Crain's New York Business

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A NEW VENUE Performers take to the streets to get around capacity limits

FINANCE

JPMorgan to shed major office space The banking giant’s reduction will be felt by Manhattan real estate

POLITICS

THE ATTRACTION OF ANDREW YANG

BY AARON ELSTEIN

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Why the former entrepreneur has become the mayoral candidate to beat

9.1M

BY BRIAN PASCUS

A

BUCK ENNIS

t the height of the 2020 presidential race, a familiar sight appeared at Andrew Yang’s campaign headquarters in the Garment District. It would show up before interviews with Time magazine and CBS This Morning, and it eventually would become a See CAMPAIGN on page 22

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Yang

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PMorgan Chase Chief Executive Jamie Dimon says the pandemic will “significantly reduce our need for real estate” as fewer workers return to the office after the scourge finally passes.

“Remote work will change how we manage our real estate,” he wrote in his annual letter to shareholders reSQUARE FEET leased last of office space Wednesday. held by the bank at the end of The bank, for 2020 years New York’s largest commercial tenant and private-sector employer, will move to more open seating arrangements, and only 60 chairs may be needed for every 100 employees because not everyone will come to the office at the same time, Dimon said. The CEO

PUTTING A LUXE SPIN ON AFFORDABLE HOUSING PAGE 23

See JPMORGAN on page 18

INSTANT EXPERT

What you need to know about the state budget PAGE 14 4/9/21 4:49 PM

REAL ESTATE

State’s $2.4B rent-relief program will allow landlords to apply directly for aid

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he state’s $2.4 billion rent-relief program will let landlords apply directly for funding and require monthly progress reports on how many households applied for and received assistance. The two measures are meant to improve upon a previous rent-relief effort that was widely panned as inadequate.

The long-awaited program is part of the state’s budget for fiscal 2022 and will be administered by the Office of Temporary and Disability Assistance. New Yorkers should be able to apply for the funds starting in May. OTDA has already been getting ready to launch the Emergency Rental Assistance Program, agency spokesman Justin Mason said in a statement. “And we are moving expeditiously to get the funding to

the program even as they deal with lingering questions about its rollout.

“Cautiously optimistic is how I feel. I think there’s a lot of good stuff in there,” said Cea Weaver, coordinator for the Housing Justice for All Campaign. “I am nervous about landlords not participating in the program, and I am nervous about implementation.”

Federal and state funds The program will be funded with $2.3 billion in federal money and $100 million in state money. It will focus on helping the households earning less than 80% of the area median income that have fallen behind on rent and are at risk of homelessness. The program will prioritize unemployed renters and vulnerable populations, such as domestic violence survivors and communities disproportionately affected by the pandemic.

Applicants will be eligible for relief on their utility bills.

The $100 million in state funding aims to supplement the rent-relief program.

It will mainly target households earning no more than 30% of the area median income and applicants who are already homeless or in imminent danger of losing their home.

Applicants will be eligible for

“WE REALLY PUSHED TO MAKE SURE IT WAS AS EXPANSIVE AS POSSIBLE” the New Yorkers who need it most with the expectation that the application window will be open next month.”

Legislators and housing groups said they are fairly confident about

BUCK ENNIS

BY EDDIE SMALL

rent relief regardless of immigration status, and both landlords and tenants will be able to start the application process, which multiple advocacy groups have said could help make it easier to distribute funds. The legislation requires OTDA to develop a way for New Yorkers to keep track of their applications, be flexible when determining the documents needed, and “ensure that extensive outreach is conducted to increase awareness of this program.”

Evictions will not be allowed to take place for tenants who apply for the rent-relief program until OTDA determines their eligibility, and landlords who accept money will

not be allowed to use the missing rent covered by the program as the basis for an eviction. The program will pay no more than a year’s worth of rental arrears and three months of prospective rent, and the money will go directly to the landlord.

Monthly reports OTDA will be required to post its monthly reports on the program starting 30 days after applications launch. Assemblywoman Linda Rosenthal cited these reports as a reaction to the prior $100 million rent-relief program administered by the Division of Housing and Community Renewal, which she described as “shrouded in secrecy.”

WeWork abandons Fifth Avenue space, the second location it ever opened

BY NATALIE SACHMECHI

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eWork has abandoned its 6-story coworking space at Zar Property NY’s 349 Fifth Ave.—the second location it opened.

The flexible office space company is now focused on turning a profit this year. It announced plans in March to go public through a $9 billion special purpose acquisition company deal with BowX Acquisition Corp. after a failed initial public offering in 2019.

Since then the company has shored up its balance sheets by reducing headcount, taking on cost-cutting measures and reducing its footprint at more than 100 national locations, including full exits at the Sapir Organization’s 261 Madison Ave., William Gottlieb Real Estate’s 1 Little W. 12th St., the Chetrit Group’s 404 Fifth Ave. and 428 Broadway, and the Durst Organization’s 205 E. 42nd St., the company confirmed.

“Over the last 12 months, WeWork has continued to optimize its

global real estate portfolio as a part of the company’s plan to achieve profitability,” spokeswoman Nicole Sizemore said. “With an abundance of supply in our markets, we have been able to rightsize our footprint while also ensuring our members can continue to access first-class flex office space.”

No bad blood At Zar’s property, across from the Empire State Building, WeWork had signed a 15-year lease to take the entire building, except for two floors of retail space below.

But just over a decade and a pandemic later, it decided to leave. It fully vacated this month, said David Zar, a principal at the real estate firm.

Still, his company is open to allowing other coworking or flexible office providers to move into the building, Zar said. Across six floors, there is 48,000 square feet available, exclusive access to a rooftop and plenty of signage.

“Right now we’re keeping all options open,” he said. “We’re target-

ing traditional tenants but also have discussions with multiple flexible office providers.”

There is also no bad blood with WeWork, he added. According to their agreement, the tenant had the right to end its lease early.

WeWork declined to comment on the terms of its lease.

In 2010 Zar’s family business was hesitant to sign the then-startup as a tenant at its Herald Square office building.

The landlord’s previous tenant, a branch of JPMorgan Chase, had mostly moved out because of the financial crisis, and ownership was looking for several tenants to take space at the 8-story building, Reeves Wiedeman explained in his WeWork exposé, Billion Dollar Loser. At its 2018 peak, the coworking giant became the city’s largest commercial tenant, surpassing JPMorgan.

Zar pitched WeWork founder Adam Neumann’s concept to his colleagues, but they asked him to find tenants with longer-term viability. But after sharing a bottle of

Johnnie Walker with Neumann, he bit the bullet and the coworking firm became the building’s sole tenant, Wiedeman said.

It was a rocky start.

After signing the lease, Zar had difficulty obtaining financing for the building because nobody knew who Neumann was or what his company did.

Refinancing While WeWork was a tenant, the property was tied to a group of other mortgages, called a commercial mortgage-backed security, according to analytics firm Trepp. In the last 12 months, the CMBS reported delinquencies twice, Trepp said, but is now current. Zar’s own building secured $30 million in refinancing from Signature Bank in December.

Despite a difficult year for real estate, Zar is betting on a comeback for the city and is looking forward to “the millions of tourists who will soon return to visit the Empire State Building and the streets of Manhattan,” he said. ■

“We can see the progress being made, and if there needs to be changes in the program, we can see in real time where that’s supposed to happen,” she said, “so I’m really grateful that we got that in the budget.”

The HCR program was widely criticized for having eligibility requirements that were too strict and not distributing enough money.

HCR argued it was working within the guidelines that the Legislature had established.

“We really pushed to make sure it was as expansive as possible,” state Sen. Brian Kavanagh, chair of the housing committee, said of the OTDA program. He added that there is a “robust expectation of outreach” to communities.

The Community Housing Improvement Program and the Rent Stabilization Association released statements about the new program indicating their main focus now is to make sure the relief is distributed as quickly as possible.

“Our greatest concern is the ability of the state to get the money out the door within days and weeks, not months,” association President Joseph Strasburg said in a statement. “We are prepared to work with OTDA and HCR to expedite the smooth and rapid distribution of these funds so owners can pay their city property taxes and repair and maintain their buildings.” ■

WEBCAST CALLOUT

MAY 5 NEW YORK CITY’S RESTAURANT REVIVAL New York City restaurants have been devastated by the pandemic— hundreds of businesses have closed, and thousands of employees have lost their jobs. As the industry begins to recover, there are questions about Covid-19’s impact and what the future has in store. Join Crain’s as we examine which establishments have been hit the hardest, how businesses are evolving and what eateries are doing to bring back diners. Additionally, attendees will learn what actionable steps the government, business community and public can take to help local food entities get back on their feet.

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ARTS & CULTURE

BUCK ENNIS

BRANDT was among dancers slated to perform at the Empire Hotel.

THE SHOW MUST GO ON, EVEN IN CHILLY WEATHER

With indoor perfomances too costly to stage right now, arts groups take to the streets

BY CARA EISENPRESS

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he city's performing artists are leaving stages behind to get back to work.

Instead, they're performing on rooftops, in gardens and in the middle of streets, aided by state and city programs and individual organizers intent on giving them a chance to work, even if the payoff is more symbolic than profitable.

“It’s exciting to be dancing outdoors,” said Morgan McEwan, a dancer who is the founder and artistic director of MorDance, a company that usually performs at Hunter College’s Kaye Playhouse.

With eight of her dancers, McEwan will set up on lower Sixth Avenue each Wednesday afternoon beginning in July, moving to Saturdays come October.

But planning is neither easy nor cheap. She will have to locate an outlet for her extension cord and remember to print signage and bring sanitizer. Choreography is another issue because the dances must be rethought “for the challenge of dancing in sneakers on concrete,” McEwan said.

Although state rules that went into effect

April 2 allow indoor venues to operate at 33% capacity to a maximum of 150, arts organizations said that producing indoor shows is so expensive that a third of ticket sales would not cover costs. Instead, outdoor performances seemed like the easiest path to performing again. So far, organizers say, putting on shows outdoors has been challenging but rewarding, both for performers and their audiences.

“We were stunned by the crowd’s response,” Matthew Aubin, the artistic director of the Chelsea Symphony, said of the first of the monthly shows put on outside Chelsea Market.

stayed for the full concert, which featured a single percussionist. (More sections of the orchestra will join in future concerts.)

“The player himself was, like, ‘I felt the pressure to keep playing’ even though he had already done the same set three times,” Aubin said.

Financially, the benefits of the outdoor shows remain to be seen, even as they draw praise from the organizers and artists. Jobs in the arts, entertainment and recreation sector fell by 66% last year compared to 2019, according to a state comptroller’s report.

The effects of the lost work aren't limited to performers. With their budgets cut, donations reduced and ticket sales gone, arts organizations had to let staff go and end relationships with stage managers and lighting designers. Many performing artists have left the city, while others, accustomed to gig work, have been able to patch together income from online performances and teaching, out-of-town in-person events and unem-

“WE WERE STUNNED

BY THE CROWD’S RESPONSE”

Industry woes The performance, a collaboration with the nonprofit StreetLab that was sponsored by the market and the Department of Cultural Affairs, was on a chilly day in early March. Nevertheless, crowds that might have watched for just a moment on a busy weekend in 2019

ployment benefits.

Many performance spaces became eligible to apply for the Shuttered Venue Operators Grant in April. These funds will make up all or most of 2020’s lost revenue for small theaters and companies.

Attracting a crowd To promote the arts, the city’s program, Open Culture, is offering permits for $20 per month for ticketed or free events at dozens of streets and plazas across the boroughs. In the past, fees per day for outdoor events amounted to $25,000 for for-profit organizations and $5,000 for nonprofits.

Still, that leaves the organizations with the burden of paying for performers and either paying for or doing the event coordination themselves. Meanwhile, the state’s arts revitalization effort focuses on a series of events called NY PopsUp that are run by a professional production company, Good Sense and Company, with a team of producers and artists acting as advisers.

The events, which take place inside and outside, are intended to help boost See DANCE on page 18 APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 3

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REAL ESTATE

‘Faithless servant’: HFZ accuses former exec of looting the struggling company the investors sued HFZ for about $10 million that he claims he was owed. The CIM Group has also foreclosed on and taken over four of HFZ’s condo buildings.

Feldman’s business was even sued by the owner of a storage facility he used over unpaid bills. When the owner, Nir Shuminer, threatened to sell off the items inside the storage units, Feldman blamed Meir for not handling the bills. The belongings were sold at auction weeks later.

Last week Tiger Ref Highline sued the company for more than $10 million over alleged fraud at a project on the High Line.

But some of the money that the cash-strapped firm needed to pay off its debts was being pumped out from under its nose, the developer claims.

Z

iel Feldman’s beleaguered development firm, HFZ Capital Group, has accused its former executive Nir Meir of being a “faithless servant” by looting the company’s coffers, according to three lawsuits filed in state Supreme Court in Manhattan and Suffolk County recently.

The developer claims that ex-managing principal Meir siphoned millions in company assets for his own personal use, padded his investment-grade wine collection and appropriated a $45 million, company-owned Southampton beach house through forged documents, according to a suit filed last Tuesday.

HFZ is seeking $43 million to recoup its losses.

HFZ and Feldman have fielded several lawsuits of their own from frustrated business partners claim-

Hidden spending Between 2016 and mid-2020, Meir spent more than $11 million on the company’s American Express mostly for personal use, HFZ claimed in court papers, adding that he had been “living well above his means with HFZ’s money.”

Those charges include hundreds of thousands spent on Meir’s wine

THE REAL ESTATE DEVELOPER IS SEEKING TO RECOUP $43 MILLION FROM MEIR ing they were owed money.

Developers are looking to take over a struggling $2 billion condo project dubbed the XI, where one of

FELDMAN

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BY NATALIE SACHMECHI

collection and other personal expenses. In April 2018 he spent nearly $1 million on the credit card and an additional $670,000 the next month. That year he racked up $5.3 million in bills, according to a company ledger filed with the court.

HFZ also claimed that he had wired himself more than $5 million from company accounts since 2017 for unknown reasons.

“Some weeks Meir would initiate just one wire to himself,” the complaint read. “Other weeks, he would

send himself a wire every other day.

And in some weeks he would send himself multiple wires in one day.”

He would “aggressively” use his position at the company to hide his activities and make sure other employees complied, HFZ said in the lawsuit, “by fostering a culture of fear of reprisals by Meir if staff members did not follow through on his directions.”

Housing dispute Meir also used forged documents

to steal the company’s Southampton beach house at 40 Meadow Lane, the company alleged.

The firm claimed in court papers that he lived there, as well as in an HFZ apartment on the Upper West Side rent-free for years.

He then fabricated documents to fraudulently transfer 95% ownership of the house to himself and claimed that his employers gave him the house to compensate him for his services, the complaint said.

In December last year, an entity tied to one of HFZ’s lenders, Monroe Capital, which held the title to the home, sued Meir for living there without its consent and tried to prevent him from selling the house.

Meir countersued, claiming that 95% of the house was actually his.

The suit was discontinued last month, but HFZ filed another in Suffolk County court on March 31 demanding back any money that Meir made from the sale after paying off its mortgage—a purported $13 million.

“Meir has demonstrated his willingness to create false documents and forge signatures in order to obtain a benefit,” the company said in the complaint. “Expatriating the excess proceeds into foreign-held bank accounts ... will be a simple matter for him.”

A representative for Meir did not respond to a request for comment. ■

POLITICS

New York’s tax agreement combined with SALT cap will soak the rich

BY BRIAN PASCUS

the new tax increases, with the income tax rates and the corporate franchise rate set to expire in 2027 and 2023, respectively.

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Uncertain future

ISTOCK

he success of New York’s newest tax increases on the rich will hinge on whether the federal government repeals an unpopular cap on local deductions and whether the wealthy decide to flee the state.

Last week Albany Democrats and Gov. Andrew Cuomo announced the tentative framework for a budget agreement that includes new taxes on millionaires and other high earners, including an increased corporate franchise tax.

The proposed legislation would give New York City millionaires the highest combined state-and-city tax rate in the nation.

Under the parameters of the tentative deal, high earners pulling in $1 million or more (and joint filers making $2 million) will now see their state income taxes rise from 8.82% to 9.65%. Two new income tax brackets will be created under the new budget: Earners making $5 million to $25 million will pay a 10.3% rate, and earners making more than $25 million will pay a 10.9% rate.

“We are still concerned with New York raising taxes on a highly mo-

bile group of people who have, to a large extent, been working remotely for more than a year,” said Kathryn Wylde, CEO of the Partnership for New York City.

‘Not surprising’ The corporate franchise tax rate rises from 6.3% to 7.25% under the tentative budget agreement, an increase that New School economist James A. Parrott called “long overdue.”

“Given the high level of income

inequality and how high-income people have fared during the pandemic year we’ve all experienced, it’s not surprising they acted to raise taxes on high earners,” Parrott said. “I don’t think the increase is onerous or out of line.”

Barbara Denham, an economist at Oxford Economics, said the new tax increases “seem very fair.” Those worried about millionaires leaving for Florida, she said, should recognize “they would’ve left by now.”

Sunset provisions are included in

This is not to say the tax increases will come without consequences. If anything, they arrive at a time when the future of New York’s economy has never been more precarious.

Millions of commuters continue to work from home—sometimes in other states or regions—and an ecosystem that supports small businesses, entertainment and tourism remains shuttered by social-distancing controls.

“You’re now upping the ante on multimillionaires at a time when they’ve lost the federal [state and local tax] discount and the future presence of them and their firms in New York is up in the air because we don’t know what’s happening,” said E.J. McMahon, research director at the Empire Center for Public Policy.

“It’s a very dangerous time to do something like this.”

The combined state and local tax, or SALT, reached 12.7% once the cap went into effect in 2018, lifting the effective marginal rate from 8.8%, according to figures from the

Empire Center.

“It’s true that if SALT had no limitations on deductions, the impact of these state tax increases would be less, no question about that," Parrott conceded.

Denham, who supports the new tax increases, thinks the federal government must repeal the SALT cap for the tax increases to make economic sense and give businesses and their workers the economic incentives to stay in the city.

“The other cities—Austin, Raleigh, Salt Lake City—won’t grow like we will because they don’t have public transportation,” she said, citing the city’s efficiency and practical urban environment. “It’s just really important to bring back the SALT deduction.”

There already may be fewer millionaires to tax, according to an Empire Center report that shows New York lagged the national average between 2009 and 2018 in growing its high-income tax base.

“If that erosion accelerates, there’s a real danger of diminishing returns from this,” McMahon said.

“All you need to do is lose a few hundred high-income earners and you have permanently dented the tax base.” ■

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HEALTH CARE

State budget bill details nursing home spending mandates for patient care, staffing

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tate lawmakers have reached a deal on requirements that New York nursing homes spend a certain portion of their revenue on patient care and staffing.

The Health and Mental Hygiene budget bill calls for nursing homes to spend at least 70% of their revenue on direct patient care, including 40% on resident-facing staffing, according to language released by the Legislature. Only 85% of such spending that relies on an outside staffing agency will count toward the minimum threshold.

Nursing homes that fail to meet the spending mandates or bring in a certain amount of excess revenue will have to put the difference into the state’s nursing home quality pool, which will then be redistributed to highly rated nursing homes, according to the bill.

“This pandemic has demonstrated that there is a need to strongly regulate and reform nursing homes in New York state to ensure they are providing the highest level of care to their patients,” said state Sen. Gustavo Rivera, who chairs the

health committee.

Estimates by Local 1199 of the Service Employee International Union, one of the country’s largest health care unions, indicate that the spending requirements would shift an estimated $500 million in existing revenue to resident care and staffing. The average nursing home spent 65% on resident care and 35% on staffing in 2018, according to a union analysis of cost reports.

policy and legislative director for 1199SEIU, said the union supported adding a waiver over loosening the standards laid out in the bill. Lawmakers cited Superstorm Sandy as the kind of circumstance that a nursing home could cite to obtain a waiver, Schaub said.

BUCK ENNIS

BY MAYA KAUFMAN

Unexpected circumstances The spending mandates echo bills approved earlier this year by the state Legislature and included in Gov. Andrew Cuomo’s 30-day budget amendments. The budget bill, which was due April 1 as part of the final state budget package, lays out the final language and definitions.

It includes a waiver for “unexpected or exceptional circumstances that prevented compliance” and “extraordinary revenues and capital expenses” incurred because of a natural disaster or other

One size fits all? circumstances.

Exceptions would be subject to approval by the health commissioner, after the long-term-care ombudsman and chairs of the Senate and Assembly health committees are given 30 days’ notice, according to the bill.

“That provision is a recognition that they really don’t know how this is going to turn out,” said Stephen Hanse, president and CEO of the New York State Health Facilities Association. “There may be many negative, unintended consequences, and those could be very significant.”

Helen Schaub, New York state

The spending mandates have drawn criticism from the nursing home industry since lawmakers and union representatives made a big push for them in February.

Hanse, whose association represents more than 450 nursing homes and assisted-living providers statewide, said the requirements impose a “one size fits all” standard on facilities that have unique needs and situations. According to his analysis, many top-rated long-term-care facilities would not meet the 70% and 40% thresholds.

“The bill is akin to the state of New York saying to every family of four in the state of New York, ‘This

is how you have to spend your money,’ ” he said.

Schaub, of 1199SEIU, commended lawmakers for the bill’s descriptive definitions of eligible and excluded spending categories. Hanse decried the definitions as arbitrary. “[The measure] jeopardizes the financing of these nursing homes,” Hanse said.

Costs that qualify as direct resident care under the bill include everything from laundry and housekeeping to therapies, laboratory services and activities programs.

Not included are administrative costs, other than nurse administration, and capital costs, debt service, taxes, capital depreciation, rent, leases and fiscal services.

“The spending ratio will help ensure that nursing home operators spend money on patient needs like staffing, quality food and other critical services rather than siphoning funds into their pockets through real estate deals and other financial manipulations,” said Assemblyman Richard Gottfried, chair of that chamber’s health committee.

Lawmakers approved the budget last Tuesday. ■

HOSPITALITY

Tavern on the Green goes down-market, but will it work?

BY CARA EISENPRESS

R

obert Moses had a vision when he built Tavern on the Green in Central Park in 1934, but New Yorkers have not always shared his enthusiasm.

But for this summer, when New Yorkers look to the outdoors as the place for dining and socializing, Moses may have left a previously unappreciated legacy: beautiful and large areas for eating outside, including a flagstone terrace where he imagined couples dancing to music from an outdoor orchestra.

The restaurant, which closed in March 2020, announced last Tuesday that it would reopen for outdoor and limited indoor dining, with a to-go window, April 29.

The question now is whether a location in the middle of the city’s prized outdoor space will be enough to redeem a restaurant that has struggled to attract New Yorkers in recent years.

“It’s an amazing spot, a magical location,” said Clark Wolf, a restaurant consultant who has worked with Tavern on the Green. “It’s at the edge of a fantasy piece of New York that we treasure.”

The fantasy has been through 87 years of real problems.

First, Moses, then parks commissioner, had to deport deformed sheep that had made it their home.

After handing Tavern’s operating

contract to favorite concessionaires, he came under criticism for charging prices that were too high for typical New Yorkers, according to Robert A. Caro’s book The Power Broker: Robert Moses and the Fall of New York. Twenty years later, in 1956, came the worst offense: At 3 in the morning, Moses destroyed a nearby glen beloved by neighborhood kids to build extra parking spaces for Tavern’s guests.

Big sales, big expenses By the 1980s Tavern on the Green had become a tourist and special occasion staple, a place to throw big parties. It closed for renovations after New Year’s Eve 2009. But for 25 years before that, Tavern was consistently one of the highest-grossing independent restaurants in the country, reporting $36.2 million in revenue in 2008, The New York Times reported.

But the big sales figures came with enormous expenses. Unlike most restaurants in the city, its employees were members of the Hotel and Motel Trades Council. The building is old and has often needed repairs. Controlling vermin from the park could cost hundreds of thousands of dollars a year.

In 2014 Tavern on the Green reopened under new ownership, with some concessions from the city and the unions to keep costs down. Its 20-year lease allows the city to col-

lect a percentage of the restaurant’s sales for rent, but after the long renovation, the city let it defer paying until 2019.

It also negotiated to pay nonunion wages for the first two years of operating. The union and the city have not yet responded to a request for details about the current agreements. After a boost from the reopening initially brought New Yorkers back out of curiosity, there was turnover among chefs and some negative reviews.

Chef Bill Peet now oversees the kitchen, which Wolf said is a good choice. From the reopened restaurant’s to-go window, which existed before the pandemic, he will serve dishes such as veggie frittatas and cheese plates. Tavern on the Green converted its South Terrace, which used to be part of the events space, and added a beer garden to the front.

Yet even if this appealing outdoor dining setup attracts passersby and the returning trickle of tourists, the restaurant will still miss what Steve Zagor, a restaurant consultant, said is the bulk of its business: large events.

“They can make a go of it,” Zagor said. “But there are a lot of ifs: if the city gives it an abatement, if the union makes adjustments, if employees come back to work, if there is some pickup business, if the outdoor dining works.” ■

Redefining what you should expect from your accountant. grassicpas.com

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IN THE MARKETS

Revenge of the retirees: Former Verizon workers look to clip executive pay packages CEO’s $39 million termination package is most recent target

J

“THIS IS THE TIME OF LIFE WE SHOULD BE PLAYING WITH OUR GRANDCHILDREN”

Verizon continues to honor its pension commitments.

“We’re all rowing in the same direction now,” he said.

In 2003 the retirees group won a majority of shareholder support for a proposal calling on the board to get investor approval for any golden parachute above a certain size.

Since then, Verizon has begun granting “performance shares” and restricted stock that aren’t covered by the 2003 policy, which Cohen said needs to be updated this year.

In 2007 the retirees secured another victory when a majority of investors endorsed their plan to hold an annual vote on Verizon executives’ pay, and in 2013 another majority approved their proposal for investors to nominate board members. The group said it has pushed Verizon to make 11 changes to its corporate governance practices over the years, mostly done behind the scenes before a shareholder vote.

“We have a very nice relationship with Verizon,” Cohen said. “We’re not in the boxing ring. We all want the company to succeed.”

He said the retirees group has begun hearing from former employees of other telecommunications companies spawned after the government broke up AT&T in the 1980s.

“We’re all children of the old Ma Bell,” he said. ■

BLOOMBERG

ack Cohen, a retired telecom- complished by shareholders,” said munications office manager, is Cohen, who retired after 26 years' service in 1994, when Verizon was an unlikely corporate activist.

“This is the time of life when known as Nynex. “Especially this we should be playing with our year, how do you look at someone grandchildren and having fun,” the waiting in line for food when there are corporate termination packages 77-year-old said. that could choke a horse?”

Instead, Cohen is chairman of the AssociaBenefit cap tion of BellTel Retirees, a group of some 130,000 The retirees are rallying former workers and curagainst the $39 million rent shareholders that for package that Verizon more than 20 years has Chief Executive Hans successfully fought for Vestberg stands to collect changes at Verizon Comif he is terminated withmunications. The retirees out cause, which amounts are at it again this year, to nearly seven times his AARON ELSTEIN salary calling on Verizon to limit and a short-term the size of golden parabonus. The retirees group chutes, those exit packages award- proposes to cap the benefit at 2.99 ed to departing corporate leaders. times and is asking all shareholdThe group persuaded 59% of all ers to vote in favor of its resolution Verizon investors to approve limits at Verizon’s annual meeting next on golden parachutes 18 years ago, month. but the former workers want to In a regulatory filing, the telecommunications giant warned that adopting the resolution “could put Verizon at a competitive disadvantage” because “a significant portion close loopholes that have emerged of the executives’ annual compensince then. sation would be uncertain” for an “It’s accounting gymnastics de- unacceptably long period. signed to circumvent what was acVerizon didn’t respond to a re-

quest for comment.

A second proposal has been introduced by BellTel board member Tommy Steed, a cable splicer who helped restore service after a catastrophic 1975 fire at the New York Telephone Co. switching station in the East Village. His plan calls on the Verizon board to amend its claw back policy so pay can be recouped from executives who engage in “misconduct” rather than “willful misconduct.”

Verizon says the resolution is “defective” because it would allow for claw backs without taking into account an executive’s personal

culpability.

Pension commitments The BellTel retiree group got started in 1998 when seven retirees kicked in $350 each and started hosting lunches for former telephone company workers. Verizon denied the group access to any retiree list. The original members were from the corporate side but now the group is 50% unionized employees. Cohen said the suits in management and blue-collar workers didn’t get along when they worked together, but they’re now allies keenly interested in ensuring

RESIDENTIAL REAL ESTATE

Brooklyn, Long Island City continue to outpace Manhattan in sales activity, report finds

I

t’s been a stellar quarter for apartment sales in Brooklyn and Long Island City, according to a report from Serhant.

The city’s residential real estate industry was excited by earlier reports that Manhattan sales activity had surpassed prepandemic levels by 2%, but Brooklyn and the popular Queens submarket have topped 2020 numbers for closed deals by 10%, according to the data.

Throughout the pandemic, both areas outperformed Manhattan activity as New Yorkers fled the borough. That trend has followed the market into the first quarter of this year and could continue until at least the fall, said Garrett Derderian, a director of market research at the brokerage.

Among Manhattan, Brooklyn and Long Island City, the latter reported the lowest discounts overall, at just 5%. In parts of Manhattan, discounts on homes reached 9%, on average, according to Compass.

“That’s because of demand and

what buyers are willing to pay,” Derderian said. Homes in Long Island City are larger and more affordable than they are in Manhattan, and that’s what attracts people, he said.

Apartments priced under $1 million dominated sales there over the quarter, accounting for nearly 70% of total closed deals, according to the data. In Brooklyn, homes in that price range made up 61% of deals.

Record prices With the rise in demand for properties in those areas, prices also increased, with Brooklyn setting average price records, the report showed. Nearly 30% of homes sold there were between $1 million and $2 million, and the average price increased by 10.6% compared with the same period last year, to nearly $1.1 million.

“The big takeaway from the first quarter is that Brooklyn is no longer a buyer’s market,” Derderian said.

Long Island City reported a 7% increase in overall prices on average, and it had the same share of

BUCK ENNIS

BY NATALIE SACHMECHI

apartments go for more than $1 million as Brooklyn did.

But one drawback for Long island City is that it’s largely tied to the performance of Manhattan’s office market, Derderian said. It’s one stop away from Midtown by subway, and its residents enjoy the short commute to their offices.

“With work from home, we saw a

pullback in activity in LIC,” he said, “but we’re slowly seeing workers return with vaccines.” As more people go back to work, he said, that could give residential activity a boost.

The luxury market also saw a boost in activity. In total, there were 237 closings priced $2 million and higher in the first quarter, the second-highest total since Serhant be-

gan tracking the market a decade ago.

The greatest first quarter total was in 2017, when 302 luxury sales were recorded, fueled by new development closings at 265 State St., 51 Jay St. and Pierhouse—all in northwestern Brooklyn, the report said.

New developments continued to feed activity this year in both markets, especially at Brooklyn Point in Downtown Brooklyn and 1 Clinton in Brooklyn Heights.

In Long Island City, new condos at Skyline Tower at 3 Court Square and the Zipper Building have been developed in the past two years by Modern Spaces. Serhant also is marketing a building with NestSeekers that was developed in 2019 called Hero LIC. But the demand for apartments there could see some pullback by the third quarter, after Labor Day, Derderian said. That’s when more people will be vaccinated and will feel comfortable returning to their offices, which will fuel demand in Manhattan, he said. ■

6 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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ASKED & ANSWERED DOSSIER WHO HE IS Chief executive and co-founder, BlocPower

INTERVIEW BY RYAN DEFFENBAUGH

S

FROM Bedford-Stuyvesant

ince it was founded in 2013, Donnel Baird's BlocPower has "greened" more than 1,100 residential buildings in New York neighborhoods with old housing stock and high levels of poverty using solar panels and heating pumps, among other tools. The company funds the projects and pays investors back with the energy savings. After raising $63 million in February to expand nationally, BlocPower has opened green investing to others as well with a crowdfunding effort launched last month that has raised $557,000.

What was behind the decision to open up investment into your company's projects through crowdfunding?

I think there is a hunger from New York residents and Americans generally to see action on the climate. We are asking them to co-invest with Goldman Sachs and New York Green Bank to help buildings in their communities.

Venture capital funding into green-energy startups hit a record level last year. What's driving that surge?

From a regulatory standpoint, you've had four years of the Trump administration rolling back a lot of the climate policy that the Obama folks put in place. Elected officials from both parties in local governments saw what was happening federally and began to aggressively push local climate policy. Wall Street and private-equity funds are reading the laws and seeing a massive opportunity.

RESIDES Summit, N.J. EDUCATION Bachelor’s in history and literature, Duke University; MBA, Columbia Business School OBAMA INTRODUCTION Baird, 39, launched his career in energy through an Obama administration program, where he helped organize energy retrofits around the country.

One of the things I'd be looking at is the New York City Housing Authority, with 3,000 buildings and 500,000 lowincome residents. You can use some of the stimulus money to transform these properties into a clean energy spine for the entire city—the rooftops for solar, extra basement space for batteries, the parking lots for electric vehicle charging stations.

Are you hearing enough from the New York mayoral candidates about climate policy?

MASSIVE MARKET There are more than 100 million buildings in the U.S. with outdated energy systems, requiring at least $1 trillion to update. “You have to have Wall Street involved,” Baird said. “You can’t do this [as a] nonprofit.”

I have not heard enough. Each candidate needs to be talking more about what we, as the richest city in the country, are going to do to protect ourselves from climate change and how New York City can be that city on a hill, where other cities across the country can follow our example on climate.

How have renewable investments performed?

If you look back at the last two, three years, natural gas and oil investments have tanked. Solar has provided consistent returns. When you look at comparables over the last six months, clean energy is outperforming.

President Joe Biden plans to spend at least $2 trillion on infrastructure,

Is the climate an issue that takes a back seat during a health and economic crisis?

I don't view climate as a separate issue beneath the economic crisis or public health or even racial justice crisis. Climate infrastructure is the solution for working our way out of this mess. ■

BUCK ENNIS

DONNEL BAIRD BlocPower

including clean energy. How would you recommend New York City's portion of that money be put to work?

TITLE SPONSOR

Wednesday, May 5 | 4-5 p.m.

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chief executive officer K.C. Crain senior executive vice president Chris Crain group publisher Jim Kirk

EDITORIAL

publisher/executive editor

New York gaining a reputation it would rather not have

editor Robert Hordt assistant managing editors Telisha Bryan,

Janon Fisher deputy digital editor, audience & analytics

the tax load. We need them.

It all comes down to reputation.

Up until now, New York officials could point to at least one state, California, where the income tax rate was higher than in New York.

But now New York will wear that infamous crown–combined state and local taxes in the city will be the highest in the nation. Not the type of slogan you want to put on a bumper sticker to attract businesses to the city, is it?

The $212 billion state budget represents a substantial increase from last year’s $177 billion spending plan. While it can be argued that many of the sectors receiving funding—small business, housing and education—are worthwhile, fully half of the $4 billion raised by the tax increases on the wealthy goes to help undocumented workers, a controversial earmark pushed by the progressive wing of the Democratic Party that may not sit well with a large portion of the taxpaying public.

In the past New York officials argued that taxes don’t matter. To be really successful, companies had to have a presence in New York. This is where deals get done and where you find the best and brightest employees. But as the

THE STATE DIDN’T NEED TO RAISE TAXES ON THE WEALTHY THIS YEAR be asking ourselves, will any ever want to move in? Let’s face it: Even rich people die, and they have to be replaced with other rich people, right? Say what you want about the 1-percenters, they bear a disproportionate share of

EDITORIAL

Jennifer Samuels associate editor Lizeth Beltran art director Carolyn McClain photographer Buck Ennis senior reporters Cara Eisenpress,

Aaron Elstein, Eddie Small reporters Ryan Deffenbaugh, Maya Kaufman,

Brian Pascus, Natalie Sachmechi, Shuan Sim executive assistant Devin Cavallo to contact the newsroom:

www.crainsnewyork.com/staff 212.210.0100 685 Third Ave., New York, NY 10017-4024 ADVERTISING AP PHOTO

W

ith last week’s state budget passage and the increase in taxes on the state’s wealthiest earners (See page 14 for a primer on the budget), the $64,000 question comes up again: Will the richest of the rich in New York City pack up their belongings and move to Florida or Texas or one of the other eight states that don’t have income taxes?

Some say yes, this is the straw that will break the camel’s back.

No, others claim, evidence shows that the rich in New York don’t move out because of higher taxes.

But maybe they’re asking the wrong question. Instead of wondering whether wealthy folks will move out, perhaps we should

Frederick P. Gabriel Jr.

pandemic has taught us, business executives have more options now.

They don’t necessarily have to be physically in New York anymore.

Deals are getting done via Zoom and employees can work from home—and home can be pretty much anywhere in the world with an internet connection.

Fact of the matter is, the state didn’t need to raise taxes on the wealthy this year. The state’s dire financial situation predicted six months ago has all but disappeared, thanks to tax revenue that has been coming in stronger than predicted ($1.8 billion more than

forecast) and the latest federal bailout bill that will bring $12.5 billion to the Empire State.

Gov. Andrew Cuomo is counting on a repeal of the cap on state and local tax deductions imposed by the Trump administration to offset the state’s latest tax increase on the wealthy, but that is no way assured, especially with Democrats' razor-thin majority in the U.S. Senate. What is more certain is that New York is looking a little less attractive right now as a place to locate a business, and that is not going to help the city’s economic recovery. ■

www.crainsnewyork.com/advertise account executives Roland Espinosa,

Kelly Maier, Courtney McCombs, Christine Rozmanich, Laura Warren people on the move manager Debora Stein,

dstein@crain.com CUSTOM CONTENT senior manager, custom content

Sophia Juarez, sophia.juarez@crainsnewyork.com EVENTS

www.crainsnewyork.com/events events and marketing manager

Michelle Sustar, mstustar@crain.com manager of conferences & events

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

OP-ED

212.210.0707, lmelesio@crain.com

It’s time to reclaim the city sidewalks

BY GUIDO HARTRAY AND LIAN FARHI

W

hat’s standing in the way of our city’s recovery?

Probably trash. Long the necessary evil with which every city dweller contends, New York’s waste has always been front and center, staring right back at us.

As the pandemic has opened our minds to new, unexpected uses for curb lanes, from outdoor dining to makeshift classrooms to pop-up entertainment venues, it has placed additional demands

and our planet.

New York City has taken tremendous strides to upgrade its bus stops, kiosks and bike lanes, so why can’t this be done with our waste?

Eurotrash

Following the example of Paris and Barcelona, in 2019 the city issued a request for a new container and collection system using the curb lane. Promising design proposals showed it’s possible to separate organics and recyclables, mitigate rat infestations, reduce the time and mileage that a garbage truck spends picking up WE NEED TO FIND A WAY TO DEAL commercial WITH REFUSE SO THAT IT HAS LESS waste by 85%, and support IMPACT ON OUR STREETSCAPE climate action and Vion curb and sidewalk space de- sion Zero goals, with the additional graded by our trash. As spring and benefit of creating more usable summer approach, our streets and and flexible streetscapes.

In the fall of 2020, the city took sidewalks offer healthy places to socialize, but we need to find a the next step by encouraging busiway to deal with refuse so that it ness improvement districts to take has less impact on our streetscape on this challenge through the

Clean Curbs Initiative. But transforming trash collection requires the coordination of too many interests and agencies for any BID to tackle the problem alone.

Complicating the picture: Refuse and recycling collection is just one of many competing demands for space at the curb. Other uses include parklets and new restaurant seating we don’t want to give up, as well as the deliveries on which we depend.

But with bold, collective action, our city’s world-class designers, architects, engineers and experts in sanitation can develop systems that treat refuse as a resource, paving the way for more lasting public-space improvements.

The situation demands a coordinated, citywide strategy that looks comprehensively at all the possibilities of this essential piece of public infrastructure. The solution needs to balance public and private use with equity and sustainability in mind. Designing and implementing this new interface between the sidewalk and the

PRODUCTION production and pre-press director

Simone Pryce media services manager Nicole Spell

street will require a substantial effort, prototypes and pilot programs, just as the bus shelters and bike-share stations we now take for granted once did.

Improving how we handle waste is an ecological imperative that the next mayor must address. Improving our sidewalks’ accessibility and comfort is a social and economic imperative if we are to build back our street life and economy. A comprehensive redesign of our sidewalks and curb lanes with new trash containers and an efficient collection system can achieve both objectives and pay for itself.

The time is now to move our streetscape into a more pedestrian-first future for all of the city. ■

SUBSCRIPTION CUSTOMER SERVICE

Guido Hartray is a founding partner at New York-based architecture and landscape architecture firm Marvel. Lian Farhi is a senior transportation planner at engineering, planning and consulting firm Sam Schwartz Engineering.

editor-in-chief emeritus Rance Crain

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Entire contents ©copyright 2021 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 chief executive officer K.C. Crain senior executive vice president Chris Crain secretary Lexie Crain Armstrong

chief financial officer Robert Recchia founder G.D. Crain Jr. [1885-1973] chairman Mrs. G.D. Crain Jr. [1911-1996]

8 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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OP-ED

BY RICK MIRANDA

S

ince being inaugurated, President Joe Biden has successfully delivered his campaign promise to provide economic relief to the American people. One of the ways his administration will continue to do that is by putting together a strong Cabinet of officials who are serving in some of the country's most important roles.

One of New York’s own, Senate Majority Leader Chuck Schumer, has been working diligently to carry out Biden’s agenda in the Senate and swiftly confirm the president’s nominees.

One of the most critical positions is that of U.S. trade representative.

Biden picked Katherine Tai to serve in this role, and Tai is a strong choice

TRADE IS VITAL TO KEEPING AMERICA’S ECONOMY STRONG for this position, given her work on negotiating trade agreements and with her experience as the chief trade lawyer on the House Ways and Means Committee. In addition, she worked in the Office of the United States Trade Representative from

2007 to 2014 and prosecuted many cases on Chinese trade practices at the World Trade Organization. Considering her qualifications, it was no surprise when the Senate Finance Committee recently voted unanimously to confirm her.

Trade truce Given that the Office of the USTR is responsible for recommending, implementing and overseeing the nation’s trade policies, which have a huge impact on small businesses throughout the country, it is crucial that Tai focus her attention on putting America’s best interests first— something that the previous administration failed to do.

The Trump administration’s trade representative, Robert Lighthizer, spent his time implementing tariffs and carrying out the president's reckless trade war with China and our allies in countries throughout Europe and Asia. As a result of the trade war with China, American businesses, farmers, manufacturers and consumers have been forced to pay more than $80 billion in tariffs, which are taxes paid by Americans directly to the federal government.

Section 232 tariffs on aluminum and steel have been incredibly devastating to American workers and

manufacturers. Overall, these tariffs have harmed Americans who are just trying to stay afloat and save their businesses amid the global pandemic.

In addition to the negative impact that businesses and farmers have endured because of Trump’s trade war, the U.S. manufacturing industry has been devastated. This damage can be easily reversed under the Biden administration. Michael Hicks, an economist at Ball State University who studies manufacturing, has said that “if the next administration was able to end the trade wars, eliminate tariffs and continue PORT JERSEY MARINE TERMINAL to stop essentially taxing Americans for buying foreign war with China. If the Biden adgoods, I think we would see a big ministration wants to send a mesexplosion in manufacturing in the sage to the tens of millions of United States and really boost the Americans who rely heavily on trade, it should lift the Trump-era prospects of a recovery.”

This is exactly why Biden and the tariffs immediately.

By doing so, the administration new leadership in the Office of the USTR must work together with can provide immediate relief to the congressional leaders such as people who have been struggling Schumer and House Speaker Nan- since the trade war began. The recy Pelosi to prioritize repealing tar- lief will allow them to focus on reiffs and ending the harmful trade covery from the pandemic instead

BLOOMBERG

Repealing Trump-era trade tariffs would throw a lifeline to struggling businesses

of the tariffs' negative impact.

Trade is vital to keeping America’s economy strong, and I have full confidence that Katherine Tai will be a champion for American farmers, businesses and manufacturers, and that she will focus on repealing the tariffs and ending the trade war. ■ Rick Miranda is president and CEO of the Brooklyn Hispanic Chamber of Commerce.

OP-ED

BY CHRIS LYNN

T

he taxi medallion industry, created and protected as a city franchise by New York City law in 1937, has been decimated by regulators at the Taxi and Limousine Commission who consciously undermined a system that was one of the greatest avenues for immigrants seeking to become part of the middle class.

The actions of the regulators in the face of driver and owner suicides led one congressman to call on the TLC chair to resign and the agency to be dismantled. Sadly, no action was taken. Local Law 149, which would put yellow cabs on a more level playing field with Lyft and Uber, was effectively vetoed by the same unelected regulators.

A City Council taxi medallion task force, established with great fanfare, concluded without a single legislative remedy drafted to address and ameliorate the city-created crisis—and the epidemic of bankruptcies and suicides that shocked the city.

Fast-forward to this year, and the failures of the past are reminiscent of Karl Marx’s observation that history repeats itself, the first time as tragedy and the second time as farce. What else would you call

Mayor Bill de Blasio's plan to provide interest-free loans of up to $29,000.00 to medallion owners who have lost everything because the TLC allowed the proliferation of Uber?

The mayor, deflecting the way his own appointees caused the tragic decimation of the iconic yellow taxi, claims the city doesn’t have the money needed to truly compensate those owners defrauded by a mayoral agency. As usual, he's wrong.

Metered response The taxi medallion can be resurrected, and those who have suffered from the tragic farce of city actions and inactions can be made whole. This pursuit of justice cannot, however, be accomplished if we leave the current regulatory agency in place. It simply has done too much damage and it is not capable of reform.

Enter the New York state special district legislation, a blueprint that the city could adopt from the entity created by the state and the city when they established the United Nations Development Corp. to assist the nascent United Nations.

The UNDC issued its tax-free bonds to build a hotel, an office building and parking garage, and it took

control of several townhouses. These properties were used for the benefit and use of the U.N. Mayor Rudy Giuliani hired me to go there and sell the hotel and office buildings, parking garage and townhouses.

The city has a strict borrowing limit imposed by law. Period. No bailouts.

But maybe there is another avenue. The governor and mayor can create a similar public benefit corporation with its own bonding capacity, and that PBC can subsume the entire TLC, as it exists--transforming the agency in the process.

This won't be easy. The TLC was created by the city charter. This council retains the authority to hand it over to a newly created public benefit corporation. Once the TLC is part of the newly created special district public benefit corporation, its board can order full implementation of Local Law 149.

That is a critical first step.

This can then begin to level the taxi and app-hail playing field. This new corporation could issue an ultimatum to those private-equity

BUCK ENNIS

Saving the taxi industry starts with getting rid of the TLC

firms that scooped up thousands of medallions but don’t operate the cabs that they own: Turn them over for what you paid (tax-free bonds can be issued to get the money) or the new corporation will simply repossess them.

The new TLC, once in possession, could then sell these medallions at an affordable price to operators who were previously and unfairly dispossessed.

Finally, this new entity could act as a guarantor to still underwater medallion owners and entertain

any proposed plan to bail out the beleaguered medallion owners. It's the right thing to do. New York City continued in 2012 to sell medallions, even though its own staff warned in internal memos that medallion values were dropping.

Bailout? Not really.

It is simply redemption for those the city defrauded. ■ Chris Lynn is the former New York City transportation commissioner and chair of the NYC Taxi and Limousine Commission.

APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 9

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PEOPLE ON THE MOVE

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

ENGINEERING

HEALTH CARE

LAW

STV

CUNY Graduate School of Public Health and Health Policy Foundation

Freeborn & Peters LLP

John D. Porcari has joined STV’s board of directors. A nationally recognized leader in public and private sector infrastructure, Porcari is president of Axilion Smart Mobility USA. Among his projects is the Moynihan Train Hall at Pennsylvania Station, where he served as principalin-charge. Previously, Porcari served as deputy secretary of the U.S. Department of Transportation for the ObamaBiden administration and twice served as Secretary of the Maryland Department of Transportation.

Daniel J. Lowy has been appointed to the CUNY Graduate School of Public Health and Health Policy Foundation Board of Directors.

He is Founder and CEO of EMU Health, a Queens-based integrated outpatient clinic, and an advocate for increasing accessibility and affordability of quality health care for 2.5 million New Yorkers in Queens. The CUNY SPH Foundation Board provides critical governance and leadership to support the school and its students, the broader CUNY community and the City at large.

Delphine Knight Brown is a Partner in Freeborn’s Litigation Practice Group, and a member of its Intellectual Property Practice Team.

With over twenty years of trial experience, Delphine’s practice focuses on complex intellectual property and technology cases, with extensive experience in the life sciences industry. She has served as lead counsel for several global pharmaceutical companies in Hatch-Waxman litigation and trials involving dozens of drug products, dosage forms and delivery systems.

FINANCE

LAW

REAL ESTATE

Popular Bank

Foley Hoag LLP

Wharton Equity Partners

Popular Bank, a subsidiary of Popular, Inc. (NASDAQ: BPOP) has appointed Brett Rand as a Financial Consultant with Popular Investments and a Registered Representative of Infinex Investments, Inc., serving clients in Brooklyn, NY. Leveraging more than 20 years of industry experience, Mr. Rand specializes in delivering holistic solutions to support diverse financial needs. He will further Popular Bank’s vision to provide clients a comprehensive range of wealth-related products and services.

Former New York State Bar President Stephen P. Younger and Noah Shaw have joined Foley Hoag LLP as partners in the Younger Litigation Department and Energy practice, respectively. Both are resident in the firm’s New York office.

Younger will build upon Foley Hoag’s Shaw existing commercial, securities, insurance and real estate disputes practices in New York, while also bringing to the firm his extensive practice representing European and Latin American companies.

Shaw will strengthen the firm’s capabilities with respect to strategic, regulatory, financial and policy matters arising in clean technology and renewable energy industries.

Wharton Equity Partners hired Ronald Uretta as COO. Uretta will oversee all operational functions across the company’s real estate and private equity platforms and will be a member of the firm’s executive committee. Uretta comes to Wharton with decades of experience in operations and management. He was previously Managing Director of CIII Capital Partners and CFO and COO of Insignia Financial Group (NYSE: IFS).

CRAINSNEWYORK.COM I OCTOBER 26, 2020 I

ASKED & ANSWERED Few qualities are more vital to the health of any business than financial experts in tax regulation, audit, estate administration, forensic accounting, organizational transformation, advisory services, fundraising and business equilibrium and organizational efficiency.

Rarely has the value of both been more strongly felt than in recent structure. They represent an extraordinary group of professionals from months. From stress-tested balance sheets to fast-changing regulations, firms of varying size and renown.

To find these honorees, Crain’s consulted with trusted sources in the and reconfigured supply chains to “new normal” working arrangements, business world in general and in the accounting and consulting realms in the Covid-19 pandemic has challenged even the strongest of businesses.

Standing tall within this chaotic breach are the foot soldiers of profes- particular. The nominations submitted by individuals and firms in the New Few qualities are more vital to the health of any business than financial experts in tax regulation, audit, estate administration, forensic accounting, York metropolitan area were rigorously vetted. Ultimately, each of the acsional service firms, led by accountants and management consultants. organizational transformation, advisory services, fundraising and business equilibrium and organizational efficiency.

In selecting the 86 honorees for this year’s list of Notable Women in counting and consulting notables was chosen for her career achievements Rarely has the value of both been more strongly felt than in recent structure. They represent an extraordinary group of professionals from Accounting and Consulting, Crain’s sought to spotlight the accomplished and involvement in industry and community organizations—and at times and renown. months. From stress-tested balance sheets to fast-changing regulations, firms of varyingI size 28, 2020 I to help New York rebound SEPTEMBER from the coronavirus. metropolitan area professionals and problem-solvers who keep business- her effortsCRAINSNEWYORK.COM To find these honorees, Crain’s consulted with trusted sources in the and reconfigured supply chains to “new normal” working arrangements, Read their biographies and learn how the members of this remarkable es churning. The talented individuals presented here are a diverse group, business world in general and in the accounting and consulting realms in the Covid-19 pandemic has challenged even the strongest of businesses. skilled at resourceful innovation and disruptive thinking. These women are cohort keep the gears of business whirling.

The nominations by individuals andadministration, firms in the New Standing tall within this chaoticare breach soldiersofof profesexperts insubmitted tax regulation, audit, estate forensic accounting, Few qualities moreare vitalthe tofoot the health any businessparticular. than financial York metropolitan organizational area were rigorously vetted. Ultimately, each of the acsional service firms, led by accountants and management consultants. transformation, advisory services, fundraising and business equilibrium and organizational efficiency. counting and consulting notables chosenan forextraordinary her career achievements In selecting the 86 honorees for this list been of Notable structure.

They was represent group of professionals from Rarely has the valueyear’s of both more Women stronglyinfelt than in recent andregulations, involvement infirms industry and community organizations—and at times Accounting and Consulting, Crain’s sought to spotlight the accomplished of varying size and renown. months. From stress-tested balance sheets to fast-changing efforts to help New from theCrain’s coronavirus. metropolitan area and professionals andsupply problem-solvers businessTo York find rebound these honorees, consulted with trusted sources in the reconfigured chains to who “newkeep normal” working her arrangements, Read their biographies learn how theand members this remarkable es churning. The talented individuals presented here are aeven diverse group, of businesses. businessand world in general in the of accounting and consulting realms in the Covid-19 pandemic has challenged the strongest cohort the gears of business whirling. submitted by individuals and firms in the New skilled at resourcefulStanding innovation disruptive thinking.

Theseare women aresoldiers particular.

The nominations talland within this chaotic breach the foot of keep professional service firms, led by accountants and management consultants.

In selecting the 86 honorees for this year’s list of Notable Women in Accounting and Consulting, Crain’s sought to spotlight the accomplished metropolitan area professionals and problem-solvers who keep businesses churning. The talented individuals presented here are a diverse group,

LAURA PETERSONskilled at resourceful innovation and disruptive thinking. These women are

York metropolitan area were rigorously vetted. Ultimately, each of the accounting and consulting notables was chosen for her career achievements and involvement in industry and community organizations—and at times her efforts to help New York rebound from the coronavirus.

Read their biographies and learn how the members of this remarkable cohort keep the gears of business whirling.

Managing Director and Communications, Media and Technology Northeast Business Leader Accenture

LAURA PETERSON

Laura Peterson’s résumé lists a whopping 10 positions she’s held at the multinational professional services company Managing Director and Communications, Media and Technology Northeast Business Leader Accenture since joining the firm in 2000. In her current role as Accenture the Northeast business lead for communications, media and technology, the enterprising ladder climber presides over a team Laura Peterson’s résumé lists a whopping 10 positions she’s of 3,000 professionals. Peterson is charged with managing a $750 held at the multinational professional services company and Media and Technology Northeast Business Leader million profit-and-lossManaging statementDirector for clients inCommunications, the Accenture since joining the firm in 2000. In her current role as aforementioned sectors as well as the high tech sector. Peterson Accenture the Northeast business lead for communications, media and works with key business leaders among more than 40 clients and technology, the enterprising ladder climber presides over a team Laura Peterson’sstructure. résumé lists a whopping within Accenture’s global management Since 2017, she 10 positions she’s of 3,000 professionals. Peterson is charged with managing a $750 held the multinational professional company has been a board adviser to at Fairygodboss, an online platformservices that million profit-and-loss statement for clients in the since joining the firm in 2000. In her current role as seeks to elevate womenAccenture in the workplace. aforementioned sectors as well as the high tech sector. Peterson the Northeast business lead for communications, media and works with key business leaders among more than 40 clients and technology, the enterprising ladder climber presides over a team within Accenture’s global management structure. Since 2017, she of 3,000 professionals. Peterson is charged with managing a $750 has been a board adviser to Fairygodboss, an online platform that million profit-and-loss statement for clients in the seeks to elevate women in the workplace. aforementioned sectors as well as the high tech sector. Peterson works with key business leaders among more than 40 clients and within Accenture’s global management structure. Since 2017, she has been a board adviser to Fairygodboss, an online platform that seeks to elevate women in the workplace.

LAURA PETERSON

Reprinted with permission from Crain’s New York Business.. © 2020 Crain Communications Inc. All rights reserved.

Further duplication without permission is prohibited. #NB20073

PAT WANG Healthfirst

P

INTERVIEW BY JENNIFER HENDERSON

at Wang, president and CEO of Healthfirst, a nonprofit insurer formed by a group of health care systems, had been working to advance value-based care long before the pandemic. The concept involves paying hospitals and physicians based on their patients’ outcomes rather than on the volume of services they provide. Now, as health care providers face unprecedented financial strain due to the Covid-19 crisis, Wang says such payment arrangements are more critical than ever. Not only do they improve the quality of care for patients—including the 1.5 million plan members Healthfirst serves throughout the city, Long Island and surrounding areas—but they also generate fiscal benefit for the facilities, practices and health centers that serve them.

How does Healthfirst contribute to value-based care?

What you understand as profit in another health insurance company’s balance sheet at Healthfirst is contractually-driven surplus that goes back to the delivery system. Eighty percent of the premiums we get for medical services flows through value-based payment arrangements, which means that providers benefit when there is a surplus in the premium. If less money is spent on fee-for-service claims, the surplus is part of the contractually-obligated payment stream.

What has that meant during the pandemic?

For April through June, we are distributing $250 million in those surpluses [about double that of the same period last year], and we’ve expedited the calculation and reconciliation of those amounts to get them out the door faster because the delivery system really needs it.

Why are value-based payments vital now and in normal times?

In the best of times, we have always been trying to push for this model because it aligns the incentives around trying to keep people healthy and avoiding unnecessary care. The providers are aligned with that goal because they benefit from it if they can reduce avoidable care. Consider Covid-19 to be like a war.

In war times, the model has been a lifesaver because there is this artificial depression of utilization, and that’s why the providers have lost so much money—their revenue has dried up. But because we have these risk contracts, the surplus that is there, that’s what has gone out the door to them.

DOSSIER WHO SHE IS President and CEO, Healthfirst AGE 66 BORN Jersey City RESIDES Manhattan EDUCATION Bachelor’s in history and East Asian studies, Princeton University; J.D., New York University School of Law FAMILY MATTERS Wang is married and has one son who lives in Brooklyn.

GLOBAL TIES She has lived in Croatia, Taiwan as well as China, where she had more than 20 first cousins.

FLARE FOR FOOD Wang has become reacquainted with the joy of cooking as a result of the pandemic.

EYE ON MEDICAID About three-quarters of Healthfirst’s members are Medicaid beneficiaries. The insurer’s initial response to the crisis included having its care managers make sure members had medicine and durable medical equipment to stay at home safely.

BUDGET CUTS Wang says the magnitude of the state’s Medicaid cuts—instituted to pare back on spending growth—is devastating. “Cuts to us as a Medicaid plan are cuts to hospitals.”

What happens when patients again begin seeking services?

We do see utilization coming back, and we have been encouraging our members to get needed care because people have put a lot of stuff off. We have to see whether the bounce back is gigantic or it just brings things back to a steady state. If we go back to a more normal utilization pattern, then the regular incentives of trying to align around good preventive care and avoiding unnecessary care, they just kick in.

How can the city safely bounce back from the pandemic?

Continue doubling down on the public health measures already in place: wearing masks, social distancing and hand sanitation. We know what to do. But I think a singular focus on getting the schools open for full learning should top the list of what we are aiming for. We should measure our success against that goal. As an employer, I can tell you that we will not be able to get fully back to work until the thousands of employees with school-age children can get their kids back into school. It’s of course better for all children and particularly critical for poorer children. The city’s economic recovery is going to hinge on how quickly and how well we can get that done so that parents can resume their normal lives too. As a longtime resident of the city who has watched us recover from recession, 9/11 and Hurricane Sandy, I believe in the city’s ability to bounce back against the odds. But this time is going test all of us, and we should be sober about the need for everyone to contribute to the solution.

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS Recognize them in Crain’s

For listing opportunities, contact Debora Stein at dstein@crain.com or submit directly to

CRAINSNEWYORK.COM/PEOPLEMOVES

PROMOTE. Why not?

What challenges face the broader insurance industry?

Balancing the needs and expectations of consumers who need and deserve good health care coverage, expanding access however we can and doing it within an increasingly constrained economic environment. This is especially true with Medicaid, where the state’s budget situation is dire at the same time as people’s needs are increasing. Given that Healthfirst has over 1 million Medicaid members, the potential impact of the state’s budget is especially concerning. For me, our priority has to be enabling as many people as possible to have full access to high-quality care, and it’s going to be a challenge to figure out how to do that in this economic environment. Insurers also need to be mindful of the hurt being experienced by so much of the provider delivery system.

The value of our products relies on having strong doctors, hospitals and community resources. Balancing all of this in a financially viable way is going to be a challenge. ■ Reprinted with permission from Crain’s New York Business. © 2020 Crain Communications Inc. All rights reserved.

Further duplication without permission is prohibited. #NB20080

For more information contact: Lauren Melesio • Director, Reprints & Licensing lmelesio@crain.com • (212) 210-0707

10 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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TECHNOLOGY

BY RYAN DEFFENBAUGH

G

oogle has accelerated its timeline for returning some of its 120,000 global employees to the office— setting off hope among the city’s business community that more firms in the tech industry will follow the search giant’s lead.

“I think the proof will be in the pudding, if Googlers come back and have a great time, others will follow,” said Ellen Baer, president and CEO of the Hudson Square Business Improvement District, the neighborhood where the tech giant is building a new $1 billion campus.

Google told employees in a note recently that its office will be open on an optional basis at some point this month, speeding up its initial estimate of reopening by September. Notably, any employee who wishes to work remotely more than 14 days a year will have to apply for permission from Google starting in September, according to an employee memo reported by CNBC. The return will be watched closely, as technology plays an increasingly important role in the city’s real estate market. Tech and adver-

tising represented 30% of all new office leasing last year, according to Cushman & Wakefield.

Many of New York’s startups and publicly traded technology companies contacted by Crain’s were still figuring out their plans for returning to the office. Most expect to keep some employees remote for the long haul.

Recruiting advantage “It is really difficult to imagine building a competitive employment experience without being able to recruit from a broader geographic area and support more remote work,” said Harry Ritter, chief executive of Alma, a startup that operates a tech-enabled network for mental health providers. “But there’s also a growing appreciation that you lose something without in-person interaction.”

Alma has boosted its staff from about 20 to 80 since March 2020, with about 30% of the new hires residing outside the New York City metro. The company has kept its Flatiron and Downtown Brooklyn offices available on an optional basis, though Ritter said that has been limited to a few employees reporting

BUCK ENNIS

As Google readies return to office, will New York tech follow?

a couple days each week. The office will remain optional through at least 2021, Ritter said, with some roles remaining remote permanently.

About 73% of workers want to be able to have flexible work options long-term, according to a survey of 30,000 workers by Microsoft, released last month. Nearly as many said they want some form of in-person collaboration, however, once such meetings are safe.

“Once their workforce is fully vaccinated and safe, most tech employers we work with are planning to offer flexibility,” said Jovena Natal, chief executive of technology-focused recruiting firm Clutch Talent. “Most are saying that they

plan to allow two to four days per week of remote work.”

Electric.ai, a startup with 233 employees in lower Manhattan, reopened its office optionally in July, one of the earliest city technology companies to do so. But the number of employees reporting in any week since has hovered around 20 at the maximum.

Not a requirement “We expect this number (to remain) through July, with potentially an increase after parts of the population choose to be vaccinated and commute to work,” said vice president Jamie Coakley. “It will, however, for the majority of teams not be

required.”

MongoDB, a publicly traded software company that leases a 100,000-square-foot office at 1633 Broadway, is fully remote for now and is eyeing an optional September return to the office, according to spokesman Ben Wolfson, who said the plans are still tentative.

“What we have told our employees that we don’t expect to be 100% remote organization,” MongoDB CEO and President Dev Ittycheria said on an investor call last month.

“We do believe that there’s value in our people coming together.”

At Privacy.com, a startup that offers digital debit cards, the staff has grown from 30 to 55 during the pandemic, with many employees operating far from the firm’s office in the Financial District. Chief Executive Bo Jiang said the firm may soon be in the market for a larger space.

“You are going from an office that’s five days a week for almost everyone to three days a week and people are here at different times,” Jiang said. “There is some logistical problems we’ve got to figure out.

But the overall philosophy is that we want to flexible.” ■

WHO’S NEXT ON THE LIST? Crain’s New York Business will single out 20 up-and-coming professionals who haven’t turned 30 yet. While their names might not be top of mind and they likely haven’t made their first million yet, there’s no denying these young professionals are making a mark on Metro New York.

NOMINATIONS NOW OPEN! DEADLINE TO NOMINATE: April 30 2021

NOMINATE TODAY: CrainsNewYork.com/nominations

2021

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APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 11

4/8/21 2:57 PM

TRANSPORTATION

Council bill would give amnesty to parking scofflaws for outstanding fines

W

ho says New York City is unforgiving?

A City Council bill would give a break to parking ticket scofflaws for outstanding fines racked up since the pandemic and could mean some extra cash in the city’s coffers.

Just one month after introducing a bill that would reduce small-businesses’ fines, Bronx Councilman Fernando Cabrera is offering another amnesty measure.

hicles, such as UPS and FedEx trucks, because of their separate agreements with the city on parking-fine payments.

Cabrera, who is running for Bronx Borough president, noted that many New Yorkers have lost income during the shutdown created

by Covid-19, and that parking violations and tickets may have come up unexpectedly during a time of financial stress.

“This bill is helping the little guy, the everyday car owner who has been confused about their responsibilities as it relates to moving their cars during Covid, and [it] specifically targets those who have not paid their summonses,” Cabrera said. “This legislation would ease that burden while helping New Yorkers keep access to their vehicles when they need them most.”

“THE CITY IS MISSING OUT ON MORE THAN $100 MILLION IN ...TICKETS AND FINES” The program would eliminate fees and interest penalties for delayed or missed parking ticket payments in exchange for paying a reduced sum at an agreed-upon date.

Under the proposal, the discounted rate would be 25% off the face value of the fine. The amnesty would not apply to commercial ve-

Help for little guy Small-business advocates say additional support for the bill in the City Council could be another sign that the local officials under-

as as a good thing.

“I don’t think it’s responsible to pardon someone that has violated or broken the law,” said Fernando Mateo, a businessman running for mayor as a Republican. “When you park illegally at a water hydrant or at a bus stop, or you double-park or park in a no-parking zone, you shouldn’t be pardoned. You should read the signs.”

Abdicating duty

BUCK ENNIS

BY BRIAN PASCUS

stand the plight of the little guy in the Covid-19 economy.

“There's a lot of issues regarding fines that businesses have gotten that ought to be considered in the same legislation,” said Tom Grech, president of the Queens Chamber of Commerce. “As we emerge from Covid-19, the best thing we can do is to let people know that city government is trying its best to help them.”

One of the motivations for this latest amnesty proposal is a desire to see residents pay a portion of their fines rather than not pay them

at all. Cabrera cited a recent state comptroller’s report that found between 2012 and 2019 the Department of Finance failed to collect roughly $100 million in unpaid parking tickets and fees.

“We know from the comptroller’s report that the city is missing out on more than $100 million in fines— revenue that we desperately need at this time,” he said, noting that another amnesty program “offers a way forward to recovering revenue.”

But not all New York City political figures interpret amnesty on fines

Mateo said Cabrera’s legislation is an example of the Democratic majority on the City Council abdicating its duty to collect the full amount of revenue on fines, leaving the city’s treasury smaller than it should be.

“Democrats look to give out what’s not theirs," he said. "I think the city will need to pardon a lot of things, but this piece of legislation doesn’t make sense.”

Speaker Corey Johnson’s office did not respond to a request for comment.

Cabrera’s amnesty plan would be administered by the Department of Finance, which oversees the parking violations bureau and collects fees inside and outside the state. ■

Keep your employees

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12 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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RESTAURANTS

Eleven Madison Park hits the road with free meals prior to its reopening

A

s Eleven Madison Park moves to reopen its dining room, the restaurant is expanding its reach in an unexpected way.

Starting on April 12, the Eleven Madison Truck will be deployed around the city.

It won’t be serving to-go containers of its famed honey lavender roast duck, or anything else that it might have featured on the $335 tasting menu. Instead, the truck, from chef-owner Daniel Humm’s partnership with the nonprofit Rethink, will feed underserved food

Matt Jozwiak, co-founder and chief executive officer of Rethink. “And then Daniel called me and was, like, ‘Let’s do a food truck.’

The handsome, royal blue, customized truck, emblazoned with the names Eleven Madison Truck and Rethink will serve around 400 meals a day for free. Operations will be paid for in large part by the restaurant’s diners; each Michelin three-star meal that’s sold guarantees five meals for Rethink. (EMP’s to-go boxes, whose $275-plus price tags have raised eyebrows, generate 10 meals per order.)

The truck will be staffed by EMP staff on a rotating basis. “For the kids who care hard about these issues, they will see it as a benefit,” says Humm. Likewise, the restaurant will prioritize sympathetic suppliers.

“We’re going to ask them to give us some product for free for Rethink.

We’ll select our suppliers based on that,” he adds.

But it won’t be serving an elite kitchen’s version of what they think people want to eat. “Those neigh-

THE FOOD TRUCK IS GOING INTO UNDERSERVED COMMUNITIES IN THE CITY communities, starting with the Bronx.

“We had been brainstorming different ways to make the restaurant part of the community, and get staff engaged beyond making meals and pushing them out of the door,” says

Jozwiak estimates that the project will cost about $16,000 a month to operate—not including the food, which will be made from EMP’s leftover ingredients, as well as donated product.

HUMM stands by food truck in front of his restaurant Eleven Madison Park.

Crowd control CLAY WILLIAMS/BLOOMBERG

BLOOMBERG

borhoods are not waiting for a bunch of white guys to show up in their hood and give out food,” says Humm.

The menu “It will be a series of our greatest hits to start,” says pastry chef Laura Cronin, who has been a key part of Rethink’s meal production at the restaurant. “Chicken is, by far, the most popular protein.”

To begin with, the program will offer the kind of meals that EMP’s

kitchen has been providing to first responders and soup kitchens throughout the pandemic, including jerk chicken with roasted vegetables, gumbo-style chicken etouffée with rice, and grain bowls, along with vegetarian and other dietary options.

The EMP team is also collaborating with local community boards in hopes of working with neighborhood restaurants in the future. “We can have them come on the truck with their food,” says Cronin.

Members of local community boards have signed on to manage lines that form and to help organize crowd control.

The truck’s starting schedule will park it on Mondays, Thursdays, and Fridays at Bronx Collegiate Academy, on Tuesdays at St Mark’s United Methodist Church in Brooklyn, and on Fridays back in the Bronx at the Mary Mitchell Family & Youth Center.

The truck helps Humm keep a commitment he made last year, while wondering whether he would relaunch his restaurant. “Any way that EMP reopens—and it’s like a blank canvas right now, we would need to redefine what luxury means—it will also be an opportunity to continue to feed people who don’t have anything. I don’t need to only feed the 1% anymore,” he said in an interview with Bloomberg Pursuits in May 2020. ■

IN-DEPTH COVERAGE OF THE CITY’S REBOUND PARTNERS:

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INSTANT EXPERT

What you need to know about New York’s $212 billion budget THE PLAYERS

1

2

After weeks of negotiations and days past its April 1 due date, Albany Democrats and Gov. Andrew Cuomo agreed upon a $212 billion fiscal 2022 budget. The budget includes $1 billion for small-business recovery and $2.4 billion in housing relief, measures sure to be overshadowed by new tax increases on the wealthy that give the city the highest combined state and local rate in the nation.

For those making $1 million per year and more and joint filers making more than $2 million per year, income tax rates rise from 8.82% to 9.65%. In addition, two new tax brackets appear: a 10.3% tax for those making between $5 million and $25 million, and a 10.9% tax for those making more than $25 million. These changes are expected to raise $4 billion in annual revenue.

The budget also calls for an increase in corporate franchise tax rates from 6.3% to 7.25%. Negotiations provided some relief for the wealthy—proposals to tax capital gains, stock transfers and increase the estate tax all fell short.

FLICKR

THE ISSUE

Even though budget negotiations no longer play out in the infamous “three men in a room” scenario as they had for years, the spring saw Gov. Andrew Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie haggling over the knotty details of a budget that grew 20% from previous years.

But a $212 billion budget is not made in isolation. Senate Finance Committee Chairwoman Liz Krueger coordinated a debt service bill. Progressives such as Sens. Jessica Ramos and Julia Salazar pushed for on tax increases, ensuring that a $2.1 billion benefits fund would be created for undocumented workers. Assembly Majority Leader Crystal Peoples-Stokes advocated for increased funding for school districts, and state budget director Robert Mujica fought to identify $5 billion in savings.

The legalization of online sports betting wouldn’t have been possible without the legislative outline provided by Sen. Joseph Addabbo of Ozone Park and Assemblyman J. Gary Pretlow of Yonkers. The final version of online sports betting takes elements from both Cuomo’s smaller, state-run plan and the more robust, market-dictated proposal set forth by Addabbo and Pretlow. Eventually, the measure is expected to raise $500 million a year.

ISTOCK

BY BRIAN PASCUS

WHAT’S NEXT

5

To try to stem the business community’s furor over the tax increases, lawmakers will lobby President Joe Biden to repeal the $10,000 cap on the state and local tax deduction in his $2 trillion infrastructure bill. The Democratic majority is thin, and progressive lawmakers in New York and California have threatened to scuttle infrastructure projects if the cap is not repealed.

But there is a catch to the new tax increases: sunset provisions that many progressives may not find appealing. The new income tax rates will expire in 2027, and the corporate excise tax increase will expire in 2023.

The sunset provisions are a signal to the business community that the increases are shortterm revenue grabs during a once-in-a-century emergency rather than fixtures to fund an expanding welfare state.

THE SUNSET PROVISIONS ARE A SIGNAL THAT THE TAX HIKES ARE A ONETIME REVENUE GRAB

YEAH, BUT …

3

While progressives can cheer the new tax increases on the wealthy and corporations, those increases may not have been necessary—at least from a fiscal perspective. State Comptroller Thomas DiNapoli has issued reports pointing out that tax receipts during the first nine months of fiscal 2021 came in $1.8 billion higher than initially projected. In addition, the American Rescue Plan provided the state with $12.6 billion in direct federal aid, making it that much easier for New York to close its $15 billion deficit.

Raising taxes could backfire. New York City office buildings remain largely vacant as workers continue to telecommute.

More than 250 CEOs, including Jamie Dimon of JPMorgan Chase and Stephen Schwarzman of the Blackstone Group, issued a letter last month expressing concern that workers may not want to return offices if taxes were raised.

SOME BACKGROUND

ISTOCK

4

FLICKR

The $212 billion budget is a rather substantial increase from the $177 billion budget agreed upon last year, during the height of the pandemic. Last year’s agreement gave Cuomo broad emergency powers to control the levers of state government, including $11 billion in borrowing authority, the ability to impose rolling budget cuts and unilateral authorization on procurement contracts.

This year the tide turned almost completely in favor of the Legislature. Facing multiple accusations of sexual harassment and an attorney general’s investigation and an Assembly impeachment inquiry into his behavior, Cuomo entered this year’s negotiations from a critically weakened position. Not surprisingly, two policy items the thirdterm governor once resolutely refused to accept—the legalization of recreational marijuana and tax increases on the wealthy—found their way across the finish line.

14 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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CRAIN WEBCAST 2021

MAYORAL DEBATES

Democratic Primary: Tuesday, May 11 | 3:30 – 5 p.m.

REPUBLICAN PRIMARY: JUNE 1 GENERAL ELECTION: OCTOBER 12

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4/2/21 11:46 AM

REAL ESTATE

Rosen and development partner continue legal squabbling over Midtown apartment building

R

FR Realty’s Aby Rosen and his development partner are duking it out in court once again over their building at 100 E. 53rd St. Vanke US, the American arm of the Chinese developer, claims Rosen and his co-founder, Michael Fuchs, owe nearly $700,000 plus interest at the Midtown apartment building, with some of it dating to 2019, according to a lawsuit filed in state Supreme Court in Manhattan.

This isn’t the first flare-up between the development partners on this project. Rosen sued Vanke in October 2020, claiming that the

the condominium together under a limitied liability company in which both had an interest.

Since 2019, the building has needed money for expenses, such as interest, real estate taxes and other operating expenses, Kai-yan Lee, a managing director at Vanke US, says in court papers.

Avoiding default In December 2019 the company asked RFR for $5.8 million to cover expenses and to keep the project from defaulting on its $360 million construction loan from the Industrial and Commercial Bank of China, which was due in full in May 2020. The money was promised under a capital agreement, according to the lawsuit.

Whenever it becomes necessary, the project’s owners can ask their investors for additional cash in what is referred to as a capital call. In this case, Vanke would be required to fork over 93% of any call and RFR to cover the remaining 7%.

RFR, however, didn’t want to

ROSEN’S CHINESE PARTNER CLAIMS IT IS OWED S700,000 PLUS INTEREST developer made a back-door deal with their lender to buy a chunk of debt on the project.

The real estate investors began work on the 63-story project in 2014, when they agreed to develop

fund any calls until it came to an agreement with Vanke and its lender on how to refinance the project’s debt, according to company emails submitted in the lawsuit.

“To do so would essentially be a waste of both Vanke’s and RFR’s funds,” Frank Mangieri, RFR’s chief legal officer, said in a December 2019 email to Vanke. He agreed to put the funds in an escrow account until an agreement could be reached.

When the mortgage on the property became due, Rosen couldn’t pay it off because of the pandemic’s damage to the condo market, the company claims in the October lawsuit, and the Chinese bank refused to extend the loan.

Since then, seven additional capital calls totaling $2.6 million have been made on the building, which Vanke claims RFR has not yet paid, court papers show. As the guarantors on RFR’s share of the capital calls, Rosen and Fuchs are on the hook for the money, Vanke says.

Rosen sued Vanke in October 2020, claiming the company had broken their contract by dealing with their lender directly despite the fact RFR had the exclusive right

CONNECT WITH

in its lawsuit, because it would be stuck with the most expensive and therefore less marketable units.

It wouldn’t be able to sell enough units in one year to pay off the loan, RFR claims in the lawsuit, and so it made no sense to accept.

The offer was “clear evidence that … Vanke was back-channeling with the lender about the loan,” which violated the agreement with RFR, the company says in court papers.

Vanke claims RFR was refusing to fund the capital calls so that it could “drive up Vanke’s costs in order to provoke a buyout well beyond the value of its stake in the company,” according to the same lawsuit, which is still being litigated in court.

Representatives for RFR Realty did not respond to requests for comment. ■

100 E. 53RD ST.

BUCK ENNIS

BY NATALIE SACHMECHI

to negotiate with the bank. Vanke spent $115 million to acquire a piece of the loan.

After RFR defaulted on the loan, Vanke then offered to purchase the 25 least expensive units in the tower for $75 million in March 2020 to help pay down the mortgage and get the bank to offer an extension.

Bad deal That deal would only make things worse for RFR, the company claims

@CrainsNewYork

CrainsNewYork.com

16 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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FINANCE

BLOOMBERG

B

lackRock Inc. is breaking ranks with peers on Wall Street by doing a deep dive into its business to see how it may have contributed to racial inequities in the financial system.

The world’s largest money manager plans to undergo an independent racial audit of its operations, following a request from a shareholder. Companies including Airbnb Inc. and Facebook Inc. have taken similar steps in the past few years.

By contrast, Goldman Sachs Group Inc., Citigroup Inc. and Wells Fargo & Co. are asking shareholders to vote against proposals calling on them to do such audits, saying they’ve already taken measures to address racial injustice. JPMorgan Chase & Co. and Citigroup even went as far as asking regulators to block the resolutions; their appeals were denied.

Outside of finance, Johnson & Johnson also has asked its shareholders to reject a proposed racial audit of the company.

The calls for racial audits have emerged since last year’s social in-

justice protests in the U.S. and President Joe Biden’s recent signing of an executive order to advance equality. The audits are conducted by third-party groups, which analyze companies’ business models— from policies to products and services—to determine whether they cause, reinforce or perpetuate discrimination.

The investors that filed resolutions for BlackRock and other financial-services companies—Service Employees International Union and CtW Investment Group—said the industry has played a key role in perpetuating the racial wealth gap.

BlackRock, with $8.7 trillion of assets under management, said in a memo to employees April 1 that an external review of how its diversity, equity and inclusion policies impact stakeholders will provide useful feedback to assess its progress.

The New York-based firm said it will start the audit in 2022.

Shareholder proposals SEIU said in its resolution, which has since been withdrawn, that BlackRock—as an investor—opposed most shareholder proposals in 2020 that were aimed at address-

BUCK ENNIS

BlackRock breaks Wall Street ranks with plan to conduct racial audit

ing racial-justice issues. That included two at Amazon.com Inc., which asked for disclosures about hate-promoting products and the impact of its facial-recognition technology on people of color. This year, Amazon.com has appealed to the U.S. Securities and Exchange Commission to block a racial-audit proposal.

In 2016, Airbnb was the first company to do a third-party racial audit after people of color said they were discriminated against as guests.

Starbucks Corp. followed with an audit by former U.S. Attorney General Eric Holder following a 2018 incident where employees at one of its locations called the police on two

Black patrons who were waiting for a business meeting.

Facebook also has done a racial review.

Banks have said racial audits are unnecessary after several initiatives were introduced in the past year such as investing in Black entrepreneurs and expanding credit. CtW said the only way to effectively address racial injustice and economic inequality is to study how the industry’s products and services contribute to imbalances.

CtW said Monday it withdrew the proposal to Morgan Stanley after reaching an agreement. CtW said the bank will conduct an internal review of the diversity of its employees and senior leadership, and set up a meeting with shareholders before next year’s annual meeting to ensure equity for non-white stakeholders.

Morgan Stanley said many of the initiatives in CtW’s proposal were similar to those already underway or planned at the firm. They include

an independent review of the global talent program, the creation of an Institute for Inclusion with an independent advisory board, and enhanced disclosures about the bank’s diversity and inclusion efforts.

Racial audit proposals also were filed with State Street Corp. The company didn’t respond to a request for comment.

Bank of America Corp. has advised shareholders to vote against a racial audit, a decision that received support from Institutional Shareholders Services. By contrast, shareholder advisory firm Glass Lewis & Co. recommended investors vote for the audit.

“Given broad societal changes, it’s particularly important for consumer-facing companies such as Bank of America, whose operations heavily rely on their customers’ trust and loyalty, to address issues of racial equity,” Glass Lewis said last week.

Bank of America said last week that an audit is unnecessary given its progress on racial equality. The lender pledged in 2020 to spend $1 billion over four years to combat racial and economic inequality. ■

2021 Events New York’s top industry thought-leaders, influencers and rising stars join Crain’s for stimulating fireside chats, panel discussions and honoree celebrations.

Check out Crain’s virtual programs at CrainsNewYork.com/Events For sponsorship opportunities, contact Kate Van Etten at kvanetten@crain.com APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 17

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FROM PAGE 3

arts-related tourism and support a wide swath of artists and companies—but by no means all of them.

The original projection for NY PopsUp was $5.5 million for 300 events across the state, with money coming from Empire State Development Corp.’s marketing budget.

That figure could change if closed venues being used for PopsUp performances open later in the summer or if new arts funding becomes available.

Paying to perform After Open Culture opened its permit application March 1, McEwan applied for 18 days for MorDance and got 14. She said the processing was quick and the city was helpful. Open Culture will grant each organization at most four per-

Spring and Broome streets. One challenge: “We haven’t been rehearsing for a year,” she said.

Instead of renting studio space for months in advance of the first permit date, a substantial cost, she decided to use her plot as an open rehearsal.

“That brings our costs down to just artist compensation,” she explained.

McEwan made other tweaks.

Putting down a dance floor in accordance with regulations would have made the stage tiny, so the ballerinas will perform on concrete.

They will wear sneakers instead of ballet shoes and avoid jumping because of the surface hardness. Because ticketing would have required more expenses to close off the street to people who hadn’t paid admission, the event will be free, with the goal of attracting a new audience to MorDance.

In the past, McEwan said, audiences loved attending dress rehearsals. Although open rehearsals haven’t yet begun, she is enthusiastic. “The program is amazing," she said, "but as a small organization there are obstacles.”

Open Culture permits do not require artists to be paid. The PopsUp program seemed to happen outside the existing network of many small arts organizations, and some said they felt overlooked.

“AS A SMALL ORGANIZATION THERE ARE OBSTACLES” mits per month per location. Forty-four events are planned from April 2 to May 2, according to the New York City events website, which posts only 30 days at a time.

Permits in hand, McEwan thought about what to do with her block, on Sixth Avenue between

The payment is hard to compare to that of regular work, LaManque said, because dancers usually are paid per weekly contracts, not per project.

A XYLOPHONE PLAYER performs in front of a crowd at Chelsea Market.

The thrill of the stage CHELSEA MARKET@LARUFOTO/LUIS RUIZ

DANCE

Kimberly Giannelli and Melissa Gerstein didn’t wait for the city’s Open Culture applications to open before scheduling four rooftop dance performances for April 11 at the Empire Hotel.After hearing from dancers who felt financially unstable and unsupported in their careers after a year out of work, they decided the profits would go to dancers in need.

Putting on a show Tickets ranged from $200 to $1,000. The dancers included American Ballet Theatre principal Skylar Brandt, who was to perform The Dying Swan, as well as dancers from the Alvin Ailey American Dance Theater and the New York City Ballet. After they found a spon-

sor to fund the venue rental, Giannelli and Gerstein began recruiting dancers who were to be paid for their solos and duets.

Any paid work is welcome right now, said Wendy LaManque of the American Guild of Musical Artists, a union that represents artists at professional ballet and opera companies in the city and around the country.

“After 13 months of our industries ground to a halt, we look at that as a good thing, even though we want to be back in the studio fully,” she said.

The union has negotiated on behalf of members who are in NY PopsUp events, and everyone has agreed to a fee and to safety protocols.

For many artists and nonprofits, a year of hard times is nothing new.

The most important thing—as it has always been—is to perform.

Giannelli and Gerstein said the artists who signed on came for the ability to dance in front of an audience as much as for the payment.

Amar Smalls had just completed his first international tour with dance company Ailey II when Gov. Andrew Cuomo ordered venues closed.

Smalls claimed unemployment benefits, then began making money through new approaches: teaching online classes, selling clothes he designed and performing in virtual gigs.

At 21, Smalls finds his dance career is just beginning. Although he has been able to make ends meet for the past year, he said getting back in the studio has been heartening.

“Being on stage in front of people again, that’s the important thing,” Smalls said.

“They need to get to do what they trained for their whole life,” Gerstein said of the artists, “so they’re not having to move back home [or] move in with family. They’re not having to wait in the wings for life to resume.”■

REAL ESTATE

Westchester homes are still all the rage

N

ew Yorkers may be getting set to return to their Manhattan offices, but demand for Westchester’s suburban homes is still on fire.

Completed sales of single- and multifamily houses, co-ops and condos totaled 2,489 in the first quarter, up 37% from a year earlier, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate said in a report. The deals pushed the supply of listings in the county down 17%, to 2,533, the fewest since the end of 2001.

Purchases of single-family houses gained the most among all property types, surging 44% from a year earlier, to 1,528. In the luxury category—the top 10% of the market, starting at $1.6 million in the quarter—sales jumped 43%.

City ties The pandemic-driven housing boom in the suburbs isn’t letting up even as vaccines lift hopes for the return of city life and the reopening of office towers in the coming months. Buyers are still clamoring for space north of Manhattan, although they may not be breaking ties with the city completely.

“A few months ago, it was people

who were leaving driving demand,” said Scott Durkin, president of Douglas Elliman. “Now it’s people who want both”—a city apartment and a home outside the city.

Competition among buyers pushed up prices in the quarter, with the median for all Westchester homes climbing 11% from a year earlier, to $565,000. Single-family houses sold for a median of $700,500, up 9.5%.

It would take just 3.1 months to sell all the properties on the market in the county at the end of March, the second-fastest pace since Miller Samuel and Douglas Elliman started tracking the data 26 years ago.

The suburban boom has implications for New York’s battered office market, which may suffer further if workers decide they prefer signing on from home over commuting into the city each day. Even as major companies prepare to bring employees back to the office, the amount of available space in Manhattan is at the highest level in at least 30 years.

Contracts to buy single-family Westchester homes—a proxy for future sales and a gauge of current demand—soared 61% from a year earlier in March, Miller Samuel and Douglas Elliman said in a separate report. ■

DIMON

JPMORGAN

up gently (but not too much) and interest rates that rise (but not too much),” he wrote.

estimated “maybe 10%” of staffers would work from home full time.

The bank intends to complete the rebuilding of its 270 Park Ave. headquarters, which will house between 12,000 and 14,000 employees.

JPMorgan occupied about 9.1 million square feet in the city at the end of last year, its annual report said.

HSBC officials recently said their office footprint would shrink by 40% globally. Many other large companies in the city also are paring back.

In his letter Dimon said there was “a chance” the end of the pandemic could unleash a two-year boom with massive waves of spending trickling down through the economy.

“It is possible that we will have a Goldilocks moment—fast and sustained growth, inflation that moves

Extraordinary discipline

FROM PAGE 1

Commercial and consumer borrowers appear to be in strong financial shape after socking away $5 trillion in cash between them during the pandemic, even before the Biden administration’s $1.9 trillion rescue package was adopted last month, Dimon said.

“I hope there is extraordinary discipline on how all of this money is spent,” he wrote. “Spent wisely, it will create more economic opportunity for everyone.”

But Dimon said his institution is preparing for the pandemic to last even longer and for long-term interest rates, which have risen a bit lately, to slide back down if the economy weakens again. He added that an economic boom could unleash

BLOOMBERG

BLOOMBERG

“IT IS POSSIBLE THAT WE WILL HAVE A GOLDILOCKS MOMENT—FAST AND SUSTAINED GROWTH” inflation and force the Federal Reserve to raise interest rates—a move that often leads to a recession.

He added that JPMorgan, a bank formed by combining with Chase, Chemical, Manufacturers Hanover, Bear Stearns, Washington Mutual and several other institutions, is hunting again for mergers—this time in payments, asset management and data.

“Acquisitions are in our future,” Dimon wrote. ■

18 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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Notice of Qualification of SPRING VALLEY PRESERVATION LIMITED PARTNERSHIP Certificate of Limited Partnership was filed with the Secretary of State of New York (SSNY) on 0330-2021. Office located in NEW YORK COUNTY. SSNY has been designated as agent of LP upon whom process against it may be served. SSNY shall mail process to 200 Vessy Street, 24th Floor, New York, NY 10281. The name of general partner is HVPG Spring Valley Preservation, LLC, 1209 Orange St, Wilmington, DE 19801.

Purpose: any lawful purpose.

Notice of Qualification of Upper90 Partners SPV GP II, LLC. Authority filed with Secy. of State of NY (SSNY) on 03/11/21. Office location: NY County. LLC formed in Delaware (DE) on 10/23/19. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 114 W 26th St., 5th Fl., NY, NY 10001. Address to be maintained in DE: 251 Little Falls Dr., Wilmington, DE 19808. Arts of Org. filed with the Secy. of State, 401 Federal St. Ste 4 Dover DE 19901. Purpose: any lawful activities.

Notice of Qualification of DAVID ZWIRNER DIGITAL, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/22/21. Office location: NY County. LLC formed in Delaware (DE) on 12/16/20. Princ. office of LLC: 525 W. 19th St., NY, NY 10011. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 80 State St., Albany, NY 12207. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

NOTICE OF FORMATION of Str8StackinBulliesKennel, LLC. Articles of Organization filed with the Secretary of State of New York (SSNY) on 03/11/2021. Office Location: BRONX County. SSNY designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the LLC served upon him/her is: 1036 Manor Ave apt 2C. The principal address of the business shall be located: Online.

Purpose: Any lawful act or activity.

Notice of Qualification of Fairview Property Group LLC. Authority filed with Secy. of State of NY (SSNY) on 12/1/20. Office loc: NY County. LLC formed in NJ on 9/23/20. SSNY designated agent upon whom process may be served & mailed to: 348 Fairview Ave, Cedar Grove, NJ 07009.

Cert. of Form. filed with State Treasurer Div. of Rev., 125 W. State St Trenton, NJ 08625. Purpose: Any lawful activity.

Notice of Qualification of Skydance Animation East, LLC. Authority filed with Secy. of State of NY (SSNY) on 0 3/11/21. Office location: NY County.

LLC formed in Connecticut (CT) on 03 /09/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: c/o Jesse Sisgold, Skydance Media, 2900 Olympic Blvd., Santa Monica, CA 90404, also the principal office address. Arts of Org. filed with the Secy. of State, 165 Capitol Ave., Hartford, CT 06106. Purpose: any lawful activities.

Notice of Qualification of SAMARA CAPITAL LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/15/21. Office location: NY County. LLC formed in Delaware (DE) on 03/11/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of the State of DE, Dept. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

NOTICE OF QUALIFICATION of Steady Rent, LLC. Authority filed with Secy. of State of NY (SSNY) on 2/11/21. Office loc: NY County. LLC formed in DE on 1/12/21. SSNY designated agent upon whom process may be served & mailed to: 379 W. Broadway, FL 2, NY NY 10012. DE address of LLC: c/ o Corp Service Co, 251 Little Falls Dr, Wilmington, DE 19808. Cert. of LLC filed with Secy. of State of DE loc: John G. Townsend Bldg, 401 Federal St, #4, Dover DE 19901. Purpose: Any lawful activity.

Notice of Qualification of MSG CHICAGO, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/03/21. Office location: NY County. LLC formed in Delaware (DE) on 06/01/07. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John D. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of EW DIRECT 1 NASSAU, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/04/21. Office location: NY County. LLC formed in Delaware (DE) on 03/02/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

NOTICE OF FORMATION OF AfroConex LLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 12/22/20. Office location: NEW YORK County. SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the LLC served upon him/her is: 119 Payson Ave, Apt 6E, New York, NY 10034. The principal business address of the LLC is: 119 Payson Ave, Apt 6e, New York, NY 10034. Purpose: any lawful act or activity

BACK FIFTY LLC, Arts. of Org. filed with the SSNY on 03/15/2021. Office loc: NY County. SSNY has been designated as agent upon whom process against the LLC may be served.

SSNY shall mail process to: The LLC, 145 Nassau Street, Apt 5D, NY, NY 10038. Reg Agent: U.S. Corp.

Agents, Inc. 7014 13th Ave., Ste 202, Brooklyn, NY 11228. Purpose: Any Lawful Purpose.

NOTICE OF REGISTRATION of Joseph Saveri Law Firm, LLP. Notice of Registration filed with the Secretary of State of New York (SSNY) on 02/12/2021. Office location: NEW YORK County. LLP formed in California on 04/05/2018. SSNY has been designated as an agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the LLP served upon him /her is: 40 Worth St, 10th Floor, Office 1018, New York, NY 10013. The principal business address of the LLP is: 40 Worth St, 10th Floor, Office 1018, New York, NY 10013. California address of LLP is: 601 California St #1000, San Francisco, CA 94108.

Certificate of LLP filed with Secretary of State of California located at: 1500 11th St, Sacramento, CA 95814. Purpose: any lawful act or activity.

Notice of Formation of PARKSIDE AMHERST RELATED CLASS C, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/18/21. Office location: NY County. Princ. office of LLC: 30 Hudson Yards, 72nd Fl., NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 122072543. Purpose: Any lawful activity.

Notice of Formation of PRINCETON AMHERST DEVELOPER, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/18/21. Office location: NY County. Princ. office of LLC: 30 Hudson Yards, 72nd Fl., NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 122072543. Purpose: Any lawful activity.

Notice of Formation of N KNOTEL 110 WILLIAM LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/10/21. Office location: NY County. Princ. office of LLC: 110 E. 59th St., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207.

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Notice of formation of Ecotage Clothing LLC. Articles of Organization filed with the Secretary of State of New York SSNY on 03/09/2021. Office located in New York. SSNY has been designated for service of process.

SSNY shall mail copy of any process served against the LLC Registered Agents Inc. 90 State Street STE 700 Office 40 Albany, NY 12207 Purpose: any lawful purpose.

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Notice of Formation of N KNOTEL PLATFORM 2017, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/10/21. Office location: NY County. Princ. office of LLC: 110 E. 59th St., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served.

SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Any lawful activity.

Notice of formation of King Durian LLC. Articles of Organization filed with the Secretary of NY (SSNY) on 10/ 07/2020. Office Location: New York County. SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the LLC served upon him/her is: 7014 13th Avenue, Suite 202BRO, Brooklyn, NY 11228. The principal business address of the LLC is: 456 Washington Street, Apt 6A, New York, NY. Purpose: any lawful act or activity.

ITALIA REALTY, LLC. Arts. of Org. filed with the SSNY on 03/15/21. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, c/o BSB Associates Ltd., 201 Moreland Road, Suite 3, Hauppauge, NY 11788. Purpose: Any lawful purpose.

NOTICE OF FORMATION of Optimal Health and Greatness LLC.Arts of Org filed with Secy.State of NY (SSNY) on 8/20/20 Office location:NY County.

SSNY designated as agent upon whom process may be served and shall mail a copy of process against LLC to 310 E 46th St,#9G, NY, NY 10017.R/A US Corp Agents, Inc. 7014 13th Ave, #202, BK, NY 11228 Purpose: any lawful act

S H A R E

Y O U R

Notice of Qualification of EQ SERVICES LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/04/21. Office location: NY County. LLC formed in Virginia (VA) on 12/09/09. Princ. office of LLC: 31 Hudson Yards, NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c /o Corporation Service Co., 80 State St., Albany, NY 12207-2543. Cert. of Form. filed with Clerk of the Commission, 1300 E. Main St., 1st Fl., Richmond, VA 23219. Purpose: Any lawful activity.

Notice of Qualification of ND Growth Investors II, L.P. Authority filed with Secy. of State of NY (SSNY) on 03/ 11/21. Office location: NY County. LP formed in Delaware (DE) on 03/ 08/21. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to: 9 Great Jones St. Fl. 4, NY, NY 10012. Address to be maintained in DE: Corporation Trust Center, 1209 Orange St., Wilmington, DE 19801.

Name/address of genl. ptr. available from SSNY. Cert. of LP filed with DE Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: any lawful activities.

Notice of Formation of MANUKAKI12K, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/04/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Law Offices of Anthony S. Cannatella, 53 Orchard St., Manhasset, NY 11030. Purpose: Any lawful activity.

Notice of formation of Farrgo Fooatge LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 1/25/21.

Office location: NY County.

SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 244 Madison Ave, #1470, New York, NY 10016. Purpose: any lawful act.

Notice of formation of Moments In Time Chef and Caterering LLC. Arts of Org. Filed with Secy. of State of NY on 11/18/2020 NY County SSNY. Agent upon whom process to be served and copy mailed of process against LLC to 1885 Adam Clayton powel BLVD 1A NY NY10026 for any lawful act.

Notice of Formation of Ballistic Sprint LLC. Arts of Org Filled with Secy. of State of NY (SSNY) on 1/21/21. Office location: New York County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 151 East 26th St, Unit 4D, New York, NY 10010. Purpose: any lawful act.

C O M P A N Y ’ S

Notice of Qualification of KNICKS HOLDINGS, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/03/21. Office location: NY County. LLC formed in Delaware (DE) on 05/19/15. NYS fictitious name: MSG KNICKS HOLDINGS, LLC. SSNY designated as agent of LLC upon whom process against it may be served.

SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808.

Cert. of Form. filed with DE Secy. of State, Div. of Corps., John D. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Qualification of MSG LAS VEGAS, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/03/21. Office location: NY C ounty. LLC formed in Delaware (DE) on 03/09/16. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John D. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

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APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 21

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CAMPAIGN sign that he was back in town from the campaign trail.

Standing next to the elevator, tilted just off the wall, was Yang's bicycle, equipped with a child seat in back and a helmet hanging off the handlebars.

“Talk about a relatable guy. He bikes to work while he’s running for president,” said Randy Jones, Yang's former press secretary and national political director. “The idea that he was running for president and still that normal, I doubt I’ll ever see that in my career again.”

A bike may not be a major policy platform, but it could explain why the untested candidate leads the polls in the New York mayoral race.

“As seriously as Andrew takes the issues facing New York City, he doesn’t take himself that seriously,” Jones said. "Andrew is brilliant, but he's also normal."

In other words, Yang is relatable.

He seems to have the ability to identify with voters in a way that the other candidates don't.

That quality may be what voters are looking for, but if he's elected, it won't help him solve some of the biggest problems the city has ever faced. The Covid-19 economy, racial unrest and growing economic inequality are just some of the problems threatening the future of the city.

The former entrepreneur says he's up to the challenge.

“My goal has been to advance our economy and society these past number of years,” said Yang, who is against a proposed wealth tax advocated by many in the Democratic Party. “Right now, the biggest opportunity is born of our biggest challenges. We’re missing 84% of commuters and 95% of tourists,” he said, referring to the drop in subway usage and pandemic restrictions that have dampened the hospitality industry.

In shifting his focus from the na-

BUCK ENNIS

FROM PAGE 1

not having “held a job in his entire life,” and Maya Wiley questioned his knowledge of the city budget.

Scott Stringer’s campaign spokesmen, Tyrone Stevens, said Yang would be “by far, the least qualified mayor in New York City history,” and didn’t mince words when asked about his business career.

“Even in the private and nonprofit sectors, Mr. Yang has bounced around from adventure to adventure—with little lasting achievement—and this campaign seems to be his latest,” Stevens said.

In his own words, Yang's story is like those of many who come to the city from modest beginnings, hoping to realize their dreams. His first job was working as a busboy in a Chinese restaurant, said Yang, the son of Taiwanese immigrants.

His business career began after he graduated from Columbia Law School during the dot-com bubble in the 1990s.

Yang founded a charity startup that soon floundered.

He then worked as an executive at a series of technology companies while moonlighting as a nightclub promoter. Later, Yang ran an education company, Manhattan Prep, which grew in revenue and regard before he and a business partner sold it to Kaplan in 2009.

“I believe in New York City so deeply,” he said. “Imagine showing up here as a 21-year-old student and then becoming CEO of a multimillion-dollar company that was acquired.”

After watching the 2008 financial crisis unfold, Yang started Venture for America, a nonprofit fellowship that sought to curb brain drain by training the next generation of entrepreneurs to launch startups in smaller cities across America. But as he learned more about the ways internet technology and automation were disrupting the economy, Yang began a crusade—one that initially appeared quixotic to the national media—of promoting new ideas and unconventional policies

“HE IS UNIQUE AND DIFFERENT, AND THEY ARE BORING AND ‘HAVE BEEN THERE’ ” tional stage to the five boroughs, Yang is attempting to leverage his tech-oriented, startup CEO background to turn New York’s recovery into his biggest entrepreneurial project yet.

“If our city agencies were a company, many of you would’ve switched awhile ago,” he said. “The city hasn’t been holding up its end of the bargain. I want city agencies to deliver.”

With less than three months until the June 22 Democratic primary, it remains to be seen if Yang's relatability will carry him across the finish line.

Out of the blue Despite the promise that rankedchoice voting will discourage negative campaigning, Yang’s opponents have reacted to his sudden surge—$6.5 million raised in 57 days—by trying to discredit his accomplishment. Eric Adams accused the 46-year-old newcomer of

to combat the threat of automation reflective of his popularity as a and permanent displacement in presidential candidate—the idea the workforce. that politicians represent the past, “I got a sense we didn’t under- and a new kind of hybrid candidate stand how fundamental the role of speaks to the future. technology was in our economy,” “I think people have gotten really Yang said. “Americans responded tired of politicians who they sense to my presidential run because they are just climbing a ladder and are sensed I was driven by a desire to surrounded by consultants who help people.” poll-tested every issue The political newbie and stance,” Yang said. ended up raising $40 “That approach to polmillion, developed a itics is one of the main strong following, and impediments to New stood among the finalYork’s success and reists on a February 2020 covery.”

THE PRICE TAG ON debate stage that inMore than anything, Universal Basic cluded future President the human, by-theIncome, a plan met with skepticism across Joe Biden. seat-of-your-pants apthe political spectrum proach to campaignThe X-factor ing that Yang has brought to politics— Yang’s presidential and by extension govcampaign provided erning—seems to aphim the platform to anTHE NUMBER of New peal to New Yorkers nounce his run for mayYorkers living below after the depressions or in mid-January, later the poverty line who associated with than all of the other would be eligible for Covid-19. candidates. In his failed the stipend “There’s a mood he quest for the highest ofis setting, and I think fice in the land, Yang gained an invaluable gift: fame. A people want to meet him there,” recent poll by George Fontas found said John DeSio, vice president of Yang has 85% name recognition Risa Heller Communications. “People want to be happy and excited among New Yorkers.

“He dazzles,” said George Arzt, a about the city, and his campaign is longtime political consultant. reading that attitude better. People “That’s where he’s different than want the good times to return.” the rest of the pack. He’s got a perPlans and pitfalls sonality.”

It’s personality, not policy, that Even if he’s not a typical politivoters are attracted to in this elec- cian, Yang will still need to learn the tion cycle, said Hank Sheinkopf, a game if he's elected. His lack of govcity political consultant. ernment experience has been “He’s fresh while the others are showcased by recent campaign tired,” Sheinkopf said. “He is unique gaffes, notably his call to build a caand different, and they are boring sino on Governors Island, which and ‘have been there.’ ” would require state legislation, or By bringing up the threat of auto- his suggestion that the city hold mation and the need for some form off spending the federal stimulus, of basic income for those who can’t which is structured to be released find work—and by using entrepre- over years.

“It speaks to not knowing the neurship to promote big ideas such as a community bank or an limits of the office,” said Nicole Gearmy of local volunteers—Yang’s linas, a senior fellow at the Manhattwo campaigns have tapped into a tan Institute. “The problem is inexgrowing discontent on the left and perience in dealing with Albany the right for leaders who offer an in- and knowing what he can and can’t novative vision for the future, not do in Albany.”

Even Yang’s central campaign just bullet points from policy books.

Yang views the surprisingly posi- policy—a $1 billion investment in tive response to his mayoral bid as basic income for 500,000 New York-

YANG’S PLAN

$1B

500K

ers living below the poverty line— has been criticized by economists for being redundant with existing benefits such as the Earned Income Tax Credit and the Child Tax Credit.

Gelinas called the plan “gimmicky," and James A. Parrott, an economist at the New School, questioned its efficacy.

“Why would you not build on existing efforts and try to add $1 billion in resources in very specific ways, rather than give everybody, regardless of their circumstance, the same amount of money?” Parrott asked. “It sort of seems to be a shotgun approach.”

But Yang and his inner circle argue that the big ideas he advocates—even if they straddle the line between fantasy and reality—are the type of chances, even risks, the city needs to take to escape from the once-in-a-generation hole created by the coronavirus.

"He owes no one and owes nothing," explained Rep. Ritchie Torres, a Yang ally. "He has the independence to do the right and responsible thing, and he has the pragmatism to do what works rather than what polls well on Twitter."

Yang argues his CEO experience and intimate knowledge of how technology is changing the workforce are the crucial difference between him and his rivals.

“If you’re a CEO reading this who hates Zoom, I’m your best friend because I will get all your workers back into your office,” he said.

“When folks talk about the ongoing automation of labor, they should recognize that working remotely is one of the first steps toward automating that labor. Zoom is not New York City’s friend.”

Yang insists that his forward-thinking, hands-off approach to leadership and governing is what the city needs in a time of rapid change and bureaucratic confusion.

“Being a micromanager as CEO builds the wrong culture,” he said.

“My favorite part of leadership is putting other people in positions to do their best work and succeed and giving them room to run. I’ll be elected because New Yorkers sense I’m on their side.” ■

22 | CRAIN’S NEW YORK BUSINESS | APRIL 12, 2021

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GOTHAM GIGS

BUCK ENNIS

KIRCHMANN in front of the Emerson at the High Line

MICHAEL KIRCHMANN AGE 48 BORN Johannesburg, South Africa

Finding inspiration in everything

A developer prioritizes design for office buildings and affordable housing

RESIDES Tribeca

BY JUDY MESSINA

EDUCATION Bachelor’s in architecture and planning, University of Capetown; master’s in real estate and real estate finance, New York University

hat do skateboards and automobiles have to do with architecture? A lot when it comes to the creative process, says Michael Kirchmann, co-founder and CEO of real estate firm GDSNY. In addition to designing and developing high-end condos, office buildings and affordable housing, the Chelsea-based company customizes vehicles: skateboards, surfboards, motorcycles, a Porsche GT3, a Land Rover Defender 90 and the interior—and exterior—of a jet plane.

“It’s a great way to flex our creative muscle, think outside the box and inform what we’re doing elsewhere,” said Kirchmann, who was once the lead singer of a punk band and a voiceover artist.

A native of South Africa, where his father was a developer and contractor and his mother, an interior

PAST LIFE Kirchmann views his time as a punk singer and a voiceover artist as a creative outlet. He draws on those experiences when working on marketing campaigns and the firm’s social media. “None of this is ever wasted,” he said. “It’s all part of a creative process.”

AFFORDABLE YET LUXE “We understand that whether you are a CEO or have a minimum wage job, you want to live in a place you’re proud of, in a comfortable environment, with all the things everybody else has,” he said of the firm’s mission when designing affordable housing.

W

designer, Kirchmann was immersed in the real estate world early on. He studied architecture at the University of Capetown and later, after earning a graduate degree in real estate at NYU, spent 11 years at Skidmore Owings and Merrill, designing and building projects all over the world.

In 2007 he co-founded GDSNY with Alan Rudikoff. It has done projects in Europe, Asia and the Middle East.

In New York City, GDSNY has a number of high-profile locations in the works, including office buildings at 1245 Broadway in NoMad, 417 Park Ave. in Midtown and a building known as 28&7 at West 28th Street and Seventh Avenue in Chelsea. Unlike the skyscrapers that dominate Midtown or huge developments like Hudson Yards, these are smaller, “boutique” office buildings with 100,000 to 300,000 square feet of space.

“The scale allows you to feel more

part of a community,” Kirchmann said.

On the luxury condo front, GDSNY recently completed the nine-unit Emerson at the High Line at West 25th Street. The company worked on the Emerson from scratch, including buying the land and managing construction. Kirchmann, in fact, flew to Alabama and descended into a quarry a mile underground to choose the limestone that clads the building.

The company’s focus on craftsmanship and detail will give currently remote workers appealing office environments to return to.

The lobby at 1245 Broadway, for example, will have a fireplace and several outdoor terraces.

“I think there is a very strong visual understanding that the city is coming back,” Kirchmann said.

“Having lived here for almost 25 years, I wake up every day excited about the city, knowing it is going to give me something new.” ■

“THERE IS A VERY STRONG VISUAL UNDERSTANDING THAT THE CITY IS COMING BACK”

APRIL 12, 2021 | CRAIN’S NEW YORK BUSINESS | 23

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