Crain's New York Business

RECOVERY SERVED: U.S. Open’s return has businesses feeling optimistic

NEW SHEDS IN TOWN: Upgraded scaffolds catch fire at last

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AUGUST 30, 2021

TECHNOLOGY

HARD RESET: IT’S PLAN B FOR LINKNYC Stalled de Blasio tech initiative sees 5G as key to reverse fortunes after renegotiating city agreement

BY RYAN DEFFENBAUGH

See REBOOT on page 18

BUCK ENNIS

AT THIRD AVENUE AND EAST 16TH STREET on a February morning five years ago, Mayor Bill de Blasio called 311.

The call marked the first use of LinkNYC, the 10-foot-tall obelisks that on top of offering free digital calls, the mayor said, would blast out “the Wi-Fi network New York City deserves—the biggest and fastest in the world and completely free-of-charge.”

New York’s private partner, CityBridge, would replace old pay phones with a modern network of 7,500 kiosks spread throughout the five boroughs, offering free Wi-Fi, phone calls and USB charging ports—all paid for with digital advertising dollars, of which the city would get a cut worth hundreds of millions of dollars over a decade.

But almost halfway through the 15-year contract between the city and CityBridge, the vendor fell behind nearly $60 million on payments to the city and had installed fewer than 2,000 kiosks. The majority have gone to wealthy neighborhoods in Manhattan and Brooklyn, failing to address disparities in internet access among the city’s richest and poorest neighborhoods. The last new Link went live nearly three years ago.

In the coming months, CityBridge will try to revamp the program

NEW GOVERNOR

Hochul will rely on these longtime allies

BY BRIAN PASCUS

G

ov. Kathy Hochul has promised big changes to the way the Executive Chamber works. Aside from a more civil and consensus-oriented approach to government, she aims to apply her

NEWSPAPER

VOL. 37, NO. 30

power in Albany through the lens of the local governments where she got her start in politics.

Hochul is expected to surround herself with a small band of longtime aides and close loyalists as she takes control of the state government. Here’s a look at some of the

© 2021 CRAIN COMMUNICATIONS INC.

close advisers who will help run New York.

JEFF LEWIS Lewis can be considered Hochul’s right-hand man. He is the new governor’s chief of staff, a position he held in the office of lieu-

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tenant governor for the past five years. He was also Hochul’s director of external affairs for nearly two years before that. Lewis has known Hochul for a decade. He managed campaign finance operations for

SMALL-BUSINESS SPOTLIGHT

HELPING LOCALS REDISCOVER HUDSON APPEAL

GOVERNORKATHYHOCHUL/FLICKR

State’s first female governor pledges more consensus building and less combativeness

See HOCHUL on page 19

ASKED & ANSWERED

Retail broker: tenant’s market will persist PAGE 11

8/27/21 5:50 PM

SPORTS

City businesses hope for rally from the U.S. Open

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s tennis star Novak Djokovic rallies for a grand slam at this year’s U.S. Open in Queens, city businesses are betting that the three-week sporting event will produce a rally for them too.

“We’re not going to have our 2019 attendance record this year,” said Daniel Zausner, the chief operating officer of the USTA National Tennis Center. “But we will establish a 2021 sporting event record in the city.”

The tennis tournament had more than a $750 million impact on the city, according to a 2014 comptroller’s report, and it has likely increased since then, Zausner said.

The total amount spent at city hotels is $15 million, he said.

Attendance will not likely match 2019’s record 850,000 guests, because 15% of the audience typically comes from abroad and the week of qualifiers—when tickets were free—was closed to fans.

Still, Zausner said that ticket sales had been solid. Bookings for indoor private hospitality spaces, parties and business meetings were on par with 2019, even without international guests. In a three-day presale period only for cardholders, American Express said it had sold 56% more tickets than during the same window in 2019.

The courts are mainly outside, and the tennis association said it had invested in new filtration for indoor spaces, cashless retail and touchless plumbing. Medical experts are on call and the facility has a new certification from an organization that monitors every aspect of sanitization.

“IT ALL TRICKLES DOWN WHEN YOU HAVE THAT INFLUX OF BUSINESS” Some of the money goes to hiring: The United States Tennis Association brings on 7,000 seasonal employees for the tournament, with about 50% from Queens.

The impact on hotels is especially profound because of the length of the event, said Hotel Association President Vijay Dandapani, since players can be in the city for at least three weeks between the qualifiers and the main draw, and certain fans stick around for a week or two.

WEBCAST CALLOUT

Dollars spent nearby The longtime goal of Queens economic development types has been to make sure that when locals and tourists come for a tennis match or baseball game that they stay to explore nearby neighborhoods, perhaps aided by the frequency of Long Island Rail Road trains, which will run every 30 minutes.

NAOMI OSAKA, reigning champion, is back home in Queens.

AP PHOTO

BY CARA EISENPRESS

“We want to encourage them to walk to downtown Flushing or Roosevelt Avenue,” said Tom Grech, president and CEO of the Queens Chamber of Commerce.

Zausner said plenty of guests head out for dumplings or to Park Side for Italian food in between day matches and evening sessions or on their way in.

“It all trickles down when you have that influx of business in Queens,” said Afredo Chiesa, the manager at Park Side. He expects higher demand in the coming weeks, he said.

About 600 athletes arrive to play in the event, and although they stay in hotels around the city, there is certainly demand for rooms right

near the courts, hoteliers say.

Between athletes and fans, the brand-new Four Points by Sheraton in Flushing is booked solid this week, said Jasmine Simon-Wallace, the regional vice president of sales and marketing at Real Hospitality Group, which manages the hotel.

When the hotel opened earlier this month, it was just over one-third full.

“You even see some on the shoulder dates as well,” she said.

And served far away The impact extends throughout the city, thanks to fans who want to dine out and watch tennis, to the annual tie-ins with sponsors, and to the guest opportunities at the on-

site food offerings, which often feature local brands such as Tacos No. 1 and Momofuku's fried chicken concept Fuku.

“We fill that void for the hospitality industry” between the summer tourism boom and the return of New Yorkers from endof-season vacations, Zausner said. “Restaurants love us.”

At the Benjamin Hotel in Midtown, guests can sign up for a package in which they get rooms, meet and greets with top-seeded players and car transport to the games. Wilson erected a pop-up store and a Billie Jean King Museum in Soho. American Express, a sponsor, built six temporary tennis courts, pingpong tables and a snack bar at Pier 76 in Manhattan.

The Citi Taste of Tennis party is usually held for 1,200 guests at Cipriani the night before the tournament. Chefs offer bites for guests to sample. The guests get the chance to mingle with tennis players. This year the party returned in a slightly different form: a two-week foodtruck tour featuring local chefs and tennis stars. It ended Thursday night with a 200-person event at Tavern on the Green, where the tastes were plated and served.

“It was important to celebrate that comeback,” said Penny Lerner, the founder and CEO of Philadelphia-based AYS Sports Marketing who puts on the 21-year-old event, “that New York is reopening, no matter what.” ■

LIFE SCIENCES

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 good-paying 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

BY DEBORAH NASON

A

lbert Bourla’s gamble to forgo federal help to develop Pfizer-BioNTech’s coronavirus vaccine paid off when the Food and Drug Administration granted full approval for the shots last week.

Pfizer's CEO recalled his decision to go it alone and how the company is applying what it learned to future drug develop-

from both internal and external bureaucracy. We knew that if we accepted governmental funds, we would have to answer to them.

“When I told the team we wouldn’t be accepting any government money,” he continued, “they cheered.”

Follow the science The Pfizer vaccine, which has been found to be 91% effective, is still under emergency-use authorization for anyone between the ages of 12 and 15.

The shots will be marketed under the name Comirnaty. It is the first vaccination to be approved by the federal government.

“For us, it’s an additional confirmation of the efficacy and safety and the work of our people,” Bourla said. “And looking at polls, [the lack of approval] has been one of the

“BUREAUCRACY AND INNOVATION ARE LIKE WATER AND OIL” ment, in an exclusive interview today with Crain’s.

“I know that bureaucracy and innovation are like water and oil,” said Bourla, who is also chairman of the Manhattan-based drug company. “I wanted to protect this team

major reasons for people to not get vaccinated. I expect to see the needle moving now.”

The joint effort between the two pharmaceutical companies happened at warp speed compared to the usual timeline for a vaccine from development to approval.

“It’s true I pushed the timelines, but they tend to give me too much credit and not enough to the team,” Bourla said. “The most important thing was that at a certain point, we believed we could do it. And we felt that if we wouldn’t be successful, no one else would be able to deliver. Failure was not an option.”

To combat internal bureaucracy, Bourla said he flattened the organization and streamlined execution, including all the managers on the team on one video call, and himself as the main decision-maker. “Everyone was able to have a say and decisions could be made much more quickly,” he said.

“Now we know how miraculous this process was," Bourla said. "It

COURTESY OF PFIZER

‘Failure was not an option,’ Pfizer chief says after FDA’s final vaccine approval

BOURLA

can’t work for all projects, but for some, I am the main decision-maker. We are duplicating the process so that other leaders will serve as the main decision-makers.” ■

Vol. 37, No. 30, August 30, 2021—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 30, 2021

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BUCK ENNIS

CONSTRUCTION

UPGRADE: Rivals are moving to challenge Urban Umbrella’s niche as an upscale provider of building sheds. The industry generates $1.5 billion a year in New York City.

CHIC SCAFFOLDS FIND AN AUDIENCE A post-pandemic surge in demand, vindication for Urban Umbrella, spawns rivals

BY AARON ELSTEIN

M

aribel Lieberman’s ground-level storefronts in a SoHo loft building are some of the most attractive retail spaces in the city.

But for the longest time she couldn’t fill her three vacant spaces. The pandemic was one reason. Another was the dreary steel pipe– and–green plywood shed covering the sidewalk while work was being done on the roof.

In May she sprung for an Urban Umbrella, a prettier kind of sidewalk shed that’s finally disrupting an industry whose unsightly work has been a defining element of the New York

pedestrian experience since the 1980s. Lieberman is now in talks with a tenant to take all of her empty Broome Street space.

“I credit the Urban Umbrella,” she said.

“Nobody objects to having it around.”

Across the city, 9,000 sidewalk sheds swallow up 1.8 million linear feet of space, equal to 335 miles. More sheds clutter sidewalks than five years ago. Even office buildings with almost no one working inside have sheds outside.

Mayor Michael Bloomberg was so disgusted by the relentless spread of sheds that in 2009 he held a beauty contest challenging the real estate world to come up with a more attractive version. Urban Umbrella won first prize, but it didn’t catch on because most landlords refused to pay for a temporary structure that costs tens of thousands of dollars more than the standard utilitarian model.

The pandemic changed that. Surviving retailers possess more bargaining power than

“YOU RENT OUT A BUNCH OF PIPES AND PLANKS. I SHOULD HAVE GOTTEN INTO SHEDS”

they have had in decades, so to keep them from fleeing, landlords whose buildings need repair are puttin’ on the Ritz and installing whiter, lighter, brighter Urban Umbrellas.

“It distinguishes yours from another property,” said Brian Altman, president of leasing at the Feil Organization, which owns 26 million square feet of space.

At 225 Park Ave. South, landlord Orda Management installed an Urban Umbrella as part of $150 million in upgrades for the 112-year-old building, where Facebook and BuzzFeed have replaced tenants such as the Port Authority of New York and New Jersey See UMBRELLA on page 22 AUGUST 30, 2021 | CRAIN’S NEW YORK BUSINESS | 3

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RESIDENTIAL SPOTLIGHT

Restaurateur hopes buyers show appetite for his 5-bedroom, 6.5-bathroom SoHo condo $17.9M

BY C. J. HUGHES

A

food-industry honcho who has spent the pandemic in Florida has found the Sunshine State so appetizing he appears to be cutting some ties to New York.

Jeffrey Zalaznick, a co-founder of Major Food Group, the global company behind such restaurant hits as Parm, Carbone and the Grill in the Seagram Building, has put his SoHo duplex on the market, records show.

The apartment, a five-bedroom, six-and-a-half-bath condo combined from two apartments at 151

AMOUNT ZALAZNICK is asking for the SOHO duplex.

The Real Deal magazine.

At the same time, Major Food, which already has locations in Hong Kong, Tel Aviv and Las Vegas, is growing its Florida presence. The company opened a new Carbone in South Beach during the winter and plans other Miami outposts.

Mixing traditional touches and unusual colors, the SoHo apartment has wallpapered dining areas, tapered chandeliers and lacquered green cabinets. Black-and-white checkerboard tiles, a cotton candy-toned walk-in closet and a tangerine-hued home office complete the kaleidoscope. If the vibe recalls some of Zalaznick’s eateries, it’s no coincidence: The apartment’s designer, Ken Fulk, styled the Miami Carbone, among other eateries.

151 WOOSTER ST. was designed by Ken Fulk.

Wooster St., was listed for $17.9 million in late July.

It comes a few months after Zalaznick snapped up the Florida home previously owned by baseball great Mike Piazza, a stucco-sided eight-bedroom residence in the Sunset Islands section of Miami Beach. It sold for $15 million. Zalaznick and his family had been renting the house as the coronavirus slammed New York, according to

Not for cookie-cutters But not all is offbeat. Ribbing the ceilings in the 6,014-square-foot apartment are brick barrel vaults, a vestige of the industrial history of

BUCK ENNIS

“THE DESIGN AND LOOK ARE WHAT THEY’RE BUYING”

the building, which was transformed in 2009 into an 11-unit condo after a $45 million redevelopment. In 2011 Major Food’s first restaurant, Parm, opened on nearby Mulberry Street.

At 151 Wooster, the lower-level unit, No. 4B, which has three bedrooms, four baths and a laundry room, was purchased for $5.4 mil-

lion in 2015, its deed shows. The upper-level unit, No. 5B, which has two bedrooms, two and a half baths and three walk-in closets, sold for $6.9 million in 2018, according to records. Despite being combined, both units retain their kitchens.

While declining to comment on the seller, Tal Alexander, one of the Douglas Elliman agents listing the

home, said he expects the apartment’s anti-cookie-cutter aesthetic to be a crowd-pleaser.

“Will this apartment work for everybody? Maybe not. But there is no one style that works for everybody,” Alexander said. “I don’t think anybody who buys this will remodel anything. The design and look are what they’re buying.” ■

REAL ESTATE

BY EDDIE SMALL

M

anhattan has never lacked for expensive places to live, and in recent years, many of those homes have been concentrated in developments just below Central Park along a stretch of 57th Street, where the incredibly high prices and high-profile buyers have earned it the nickname Billionaires Row. Amenities such as spas, wine cellars and libraries, along with the towers’ central location in Manhattan, have helped them attract famed residents including Dell Technologies founder Michael Dell and Pershing Square Capital Management CEO Bill Ackman. But in a city dealing with a longstanding affordable housing shortage and rampant income inequality, skyscrapers where units routinely sell for more than $20 million have faced plenty of criticism as well, ranging from the shadows they cast over Central Park to claims that they are designed more as investments for the wealthy than as homes for New Yorkers.

Here is a look at some of the street’s most well-known and new-

est projects:

126 E. 57th St. MRR Capital Investments, run by real estate mogul Rotem Rosen, just filed plans for a new Billionaires Row condo building in August. The project will stand 28 stories tall with 145 units, and the company bought the sites for its project for about $97.5 million in 2019.

125 W. 57th St. Alchemy-ABR Investment Partners and Cain International closed on their purchase of this site for $130 million in June. Despite the uncertainty surrounding office space in Manhattan amid the pandemic, the developers still intend to move forward with plans for a new $330 million office building at the site, which should be finished by 2024.

220 Central Park South This luxury condo project from Vornado Realty Trust stands 79 stories tall and has seen steady sales recently despite the pandemic. It broke sales records in 2019, when hedge fund billionaire Ken Griffin bought a penthouse unit for $240

million, the priciest home sale the country has ever seen. Vornado finished work on the project in 2018, and Chairman Steven Roth boasted about its success on his company’s second-quarter earnings call.

“Condo sales, which had stalled during Covid, are now active, albeit at discounted pricing,” he said, “except, I am proud to say, at our 220 Central Park South, where resales are at a premium.”

One57 Extell Development’s One57, on West 57th Street between Sixth and Seventh avenues, is generally seen as the project that kick-started Billionaires Row. The real estate firm, run by Gary Barnett, broke ground on the 1,004-foot project in 2009, when the Great Recession had stalled several other projects. Dell purchased a penthouse unit for more than $100 million in 2014, and a group controlled by Ackman bought a duplex penthouse in the project for $91.5 million in 2015.

432 Park Ave. This skyscraper from Macklowe Properties and CIM Group stands 1,397 feet tall and once held the re-

cord for the Western Hemisphere’s tallest residential building. The owner of the penthouse on the 96th floor recently listed it for sale at $169 million, almost double the $87.7 million the buyer purchased it for in 2016 and a sign of confidence that the city’s luxury residential market is rebounding coming out of the pandemic.

111 W. 57th St. JDS Development is behind this roughly 1,400-foot luxury residential tower, which the company has described as the “most slender skyscraper in the world.” The developer has faced a host of troubles at the project and just recently sued crane operators over an accident during the fall that stopped construction for months.

41-47 W. 57th St. Sedesco is planning a 1,100-foottall project at 41-47 W. 57th St. and

STREETEASY

Billionaires Row: the latest developments for city’s most expensive real estate corridor

is attempting to add 52,000 square feet to the project in exchange for building two elevators for the 57th Street subway station on the F line.

If this is approved, the 63-story building would span about 443,000 square feet with 119 residential units, 158 hotel rooms and a roughly 10,200-square-foot restaurant.

Central Park Tower One57 is not Extell’s only Billionaires Row project. The company is also behind Central Park Tower, a 1,550-foot tall, 131-story building at 217 W. 57th St. The project features 179 luxury condo units. ■

4 | CRAIN’S NEW YORK BUSINESS | AUGUST 30, 2021

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HEALTH CARE

BY MAYA KAUFMAN AND SHUAN SIM

T

he U.S. Food and Drug Administration’s approval last Monday of the PfizerBioNTech Covid-19 vaccine is inspiring new mandates and prompting city officials and local employers to reexamine their policies for the workplace.

New mandates citing the FDA announcement include one for employees of the state court system and another for New York City public school teachers and staff. For

er, which is based in Midtown East, is priced at $24 per vaccine dose.

In a news conference, Mayor Bill de Blasio referred to the FDA’s full approval as “crucial” and “a game-changing moment” as he announced a vaccine mandate for teachers. The mandate does not include an option for weekly testing in lieu of vaccination, as does the city’s existing policy for other municipal workers, such as those at the Department of Health and Mental Hygiene.

Asked whether he will extend the mandate to the rest of the city’s employees, nixing the testing alternative, de Blasio said the New York City is “looking at that right now.”

“Every option is on the table, and we keep implementing additional steps at the point we believe it makes sense to do that,” he told reporters.

“EVERY OPTION IS ON THE TABLE, AND WE KEEP IMPLEMENTING STEPS” private employers that have not required staff to be vaccinated against Covid-19, the approval is already serving as an impetus to revisit their policy, business leaders said.

Pfizer and its partner, BioNTech SE, have an agreement in place to supply the federal government with vaccine doses through April, under which eligible U.S. residents will continue to receive the vaccine for free. The federal government’s most recent supply agreement with Pfiz-

Confidence boost Randy Peers, president and CEO of the Brooklyn Chamber of Commerce, said the FDA’s approval should give business owners “more confidence to exercise employee immunization requirements that will help bring people back to the

office and restart the economy in earnest,” but it is too early to tell what difference it will make.

Employers that are already revisiting their policy include several local insurers, said Leslie Moran, senior vice president of the New York Health Plan Association.

Dr. Ayman El-Mohandes, dean of the City University of New York Graduate School of Public Health and Health Policy, said the FDA approval should embolden employers, schools and public institutions to add the Covid vaccine to their list of already required immunizations.

“Now that this vaccine is like any other, then the mandate is neither a new nor a peculiar thing,” he said.

Other experts said that employers are becoming more comfortable with vaccine mandates but still face the challenge of implementing exemptions for medical or religious reasons. Given the current labor climate, employees have the flexibility to move to employers that are

BUCK ENNIS

Pfizer Covid vaccine approval spurs new mandates

not mandating vaccinations, said Jill M. Lashay, a health care attorney at Buchanan Ingersoll & Rooney.

Calling on businesses President Joe Biden last Monday cited the FDA’s approval in a plea to private employers to institute vaccine mandates.

“If you’re a business leader, a nonprofit leader, a state or local leader who has been waiting for full

FDA approval to require vaccinations, I call on you now to do that,” he said in a public address.

Pfizer and BioNTech’s two-dose Covid vaccine is the first to receive FDA approval. It and other brands of Covid vaccines have so far been administered under emergencyuse authorization from the federal government, which facilitates access to unapproved medical products during public health emergencies. ■

*

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AUGUST 30, 2021 | CRAIN’S NEW YORK BUSINESS | 5

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8/27/21 4:00 PM

IN THE MARKETS

The demise of SPACs spells opportunity for a new generation of American suckers

Step right up, aspiring authors: Dot-coms’ kissing cousin needs a great chronicler ASAP

GETTY IMAGES

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n 2004 the New Yorker movie SPACs accounted for 75% of IPOs, critic David Denby wrote a Goldman Sachs said, or 40% of all good book about the dot-com equity sold everywhere.

The irrational exuberance didn’t mania. It’s called American last, and 37 of the 49 stocks that hit Sucker.

Denby tried to make $1 million in 52-week lows Tuesday were SPACs. Some trade for pennies.

2000 by betting on interThe Defiance Next Gen net stocks so he could buy SPAC Derived ETF is his wife’s share of their down 34% since February.

West End Avenue apartTrue believers see a ment after their divorce. buying opportunity.

This quest led directly to “The last thing we’re massive CNBC consumpconsidering is throwing in tion and attending Tribethe towel,” Whitney Tilca Rooftop gabfests where son, a financial newsletter carnival barkers talked up writer and former hedge the World Wide Web until AARON ELSTEIN fund manager, wrote this the market tanked. week. “Rather, we’re start“The ax had swung,” Denby wrote, “and heads lay all ing to get that feeling that I call ‘trembling with greed.’” over the ground.”

That must be an interesting feelToday we have a bubble involving special-purpose acquisition ing, especially considering a SPAC companies. One nice outcome for Topps went splat last week after would be a candid memoir. Be- the baseball-card maker lost its contract with Major League Basecause the ax is swinging.

SPACs are the kissing cousins of ball. The $4 billion SPAC sponsored dot-com initial public offerings, by money manager Bill Ackman has most of which had only an inkling been sued by a former Securities of how they would make money us- and Exchange commissioner, alleging the internet. SPACs are shell ing violations of the 1940 law govcompanies that list on a stock ex- erning investment companies. change and seek to use their investor money to buy some sort of pri- Shareholder lawsuits aplenty vate enterprise and take it public. In Last month the U.S. attorney’s ofone case a SPAC sponsor bought a fice in Manhattan charged the forcompany founded by his daughter. mer CEO of electric truck company A bubble formed in 2019 and Nikola Corp., which went public via topped out in early spring, when a SPAC, with making false and mis-

leading statements to investors. The Securities and Exchange Commission is cracking the whip and class-action lawyers are busy filing shareholder suits.

It all comes down to this: SPACs are lousy for most investors, full of poorly disclosed conflicts of interest and opaque fees. This structure for taking companies public was invented by a penny-stock hustler 30 years ago and becomes popular about once a decade because SPACs offer great opportunities for regulatory arbitrage. Specifically,

they’re free to make wild growth projections about their business.

Companies that go public via traditional IPOs can’t do these things.

For some, a can’t-lose deal Boldfaced names from the worlds of finance, entertainment, sports and politics love to sponsor SPACs because they’re a can’t-lose proposition for them. They get a 20% stake in the shell company, usually at a cost of less than a penny per share, so even if they buy a crummy company, they’ll do fine.

Everyone else who joins the ride pays $10 a share.

Hedge funds love SPACs because so many latter-day Denbys have invested in them, and there’s lots of action. The pros’ strategy is to get in at the initial offering price of $10 a share and redeem their stock before a merger to collect the cash. It’s a no-risk return of about 12%, thanks to warrants sweetening the results. The folks who hold their shares after the merger because they buy the hype and wild growth projections are the ones taking the risks.

“This is the opposite of a fast, efficient process for taking companies public,” Michael Ohlrogge, a New York University law professor, told Crain’s earlier this year. “It’s a giveaway.”

That’s not to say a giveaway must be all bad.

This bubble’s great chronicler hasn’t been found, so SPAC speculators, step up with your story! If writing a book such as Denby’s feels intimidating, start by picking up a copy of Where Are the Customers’ Yachts? You’ll at least get a good laugh from this entertaining classic, which inspired Michael Lewis when he launched his literary career with Liar’s Poker. Lewis’ books are top sellers; imagine what a tale about SPACs must be worth.

You could probably even start a SPAC with it. ■

FINANCE

Warby Parker public offering brings test for companies promising societal good

S

oHo-based eyeglasses retailer Warby Parker will register as a public benefit corporation before selling its shares on the New York Stock Exchange in the coming weeks—offering a test for a movement pushing companies to balance societal good with the bottom line.

Warby Parker will also enter the public market as a certified B Corp., a designation that requires it to consider social and environmental priorities in equal measure to shareholder value. The company is the latest in a string of public benefit corporations to reach public markets in the past year.

“Warby Parker was an early B Corp. and in many ways a poster child for the entire movement,” said Christopher Marquis, a professor at Cornell University and author of Better Business, a book about B Corporations.

Warby Parker, which has about 1,800 employees, is known for giv-

ing a pair of glasses away to someone in need for each that it sells— totaling more than 8 million donations over its decade in business.

Bottom line The B Corp. designation is conferred by a nonprofit called B Lab, requiring a rigorous review of a company’s overall impact. The majority of the 3,500 certified B Corp. companies are small businesses, according to B-Lab, but the list includes Ben & Jerry’s, which is a subsidiary of the publicly traded Unilever. Privately-held apparel company Patagonia is also certified.

The Brooklyn-based Etsy, which is now one of New York's most valuable homegrown tech companies, was a B Corp. at the time it went public in 2015. Etsy and Warby Parker dropped out of the program around the same time in 2017, when B Lab changed its rules to require companies to register as public benefit corporations to maintain certifications.

Etsy was also reportedly facing pressure from investors to focus more on its bottom line.

“The company had the best of intentions, but wasn’t great at tying that to impact,” CEO Josh Silverman told The New York Times about the decision. “Being good doesn’t cut the mustard.”

But since then there have been several B Corp. and public benefit corporations to go public, including the SoHo-based insurer Lemonade, which had one of the most successful initial public offerings of 2020.

“Warby Parker re-certifying is a very big deal,” Marquis said. “It shows how much the public benefit corporation has gained acceptance as a corporate form.”

Coursera, a Silicon Valley online-learning company, went public earlier this year with the B Corp. designation. Allbirds, the shoe company focused on sustainability, is expected to file for an IPO later this year.

“We may be looking at the tip of

the wave right now,” Marquis said of public company IPOs.

The risks The titles are good marketing— who doesn’t want to support a company doing good in the world?— but they can be tricky for companies to square with the desires of shareholders.

Warby Parker’s SEC prospectus acknowledges as much.

“Our directors have a fiduciary duty to consider not only our stockholders’ pecuniary interests, but also our specific public benefit and the best interests of stakeholders materially affected by our actions,” the company wrote.

When those interests are at odds, the warning continued, there is no

BLUMENTHAL

BLOOMBERG

BY RYAN DEFFENBAUGH

promise the stockholders will win.

The B Corp. designation requires companies to recertify every three years. That's another risk for Warby.

“Our reputation could be harmed if we lose our intended status as a Certified B Corporation, whether by our choice or by our failure to continue to meet the certification requirements,” the company's filing said. ■

6 | CRAIN’S NEW YORK BUSINESS | AUGUST 30, 2021

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MARIJUANA

Market for recreational cannabis in New York off to a sluggish start but has high potential

S

everal large, local cannabis companies reported strong results in the second quarter, but New York has not played a big part in their growth despite recreational use of the drug becoming legal in the state in March. New York has moved slowly in order to ensure an equitable marketplace, experts say, but when those checks are resolved, its market potential is expected to surpass that of its neighbors.

“Different states that are transitioning from only medical use to adult use are finding their rollouts happening at difference paces, despite what their potential market sizes could be,” said Kelly Nielsen, vice president of insights and analytics at BDSA, a Colorado-based market research firm focused on the global cannabis market. Because New York had seen modest use of its medical marijuana market, as well as because of the pending legislative requirements, some firms intend to focus on other states first, she said.

For example, TerrAscend, with its U.S. headquarters in New York, recently reported 72% net sales growth, to $59 million, in the second quarter, compared to the same period of 2020. It also announced a

seeking to ensure that stakeholders are committed to equity and inclusion so that populations that had been historically incriminated for marijuana use and sales benefit most from its legality, the process has been slow-going, O’Boyle said.

These positions, to be nominated and decided by the state Senate and Assembly, will probably not MEDICAL MARIJUANA be filled until the DISPENSARY The spring, WalkerBotanist on Queens Miller said.

Boulevard is operated New Jersey reby Acreage Holdings. cently released its first set of rules for recreational marijuana sales. That development gives it a head start, but New York would likely outpace its neighbor in the long run, Nielsen said.

According to BDSA’s research, New Jersey saw $178 million in medical marijuana sales last year, and the amount is expected to reach over $250 million this year.

Next year, factoring in recreational marijuana sales, its take is forecast to reach $470 million and $1.9 billion by 2026.

Comparatively, New York’s sales of medical marijuana were $110 million last year, and they’re expected to be $150 million this year. However, with recreational marijuana pegged to come online next year, sales could reach $750 million then and $2.4 billion by 2026.

BUCK ENNIS

BY SHUAN SIM

“WITHIN JUST A FEW YEARS’ TIME, NEW YORK WILL SEE LARGE ECONOMIC GROWTH” partnership to expand its presence in New Jersey and outlined expectations for sales growth in Pennsylvania and California. But the company does not have a retail presence in its home state, nor has it announced plans for a local entry.

Similarly, Midtown-based Acreage Holdings earlier this month announced year-on-year sales growth of 63%, to $44 million, in the second quarter. It experienced retail growth led by its New Jersey operations and expects to expand in Connecticut, Illinois, Pennsylvania and Maine.

“New York is an attractive market, given its population, but there are a couple of things that need to be in place first before the adult-use sector can take off,” said Michael O’Boyle, group leader of business strategy at Capalino, a Tribecabased business consulting firm with a cannabis advisory segment.

The first barrier is that the state has yet to appoint an advisory board that can provide the guidelines and framework for which the drug can be grown, processed or sold, O’Boyle said.

A baseline of what kind of licensing is available is in place, but implementation details have not been ironed out, added Tunisha Walker-Miller, principal and state lobbyist at Capalino.

Given that the state Legislature is

Entry strategy Some operators in the state, however, are slowly setting the stage for when New York is ripe for the picking. Midtown-based Columbia Care spent the last year expanding its footprint in New Jersey, but it also started working to capitalize on New York’s potential, said Adam Goers, senior vice president of corporate affairs.

The company, which announced second quarter earnings of $110 million earlier this month, in April acquired a 34-acre cultivation site on Long Island for $43 million. It also plans to add four more dispensaries in the state in the coming years, Goers said.

“Based on our entry strategies and deep understanding of our consumers, we’re confident that within just a few years’ time, New York will see mass adoption and large economic growth,” Goers said.

“It’s not like New York is dragging its feet to get to adult use,” O’Boyle said. “It’s better we take time to get it right rather than have to undo any errors.” ■

THURSDAY SEPTEMBER 30, 2021 ◊ 5:30PM PARKER JEWISH INSTITUTE New Hyde Park, New York PETER SEIDEMAN Chairman of the Board

MICHAEL N. ROSENBLUT President and CEO

Parker Jewish Institute

F O U N DAT I O N

FOR RESERVATIONS AND FURTHER INFORMATION

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

EDITORIAL

publisher/executive editor

LinkNYC debacle is a cautionary tale for public-private partnerships

Frederick P. Gabriel Jr. EDITORIAL editor-in-chief Cory Schouten assistant managing editors Telisha Bryan,

Janon Fisher

T

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 to contact the newsroom:

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

www.crainsnewyork.com/advertise BUCK ENNIS

he ill-fated arrangement between New York and CityBridge to build LinkNYC wifi units across the five boroughs carries an important lesson about the hazards of public-private partnerships.

If they don’t work for both business and taxpayers, they don’t work. The second, more nuanced lesson, is to never over-promise and under-deliver.

It seems like a pretty obvious lesson, but one that this tech trainwreck proves can never be taken for granted. Halfway through its 15-year contract the Sidewalk Labs-backed project to build 7,500 kiosks throughout the city is nearly $60 million behind on payments to the city and hasn’t installed a new unit in three years, according to reporter Ryan Deffenbaugh’s cover story.

It started out hopeful and with the best intentions, like all

deputy digital editor, audience & analytics

Laura Warren people on the move manager Debora Stein,

place of innovation. Sidewalk’s CEO Dan Doctoroff pitched it as both a moneymaker and the socially responsible thing to do—not only was it supposed to bring in nearly a billion dollars, it would bridge the digital divide.

CityBridge was going to bring broadband to three million New Yorkers who wouldn’t otherwise be able to afford it. That

REVENUE SHARING PROJECTIONS WERE ‘WILDLY UNREALISTIC’ entrepreneurial endeavors must.

Six years ago, LinkNYC was the thing the city needed to remain a

account executives Kelly Maier,

Courtney McCombs, Christine Rozmanich,

didn’t happen. In the Bronx where nearly 40% of the borough does not have high-speed internet, there are 137 kiosks; in Manhattan there are 1,200. In Queens and Staten Island, 70% of the ZIP codes have no LinkNYC. Revenue sharing projections were “wildly unrealistic”—$750 million—for the competitive outdoor ad market. So far, CityBridge has paid $70 million over seven years.

We support ambitious projects.

We encourage public-private partnerships. New York City needs to stay on the cutting edge of technology, but that doesn’t mean leaving the outer boroughs in the dark. Spreading crucial services like broadband to all parts of the city would lift the overall economy.

It’s encouraging that the project has been rebooted. CityBridge has been given a second chance, but it must make good on its latest promises. ■

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

OP-ED

REPRINTS director, reprints & licensing Lauren Melesio,

Albany must relax requirements for small business relief funds

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

Simone Pryce media services manager Nicole Spell SUBSCRIPTION CUSTOMER SERVICE

W

hile the pandemic has taken a toll on city businesses of every size, many that were able to access relief funds have survived and are beginning to recover. Unfortunately, that has not been the case for thousands of mom-and-pop retailers, restaurants and service businesses in low- and moderate-income communities—particularly those owned by immigrants and people of color.

It is true that some commercial corridors in residential areas fared relatively well and even thrived when residents were quarantined, but that phenomenon has not made up for pandemic-related losses experienced by many other small businesses—including hundreds in the South Bronx.

These are businesses that, even before the pandemic, struggled to keep their doors open because of disparities in access to resources

and legacies of systemic neighborhood disinvestment.

Amid Covid-19, many could not access relief funds such as Paycheck Protection Program loans because they lacked the necessary tools and relationships with financial institutions. Others faced language and technology gaps or obstacles related to their immigration status.

Red tape As a result, thousands of entrepreneurs whose businesses are critical to their neighborhoods— for the goods, services and jobs they provide—have been on the brink of shuttering for more than a year.

An $800 million Pandemic Small Business Recovery Grant Program filled in some of the gap; it reimbursed small businesses with grants of up to $50,000 for coronavirus-related expenses.

Despite this good news, a problematic application requirement is preventing some of the most in-

need business owners from applying. Specifically, businesses are required to submit their 2019 and 2020 income tax returns, even though many have yet to close out their fiscal 2020 and cannot file their business taxes until later this year. In other cases, a business’s 2019 tax returns may also include months in which sales were affected by the New York State on PAUSE mandatory closures, precluding them from meeting the sales and profit minimums to be eligible for the program.

Fortunately, there is a clear solution. The state Legislature is uniquely positioned to resolve this issue by simply allowing businesses with fiscal years that do not align with a traditional calendar tax year to submit their 2018 tax returns. This would bring the program in line with its goal of being broadly accessible to all small

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.

BUCK ENNIS

BY MARCO CASTRO

Entire contents ©copyright 2021 Crain Communications Inc. All rights reserved. ©CityBusiness is a registered trademark of MCP Inc., used under license

businesses that need it. In the meantime, the state should set aside some portion of the grant funding for these businesses that are currently left out.

New York small businesses need the Legislature to step up and address the application’s one major remaining shortcoming to ensure that the Pandemic Small Business Recovery Grant Program lives up to its tremendous promise. ■ Marco Castro is a senior program manager for community development at WHEDco.

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]

8 | CRAIN’S NEW YORK BUSINESS | AUGUST 30, 2021

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OP-ED

BY BARBARA DENHAM

W

e urban enthusiasts have been writing about the reemergence of cities in the past 10 years. We observed tremendous growth in jobs, cultural amenities and, of course, real estate within city centers.

Much of this narrative—that many more people, especially younger ones, were choosing city life and creating an urban renaissance of sorts—had been dismissed by skeptics because the population

timate for the city yielded an even lower 78,000 population growth for 2010 to 2020 as the Census Bureau likely discounted the estimates because of the pandemic. The Census Bureau releases population estimates for the previous year every July.

Population boom New York is not alone. Chicago, Philadelphia, Los Angeles and San Francisco all saw upward adjustments to their population growth— for both their city county and their metropolitan area count—over recent estimate numbers. At the same time, Phoenix; Tampa, Florida; Miami; and Las Vegas, Nevada, saw downward revisions.

Many of us population watchers were pleasantly surprised to see these decennial census results; we were deeply dismayed when the 2010 decennial census had seemed to severely undercount many cities’ population growth, especially New York’s, over the previous decade.

We believed, moreover, that re-

“THE NUMBERS VALIDATE BELIEVERS, THE URBAN RENAISSANCE IS STILL VERY REAL” numbers never seemed to agree with the anecdotal evidence.

Until now.

Last week’s release of the 2020 census showed that the city’s population grew by 629,000 from 2010 to 2020, nearly four times the absurdly low count of 168,000 as of the 2019 population estimates. The 2020 es-

cent annual population estimates were not representative of what we were seeing on the ground, which is that New York City’s population growth was not only healthy but robust.

A simple rule of thumb: The population-to-job ratio is approximately 2-to-1 in most metropolitan areas.

The New York metropolitan area’s population of 20.8 million as of the 2020 census is approximately twice the employment total of 9.5 million.

Thus, over time, a metropolitan area's population growth should average twice the number of jobs added. Indeed, transition years, including 2020 when many fled the city because of the pandemic, can disrupt this rule of thumb. But consider this: From 2010 to 2019, the city added 902,000 jobs or just about 100,000 jobs per year.

The metropolitan area, including most of northern New Jersey, Long Island and Westchester County, added 148,000 jobs per year on average. Yet the original population estimates for population growth averaged less than 20,000 people per year for the city and 141,000 per year for the metropolitan area.

These ratios are not even 1-to-1.

BLOOMBERG

New York’s urban renaissance is real.

The latest census numbers are evidence

Even with the revised census numbers, the city’s population growth could still be undercounted.

Los Angeles, San Francisco, Chicago and a few other metropolitan areas also have low population-to-job growth ratios.

By now, many readers know that these population numbers have a significant impact on federal funding for the city as well as for congressional seats. Of course, these new numbers raise more questions than they answer, including what

do they mean for a post-pandemic world, especially in light of the tepid job growth in the past few months?

Demographers and econometricians will pore over these numbers for months. Stay tuned.

Still, these numbers validate what so many of us have known for years: The urban renaissance was and still is very real. ■ Barbara Denham is a senior economist at Oxford Economics.

OP-ED

Remember garment workers in city’s comeback strategy JOE BORELLO AND CARLOS SURGRANES

W

hen Covid-19 shut down Midtown, Erika Diaz knew she’d only get busier. Ferrara Manufacturing, the Garment Center company where Erika was a production manager, could make personal protective equipment for first responders.

So Erika braved the pandemic to source material from across the globe, develop technical designs and adapt jacket-making techniques on the fly. She and Ferrara partnered with dozens of other Garment Center businesses—nearly half of which are woman-owned and 73% of which are led by people of color—to supply a desperately needed hospital contract. While Ferrara specialized in hospital gowns, hundreds of garment firms produced millions of units of PPE to slow the spread of Covid-19.

Thousands of New Yorkers literally owe their lives to local garment manufacturers.

The 2019 rezoning of the Garment District, threatens to displace manufacturers from their historic home to create more hotels and offices.

In exchange, the city planned to relocate some companies to a designated fashion campus in Brooklyn. But with years between the rezoning and the campus

development, prices are skyrocketing, supply relationships are being upended, and companies that can’t move to the campus have to find other homes—or shut down. If the pandemic had hit just years later, garment firms might not have been here to protect us.

Admittedly garment manufacturing in New York isn’t what it was in the 1970s. Corporate consolidation, fast fashion and disrupted supply chains meant that, by the 2010s, garment companies represented just half the businesses in the district.

Hanging by a thread But given their role in our health, security and economic mobility, manufacturers clearly punch above their weight. Even Mayor Bill de Blasio gushed over New York’s reliance on garment firms’ “resilience, ingenuity and manufacturing prowess to . . . get [us] through this crisis.”

Zoning regulates where different activities can safely locate, separating housing from sewage treatment, for example. But zoning also protects space for vital activities that can’t compete on market terms; needing room for equipment, manufacturing simply produces less revenue per square foot than offices. Public intervention— zoning protections or subsidies to make up the difference—is required for essential businesses to

afford the space they need.

That’s why the city also planned to support the purchase of a building in the Garment District dedicated to garment manufacturing. But the subsidy wasn’t enough, and the building hasn’t happened.

Particularly as the future of office space is unclear, we need another push to protect manufacturers. City Hall should expand the subsidy— using whatever mix of city, state and federal funds and philanthropic or private investments is needed—to make the building a reality.

We need local firms to design the costumes and make the repairs between a matinee and evening curtain for Broadway’s return.

Events such as Fashion Week must serve as anchors to what was a $100 billion local industry.

Fashion manufacturers are creating next-generation wearable technologies and pioneering ways to reduce waste in an industry that’s wrought environmental havoc as it moved abroad.

As we build back "better," the city needs to be a stable home for garment manufacturers—Erika and others—who in our darkest hour were there for us. ■

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

Joe Borrello is prototyping fellow and biomedical engineer at Mount Sinai BioDesign. Carlos Sugranes is the industrial manager for Next Street.

AUGUST 30, 2021 | CRAIN’S NEW YORK BUSINESS | 9

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PEOPLE ON THE MOVE

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

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City National Bank

Joshua Rubin joins PMA as Vice President & General Manager, New York, via the acquisition of LPE Management Services, to lead PMA’s new team in New York as part of a strategic expansion. Josh has more than 30 years of experience managing significant healthcare, research, and university capital programs and projects in the New York metropolitan area.

Throughout his career, he has remained focused on these sectors, working with some of the nation’s largest and most renowned institutions. Prior to founding LPE in 2007, Josh was a founding member of Rand Engineering and LPE Engineering.

Gerard Peduto joins PMA as Senior Project Manager as part of the acquisition of LPE Management Services. With nearly 30 years of experience as a mechanical engineer, Gerard has an extensive background working in academic and medical research institutions and a deep understanding of all types of complex institutional projects. His experience includes diagnostic radiology, imaging research, ambulatory surgery centers, new construction, utility services, infrastructure, technology and civil projects.

Jerry Maffia, RA, LEED AP, CHC, joins PMA as Senior Project Manager through the acquisition of LPE Management Services. With more than 37 years of experience as an architect, owner’s representative and construction manager, Jerry is known for his successful project delivery of highly technical projects, working within the confines of strict schedules and coordinating the interest of multiple stakeholders.

Jerry has led both ground-up and interior fit-out projects in the research laboratory, higher education, institutional, cultural, healthcare and commercial sectors.

Tina Macica, PMP, LEED AP, joins PMA as Senior Project Manager via the acquisition of LPE Management Services. With nearly 30 years of experience in real estate, capital program, project and facilities management, Tina’s experience includes major healthcare and institutional programs, including managing nine separately contracted program management teams. Her project portfolio includes healthcare, laboratories, colleges and universities, tech, nuclear, retail, commercial, golf course and country club, as well as public and infrastructure projects.

Tim Cooney has joined City National Bank as senior vice president and private banker. A seasoned leader in his field, Cooney will use his 20+ years of experience in wealth management to lead City National’s new Private Banking team in New Jersey.

Cooney specializes in providing personalized service to ultrahigh-net-worth individuals and their families, entrepreneurs, business owners and real estate professionals. City National has $87.3 billion in assets and more than 70 offices.

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Prior to that, he was the Account Manager and Senior Project Manager at New York Presbyterian Hospital. Rob is a veteran of the U.S. Navy, where he served aboard a nuclear submarine.

Gi He Choi joins PMA as Assistant Project Manager as part of the acquisition of LPE Management Services. With a background in construction and facilities management, Gi He’s project portfolio is comprised of healthcare projects including renovations, additions and equipment upgrades. She brings a high level of knowledge on technically complex healthcare projects to the team. Prior to LPE, Gi He was an Assistant Project Manager for a contractor where she was responsible for providing administrative and tactical support for a variety of healthcare projects.

Amy KurtzbergOlshever joins PMA as Assistant Project Manager as part of the acquisition of LPE Management Services. Amy is an experienced design professional with a demonstrated background in project management, including experience with code analysis, plan review, budgeting and scheduling. Amy will support project teams from project inception through closeout.

Elizabeth Bravo joins PMA as Project Administrator and Project Controls Manager as part of the acquisition of LPE Management Services. Elizabeth has 27 years of experience with administrative management in the construction industry.

She has a demonstrated track record of maintaining organized records and ensuring that all administrative deliverable milestones are met, keeping a project running smoothly from inception through closeout.

Michael Felix has joined City National Bank as vice president and client manager. With 10+ years of experience in finance, Felix is well-positioned to deliver City National’s suite of personalized services. He will be serving the Metro-NY area, and will be based in New Jersey.

Felix specializes in supporting ultra-high-net-worth individuals and their families, entrepreneurs, business owners and real estate professionals. City National has $87.3 billion in assets and more than 70 offices.

REAL

ANNOUNCE

YOUR BIG NEWS IN CRAIN’S!

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Lend

Glob grou appo N.J.Ledd Direc for its nearl expe the h will h its de poise role w oper addi scien Lend the U

ASKED & ANSWERED

MORRIS SABBAGH Kassin Sabbagh Realty

INTERVIEW BY NATALIE SACHMECHI

R

etail vacancies in New York City reached a record high of 28% last month, but that doesn’t mean leasing is dead. Brokerage firm Kassin Sabbagh Realty has had its best year yet. The company has closed 293 deals so far this year, up 30% from the same period in 2019, said company president Morris Sabbagh.

It’s all about the retailers that have found opportunities during the pandemic and used the low prices to their advantage to expand or get their start in the big city, he said. Nearly 18 months into the pandemic, local businesses and even national chains are looking at lapping up space in the city. But, he noted, retailers are getting savvy about building so-called pandemic clauses into their leases before signing on the dotted line.

What types of tenants did you focus on before the pandemic? What changed?

Prepandemic we were predominantly focused on food and fashion. During the pandemic we focused on grocery stores, supermarkets, drugstores and pharmacies—they were the only tenants that were able to expand because every other tenant wasn't allowed to be open. And now for a retailer coming into the market or expanding in the marketplace, they are able to view this as a tremendous opportunity because the cost of entry is much lower. We

DOSSIER WHO HE IS President, Kassin Sabbagh Realty AGE 37

had before. It specifically outlines what happens if the pandemic comes back. What discount does the tenant get and at what point is the tenant not paying rent if he’s fully shut down?

When do you think rents will stop falling?

GREW UP Midwood, Brooklyn RESIDES Gravesend, Brooklyn EDUCATION Bachelor’s in business management and finance, Brooklyn College OVERCOMING OBSTACLES The gift of gab is important for brokers. Before he developed his, Sabbagh stuttered for more than a decade as a child. He was painfully shy and would hardly speak.

DREAM DEFERRED Before he became a broker, Sabbagh worked as a property manager but his dream was to be an anesthesiologist.

have three leases out for Little Italy Pizza. For the first time in a long time, rents are affordable for these local retailers again.

What do retail leases look like now?

You're seeing that a lot of retailers want a long-term lease.

But a lot of the landlords are understanding that the rents will come back, and they’re more hesitant to give longer leases if they don’t have some type of increase or bump.

I would say 80% of our leases have a pandemic clause that they never

I think that’s already happened. The rents have stabilized, and in certain markets they’re even starting to climb a little bit. However, I do think for the next 12 to 24 months, at the minimum, the market will be a tenant’s market.

Do you expect mass evictions in the next few months?

Prepandemic it took a year-plus to evict somebody.

It's not like the light switch turns on and everybody's evicted. I can say with certainty that most landlords will and want to work with the tenant. At the end of the day, nobody wants a dark store, and there’s a cost to re-renting a store. Whatever that tenant was paying prepandemic, they’re going to get less rent, and any new tenant is going to demand free rent.

The landlords are incentivized to retain their tenants.

What does the relationship between tenants and landlords look like now?

I think the pandemic brought the landlord and tenant relationship much closer. Because at the end of the day, we all realize that we sink or swim together.

If the tenants can pay the landlord, the landlord can pay their mortgage—it’s very simple. We find that a lot of landlords are communicating with their tenants more. It’s not about every last dollar. ■

VIRTUAL EVENT Thursday, Sept. 23 | 12:30-1:30 p.m.

See whose staff is happiest and healthiest in the city!

Join us at Crain’s Best Places to Work virtual lunch event on September 23. This celebration will feature a live unveiling of the rankings of the 2021 Best Places to Work companies, congratulatory videos and special guest speakers.

Register at CrainsNewYork.com/bestplaces2021 CO-SPONSORED BY

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AUGUST 30, 2021 | CRAIN’S NEW YORK BUSINESS | 11

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CRAIN’S 2021

best places to work in NYC

T

hough office life in the past year has been virtually unrecognizable for most workers, they still have thoughts about what makes a good employer.

This year Crain’s has again partnered with Best Companies Group, an independent research firm, to survey employees about their workplace. The top 100 are presented here, in alphabetical order.

Join Crain’s for a virtual event Sept. 23, when we will reveal the ranked list.

The ranking also will appear on CrainsNewYork.com Sept.

23 and in our Sept. 27 print edition.

CELEBRATE THE BEST PLACES TO WORK

23 SEPT.

12:30 TO 1:30 P.M.

The event will feature a live unveiling of the ranking of the companies named Crain’s 2021 Best Places to Work. Secure your company’s ticket package at CrainsNewYork.com/BPTWAwards.

Accern AdTheorent ■ Alan Margolin & Associates ■ Allison+Partners ■ Alma ■ American Arbitration Association ■ Anchin ■ Animoto ■ Argo Real Estate ■ Arlo Hotels ■ Baker Tilly US LLP ■ Bitly ■ Bluecore ■ Bombas ■ Braze ■ C.A.C. Industries ■ Catalyst ■ CBIZ ■ Centro ■ Clear Street ■ Clune Construction ■ Cockroach Labs ■ Cogent World ■ Columbia Property Trust ■ Conductor ■ Dataprise ■ Digital Remedy ■ Direct Agents ■ Dynamic Yield ■ eClerx ■ EisnerAmper LLP ■ Empire BlueCross BlueShield ■ eShopWorld (ESW) ■ Evoke ■ Fenwick & West LLP

Fluent Fortis Lux Financial ■ Frame.io ■ Frankfurt Kurnit Klein & Selz PC ■ Friedman LLP ■ Giant Machines ■ Global X ETFs ■ Good Apple ■ Grassi ■ Greenhouse Software ■ Hersha Hospitality Management ■ HNTB ■ Homer ■ Hyperscience ■ Index Exchange ■ J.T. Magen & Co. ■ Janover LLC ■ JFK International Air Terminal LLC ■ JRM Construction Management ■ Lawline ■ LiveAuctioneers ■ Logicworks ■ Lowenstein Sandler LLP ■ ManhattanTech Support.com LLC ■ MANTL ■ Marx Realty ■ Monday.com ■ MongoDB ■ Muck Rack ■ Myriad360 ■ National Financial Network ■ NextRoll

Noodle Numerix ■ One Drop ■ Orchard ■ Pappas Agency ■ Pariveda Solutions ■ Peloton ■ Peppercomm ■ Perkins Coie LLP ■ PlaceIQ ■ Pragma ■ Protiviti ■ Rand Engineering & Architecture DPC ■ Reed Smith LLP ■ RevTrax ■ Rockefeller Group ■ Ryan LLC ■ Schimenti ■ Schrödinger ■ Sharebite ■ Shawmut Design and Construction ■ Sheppard Mullin ■ Star Mountain Capital ■ Tapad ■ Tarter Krinsky & Drogin LLP ■ The Trade Desk ■ Transwestern ■ Triplemint ■ Unqork ■ VHB ■ Virginia and Ambinder LLP ■ West Monroe ■ Yieldmo

■

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■

■

■

FROM TOP: Shawmut Design and Construction, Sharebite, West Monroe, Digital Remedy, J.T. Magen & Co., Evoke. Photos provided by the companies.

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MIDDLE MARKET COMPANIES PRESS THE RESET BUTTON ON GROWTH The economy has opened up again for middle market companies, and business is booming in many sectors. The surge of the delta variant, however, is requiring many midsize firms in the city to stay flexible in their approaches to everything from real estate to risk management.

For insight into some of the key issues affecting middle market companies in the city these days, Crain’s Content Studio spoke with Michael J. Clain, a partner with the law firm of Windels Marx Lane & Mittendorf; John Giardino, managing partner of the city office of Michelman & Robinson; and Ling Kong, director at Goulston & Storrs.

Crain’s: From what you see in the marketplace, how long do you think it will take for revenues and profits to return to pre-pandemic levels?

seeing many clients push their returnto-work plans further back into this fall (October, for instance) or delay returning to the office until the start of next year.

John Giardino: The short answer: faster than many expect. As we’ve seen over the past couple of months, the economic recovery has been recordsetting in terms of speed and growth.

That’s because the pandemic—in terms of its impact on the economy, which was strong through 2019—is more like a natural disaster than a recession.

Of course, many clients in the city are assessing current real estate needs, whether to re-negotiate existing or upcoming leases or whether to increase or reduce the business’s footprint in light of greater flexibility with respect to work-from-home policies and the changing times.

Consequently, businesses that adapted to the different operating conditions have actually reported their best results in the last two years, with profits improving as a result of lower costs (transportation, travel, utility expenses and the like) and enhanced efficiencies. In my view, the positive economic results should continue for the next several quarters, as businesses satisfy pent-up demand. Sure, the Delta variant and others that develop may require more restrictions, but the economy should keep growing.

Over the pandemic, the largest tech players have expanded their respective office space in Manhattan, leasing iconic landmarks including Google’s further expansion in Chelsea; Facebook’s expanding into the former main post office complex across from Pennsylvania Station and Amazon’s purchasing the Lord & Taylor building on Fifth Avenue in March.

Certain clients have realized now is a great opportunity for them to finally be able to afford to set up or upgrade a storefront or move to a more attractive address in the city. The life sciences

“... WE EXPECT REVENUES AND PROFITS FOR MOST BUSINESSES TO RETURN TO PRE-PANDEMIC LEVELS BY THE END OF THIS YEAR.”

LING W. KONG

Director Goulston & Storrs, New York 212-878-5519 lkong@goulstonstorrs.com

Michael Clain: We’ve seen great confusion in the market as businesses struggle with three distinct questions: Should they require that employees return to the office? Should they require that employees be vaccinated?

JOHN J. GIARDINO

MICHAEL J. CLAIN

Managing Partner Michelman & Robinson, LLP New York City 212-730-7700 jgiardino@mrllp.com

Partner Windels Marx Lane & Mittendorf, LLP 212-237-1035 mclain@windelsmarx.com

And should they require that employees wear masks?

Most companies that can accommodate remote work are planning to extend that arrangement for at least a few

months. All companies have a mask mandate for all common areas (and for all public-facing employees), and most require either proof of vaccination or a negative test before reporting to the office. We expect proof of

thinkresults

— MICHAEL CLAIN, WINDELS MARX LANE & MITTENDORF Michael Clain: The pandemic has hit businesses unevenly. A number of industries, including technology and health care, have boomed, while others like leisure and hospitality, have tanked. As the economy reopens and more Americans return to the office and start to travel, we expect the trend to reverse and all companies to return to historical growth patterns, with some growing faster than usual—for instance, we expect construction businesses to be quite busy as the industry deals with housing shortages and the transition to clean energy.

While this is a bit of a star-gazing exercise, we expect revenues and profits for most businesses to return to pre-pandemic levels by the end of this year.

Crain’s: How are middle market businesses navigating return to work and real estate needs?

Ling Kong: With the delta variant and the uncertainty it brings, we are

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PRACTICE AREAS:

and biotech industry expansion into the city has been accelerated by the pandemic, and wet lab space is always at a premium. Overall, it seems middle market clients are cautiously exploring opening or expanding offices, but generally to a lesser degree than the largest companies, which have greater geographic span and perhaps more flexibility to move employees around.

Crain’s: What kind of returnto-work policies have you seen among middle market businesses?

John Giardino: For many middle market companies, return-to-work policies have evolved over the past six to eight months, moving from a conservative remote working model to an on-site, work-with-restrictions approach. Employers have been reacting to conditions on the ground within their communities, and requirements for masks, protective screening and social distancing have been common.

Emerging Companies Venture Capital Proptech Ling Kong, Director New York Office 885 3rd Ave, New York, NY 10022

Goulston & Storrs is committed to achieving results for clients with no compromise to service. Ling Kong is a leader in middlemarket merger and acquisition work representing clients in a range of corporate transactions and financings.

goulstonstorrs.com

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Middle market companies need to have more equity in the form of liquid assets for lenders to be willing to make loans, which has led to nontraditional investor sources including not-forprofits. When it comes to investor

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“IF A BUSINESS USES MORE ENERGY COMPARED TO OTHERS IN ITS BUSINESS CATEGORY, IT MIGHT BE LESS DESIRABLE TO A LANDLORD.”

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MIDDLE MARKET COMPANIES PRESS THE RESET BUTTON ON GROWTH vaccination to become the norm once vaccines receive full Food and Drug Administration approval.

either new coverages will emerge or businesses will develop escape clauses in their contracts.

Crain’s: How has the pandemic caused changes in risk assessment, and do you see companies rethinking and revising their contractual relationships?

Crain’s: How are middle market businesses handling the supply chain disruptions caused by the pandemic?

Michael Clain: Resilience is the word of the day. Companies are learning to build operations that are flexible enough to withstand pandemics and other unexpected events. What that means in practice is moving computer systems to the cloud, building teams that can operate remotely, making discipline, organization and self-direction key elements in hiring decisions, outsourcing nonessential workflow and choosing vendors who are similarly focused. We also expect office space to become decentralized over time, with companies reducing their footprint in central business areas and instead opening smaller satellite offices closer to where their employees live.

John Giardino: The pandemic has caused companies—middle market included—to focus on the following risks: health and contagion, shortage of labor, and curtailment of supplies.

Going forward, these businesses will begin to manage against risk by conditioning their obligations for performance upon these variables.

Because many business interruptions may not be covered by insurance,

Michael Clain: Not well. We see shortages of everything from copper to computer chips. All companies, large and small, are scrambling to find alternative suppliers, but small and midsized businesses have limited resources. We’ve noticed an increased focus on domestic sourcing to reduce wait times and avoid shipping congestion, and increased willingness to listen to middlemen who claim access to new suppliers. The disruptions are causing significant cost increases, resulting in lower margins as businesses have been reluctant to pass them on to customers. Most midsized businesses survive on relatively low margins, so we expect a new wave of business failures if these disruptions continue into 2022.

John Giardino: Businesses have begun managing their inventories differently by increasing “on hand inventories,” seeking local supplies, or looking to distribution centers that can accommodate longer cycle needs. There has been significant growth in the distribution sector and greater opportunity for locally produced goods. These measures go a long way in mitigating the risks of interruption.

Crain’s: How will federal and state debt associated with stimulus spending affect taxation and other charges imposed on businesses?

John Giardino: State and federal governments will need to create new revenue sources to recover the costs of spending since the onset of the pandemic. No doubt, tax revenue, including that from increased wages, will fund some of this need, and over the next 10 years or so, we will see extreme pressure to increase taxes and fees on businesses.

Michael Clain: We fully expect to see the federal corporate income tax rate go up to 25%. We expect that the massive federal pandemic aid to states and municipalities, combined with concerns over losing business to states like Texas and Florida, will keep New York state and the city from imposing material increases in corporate income tax rates. We expected the cost of doing business in the city to increase, however, because of nonbudget-related measures, such as Local Law 97, which we’ll get into later, and congestion pricing.

For more information, please visit www.mrllp.com Los Angeles

212.730.7700

310.299.5500

Chicago

312.638.5671

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Michael Clain: Local Law 97 imposes strict greenhouse gas emission caps on most buildings larger than 25,000 square feet (about 50,000 properties across NYC) starting in 2024. It targets a 40% reduction compared to 2005 levels by 2030, and an 80% reduction by 2050. The estimated cost of retrofitting properties to meet the new emissions caps is expected to exceed $20 billion

Small Business Administration.

What is notable about these pandemicera loans, which served to help stabilize middle market businesses, is that they were all done through an online lending process. As a result, there are now several new online lending companies popping up for middle market capital transactions, such as Opus Connect and iBorrow.

— JOHN GIARDINO, MICHELMAN & ROBINSON

A full-service, national law firm that sits at the intersection of industry expertise, legal excellence, extraordinary client service, and thought leadership.

New York

Crain’s: So how will the city’s Local Law 97 (which places carbon caps on about 50,000 properties across the five boroughs) affect middlemarket businesses?

Orange County 714.557.7990

San Francisco 415.882.7770

in the next decade. The law will cause hand-wringing among property owners, provide significant new business to companies in the construction industry and raise rents for most people who live or work in NYC. The rent increases will likely reinforce the trend towards remote-work arrangements and office space reductions.

John Giardino: The fines for noncompliance with Local Law 97 are substantial, up to $268 per ton of carbon emitted over the limit.

Buildings that do not make energysaving changes could face hundreds of thousands of dollars in annual fines, up to a maximum of $5 million.

High-energy-use businesses will likely be particularly stung by the new law. If a business uses more energy compared to others in its business category, it might be less desirable to a landlord.

For example, hotels as a whole have a certain level of carbon emissions allowed, but any given hotel might include a spa with saunas and outdoor hot tubs, which causes its energy use to be higher. A landlord might want to charge more rent to such a high-energy-use business in the event high-energy use ends up costing the landlord carbon fines. Stated another way, landlords will likely want to pass on these fines to the tenants incurring them.

For their part, low-energy-use businesses will have an easier time finding space to lease, particularly if they note that another business in a given building is a high-energy user and the landlord needs a low-energy user to balance that out.

Crain’s: What are alternative or new sources of funding for financings and mergers and acquisitions for middle-market businesses?

John Giardino: Middle market businesses have traditionally been underserved by the standard lending market, and the pandemic forced many of these companies to look for alternative cash sources, including Paycheck Protection Program and government loans backed by the U.S.

funding, we have seen a recent proliferation of green and socially responsible investors and a significant rise in special purpose acquisition companies.

Michael Clain: Business development companies continue to be active in this space, financing transactions that are too highly leveraged for regulated banks. We’ve seen a rise in loan funds established by insurance companies, pension funds and other nonbank entities seeking to expand their variable rate portfolios.

In the trade finance area, supply chain finance has become commonplace as large buyers look to protect and maintain the loyalty of their vendors.

Energy efficiency and renewable energy financing has been growing rapidly, aided by nontraditional lenders, such as Commercial Property Assessed Clean Energy and green banks.

Crain’s: Could you tell us more about the new C-PACE program adopted by NYC and what it is intended to do?

Michael Clain: C-PACE stands for “commercial property assessed clean energy.” C-PACE financing is available only for improvements that reduce energy consumption (such as heating and cooling system upgrades) or incorporate renewable energy systems (such as solar, wind or geothermal). It allows up to 100% financing, with maturities of up to 30 years, at rates currently in the 4-6% range. The financing is non-recourse to the property owner and transferable with the property. It is secured by a lien that is similar to a property tax lien and payable through an assessment on the property tax bill. It is intended to encourage the deployment of renewable energy systems in new construction and help finance retrofits needed to meet the massive reduction in greenhouse gas emissions mandated

by Local Law 97.

John Giardino: The goal of C-PACE is to incentivize borrowing by building owners and expenditure

8/26/21 9:26 AM

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SPONSORED CONTENT of funds toward capital improvements that increase energy efficiency.

Toward that goal, money is made readily available from prequalified private lenders to property owners—100% financing is available with no out-of-pocket costs, allowing building owners who do not have the upfront resources to still be able to install energy-saving improvements, with payback made in installments through a charge on the property tax bill over the course of 20 to 30 years.

In other words, C-PACE allows for longer term and more flexible payback than property owners would get from a traditional lender. Also, the fact that payback is through property taxes means the loans transfer to a new building owner upon sale of the property. Translation: The loans are tied to the building, not the owner.

Crain’s: What trends and resulting impacts are middle market businesses seeing with regards to proptech and emerging technologies?

Ling Kong: Overall proptech venture capital financing is having one of its strongest years ever, with Crunchbase reporting $10.6 billion raised as of July.

The most successful and accelerated proptech companies and emerging technologies are those providing solutions to the problems raised by Covid-19.

For example, property management and construction technology companies are two sectors that have received robust funding this year, as owners navigate the challenges of managing property (often remotely) and meeting the need for new housing because of the overall housing shortage, particularly in single-family homes. Property management and leasing tools look to continue to be strong given many first-time home buyers are finding renting easier than buying in today’s competitive market.

Many businesses are also looking past the pandemic to a period of anticipated increased demand for travel and hospitality. Proptech companies addressing this desire for tourism and exploring the great outdoors are receiving attention and funding, particularly off of the backs of a successful initial public offering of Airbnb in December 2020. Proptech hospitality platforms coming out of the pandemic seeking to address the changing tastes of the luxury traveler will certainly be the ones to watch.

Michael Clain: Proptech has been defined as the application of information technology and platform economics to real estate markets.

Airbnb, an early example, disrupted the hotel industry in ways we’re all aware of. The pandemic has accelerated the trend by requiring companies to find new ways to handle interactions that used to be handled personally.

Proptech startups have stepped in to offer online marketing, virtual tours and self-guided visits, crowdfunding, and investments guided by proprietary algorithms driven by big data.

Unfortunately, most middle market businesses focus on the next sale and not on industry trends. We think that over the next decade real estate brokerage, property management and real estate investment will experience disruptions similar to those that impacted the hotel and transportation sectors in the last decade.

Crain’s: How do startups continue to shape the middlemarket landscape? What do investors and private-equity firms need to consider?

Ling Kong: Because of the record amount of venture capital invested into startups over the last year, middle market participants need to consider and anticipate the many ways technology will innovate and disrupt existing businesses and how to adapt and evolve—whether that is through innovating in-house or through outside strategic investments and M&A. Every industry will be affected, but I suspect that those startups and emerging growth companies that have received the most venture capital funding over the pandemic will be strongest: health and wellness, life sciences and biotech, cybersecurity, fintech and biotech.

The good news is many of those businesses and industries call the city home.

Investors and PE firms need to consider there are many more sources of capital now competing to invest in promising startups and emerging growth companies. The timelines may be accelerated and the round sizes larger at each stage than in years’ past as more potential investors enter the space–ranging from traditional venture capital and angel groups with fresh capital, to newer hedge fund, private equity and family office players that have not historically been focused on making venture investments.

ABOUT THE PANELISTS LING W. KONG is a corporate lawyer who represents clients in a range of corporate transactions and financings, including venture capital investments, mergers, stock and asset purchases and sales, joint ventures, restructuring and recapitalizations.

He represents public and private companies, private equity and venture capital funds, family offices, entrepreneurs and founders, and other clients involved in numerous industries, including technology, consumer products, chemicals, energy, entertainment, fashion, medical devices, packaging and sporting equipment.

JOHN J. GIARDINO is the Managing Partner of Michelman & Robinson, LLP’s office in New York City. A sought after trial lawyer and transactional attorney, John represents middle market clients across industries and is one of the select few legal professionals chosen to serve on the American Board of Trial Advocates (ABOTA) COVID-19 Task Force, created to address pandemic-related issues impacting the legal profession, the judicial system, and the public. He can be contacted at 212-730-7700 or jgiardino@mrllp.com.

MICHAEL J. CLAIN is a partner with the law firm of Windels Marx Lane & Mittendorf, LLP. His practice focuses on the structuring, negotiation and documentation of a variety of credit products, including syndicated corporate loans, assetbased loans, warehousing facilities, subscription loans, lender finance, trade and supply-chain finance, and the workout of troubled assets. His clients include money-center and regional banks, foreign banks, investment funds, finance companies and state sponsored financial institutions. He also leads the firm’s Renewable Energy & Sustainability Practice Group.

them unusable, allowing attackers to demand ransom in exchange for decryption. Hacking is a major concern for large companies that have troves of consumer information, but ransomware is of concern to every company, irrespective of size or industry. Ransom malware is now being offered on the

internet as a service, and more than 4,000 ransomware attacks take place daily in the US. Small and midsized businesses can’t afford custom solutions, so they’re increasingly moving their operations to the cloud, relying on Amazon,

Microsoft and Alphabet to protect their data, and subscribing to clouddelivered services for communications and endpoint protection – essentially outsourcing cybersecurity to big companies in that business. It is all about staying ahead of the trends that affect middle market companies.

Those investing capital need to better explain the value they will bring to the startup, beyond simply the dollars and introductions, such as helping with other functions such as talent management and employee recruiting, marketing and public relations, business development and execution.

They will need to consider that the founders are a lot savvier and can, at the moment, afford to be choosier.

Crain’s: How have middlemarket businesses reacted to the recent increase in hacking and ransomware incidents?

Michael Clain: While hacking is designed to gain access to confidential information, ransomware attacks are designed to encrypt files and render

“THOSE INVESTING CAPITAL NEED TO BETTER EXPLAIN THE VALUE THEY WILL BRING TO THE STARTUP, BEYOND SIMPLY THE DOLLARS AND INTRODUCTIONS.” — LING KONG, GOULSTON & STORRS

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BUSINESS FORUM

Crain’s Life Sciences forum tackles challenges and triumphs of growing sector

BY JANON FISHER

N

ew Yorkers hate to think of their city as second to anywhere, but when it comes to the life sciences sector, the Big Apple has ranked in the back of the pack, behind the Bay Area, the Research Triangle in North Carolina and (shudder) Boston.

“New York City has the second-largest academic biotech medical infrastructure and funding

“WE NEED A PIPELINE OF ENTREPRENEURS AND ENTERPRISES” in the United States, behind only Boston,” said Dr. Richard Lifton, president of Rockefeller University.

“And yet we do not have a commensurate sized biotech community.”

But that is changing quickly.

Over the summer, Mayor Bill de Blasio promised a half-billion dollar investment in lab space devel-

opment and life sciences research.

That’s in addition to the $500 million that he promised for his LifeSci NYC, which was geared toward creating 16,000 jobs in the sciences.

Though the five boroughs are catching up quickly, there are still challenges.

Control group To discuss the opportunities and obstacles in the field, Crain’s New York Business will host a forum with Dr. Lifton, Alexandria Real Estate Equities CEO Joel Marcus, NYU’s BioLab’s director Dr. Glennis Matthews Mehra and Queens Chamber of Commerce President Tom Grech on Sept.

14. The conversation will touch on the future of the life sciences industry in the city, research, entrepreneurship, real estate and development.

It’s not that New York City lacks expertise in the field. Rockefeller, which has its roots in public health research going back to the early 1900s, is one of the premier bio-

medical institutes in the country and boasts five Nobel laureates on its faculty.

Nevertheless, finding an affordable space to grow a biotech company has sent many startups packing to New England or the Bay area. “[In the past] the most common route was, if something really promising happened for development of a startup, out of a lab in New York, they would go to Boston or San Francisco to start up just because it was thought that the city doesn't have space that's affordable,” Lifton said.

It hasn’t just been affordability that’s reined in the city’s biotech field, availability has also been an issue.

The 1.9 million square feet of lab space in New York has about a 2% vacancy rate.

The Alexandria Center, a 21-story, 730,000 square foot double office tower, built by Marcus’s development company is planning another office tower to add to its Kips Bay campus.

Other developments, such as the New York Blood Center, which planned on building a 16-story life

GRECH

LIFTON

MARCUS

MEHRA

CRAIN’S NEW YORK BUSINESS FORUM To purchase tickets to the Sept. 14 forum Life Sciences: Opportunities and Challenges go to CrainsNewYork.com/SeptBizForum

sciences center on it’s current East 67th Street site, may have to find another location after strong community opposition.

The other hurdle, common to any developing sector, is money, but NYU’s Biolabs has made it their business to pair investors with entrepreneurs.

Lab space “I think it's vital to create a pipeline of companies in the New York ecosystem,” Mehra said. “If we as-

pire to rival Boston, Bay Area etc, then we need a robust pipeline of entrepreneurs and enterprises that could create future and large companies here.”

Though Manhattan’s East Side from 23rd Street into Harlem has become a corridor for life sciences in the city, expansion is limited.

Queens, however, provides much more space for growth. Grech will discuss opportunities to build a life sciences cluster in the outer borough. ■

Last few spots remaining to

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WORKFORCE

BY CARA EISENPRESS

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illions of dollars will drop out of the city’s economy beginning in September, as hundreds of thousands of city residents lose their federal unemployment benefits.

For the past 17 months, residents received an average of $3 billion each month in unemployment benefits, according to research from New School economist James Parrott.

Currently, unemployed New Yorkers receive a total of $500 million a week or about $2 billion a month.

“It will be economically painful for multitudes and is certain to crimp consumer spending.”

Daunting prospect An estimated 750,000 to 800,000 city residents will lose benefits. That is 10% of the 7.5 million workers nationwide in the same boat, according to an estimate by the Century Foundation.

This includes self-employed independent contractors who are ineligible for state unemployment insurance, out-of-work employees who had been receiving the weekly federal pandemic unemployment compensation supplement, which was $600 a week until August 2020 and then $300 since, and an extended unemployment compensation program that provided benefits to workers who had exhausted the state’s program, which lasts for 26 weeks. Although the maximum amount is $604 per week, the average is just $290.

President Joe Biden said last week that states could redirect American Rescue Plan funds to unemployment benefits, but no state officials contacted by Crain’s had responded to an inquiry about whether this was under consideration. ■

“IT WILL BE ECONOMICALLY PAINFUL FOR MULTITUDES...

AND CRIMP SPENDING” That will drop to $156 million per month on Sept. 5, when benefits end.

Parrott, director of economic and fiscal policies for the Center for New York City Affairs at the school, said the loss not only threatens individual households where workers are still unemployed but also the city’s economy. In July the city’s recovery stalled.

“The prospect is pretty daunting,” he said.

GOVERNORKATHYHOCHUL/FLICKR

Billions in benefits expire in September for city’s unemployed Benjamin tapped to be Lt. Governor GOV. KATHY HOCHUL selected State Senator Brian Benjamin as her Lieutenant Governor last week, a choice that brings diversity and New York City insight into her administration.

The 44-year-old Benjamin has represented Harlem, Washington Heights and parts of the Upper West Side since 2017. He ran unsuccessfully for the City Comptroller seat during the 2021 primary, losing to City Councilman Brad Lander.

As Chairman of the Committee on Revenue and Budget in the Senate, Benjamin is an expert on fiscal policy who will provide Hochul with perspective on matters pertaining to New York City government and politics.

Before entering government, Benjamin worked in the private sector, running a real estate development firm specializing in affordable housing with a classmate from Harvard Business School, where he earned an MBA. During this time, Benjamin also chaired Community Board 10 in Harlem.

He earned his political chops by fundraising for President Barack Obama during his 2008 and 2012 presidential campaigns. Benjamin even appeared as a delegate for Obama at the 2012 Democratic National Convention.

After winning his Senate seat in 2017 during a special election, Benjamin made a name for himself through criminal justice reform and fiscal policy. He advocated for the closing of Rikers Island jail, introducing bills to close the prison and divert investments of the state’s public pension system from private, for-profit prisons. During his campaign for comptroller he advocated for the city’s pension system to follow opportunities to invest in green energy technology. —Brian Pascus

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FROM PAGE 1

after reworking its deal with the city. New and potentially much taller Links should begin appearing early next year, sporting equipment designed to blast out the next-generation 5G cellular network, the rollout of which business leaders have identified as crucial to New York's post-pandemic recovery.

But this is not the first time CityBridge has made promises to fix the program, and the plan is not without risk. It relies on a technology not yet adopted on a wide scale anywhere in the U.S. and will need to win approvals for a design that could bring the Link to three times its height (more akin to streetlamps)

“WE EXPECT TO MAKE A LOT OF MONEY FROM THIS” from a local review commission that has a history of being dubious of cellular equipment.

Crying poor The conflict between the city and CityBridge came to a head at a City Council budget hearing in March 2020, days before the pandemic took hold of the city.

The city's chief technology officer, Jessica Tisch, testified that CityBridge owed the city $75 million in revenue-sharing payments dating back to 2018 and had not built new Link kiosks for almost two years.

"What I understand is they’re crying poor," said Tisch, who was appointed commissioner of the Department of Information Technology and Telecommunications in 2019. "Our patience is up.”

By then, it had been six years since the city awarded the contract to CityBridge, which is operated by a digital advertising startup called Intersection, which counts Sidewalk Labs (an offshoot of Google parent company Alphabet) as an investor. Sidewalk Labs CEO Dan Doctoroff, who spent six years in the Bloomberg administration, described the project as a pioneer for urban technology.

“We expect to make a lot of money from this, but at the same time, we want to solve big problems,”

Doctoroff said in 2016 at an event hosted by The Information. “In this case the big problem is digital inequality. In New York City, there are three million people who do not have access to broadband.”

Doctoroff declined to comment for this article.

There were plenty of early controversies: Privacy advocates questioned how much information the kiosks were collecting on New Yorkers, and a web-browsing feature was shut down after local businesses complained of residents viewing porn.

But by the time of the hearing last year, the biggest problems came down to money and access.

In the Bronx, where 38% of households lack a broadband connection, there are only 137 active Links, according to an audit released by state Comptroller Thomas DiNapoli in July. In Manhattan there are nearly 1,200.

More than 70% of ZIP codes in Queens and Staten Island do not have a single LinkNYC kiosk, according to DiNapoli’s report, compared with just 26% of the ZIP codes in Manhattan.

With the Links funded by ad revenue, CityBridge appeared to focus on areas with the most foot traffic and ability to deliver eyeballs to its ads.

On top of failing to construct the number of kiosks it promised, CityBridge had only paid $2.6 million toward $32 million in the minimum ad revenue-sharing payments it owed the city in 2019 and had offered zero toward the $44 million owed for 2020.

Tisch threatened to hold CityBridge in default of its contract, potentially removing the company entirely. CityBridge, meanwhile, said in its own statement that its work to resolve problems with the program had been met with "silence and delay" from the city.

The consortium was facing increased competition for the digital out-of-home advertising market and was beset by logistical headaches in trying to find sites for the Links, in part because of the city’s strict rules. It had been trying to get the city to rework the deal.

"Many aspects of the LinkNYC program were unprecedented when the original franchise was written in 2014—from its massive scale to the speed of its free public

USE OF LINKNYC PUBLIC WI-FI SUPPRESSED BY PANDEMIC Weekly number of LinkNYC sessions Number of sessions

25M

Wi-Fi to its complexity," Nick Colvin, CEO of CityBridge, said in a statement to Crain’s.

Reboot The city was close to kicking CityBridge out and starting over, but the pandemic changed the equation for the city, Tisch said in an interview.

Rather than let LinkNYC's kiosks go dark at a time when the city had enough problems to deal with, the two sides began reworking the deal.

ZenFi Networks, a telecom equipment provider, was prepared to invest $200 million to restart LinkNYC construction efforts, with the intent to install 5G equipment on the kiosks it could lease to Verizon and AT&T. But first CityBridge needed to be let out of revenue-sharing agreements that were built on assumptions called “wildly unrealistic” even by Tisch.

Under the new franchise agreement, CityBridge is required to share 5% of expected ad revenue— about $160 million over the life of the 15-year deal, compared with $750 million in the first agreement.

In exchange, the company must build at least 2,000 kiosks outside Lower Manhattan and Midtown in

15M 7,644,607

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JAN 2020

AUG 2020

JAN 2021

AUG 2021

SOURCE: New York City Department of Information Technology and Telecommunications

cluding on LinkNYC kiosks.

"A huge issue for the industry is the lack of infrastructure for smallcell deployments," said Sundeep Rangan, associate director of the NYU Wireless research center. "Improving access to this infrastructure is probably the biggest thing a city can do to get better wireless service."

Covid-19 has brought extra scrutiny to the digital divide, with the

NUMBER OF LINKNYC LOCATIONS PER BOROUGH Manhattan 1176 Queens 265 Brooklyn 257 Bronx 137 Staten Island 34

SOURCE: New York City Department of Information

Technology and Telecommunications

the next three years—and pay back what it owes.

“This deal allows the LinkNYC program to continue to serve New Yorkers while prioritizing buildout in underserved areas, helping us close the digital divide,” said Laura Feyer, a spokeswoman for the mayor.

The agreement was approved by the city’s franchise review committee in June, after which CityBridge paid $27 million to the city.

The $275B plan 20M

MAYOR BILL DE BLASIO dials 311 on a LinkNYC kiosk in 2016.

Much of the talk around 5G is still hype, but what is known about the network is that it will require a lot more cellular equipment than the current 4G. The speediest part of 5G uses a radio spectrum known as millimeter wave, which carries data at higher speeds but for shorter distances than the 4G network.

The cellular industry will spend at least $275 billion building the 5G network in the next five years, according to estimates from industry group CTIA. That includes the small-cell base stations that companies such as ZenFi build to host signals along urban streets—in-

shift to almost full virtual living exposing how more than 1.5 million New Yorkers still lack home broadband.

ZenFi CEO Ray LaChance said LinkNYC's expansion could help not just by providing Wi-Fi and 5G on the kiosks, but by laying new fiber in the ground to serve areas outside Manhattan. That wiring could be used by independent providers to offer internet options in areas where service is currently limited.

"The more fiber, the more opportunities for competitive broadband offerings within a given neighborhood," LaChance said.

‘Big mistake’ CityBridge and ZenFi hope to have new kiosks installed starting early next year—meaning the next mayor will have to oversee the effort.

Before then, the LinkNYC effort has at least one administrative hurdle to clear. The new cellular equipment on the LinkNYC kiosks may need to rise up to 32 feet, towering above the current 10-foot-tall kiosks. It needs to reach the same

NYC MAYOR’S OFFICE

REBOOT

height as light posts.

It is not clear what that will look like yet, although Tisch said the advertising screen would not change in size. The new look will require approval from the city’s Public Design Commission, which last year barred 5G equipment from being applied to certain street pole types, citing their historical design significance.

This is the second time the LinkNYC contract has been revised.

CityBridge was given more time to deploy kiosks through a 2018 revision—which it still missed. The City Council initially held hearings in 2016 and 2018, when problems with the build-out of kiosks cropped up, but CityBridge’s money problems appeared to catch councilmembers by surprise at the 2020 hearing.

“I understand if there is skepticism out there—I expect there will be,” Tisch told Crain’s, when the amended contract was first revealed. “But in my mind, these elements are all coming together in a realistic way.”

The City Council will watch the effort closely and hopes to have a say in where future Link kiosks land, said Councilman Robert Holden, chair of the Committee on Technology.

"They were dealing with a new frontier in tech at the time, and this was a big mistake, these initial projections, but I think the city is making the best of the situation," said Holden, who represents parts of central Queens.

Eye on the ball Michael Samuelian, director of the Urban Tech Hub at Cornell Tech and a former city planner, said the agreement is rightly focused on distributing the tech, rather than capturing maximum revenue.

“But oversight will be the key," Samuelian said. "Whenever there is this private provision of a public asset, you have to keep your eye on the ball.”

Greta Byrum, co-director of the Digital Equity Laboratory at the New School, defended the project’s mission of closing long-existing gaps in internet access.

“The de Blasio administration was trying to address generations of underinvestment from telecom providers who held the franchises forever in New York City,” Byrum said. “This was an ambitious project to address those shortcomings—which itself had some shortcomings that we can learn from.” ■

18 | CRAIN’S NEW YORK BUSINESS | AUGUST 30, 2021

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HOCHUL FROM PAGE 1

her successful 2011 congressional campaign and worked in her congressional office as legislative correspondent.

MELISSA BOCHENSKI As Hochul’s deputy chief of staff, Bochenski has been seen at Hochul’s side throughout her many public appearances. Bochenski, a Buffalo native like Hochul, began working for the governor during her brief tenure in Washington, when she served as then-Rep. Hochul’s office manager and executive assistant for 18 months.

JOAN A. KESNER Kesner, a fellow resident of Hamburg, New York—the Buffalo suburb Hochul calls home—is considered one of the new governor’s closest friends and is the person who recruited her into politics in the 1990s. Kesner managed Hochul’s first campaign for Hamburg Town Board. She also worked for Hochul in the county clerk’s office in Eerie County and served on both her congressional transition team and as her office’s district manager.

Kesner is expected to be named the director of the governor’s office in Buffalo.

JEFFREY PEARLMAN Pearlman was Hochul’s former chief of staff and counsel during her

early years as lieutenant governor.

For the past five years, he directed the New York State Authorities Budget Office, an independent state entity that provides oversight to New York’s public-benefit corporations. Pearlman is a political operative with deep ties to Albany, where he was assistant counsel to former Gov. David A. Paterson. He spent six years as assistant general counsel to the Senate.

It is not clear what role he will have in the new administration.

MARISSA SHORENSTEIN Shorenstein, a former press officer for Gov. Paterson and Gov. Andrew Cuomo, has directed corporate communications for the New York Jets and served as president of AT&T’s New York office. Today she is director of the executive transition team and is helping Hochul pick her administration.

KAREN PERSICHILLI KEOGH Keogh, among the first appointments Hochul made as she took office, is the new secretary to the governor, the highest unelected position in the state. She’s a former Hillary Clinton senior staff member who served for seven years as Clinton’s New York state director and 2006 Senate campaign manager.

Keogh also advised Sen. Kirsten Gillibrand and former Mayor Michael Bloomberg. For the past decade, Keogh worked at JP Morgan Chase, managing the firm’s $2 billion global philanthropy fund.

“She did a lot of great work on my staff,” said Sal Albanese, a former city councilman who hired Keogh during his unsuccessful 1992 congressional campaign and later brought her on as his chief of staff.

ELIZABETH FINE Fine is another early Hochul appointment. She is the new counsel to the governor. Fine leaves behind her position as executive vice president and general counsel at Empire State Development Corp., the state’s public-private jobs and urban development organization.

Fine has a history in city politics, having served as general counsel to the City Council from 2006 to 2014.

Before that she worked for seven years in the Justice Department and served as special counsel to President Bill Clinton’s White House.

WILLIAM J. HOCHUL No one will be closer to Hochul than her husband, William J. Hochul, a former U.S. attorney for the Western District of New York.

“When it comes to any issues involving the criminal-justice system, I suspect that her husband might be her best counselor,” former Rep. John J. LaFalce said.

The first gentleman’s current role as Delaware North’s general counsel and senior vice president drew scrutiny following his wife’s ascension to the governor’s chair. Delaware North is a Buffalo-based casino and hospitality conglomerate that relies on contracts and licenses

W. HOCHUL

MALONEY

SHORENSTEIN

from multiple state agencies. Delaware North said Hochul would recuse himself from any business involving the state.

HOWARD ZEMSKY Zemsky, a Buffalo businessman and former head of Empire State Development, is valued by both Hochul and Cuomo. “She’s very close with Howard and his wife, Leslie,” said LaFalce. “They too helped raise money for her [2011 congressional race]. Both Howard and Leslie flew to Washington for her swearing-in.”

Zemsky takes a less political view of his relationship with the governor. “We are first and foremost friends,” Zemsky said, adding political strategy is not his forte.

Zemsky was the Cuomo administration’s point person for economic affairs in Western New York.

Zemsky, who is retired from government, is the managing partner of a Buffalo real estate developer.

ABBY ERWIN Erwin is considered Hochul’s top fundraiser. Ervin is a senior adviser of Friends for Kathy Hochul, the

ZEMSKY

governor’s political action committee. Erwin also serves as Hochul’s campaign representative and will head her reelection effort in 2022.

Erwin led fundraising efforts for elected officials and candidates in the Chicago and D.C. areas before joining Hochul in 2018.

REP. CAROLYN MALONEY Hochul will have a close ally in Washington in Maloney, a 14-term Manhattan congresswoman who let Hochul stay in her D.C. townhouse for a few months when she began her congressional term in 2011. Maloney represents the East Side of Manhattan, Long Island City in Queens, Roosevelt Island, and Greenpoint, Brooklyn. She is a senior Democrat in the House.

Although Hochul’s relationships extend to Washington, LaFalce said he sees a common thread.

“She’s going to try to find people who are bright, seasoned and can hit the ground running,” LaFalce said. “But I also think she’ll want people who have some of the personality traits that she has: that is, an openness to the perspectives of others.” ■

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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 Coastal Returns, LLC. Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/09/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: Coastal Returns, LLC, c/o BFFA 1430 Broadway, Ste. 1208, NY, NY 10018. Purpose: any lawful activities.

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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.

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.

PUBLIC SALE NOTICE UCC PUBLIC SALE NOTICE

PLEASE TAKE NOTICE THAT RICP II 241 BEDFORD, LLC, a Delaware limited liability company (together with its successors and assigns, “Secured Party”), will offer for sale at public auction (the “Sale”) on October 27, 2021 at 2:00 P.M. (New York Time), in WKH RIÀFHV RI 'HFKHUW //3 ORFDWHG DW $YHQXH RI WKH $PHULFDV 1HZ <RUN 1HZ <RUN (subject to the COVID-19 pandemic and applicable law (including any Executive Orders of the Governor of the State of New York) relating thereto), and also broadcast for remote participation via virtual audio/ video teleconference, one hundred percent (100%) of the issued and outstanding limited liability company interests (collectively, the “Membership Interests”) in each of 241 Bedford Investors, LLC, a Delaware limited liability company, and Redbridge Bedford Holdings LLC, a Delaware limited liability company (collectively, the “Pledged Entities”), together with certain rights and property representing, relating to, or arising from the Membership Interests (collectively with the Membership Interests, the “Collateral”).

Based upon information provided by 241 Bedford Partners, LLC, a Delaware limited liability company, and Redbridge Bedford Partners LLC, a Delaware limited liability company (collectively, “Debtor”), the Pledged Entities DQG FHUWDLQ RWKHU SHUVRQV DQG HQWLWLHV DIÀOLDWHG WKHUHZLWK LW LV WKH XQGHUVWDQGLQJ RI 6HFXUHG 3DUW\ EXW ZLWKRXW any representation or warranty of any kind by Secured Party as to the accuracy or completeness) that: (i) Debtor owns one hundred percent (100%) of the Membership Interests in the Pledged Entities; (ii) the Pledged Entities (a) own one hundred percent (100%) of the limited liability company interests (the “Mezzanine A Collateral”) in 241 Bedford Associates, LLC, a Delaware limited liability company, and Redbridge Bedford LLC, a Delaware limited liability company (collectively, the “Property Owners”) and (b) have pledged, among other things, the Mezzanine A Collateral as collateral for a senior mezzanine loan made to the Pledged Entities (the “Mezzanine A Loan”); (iii) the Property Owners own (and Debtor indirectly owns) certain condominium units in the real property known as 241 Bedford Condominium and by the street numbers 156 to 170 North 4th Street, 155 to 175 North 3rd Street, 239 to 243 Bedford Avenue and 237 Bedford Avenue, Borough of Brooklyn, County of Kings, City and State of New York (collectively, the “Property”) and (iv) the Property is subject to a mortgage loan (the “Mortgage Loan”) made to the Property Owners.

Debtor has granted to Secured Party a security interest in the Collateral as collateral for a junior mezzanine loan made by Secured Party to Debtor (the “Mezzanine B Loan”). The Mezzanine B Loan is subordinated to the Mezzanine A Loan and the Mortgage Loan.

The Collateral will be sold as a single lot, and will not be divided or sold in lesser amounts, on an “as is, where is” basis, with all faults, and without representations or warranties of any kind or nature whatsoever, including, without limitation, any representation or warranty relating to title, possession, quiet enjoyment, or the like, and without any recourse whatsoever to Secured Party or any other person acting for or on behalf of Secured Party. Secured Party reserves the right to restrict prospective bidders to those who will represent that they (i) are purchasing the Membership Interests for their own accounts for investment and not with a view to the distribution or resale of such Membership Interests; (ii) are an accredited investor within the meaning of the applicable securities laws; (iii) have VXIÀFLHQW NQRZOHGJH DQG H[SHULHQFH LQ ÀQDQFLDO DQG EXVLQHVV PDWWHUV VR DV WR EH FDSDEOH RI HYDOXDWLQJ WKH PHULWV DQG ULVNV RI LQYHVWPHQW DQG KDYH VXIÀFLHQW ÀQDQFLDO PHDQV WR DIIRUG WKH ULVN RI LQYHVWPHQW LQ WKH &ROODWHUDO LY

will not resell or otherwise hypothecate the Collateral without a valid registration under applicable federal or state laws, including, without limitation, the Securities Act of 1933, as amended (the “Securities Act”), or an available H[HPSWLRQ WKHUHIURP SURYLGHG WKDW WKH 6HFXUHG 3DUW\ UHVHUYHV WKH ULJKW WR YHULI\ WKDW HDFK FHUWLÀFDWH IRU WKH OLPLWHG liability company interests to be sold bears a legend substantially to the effect that such interests have not been registered under the Securities Act and to impose such other limitations or conditions in connection with the sale of the Collateral as the Secured Party deems necessary or advisable in order to comply with the Securities Act or any other applicable law; (v) will purchase the Collateral in compliance with all applicable federal and state laws; (vi) DUH RU ZLOO EH DW WKH WLPH RI FORVLQJ RI WKH VDOH D 4XDOLÀHG 7UDQVIHUHH DV GHÀQHG LQ WKH ,QWHUFUHGLWRU $JUHHPHQW

and (vii) will be able to satisfy and will satisfy all of the other requirements of the Intercreditor Agreement. The FRVW H[SHQVH DQG ULVN RI VDWLVI\LQJ DQ\ RI WKH IRUHJRLQJ UHTXLUHPHQWV VKDOO EH VROHO\ WKH UHVSRQVLELOLW\ RI WKH SURVSHFWLYH ELGGHU PLEASE TAKE NOTICE WKDW WKHUH DUH VSHFLÀF UHTXLUHPHQWV IRU DQ\ SRWHQWLDO ELGGHU LQ FRQQHFWLRQ ZLWK obtaining information, bidding on the Collateral and purchasing the Collateral (the “Requirements”), including (i) complying with the restrictions applicable to the sale of the Membership Interests set forth in that certain Intercreditor Agreement, dated as of May 25, 2018 (the “ICA”), including without limitation, that such bidder is a ´4XDOLÀHG 7UDQVIHUHHµ DV GHÀQHG LQ WKH ,&$ DQG WKH ZLQQLQJ ELGGHU PXVW GHOLYHU DOO GRFXPHQWV DQG SD\ VXFK amounts required by the ICA (including, but not limited to, providing replacement guarantees and indemnities E\ D 6XSSOHPHQWDO 7KLUG 3DUW\ 2EOLJRU DV GHÀQHG LQ WKH ,&$

LL FRPSO\LQJ ZLWK HDFK 3OHGJHG (QWLW\·V JRYHUQLQJ documents, the Mezzanine A Loan documents and the Mortgage Loan documents, and (iii) complying with all other DSSOLFDEOH TXDOLÀFDWLRQV DQG UHTXLUHPHQWV LQFOXGLQJ EXW QRW OLPLWHG WR VXFK TXDOLÀFDWLRQV DQG UHTXLUHPHQWV VHW forth in the Terms of Public Sale relating to the sale of Collateral) (collectively, the “Terms of Sale”).

Secured Party reserves the right to credit bid, reject all bids and terminate or adjourn the Sale to such other date and time as Secured Party may deem proper. All bids (other than credit bids of Secured Party) must be for cash and the successful bidder (other than Secured Party) must be prepared to deliver immediately available federal funds L IRU WKH 5HTXLUHG 'HSRVLW DV GHÀQHG LQ WKH 7HUPV RI 6DOH ZLWKLQ WZHQW\ IRXU KRXUV DIWHU WKH FRQFOXVLRQ RI the Sale and (ii) for the balance of the purchase price of the Collateral on the closing date prescribed by the Terms of Sale and otherwise comply with the Requirements. The winning bidder must pay all transfer taxes, stamp duties and similar taxes incurred in connection with the purchase of the Collateral.

Further information concerning the Collateral, the Sale, the requirements for obtaining information and bidding on the interests and the Terms of Sale can be found at http://www.241bedforduccsale.com, or by contacting Brett Rosenberg of JLL Capital Markets by telephone at (212) 812-5926 or by email at brett.rosenberg@am.jll.com.

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 Qualification of JOY, LOVE & PEACE LLC. Authority filed with Secy. of State of NY (SSNY) on 08/04/21. Office location: NY County. LLC formed in Florida (FL) on 09/02/03. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: 3595 Anchorage Way, Coconut Grove, FL 33133, Attn: Dania Da La Vega, also the address to be maintained in FL. Arts of Org. filed with the Secy. of State, R.A. Gray Bldg., 500 South Bronough St., Tallahassee, FL 32399. Purpose: any lawful activities.

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 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 Limited Liability Company. Name: Breaking Ground VI LLC (“LLC”). Articles of Organization filed with the Secretary of State of the State of New York (“SSNY”) on June 16, 2021. NY office location: New York County. The SSNY has been designated as agent of the LLC upon whom process against it may be served. The SSNY shall mail a copy of any process to The LLC, c/ o Common Ground Management Corporation, 505 Fifth Avenue, Fifth Floor, New York, New York 10018. P urpose/character of LLC is to engage in any lawful act or activity.

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.

Notice is hereby given that a license number 1337774 for a beer and wine license has been applied for by LITTLE GUILTY PLEASURES LLC., D/B/A CRISPY HEAVEN to sell beer and wine at retail in a Tavern under the Alcoholic Beverage Control law at 38 GRAND STREET, NEW YORK, NY 10013 for on premises consumption.

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.

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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 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.

Notice of Formation of ABNER GP LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/16/21.

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.

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.

S H A R E

Y O U R

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.

C O M P A N Y ’ S

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.

J O U R N E Y

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UMBRELLA FROM PAGE 3

and Baruch College.

“The rent has gone up and so has the stature of the building,” said John Moran, Orda’s vice president of operations.

It’s sweet vindication for Urban Umbrella. Even with $18 million in venture funding, it struggled to break into the scaffolding business, which generates an estimated $1.5 billion in annual revenue for the city’s hard hats.

“I’m amazed. I thought Urban Umbrella was a dead dog,” said Ken Buettner, CEO of York Scaffold Equipment Corp. in Long Island City. “It’s driving the industry to clean itself up and come up with

thetically appealing sheds.

Universal Builders Supply, a 90-year-old firm whose scaffolding has enveloped Grand Central Terminal and St. Patrick’s Cathedral, has developed the CanopY, a shed that stands in front of the American Institute of Architects’ office near Washington Square Park. With its white columns, colorful LED lighting and a ceiling that lets the sunshine in, the CanopY is undeniably handsome. It also looks a lot like an Urban Umbrella.

“No, it’s different,” UBS President Chris Evans insisted, pointing out that the CanopY on LaGuardia Place is wider than a nearby Urban Umbrella built over a narrower sidewalk. “A jogger would sail through this. Imagine a jogger going through the Urban Umbrella.”

Urban Umbrella accuses UBS of stealing its proprietary ideas, and in June it threatened to sue unless the firm ceased its “potential misappropriation.” Krall said he is “actively pursuing” legal action, although he has not filed suit.

Asked about the legal jostling, Evans replied in a written statement, “We believe there is room for a variety of innovative solutions to enhance the streetscapes in New York and beyond.”

Opportunity knocks because shed construction is arguably the

“I’M AMAZED. I THOUGHT URBAN UMBRELLA WAS A DEAD DOG” something better, and for the public, that’s a good thing.”

“We’ve shown there is a market for what we do,” Urban Umbrella CEO Benjamin Krall said, adding that 100 of his posh sheds stand in the city.

That’s a sliver of the total, but it’s enough to have caught the attention of rival builders, who now are busily working on their own aes-

best business in New York real estate. It is certainly the steadiest.

Data from the city shows that slightly more sheds cover sidewalks than five years ago. Moran, the Park Avenue building manager, said shed specialists have the best business model he’s ever seen.

“You rent out a bunch of pipes and planks, take them back when the project is done and then rent them again. All you need is a yard big enough to store the stuff,” he marveled. “I should have gotten into sheds.”

Tragic origins The never-ending good fortune is thanks to Local Law 11, adopted in 1980 after a piece of masonry broke off an Upper West Side building and killed a college student. The law requires owners of buildings higher than 6 stories to inspect their properties’ facades every five years. When repairs are necessary, a sidewalk shed must be installed for the duration of the project. Over time the law has been broadened, usually in reaction to accidents.

A handful of big players, such as UBS and York, do most of the major shed jobs, and scores of smaller nonunion firms fight over the rest.

Erecting a 200-foot-long standard shed costs between $25,000 and $45,000, industry insiders said, two-thirds of which is paid upfront and the rest when the shed is taken down. In between, the rent ranges from $1,300 to $1,800 per month.

An Urban Umbrella of similar size costs $45,000 to install, and the rent is $5,000 per month.

The rent makes sheds lucrative for builders because the structures can stick around an awfully long time, especially when a landlord can’t afford repairs and no work is being done. One shed loitered outside the Department of Buildings office at 280 Broadway for 11 years, or until 2019. Another has stood almost constantly at the corner of West 115th Street and Lenox Avenue in Harlem since 1990.

“I mean, come on,” said Dianne Howard, a real estate broker who walks past it every day.

The de Blasio administration ordered the New York City Housing Authority to remove miles of dormant sheds years ago, but City Council bills that would force private landlords to do the same have hit a wall. City inspectors aren’t interested in exposing pedestrians to falling debris, especially after one was killed two years ago in a tragic replay of the accident that led to the creation of the industry.

Alexander Schmiedt, president of the Americas for Swiss watchmaker Vacheron Constantin, never encountered sidewalk sheds anywhere else in the world. When his company took the bold step in June of opening a flagship boutique on East 57th Street, the sea of sheds covering the block dismayed him.

“As we got close to moving in, the more insecurity we had,” Schmiedt

said, so the store rented an Urban Umbrella. “We had to make lemonade out of lemons.”

Brighter outlook The sea of sheds is so vast that city inspectors struggle to keep their heads above water. In July an audit by the New York state comptroller’s office criticized the Buildings Department for poor oversight and safety lapses.

“Sidewalk sheds are a fact of life in the city, but they don’t need to be the nuisance and the danger that they have become,” Comptroller Thomas DiNapoli grumbled.

The Buildings Department said it has strengthened enforcement.

When New Yorkers return to their offices, the rising popularity of the Urban Umbrella means some Midtown and downtown sidewalks will be less dark and cramped. The big question is, will aesthetically pleasing sheds spread from the city’s business corridors into neighborhoods?

Now that a competitive market for an alternative is finally forming, prices should fall enough that the good drives out the bad and the ugly, said Howard Zimmerman, an architect who specializes in building exteriors.

At least for now, however, prices remain stubbornly high.

“So much building work is going on,” Zimmerman said, “shed companies are running out of inventory.” ■

CRAIN’S NEW YORK BUSINESS 2021

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22 | CRAIN’S NEW YORK BUSINESS | AUGUST 30, 2021

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SMALL- BUSINESS SPOTLIGHT

BUCK ENNIS

PENNINGTON worked her way up from a skipper to general manager of Classic Harbor Lines.

FOCAL POINTS

City residents keep Hudson cruise line afloat

COMPANY NAME Classic Harbor Lines

New sales strategy, focus on social media influencers helps Classic Harbor navigate rough waters

FULL-TIME EMPLOYEES 68

BY CARA EISENPRESS

S

pending sunset on a wooden schooner sailing along the Hudson, gazing back at the city skyline, is a classic New York City experience with massive appeal for out-of-towners. But for Classic Harbor Lines, not pinning all its business hopes on tourists has proven to be a smart strategy.

“We always did well locally,” said general manager Sarah Pennington, adding that “10011 has always been our number one ZIP code.”

The local connection has paid off.

When the boats reopened to passengers last summer and then again this past spring, cloistered New Yorkers took advantage of participating in an outdoor adventure that felt both social and safe.

By the middle of this summer, revenue on its New York City boats was within 10% of what it was in 2019, according to the owner of Classic Harbor Lines, Albany-based Scarano Boat Builders.

The resurgence is due to the return of regular customers, who book frequently, and private parties, including anniversaries and weddings.

“We are small and outdoorsy, and the venue speaks well to small personal parties,” said Pennington.

In 1998 Scarano had a single offering: a two-hour sail in the Hudson. Pennington was an early skipper on that schooner, the Adirondack, and in 2002 she became manager to oversee the growth of the operation. By 2007 she had turned it into the public cruise and boating outfit now called Classic Harbor Lines. The number of offerings grew through

“WE ARE OUTDOORSY, AND THE VENUE SPEAKS WELL TO SMALL PERSONAL PARTIES” the 2010s, including a Cocoa and Carols ride, and additional vessels, such as a motorized yacht.

The boats themselves are new but meant to evoke the past. The schooner was crafted in the style of the 1890s, while the company’s yacht is supposed to look like it came from the 1920s, with teak decks and mahogany trim.

That Classic Harbor Lines has gotten its revenue back to normal even while capacity is down is because of a new tiered pricing structure.

Currently, tickets are sold in packages of four, encouraging visitors to come in groups who can sit together but then be separated

from others. For those who book just two or three tickets, there is a new premium, because that smaller group size reduces overall capacity. Pennington said most customers have been understanding about the new policy in such a tough business environment.

In the second quarter of 2019, the average ticket price for both private events and cruises was $86, and the boats carried 28,000 passengers total. For the second quarter of 2021, by contrast, the average ticket price was $112, but only 18,000 passengers took a ride. The recent demand, however, has meant that Pennington no longer offloads tickets at discount rates.

“I think I’ll be paying a lot more attention to price and pricing structure in the future,” she said.

Sailing ahead Alongside the change in pricing has been a shift in how the tickets are marketed, Pennington said.

She has canned all print advertisements and kept a little bit of social media outreach.

“We are all in on influencers,” she said.

After the social media stars head out on comped trips, they post content and resell tickets for a commission, a strategy that has been more successful in booking full-price tickets than the company’s marketing was prepandemic, Pennington said.

FOUNDED 1998 GENERAL MANAGER Sarah Pennington 2019 PASSENGER COUNT 97,000, at ticket prices from $34 to $124 MIX OF OFFERINGS The firm handles private yacht charters and ticketed cruises.

GROWTH STRATEGY By changing its pricing strategy to eliminate discounts, Classic Harbor Lines has been able to sell tickets to local customers eager to enjoy an outdoor activity and willing to pay full price—or even a premium if booking a smaller group.

WEBSITE sail-nyc.com

In addition to the comeback of corporate parties, Pennington also looks forward to the return of tourists, including international travelers. Though Classic Harbor Lines has survived without them, their lack is felt particularly on the architecture sightseeing tours, narrated cruises and any rides during daytime hours, when locals are less likely to book tickets or parties. She also looks forward to when groups can mingle again on board.

“Part of the charm was meeting everyone at communal tables,” she said. “Even now we have to do some kind of separation for every booking. That comfort level isn’t back.” ■ AUGUST 30, 2021 | CRAIN’S NEW YORK BUSINESS | 23

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