being of our tenants and communities is our main priority.

mack-cali.com

CN019739.indd 1

Harborside 3 210 Hudson St, Suite 400 Jersey City, NJ 07311

6/9/20 1:40 PM

CORONAVIRUS ALERT

Albany pandemic bill could change commercial insurance industry forever

Measure targets clauses that exclude liability for business interruption induced by a virus BY BRIAN PASCUS CARROLL’S BILL allows for the Department of Financial Services to create a fund to reinsure small businesses.

GETTY IMAGES

lbany is trying to intervene on behalf of small businesses to force insurance companies to pay up for losses suffered due to the pandemic shutdown. Assemblyman Robert Carroll has introduced a bill seeking to hold the entire industry liable for business interruption insurance claims denied to businesses because of fine print in insurance contracts. Carroll is targeting the clauses that exclude liability for traditional business interruption induced by a virus—ones typically reserved for e-coli on food—for the coronavirus. “It is within the state’s power to say that we are retroactively finding these clauses unconscionable and null and void, starting on day one of the emergency and running through when the emergency is over,” Carroll said. “Furthermore, we are saying it’s for businesses under 250 employees, legit small businesses that don’t have bargaining power.” Carroll’s bill allows for the Department of Financial Services and the state’s other insurance regulators to create a backstop, a fund, out of the commercial insurance industry’s surplus capital to reinsure small businesses. Carroll estimates the entire industry’s surplus to be as high as $1 trillion. “They say if they paid out every bill of every claim in New York State that it would cost them $30 billion a month and they are sitting on $1 trillion in reserves,” he said.

fire insurance, property insurance, and casualty insurance—then that would equal $800 billion, giving the industry a total of $1.4 trillion, in theory, to cover pandemic losses. “We can take $1.4 trillion in theory and apply it,” he hypothesized. “But it’s not going to solve the problem, and you will bankrupt the property and casualty industry.” Dedman said the estimated business interrupted insurance losses of all U.S. companies are between $250 billion and $350 billion per month. He said Carroll’s bill, if adopted across the United States after becoming law in New York, is enough to cover only four months of claim payouts, while leaving the entire industry bankrupt. “I’m not saying the efforts are not appropriate. Something has to be done. But the simple assumption that the insurance industry has the money to pay for this is not accurate,” he explained.

SOME SMALL-BUSINESS OWNERS FEEL THE PROTECTIONS OFFERED BY THE BILL ARE LONG OVERDUE Carroll told Crain’s his bill has 40 co-sponsors in the Assembly and 16 co-sponsors in the Senate. He said he expects it to be taken up after lawmakers confront the social justice legislation related to the ongoing Black Lives Matter protests. But those who work in the insurance industry and arbitrate insurance disputes question both the legality of the bill and the feasibility of asking the insurance industry to use the money it keeps in reserve for traditional claims to establish a retroactive fund. Marc Dedman, an attorney at Barton LLP and a business and insurance specialist, estimates the commercial insurance industry took in $600 billion in premiums in 2019. He believes if all industry reserves are taken together—and this includes worker’s compensation,

Constitutionality Others have questioned the bill’s constitutionality. Article 1, Section 10 of The Constitution states the state shall make no laws impairing the obligation of contracts. “Problem one is retroactively forcing an insurance policy to cover what it does not cover,” said Erin Collins, vice president of state affairs at the National Association of Mutual Insurance Companies. “It is problematic in that it changes the

contract retroactively, which is unconstitutional.” Dedman agreed with this assessment, citing the dangers retroactive policy would have on all contracts. “If you can do it for an insurance policy does that mean they can do it for any other contract we enter into?” he wondered. “It’s potentially a very dangerous precedent for the stability of the markets and contracting.” Carroll defended his bill and believes he has history on his side. “It’s totally constitutional,” Carroll said. “This idea that we’re going to upend 500 years of property rights is crazy.” Carroll cited how housing contracts in the 1950s and 1960s were voided due to discriminatory language in the deeds against minorities. He also attacked the fact that insurance companies hid the clauses excluding pandemic coverage and did not disclose the exclusion to those owners who signed their contracts. “Insurance companies tricked them,” he said, arguing actuaries, lawyers, and epidemiologists realized in the early 2000s that a global pandemic in the future would put their entire economic model at risk and warned insurance companies ahead of time. “New York is a fair arbiter. We won’t allow large corporations to take advantage of small businesses and consumers.” As for the concern that the insurance industry doesn’t have enough capital to pay out the business interruption claims, Carroll argues that many policyholders won’t be able to make a claim because their

businesses weren’t interrupted, as some restaurants moved to online delivery services, while other businesses were able to mitigate damage to their business models that would lower the claim amount.

‘It would be amazing’ Some small-business owners feel the protections offered by the bill are long overdue. Susannah Koteen’s Harlem Italian restaurant, Lido’s, was just one of many that had to shut its doors during the pandemic. After fighting for her PPP loan, Koteen feels relieved some help could be coming on the insurance side. “It would be amazing,” she said. “There’s such a huge problem. We don’t have any income coming in. There’s rent, there’s vendors, there’s insurance, and none of that goes away when you’re closed.” Koteen admits she signed her insurance policy under the assumption that pandemic coverage would be included. “I was surprised. When we were ordered to close, I contacted my broker and he told me that no insurance covers it,” she said. “Seems like it’s always the case, just exactly when you need it, they don’t cover what you need.” Other restaurant owners admit they should’ve read the fine print more carefully before they signed their insurance policy and that it doesn’t seem legal to void the contract. “This is a document, we paid the bill, I hate to say it’s on me, but I probably should’ve paid more attention,” said James Mallios, owner

of the Greek restaurant Calissa in Southampton. “I’m not a fan of retroactively passing laws that invalidate contracts that were valid when you signed them.” One alternative solution to the plight of business owners might be a federal program structured along the same lines at the Terrorism Risk Insurance Act, which was passed in 2002 after 9/11 to give business owners and the insurance industry mutual protection in the event of a terrorist attack. TRIA is a joint effort by insurance companies to pay additional monies into a state fund. The federal government subsidizes it as well so there is money available to subsidize losses that otherwise wouldn’t be available. Dedman believes a pandemic risk insurance act would be an equitable solution to the massive losses small businesses suffered during Covid-19. “TRIA, exactly,” Dedman said. “That’s a good prototype to look at.” Rep. Carolyn Maloney has introduced a bill into Congress that would backstop insurers’ coverage of pandemic events with the promise that the government would cover a portion of their losses, up to $750 billion per year. The difference between Maloney’s federal bill and Carroll’s state bill is one seeks to protect businesses from future pandemics while the other seeks payouts for Covid-19 losses. “It’s the job of the state to protect small businesses that by some estimates employ 60% of state workers,” Carroll said. ■

JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 15

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1 THE LIST LARGEST HOSPITALS New Yorkâ&#x20AC;&#x201C;area institutions ranked by operating expenses 2019 OPERATING EXPENSES (IN MILLIONS)/ % CHANGE VS. 2018

2019 NET PATIENT REVENUE (IN MILLIONS)/ % CHANGE VS. 2018

2019 NUMBER OF CERTIFIED BEDS

2019 NUMBER OF AMBULATORY CARE VISITS

2019 INPATIENT DAYS

HOSPITAL/ ADDRESS

PHONE NUMBER/ WEBSITE/ NETWORK AFFILIATION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

New Yorkâ&#x20AC;&#x201C;Presbyterian Hospital 1 525 E. 68th St. New York, NY 10065

212-746-5454 nyp.org New Yorkâ&#x20AC;&#x201C;Presbyterian

Steven Corwin, M.D. President, chief executive

$6,486.9 +15.0%

$6,470.3 +13.6%

2,795

2,491,197

854,934

NYU Langone Health 2 550 First Ave. New York, NY 10016

212-263-7300 nyulangone.org NYU Langone Health

Robert Grossman, M.D. Medical school dean, chief executive of health system

$6,082.5 +45.5%

$6,087.8 +52.0%

2,104

1,659,163

492,653

Memorial Sloan Kettering Cancer Center 1275 York Ave. New York, NY 10065

212-639-2000 mskcc.org Independent

Craig Thompson, M.D. President, chief executive

$5,288.9 +12.8%

$4,560.2 +14.8%

514

1,454,836

173,678

Montefiore Medical Center 111 E. 210th St. Bronx, NY 10467

718-920-4321 montefiore.org Montefiore Health System

Philip Ozuah, M.D. President, chief executive

$4,153.3 +6.1%

$4,158.9 +6.2%

1,558

4,419,188

518,067

Long Island Jewish Medical Center 270-05 76th Ave. New Hyde Park, NY 11040

516-470-7000 northwell.edu Northwell Health

Michael Goldberg Executive director

$3,068.5 +4.2%

$2,972.1 +5.1%

1,621

1,067,095

447,113

Mount Sinai Hospital 1 Gustave L. Levy Place New York, NY 10029

212-241-6500 mountsinaihealth.org Mount Sinai Health System

David Reich, M.D. President

$2,896.7 +7.8%

$2,887.8 +6.4%

1,362

1,011,448

391,340

North Shore University Hospital 300 Community Drive Manhasset, NY 11030

516-562-0100 northwell.edu Northwell Health

Jon Sendach Executive director

$2,888.0 +11.3%

$2,546.0 +11.7%

859

1,137,212

295,477

Stony Brook University Hospital 101 Nicolls Road Stony Brook, NY 11794

631-444-4000 stonybrookmedicine.edu Stony Brook Medicine

Carol Gomes Chief executive, chief operating officer

$1,742.5 +4.8%

$1,647.5 +11.2%

819

398,185

223,589

Hackensack University Medical Center 30 Prospect Ave. Hackensack, NJ 07601

551-996-2000 hackensackumc.org Hackensack Meridian Health

Mark Sparta President, chief executive

$1,732.3 +6.9%

$1,871.0 +10.9%

781

511,060

237,461

Lenox Hill Hospital 100 E. 77th St. New York, NY 10075

212-434-2000 northwell.edu Northwell Health

Jill Kalman, M.D. Executive director

$1,479.0 +9.6%

$1,312.0 +10.2%

634

265,560

127,108

Maimonides Medical Center 4802 10th Ave. Brooklyn, NY 11219

718-283-6000 maimonidesmed.org Independent

Kenneth Gibbs President, chief executive

$1,374.0 +6.9%

$1,359.2 +4.4%

711

509,721

214,673

Mount Sinai St. Luke's Roosevelt 3 1111 Amsterdam Ave. New York, NY 10025

212-523-4000 mountsinaihealth.org Mount Sinai Health System

Arthur Gianelli, Evan Flatow, M.D. Presidents

$1,350.4 +6.1%

$1,178.7 +11.2%

1,009

515,907

212,712

Hospital for Special Surgery 535 E. 70th St. New York, NY 10021

212-606-1000 hss.edu Independent

Louis Shapiro President, chief executive

$1,312.9 +8.2%

$1,084.4 +8.1%

215

18,554

46,804

NYC Health and Hospitals/Bellevue 462 First Ave. New York, NY 10016

212-562-4141 nychealthandhospitals.org NYC Health and Hospitals

William Hicks Chief executive

$1,085.0 +7.0%

$812.4 -1.0%

912

526,419

212,863

Staten Island University Hospital 475 Seaview Ave. Staten Island, NY 10305

718-226-9000 northwell.edu Northwell Health

Brahim Ardolic, M.D. Executive director

$1,046.0 +10.1%

$1,025.0 +9.6%

666

947,725

211,048

Mount Sinai Beth Israel 4 First Avenue at East 16th Street New York, NY 10003

212-420-2000 mountsinaihealth.org Mount Sinai Health System

Jeremy Boal, M.D. President Scott Lorin, M.D. President, Mount Sinai Brooklyn

$1,024.0 +1.4%

$820.1 -1.3%

908

585,331

146,460

17 18 19 20 21

New Yorkâ&#x20AC;&#x201C;Presbyterian Brooklyn Methodist Hospital 506 Sixth St. Brooklyn, NY 11215

718-780-3000 nym.org New York-Presbyterian Regional Hospital Network

Robert Guimento President

$1,000.0 -1.8%

$960.6 -4.4%

591

291,372

190,651

New Yorkâ&#x20AC;&#x201C;Presbyterian Queens 56-45 Main St. Flushing, NY 11355

718-670-2000 nyp.org/queens New Yorkâ&#x20AC;&#x201C;Presbyterian

Jaclyn Mucaria President

$972.0 +12.2%

$873.1 +4.7%

535

513,395

171,410

St. Francis Hospital 100 Port Washington Blvd. Roslyn, NY 11576

516-562-6000 stfrancisheartcenter.chsli.org Catholic Health Services of Long Island

Charles Lucore, M.D. President

$965.8 +4.1%

$961.6 +4.5%

364

10,952

101,164

NYC Health and Hospitals/

718-245-3131

Sheldon McLeod Chief executive

$959.2 +3.9%

$750.7 +13.6%

624

627,209

156,706

451 Clarkson Ave. Brooklyn, NY 11203

NYC Health and Hospitals

Saint Barnabas Medical Center 94 Old Short Hills Road Livingston, NJ 07039

973-322-5000 rwjbh.org/saintbarnabas RWJBarnabas Health

Stephen Zieniewicz President, chief executive

$865.2 +7.8%

$895.3 +7.6%

597

343,137

RANK

CountyBUSINESS | JUNE 15, 2020nychealthandhospitals.org 16 | CRAINâ&#x20AC;&#x2122;S Kings NEW YORK

P016_P017_CN_20200615.indd 16

HOSPITAL LEADER

164,926

6/10/20 11:25 AM

1 1 1 12 2 32 42 52 62 7 8 9 1 1 1 1 1 1 1

RAN

Â? Â? Â&#x20AC;

1 1 1 2 2

019 AYS

934

653

678

067

113

340

477

589

461

108

673

712

804

863

048

460

651

410

164

706

926

Mount Sinai Beth Israel 4 First Avenue at East 16th Street New York, NY 10003

212-420-2000 mountsinaihealth.org Mount Sinai Health System

Jeremy Boal, M.D. President Scott Lorin, M.D. President, Mount Sinai Brooklyn

$1,024.0 +1.4%

$820.1 -1.3%

908

585,331

146,460

New Yorkâ&#x20AC;&#x201C;Presbyterian Brooklyn Methodist Hospital 506 Sixth St. Brooklyn, NY 11215

718-780-3000 nym.org New York-Presbyterian Regional Hospital Network

Robert Guimento President

$1,000.0 -1.8%

$960.6 -4.4%

591

291,372

190,651

New Yorkâ&#x20AC;&#x201C;Presbyterian Queens 56-45 Main St. Flushing, NY 11355

718-670-2000 nyp.org/queens New Yorkâ&#x20AC;&#x201C;Presbyterian

Jaclyn Mucaria President

$972.0 +12.2%

$873.1 +4.7%

535

513,395

171,410

St. Francis Hospital 100 Port Washington Blvd. HOSPITAL/ Roslyn, NY 11576

516-562-6000 stfrancisheartcenter.chsli.org PHONE NUMBER/ WEBSITE/Health Services of Catholic NETWORK AFFILIATION Long Island

Charles Lucore, M.D. President

$965.8 2019 +4.1% OPERATING EXPENSES (IN MILLIONS)/ % CHANGE VS. 2018

$961.6 2019 +4.5% NET PATIENT REVENUE (IN MILLIONS)/ % CHANGE VS. 2018

364

10,952 2019 NUMBER OF AMBULATORY CARE VISITS

101,164

2019 NUMBER OF CERTIFIED BEDS

2019 INPATIENT DAYS

New Yorkâ&#x20AC;&#x201C;Presbyterian Hospital 1 NYC Health and Hospitals/ 525 68th St. KingsE.County New York, NY 10065 451 Clarkson Ave. Brooklyn, NY 11203

212-746-5454 718-245-3131 nyp.org nychealthandhospitals.org New Yorkâ&#x20AC;&#x201C;Presbyterian NYC Health and Hospitals

Steven SheldonCorwin, McLeodM.D. President, chief executive Chief executive

$6,486.9 $959.2 +15.0% +3.9%

$6,470.3 $750.7 +13.6%

2,795 624

2,491,197 627,209

854,934 156,706

2 NYU Health SaintLangone Barnabas Medical Center 550 First Ave. 94 Old Short Hills Road New York, NY Livingston, NJ10016 07039

212-263-7300 973-322-5000 nyulangone.org rwjbh.org/saintbarnabas NYU Langone Health RWJBarnabas Health

Robert StephenGrossman, ZieniewiczM.D. Medical school President, chief dean, executive chief executive of health system

$6,082.5 $865.2 +45.5% +7.8%

$6,087.8 $895.3 +52.0% +7.6%

2,104 597

1,659,163 343,137

492,653 164,926

Memorial Kettering NYC HealthSloan and Hospitals/Jacobi Cancer CenterParkway South 1400 Pelham 1275 Ave. Bronx,York NY 10461 New York, NY 10065

212-639-2000 718-918-5000 mskcc.org nychealthandhospitals.org Independent NYC Health and Hospitals

Craig Thompson, M.D. Christopher Mastromano President, chief executive Chief executive

$5,288.9 $791.7 +12.8% +10.5%

$4,560.2 $637.2 +14.8% -8.2%

514 457

1,454,836 381,473

173,678 132,597

Good Samaritan Hospital Montefiore Medical Center 1000 Highway 111 E.Montauk 210th St. West Islip, NY 11795 Bronx, NY 10467

631-376-3900 718-920-4321 goodsamaritan.chsli.org montefiore.org Catholic Health Services Montefiore Health Systemof Long Island

Ruth PhilipHennessey Ozuah, M.D. President President, chief executive

$774.4 $4,153.3 +5.0% +6.1%

$728.9 $4,158.9 +5.3% +6.2%

437 1,558

18,045 4,419,188

118,419 518,067

5 Center Long IslandHealth JewishSystem Medical BronxCare 270-05 76thAve. Ave. 1276 Fulton New Park, NY 11040 Bronx,Hyde NY 10456

516-470-7000 718-901-8600 northwell.edu bronxcare.org Northwell BronxCareHealth Health System

Michael Goldberg Miguel Fuentes Jr. Executive President,director chief executive

$3,068.5 $772.5 +4.2% +0.0%

$2,972.1 $723.3 +5.1% -1.9%

1,621 570

1,067,095 1,092,724

447,113 166,541

Mount Sinaiand Hospital NYC Health Hospitals/Elmhurst 1 Gustave L. Levy Place 79-01 Broadway New York, NY 11373 10029 Elmhurst,

212-241-6500 718-334-4000 mountsinaihealth.org nychealthandhospitals.org Mount Sinaiand Health System NYC Health Hospitals

David Reich, M.D. Israel Rocha Jr. President Chief executive

$2,896.7 $748.1 +7.8% +4.1%

$2,887.8 $582.3 +6.4% +13.7%

1,362 545

1,011,448 594,622

391,340 146,528

North Shore University Hospital 300 Community Drive

516-562-0100 northwell.edu

Jon Sendach Executive director

$2,888.0 +11.3%

$2,546.0 +11.7%

859

1,137,212

295,477

101 Nicolls Road Stony Brook, NY 11794

stonybrookmedicine.edu Stony Brook Medicine

Chief executive, chief operating officer

+4.8%

+11.2%

Hackensack University Medical Center 30 Prospect Ave. Hackensack, NJ 07601

551-996-2000 hackensackumc.org Hackensack Meridian Health

Mark Sparta President, chief executive

$1,732.3 +6.9%

$1,871.0 +10.9%

Lenox Hill Hospital 100 E. 77th St. New York, NY 10075

212-434-2000 northwell.edu Northwell Health

Jill Kalman, M.D. Executive director

$1,479.0 +9.6%

$1,312.0 +10.2%

634

265,560

127,108

Maimonides Medical Center 4802 10th Ave. Brooklyn, NY 11219

718-283-6000 maimonidesmed.org Independent

Kenneth Gibbs President, chief executive

$1,374.0 +6.9%

$1,359.2 +4.4%

711

509,721

214,673

Mount Sinai St. Luke's Roosevelt 3 1111 Amsterdam Ave. New York, NY 10025

212-523-4000 mountsinaihealth.org Mount Sinai Health System

Arthur Gianelli, Evan Flatow, M.D. Presidents

$1,350.4 +6.1%

$1,178.7 +11.2%

1,009

515,907

212,712

Hospital for Special Surgery 535 E. 70th St. New York, NY 10021

212-606-1000 hss.edu Independent

Louis Shapiro President, chief executive

$1,312.9 +8.2%

$1,084.4 +8.1%

215

18,554

46,804

NYC Health and Hospitals/Bellevue 462 First Ave. New York, NY 10016

212-562-4141 nychealthandhospitals.org NYC Health and Hospitals

William Hicks Chief executive

$1,085.0 +7.0%

$812.4 -1.0%

912

526,419

212,863

Staten Island University Hospital 475 Seaview Ave. Staten Island, NY 10305

718-226-9000 northwell.edu Northwell Health

Brahim Ardolic, M.D. Executive director

$1,046.0 +10.1%

$1,025.0 +9.6%

666

947,725

211,048

Mount Sinai Beth Israel 4 First Avenue at East 16th Street New York, NY 10003

212-420-2000 mountsinaihealth.org Mount Sinai Health System

Jeremy Boal, M.D. President Scott Lorin, M.D. President, Mount Sinai Brooklyn

$1,024.0 +1.4%

$820.1 -1.3%

908

585,331

146,460

$1,000.0 -1.8%

$960.6 -4.4%

591

291,372

190,651

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ADDRESS

HOSPITAL LEADER

Â Â? Manhasset, NY 11030 Northwell Health Â? Â?Â? Â Â? Â? Â? Â? Â? Â? Â? Â? Â? Â? Â Â? Â 1-Â? Â?Â Â? Â Â? Â?Â? Â? Â 2-Â? Â Â Â? Â 3- Â?Â? Â? Â? Â? Â? Â? Â? Â Â Â Â? Â&#x20AC; Â? Â 4-Â? Â? Â 5-Â&#x201A; Â&#x192;Â Â? Â Stony Brook University Hospital 631-444-4000 Carol Gomes $1,742.5 $1,647.5 819 398,185 223,589 Â&#x20AC; Â&#x201E;Â&#x2026;Â&#x2020; Â&#x2026; Â?

17 18 19 20 21

CrainsNewYork.com/HPsubs

781

511,060

NEED

237,461

New Yorkâ&#x20AC;&#x201C;Presbyterian Brooklyn Methodist Hospital 506 Sixth St. Brooklyn, NY 11215

718-780-3000 nym.org New York-Presbyterian Regional Hospital Network

Robert Guimento President

New Yorkâ&#x20AC;&#x201C;Presbyterian Queens 56-45 Main St. Flushing, NY 11355

718-670-2000 nyp.org/queens New Yorkâ&#x20AC;&#x201C;Presbyterian

Jaclyn Mucaria President

$972.0 +12.2%

$873.1 +4.7%

535

513,395

171,410

St. Francis Hospital 100 Port Washington Blvd. Roslyn, NY 11576

516-562-6000 stfrancisheartcenter.chsli.org Catholic Health Services of Long Island

Charles Lucore, M.D. President

$965.8 +4.1%

$961.6 +4.5%

364

10,952

101,164

NYC Health and Hospitals/ Kings County 451 Clarkson Ave. Brooklyn, NY 11203

718-245-3131 nychealthandhospitals.org NYC Health and Hospitals

Sheldon McLeod Chief executive

$959.2 +3.9%

$750.7 +13.6%

624

627,209

156,706

Saint Barnabas Medical Center 94 Old Short Hills Road Livingston, NJ 07039

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Stephen Zieniewicz President, chief executive

$865.2 +7.8%

$895.3 +7.6%

P016_P017_CN_20200615.indd 17

JUNE 15, 2020 | CRAINâ&#x20AC;&#x2122;S NEW YORK BUSINESS | 17

597

343,137

164,926

6/10/20 11:25 AM

CORONAVIRUS ALERT

Tracking Covid-19 in New York BY GERALD SCHIFMAN

New York City is the epicenter of the Covid-19 outbreak in the United States. Crain’s is tracking the growth of the virus in the five boroughs and the surrounding counties. The figures below are as of Friday, June 12.

DAILY HOSPITALIZATIONS

POSITIVE CASES

Weeks ago, the state reported that a projected 110,000 hospital beds would be needed during the virus’ peak. With roughly 50,000 beds in operation, New York’s health systems would have been overwhelmed. But thanks to social-distancing measures driving the apex downward, hospitalization totals have decreased for two months, albeit at a slower rate than the initial ascent.

On March 22, Gov. Andrew Cuomo put New York “on pause” with an order that closed nonessential businesses. With the virus having already spread throughout the downstate region, the Covid-19 caseload skyrocketed for weeks before slowing in late April. The city and suburbs are now adding fewer than 1,000 new diagnoses each day. 250,000

20,000

New York City

Long Island

Lower Hudson Valley

200,000

208,954

15,000 150,000 10,000 100,000

81,673

5,000

1,898

326

50,000

63,446

0 March 16

June 11

+50

321

June 11

MINIMUM AMOUNT by which hospitals needed to increase capacity

NUMBER of Covid-19 patients currently in intensive-care units at city hospitals

March 3

PORTION of the state’s positive cases that were in the city

381,714

NUMBER of positive cases in the state, the most in the country

TESTS CONDUCTED

DISTRIBUTION OF CASES BY BOROUGH

The Food & Drug Administration granted approval to private labs to screen for Covid-19 on March 13. The city now has the capacity for approximately 35,000 tests per day. A full economic reopening requires easy access to tests, including reliable serology exams.

Queens has the most confirmed positive cases in the city. When the numbers are restated on a per-capita basis, however, the Bronx emerges as the hardest-hit borough. Staten Island

1,500,000

New York City

Long Island

Lower Hudson Valley

Queens 1,251,984

1,250,000

7% Manhattan 13%

30%

1,000,000

750,000

469,823

500,000

250,000

380,118

22%

The Bronx

28% Brooklyn

March 3

June 11

NUMBER of city testing sites to be opened specifically for Black Lives Matter protesters

24,495

NUMBER of deaths from Covid-19 in the state

PORTION of state Covid-19 fatalities in which patients had preexisting conditions ISTOCK

PORTION of state tests that have resulted in a positive case

NOTE: Lower Hudson Valley includes Dutchess, Orange, Putnam, Rockland and Westchester counties.

SOURCE: State Department of Health

FOR THE MOST UP-TO-DATE COVID-19 STATISTICS, VISIT CRAINSNEWYORK.COM/TRACKING-CORONAVIRUS-NEW-YORK. 18 | CRAIN’S NEW YORK BUSINESS | JUNE 15, 2020

P018_CN_20200615.indd 18

6/12/20 4:43 PM

FROM PAGE 3

their prospects too uncertain. Small Business Administration data show alternative lenders such as Pursuit have helped secure $18 billion worth of Paycheck Protection Program loans, at an average of $60,000 each. On May 28 the Trump administration announced an additional $10 billion is being set aside to be lent exclusively by more than 300 community development financial institutions, a category that includes Pursuit. “We have received bipartisan support for dedicating these funds for CDFIs to ensure that traditionally underserved communities have every opportunity to emerge from the pandemic stronger than before,” Treasury Secretary Steven Mnuchin said.

Left out The funding by the likes of Pursuit and other alternative lenders represents a fraction of the $511 billion in PPP money allocated so far but aims to address a problem that quickly emerged after the program kicked off in early April: Small businesses in low-income neighborhoods weren’t getting the funds. Many of these enterprises had no shot because fewer than half of small businesses in New York have received bank financing, according to a study by the Federal Reserve

Bank of New York, and most banks at first prioritized PPP applications from existing commercial borrowers. Even before PPP came along, only 3% of SBA-backed loans in the city went to businesses in low-income neighborhoods, said Michael Roth, managing partner at Next Street, an advisory firm that helps minority-owned businesses raise financing.

hoods, small lenders have stepped up, including Pursuit and the National Development Council, a Manhattan-based nonprofit. NDC has helped secure $67 million in loans for 618 borrowers, half of them in low- or moderate-income census tracts. “We’re getting to small businesses left out in the first round,” NDC President Daniel Marsh said. “It’s good that they can use the money for payroll, but they’ll also need money to pay suppliers and even their Con Edison bills.” One recipient was Harlem-based StreetSquash, which combines squash-playing with academic tutoring, community service and mentoring for 400 individuals ages 11 to 24. Executive Director George Polsky said NDC lined up a $465,000 PPP loan in 14 hours that enabled the nonprofit to keep its staff of 30. “We’ll still run a deficit this year because fundraising is so hard, but this softens the blow meaningfully,” Polsky said.

“THOSE WHO HISTORICALLY ARE UNDERSERVED WERE LAST IN LINE WITH PPP” “Those who historically are underserved were last in line with PPP,” Roth said. In the weeks after PPP started, scores of restaurants, retailers and other African American or Latinoowned businesses ran out of cash and closed their doors before help could arrive. No one knows how many will reopen when the lockdown ends. In a recent report, the Center for an Urban Future said 27% of Elmhurst, Queens, residents work in sectors that have seen particularly high job losses, including restaurants, hotels, retail and personal-care services. The number is 25% for residents in Corona and 24% in Norwood, Highbridge, Sunset Park, and Flushing. In an effort to minimize the damage to vulnerable neighbor-

‘The farm team’ Pursuit has been serving overlooked and struggling borrowers since 1955, when it was created by the state Legislature. Until March it was known as the New York Business Development Corp. The for-profit company is funded by more than 100 banks across the

state and gets most clients by referral. That suggests small businesses that may benefit most from Pursuit could have a hard time finding it because they don’t have a bank relationship. MacKrell said the firm has done little direct PURSUIT SCORED $7 million in PPP loans for 82 Navy Yard marketing in the tenants. past but is rethinking that stance. At the same time, printers, said Pursuit came through he isn’t interested in competing quickly after her big bank dragged against the institutions that fund its feet. “The people at Pursuit kept me Pursuit, which has 150 employees, $175 million in loans as of last fall, informed every step of the way,” $2.3 million in annual net income Lee said. The firm’s success during the criand no retail branches. “We honestly think most small sis has scores of grateful customers businesses are best served by a telling MacKrell they want Pursuit bank,” MacKrell said. “Our goal is to be their primary lender from to be the farm team.” now on. He reminds them that’s During the first round of PPP, it not the firm’s mission and worries was just that, as Pursuit’s staff man- many borrowers aren’t in as robust aged applications for about 20 health as they think they are, even banks and rounded up $250 mil- if they received a PPP infusion. “We have clients who may have lion worth of loans. The lender has gotten more ag- been bank-ready six months ago gressive in the second round. After that are not bank-ready now,” he only eight small businesses at the said. His goal is to nurse clients to a Brooklyn Navy Yard got PPP loans from banks in the early weeks, offi- point where they’re so strong that cials asked Pursuit for help. Armed banks are knocking themselves out with funding from Goldman Sachs, to win their business. “I don’t want you walking into a Pursuit secured $7 million in PPP bank with your hat in hand,” he loans for 82 Navy Yard tenants. Anna Lee, co-founder of gCreate, said. “I want you kicking the door a four-employee maker of 3-D down. I want you ready to fly.” ■

BUCK ENNIS

PURSUIT

Tuesday, June 30 | 4-5 p.m.

HOW ARE PRODUCERS INNOVATING?

As Broadway, which was experiencing one of its biggest boom periods in history, remains dark, Crain’s talks to some of Broadway’s top talent about how they are innovating. How are they still reaching loyal audiences with strong content? What have they learned about abandoning old rules and reinventing themselves? PANEL DISCUSSION:

KEYNOTE:

Stewart F. Lane CEO & Co-Founder BroadwayHD

Stephen C. Byrd Founder & Producer Front Row Productions

Clive Chang Chief of Staff & Innovation Lincoln Center for the Performing Arts

Bonnie Comley Owner/Founder BroadwayHD

Julia C. Levy Executive Director Roundabout Theatre Company

Register today at: www.crainsnewyork.com/ACSpring2020 For event questions: Ana Jimenez | 212-210-0739 | crainsevents@crainsnewyork.com For sponsorship opportunities: Lisa Rudy | lrudy@crain.com

JUNE 15, 2020 | CRAIN’S NEW YORK BUSINESS | 19

P019_CN_20200615.indd 19

6/12/20 3:12 PM

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TECH FROM PAGE 3

“The first challenge for us was, how do you keep people 6 feet apart?” Shaun Stewart, CEO of Newlab, an 84,000-square-foot center for startups in advanced manufacturing, said. “The second is, how can we contact trace if we need to?” Newlab, home to 800 engineers and entrepreneurs at full capacity, is among the many city employers and landlords seeking new ways to prevent the spread of Covid-19 as more employees return to the office. Up to 400,000 New Yorkers are expected to head back to their workplace during the first phase of economic reopening. By the first week of July, millions more office workers could be called back. Those employees likely will return to a mix of wearable technologies, foot-traffic sensors, symptom-tracking apps and automatic temperature scanners. Everything from walking through the door to heading to the restroom could become tech-enabled. About 80% of companies changed workplace safety protocols last month, and about a quarter of firms

oped by Brooklyn startup Norbert Health. The scanners use a mix of radar and infrared technology to instantly scan workers' vital signs, including heart and breathing rate. Norbert launched last year out of Newlab with a focus on developing vital sign monitoring technology that would allow families to more easily check on elderly relatives. “But that needs to be the second step, because returning-to-work applications are what the world most dramatically needs right now,” said Alexandre Winter, the company’s CEO and co-founder. The Centers for Disease Control and Prevention has recommended all office buildings check temperatures at the door each day. An executive order from Gov. Andrew Cuomo gives landlords the right to deny entry to those who refuse a fever scan. The rules for technologies that monitor social distancing are less established. Risa Boerner, a partner with the law firm Fisher Phillips, said employers are increasingly asking for advice on wearables and other devices that can track Covid-19 exposure. “They are trying to find the solution that protects their workforce but is also safest from a privacy standpoint,” said Boerner, who is chair of the firm’s data security and workplace privacy practice group. Companies need to consider how much data the devices are collecting on employees, where that data is stored and who has access to it, she said. Employers are required to develop a data security program for any information they store about their workers and visitors under a state law passed last year. About 82% of people working in Newlab—who are not direct employees but lease space—have opted to wear the sensors. Some have declined out of privacy concerns, Stewart said. StrongArm says employers can’t access the data for punitive purposes. Managers receive reports only on incidents that could have created exposure to the virus. “I need to know your proximity to risk from front door to back door,” Petterson said. “I do not need to know how long you took for your smoke break.” Surveillance is hardly new to the workplace. Cameras and monitors are common in offices and on factory floors. Personalized RFID key cards open doors and security gates in most Manhattan office towers, creating trackable data. Manhattan startup Actuate uses the closed-circuit cameras already installed in buildings for its social-distancing technology. The firm launched two years ago with an artificial intelligence platform that can detect through surveillance video when someone is carrying a firearm. The same technology can detect and catalog instances when employees stand closer than 6 feet apart. The company uses the data to build a heat map of where employees are most likely to make close contact. “We don’t think employers or employees want instant alerts when

“THIS IS A WHOLE FRONTIER FOCUSED ON MAKING BUILDINGS RESPONSIVE” invested in new technology for social distancing and contact tracing, according to a PwC survey of 288 chief financial officers in May. Technology companies are adjusting their business model to meet that demand. The main business for StrongArm is developing wearable technology that keeps industrial and warehouse workers safe from injury. StrongArm devices monitor the movements of workers for Walmart and Toyota, among other companies, and send warnings about actions that risk longterm injury. Many industrial and warehouse employees were deemed essential and have kept reporting to work through the pandemic, motivating employers to find ways to prevent the types of outbreaks reported at meatpacking plants and some e-commerce warehouses. Of StrongArm's clients, “the majority believe this is a 12- to 18-month exercise, so they need a long-term solution,” said CEO Sean Petterson.

Office demand StrongArm has fielded inquiries from white-collar managers, but Petterson said the firm is focused for now on its current industrial clients. A long list of companies are developing technologies to meet demand in offices, however. New apps host employee surveys to monitor possible exposure. Bluetooth-enabled wristbands provide warnings when employees come to close, similar to the device StrongArm provides. At Industrious, a flexible-workspace competitor to WeWork, E-Z Pass–style scanners will check workers for fever as they enter. Newlab has a similar system, devel-

people get too close,” said Ben Ziomek, co-founder and chief product officer. “But we can tell them the areas where employees are having trouble keeping apart, and they can adjust staff or furniture to make it easier.”

The bathroom factor Companies such as Humanyze, meanwhile, already represent a growing niche in real estate, using sensor data to understand how people move throughout an office. That data can help companies adjust their office design by better tracking natural gathering places for employees. Clients could use that same technology to keep people apart. The sensors can uncover bottlenecks and other areas where employees are likely to break social distancing. “This can also tell an employer that, look, here is an area of the office you need to sanitize more frequently,” said Ben Waber, the company’s president. While most offices are pushing desks and furniture 6 feet apart, that won't matter if people can't walk to the bathroom or get out the door without bumping into someone, noted James Wynn, a director of Gensler’s Intelligent Places division. The international design firm is using software that analyzes floor plans and makes suggestions to allow better circulation. That is combined with sensors providing insights into how offices are used in real time. “This is a whole frontier focused on making buildings more responsive to inhabitants,” Wynn said. “That could be signage that directs you to go one way or another, based on the density at that time: ‘Follow the left path, not the right, where there are more people.’ ‘Don't go to this bathroom; it is full.’ ” The bathroom is a whole other challenge, as Newlab found. Stewart said workers feared they could stumble into rooms filled beyond

OFFICE LANDLORDS LOOK TO CLEAR THE AIR FEAR THAT COVID-19 will spread through the air in office buildings has the owner of New York’s most famous tower boasting on TV about HVAC systems. “Even at the Empire State Building, down to the observatory, we have MERV-13 filters,” said Anthony Malkin, CEO of Empire State Realty Trust, in a June 9 interview with CNBC. “We have AtmosAir, proven to remove 99.92% of the Covid virus from the air.” MERV-13 air filters are high-efficiency. AtmosAir is an indoor system that uses energized ions capable of “seeking and destroying” viruses, germs and other pollutants, as described by Steve Levine, CEO of the Connecticut-based company. Demand for the system has increased tenfold since the start of the pandemic. Clients include Brookfield, WeWork, Google, the Department of Defense and LaGuardia Airport. Levine said tests from Microchem Laboratory, which rates sanitizing products, estimated that the AtmosAir system could reduce the presence of Covid-19 by 99.92% within 30 minutes. Guidelines from the Centers for Disease Control and Prevention recommend firms open office windows to increase circulation. For many Manhattan skyscrapers, that isn’t an option. As workers prepare to return to the office, air quality could be a major problem. A 2017 study in Europe found offices typically had lower air quality than airplanes did. “Not in Tower 45,” said Steven Levy, principal of Kamber Management. His company was one of the first in the city to adopt AtmosAir’s tech, installing it throughout Midtown’s 40-story Tower 45 in 2016. Levy was persuaded by a Gensler study that found workers were more productive and called in sick less often when workplace air quality improved. The machine cost $4,000 per floor to install. George Comfort & Sons, an office landlord, said it installed new air filters and would increase the intake of fresh air to its buildings in a note to Fairfield County tenants, who are returning to work sooner than those in the city. President and CEO Peter Duncan said the firm is studying how to improve air quality throughout its portfolio. “Increasing outside air is really important, but we are also looking at ultraviolet light for when air passes through, among a number of options,” said Duncan. “The options like installing stronger air filters, — R.D. that’s already done.”

the point where social distancing is possible. But no one wants any sort of surveillance in the bathroom. Norbert Health’s radar sensors also may help there. The company’s radar can detect through the bathroom wall whether people are in there, identifying shapes rather than individuals. The company is still developing

the application, but Winter said workers eventually could check through their work intranet—or via a monitor near the door—whether the bathroom is available. The hope is to replace the old-fashioned knock as well as potential crowding, Winter said, “without having to go in—the exact thing you want avoid.” ■

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CORONAVIRUS SURVEY RESPONSE Companies surveyed by Crain’s represented a range of industries, with real estate, consulting and health care leading the way. Portion of respondents REAL ESTATE

DOOM AND GLOOM

RATING GAME

MORALE BOOST

The vast majority of respondents expect that business won’t return to usual levels until 2021 or later.

Crain’s asked companies to reflect on their ability to rapidly pivot to the new economy created by the novel coronavirus. While the majority of answers were positive, many respondents saw room for improvement.

The firms surveyed said that they will put more emphasis on the morale of employees in the next three to six months. As of survey time, few companies expected to prioritize hiring and inclusion.

NOT APPLICABLE 2.5% NEVER

15.4%

4.9%

CONSULTING

0–3 MONTHS

4.2%

4–6 MONTHS 14.9%

8.7% 8.4%

7–9 MONTHS 11.8%

HOSPITALITY AND TOURISM 6.2% BANKING AND FINANCE 5.6%

44.8%

MEDIA, ADVERTISING AND PUBLISHING 4.9% 5%

10%

Average

80%

HEALTH CARE

Terrible Bad 3.0% 100% 3.0% 17.4%

15%

60%

MORE 20% THAN A YEAR

PORTION OF RESPONDENTS whose company had cut employees since the virus was declared a national emergency

10–12 MONTHS

26.4%

35.7% 41.2%

40% 20%

17.4%

Good Excellent 3.5% 8.4%

40.8% 20.6% Ability to work remotely and through digital channels

Ability to adapt to new market conditions

PORTION OF RESPONDENTS whose company had shifted resources toward the public effort to combat the disease

Portion of respondents prioritizing each matter EMPLOYEE MORALE 45.1% INVESTING IN TECHNOLOGY 38.4% HEALTH AND WELLNESS BENEFITS 37.5% TALENT RETENTION 34.7% PERFORMANCE MANAGEMENT 31.1% PRODUCT LAUNCHES 25.2% EMPLOYEE DEVELOPMENT 22.1% DOWNSIZING 20.5% DIVERSITY AND INCLUSION 14.0% HIRING 7.3%

SURVEY

Although 76% of the businesses reported revenue declines, not everyone requested help from the FROM PAGE 1 federal government. Forty-two permid-March, the survey found. On cent of those surveyed said they did not request aid under the Coronaaverage, revenue declined 52%. The survey of 357 owners, execu- virus Aid, Relief and Economic Setives, senior management and ju- curity Act. Of the 48% that did request federnior staff members in businesses in the New York City area was taken al aid, 36% said their organization the week of May 10. The surveyed received the requested funds, a businesses ranged from small mom- number that is in line with some of and-pop shops with fewer than 20 the delays and frustrations employees to major corporations small-business owners have expressed toward the Paycheck Prowith more than 1,000 workers. The businesses were in 19 indus- tection Program since its inauguration at the end of March. tries, ranging from real esSchwartz said recent tate to health care, hospichanges in the forgivetality, transportation, ness features of the PPP, manufacturing and law. allowing business owners Three-quarters of the PORTION OF to use more of the money businesses surveyed listed businesses for non-payroll expenses themselves as for-profit surveyed that and extending the time companies, 13% said they project a period to use the money were nonprofits, 5% were revenue decline from eight weeks to 24, from government agenin the remainder of 2020 are helpful. cies, and the rest listed “Those steps will allow themselves as other. us to creep back on some One-third of the busiscale, albeit it much nesses said they had fewer smaller,” he said. employees at the time of RESPONDENTS’ Some survey responthe survey that at the start expected dents said the pandemic of the pandemic. Some revenue decline had brought business achad chosen reductions in in the remainder tivity to all but a halt. work hours for hourly emof 2020 “It has had an impact,” ployees (13%); others had said Steve Cohen, attorimplemented furloughs (11%), laid off workers (12%), insti- ney at Pollock Cohen LLP. “With the tuted hiring freezes (17%) or cut sal- courts closed, you can’t file new acaries (6%). Sixteen percent said they tions. You can’t pursue actions that had cut salaries for senior execu- are already in the court system. It’s tives; 11% said they had delayed or had an enormous impact on serving reduced bonuses, commissions or people and resolving issues.” Terry Fulner, president of the other compensation benefits. Sixty-seven percent said they were John Hartford Foundation, said market volatility had affected his working from home. nonprofit, whose mission is to imDouble-digit hit prove the health of older Ameri“We have managed so far to avoid cans. “Our portfolio has gone down 8%, layoffs, but I couldn’t say if that is going to continue,” said Jeffrey Co- and that means that it has an influhen, a marketing professional at In- ence on the number of dollars we formation Builders, a software com- are able to give away next year,” Fulpany. “Revenue in the second ner said. “When we have an ecoquarter is going to take a double- nomic downturn, it hurts our ability digit hit. That’s just the way it’s going to give as much philanthropy as we’d like to.” to be.”

83% 41%

60.2%

BRANDING AND MARKETING

15%

30%

45%

60%

75%

RATING THE GOVERNMENT State ranks high, feds flunk, and NYC is somewhere in between, survey finds NEW YORK STATE RECEIVED HIGH MARKS, but the federal government was panned when participants in a Crain’s survey were asked to rate the government’s response to the Covid-19 pandemic. Of those surveyed, 71% said the state’s actions had been either “good” or “excellent,” but only 18% described the federal government’s response in those terms. Fourteen percent said the federal response had been “average,” 24% described it as “bad,” and 45% viewed it as “terrible.” “I think that the federal response is a disaster,” said Jeffrey Cohen, a marketing professional at Information Builders, a software company. CUOMO “Horrible,” said Vigdis Eriksen, owner of Eriksen Translations. “No leadership. Nothing.” The city fared somewhere in between the state and the federal government. Forty-two percent gave the city’s response either a “good” or an “excellent” rating; 33% rated it as “bad” or “terrible.” Twenty-five percent rated it as “average.” “The mayor [Bill de Blasio] has been out to sea,” Cohen said. “He seems to be behind the curve in every aspect, providing neither insight nor leadership.” “The city’s done terrible,” said Lance Spodek, a sole practitioner in Hell’s Kitchen. Spodek noted that the city has had to limit the population in homeless shelters because of crowding, and it has moved many of the homeless into single- and double-occupancy hotel rooms in residential areas such as Hell’s Kitchen. “These people are not well mentally,” Spodek continued. “They are sleeping in the street, defecating in the street. The police arrest them, and they are out the next day because there is no bail. It’s become detrimental to the quality of life in the neighborhood.” The only clear winner among elected officials in the survey was Gov. Andrew Cuomo. “I think Cuomo has done great with leadership,” Eriksen said. “He has been very steadfast, and he has empathy.” “I think the governor has been impressive with his clarity, in his ability to balance public health and keeping the economy with its head above water,” said Steven Cohen, an attorney. — B.P.

Among the businesses’ biggest concerns, financial liquidity was cited by 27% of respondents; 25% said it was customer attrition. Other top concerns were workforce stability (12%) and the ability to advance new initiatives or key projects (11%). “[My] biggest concern is being able to open where we can do enough business to pay the cost of doing such business,” Schwartz said. “My guess is the revenue re-

turn will be less than 50% for quite a while.” Others are not as worried—they even welcome the sudden changes to their business model. “The advantage of being a software company is we can do this virtually,” said Cohen of Information Builders. “If need be, we have remote staff around the country.” Forty-four percent of the businesses surveyed expect it will take

GOVERNORANDREWCUOMO /FLICKR

SECTOR STRENGTH

more than a year for their operations to return to normal and proceed at previrus levels. Only 15% expect the return to normalcy to begin within the next four to six months. Nearly 5% believe they will never return to previrus levels. “At the end of the day, the real truth of what is happening in America is at the ground floor of small business,” Schwartz said. “It’s scary. It really is.” ■

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GOTHAM GIGS

JOCELYN completes about seven tracing calls per day.

KIMBERLY JOCELYN BORN New Jersey RESIDES Prospect Heights, Brooklyn EDUCATION Master’s in public health and master’s in social work, Columbia University GOOD SPORTS “The cases have been pretty happy to receive a call from us,” Jocelyn said. “They’re happy that the city is following up and providing resources and support.” MORE TO COME The initial efforts of the Test & Trace Corps are focused on information, isolation and resources. Services will expand to reaching out to individuals’ contacts. TRACING BOOT CAMP The training through New York City Health and Hospitals was intense, Jocelyn said. The focus was on empathy, navigating technology and the use of language during calls. Training will be ongoing as the program expands.

Calling out for public health

A contact tracer picks up the phone to track the spread of Covid-19 BY JENNIFER HENDERSON

hen New Yorkers receive a call from Kimberly Jocelyn, it’s likely a follow-up to recent news that they’ve tested positive for Covid-19. But Jocelyn, a newly trained contact tracer, is adept at handling crises—and she’s ready to help. This month Jocelyn, 29, began working full time as a supervisor for the city’s newly launched Test & Trace Corps, a fleet of 1,700 contact tracers led by New York City Health and Hospitals. In the past several days, she’s spoken with more than 20 Covid-19-positive individuals to glean important public health information and also provide support. Jocelyn has been conducting calls from her home in Brooklyn to trace the spread of the virus from person to person in order to reduce its transmission. Her calls last up to

45 minutes each, and she does about seven per day. She asks questions to gather demographic information as well as details about an individual’s symptoms and the people with whom they’ve come into contact. Jocelyn also connects those she’s called to a Health and Hospitals provider hotline, mental health resources and even hotels should they need a place more conducive to self-isolation from family or roommates. Most of the people she’s phoned have been receptive—if not happy—about hearing from her. They’re appreciative of someone calling just to listen to their experience, Jocelyn said. Putting active listening skills to work has been critical. “We want to provide support, compassion and respect in addition to resources,” she said. Jocelyn previously worked in human resources and social services and has been a crisis counselor for

children and families. The empathy needed to become an effective contact tracer is second nature to her. She believes a sprawling effort is necessary to getting New Yorkers back to work. “It’s a very impactful initiative, because as Covid-19 evolves, we’re still learning,” Jocelyn said. “It’s very important to be transparent.” Originally from New Jersey, Jocelyn had a longstanding interest in public health. That led her back to school to complete a master’s degree in the field as well as a master’s in social work at Columbia University. After graduation, she worked as a public health analyst for the Centers for Disease Control and Prevention. In that role, Jocelyn screened airport travelers for Covid-19. But she quickly realized she wanted to more deeply engage with people. “They have to know that they’re not alone,” Jocelyn said. ■

“WE WANT TO PROVIDE SUPPORT, COMPASSION AND RESPECT IN ADDITION TO RESOURCES”

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