Crain's New York Business

DYNAMIC DUO? How Hochul and Adams can help each other

PAGE 17

CRAINSNEWYORK.COM | AUGUST 23, 2021

CODE RED Companies boost investments in solutions to the climate-change crisis PAGE 3

TRANSPORTATION

CAR CITY

New Yorkers are racing to get behind the wheel, clogging roads, boosting car-related businesses and hurting transit in trend that could reshape city

BY AMANDA GLODOWSKI

M

BUCK ENNIS

icah Wilson was a public-transit enthusiast. He used to ride the subway three times per day in addition to having memberships with Car2Go and Citi Bike.

Last year, however, he did something out of character.

“I more or less made an impulse purchase,” said Wilson, who works in marketing. “I Slacked my wife one day, saying, ‘I just bought a car.’ ” Wilson isn’t alone. New York City is on track for a 34% uptick in new vehicle registrations this year. The number of new learner’s permits issued this year already has far surpassed prepandemic figures. In tandem, automobile-related businesses, from dealerships to car washes, are applying for permits at a rapid and growing pace across the five boroughs.

New York is becoming a car city. The implications of the trend are far-reaching, with consequences that cut to the core of how residents live and work. Just a slight shift in New Yorkers See CARS on page 18

CENSUS

City payoff for census outreach: billions in federal money New funding for housing, roads, health will ultimately benefit local businesses

NEWSPAPER

VOL. 37, NO. 29

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BY AARON ELSTEIN AND MAYA KAUFMAN

A

$40 million investment that generates a $1.8 billion annual return sounds too good to be true. But that’s what New York is in line for after its investment in census outreach led the federal government to

© 2021 CRAIN COMMUNICATIONS INC.

conclude the city’s population is much higher than expected.

The city benefits from a higher population because after Congress sets a budget, allocations for more than 130 federal programs are based at least in part on population size. Every new resident means $3,000 in additional

federal money, experts estimate; the 600,000 new New Yorkers tallied in last year’s census, therefore, means the city stands to collect $1.8 billion in extra money from Washington, annually, until the next census.

See CENSUS on page 22

SPOTLIGHT

ASKED & ANSWERED

PAGE 23

PAGE 10

BREWERY ENTERS THE HARD SELTZER PARTY

Where do nursing homes go from here?

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TECHNOLOGY

VC-backed scooter startups get first crack at NY market

A

pilot program for e-scooter sharing has gone live in the East Bronx, offering the city’s streets to venture capital–backed scooter firms for the first time.

Bird and Lime, two of the startups taking part in the pilot and some of the biggest competitors in the e-scooter marketplace, have raised more than $1.5 billion from investors collectively in the past half-decade, despite being locked out of the largest U.S. market.

“What happens in New York reverberates globally,” said Phil Jones, senior government relations director with Lime.

E-scooters became legal in the state last year, and the city earlier this year selected California companies Bird and Lime, as well as Chicago-based Veo, to operate a scooter-sharing program in the Bronx.

Lime is backed by Google and Uber and has raised just under $1 billion in its four years in business.

Bird is expected to debut on the New York Stock Exchange later this year via a deal with a special acquisition company. The company raised about $625 million from investors before reaching the SPAC deal, which valued Bird at $2.3 billion.

The firm released second-quarter earnings ahead of its SPAC debut, showing revenue of $60 million, up about 40% from the total of April through June 2019 (and representing 435% growth from the pandemic-suppressed totals of spring 2020).

CEO Travis VanderZanden noted the company’s launch in New York during a call with Wall Street analysts, adding that the company now operates in more than 300 cities.

Lime, which also offers electric moped rentals, has reportedly eyed

a SPAC deal of its own but has not yet declared any official plans.

Veo was founded in 2017 but has taken on less venture investment in that time—announcing last year that it is profitable. The firm last month closed a deal for a $16 million investment to help expand its operations.

The rollout Lime and Bird scooters emerged in U.S. cities throughout 2017 and 2018—providing a new way to get around but also raising concerns about safety and how to park them without blocking sidewalks.

Though privately owned scooters can roam the five boroughs, scooter-sharing is so far limited to the East Bronx. Lime, Bird and Veo can place up to 3,000 scooters in the next year in a radius that includes Eastchester, Co-op City and Morris Park.

The scooters are equipped with safety features such as a beginner mode that limits the max speed from 15 mph to 10 mph. Lime is charging $1 to unlock its scooters and $0.30 per minute on each ride.

Veo and Bird are both charging $1 to unlock one and $0.39 per minute.

A second phase of the pilot will launch next year, which could include up to 6,000 e-scooters and more neighborhoods in the southern end of the borough.

The firms will share ridership data with the city Department of Transportation, which is required to produce a report on the pilot by the end of 2022. It could include recommendations for how to regulate scooter-sharing should it be expanded to Queens, Brooklyn and Staten Island (under state law , such programs are not allowed in Manhattan).

“If the program succeeds, we all succeed,” Lime’s Jones said. ■

WEBCAST CALLOUT

CRAIN’S BUSINESS FORUM SEPT. 14 LIFE SCIENCES: OPPORTUNITIES AND CHALLENGES The life sciences industry is considered one of the most promising for economic development in New York City, having the potential to create up to 40,000 goodpaying jobs. Mayor Bill de Blasio recently announced a plan to double the city’s $500 million investment in the sector, to $1 billion. This panel will discuss the future of the industry and what needs to be done to help it realize its potential.

VIRTUAL EVENT Time: 4 to 5 p.m.

CrainsNewYork.com/SeptBizForum

CORRECTIONS Clodagh, principal of Clodagh and who goes by one name, was recognized as one of Crain’s 2021 Notable Women Business Owners in the Aug. 9 issue. Clodagh’s name was cited incorrectly in that profile. ● Michele Medaglia’s name and the location of one of her projects, STK Steakhouse Midtown, were cited incorrectly in her profile for Crain’s 2021 Notable Women Business Owners. ●

COURTESY OF THE TIMES SQUARE ALLIANCE

BY RYAN DEFFENBAUGH

TOURISM & HOSPITALITY

Times Square will soon have an 11-story Ferris wheel

BY CARA EISENPRESS

T

he hundreds of thousands of daily visitors who are now back to traipsing through Times Square soon will be able to look down on the commotion from a Ferris wheel soaring 11 stories high for a month.

While the city awaits the return of tourism draws like Broadway shows and the New York City Marathon, a pop-up attraction has a role to play in the revitalization effort, said Tom Harris, president of the Times Square Alliance. In July there were 200,000 visitors in the area each day, compared with over 400,000 in recent prepandemic summer months— even as reports of crime in the area mounted.

“This is the time for bold ideas to celebrate our great city,” he said, adding that viewing Times Square from above would provide “a completely new vantage point as we navigate these times and reflect on all we have been through this past year.”

ets will be sold online and on site, and no proof of vaccination is needed, because the wheel is outdoors.

The creator, Vito Bruno, said he came up with the idea several years ago, when he was working in Times Square and observed the waves of visitors milling about.

“I said, ‘We have all these people out here and in the daytime, and there’s not much to do in a way,’ ” he recalled.

At that point, the timing wasn't right, but when he pitched it to

door attractions like boats and zoos have seen pent-up demand among locals and tourists alike.

This summer a Pixar-themed minigolf course opened in Battery Park City by Pier A, marketing itself as a family activity during the day and an adults-only event after dark.

“The demand is very high,” said Jonathan Rockefeller, CEO and creative director of Rockefeller Productions, which brought the Pixar Putt concept to New York. He said he had been looking to produce “safe outdoor activities that could … bring people together,” as families, in particular, look for fun activities.

A long-planned Ferris wheel on Staten Island was abandoned in 2018 but is back on track, according to the Staten Island Advance.

Its construction is expected to take more than three years.

“THIS IS THE TIME FOR BOLD IDEAS TO CELEBRATE OUR GREAT CITY”

The big idea Brooklyn-based production company AMPM Entertainment Concepts came up with the idea, then financed and built the attraction, which will be in the plaza between West 47th and West 48th streets, just north of Duffy Square.

Tickets will cost between $15 and $20, with kids under 3 free and discounts for those ages 3 to 10. Tick-

Harris again recently, Harris told him to come in for a meeting the next day.

“It puts New York in a positive light,” Bruno said.

It is unclear exactly what kind of permit is needed to erect a temporary Ferris wheel in Times Square.

Going by the city’s street activity permit types, it could qualify as a “large street event,” for which a permit costs $25,000 a day, but Bruno said the fee was nowhere near that figure. He did not disclose the full investment but said he took money from his retirement account to build the wheel.

Since the city reopened after its first Covid-related closures, out-

Heartbeat of the city In Times Square, the Ferris wheel will take a few days to get up and running, with construction beginning this week, according to the Times Square Alliance. The city's tourism agency, NYC & Company, applauded the pop-up ride.

“Times Square is the heartbeat of New York City, and we are so pleased that visitors and locals will have one more reason to visit the Crossroads of the World while enjoying this once-in-a-lifetime experience,” said Fred Dixon, president and CEO. ■

Vol. 37, No. 29, August 23—Crain’s New York Business (ISSN 8756-789X) is published weekly,except for a combined issue on 1/4/21 and 1/11/21, 6/28/21 and 7/5/21, 7/12/21 and 7/19/21, 7/26/21 and 8/2/21, 8/9/21 and 8/16/21 and the last issue in December. Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: call 877-824-9379; fax 313-446-6777. $3.00 a copy; $129.00 per year. (GST No. 13676-0444-RT) ©Entire contents copyright 2021 by Crain Communications Inc. All rights reserved.

2 | CRAIN’S NEW YORK BUSINESS | August 23, 2021

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TECHNOLOGY

Local climate investment increases as global crisis reaches ‘code red’

Firms have already closed as many new climate-focused funds this year as in the prior five combined

BY RYAN DEFFENBAUGH

A

dire report on climate change from a global group of scientists offers what one advocate calls a clarion call to increase private sector investment in climate solutions, spending that already has picked up in the past 12 months.

Increasing global temperatures and extreme weather events are providing a “code red for humanity,” warned a new report from the United Nations Intergovernmental Panel on Climate Change.

“If we combine forces now, we can avert climate catastrophe,” U.N. Secretary-General António Guterres said in a statement.

“But, as today’s report makes clear, there is no time for delay and no room for excuses.”

The private sector seems increasingly ready to contribute to that effort. Investment firms have already closed as many new climate-focused funds this year as were raised during the previous five years combined, according to a recent report from PitchBook , a private market-research firm.

That spending could help boost local clean-tech startups as well as existing businesses that need to find ways to comply with state and city mandates to cut energy use.

Midtown startups Recycle Track Systems and Sealed, which reduces home energy usage, both recently raised venture investment rounds to expand. Climate-focused startups raised $15 billion globally in the first half of 2021, nearly topping the total investment for 2020, according to PitchBook.

said Kotch, managing director of Urban-X, a Brooklyn-based accelerator program for urban and climate-focused startups. “As our economy transitions to rapidly meet a net-zero emissions mandate, large investors see opportunities for new value creation amidst the disruption.”

As an example of public-private collaboration, the NY Green Bank, a state-run effort to finance renewable energy projects, said last week that it had raised $314 million from Bank of America, the first time the fund has raised private capital. One of New York’s top technology investment firms, Union Square Ventures, earlier this year launched a $162 million fund to invest in climate-focused startups.

Climate investment had slowed down for several years starting a decade ago, after many clean-tech investments went bust— most notably solar manufacturer Solyn-

“IF WE COMBINE FORCES NOW, WE CAN AVERT CLIMATE CATASTROPHE”

Call to action Micah Kotch, a longtime climate-tech investor and adviser to New York startups, called the U.N. report a clarion call for action. Private sector investment will be helped, he said, by the fact that there is “real money to be made.”

“Entire industries are shifting: energy, transportation, food, fashion, real estate,”

dra—in what became known as the green bubble.

A big investment Meeting the emissions reductions goals of the Paris Agreement will require public and private investment of about $7 trillion per year through 2030, according to estimates from the Organization for Economic Cooperation and Development.

Fifth Wall, which partners with real estate firms, such as CBRE and The Related Cos., to invest in property-tech startups, launched a climate-focused fund late last year. Brendan Wallace, the firm’s co-founder and managing partner, said the biggest players in the industry see climate as both a challenge and “generational opportunity” for investment.

“I think there is growing awareness that the private sector needs to take on the responsibility in mitigating the climate crisis,” Wallace said. “The public sector has its role to play, through rules and regulations, but the private sector ultimately needs to fund the tech to get from where we are today to where we need to be.” ■

BUCK ENNIS

SOLAR PANELS at Brooklyn Navy Yard

AUGUST 23, 2021 | CRAIN’S NEW YORK BUSINESS | 3

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POLITICS

Hochul’s ties to a Buffalo conglomerate draw

BY BRIAN PASCUS

K

athy Hochul is getting a new job, and her husband is keeping his old one. Ethics experts say the latter is a problem.

The soon-to-be governor is married to William Hochul, general counsel and senior vice president at Delaware North, a Buffalo-based casino and hospitality conglomerate that has built a chunk of its business around doing business with New York.

The dealings of a little-known company normally wouldn’t take the spotlight, but when Kathy Hochul moves into the governor’s mansion, she will control the state’s Gaming Commission as well as the Thruway Authority and the Office of Parks and Recreation, three agencies that can affect Delaware North’s bottom line.

The casino and hospitality giant currently holds nearly $50 million in contracts to operate concessions at state parks and rest stops across the New York Thruway system— contracts set to expire next year and that Hochul will oversee while she serves out Gov. Andrew Cuomo’s term.

The state Gaming Commission and state liquor licenses regulate the firm’s two upstate casinos: Hamburg Gaming and Finger Lakes Gaming and Racetrack. The company manages gambling operations in six other states and Australia as well.

said Robert Galbraith, research analyst at the Public Accountability Initiative, an upstate government watchdog. “If the Hochuls are at all serious about avoiding the conflict of interest, then I don’t think it’s tenable for him to stay in this position.”

Long reach Delaware North’s business interests reach far beyond Western New York, even if most New Yorkers are oblivious to it.

The company has co-managed catering at the Plaza Hotel since 2007 and since 2010 has managed concessions, dining and retail operations at MetLife Stadium in East Rutherford, N.J., home to the Giants and Jets. Delaware North’s Patina Restaurant Group owns eateries at some of Manhattan’s most iconic landmarks and buildings, including Lincoln Ristorante at Lincoln Center, the Grand Tier Restaurant in the Metropolitan Opera House and the State Bar and Grill inside the Em-

pire State Building. It also manages the catering, events and food service at the Brooklyn Botanic

tered in Buffalo, where it wields “a tremendous amount of economic and political power,” Kaehny said.

“They not only employ the soonto-be new governor’s husband,” he said, “but they also employ many folks who are prominent, or former politicians or elected officials from the Buffalo area.” The company, which Kaehny called “a colossus,” is a ma-

“MY HUSBAND WILL DO THE RIGHT THING, AS HE’S ALWAYS DONE” ­Garden.

The firm is considered the single-largest company headquar-

‘Enormously influential’ Hochul swiftly addressed her husband’s role at Delaware North.

She said he will recuse himself from New York state business. “My husband will do the right thing, as he’s always done,” she said. “We’ll continue the recusal policy that we’ve had since I was lieutenant governor.”

Delaware North said in a statement that William Hochul is precluded from involvement in matters relating to business the company conducts in which a New York state government official, department or agency is—or potentially could be—engaged.

The conglomerate, which has 55,000 employees and generated $3.7 billion in revenue in 2019, has spent millions on lobbying efforts in Albany. It dropped $2.5 million mostly on casino, gaming, racing and sports-wagering efforts, according to Reinvent Albany, a government watchdog.

“The key issues for them are casino licenses, getting them and getting the permission to do online gambling apps,” said John Kaehny, executive director of Reinvent Albany. “They want licenses from the state.”

Government watchdogs are drawing attention to the potential conflict of interest.

“This is an enormously influential company that basically managed to gain deep influence in the executive branch of the state by hiring the spouse of its top official,”

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wa

jor s Th food acro from and dea for held the sion Nia B and

s “a mic d. only onverhe also olks ent, litithe hich ma-

warnings from watchdogs jor source of local jobs, he added.

The company’s state contract for food-service facilities and rest stops across the Thruway system extends from New York City through Albany and Syracuse and into Buffalo—a deal that first came about in 2006 for $39.4 million. The firm also has held a $10.2 million contract with the state to manage food concessions, beverages and gift shops at Niagara Falls State Park since 2002.

Both contracts were publicly bid and subsequently reviewed and ap-

proved by the offices of both the comptroller and the attorney general before being awarded, said Brian Nearing, a spokesman at the parks office.

Cuomo connection The company is known as a family business in Western New York.

Founded in Buffalo by Lou Jacobs and his two brothers in 1915, the firm’s current chairman is Lou’s son, Jeremy Jacobs; Jeremy’s three sons are co-CEOs. With business in

Canada, the United Kingdom and Australia, the company’s operation is massive, but it was hit hard by the Covid-19 pandemic, and it laid off 4% of its full-time U.S. workforce last year.

Galbraith said the apparent conflict of interest of Hochul’s husband “is too deep and too glaring” to be adequately mitigated by a recusal policy.

The company also has ties with the soon-to-be former governor, who selected Jeremy Jacobs as

HOCHUL

AP PHOTO

w

chairman of the University of Buffalo Council in 2017.

“Starting out with this intractable conflict of interest with a company

so close to Cuomo doesn’t augur well for her drawing any kind of distinction here,” Galbraith said of Kathy Hochul. ■

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Snoop Dogg’s VC firm backs marijuanatech startup

BY RYAN DEFFENBAUGH

S

urfside, a SoHo-based startup that provides digital marketing services to marijuana firms, has raised $4 million in seed funding, led by Casa Verde Capital, a venture capital firm co-founded by hip-hop artist Snoop Dogg.

The firm’s software, launched in 2019, helps marijuana dispensary owners analyze the information they receive directly from customers to drive new and repeat sales.

“We can get a great understanding of the cannabis consumer to build out unique audiences and measure the success of campaigns," said co-founder Jon Lowen.

Adult-use recreational marijuana is legal in 18 states and medical marijuana is legal in all but 14 states, but cannabis marketing is prohibited by Facebook and Google, the two largest players in online advertising.

Many of the biggest firms in marketing tech have stayed out of the heavily regulated marijuana market, Lowen said. That has left dispensaries and other marijuana operations without the insights into customers that digital advertising offers.

Surfside is attempting to close that gap by developing tools to understand what customers want from both online and offline sales, while staying within the varying regulations of how cannabis can be advertised state to state.

Surfside has 25 employees, largely in the greater New York area, and expects to use the funding to help double its staff. The company has roughly 1,000 dispensaries and online brands that pay to use its software.

New York is still forming the rules for its recreational marijuana market, after the Legislature gave the industry the green light in April. Gov. Andrew Cuomo, who is set to resign, has yet to appoint a director of the state Office of Cannabis Management or name members for the Cannabis Control Board. Both will set up the adult-use marijuana market. ■

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WHO OWNS THE BLOCK

ONE BOERUM PLACE

BIG DEAL ON BOERUM PLACE Developer pleased with midstream pivot from condo to rental

BY C.J. HUGHES

209 JORALEMON ST.

405 FULTON ST.

In 1848, when it opened, the marble-columned Greek Revival structure here was Brooklyn’s City Hall. But in 1898, with the consolidation of greater New York City, the building was recast as Borough Hall.

This 2-story trapezoidal building is owned by the aptly named LLC Fulton Gateway; it sits at the head of Fulton Street. Michael Chera, a principal of the firm, is a member of the Chera family, retail-focused developers. The family’s most well-known member, Stanley Chera, died last year from Covid-19. Tenants at No. 405 include Shake Shack and Burger King. Upstairs is Physio Logic, a wellness provider with Pilates studios. As part of the ongoing makeover of the commercial area, the stretch of Willoughby Street next to No. 405 was in 2006 temporarily closed to traffic and in 2013 permanently became Willoughby Plaza, a pedestrian-only park. It was one of the first such conversions in New York. Recently nearby blocks also have gone car-free as part of the city’s Open Streets program.

372 FULTON ST. On and off for more than a century, this 4-story 1870s Italianate commercial building has been home to the Gage & Tollner restaurant. In 2011 the building offered the Ladies and Gents costume jewelry store, after years when it contained a TGI Friday’s restaurant and an Arby’s.

Since the mid-1970s, tenants haven’t been able to modify the interior. The 2,500-square-foot space, which has eight gently curving Victorian brass lamps along its ceiling, is one of the few rooms in New York to enjoy landmark protection. The exterior is a landmark as well. This year a new incarnation of Gage & Tollner opened at the address, a reopening that was delayed by a year because of the pandemic. So far, reviews have been strong and reservations scarce. The buzz about the eatery—whose landlord is commercial developer JJ Operating Real Estate Investment, which bought the site in 2004 for $2.8 million—has local owners hopeful about a revival of Fulton Street, a once-elegant retail strip that declined with the advent of malls.

An effort to punch back led to the street’s rebranding as Fulton Mall in the 1970s. Today the street, which recently shed the “mall” moniker, is dotted with vacancies.

ONE BOERUM PLACE

130 LIVINGSTON ST. Although soaring apartment towers have elbowed in during the past few decades, Downtown Brooklyn is still packed with commercial and governmental buildings such as this 12-story, 500,000-square-foot tower, Livingston Plaza. It’s home to the New York City Transit Authority as well as Local 100 of the Transport Workers Union. Developed in 1989 by Cohen Brothers Realty and designed by Helmut Jahn, the full-block building is across the street from the New York Transit Museum, which is tucked inside an abandoned subway station.

This 22-story rental tower at Fulton Street has mostly three- and four-bedroom apartments. It is from a team that includes Avery Hall Investments and Aria Development. The developers pivoted the building from condominium to rental last year, boosting the number of units in the process while keeping high-end finishes, said founding principal Avi Fisher. The wear and tear from renters could result in pricier-than-usual repairs, Fisher acknowledged. “But the couple million dollars in extra finishes will pay for itself, and then some,” he said. Avery, which is named for the building at Columbia University where the principals met, purchased its arrow-shape site from Brooklyn Law School in 2016 for $76.5 million; the 4-story building there once housed school offices. Avery also snapped up air rights from the commercial building next door. One Boerum, still under construction, began moving in tenants last month.

BUCK ENNIS, GOOGLE MAPS

A

s Downtown Brooklyn continues to go from governmental to resi250 JORALEMON ST. dential hub, a rental This 10-story high-rise, completed in 1968, is development appears to have set a Brooklyn Law School’s main building. It conrecord for the highest-ever rent tains classrooms, offices and a 4-story library. paid for a Brooklyn apartment.

The private school, with about 1,000 students, The new building, One Boerum Place, has leased its largest pentwas founded in 1901 but bounced between house for $27,000 per month, locations before settling in 1927 at nearby 375 according to Avery Hall InvestPearl St., an address that today houses the ments, the project’s developer, Brooklyn Friends School, though “Brooklyn Law which provided a redacted lease as School” remains inscribed over its front door. proof of its claim.

The law school, which guarantees housing Scoring such a sky-high rent for to first-year students, has shrewdly invested in the penthouse, which has four real estate through the years. In 1985 it paid bedrooms, four baths and 2,000 $2.2 million for 2 Pierrepont St., an apartment square feet of terraces, helps valibuilding that it sold in 2015 for $35 million. The date the developer’s decision to buyer was a limited-liability company connected switch gears midproject and turn a to billionaire Vincent Viola, who used to live a planned condominium into a block away. During the winter, Viola sold his rental building, said Avi Fisher, a home, an 1875 brownstone with 10 fireplaces founding principal, who declined at 8 Montague Terrace, for about $26 million, to identify the tenant. a big jump from the $8 million he shelled out “We thought: Let’s take a gamin 2007. That deal set a borough sales record. ble. There are renters out there with nowhere to go,” Fisher said.

“It looks like our thesis was right.”

One Boerum’s penthouse deal easily beats one inked in April for a three-bedroom with a private yard at 3 14 BOERUM PLACE Pierrepont Place, a brownstone comThis 22-story postwar office tower, also known plex in Brooklyn Heights. It leased for as 111 Livingston St., has been owned since $20,000 per month, said Nancy Packes, 1996 by investors including the Leser Group, the broker marketing One Boerum. a Brooklyn-based developer. Brooklyn Law The third biggest deal also closed in School has offices in the building. So does the the spring, for a four-bedroom triplex state of New York, whose Office of Temporary at 15 Third Place in Carroll Gardens. and Disability Assistance is there. The agency It was $15,000 per month, Packes is overseeing the Emergency Rental Assistance said. But Brooklyn Heights rentals Program, a $2.7 billion pandemic-aid initiative accounted for most of the recent top designed to help tenants stave off eviction. The deals, she said, including 146 PierreLegal Aid Society, a not-for-profit organization pont St., a 90-unit high-rise that that provides lawyers for low-income New Yorkopened in 2019. ers, also has an office there. Onetime phone A 22-story tower with 138 units, 96 of giant Nynex used to control the entire building. which are market-rate, One Boerum was conceived as a condominium with 120 units. But with the condo market softening, followed by the effects of the Covid-19 pandemic, Avery decided last year to take the project in a different direction.

415 RED HOOK LANE Since leasing began in May, One Boerum might have competition across the more than a third of the marketstreet, in the form of The Lane at Boerum Place, rate units have rented, said a 21-story luxury rental building that opened Fisher, who as of last month is no four years ago. It has 108 apartments—studios longer offering to sweeten deals to three-bedrooms. To construct the complex, with a one-month concession. developers Quinlan Development and Lonicera The inclusion of 42 affordable Partners razed five tenement-style prewar units allows for tax breaks. walk-up buildings lined with stores along LivOverall, One Boerum seems competitive for Downtown ingston Street. The Lane includes Rumble BoxBrooklyn. Its units start at $4,500 ing, a gym that offers simulated matches; it has per month, which was about the leased part of the retail space, a commercial average list price for the neighcondo, since 2018. In 2019 Quinlan closed on borhood, according to Streeta $75 million loan from TD Bank that paid off Easy. But new development the project’s construction debt from M&T Bank product there is more expensive, and included a gap mortgage of $22 million. with an average list price of No apartments were available in late July. But $6,100, according to the data. a three-bedroom, two-bath recently traded for “There is definitely a pocket of $6,417 per month, which reflected a concespeople who left the city during sion of a free month on a 12-month lease, Covid and went to Austin or Floraccording to StreetEasy. ida,” Fisher said. “But we are seeing a lot of them come back, even if it’s not quite as aggressive as the outward migration.” ■ 6 | CRAIN’S NEW YORK BUSINESS | August 23, 2021

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REAL ESTATE

Department store flagships get makeovers as they shop for new revenue sources Our top priority is your bottom line.

BY NATALIE SACHMECHI

A

n evolving retail landscape and the Covid-19 pandemic are pushing the city’s largest shopping destinations to get creative to stay afloat.

That includes Saks Fifth Avenue, which is partnering with WeWork to incorporate coworking space and other amenities in its department stores. The two recently announced the SaksWorks project, with plans to open the first locations by next month.

Here are several transformations that some of the city’s most iconic department stores are undergoing.

Saks’ parent company, Hudson’s Bay, is bringing coworking to a Saks location near you.

The fashion conglomerate is partnering with WeWork to create workspaces within five of its retail locations around the country, including a former Lord & Taylor store on Long Island. The initiative also is headed to Saks’ flagship on Fifth Avenue in Midtown.

“We created SaksWorks because the millions of Americans who now work remotely from their suburban homes or who find themselves as part-time commuters in this hybrid world deserve a beautiful place to work and gather,” said Amy Nelson, president of SaksWorks.

In some stores, a section will be dedicated to work space, while others, such as the men’s store at Brookfield Place, will be used in

BLOOMBERG

Saks Fifth Avenue

Count on our Construction Advisors to help you reach your business goals. grassicpas.com/construction Amazon bought it from the coworking provider for $1.1 billion last August.

As for Lord & Taylor, it was acquired by investment firm Saadia Group at a bankruptcy auction during the fall. It plans to operate the brand as an e-commerce business, with a new 41,000-squarefoot headquarters it will share with women’s clothier New York & Co. at RPW’s 275 Madison Ave.

Neiman Marcus Developing Hudson Yards was a gamble. It appears to have paid off, but the decision to open a Neiman Marcus there did not.

The retailer announced in July 2020 that it would close its roughly 2 0 0 , 0 0 0 -s q u a re foot department store. It made the announcement two months after it filed for bankruptcy protection and a little more than a year after it signed a 50-year lease.

The Related Cos., the developer behind Hudson Yards, announced it would convert the retail space to offices.

That meant more people would walk through the mall and shop at the surviving retail spaces, Newmark broker Jeffrey Roseman said when the plans were announced.

“This opens up a great opportunity to create incredibly attractive office space, with the largest floor plates available in New York City,” Related spokesman Jon Weinstein said.

But the space is still vacant.

“THIS OPENS UP A GREAT OPPORTUNITY TO CREATE ATTRACTIVE OFFICE SPACE” their entirety for coworking. At the flagship, the workspace will be in the former children’s store on the 10th floor, Saks said.

SaksWorks memberships start at $299. Users can access any WeWork or SaksWorks location.

WeWork will handle the operations, the greeting of guests, membership management and the hospitality elements. Hudson’s Bay will curate the space.

Lord & Taylor The 630,000-square-foot Lord & Taylor building, now owned by Amazon, is being turned into a technology hub, the company announced last year. But it is not scheduled to move in until 2023.

The tech giant plans to hire about 2,000 office workers for the historic building.

Hudson’s Bay, which owned Lord & Taylor and the building, sold the property to WeWork for $850 million in 2019.

atop the store and upgrade the neighborhood with improved transit infrastructure and public spaces.

The tower will generate $269 million annually in new tax revenue, create 16,290 jobs and produce almost $4.3 billion in annual economic output, the company said, while the portion of the building in which it operates its store will remain unchanged. ■

Macy’s One of the oldest department stores in the city, Macy’s has big plans for its Herald Square flagship.

The company announced last year that it would spend more than $235 million to build an office tower

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August 23, 2021 | CRAIN’S NEW YORK BUSINESS | 7

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

EDITORIAL

publisher/executive editor

Kathy Hochul should seize opportunity to be transformative New York leader

editor-in-chief Cory Schouten assistant managing editors Telisha Bryan,

Janon Fisher deputy digital editor, audience & analytics

the state’s highest elected official for another term. If she fails, she will leave the office at the end of 2022 and go back into relative obscurity.

Hochul will become governor Aug. 24. Her first order of business should be to increase vaccination rates. With 58.5% of adult New Yorkers fully vaccinated, Hochul should target parts of the state that have lagged in getting shots, including certain minority groups.

Along the same lines, Hochul should consider a statewide vaccine mandate for all indoor activities—so that restaurants, bars, gyms and entertainment venues can safely open their doors to patrons and employees and get back to business.

With many New York learning institutions expected to reopen next month, Hochul should require masks in schools. Such a policy would be in keeping with federal guidelines and go a long way toward getting more children back in physical classrooms.

In terms of federal relief efforts around the pandemic, Hochul should make it a priority to release

HER FIRST ORDER OF BUSINESS SHOULD BE TO INCREASE VACCINATION RATES divvying up relief for rental tenants, rolling out marijuana legalization and implementing congestion pricing to ease a growing traffic problem.

If she is successful—that is, if she can lead New York through a period of incredible tumult and uncertainty—Hochul likely will retain the privilege of serving as

EDITORIAL

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

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

Brian Pascus, Natalie Sachmechi, Shuan Sim executive assistant Brittany Brown AP PHOTO

A

fter years of cutting ribbons and standing quietly in the shadow of Gov. Andrew Cuomo, Lt. Gov. Kathy Hochul this week will not only become the first woman to serve as New York’s governor but also will inherit the opportunity to become a transformative leader.

The question is whether she will seize that opportunity.

The Democrat from Buffalo faces unprecedented challenges in the course of her term. In addition to restoring the dignity of the state’s highest office, she must lead New York out of the pandemic. She also must address myriad items of unfinished business, including

Frederick P. Gabriel Jr.

the $2.4 billion that is owed to New York tenants and landlords.

Releasing those funds will avoid an eviction crisis that would set the recovery back.

Another way Hochul could help the state is by pushing ahead with New York’s recreational marijuana program. New York officially legalized recreational marijuana for adults at the end of March, and sales estimates for the state have exceeded $1 billion.

Under Cuomo, the rollout of the legal use of pot came to a standstill. Specifically, Cuomo delayed nominating appointees to the Cannabis Control Board and the executive director of the Office of Cannabis Management, primarily because he first wanted the Legislature to approve his

leadership overall at the Metropolitan Transportation Authority. By moving quickly on her nominations, much-needed revenue will soon follow.

Let’s not forget congestion pricing. The policy, which would charge tolls to drivers entering traffic-ridden parts of Manhattan, was approved by lawmakers in 2019. It is expected to generate $1 billion a year. That revenue would be used to secure $15 billion in funding for other transit projects.

Hochul will need to decide whether to forge ahead with her predecessor’s plan to bring congestion pricing to the city.

Finally, Hochul has a unique opportunity to transform the executive branch with a more transparent and less combative style. ■

OP-ED

to contact the newsroom:

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

www.crainsnewyork.com/advertise account executives 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 Managing Director, Marketing and Events

Jill Heise, jill.heise@crain.com marketing manager Jessica Botos,

jessica.botos@crainsnewyork.com manager of conferences & events

Ana Jimenez, ajimenez@crainsnewyork.com REPRINTS

Diversity in pension fund management delivers stronger investment results

director, reprints & licensing Lauren Melesio,

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

Simone Pryce media services manager Nicole Spell SUBSCRIPTION CUSTOMER SERVICE

BY THOMAS DINAPOLI

O

ne of the great strengths of our state and nation is our diversity. It is unfortunate that when it comes to choosing investment managers, diversity is often absent. Increasing business with minority- and women-owned business enterprises is not just about correcting long-standing inequities, it is also very smart money.

We know that companies that foster diversity at all levels of their operations are more likely to outperform peers that are less diverse.

The same truth applies to investment portfolios.

The New York State Common Retirement Fund recognizes this and has worked hard over the years to build new opportunities for asset management with emerging managers (smaller firms often operated by women and minorities) and MWBEs. It starts with a clear goal: ensuring secure, sustainable retirement

benefits for our 1.1 million members—active employees, beneficiaries and retirees.

New York state’s pension fund is one of the strongest in the nation.

The fund’s value at the end of the last fiscal year in 2020-21 was an estimated $258.1 billion, and that value reflects retirement benefits of $13.7 billion paid out during the fiscal year.

When I became comptroller, I made diversity one of my office’s key strategic priorities, including managing pension fund assets and building a diverse staff of investment professionals. I pushed my team to think big and lay out aggressive goals.

We set out to improve access to the rising talent pool of MWBEs and emerging managers who could build significant, long-term gains for the fund. At the same time, we prioritized recruiting staff from different backgrounds and ethnicities.

More than half of the fund’s assets are in public equities and fixed

income, managed in-house by our dedicated, professional and diverse staff. More than 60% of our staff have a least one diverse quality: 47% are female; 19% are African American; 6% are Hispanic; and 10% are Asian American.

Smart money For the assets that are managed externally, 21.5% are managed by an MWBE investment manager.

This represents an increase of approximately 36% from the last fiscal year alone. With 21.5% of its actively managed external assets overseen by MWBE managers, the state’s pension fund exceeds the 20% goal that some state pensions are just now targeting. This is the highest level of MWBE investment partnership in the pension fund’s history—and it continues to grow.

I also launched an Emerging Manager Program in each of our major asset classes. The program has grown to $9 billion, with the program nurturing firms to gradu-

ate to larger allocations. These investments aren’t about making a statement or a gesture.

Results are what matter. The firms in our Emerging Manager Program have delivered solid returns and are meeting and, in many cases, exceeding their benchmarks. In fact, approximately 30 emerging managers have graduated into the core portfolio and others have grown to become large firms, thanks to their success.

This demonstrates the correlation between a diverse leadership team and financial performance. Expanding opportunity and access to MWBEs and emerging managers is not only the right approach—it’s the best approach.

The fact is, diversity is an asset— for the pension fund, the state and the nation. I encourage all pension fund managers to follow our example. ■

www.crainsnewyork.com/subscribe customerservice@crainsnewyork.com 877.824.9379 (in the U.S. and Canada). $3.00 a copy for the print edition; or $129.00 one year, for print subscriptions with digital access.

Entire contents ©copyright 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 editor-in-chief emeritus Rance Crain chief financial officer Robert Recchia founder G.D. Crain Jr. [1885-1973] chairman Mrs. G.D. Crain Jr. [1911-1996]

Thomas DiNapoli has been state comptroller since 2007.

8 | CRAIN’S NEW YORK BUSINESS | AUGUST 23, 2021

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OP-ED

Wollman Rink food and beverage contracts can bolster women- and minority-owned businesses

T

he city is finally reawakening.

People are flocking back to restaurants and dining alfresco. Museums have reopened their doors for exciting new exhibitions. Our sports teams are performing live again in front of fans.

Bruce Springsteen is back on Broadway.

Although there is much to celebrate as more people are getting vaccinated, we’d be remiss not to correct the inequalities and flaws exacerbated and exposed by the pandemic, particularly in the food and beverage industry.

The city represents more than 150 cuisines from around the world, with approximately 60% of our restaurant workforce made up of immigrants. Most restaurant owners operate small, local businesses embedded deep within their neighborhoods. They consistently experience, however, a lack of investment and support from the financial community. They are overburdened with regulation, and they struggle with navigating complex and overlapping government agencies.

All of this makes it increasingly difficult for small women- and minority-owned restaurants to get off the ground. It’s one of the main reasons only 3.5% of city businesses are owned by Black entrepreneurs, despite the Black community making up 22% of the city’s population. As we continue our recovery, our civic, elected and business leaders should prioritize projects that can support small businesses and prioritize inclusion and diversity during and post-pandemic.

turn Wollman Rink into a platform for these businesses and create a showcase of great flavors, creativity, resiliency, new voices and culinary spirit.

We are also committed to engaging Wollman’s supply chain to prioritize Black and minority- and women-owned businesses, something that will help us form a deep pipeline of minority-owned businesses and vendors to work in the

heart of Central Park.

In addition, our plan includes a workforce-development program to educate, train and uplift workers at all stages of the rink’s revitalization, including design, construction and operations.

Our leaders should use the revitalization of Wollman Rink as a model for how to correct some of the city’s inequalities and open the economic tent to even more neigh-

borhoods, entrepreneurs and New Yorkers simply looking for an opportunity.

Now’s the time to move the needle forward and give equity and inclusion the genuine priority they deserve. ■

WOLLMAN RINK

Melba Wilson is the founder of Melba’s Restaurant in Harlem. Liz Neumark is the founder of Great Performances catering company.

WIKIPEDIA

BY MELBA WILSON AND LIZ NEUMARK

Close to Talent. Close to Perfect.

Smooth skating Take for example the revitalization of a city gem, Wollman Rink.

The Parks Department issued a request for proposals seeking an operator with the resources and knowledge to transform the rink to live up to its true potential as a cultural destination that New Yorkers from every borough can visit and afford time and again. Its recommendation of Wollman Park Partners, a coalition of New Yorkers who have pledged to keep none of the profit and make workforce development and access a cornerstone of its proposal, is the type of partnership we need.

The Wollman partnership recognizes the critical importance that food and beverage companies will play in making Wollman a culturally vibrant and relevant space for all New Yorkers. That’s why, as official community partners to the bid, we will find diverse businesses and entrepreneurs from across the city to participate in the food and beverage concession program. True passion for our city is embedded in the heart and soul of small and midsize neighborhood food companies that feed New Yorkers.

By working together, we can help

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Jacqueline L. Novotny (203) 352-8919 jacqueline.novotny@cbre.com 1111 & 1129 Westchester Avenue, White Plains, NY

August 23, 2021 | CRAIN’S NEW YORK BUSINESS | 9

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ASKED & ANSWERED What’s the industry’s biggest challenge now?

DANIEL REINGOLD RiverSpring Living

DOSSIER

INTERVIEW BY MAYA KAUFMAN

WHO HE IS President and CEO, RiverSpring Living

If you could go back, what would you do differently?

I would demand that the government provide us with the gear and the testing on day one and not have us go through those first horrible 10 weeks that we were on our own. Particularly knowing the first outbreak was in a nursing home in Washington state, we should have known long-term care was going to be a vulnerable spot.

How has the pandemic altered the landscape of nursing homes, assisted-living facilities and home care?

People want to stay home as long as they can. We expanded our home care program, and others are looking at home care as an area of growth. Ironically, as much as people were fearful of congregate care, people were much more fearful of being alone in their own apartments.

AGE 66 BORN Scarsdale, N.Y. RESIDES Scarsdale, N.Y. EDUCATION: Bachelor’s in sociology, Hobart College; master’s in social work, Columbia University; J.D., Benjamin N. Cardozo School of Law of Yeshiva University

How does the industry chart a course for survival post-pandemic?

We have to partner with our workforce to come up with new models of staffing.

In many ways the collective-bargaining agreement that we’re operating under has been the same since 1974. We need to talk about new types of job creation, career ladders, a living wage, making sure the benefits are good but not prohibitively expensive.

FAMILY LIFE Reingold has three grown daughters.

SEA LEGS Reingold spent the summer of 1976 in the U.S. Merchant Marines. The experience taught him the importance of providing social services directly in the workplace. When he got back to land, he set up an alcoholism program with the Seafarers International Union to tackle what he had observed was a major problem for mariners.

“This is primarily men who are away for six months at a time,” he said. “It’s a lonely time.”

The Legislature this year passed new staffing requirements for nursing homes. Why has finding workers been such a challenge?

Part of it is the pure demand on the health care system. It has been stretched to its max. We’re seeing calls from other states asking for health care workers to come and deal with the surge.

We’re not able to recruit as we have in the past from other countries because of limitations on immigration and even just the pandemic. This is kind of a perfect storm. The key right now is to hold on to the staff that we have. The staffing requirements make wonderful sense. The question is, is the Legislature going to pay for it, which will allow us to then recruit people and compete with other industries? ■

So we’re seeing an enormous demand for safe care that allows people to be in a social environment. The old model of the nursing home is going to change to serving three primary populations: short-term rehabilitation, supporting advanced memory care and end-of-life care.

WHERE LEADERS CONNECT AND LEARN

BUCK ENNIS

C

ovid-19 ravaged the city’s nursing homes, and they have yet to fully recover from the fatalities and financial devastation.

Some never will. One industry survey found only a quarter of nursing homes and assisted-living communities nationwide are confident they will make it through the year. Hebrew Home at Riverdale, a 751-bed nursing home in the Bronx, was hit especially hard. Now its not-forprofit owner, RiverSpring Living, and CEO Daniel Reingold are embarking on a long-term transformation plan that will remake what it looks like to care for the elderly.

Capital, particularly on the nonprofit side. The biggest need is for us to secure significant capital investment in buildings that have been built 30, 40 years ago and need to be retrofitted to this population and the consumer preferences.

In our case, we’re taking what was much more of a hospital-looking structure and converting it into something very spa-like, upscale.

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10 | CRAIN’S NEW YORK BUSINESS | AUGUST 23, 2021

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SPONSORED CONTENT

Tax strategies for commercial real estate debt workouts Taxpayers that choose to exclude COD as a result of bankruptcy or insolvency are required to reduce tax attributes. Unless the taxpayer elects otherwise, the tax attributes are required to be reduced by the amount of debt discharged in the following order:

Conversely, the determination of whether the indebtedness is qualified real property business indebtedness is determined at the partnership level.

The following criteria must be met for debt to be considered qualified real property business indebtedness:

• net operating losses, • general business credits, • minimum tax credits,

I

t’s no surprise that Covid-19 has had a dramatic impact on the commercial real estate industry. Building owners feel the effects in two ways: Tenants are strapped for cash, and employees are working from home. Despite various state and local grants that have recently become available, property owners find themselves working with tenants on rent deferrals or abatements, early lease terminations, or modifications to reduce existing space. The result is a devaluation of commercial real estate that’s left owners overleveraged and unable to pay their debt.

When restructuring a debt, taxpayers may find themselves in a position where they are forced to recognize income for tax purposes. They may encounter a discharge of indebtedness income, also known as cancellation-of-debt income or a gain or loss resulting from a sale.

Treatment of COD income for federal income taxes will depend on the classification of the taxpayer receiving debt forgiveness. In addition, states may vary in how they tax COD income. They should be looked at separately.

Corporation insolvency For corporations, including S-corporations, COD income can be excluded from gross income for federal income tax purposes if the debt is discharged in Chapter 11 bankruptcy. In addition, corporations that are merely insolvent immediately before a discharge—having liabilities in excess of the fair market value of assets—can exclude COD income to the extent of their insolvency.

• capital loss carryforwards,

• The real property must be held by the partnership in connection with a trade or business conducted by the partnership.

A rental arrangement under a triple net lease may not qualify as a trade or business.

• basis reduction of property, • passive activity losses and credit carryovers, and • foreign tax credit carryovers.

Partnership insolvency For partnerships, either the bankruptcy or insolvency analysis or both are performed at the partner level, so while the entity may be insolvent, the individuals or trusts who are the ultimate owners of the entity may not be. The exception is determined on a partner-bypartner basis, so a situation could occur in which one partner is insolvent and will not be taxed on the income while another partner is solvent and will have to pay federal income tax on the COD income.

Similar to corporations, the partner in the partnership who excludes COD income because of insolvency must reduce personal tax attributes to the extent available.

‘Qualified real property business indebtedness’ While the insolvency exception is passed through to the partner in many cases, taxpayers, other than C-corporations, have an opportunity to exclude COD income generated from “qualified real property business indebtedness” at the entity level.

This exception only applies to debt incurred in connection with and secured by real property used in a trade or business. For partnerships, disregarded entities and grantor trusts, the income exclusion and election are reported at the partner level.

• The indebtedness was incurred or assumed to acquire, construct, reconstruct or substantially improve the real property.

• The partner must make a timely election on the personal income tax return by filing Form 982.

The amount of COD income from qualified real property business indebtedness is determined at the partnership level. It is limited to the excess of the outstanding principal amount of the indebtedness immediately before the discharge over the fair market value of the real property reduced by the outstanding principal amount of any other qualified real property business indebtedness secured by such property. Once the amount is determined, the election is made by filing Form 982 with the partner’s income tax return combined with reducing the basis of the partner’s interest in the partnership by the amount of COD income excluded and the basis of the real property is reduced on the following year’s tax return.

outstanding principal debt balance canceled is included in the proceeds on the property disposition. Gain or loss is characterized as either Section 1231 gain when business property, subject to depreciation recapture, or capital gain when investment property. The gain may also be subject to the depreciation recapture rules under Section 1250. The fair market value of the property has no impact on the amount realized for income tax purposes.

Similarly, when dealing with recourse debt, the same rules generally apply, except when the recourse debt exceeds the FMV of the surrendered property. In this case, the transaction is considered two unrelated transactions where the taxpayer may be required to recognize ordinary income and capital gain or loss. First, the taxpayer will recognize COD income to the extent the canceled debt exceeds the FMV of the property at the time of the foreclosure. Second, a sale or exchange is deemed to occur, and gain or loss will be determined by calculating the difference between the amount realized (the canceled debt less the portion treated as COD income) and the adjusted tax basis of the property. In situations where the property’s FMV is less than its adjusted tax basis, a taxpayer may realize a capital loss (ordinary loss if the underlying collateral was Section 1231 property) and COD income on the same transaction. This would result in a net effect of the same total gain or loss that would have occurred if the property was secured by nonrecourse debt.

ABOUT THE AUTHORS

Michael Gershon, CPA, MBA,MS Partner mgershon@citrincooperman.com

Christine L. Meller, CPA Director cmeller@citrincooperman.com

There are several strategies to restructure, modify or eliminate liabilities that can reduce the adverse federal and state income tax consequences of COD income that are dependent on individual facts and circumstances.

We are here to work with you to find the best approach for you and your business. Please contact your Citrin Cooperman professional today to find out more.

Foreclosures In a foreclosure, whether voluntarily (deed in lieu) or involuntarily, the lender takes title to the collateralized property to satisfy the outstanding debt. The transaction is generally considered a sale of property, but the tax treatment is also dependent on whether the debt is recourse or nonrecourse.

When a foreclosure occurs on nonrecourse debt, the

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11 | CRAIN’S NEW YORK BUSINESS | AUGUST 23, 2021

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THE LIST TOP OFFICE LEASES Largest transactions in Manhattan in the first half of 2021, ranked by square feet ADDRESS

LANDLORD(S)

LANDLORD/SUBLANDLORD REPRESENTATIVE(S)

DEAL TYPE

NEIGHBORHOOD

313,022 Department of Citywide Administrative Cushman & Wakefield Services 198,900 Legal Aid Society CBRE

Piedmont Office Realty Trust

JLL

Renewal

Financial District

GFP Real Estate

GFP Real Estate

Renewal and expansion

TriBeCa

Cushman & Wakefield

JLL

New lease

Columbus Circle

CBRE

The Georgetown Company/Pershing Square Capital Management Vornado Realty Trust

CBRE

New lease

Penn Plaza

SQUARE FEET

TENANT

TENANT REPRESENTATIVE

AMANDA.GLODOWSKI@CRAINSNEWYORK.COM

1

60 Broad St.

2 3

40 Worth St.

4 5 6 7 8

11 Penn Plaza

165,000 Icahn School of Medicine at Mount Sinai 156,565 SPARC Group

245 Park Ave.

148,232 Houlihan Lokey

CBRE

SL Green Realty/HNA Group North America

Cushman & Wakefield

New lease

Midtown East

620 Eighth Ave.

132,094 Seyfarth Shaw LLP

Cushman & Wakefield

Brookfield Properties

Brookfield Properties

Renewal

Times Square

55 E. 52nd St.

121,300 Jennison Associates

CBRE

Fisher Brothers Management

CBRE/Fisher Brothers Management

New lease

Plaza District

1540 Broadway

108,849 Schrödinger

Cushman & Wakefield

CBRE

New lease

Times Square

9 10 11

100 Park Ave.

103,803 Wells Fargo

Direct Deal

Vornado Realty Trust/Crown Acquisitions/ EDGE Funds Advisors SL Green Realty/PGIM Real Estate

Cushman & Wakefield/SL Green Realty

New lease

Grand Central

12 13 14 15 16 17

787 11th Ave.

11 Madison Ave.

99,566 Beam Suntory

CBRE

SL Green Realty/PGIM Real Estate

Newmark/SL Green Realty

New lease

Gramercy Park

1 Vanderbilt Ave.

97,652 Stone Ridge Asset Management

CBRE

CBRE/SL Green Realty

New lease

Grand Central

1 Broadway

94,061 Fiserv

Cushman & Wakefield

SL Green Realty/Hines/National Pension Service of Korea Rockwood Capital

Cushman & Wakefield/Rockwood Capital New lease

Financial District

63 Madison Ave.

92,306 Freshly

Colliers

Loeb Partners Realty

George Comfort & Sons

New lease

Gramercy Park

635-641 Avenue of the Americas 75 Ninth Ave.

90,428 Infor

JLL

Spear Street Capital

SL Green Realty

Renewal

Chelsea

82,870 Charter Communications

CBRE

Google

Direct Deal

Renewal

Chelsea

345 Park Ave.

80,922 The Blackstone Group

Direct Deal

Rudin Management Company

Rudin Management Company

New lease

Midtown East

825 Seventh Ave.

JLL

Vornado Realty Trust/Edward J. Minskoff Equities Vornado Realty Trust

Avison Young

New lease

Columbus Circle

Vornado Realty Trust

New lease

Penn Plaza

Newmark/Empire State Realty Trust

Renewal and expansion

Penn Plaza

The Durst Organization

New lease

Midtown

18 19

1 Penn Plaza

74,896 YAI National Institute for People with Disabilities 72,721 Empire Health Choice

1400 Broadway

68,307 Burlington Stores

Colliers

20

1155 Avenue of the Americas 199 Church St.

66,935 Jenner & Block LLP

CBRE

Empire State Realty Trust/Qatar Investment Authority The Durst Organization

65,561 The People of the State of New York

CBRE

New York State Insurance Fund

JLL

New lease

TriBeCa

125 W. 25th St.

64,516 Cockroach Labs

Newmark

AFIAA

Newmark

New lease

Chelsea

1251 Avenue of the Americas 601 W. 26th St.

62,400 Berenberg Bank

JLL

Mitsui Fudosan America

Newmark

Renewal and expansion

Midtown

60,571 Fashionphile

CBRE

RXR Realty

RXR Realty/CBRE

New lease

Chelsea

100 Pearl St.

55,656 New York Legal Assistance Group

Cushman & Wakefield

GFP Real Estate

Newmark

New lease

Financial District

1290 Avenue of the Americas 31 W. 52nd St.

55,042 Fubo TV

Newmark/CBRE

Vornado Realty Trust/Trump Organization

New lease

Midtown East

54,095 Bracewell LLP

Cushman & Wakefield

Paramount Group

Cushman & Wakefield/Vornado Realty Trust JLL/Paramount Group

New lease

Midtown East

1290 Avenue of the Americas 845 Third Ave.

52,258 G/O Media

CBRE

Vornado Realty Trust/Trump Organization

JLL

New lease

Midtown East

51,843 South African Consulate General

Attentiv RE Partners

Rudin Management Company

CBRE

New lease

Midtown East

335 Madison Ave.

51,569 Armani

Cushman & Wakefield

Milstein Properties

CBRE

New lease

Midtown East

40 W. 57th St.

50,000 Givaudan Flavors

Cushman & Wakefield

LeFrak Associates

CBRE

Renewal

Midtown East

280 Park Ave.

49,751 Kyndryl

Cushman & Wakefield

SL Green Realty/Vornado Realty Trust

JLL

New lease

Midtown East

399 Park Ave.

49,204 Blue Owl Capital

Cushman & Wakefield

Boston Properties

CBRE

Renewal and expansion

Midtown East

41 E. 11th St.

44,333 Alloy

Colliers

Thomas F. Campenni Company

JLL

New lease

Greenwich Village

630 Fifth Ave.

43,828 Lindsay Goldberg LLC

CBRE

Tishman Speyer

Tishman Speyer

New lease

Midtown East

48 Wall St.

43,542 Quest Workspaces

Direct Deal

Helmsley Spear LLC

Helmsley Spear LLC

Renewal

Financial District

275 Madison Ave.

40,738 Saadia Group

Savills

RPW Group

Cushman & Wakefield

New lease

Midtown East

299 Park Ave.

40,386 Court Square Capital Partners

CBRE

JLL

New lease

Midtown East

39 40

151 West 26th St.

40,068 Swedish Institute

Cushman & Wakefield

Fisher Brothers Management/ Alaska Permanent Fund Rosen Gluck & May

Koeppel Rosen LLC

New lease

Chelsea

33 Whitehall St.

CBRE

Stawski Partners

CBRE

Renewal

Financial District

41 42

11 Madison Ave.

39,721 U. S. Equal Employment Opportunity Commission 39,595 ActionIQ

Savills

SL Green Realty/PGIM Real Estate

CBRE

New lease

Gramercy Park

915 Broadway

39,000 General Assembly

Vicus Partners

ABS Partners Real Estate

Renewal and expansion

Gramercy Park

43

114-116 Fifth Ave.

38,672 Splice

BGR Ventures

Cushman & Wakefield

New lease

Chelsea

44

60 E. 42nd St.

38,162 Stark Business Solutions

Savills

Newmark/Empire State Realty Trust

Renewal

Midtown East

45 46 47 48

350 Park Ave.

38,011 Marshall Wace

Newmark

Allied Partners/The Feil Organization, ABS Partners Real Estate L&L Holding Company/Allianz Real Estate of America/Columbia Property Trust Empire State Realty Trust/Qatar Investment Authority Vornado Realty Trust

Vornado Realty Trust

Renewal and expansion

Midtown East

387 Park Avenue South

38,000 Deutsch

Newmark

TF Cornerstone

TF Cornerstone

New lease

Gramercy Park

245 Park Ave.

36,166 PKF O’Connor Davies

Cushman & Wakefield

SL Green Realty/HNA Group North America

Cushman & Wakefield

New lease

Midtown East

1 Vanderbilt Ave.

35,567 MSD Partners

JLL

CBRE/SL Green Realty

New lease

Grand Central

49 50

One World Trade Center

34,382 Hyperscience

JLL

SL Green Realty/Hines/National Pension Service of Korea The Durst Organization

The Durst Organization/Newmark

New lease

Financial District

888 Seventh Ave.

33,616 TOP-NY

Cushman & Wakefield

Vornado Realty Trust

Vornado Realty Trust

New lease

Columbus Circle

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Savills

SOURCE: CoStar Group with additional research by Amanda Glodowski. This list includes leases with terms of at least two years. For quality control purposes, CoStar only includes deals where representatives for both the tenant and landlord are known.

CoStar conducts research to maintain a database of commercial real estate information. For more information, visit costar.com or call 800-204-5960.

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

P012_CN_20210823.indd 12

8/19/21 4:49 PM

AT THE CENTER OF

WHAT’S NEXT

Acting responsibly as a global leader and local neighbor is more important than ever. We’re committed to setting the highest ethical standards; putting the wellbeing of people and the planet first; advancing diversity, equity and inclusion; and giving back to our communities.

Learn more about Cushman & Wakefield’s CSR Report. cushmanwakefield.com/en/about-us/ corporate-social-responsibility

CN020353.indd 1

8/17/21 8:16 AM

THE LIST TOP PROPERTY SALES Largest commercial transactions in New York City through the first half of 2021, ranked by price TRANSACTION PRICE (IN MILLIONS)

1

121 W. End Ave.

$450

2

520 Broadway

3

SQ. FT. OR NO. OF UNITS/ PRICE PER SQ. FT. OR UNIT

INTEREST CONVEYED

100% VALUE (IN MILLIONS)

CLOSE DATE

BUYER(S)

SELLER(S)

400,000 $1,500

Majority 1

$600

3/30

LaSalle 2

Taconic Investment Partners/ TIAA

$324

240,000 $1,348

100%

$324

6/10

Northwood Investors

Tahl Propp Equities

511 Lexington Ave.

$185

725 $255,503

100%

$185

6/30

Island Capital/MCR Hotels

DiamondRock Hospitality Co.

563 Eleventh Ave. (Sky Residences)

$172

1,176 $729,677

20%

$858

6/30

Moinian Group

SL Green

5

546 Broadway

$160

93,600 $1,709

100%

$160

5/24

Fast Retailing

Isaac Chetrit and Ray Yadidi

6

280 Richards St. (Amazon)

$157

311,796 $529

95%

$165

2/1

280 Richards Street LLC

Thor Equities

7

15 Park Row

$142

322 $439,441

100%

$142

1/21

Atlas Capital Group

Broadway Management Co.

8

920 Park Ave.

$135

68 $1,977,941

100%

$135

4/23

Stonehenge Partners

926 Park Avenue Corp.

9

325 Hudson St.

$134

241,000 $557

100%

$134

5/20

DivcoWest

Macquarie Group/Jamestown

141 W. 57th St. (Salisbury Hotel)

$130

197 $659,898

100%

$130

6/15

Alchemy-ABR Investment Partners/Cain International

Calvary Baptist Church

1080 Leggett Ave. (Amazon Fresh)

$117

140,348 $830

100%

$117

5/4

CalPERS

Goldman Sachs/Blumenfeld Development

102-05 Ditmars Blvd.

$104

443 $234,011

100%

$104

1/15

ASAP International

Rubicon Cos.

1110 Oak Point Ave.

$103

90,000 $1,139

100%

$103

6/4

Andrew Chung

Pearl Realty Management

4

Office Upper West Side Office SoHo

Hotel Midtown East

Apartment Hell’s Kitchen Retail/Office SoHo

Industrial Brooklyn

Apartment Financial District Apartment Upper East Side

Office TriBeCa

10

Hotel Midtown

11

Industrial The Bronx

12 13

(Mariott LaGuardia Airport) Hotel Queens (New York Expo Center) Industrial The Bronx

14

505 W. 43rd St. (Charlie West) Apartment Hell’s Kitchen

$90

70 $1,285,905

100%

$90

4/20

Tishman/PIMCO

Delek Group

15

215 W. 84th St. (Eagle Court) Apartment Upper West Side

$70

129 $544,574

100%

$70

6/9

Naftali Group

Jeffrey Elghanayan

16

Office Midtown

55 W 46th St.

$69

347,000 $793

25%

$275

4/21

Brookfield Asset Management

SL Green

17

Office Queens

94-05 Queens Blvd. (AT&T)

$59

194,989 $304

100%

$59

5/28

Reign Capital Holdings

AT&T

18

182-20 Liberty Ave.

$58

180,200 $322

100%

$58

4/23

Elion Partners

Babyking

19

105 W. 125th St.

$57

151,316 $377

100%

$57

5/26

David Werner Real Estate

Brookfield Asset Management

20

902 Quentin Road

$54

73,245 $734

100%

$54

5/26

Seavest

David Marx

21

260 5th Ave.

$53

59,870 $877

100%

$53

5/7

William Amir Loloi

Boris Kuzinez

144 E. 48 St.

$50

211 $236,260

100%

$50

6/4

AEW

Arch Street Cap Advisors 3

2300 Linden Blvd (Amazon)

$46

90,000 $511

100%

$46

1/28

BentallGreenOak

Turnbridge Equities/Harbor Group International

688 Court St.

$45

76,343 $589

100%

$45

5/27

Madison Capital

Pearl Realty Management

604 5th Ave.

$45

21,000 $2,141

100%

$45

4/8

Minamoto Kitchoan

Riese Organization

Industrial Queens Office Harlem

Office Brooklyn

Office Midtown

22

Hotel Midtown East

23

Industrial Brooklyn

24

Industrial Brooklyn

25

Retail Midtown

SOURCE: Real Capital Analytics with additional research by Amanda Glodowski. List is based on independent reports of properties and portfolios $2.5 million and greater. The list does not include sales for which no price was made public. Partial-interest transactions are included at the prorated share of the 100% property value. Real Capital Analytics Inc., headquartered in New York City, is an independent data and analytics firm focused on the investment market for commercial real estate. RCA offers data on commercial property transactions around the world. 1- Confidential 2- On behalf of CALSTRS 3-On behalf of Global Securities House

THE TOP FOUR

121 W. End Ave. TRANSACTION PRICE $450 million

520 Broadway TRANSACTION PRICE $324 million

511 Lexington Ave. TRANSACTION PRICE $185 million

PHOTOS: BUCK ENNIS

ADDRESS PROPERTY TYPE NEIGHBORHOOD

AMANDA.GLODOWSKI@CRAINSNEWYORK.COM

563 Eleventh Ave. TRANSACTION PRICE $172 million

14 | CRAIN’S NEW YORK BUSINESS | August 23, 2021

P014_CN_20210823.indd 14

8/19/21 4:52 PM

SPONSORED CONTENT

How companies can put mental health care front and center Greater awareness of the importance of mental health has been one of the biggest legacies of the pandemic. Many companies have expanded mental health benefits in response to the strain the lockdowns put on many of their team members. Besides helping workers, these services have valuable business benefits. Almost half of behavioral telehealth users reported higher productivity and fewer missed workdays.

For insight into trends around mental health in the workplace, Crain’s Content Studio spoke with W. Clayton Davis, behavioral clinical account manager for Cigna’s New York-New Jersey market. with a mental health condition actually received treatment1.

Sadly, people do not prioritize mental health treatment and delay or decline to seek any number of effective treatments.

These elite athletes are modeling very healthy actions of approaching their mental health the same way they would treat an athletic injury. They are bringing about positive discussion on taking time out to prioritize their emotional health.

W. CLAYTON DAVIS

Behavioral clinical account manager Cigna

CRAIN’S: What is the relationship between mental health and physical health? Has thinking within the medical community on this subject changed in recent years?

W. CLAYTON DAVIS: When we looked at Cigna’s internal data we found that of all adults with a mental disorder, 63% of them will have a medical condition impacting them. If you look at all the adults with a medical condition, 35% of that group will have a behavioral condition. So there is a definite overlap of the two. The medical community has integrated this knowledge with primary care physicians starting to ask questions about mental health in exams for possible referrals. Cigna also leverages this relationship with predictive analytics from medical and pharmacy data for behavioral coaching outreach to improve wellness.

CRAIN’S: We’ve seen public figures such as Simone Biles and Michael Phelps speaking openly about mental health. What effect does this have on how the public thinks about mental health and in decreasing the stigma around seeking mental health treatment?

DAVIS: A national study by the Substance Abuse and Mental Health Services Administration found that only 41% of people

P015_CN_20210823.indd 15

and behavioral for a healthier workforce3.

CRAIN’S: More employees have turned to employee assistance programs since the pandemic.

How do these programs work?

What benefits do they offer?

DAVIS: The main feature of the present-day EAP is up to three to five therapy sessions per issue,

will have a number of seminars on mental health available for employees and critical incident debrief services with a counselor if a traumatic event impacts their staff.

CRAIN’S: Please explain the Mental Health First Aid program. How has it been used since the pandemic to address mental health crises?

CRAIN’S: What trends have we seen in mental health since the pandemic? Have mental health issues that emerged since the start of the pandemic influenced people’s physical health and vice versa?

“One of the goals of the MHFA program is to increase awareness of the early warning signs and encourage the use of professional resources and self-help.”

DAVIS: We have seen depression increase to 1 in 4 people along with the number of people considering suicide doubling. If relationship data with behavioral and medical conditions continues along present trends, then an increase in the overall number of people suffering from both challenges will occur. This is troubling in that people suffering from behavioral and medical issues concurrently have a decreased life expectancy of 20 to 25 years.

per year with a counselor from the EAP’s provider network with no copay cost. Cigna has its EAP structured so that anyone within the household of an active employee of the company can access the service, regardless of whether the employee has Cigna medical benefits. EAP programs also provide consultation services that include areas such as wills, identify theft, limited legal discussion and community resources. The company typically

DAVIS: Mental Health First Aid can be considered CPR for the brain certification in that it provides a person with training to recognize mental health challenges, along with a few simple steps to assist until appropriate professional help is engaged. During the pandemic, the MHFA curriculum was updated for virtual delivery that enabled the nationwide network of instructors to continue training individuals in

the MHFA tools. One of the goals of MHFA program is to increase awareness of the early warning signs and encourage the use of professional resources and selfhelp. People are more likely to seek help when those around them encourage it.

Product availability may vary by location and plan type and is subject to change.

All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and details of coverage, contact a Cigna representative.

All Cigna products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company (CHLIC) or its affiliates.

1 Substance Abuse and Mental Health Services Administration, Results from the 2014 National Survey on Drug Use and Health: Mental Health Findings, NSDUH Series H-50, HHS Publication No. (SMA) 154927. Rockville, MD: Substance Abuse and Mental Health Services Administration. (2015)

Newhook, Emily, “Costs of Care: Stigma is Only Part of the Mental Health Price Tag,” USA Today, June 16, 2017

2

World Health Organization, Investing in Treatment for Depression and Anxiety

3

Leads to a Fourfold Return, April 2016

CRAIN’S: Among people who get mental health care, what is the effect on productivity at work?

DAVIS: According to an examination of Mental Health costs by Emily Newhook in USA Today, she found the lost costs and productivity is believed to be $444 billion each year with unresolved depression accounting for a 35% reduction in productivity2. The good news is that mental health treatment can yield positive benefits. According to a study by the World Health Organization, every dollar invested in depression and anxiety treatment, there is a return of $4 from improved health and the ability to work.

Cigna found within an internal study of their data a cost savings of $227 per member per year can be found when people integrate medical, pharmacy

8/19/21 8:43 AM

PEOPLE ON THE MOVE ACCOUNTING

ADVERTISING / MARKETING

Crowe LLP

Movable Ink

Crowe would like to announce the hiring of Michael Schindler as a principal in tax services. Schindler will focus on partnership taxation for Crowe’s Washington national tax office and utilize his deep technical experience in the real estate and private equity sectors to grow the firm’s capabilities in these industries.

He received a bachelor’s degree in accounting from George Washington University, a JD from Golden Gate School of Law, and an LLM in Taxation from New York University.

As the Vice President of Corporate Development, Nilay Gandhi brings decades of experience to Movable Ink in managing and executing corporate development and M&A strategy at companies such as DoubleClick, Google and Getty Images. In his new role, Nilay will be responsible for overseeing Movable Ink’s approach to strategic investments, and acquisitions to accelerate growth and continually bring the latest technology and solutions to customers.

ADVERTISING / PR / MARKETING

FINN Partners FINN Partners has hired Pepe Aguilar as Executive Creative Director. A Canneswinning ECD, Aguilar bolsters the agency’s position as a global integrated communications powerhouse, elevating the firm’s creative capabilities, spearheading major accounts, leading new business efforts, and nurturing an inclusive, creative work culture. Prior to FINN, Aguilar was Chief Creative Officer of Grey Wing New York, achieving record revenues and numerous top tier awards.

CONSTRUCTION

FINANCIAL SERVICES

NONPROFIT

Skanska USA

Fiduciary Trust International

New York Edge

Skanska USA, a leading global construction and development firm, announces the promotion of Erin Willis-Freedman to vice president of human resources for Skanska USA’s Civil operations.

Ms. Willis-Freedman joined Skanska in 2009 as an HR administrator, and most recently served as the HR Business Partner for Skanska’s Northeast Civil operations. She is now assuming national responsibilities and leading all human resources programs, policies and processes for Skanska USA’s Civil operations.

Fiduciary Trust International has appointed Paul Cummings as their new Head of Family Office Services, Foundations, and Endowments based in its New York office.

Mr. Cummings is a veteran in the family office and wealth management community and has served as a trusted advisor to families and non-profits for over 15 years. Mr. Cummings will continue to support the firm’s vision by collaborating with family advisors and consultants to build a comprehensive suite of family office services in place.

New York Edge – New York City’s largest provider of schoolbased afterschool and summer programs – has appointed Stephanie Costner to vice president of curriculum design and instructional technology.

In this role, she will provide strategic leadership in the areas of educational equity, curriculum design, learner outcomes, and social-emotional supports. As a former professor, Ms. Costner has dedicated her career to ensuring that students receive access to enriching, high-quality education.

NONPROFIT EDUCATION

ADVERTISING / MARKETING

Movable Ink Jeremy Seltzer will now serve as Chief Revenue Officer, formerly Senior Vice President of Worldwide Sales.

As CRO, Jeremy will focus on international expansion, continuing to invest in our growing list of successful partnerships, bringing new products to market, and remaining committed to generating ROI for Movable Ink’s world class roster of clients.

New York Institute of Technology Santhosh I. Keshavan, executive vice president and chief information officer at Voya Financial, has been named a trustee of New York Institute of Technology. Highly ranked and accredited, New York Tech educates the next generation of doers, makers, and innovators at campuses in New York City, Long Island, Jonesboro, AR, and Vancouver, Canada. It offers 90+ degree programs in high-growth fields including computer science, biology, architecture, design, business, and medicine.

Visit nyit.edu.

FINANCIAL SERVICES

SVB Leerink SVB Leerink, a leading investment bank specializing in healthcare and life sciences, announced that Ben Brown will join the firm’s Healthcare Services practice to enhance its pharma services offerings. Mr. Brown joins SVB Leerink as a Senior Managing Director, reporting to the Global Co-Head of Healthcare Investment Banking, Barry Blake.

New York Edge Dorene Lewis has been appointed to chief human resources officer at New York Edge – the city’s largest schoolbased afterschool and summer program provider – where she will work closely with senior leadership to further strengthen the organization’s HR department.

Ms. Lewis has more than 15 years of experience, and previously served as director of HR at Morris Heights Health Center and deputy director of HR at New York City Health + Hospitals Corporation at King County Hospital Center.

LAW

Blank Rome

ADVERTISING / PR / MARKETING

FINN Partners Global independent marketing and communications firm, FINN Partners, has hired Ritesh Patel, a pioneering digital Patel health transformation leader, as senior partner, Global Digital Health. Previously Chief Digital Officer at Ogilvy Consulting, Patel will collaborate Hatzfeld across FINN Practices and work with the agency’s clients at the intersection of health and wellness decisionmaking and health-professional voice. Vaccine and Public Health Communications Leader, Richard Hatzfeld has also joined FINN Partners as Senior Partner, Global Health and Washington, D.C. Health Group lead. A 25-year industry veteran, he joins FINN after five years as a global team lead at Ogilvy, where he supervised multi-national vaccine communication efforts.

ADVERTISING / MARKETING

Movable Ink Adam Stambleck has been elevated from Chief Revenue Officer to the company’s first President & Chief Customer Officer, where he will be responsible for worldwide sales, marketing, partnerships, brand and overseeing an award-winning client experience and strategy teams. Culture also remains a top priority for Adam, who is focused on maintaining a people-first approach as Movable Ink rapidly scales in a hybrid environment.

ANNOUNCE

YOUR BIG NEWS IN CRAIN’S!

P016_CN_20210823.indd 16

16 | CRAIN’S NEW YORK BUSINESS | August 23, 2021

EDUCATION

New York Institute of Technology Michael Merlo and Daniel Ferrara, D.O. have been named vice chairs of New York Institute of Merlo Technology’s Board of Trustees. Merlo, former chief credit officer of Signature Bank, was reelected as vice chair.

Ferrara, a university board member, graduate of New York Ferrara Institute of Technology’s College of Osteopathic Medicine, and Northeast Regional President of Alteon Health, was elected to his first term as vice chair. New York Tech, with campuses in New York City, Long Island, Jonesboro, AR, and Vancouver, Canada, and a curriculum that fosters research, inclusivity, and exploration, offers 90+ degree programs in engineering, computer and data science, biology/biotechnology, architecture, business, health care, and design. Learn more: nyit.edu.

Christy Reuter has joined Blank Rome’s New York office as a partner in the Real Estate group.

As a leader in the hospitality sector, Christy brings more than 25 years of experience guiding clients in hospitality transactions and related business law matters. Christy advises hospitality groups, restaurants, and hotels in all phases of real estate transactions and has experience in joint ventures, shareholder and operating agreements, commercial leases, and license and management agreements.

LAW

Latham & Watkins LLP P. Anthony “Tony” Sammi has joined the New York office of Latham & Watkins as a partner in the Litigation & Trial Department and as a Global Vice Chair of the Intellectual Property Litigation Practice. Sammi is a first chair trial lawyer with extensive experience in tech whose practice includes patent, trade secrets, trademark, and copyright matters.

NONPROFIT

New York Edge New York Edge has welcomed Dr. Courtne Thomas as a member of its Advisory Board and as director of instructional design and curriculum of the organization’s Excellence Project, a first-of-its kind afterschool program for diverse, underrepresented gifted and talented students. In addition to her work with New York City’s largest provider of schoolbased afterschool and summer programs, Dr. Thomas is the founder and CEO of Educational Elevation, an equity-oriented, education consulting firm.

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

8/19/21 2:30 PM

POLITICS

Hochul’s ascent to the governor’s seat provides mayoral hopeful Adams with a political opening

Mutual cooperation Adams is likely to become the first mayor in years to hold political leverage over Albany, due to the distinctive nature of Hochul’s ascent. She takes over the final year of Cuomo’s third term facing budget negotiations that will require collaboration with the leader of the state’s main economic engine.

“The new governor is going to have to be very deferential to him, more so than if this were her first term,” said Richard Ravitch, lieutenant governor of New York in 2009 and 2010. “The needs of the city of New York are a major part of the budgetary decisions that are made at the state level.”

Adams also can avoid taking office with Cuomo’s combative shadow lurking over him. Adams and Hochul share workingclass backgrounds and moderate, business-friendly tendencies that align more closely with the style

“THE NEW GOVERNOR IS GOING TO HAVE TO BE VERY DEFERENTIAL TO HIM” organization. “That relationship will be important, and she’ll work to make it a good one. And I’d expect the same of Eric.”

Hochul will need to connect with Adams’ powerful voting bloc, which stretches across neighborhoods in the Bronx, Brooklyn and Queens, if she wants to win the Democratic nomination to run for re-election at the end of Cuomo’s unfinished term. And Adams could

of President Joe Biden than with New York’s more progressive contingent.

“There’s considerable merit to being able to start fresh with a new governor and not someone who’s been in the public eye for four decades and all the psychology that comes with that,” said John DeSio, a communications consultant at Risa Heller Communications.

Adams already appeared to have a better relationship with Cuomo than Mayor Bill de Blasio, but having Hochul in Albany further reduces the likelihood of a feud slowing down progress.

“No one is playing the old movies anymore,” DeSio said. “It’s an opportunity to have a feeling-out period between the new mayor and new governor.”

Adams had called on Cuomo to resign. He recently took to Twitter to welcome a chance to work with Hochul, the first woman to serve as New York governor.

“I stand ready to work with incoming Gov. Kathy Hochul as we guide our city through these challenging times and do the hard work of leading a safe, equitable recovery for New York City,” Adams wrote.

There’s room for mutual cooperation, said Bruce Gyory, a Democratic political consultant. If Adams prevails as expected in November’s general election, he will come into office in a strong political position, while Hochul will be a new chief executive holding the institutional levers of budgetary powers over a reeling New York City.

HOCHUL

Cuomo tapped her as his running mate in part to shore up his support upstate. She’ll need to build her own machine downstate if she wants to win statewide election atop the ticket.

“You can see the two of them having an enlightened self-interest in wanting to help each other,” Gyory said. “The mayor wants to maximize what the city can get in policy and dollars out of the budget process, and Hochul, as an upstate governor, is trying to build a political alliance with New York City.”

Buffalo revival Hochul, a Buffalo native, is the first governor from upstate since Franklin Roosevelt in 1932. She held elected office at multiple levels—including a seat in Congress— before her six years in the lieutenant governor’s chair.

ADAMS AP PHOTO

L

t. Gov. Kathy Hochul is not the only political beneficiary of Gov. Andrew Cuomo’s resignation from office.

New York City’s Democratic mayoral nominee, Eric Adams, is likely to reap rewards as well.

Adams is expected to profit from Hochul’s unusual political circumstances: She’s a less-well-known upstate politician who needs to build alliances in New York City, notably with Adams’ diverse, working-class base.

“I think that Eric’s support and the downstate Black community’s support will be very important to her,” said Kathryn Wylde, chief executive of the Partnership for New York City, a leading business

use a pragmatic ally in Albany.

“Absolutely, I think he’s in a good position,” Wylde said. “He represents a constituency in the city that she is going to want to demonstrate that she is supporting.”

Hochul’s allies describe her as a pure retail politician who loves the art of campaigning. When she said last week that she plans to run for governor next year, it did not surprise them.

BLOOMBERG

BY BRIAN PASCUS

“The people in New York City need to understand that upstate isn’t a backwater place,” said Erie County Executive Mark Poloncarz, who has known Hochul for more than 20 years. “The general assumption is that New York City is the hub.

But there’s been a tremendous revival in Buffalo these last 10 years, and Kathy, in many ways, played a role in that.”

The June 2022 Democratic primary follows closely on the heels of April budget negotiations. Hochul’s first budget will need to appease voters in Buffalo as well as those in Brooklyn and Queens.

“That makes the budget key for different reasons for both of them,” Gyory said. “The new governor gets New York City political alliances, and the new mayor gets a positive budget to solidify his first year in office.” ■

HOSPITALITY

Union Square Events serves short ribs in the sky as fine meals return to certain Delta flights

B

reakfast, lunch and dinner from one of New York City’s preeminent restaurant groups are back on the menu for certain Delta Air Lines passengers now that meal service is once again available in the sky.

Union Square Events, owned by Danny Meyer, is cooking braised short ribs with cheesy twice-baked potatoes and a spinach-and-goatcheese frittata served with bacon and hash browns for passengers in Delta One and first-class seats who fly between Kennedy Airport and Seattle, Los Angeles or San Francisco.

The partnership began years ago but paused during the pandemic as airlines cut meal service. In midJune, as Covid-19 cases fell across the nation, Delta restarted its onboard food and beverage program. Soon after that, the culinary team at Union Square Events began work on a seasonal menu.

Not all airlines have resumed

serving meals, and most of the fare is available only on long-haul flights. New York–based JetBlue serves free packaged snacks and drinks as well as boxed meals for purchase. Although federal law requires that everyone older than 2 wear a mask in airports and on planes, flyers are allowed to take off their mask to drink or eat.

‘Consistent business’ So far the return of Union Square meals on Delta flights is a soft launch, with about 250 meals served each day—about half the pre-pandemic volume.

Although the partnership accounts for only a portion of Union Square Events’ catering business, it provides crucial predictability as the firm rehires staff and forecasts the near future.

“In the catering world, it is amazing to have consistent business,” said Dan Dilworth, director of culinary operations. “Having this be consistent, rather than catering events—which is fast and slow—

UNION SQUARE HOSPITALIY GROUP

BY CARA EISENPRESS

helps us bring back employees.”

The restart of the airline business comes as Union Square Events puts the finishing touches on its

70,000-square-foot space on 41st Street in Industry City, Brooklyn.

Once the move is completed in early fall, Dilworth said, the Delta

food will be produced in bulk at the new location. He hopes to hold the next airline tasting in the brandnew kitchen. ■

August 23, 2021 | CRAIN’S NEW YORK BUSINESS | 17

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CARS FROM PAGE 1

GET USED TO GRIDLOCK: As more people drive, the reverberations could change the face of the city.

BUCK ENNIS

choosing to drive rather than take mass transit would change the face of the city. The reverberations could impact everything from how we spend our time to economic mobility and the climate crisis.

The evidence of the shift to cars is overwhelming, a Crain’s review of multiple data sources shows. A few highlights: ● More cars are crowding city streets. The city is on track to add 538,330 newly registered vehicles this year—a 34% increase from last year—according to the state Department of Motor Vehicles. ● Bridge and tunnel traffic has recovered. A daily average of more than 900,000 vehicles used the city’s bridges and tunnels in July and August, just 4% below prepandemic times. ● More New Yorkers plan to drive. As of the end of July, the DMV had issued 242,871 learner’s permits—required precursors to a license—to New Yorkers, a 25% increase from the 2019 total. The pace suggests a year-end increase of 144%. ● Car-related businesses are proliferating. Entrepreneurs are applying for more permits for garages, used-car dealerships and car washes with the Department of Consumer Affairs.

And an increasing number of car dealerships and vehicle repair shops are applying for a license renewal with the DMV. ● Subway traffic is way down. A little more than 2 million riders per day are making use of the trains, about half the prepandemic numbers. ● More people are paying for parking. The number of drivers going into the city for oneoff occasions is steadily inching back to prepandemic levels. Last month there was a 2% increase in transient parkers compared to July 2019. In July 2020 there was an 88% increase in monthly bookings compared to July 2019. Arrive, a parking technology company that partners with garages across the city and sells parking reservations on the ParkWhiz and BestParking apps and websites, says monthly parking passes are driven by increased car ownership and are a strong indicator that pass holders plan to commute regularly.

Charles Komanoff, a New York–based transit economist who created a traffic-modeling tool used to evaluate congestion pricing, estimates that if just 1 in 10 prepandemic mass-transit travelers switched to cars, it would result in a 45% increase in vehicle volume in the central business district, gridlocking traffic, slowing deliveries and lowering the quality of life.

“The real catastrophe is the incredible loss of time,” said Komanoff, who directs the Carbon Tax Center, a New York nonprofit that advocates for taxing carbon emissions. “It goes against the functioning of our metropolis. If it’s going to take you 50 minutes to go 5 miles in a car, that’s going to be a death knell to New York City.”

More cars on the road also mean more city

“THE PICTURE FOR 2022 AND BEYOND IS MUCH WORSE TRAFFIC” buses “snarled in traffic,” said Danny Pearlstein, policy and communications director for the Riders Alliance, a group that advocates for public transportation.

Pearlstein said that with 66% of bus riders hailing from low-income communities and communities of color, “the most inequitable impact of the car boom is the deterioration of bus service.”

The drop in subway riders also could starve the MTA, resulting in less reliable service and scuttling planned upgrades. The MTA’s debt reached $38 billion last year. Unreliable ser-

vice, the Covid-19 pandemic and an uptick in crime have kept riders from refilling their MetroCards.

Historically, an affordable and reliable subway system has been one of the great drivers of upward mobility in the city.

“If you get into a situation where if the quality of service starts to decline, there’s a self-fulfilling prophecy,” said analyst Aaron Renn, author of The Urban State of Mind.

“With fewer riders, there will be more service cuts.”

Smelling opportunity Businesses that serve car owners are moving to take advantage of the trend.

Edwin Soyfer, chief executive of The Car Guys, a dealership on Staten Island, saw the writing on the pavement as soon as the coronavirus hit, and he quickly filed for a license to expand his car dealership to include secondhand vehicles.

“The first thing we noticed right away was people from Manhattan calling us with the same story: They didn’t want to get on the subway, or they wanted to get out to the suburbs,” Soyfer said.

So far 185 new parking lots and garages have filed for a business license with the Department of Consumer Affairs this year— putting the city on pace to add 317 by the end

900K

coming a much more attractive of the year, a 125% increase. option.”

The profile of customers reserving advanced parking spaces onNUMBER of Drive time line has shifted, said Dan Roarty, vehicles per day president and chief operating offiSome new drivers don’t mind on average that cer at Chicago-based Arrive. They the threat of traffic. Prepandemic, use the city’s aren’t just selling to Connecticut or Lauren Dowe used public transtunnels and New Jersey residents purchasing portation, taking the Metro-North, bridges monthly passes for daily coma shuttle and two subway lines five mutes; New Yorkers are popping in days each week from Bronxville to for meetings or one-time events. her office in Lower Manhattan.

One garage owner, Centerpark, She twice was harassed on the PROCEEDS converted an Upper East Side gasubway and, she said, she grew to for transit the rage into a car condominium and dread getting on public transporcity could score is selling 23 parking spaces for as tation. annually by much as $350,000 each.

When Dowe’s office temporarily implementing Meanwhile, more New Yorkers closed because of the pandemic, congestion are getting their driver’s license. she was relieved, she said, and she pricing The DMV has added road-test started plotting how she would get hours in the city to help meet deback to the office when the time mand for those trying their hand at came. parallel parking. Driving schools “The choice to drive was easy,” are struggling to keep up with the influx of she said. new students.

She has no plans to ditch her new navy “We’ve been backed up for months trying blue Mazda when her workplace reopens. to shoehorn new lessons into an already She either will wake up at 5 a.m. or try to netight schedule,” said Alexander Murphy, an gotiate a later start time, she said, to miss office administrator at the Professional Driv- rush-hour traffic. If all else fails, Dowe, who ing School of the Americas in the Flatiron works in advertising, vows to endure a fourDistrict. “A lot of people in New York never hour daily commute rather than take the really had a reason to drive, and now it’s be- train again. Sitting in traffic would just be

$1B

18 | CRAIN’S NEW YORK BUSINESS | AUGUST 23, 2021

P018_P019_CN_20210823.indd 18

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DRIVING TOWARD A CAR-CENTRIC CITY MORE CARS ARE ON THE ROAD, AND REGISTERED VEHICLES ARE ON THE RISE New York City is on track to record 538,330 newly registered vehicles in 2021, a 34% increase from 2020. Here are the number of newly registered vehicles in the five boroughs each year since 2017.

Newly registered vehicles

Projected for the rest of year

600K

Total 538,330 224,304

500K 406,703

400K

398,233

396,972

400,757

300K

314,026

200K 100K 0 2017

2018

2019

2020

2021

SOURCE: Department of Motor Vehicles. Data as of July 30, 2021. Projected figure is current 2021 monthly average multiplied

by 12.

SUBWAY TRAFFIC CONTINUES TO LAG AS BRIDGE AND TUNNEL TRAFFIC RECOVERS Daily subway traffic is half of its prepandemic level, as bridge and tunnel traffic has nearly recovered.

Here’s the breakdown of the percentage change in ridership from prepandemic-equivalent days.

Prepandemic norm

Subways

Bridges and tunnels

40%

-7.80%

20% 0 -20% -40% -60%

-48.20%

-80% -100%

03/01/2020

08/08/2021

SOURCE: MTA

MORE NEW YORKERS ARE LEARNING TO DRIVE The DMV has already issued more new learner’s permits in 2021 than it did in 2019 or 2020. In New York, a driver must get their permit before getting their license.

MORE THAN 200,000 NEW LEARNER’S PERMITS ISSUED

Car today, gone tomorrow?

Not everyone is convinced New Yorkers’ newfound love of cars will be long-lasting.

Dan Doctoroff, chief executive at Sidewalk Labs, a consulting company that works with developers to reimagine cities, views the trend as a Covid-fueled blip.

“A seemingly growing desire for people to have cars is not a sustainable battle at the end of the day,” said Doctoroff, who served as deputy mayor for economic development under Mayor Michael Bloomberg.

The city could make a dent in its growing traffic problem using a number of strategies, Doctoroff said, starting with congestion pric-

ing. The policy would levy hefty tolls when drivers enter Manhattan below 61st Street, funneling as much as $1 billion in proceeds annually to the MTA. The proposal won support from President Joe Biden’s administration in March, but the MTA has not worked out details of the program.

In the meantime, the newfound preference for cars is unlikely to abate as long as Covid-19 continues to throw new wrinkles into plans for a return to “normal.”

“It all depends on the Delta variant,” said former city Traffic Commissioner Sam Schwartz, who calls himself Gridlock Sam. “The picture for 2022 and beyond is much worse traffic, longer delays at the bridges and tunnels, and more reasons to advance congestion pricing and other strategies as soon as possible.”

Schwartz, who has authored several books, including Street Smart: The Rise of Cities and the Fall of Cars, said this time in the city’s transportation field is reminiscent of the post-9/11 and post–Superstorm Sandy periods, when a resolve to rebuild better was sparked by the crises.

“New York reinvents itself without major events. But every time there’s a major event, the city reinvents itself,” he said. “So I hope we once again reinvent ourselves for the ­better.” ■

Queens 73,217

416,350 173,479

400K

more time for her to catch up on true-crime podcasts, she reasoned.

New car owners are discovering that the benefits of having a vehicle in the city go beyond the commute. Wilson, the transit enthusiast who now drives, said he and his wife, Erica, in April 2020 began to look for ways to escape their 800-square-foot apartment on weekends to ride their road bikes and visit friends who had moved to the suburbs. The couple made finding a spot to park their Audi A4 Allroad a top priority in their apartment hunt. They eventually moved to Red Hook, and they stow the car in a dedicated outdoor spot.

Number of new learner’s permits issued by the DMV in 2021 by borough

Newly issued learner’s permits Projected for rest of year Total

500K

MOST NEW DRIVERS HIT THE ROAD IN QUEENS, MANHATTAN

Manhattan 63,447

300K 193,452

200K

Brooklyn 51,145

242,871

170,475

Bronx 38,289

100K 0

2019

2020

Staten Island 16,773

2021

SOURCE: Department of Motor Vehicles. Data as of July 30, 2021. Projected figure is current 2021 monthly average multiplied

by 12.

BUSINESSES ARE MOBILIZING TO MEET DEMAND New York has seen an uptick in new license applications for car-related businesses such as garages, car dealerships, car washes and repair shops.

BUSINESS REGISTRATION RENEWAL ON THE RISE Business registration renewals filed per category, per year

NEW BUSINESS APPLICATIONS INCREASE New license applications filed per category, yearly 2018 400 350 300

2019

2020

2021 YTD

317

280

250 185

200

150 145

53 55 Garages and parking lots

221

225

36 31

Used-car dealerships

53

161

150

120

310

276

200

141

100

385

300

250

50 0

2021 Projection 400 379 350

181

100 85 37 19 22 38 Car washes

50 0

41 Car dealerships

Vehicle repair shops

SOURCES: Department of Motor Vehicles and Department of Consumer Affairs. Data as of July 30, 2021. Projected figure is current 2021 monthly average multiplied by 12. Businesses need to renew their license with the DMV every two years.

August 23, 2021 | CRAIN’S NEW YORK BUSINESS | 19

P018_P019_CN_20210823.indd 19

8/20/21 1:08 PM

CLASSIFIEDS POSITIONS AVAILABLE Anheuser-Busch InBev Services, LLC seeks a full-time Global Specialist, IT

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48 W 37 ASSOCIATES LLC, Arts. of Org. filed with the SSNY on 07/01/2021. 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, C/O Adams & Co. Real Estate, Inc., 411 Fifth Avenue, NY, NY 10016. Purpose: Any Lawful Purpose.

Ave Fl 3, New York, NY 10011 & note Job ID#

Quantitative Researcher (Citadel

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NOTICE OF FORMATION OF LIMITED LIABILITY COMPANY NAME: OTHER PARENTS LIKE ME LLC Articles of Organization were filed with the Secretary of State of New York (SSNY) on 06/11/2021. Office Location: New York County. SSNY has been designated as agent of LLC upon whom process may be served.

SSNY shall mail a copy of any process against the LLC served upon him or her to the company at 130 Watts Street, New York, NY 10013.

Principal business address: 43 County Road 635, Hampton, NJ 08827.

Purpose: Any lawful acts.

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Notice of Formation of FINEGOLD CENTRAL PARK, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 05/10/16. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Deborah Finegold, 10897 E. San Felipe Ave., Clovis, CA 93619. Purpose: any lawful activities.

Advertising Section

To place a classified ad, contact Claudia Hippel at 312-659-0076 or email: claudia.hippel@crain.com PUBLIC & LEGAL NOTICES Notice of Formation of 303-305 GROUP LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/13/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Pietro Martire, 155 W. 85th St., NY, NY 10024. Purpose: Any lawful activity.

Notice of Qualification of COFFEE DIGITAL, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 06/ 09/21. Office location: NY County. LLC formed in Delaware (DE) on 05/ 26/21. Princ. office of LLC: 177 Mott St., NY, NY 10012. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of the State of DE, 401 Federal St., Dover, DE 19907. Purpose: Any lawful activity.

Notice of Qualification of SCALE 4TH ASTORIA LLC. Authority filed with Secy. of State of NY (SSNY) on 06/10/21. Office location: NY County.

LLC formed in Delaware (DE) on 06/07/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: c/o National Registered Agents, Inc., 28 Liberty St., NY, NY 10005, also the registered agent upon whom process may be served.

Address to be maintained in DE: c/o National Registered Agents, Inc., 1209 Orange St., Wilmington, DE 19801. Arts of Org. filed with the Secy. of State, Division of Corporations, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: any lawful activities.

NOTICE OF FORMATION OF Harlem Biscuit Company LLC. Art. of Org. filed with the Secretary of State of NY (SSNY) on 12/18/20. Office location: NEW YORK County. SSNY designated as agent upon whom process may be served. SSNY shall mail a copy of process to the LLC at 235 W. 135TH STREET, 3B, New York, NY 10030. Purpose: any lawful act or activity.

Notice Of Formation Of OUR FIRST LABOR AND DELIVERY SERVICES LLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 03/22/2021. 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: 641 LEXINGTON AVE 13TH FLOOR NY, NY 10022. The principal business address of the LLC is: 641 LEXINGTON AVE 13TH FLOOR NY, NY, 10022. Purpose: any lawful act or activity.

STREET FOOD CHAAT LLC, Arts. of Org. filed with the SSNY on 05/ 24/2021. 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, 176 Bleecker Street, NY, NY 10012. Purpose: Any Lawful Purpose.

Notice of Formation of 203 Flatiron Property Management, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/21/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Registered Agents Inc., 90 State St., Ste. 700, Office 40, Albany, NY 12207.

Purpose: any lawful activities.

Notice of Formation of RYM OWNER LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 05/21/21.

Office location: NY County. Princ. office of LLC: 17 Henmar Dr., Closter, NJ 07624. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: Any lawful activity.

Notice of Formation of WG 115 LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/16/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: WG 115 LLC c/o WG & Associates Management and Development, Inc., 1140 Broadway, Ste. 904, NY, NY 10001. Purpose: any lawful activities.

Notice of Formation of CPG TRIBORO PORTFOLIO MANAGER LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/15/21. Office location: NY County. Princ. office of LLC: 419 Park Ave. South, Ste. 401, NY, NY 10016.

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: Real estate.

Notice of Qualification of AGILE TELEHEALTH SERVICES, LLC. Authority filed with Secy. of State of NY (SSNY) on 06/15/21. Office location: NY County. LLC formed in Delaware (DE) on 06/22/20. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: C/O CORP2000 INC., 720 14th St., Sacramento, CA 95814.

Address to be maintained in DE: c/o Corp2000, 838 Walker Rd., Ste. 21-2, Dover, DE 19904. Arts of Org. filed with the Secy. of State, 401 Federal St. #4, Dover, DE 19901. Purpose: any lawful activities.

Notice of Formation of PSINY Enterprises, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/22/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 82 Soundview Dr., Port Washington, NY 11050, Attn: Adam Schaffner. Purpose: any lawful activities.

Notice of Formation of 315-317 GROUP LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/13/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Pietro Martire, 155 W. 85th St., NY, NY 10024.

Purpose: Any lawful activity.

NOTICE FOR FORMATION of a limited liability company (LLC). The name of the limited liability company is NTT PROPERTIES LLC. The date of filing of the articles of organization with the Department of State was March 30, 2021. The County in New York in which the office of the company is located is New York. The Secretary of State has been designated as agent of the company upon whom process may be served, and the Secretary of State shall mail a copy of any process against the company served upon him or her to The LLC, 182 2nd Avenue, Apt 2, New York, New York 10003.

The business purpose of the company is to engage in any and all business activities permitted under the laws of the State of New York.

Notice of Formation of RGM GP LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/08/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served.

SSNY shall mail process to Philip J. Michaels, c/o Norton Rose Fulbright US LLP, 1301 Ave. of the Americas, NY, NY 10019. Purpose: Any lawful activity.

NOTICE OF FORMATION OF THREE BEARS CAPITAL, LLC. Articles of Organization filed with Secretary of State of NY (SSNY) on 05/25/2021. Office location: NEW YORK County. Principal office of LLC: 380 LENOX AVE., APT #10E, NEW YORK NY, 10027. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail a copy of any process against LLC to address of its principal office. Purpose: any lawful act or activity

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NOTICE OF FORMATION OF Justice, Accountability, and Security Institute, L.L.C.. Articles of Organization filed with the Secretary of State of NY (SSNY) on June 14, 2021. 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: 413 Grand Street, Apt. 1701, New York, NY 10002.

The principal business address of the LLC is: 413 Grand Street, Apt. 1701, New York, NY 10002.

Purpose: any lawful act or activity.

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Office location: NY County. Princ. office of LLC: 40 E. 69th St., NY, NY 10021. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Philip J. Michaels, c/o Norton Rose Fulbright US LLP, 1301 Ave. of the Americas, NY, NY 10019. Purpose: Any lawful activity.

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Notice of Qualification of A PRIORI INVESTMENT MANAGEMENT LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 06/16/21. Office location: NY County. LLC formed in Delaware (DE) on 05/15/14. Princ. office of LLC: 363 Lafayette St., NY, NY 10012. 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 Jeffrey W. Bullock, 401 Federal St., #4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation of Glam-Amor Skin LLC. Art. Of Org. filed with the SSNY on 06/18/21. Office loc: NY County. Prin. Office of LLC: 38W 32nd St, Ste. 1102, NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail a copy of any process against LLC to address of its principal office.

Purpose: any lawful act or activity.

Notice of Qualification of ACRE SOLUTIONS L.P. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/09/21. Office location: NY County. LP formed in Delaware (DE) on 04/30/21. Duration of LP is Perpetual. SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. Name and addr. of each general partner are available from SSNY. DE addr. of LP: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Notice of Formation of Columbia Butlers, LLC. Arts. of Org. filed with Secy of State of NY(SSNY) on 06/07/21. Office loc: NY County.

SSNY designated as agent upon whom process against it may be served. SSNY shall mail process to the LLC, 625 W 57th St Apt 454 NY, NY 10019. Purpose: any lawful activity.

Notice of Formation of 37A - 200 AMSTERDAM, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/09/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Any lawful activity.

Notice of Qualification of 155 WEST 11TH 9D LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/09/21. Office location: NY County. LLC formed in Delaware (DE) on 07/02/21. Princ. office of LLC: 820 Morris Tnpk., Ste. 301, Short Hills, NJ 07078. 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: Real estate.

NOTICE OF FORMATION OF LIMITED LIABILITY COMPANY. NAME: DEFT CHARTERS LLC. Articles of Organization were filed with the Secretary of State of New York (SSNY) on 07/06/2021. Office location: New York County. SSNY has been designated as agent of the LLC upon whom process against it may be served. SSNY shall mail a copy of process to the LLC, c/o Foreht Associates, LLP, 228 East 45th Street, 17th floor, New York, NY 10017.

Purpose: For any lawful purpose.

Notice of Formation of THE IMMOBILARIE GROUP LLC Articles of Organization filed with the Secretary of State of New York (SSNY) on 6/11/2021. Office location: New York County. SSNY is designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to TEFONE HERRING, THE IMMOBILARIE GROUP LLC 30 W141st Street, Suite 4N, New York, NY 10037 Purpose: Any lawful purpose.

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AUGUST 23, 2021 | CRAIN’S NEW YORK BUSINESS | 21

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CENSUS FROM PAGE 1

These calculations are approximate and would change if Congress were to cut spending or change funding formulas. Albany has considerable discretion in distributing federal grants to cities. But considering how New York struggles to balance its $100 billion budget while tax collections from hotels, office buildings and other formerly reliable sources are under pressure, the census-fueled federal funding amounts to trillions of pennies from heaven.

The Plan “New York was a big winner from the census,” said Andrew Reamer, a census expert at George Washington University’s GW Institute of

when the White House made no secret of its desire to undercount urban populations.

“New York City has been on the front lines of the resistance against the Trump administration, and ensuring every New Yorker gets counted is central to that fight,” Mayor Bill de Blasio said, when introducing his plan to leave no child or adult behind. “No matter how hard the federal government tries to silence our diverse voices, we still stand up and be counted.”

It had been understood for years that New York’s population was higher than reported.

Barbara Denham, an economist who closely tracks real estate development, said that about a decade ago she sent the city a file showing more than 8,000 apartments were built on the Upper West Side between 2000 and 2010.

But the census showed fewer than 200.

“It was absurd,” said Denham, who works at Oxford Economics.

This time, after examining property-tax records and other sources, the city submitted 143,000 addresses from newly constructed buildings to the U.S. Census Bureau. The city shared 122,000 previously unknown addresses, and 99.9% were accepted.

Altogether, 7% of New York’s hous-

“THEY INVESTED A LOT OF MONEY IN THE COUNT AND NOW COMES THE BENEFITS” Public Policy. “They invested a lot of money in the count and now comes the benefits.”

The trip to bountiful began in January 2020, when the city allocated $40 million to count residents. It enlisted the help of 160 community organizations to find them at a time

WHAT’S AT STAKE? CONGRESS SETS A BUDGET EVERY YEAR, but how the money gets divided up is determined in many cases by census data. In 2016 the state of New York received $73 billion worth of federal grants based on the 2010 census. About half was for Medicaid and the rest distributed across more than 50 other programs, including Title I allocations to educate poor children, providing food and rental assistance for urban and rural residents, and training workers for jobs. Below are some examples of federal assistance sent to New York City in 2017. Now that the city has counted more people, it stands to collect a bigger piece of the pie.

$779 MILLION $150 MILLION $57 MILLION Title I allocations

Community development block grants

Workforce Innovation and Opportunity Act allocation

SOURCE:Project on Government Oversight, GW Institute of Public Policy

ing stock was reported to the Census Bureau for the first time. The city estimates this legwork, combined with media campaigns, resulted in counting 500,000 residents who otherwise might have been missed.

The Payoff With a population now at 8.8 million, the city is in line for higher federal allocations for scores of programs, including affordable housing, Medicare prescription-drug coverage and highway construction. Ultimately, that money cycles into neighborhoods and goes to pharmacies, landlords and contractors.

But the big-ticket item is always Medicaid. Because New York is a prosperous state, the federal government reimburses it for only half its Medicaid costs, which clocked in at $35 billion in 2016. Reimbursement rates are determined by dividing per capita income over population, and it’s unlikely even an 8% jump in population is sufficient to lower New York’s per capita income enough to compel Uncle Sam to kick in more.

The city, however, does stand to collect additional funding for preventive health block grants, maternal and child health block grants, and food stamps.

“Overall, if you have a greater

population, at least some of the funding is going to increase,” said Bruce Y. Lee, a professor of health policy and management at City University of New York’s School of Public Health.

The one bit of unfortunate news is that every additional dollar for New Yorkers is one less dollar for residents of a place that didn’t try as hard to count its people. Reamer said Texas committed no resources to census outreach and he’s heard from city officials there who are “freaking out” because their region’s slice of the pie will shrink.

“If you undercount your people, you lose share,” Reamer said. “This is a zero-sum game.” ■

REAL ESTATE

BY EDDIE SMALL

N

ew York City isn’t dead, but some say its housing market remains lifeless.

Despite the city defying predictions of its decline and adding more than half a million people since 2010, the number of housing units added in the five boroughs has not kept up with population growth.

The city grew by about 630,000 from 2010 to 2020, according to the latest data from the U.S. Census.

But the number of housing units in the five boroughs increased by only 206,000 during that same period, according to figures from the Department of City Planning.

Although the population increase was widely viewed as a positive, multiple real estate groups cit-

Whelan, president of the Real Estate Board of New York, said in a statement. “The widening gap between the city’s population growth and new housing units demonstrates the urgent need for state and city elected officials to address this serious problem by focusing on housing policies that leverage the power of public- and private-sector collaboration and are driven by data rather than ideology.”

The wrong direction New York was already dealing with a housing shortage before 2010, and things have been moving in the wrong direction since then, said Jolie Milstein, president and CEO of the New York State Association for Affordable Housing. Although the number of empty apartments in the city went up during the pandemic, demand for affordable units specifically has consistently outpaced supply, she said.

“We have to do better,” Milstein said. “We know from the extremely low or nonexistent vacancy rates in affordable housing and how oversubscribed the lotteries are for any new unit that comes online that we have to do better.”

Department of City Planning spokeswoman Melissa Grace did not dispute the need for more affordable housing but defended the

“OF COURSE WE’VE GOT TO CONTINUE FINDING WAYS TO KEEP THE CITY ACCESSIBLE” ed the discrepancy between the two figures as proof that the city needs to focus more on growing its housing supply.

“There can no longer be any serious debate about whether New York City needs to rapidly and significantly increase the production of new housing, especially below-market-rate housing,” Jim

pace at which the city has been producing housing in recent years.

“New York City’s population is breaking records, and our housing production has reached levels we haven’t seen since the 1960s,” she said in a statement, “but we need to continue producing housing—and especially affordable housing— across all of our neighborhoods if we are going to continue to make America’s biggest city fairer and more equitable.”

Aaron Carr, founder and executive director of Housing Rights Initiative, a nonprofit housing watchdog group, emphasized that producing more housing is essential to a growing metropolis.

“Although the market won’t be able to provide affordable housing for low-income and working-class families on its own, which is why we need ample social housing and rental assistance, it’s still important for construction to keep pace with population growth to ensure that our housing crisis doesn’t turn into a housing apocalypse,” he said.

Mayor Bill de Blasio has made building and preserving affordable housing one of the central goals of his administration.

The city constructed and maintained 28,310 affordable housing units during fiscal 2021 and remains on track to build and preserve 200,000 units by the end of his administration and 300,000 by 2026, officials announced in late July.

More housing units should come

BLOOMBERG

The city’s population is booming—but its housing stock is struggling to keep up with the pace

online soon, in part because of rezonings the city has completed or is on pace to complete before the end of the year, the administration said.

Officials are trying to push through a rezoning in Gowanus that could bring roughly 8,000 apartments to the neighborhood and a rezoning in SoHo that could bring roughly 3,500 apartments to the neighborhood, although both have faced strong community opposition.

The de Blasio administration has fulfilled “the most ambitious housing plan ever made,” City Hall spokesman Mitch Schwartz said.

“As the city continues to grow, of course we’ve got to continue finding ways to keep it accessible.

That’s what building a recovery for

all of us is all about.”

Still a draw The city’s population increase in the past decade demonstrates that people still want to live in New York, but the lower housing numbers could make it hard for them to fulfill that desire, said Lou Coletti, president of the Building and Trades Employers’ Association.

“It’s encouraging that the city continues to grow in population," he said. "I think that’s a great sign for the future, showing that people want to live here. As to the lagging housing numbers, that’s very disconcerting because it’s obviously one of the most important factors in getting people to stay here.” ■

22 | CRAIN’S NEW YORK BUSINESS | August 23, 2021

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BUCK ENNIS

SMALL- BUSINESS SPOTLIGHT

TOMNITZ began microbrewing in his dorm room at Boston College.

FOCAL POINTS

Local craft brewery joins the hard seltzer party Five Boroughs Brewing’s long-term strategy lies in cultivating a diverse product mix

BY GABRIEL POBLETE

B

ack in 2011, before Five Boroughs Brewing became a bona fide brewery servicing the tristate area, company co-founder Blake Tomnitz was trying his hand at microbrewing with his roommates in their Boston College dorm room.

The college ended up confiscating their equipment, and they appeared before a disciplinary board.

They were let off the hook with the understanding that microbrewing had no place on campus. But for Tomnitz, the experience laid the foundation for Five Boroughs, which he, the company’s CEO, officially founded in 2017 with COO Kevin O’Donnell.

A citywide question Tomnitz met O’Donnell while working on Wall Street, and the pair began visiting local breweries together. Bronx Brewery had just gotten started, and Brooklyn Brewery’s status had already been cemented. But Tomnitz and O’Donnell had a question in mind: What was the beer for all of New York City?

After not finding a straight answer, they decided to build something that represented all five boroughs. Beginning in early 2015, they started brewing in the Bronx and then at a friend’s place in the Rockaways, carting around their equipment. As they scaled up,

12K

oughs taproom in Sunset Park as they looked for industrial real well as at grocery stores, restauestate, eventually landing on their rants, bars and bodegas across the current 15,000-square-foot locaNUMBER of area. It also can be shipped tion in Sunset Park, Brooklyn. barrels of beer statewide.

Today Five Boroughs offers an Five Boroughs “With Party Water, we wanted array of craft beers. At the core of is projecting to something that was kind of scalable the company’s guiding principles, sell this year beyond the tristate area,” Tomnitz Tomnitz said, is making good beer said. In terms of picking the name, accessible and inclusive.

“We wanted to bring beer to the masses,” he added, “We wanted something kind of fun he said. “It didn’t matter if it was your first and tongue-in-cheek, where it was almost like craft beer or you’re a craft beer connoisseur.” a literal expression of the product.”

Five Boroughs offers many of the varieties one would expect to find when visiting a Take one down, pass it around brewery, including a pilsner, a hoppy lager In 2019 Five Boroughs sold 10,000 barrels and several India pale ales including Grid- of beer. Last year, amid the pandemic, Tomlock Hazy and Tiny Juicy. But Tomnitz said nitz said, that dropped to about 7,500 barrels. that early on in the company’s trajectory, the With things opening up again, the company team decided it would diversify its products is hoping to get to 12,000 barrels this year. with other beverages.

Five Boroughs’ biggest hurdle has been Tomnitz became familiar with the Samuel maneuvering through government red tape Adams brand while in college, describing it to obtain federal and state permits against a as the poster child for craft beer. He said he clock that started ticking the moment it admired the brand’s model and noted that its signed its Sunset Park lease, Tomnitz said. parent company, Boston Beer, had other Additionally, coming to an agreement with well-known alcoholic beverage brands under distributors has been a significant challenge, its umbrella, including Twisted tea, Angry he said, because those contracts are essenOrchard hard cider and trendy Truly hard tially for perpetuity. seltzer.

“Aligning all these processes together— Three months ago Five Boroughs joined in construction, federal approval, state approval on the spiked seltzer frenzy by premiering and then distribution negotiation—that is Party Water. It’s available at the Five Bor- quite an art form,” he said.

FOUNDED 2017 COMPANY LEADERSHIP Blake Tomnitz, co-founder and CEO; Kevin O’Donnell, co-founder and COO EMPLOYEES Around 25

BY THE NUMBERS The company sold 10,000 barrels of beer in 2019.

Last year it sold between 7,000 and 8,000.

GROWTH STRATEGY The company recently premiered Party Water, a hard seltzer line. Five Boroughs is eyeing other beverage offerings including ones infused with CBD. WEBSITE fiveboroughs.com

Now, as Five Boroughs builds its brand, he said, it’s looking at other product areas including nonalcoholic beverages, ready-todrink cocktails and CBD-infused offerings.

The necessity of a diverse product mix has been one of the team’s key takeaways from the Covid-19 pandemic.

“We’re coming up on our four-year anniversary—which is pretty exciting, especially after the last year and a half,” Tomnitz said.

“But we’re very fortunate.”

As Five Boroughs continues to explore ways to expand, Tomnitz recognizes how far the brand has come.

“I think to be able to look back and take something that was really kind of a side passion and hobby and be able to materialize that and turn it into something tangible,” he said, “it's still kind of a pinch-me moment.” ■ AUGUST 23, 2021 | CRAIN’S NEW YORK BUSINESS | 23

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