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

CHASING GIANTS Ear-piercing startup looks to poke out place in industry PAGE 3

CRAINSNEWYORK.COM

REAL ESTATE A prewar apartment on Fifth gives a sale another shot PAGE 4

MARCH 7, 2022

HOSPITALITY

Meetings, trade events, conventions spring to life Work-related visitors display appetite for the Big Apple Bill Carter, the chief executive officer of ALM, a media law firm, is putting the finishing touches on LegalWeek, an event for thousands of legal industry professionals that starts March 8. LegalWeek comes close on the heels of business-to-business fashion market show Coterie, which ended March 1 at the Javits Center. There, Emily Shalant said her eponymous fashion line

did well in picking up sales. Coterie, in turn, followed a mid-February gathering of 5,000 Salesforce employees who came for nearly a week, accumulating 26,000 hotel-room nights. New York was “the perfect backdrop for us to host our biggest in-person event since the pandemic started,” said Debbie Brewer, vice president for strategic events at the company. See EVENTS on page 22

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BY CARA EISENPRESS

SHALANT AT THE COTERIE SHOW on March 1 at the Javits Center

TECHNOLOGY

CO-OPS AIM TO SHAKE UP TECH

In fields ranging from ridesharing to cleaning to internet service, employees fed up with corporate ownership set out to deliver more for workers, customers

“WE THOUGHT, LET’S GET OUR COLLECTIVE EXPERIENCE TOGETHER. WE’VE ALREADY BUILT THIS SYSTEM ONCE. PEOPLE DON’T LIKE THE CABLE COMPANIES. LET’S OFFER SOMETHING DIFFERENT”

BY RYAN DEFFENBAUGH

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WALCOTT (right) and the People’s Choice Communications team hope to help close the large gaps in internet access between the city’s wealthy and low-income neighborhoods.

NEWSPAPER

VOL. 38, NO. 9

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orn and raised in Brooklyn, Troy Walcott spent 20 years as a union technician, building the network of underground wiring that serves cable and internet to millions of New Yorkers. These days he’s a startup founder. He is among a group of Spectrum technicians who, mired in what is now the longest-running labor strike in the U.S., last spring launched a cooperatively owned internet service provider called People’s Choice Communications. The group, currently about 30 technicians from Local 3 of the International Brotherhood of Electrical Workers, has been working to bring a new internet option to the Bronx, an area Walcott said has been long overlooked. “We thought, Let’s get our collective experience together. We’ve already built this system once,” Walcott said. “People don’t like the cable companies. Let’s offer something different.” See COOPERATIVES on page 17

CON EDISON

BUSINESS SPOTLIGHT

Soaring prices prompt attorney general inquiry

Vending machine firm makes a new kind of sale

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PAGE 23

3/4/22 4:24 PM

HOSPITALITY

Hochul endorses rollback of Prohibition-era alcohol regulations BY CARA EISENPRESS

BLOOMBERG

ov. Kathy Hochul has reiterated her push to make alcohol-to-go legal for bars and restaurants as she broadened a vision of regulatory reform for the state’s alcohol laws. The governor said Wednesday that she had asked the State Liquor Authority to review the whole set of laws surrounding alcohol sales and distribution. SLA Chairman Vincent Bradley is tasked with “going back 100 years, looking at our Prohibition laws,” Hochul said. Her particular emphasis on the alcohol-to-go law, a pandemic-era rule that the city’s hospitality industry and many consumers have embraced, comes as liquor stores have stood up against making the rule permanent since she included it in her proposed budget in late January. Gov. Andrew Cuomo let restaurants and bars deliver alcohol— both mixed drinks and full bottles of booze—in early 2020 as a way to increase delivery sales after he shut down dining rooms. Although restaurants and bars reported a falloff in booze sales once in-person dining began coming back, many operators said that being able to offer a pitcher of sangria with a delivery food order remained a solid source of revenue until ending in June 2021. “It’s necessary to reinstate the popular drinks-to-go policy that provides struggling businesses an

important revenue stream while giving New Yorkers what they want, which is wine and cocktails for takeout and delivery from their favorite restaurants and bars,” said Andrew Rigie, executive director of the NYC Hospitality Alliance. Although liquor store owners did not suffer from the temporary program, thanks to overall high booze sales during the pandemic, they bristle at the potential for a permanent rule to crown winners

and losers without a philosophical basis. For example, chain restaurants with on-premises liquor licenses might opt to stay open later to capitalize on alcohol delivery orders placed in the late-night hours after liquor stores are required to close, said Michael Correra, executive director of the Metropolitan Package Store Association, which represents wine and spirit stores. Other sectors of the industry, including beer distributors, distillers

and brewers, have ideas for modernizing too. For example, many local breweries and distilleries cannot sell their bottles directly to consumers, while wineries–and potentially restaurants–can. The muddle has not seemed to stop the governor, who appeared buoyed by the popularity of the proposal at a Wednesday morning conference at Therapy Wine Bar 2.0 in Bedford Stuyvesant. “Who would have thought this would be the most popular item in

my budget?” Hochul said. “The one thing that went viral was to-go drinks.” In addition to the to-go proposal, Hochul touted other reforms, including the issuing of temporary liquor licenses so businesses can start up faster and a proposed extra $2 million for the SLA to hire more application reviewers and create a faster online application process. The authority issued 101 temporary permits for city businesses in January and 116 in February. These permits let businesses sell alcohol with limited hours within about a month of applying, rather than having to wait from four to six months for a full license. They only apply, however, to spots that have had a license within two years and are not within 500 feet of three other establishments with current on-premises liquor licenses. Hochul said she had directed the SLA to start conversations with the industry to discuss potential reforms. Correra said he had not heard anything from the state before the announcement. A larger-scale approach to the Alcoholic Beverage Control Law, known as the ABC Law, could be a positive step for liquor stores, said Paul Zuber, executive vice president of the Business Council. “We should take this opportunity to expand the conversation about state liquor law reform and begin addressing the myriad of Prohibition era laws that create challenges for businesses and consumers statewide,” he said. ■

WOMEN

BY NATALIE SACHMECHI

CONFERENCE CALLOUT

APRIL 27 COMMERCIAL REAL ESTATE NETWORKING EVENT New York City Comptroller Brad Lander joins Ron Moelis of L+M Development Partners and Brenda Rosen of nonprofit developer Breaking Ground for a discussion on affordable housing policy and its implications for developers. The April 27 event will cover what’s next for New York’s 421-a program.

NEW YORK ATHLETIC CLUB Time: 5 to 7 p.m. 180 Central Park South, ninth floor CrainsNewYork.com/affordablehousing

ew things are better than a gathering of the most powerful and influential women in New York, especially when champagne is involved. Kim Godwin of ABC News, MaryAnne Gilmartin of MAG Partners, Kathy Wylde of the Partnership for New York City and event keynote speakers Katherine Farley of Lincoln Center for the Performing Arts and Melba Wilson of Melba’s restaurant were some of the heavy hitters in attendance at Crain’s New York Business’s 50 Most Powerful Women luncheon on Thursday afternoon. As Farley put it, “The best of the best is here.” “We’re going to have to call this the Most Beautiful People event,” added Wilson, who delivered an inspired speech describing her days working at a charm school and climbing her way to the top of the hospitality industry, becoming the first Black woman at the helm of the New York City Hospitality

Alliance. During a panel discussion with moderator and Crain’s New York Business managing editor Telisha Bryan, Godwin, Gilmartin and Nancy Hagans of the New York State Nurses Association shared their thoughts on what it means to be powerful and how best to welcome women back into the workforce as the pandemic begins to wind down. According to some estimates, more than 1 million women left the labor force during the pandemic, largely because of child care responsibilities. Gilmartin discussed asking for flexibility from a former boss, telling him she could never perform well at work if she didn’t feel like she was being a good mother. “We achieve at our highest level if we have that flexibility,” she said. It also took a powerful female mentor, Mary Ann Tighe of CBRE, to help her realize her own abilities. “She told me what my thenmale boss didn’t want to tell me: that I was really good at my job,”

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Crain’s celebrates New York’s 50 Most Powerful Women

MELBA WILSON AND ANNE BURRELL speak to one another at the Crain’s New York Business’s 50 Most Powerful Women luncheon Thursday afternoon. Gilmartin said. Hagans stressed the importance of affordable child care or even having it on the premises at work. Godwin said that as a newswoman, she had backpacks and sleeping bags packed and ready by the front door in case there was a particularly urgent news event. “The kids would be sleeping in the office, and that’s OK,” she said. She also called on women to be

more confident in their own qualifications while job hunting and encouraged them not to be discouraged by the word “no.” “[Now] women run ABC News, and it wasn’t always that way.” She added that a smile is one of the utmost superpowers of women. “It disarms people,” she said. ■ For more photos from the event, turn to page 19.

Vol. 38, No. 9, March 7, 2022—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for no issue on 1/3/22, 7/4/22, 7/18/22, 8/1/22, 8/15/22, 8/29/22, 11/28/22 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. $140.00 per year. (GST No. 13676-0444-RT) ©Entire contents copyright 2022 by Crain Communications Inc. All rights reserved.

2 | CRAIN’S NEW YORK BUSINESS | March 7, 2022

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3/4/22 4:00 PM

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CHASING GIANTS

PIERCING OPPORTUNITY: Studs co-founders Lisa Bubbers, left, the chief brand officer, and CEO Anna Harman have helped oversee growth at the company, which started in 2019 in SoHo and now has eight locations.

Studs looks to poke out a place in a Claire’s-dominated industry

City-based ear-piercing startup offers a broad array of “earscaping” options

hasing Giants is a new, biweekly column on CrainsNewYork.com in which Anne Kadet profiles budding startups in New York City and their plans to compete with, and potentially overtake, an industry leader.

The upstart: Studs

high-priced studios, Claire’s (the kid-friendly mall chain) or the local tattoo parlor. “And the tattoo parlor is not for everyone,” Harman said. Studs launched in a SoHo storefront in November 2019, and it now has eight locations in New York; Los Angeles; Austin, Texas; Boston; and Miami. It employs more than 100 executives and sales associates.

Can a chain of ear-piercing studios act like The reigning Goliath: Claire’s a startup? The founders of New York City– based Studs say their fledgling company Tens of millions of people got their first can grow and scale as fast as any piercing at Claire’s. The colorful software outfit. And its backers are boutique chain, which caters to the just as enthusiastic. 3- to 18-year-old set, has dominat“We were investors in Warby ed the market since its 1974 launch. Parker, which is a similar story,” It operates 2,300 stores in 17 counsaid Kevin Thau, a general partner tries in North America and Europe, at Spark Capital, which led Studs’ and it pierces nearly 100,000 ears a recent $20 million Series B funding week. It’s planning an initial public round. offering to fund further expansion CEO Anna Harman and Chief and new initiatives such as online Brand Officer Lisa Bubbers, both scheduling and a virtual earring ANNE KADET 37, were good friends for a decade try-on. before they teamed up to launch How to slay the giant Studs. Harman, a former lawyer, said she and Bubbers, a marketing and branding Unlike mall chains, which use piercing consultant, spotted the opportunity after guns, Studs employs needle piercing, which Harman decided to get a second piercing in allows a broader array of puncture options— her left ear. The only options seemed to be in up to 16 locations on each ear. Never

mind the traditional lobe, the company’s piercing menu includes the daith, the conch and even the tragus—that little flap extending off your face. Studs, which sells more than 300 earring styles in singles and pairs, pushes what it refers to as “earscaping”— multiple piercings in each ear fitted with jewelry that, collectively, tell a story beyond what can be communicated with, say, a pair of gold hoops. It’s got some customers hooked. Heather Lynn, a 39-year-old nonprofit fundraiser and event planner, makes regular visits to Studs’ SoHo location to consult with her “earscape adviser” and buy new jewelry for her 11 piercings. “It’s a form of self-expression curated by me,” she said. “I purposely pick out jewelry that resonates with who I am. It sounds cheesy, but I’m an artist at heart, and I need an avenue for creativity.” That’s the mentality investor Kevin Thau is betting on. “I don’t think anyone in venture capital wakes up one day and says, ‘What’s going on in ear piercing?’ ” he said. But the desire for self-expression is insatiable these days, he said, and multiple piercings are a growing trend. “It has unbounded potential,” Thau added.

Harman said her company was really targeting a different market from Claire’s, going after an older customer who might not consider additional piercings were it not for Studs. The company’s Instagram-friendly locations look more like a spa than a store. The earrings, meanwhile, typically cost from $20 to $100 a pair—a higher price point than the mall chain. But Harman hopes Studs will soon share one thing in common with Claire’s: status as an iconic national brand.

The added challenge Opening and staffing a store chain is a lot more complicated than hiring engineers to crank out software, Thau said, especially in light of the challenges imposed by Covid-19. But Studs, which launched just before the pandemic hit, grew through a difficult two years, he said, pivoting to e-commerce sales when the lockdown put the kibosh on piercing.

Goliath responds Claire’s declined to comment, citing its pre-IPO quiet period. But in its prospectus, the company noted that its newer, 191-store Icing brand caters to older customers “and retains Claire’s customers as they age.” ■ March 7, 2022 | CRAIN’S NEW YORK BUSINESS | 3

RESIDENTIAL SPOTLIGHT

Prewar apartment on Fifth gives a sale another shot The property owned by a former Bristol Myers Squibb vice chairman has been on and off the market for six years

f at first—or at second or third—you don’t succeed, try another price cut. A seven-bedroom, five-bath expanse at 1060 Fifth Ave., No. 10B, which has been on and off the market for six years, reappeared last month at a new price: $20 million. The prewar apartment has fireplaces, 11-foot ceilings and Central Park views, but its decor can seem dated on account of chintz upholstery and drapes. The unit first was listed in spring 2016 at $65 million. An aggressive discount of 70% plus the marketing muscle of four different brokerages have not yet been enough to sell the place. If the unit does trade, an influential family’s connections to the neo-Renaissance-style building, at East 87th Street near the Guggenheim Museum, apparently will come to an end. Its seller is Bruce Gelb, who served as vice chairman of pharmaceutical giant Bristol Myers Squibb and has held a number of government posts, including ambassador to Belgium. For years Gelb’s brother, Richard, who was Bristol Myers Squibb’s chief executive, also lived at 1060 Fifth, in No. 3B. His five-bedroom, five-bath apartment sold for $21.5 million in 2008, public records show, four years after he died of cancer. The Gelbs’ father was Lawrence,

$20M

LISTING PRICE for No. 10B at 1060 Fifth Ave. a chemist who in 1931 founded Clairol, the beauty products company known for its hair dyes. Clairol is now part of Bristol Myers Squibb. Serena Boardman, the agent with Sotheby’s who now has the listing after previous efforts by Compass, Stribling and Dolly Lenz Real Estate, declined to comment. Some high-end co-ops have struggled to sell even as other sectors of the housing market have improved. And their troubles in some ways predate the pandemic. Indeed, one of the only apartments to recently sell at 1060 Fifth, No. 11CD, a six-bedroom, went for $10.8 million in early 2020 after initially being listed for $15.8 million in 2019. Records show that its seller was Vincent Pagano Jr., a former partner at law firm Simpson Thacher & Bartlett. Prospective buyers might be happy to learn that, unlike with some exclusive co-ops, purchasers at 1060 Fifth can use a mortgage for up to half the purchase price. Yet the buyer of No. 10B, which comes with a monthly maintenance bill of more than $14,000, will be on the hook for a 3% flip tax. ■

SOTHEBY’S

BY C. J. HUGHES

NO. 10B AT 1060 FIFTH AVE., includes seven bedrooms and five baths and has 11-foot ceilings and Central Park views.

REAL ESTATE

Timeshare firm snaps up Midtown’s Roger Smith Hotel BY EDDIE SMALL

share. Florida-based firm Timeshares Only has purchased the shuttered Roger Smith Hotel, at 501-507 Lexington Ave. and East 47th Street, for about $41.4 million, property records show. The Manhattan hotel opened in 1929 and prided itself on hosting live performances and supporting local artists. Bert Blicher, president of the timeshare firm, said the company plans to renovate the hotel and reopen it in about 18 months with 81 timeshare units. “I think it’s going to be, actually, the highest-end timeshare in New York City,” he said. Representatives for Roger Smith did not respond to a request for comment. Manhattan is much better known for short-stay hotels than for extended-stay inns and timeshares, but extended-stay hotels in general seem to have held up better during the pandemic. A recent report from the

BUCK ENNIS

nearly 100-year-old boutique Midtown hotel appears on its way to becoming a time-

Highland Group on extended-stay hotels in the U.S. found that supply, demand and revenues for the properties had reached all-time highs. This timeshare won’t be the first in the neighborhood. Hilton Grand Vacations, which specializes in timeshare properties, reopened its

4 | CRAIN’S NEW YORK BUSINESS | March 7, 2022

flagship location, The Quin, at 101 W. 57th St., in June and opened a new location, at 12 E. 48th St., called The Central, in August. Marriott Vacations Worldwide has the Marriott Vacation Club Pulse at 33 W. 37th St. Although the city has estimated that commercial properties overall

have kept about 92% of their value since before the pandemic, the value of hotels specifically has dropped by 19.6%, falling from $32.7 billion to $26.3 billion, according to the city. Multiple hotels have traded at incredibly steep discounts since Covid-19 hit and devastated New

York’s tourism industry. Hawkins Way Capital bought the Midtown DoubleTree hotel at 569 Lexington Ave. for $146 million in late 2021, much less than the roughly $332 million seller RLJ Lodging Trust bought it for in late 2010, and the Lexington Hotel at 511 Lexington Ave. sold for about $175 million last year after selling for roughly $335 million in 2011. The closed Hilton Times Square has lost about 62% of its value, according to data from analytics firm Trepp. It is now worth $93.8 million after selling in 2010 for $246 million. It was unclear if the Roger Smith Hotel had similarly sold at a steep discount. The only other deed available in property records was a 2019 transfer for $0 to the LLC that sold the property to Timeshares Only. But there are signs of hope for the beleaguered industry. The city’s hotels hosted the highest number of visitors since the beginning of the year during the week ending Feb. 19, with an average occupancy of 56.5%, according to STR. This was a 40% jump from early January. ■ Beth Treffeisen contributed reporting.

Indira Verastegui New York Construction

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IN THE MARKETS

Blackstone CEO made more than $1B last year The private-equity firm distributed $4.06 per share in dividends to shareholders, 80% more than in 2020

SCHWARZMAN

BLOOMBERG

lackstone Group’s Stephen neration is in stock that takes years Schwarzman has become to vest, Schwarzman’s take is all the first CEO of a publicly cash. Because most of that cash traded company whose an- comes from dividends and investnual income topped $1 billion. ment gains, a slug of Schwarzman’s It isn’t the first time Schwarzman income is taxed at a 23.8% rate. has made history. In 2008 the pri- Wages for the highest earners are vate-equity titan donated $100 mil- taxed at a 37%. The rate is 22% for lion to the New York Public Library, those paid between $40,000 and and his name was carved into the $86,000. Blackstone spokesman main branch’s facade Matt Anderson said, “Our along with 19th-century compensation model is benefactors John Jacob built on long-term alignAstor, James Lenox and Samuel Tilden. ment with our investors— Around the time the and we are proud that in head of the library prom2021 we delivered record fund appreciation and ised no more names earnings performance.” would be added, Kenneth He added, “Our senior Langone pledged $200 million to get his name AARON ELSTEIN executives are among the largest individual taxpayattached to the New York University Medical Ceners in the country beter. In 2015 David Geffen gave $100 cause—unlike other businesses million to rename Lincoln Center’s that primarily retain their earnAvery Fisher Hall. ings—we pay out the vast majority Schwarzman’s total haul of $1.1 of our profits each year in dividends billion last year was 20 times larger generating significant annual tax than compensation awarded to JP- payments.” Blackstone distributed $4.06 per Morgan Chase CEO Jamie Dimon. But while most of Dimon’s remu- share in dividends to shareholders

last year, 80% more than in 2020, thanks to red-hot markets that enabled Blackstone to sell investments from its portfolio for $5.7 billion in gains. Institutional investors continued to pour in fresh money,

and the firm ended the year with nearly $900 billion in assets under management. It is also sitting on $8.7 billion worth of unrealized gains. Additionally, Blackstone’s share

price doubled, adding to Schwarzman’s wealth because he owns 20% of the firm. Forbes estimates his personal fortune is $37 billion. Blackstone’s hefty dividend payout put $940 million in his pocket last year. He collected $160 million in so-called carried interest, which is his slice of the firm’s investment gains, plus a $350,000 salary. Blackstone President Jonathan Gray’s take was $322 million, according to annual report data that likely understates the actual income collected by Schwarzman and other top executives. That’s because they own shares in Blackstone’s holding company and are paid somewhat higher dividends than other investors, although the exact amount of those additional payouts isn’t disclosed. Although Schwarzman’s haul is undeniably massive, it doesn’t appear to set a record for Wall Street pay after accounting for inflation. Drexel Burnham Lambert’s Michael Milken was paid $550 million in 1987. That equals almost $1.4 billion in today’s dollars. ■

ON POLITICS

owing to pressure from nated the 2021 elections in both suburban lawmakers in Long Island counties, Democrats both parties, Gov. Kathy are wary of angering an already Hochul recently an- restive voter base. Hochul has promised to collabonounced she would withdraw a plan to add affordable housing to rate with local governments to seek the counties outside of New York some kind of compromise, but City. It was a disappointing—if in- when it comes to adding new housevitable—decision that will have ing on Long Island, talk of compropotentially dire consequences for mise almost always means no Long Island, Westchester and the shovels in the ground. This is a quifive boroughs. et tragedy. New York is in In her initial budget the throes of an affordproposal, Hochul includability crisis, and if the suburbs don’t begin to ed a requirement for loadd housing soon, it will cal governments to allow only worsen, locking out for additional housing on more generations. land otherwise zoned for Despite the complaints single-occupancy units. of local politicians, Long The plan would force deIsland is grievously unvelopment-resistant towns and counties to derdeveloped. Other subpass legislation permit- ROSS BARKAN urbs, including Westchester, have clusters of ting accessory dwelling units—apartments in basements, apartments and density to give attics or garages. housing options to those who arLong Island politicians of both en’t wealthy or even middle class. parties revolted. They warned In Suffolk County, free-standing against a fundamental attack on single-family homes account for the suburban character of their more than 81% of the housing towns and bemoaned a loss of local stock. Nassau is at 75%. These are zoning power. Hochul, who is seek- higher shares than most counties ing a full term in a year when Re- in America, far outstripping the publicans are expected to perform 44% in Westchester County. Much well, backed off the proposal at the of this is by design: After World War behest of Democrats running down II, Long Island was offered as an the ballot. After Republicans domi- oasis for white, middle-class fami6 | CRAIN’S NEW YORK BUSINESS | March 7, 2022

lies to escape New York City and was zoned in such a way to enforce racial segregation. Even today there is a racial tinge to the fierce opposition to density. Long Island’s housing decisions have rippled far beyond the suburbs. Had politicians in Nassau and Suffolk decided, decades ago, to pursue a growth strategy that created more apartments and other kinds of affordable units, young professionals wouldn’t have to flock to the five boroughs, where rents are skyrocketing again and housing remains in short supply. A regional housing strategy, with extensive building along transit lines, could have made a tremendous difference. In truth, Hochul’s proposal was hardly transformational, which makes the furious opposition to it so disconcerting. If Long Island can’t even accept an expansion of basement apartments, what hope do tenants in the region really have? Long Island needs hundreds of thousands of new units to match demand. Right now there is no road map to getting there. New York City, in the meantime, must not become another Long Island and grow too resistant to building new housing. We need far more of it—by the estimate of the city comptroller’s office, the city saw a

HOCHUL net increase of only 100,000 housing units, although resident employment grew by 500,000 between 2009 and 2018. Eric Adams has spoken of building aggressively but offered few, if any, concrete plans for growing the housing stock. His predecessors, Bill de Blasio and Michael Bloomberg, pursued strategies that relied on upzoning working-class areas but leaving alone the suburban-style parts of the city that need development now. Bloomberg, in particular, selectively downzoned white, wealthier neighborhoods, bowing to public pressure. Hochul, meanwhile, still has the clout to fight for a regional housing solution that will take pressure off New York City and make Long Island more affordable. After the No-

BUCK ENNIS

Hochul appeases foes of boosting suburban density

vember elections, she may be able to take up the fight again. It is desperately needed.

Short takes ● It’s good Mayor Eric Adams has decided to lift vaccine mandates for indoor activities in New York City, following the lead of other major cities. ● Speaking of mandates, it’s time Adams lets Kyrie Irving play home games at the Barclays Center. ● Andrew Cuomo’s attempted comeback with a new TV ad should revolt New Yorkers. There’s no purpose for him in public life anymore. ■

Ross Barkan is an author and journalist from New York City.

HEALTH CARE

Despite HIV cases falling, Black city residents still suffer BY SHUAN SIM

ven with new HIV cases falling in the city each year, the proportion taking root in Black populations has steadily risen. From 2003 to 2020, new HIV diagnoses in New York City fell to 1,396 from 2,832, according to data from the city Department of Health and Mental Hygiene. The proportion of new cases in Black populations, however, rose to 47% from 42% during that time. Cases among Latinos and Asian-Pacific Islanders stayed at roughly the same levels, 34% and 5% in 2020, respectively, from 2013. Only white populations saw a drop, from 18% to 13%. The trend in Black populations, however, appears to be confined to New York City and isn’t really seen in the rest of the state, said James Tesoriero, director of the division of HIV/STD epidemiology, evaluation and partner service at the state Department of Health AIDS Institute. With the city making up more than 70% of new diagnoses, however, it is an important trend to keep track of. Although timely access to care has improved across the board for all ethnicities, the city’s Black patients newly diagnosed with HIV still have the lowest rates when it comes to finding care. In 2020, 75% of Black

BLACK PATIENTS REMAIN LEAST LIKELY TO RECEIVE TIMELY LINKAGE TO CARE AFTER AN HIV DIAGNOSIS Black

Latino

White

Asian-Pacific Islander

Others*

100%

90%

80%

70%

60%

70% 2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Note: Linkage to care within 30 days among newly diagnosed people. *Includes Native American, multiracial and unknown SOURCE: Department of Health and Mental Hygiene

patients were connected to HIV care within 30 days, compared to Latino (84%), white (84%), Asian-Pacific Islander (81%) and others (70%). Some barriers to accessing HIV prevention and care are historic. But hurdles extend beyond history. “Many current barriers to care and prevention are simply structural, such as not having enough HIV centers of excellence in areas where Black and Latino people live,” said Doug Wirth, CEO of Amida Care, a Midtown-based health plan for people living with HIV.

The ability to access testing, pre-exposure prophylaxis medication and treatment stem from a situation rooted in issues related to social determinants of health, which include access to housing and nutritious food, and the state has recognized that, said Johanne Morne, director of the AIDS Institute. Even if referred for treatment, patients experiencing issues with social determinants of health need support such as transportation, stable housing and nutrition for the linkage to treatment to even work,

Morne said. Stigma could also drive patients to desire care from providers not based in their neighborhood, said Dr. Ofole Mgbako, section chief of infectious diseases at NYC Health + Hospitals/Bellevue. “Black and Hispanic communities tend to face these barriers to care more starkly than other ethnic groups,” he added. This year the state Department of Health and the AIDS Institute are prioritizing funding for initiatives that address the inequity in HIV treatment, such as programs for aging individuals as well as employment partnerships to provide livable wages and housing support. Gov. Kathy Hochul in November renewed the state’s commitment to achieving goals outlined in the Ending the Epidemic initiative by 2024. The state has earmarked $20 million toward it since its inception in 2015. Hochul and the state have the ability to implement structural changes to elevate access to HIV care, Wirth said. “For far too long, under the previous administration, Medicaid was undermined,” Wirth said, referring to former Gov. Andrew Cuomo, who proposed across-the-board 1.5% cuts to Medicaid reimbursement rates in fiscal 2021. Hochul’s proposed budget for fiscal 2023 would restore those cuts.

“You cannot deal with racism in health care without investing in Medicaid,” Wirth said, adding that communities of color are most likely to need state-sponsored coverage. Currently, providers contracting at the lowest level of value-based care with Medicaid do not need to account for the social determinants of health needs of patients. The state Department of Health, however, has the ability to require that providers address them even with a level-one contract as it is redesigning its Medicaid waiver program. At the city level, the renewed focus on health equity is promising. The city Health Department’s appointment of Dr. Michelle Morse as its first chief medical officer, who will also head the agency’s Center for Health Equity and Community Wellness, means initiatives to improve HIV disparities for communities of color are forthcoming, Mgbako said. The road ahead will be rocky as Covid continues to threaten progress. HIV testing decreased in 2020, and pre-exposure prophylaxis medication uptake and rates of people who achieved viral suppression decreased, said Tesoriero from the AIDS Institute. “It will get a little worse before we can get to where we need to be,” he said. ■

Men have always been the default in medicine, which has left women understudied, undertreated and misdiagnosed. Northwell created the Katz Institute for Women’s Health, the only network of experts devoted to every aspect of women’s care. Because when we raise the health of women, we raise everyone. Be a Health Raiser at RaiseHealth.com/Women

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

EDITORIAL

publisher/executive editor

The governor is wise to revisit outdated liquor legislation so industry can evolve

s the state keeps an eye on regulating new vices, it shouldn’t lose focus on the old ones. New York is now tasked with governing a massive, booming online sports-betting industry, launched in January, and the opening of the marketplace for recreational marijuana could be on the way just months from now. But as senior reporter Cara Eisenpress found in her article “Hochul endorses rollback of Prohibition-era alcohol regulations,” even though spirits, beer and wine have been sold in the state for as long as anyone can remember, there are changes to related legislation that should be made as the needs of businesses evolve.

restaurant and liquor store associations. These discussions, and any reforms they spur, are a long time coming. “We should take this opportunity to expand the conversation about state liquor law reform and begin addressing the myriad of Prohibition-era laws that create challenges for businesses and consumers statewide,” Paul Zuber, executive vice president of the Business Council of New York State, told Eisenpress. New York is barely recognizable from the Prohibition era of the 1920s and early ’30s. Restaurants back then would have little in common with the establishments of today. And the areas of improvement to their operations and bottom line brought to the forefront by the pandemic make revisiting the rules and regulations that apply to them even more necessary. As Eisenpress pointed out, other sectors of the industry, including beer distributors, distillers and brewers, have ideas for modernizing too. For example, many local breweries and distilleries cannot sell their bottles directly to consumers, although wineries can.

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RESTAURANTS, BREWERIES AND LIQUOR STORES ARE OVERDUE FOR MODERN RULES Last week Gov. Kathy Hochul said she had asked the State Liquor Authority, led by Chairman Vincent Bradley, to review the whole set of laws surrounding alcohol sales and distribution. The move comes after the governor included the allowance of sales of to-go alcohol in her proposed budget, sparking widespread debate from

Frederick P. Gabriel Jr.

account executives Kelly Maier, Marc Rebucci, BLOOMBERG

Laura Warren

The time to adopt rules and regulations for industries does not end once they get off the ground. As the needs of businesses continually change, legislators are wise to regularly look at how laws can change, too, to keep pace. Cheers to Hochul for kicking off a review process that is long overdue. ■

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Subway station restrooms that closed during the pandemic need to reopen t a recent state budget hearing, Janno Lieber, chairman of the Metropolitan Transportation Authority, said he couldn’t reopen all 76 New York City Transit subway station bathrooms that have been closed during the pandemic, leaving us with a full bladder and no place to go. His justification was that he doesn’t have sufficient cleaners, and Covid-intensive cleaning is not yet possible. This doesn’t tell the whole story. Long Island Rail Road restrooms at Penn Station, Atlantic Terminal, Jamaica Station and dozens of other stations are open. Metro-North Railroad, Grand Central Terminal and dozens of other stations have restrooms that are open. Staten Island Railway passengers have direct access to restrooms at both the city Department of Transportation’s St. George Ferry Terminal

dstein@crain.com CUSTOM CONTENT associate director, custom content

For her part, the governor is touting industry reforms including the issuing of temporary liquor licenses so businesses can start up quicker and a proposed extra $2 million for the State Liquor Authority to hire more application reviewers and create a faster online application process.

OP-ED

BY LARRY PENNER

people on the move manager Debora Stein,

and the Whitehall Street Ferry Terminal. Perhaps Lieber forgot that his colleague, then New York City Transit Authority President Sarah Feinberg, said in June that she would like to reopen NYC Transit subway station bathrooms as quickly as possible. This never happened.

Funds can be found NYC Transit’s 472 subway stations have 76 bathrooms. According to the MTA’s website, just five are open. Why did the MTA recently remove this information from its website? Reopening secure, safe subway station bathrooms with adequate supplies of toilet paper, soap and hot water would be one way to attract the 2 million prepandemic riders who have yet to return. Access to a public restroom is a basic human right. Within the $51 billion 2020-24 capital program, surely funding can be found to reopen the exist-

ing 76 NYC Transit subway system bathrooms. Bringing more subway stations into compliance with the Americans with Disabilities Act should also include construction of restroom facilities at those stations lacking such amenities. The MTA was eligible for $1.5 billion in funding from the Federal Transit Administration in 2021. This will grow this year by several hundred million dollars. The MTA historically has allocated 70% of these annual federal funds for NYC Transit. These funds can be used for both bathroom capital improvements and construction of new restrooms. Funds can also be programmed for preventative maintenance. Why doesn't the MTA add functioning restrooms to the NYC Transit capital program? It can use federal funds to pay for improvements.

Get creative Why not coordinate the sched-

uling of bathroom cleaning with the assigning of police who patrol stations? They can provide employees with a level of comfort when cleaning. A private-sector company could be hired to maintain and clean bathrooms. Let’s offer the private sector the ability to adopt a station bathroom in exchange for free station advertising. Let’s do the same with companies that provide bathroom cleaning products and supplies. Hundreds of employees at the MTA’s headquarters at 2 Broadway and the thousands of other MTA employees have access to clean, safe restroom facilities on a daily basis. Paying customers deserve no less. ■ Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration’s Region 2 office in New York.

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8 | CRAIN’S NEW YORK BUSINESS | MARCH 7, 2022

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OP-ED

BY SEN. BRIAN KAVANAGH AND KATRELL LEWIS

ov. Kathy Hochul sounded “an alarm bell that cannot be ignored” in her recent State of the State address: New York lost 300,000 residents from 2020 to 2021, representing the steepest population decline of any state in the nation. Housing affordability continues to be a key catalyst for New York’s population loss, especially for Black, Indigenous, people of color communities and low-to-moderate-income New Yorkers. Whether in rural communities or in the heart of our cities, many of our neighbors are grasping for solutions to gentri-

Community Land Trust Acquisition Fund, and I, Brian Kavanaugh, just introduced establishing legislation, S8265.

Benefits generations CLTs are nonprofit organizations that own land to ensure that housing on it is and remains affordable to low- and moderate-income families. They are stewards for long-term affordability, which benefits generations of renters and homeowners. The fund would help local, mission-driven organizations compete with speculative investors to buy land on the open market, which is typically a CLT’s biggest hurdle. Another hurdle is that funding for New York’s land banks—a source of acquisition funds for some CLTs—has dried up in recent years, making it difficult for CLTs to promote homeownership. The fund would be a big step toward addressing this need. Ultimately, it would enable CLTs to invest in their own communities, which is why, as negotiations of the state budget proceed, Katrell Lewis and I propose that New York state finance the fund with $50 million.

AFFORDABILITY CONTINUES TO BE A KEY CATALYST FOR NEW YORK’S POPULATION LOSS fication. Longtime residents are being forced to move because of rising home prices and rents, and there is a growing realization that the dream of homeownership is out of reach for too many New Yorkers. To address these issues, we legislators and advocates have partnered to support the creation of the

This initial investment will help reduce the disparity between the state’s support for affordable rental homes and for affordable homeownership. By nearly 2-to-1, this disparity results in most developers building only rental properties in communities of color and causes many residents to miss out on the tremendous benefits--such as building equity--that come from owning a home. In addition, CLTs that produce rental homes could combine support from the fund with other programs, so the housing that is generated could be offered at rates affordable to lower-income families. The governor’s State of the State address envisions a pilot program to create affordable homeownership opportunities that “prioritize resident control and permanent affordability.” The pilot reflects the growing desire in upstate and downstate communities to “take more control of their housing environments.” Building on this vision, the creation of a $50 million state CLT acquisition fund would go a long way toward ensuring more homeowners are rooted in the community and benefit from the generational equity-building opportunities affordable homeownership provides. Affordable homeownership and

NEWSCOM

Community land trusts are a bridge to affordable homeownership and stable neighborhoods

community control of permanently affordable housing are cornerstones of infrastructure for equity, an urgent response to more than a century of unjust and racially discriminatory housing laws and financing mechanisms that prevented communities of color from entering the homeownership market and shaped the geography of the wealth, health and education inequality we see today. If New York wishes to reverse the mass exodus of our residents and strengthen our infrastructure for

equity, then we should enact this important legislation to properly fund acquisitions by CLTs. ■ Sen. Brian Kavanagh represents New York’s 26th District and chairs the Committee on Housing, Construction and Community Development. Katrell Lewis is vice president, government and community partnerships at Habitat for Humanity New York City and Westchester County and a cofounder of the Interboro Community Land Trust.

OP-ED

How commercial property owners here can— and should—prepare for influx of electric cars

he use of electric vehicles in the United States is growing rapidly, and commercial property owners in New York should prepare for sudden acceleration. The exact speed at which electric car use will grow is not known, but with it will come a rapid increase in the need for charging stations. It’s time for property owners to create plans, so they are ready to move quickly as the need arises. Here are four steps to take: First, begin thinking about the nature and needs of existing properties in this context. Consider the

hicle chargers to potential tenants—to meet their needs and underscore the property’s environmental commitment. Second, if the anticipated needs are substantial, survey the infrastructure. Secure professional assistance to evaluate the existing electrical infrastructure and what is needed to adapt it. That will be determined in part by the capacity of the needed electrical service upgrade, the distance from existing electrical service to the sites where chargers are needed, whether digging trenches is required, and any local law requirements. In New York City, Local Law 130 of 2013 requires that any parking garages or parking lots that make electrical modifications must include the electrical capacity needed to make at least 20% of the parking spaces suitable for electric vehicles. There is also proposed legislation in the City Council to amend this to require parking garages and parking lots to have at least 40% of their parking spots powered for electric

CHARGERS WILL BE EXPECTED AT COMMERCIAL PROPERTIES NATIONWIDE number of existing parking spaces, the proximity of the electrical infrastructure, and the potential demand for electric vehicle charging. Also consider the marketing benefits of offering sufficient electric ve-

vehicles by 2030. This would apply retroactively to all such properties. Third, determine the estimated cost of any needed upgrade. The cost has three primary factors: the upfront infrastructure upgrade required; the extent of financial incentives available, and the potential for the upfront cost to be reimbursed over time through a nominal surcharge (perhaps 10 cents per hour per charge) beyond the energy consumption used by each vehicle serviced. Chargers on commercial properties would typically be Level 2 chargers, which can provide around 32 miles of range per hour of charging. That’s about twice as fast as a Level 1 residential charger.

Incentives available Fortunately, government and utility incentives are available and can cover 50% or more of the cost. In New York City and the surrounding region served by Con Edison, incentives from the New York State Energy Research and Development Authority (NYSERDA) and Con Edison can reduce the upfront cost significantly. Con Edison’s rebate

GETTY IMAGES

DANIEL COLOMBINI AND VINOD PALAL

per electric vehicle charger port can be as much as $11,200. Fourth, develop a staged plan to meet the need. Determine how many electric vehicle chargers are required and when. Activate the plan so that the property is suitably ahead of the demand. Every commercial property owner should take these four steps, as electric vehicle chargers will be ex-

pected at commercial properties nationwide. These steps will ensure that the properties are ahead of the demand and are part of the vital national priority to reduce carbon emissions. ■ Daniel Colombini and Vinod Palal are principals at New York City-based consulting engineering firm Goldman Copeland.

Write us: Crain’s welcomes submissions to its opinion pages. Send letters to letters@CrainsNewYork.com. Send op-eds of 500 words or fewer to opinion@CrainsNewYork.com. Please include the writer’s name, company, address and telephone number. Crain’s reserves the right to edit submissions for clarity. March 7, 2022 | CRAIN’S NEW YORK BUSINESS | 9

TECHNOLOGY

Etsy reports record sales, 30% hike in seller fee Sellers respond with 300 comments on Reddit in 24 hours BY RYAN DEFFENBAUGH

tsy share price’s jumped nearly 15% in trading on Feb. 25 after the company reported strong fourth-quarter sales as well as a plan to increase fees on sellers by 30%. The Brooklyn-based online marketplace for crafters collected $2.3 billion in revenue last year, according to the earnings report, up 35% from 2020. The website connects about 90 million active customers to a global network of 5.5 million individual sellers. It risks angering some of those sellers, however, with a plan to start collecting 6.5% of each sale from its website and app starting April 11, up from 5%. Rachel Glaser, Etsy’s chief financial officer, noted that Etsy last raised its fee in 2018, from 3.5% to 5%. “We plan to reinvest a considerable portion of that incremental revenue back into the marketplace because we want to directly have

(the fee increase) benefit the seller,” Glaser said. “So a lot of that will go into marketing and customer support and product development, like we did before.” Last quarter was another strong one for Etsy, whose fortunes have been fueled by the rise of e-commerce during the Covid-19 pandemic. The company reported $717 million in revenue from October through December, outpacing 2020’s holiday sales by 16%. Even after spending about $1.9 billion on two cash acquisitions last year, Etsy ended 2021 with about $1.1 billion in the bank. The fee increase situation demonstrates the difficult balance Etsy faces in keeping sellers happy while also showing growth to investors on Wall Street. Etsy was a pandemic stock darling, its share value growing 300% in 2020, faster than any company outside of Tesla. The performance earned Chief Executive Josh Silverman, a former eBay executive credited with leading Etsy’s turnaround, a $25 million retention bonus, tied to the company’s performance through next year. Leading up to the earnings report, investors appeared somewhat concerned about Etsy’s continued sales growth, as pandemic lockdown

garnered more than 300 comments in less than 24 hours. “How does this benefit sellers?” one commentShare price $296.91 er asked. “Just another money grab $300 on Etsy’s end.” About a third of Etsy’s sellers derive their sole income from their creative business, according to the $250 company’s most recent census of sellers in 2020. The census did not include a breakdown of how many $200 sellers offer their products on other platforms such as competitors Amazon and eBay or through personal $150 websites. $116.51 Etsy appears to be betting that its ability to deliver buyers—it count$100 ed 10 million first-time customers Aug. 5, 2021 Nov. 24, 2021 Feb. 23, 2022 last quarter alone—will make the extra cut worthwhile to its sellers. SOURCE: Google Finance In a livestream interview Friday morning with Yahoo Finance, Silmeasures and financial-relief free shipping on most items. Sales verman defended the increase by checks that boosted buying faded rebounded by the next spring and noting that Etsy’s spending on adfurther into the past. Etsy’s share then took off as Etsy became a vertising—and its ability to deliver price has fallen 30% in the past six mask-selling empire during the pan- buyers—has increased significantly demic. months. since it raised rates three years ago. Founded in 2005, Etsy rose to “The number of sellers on our prominence while preaching a form The reaction platform is more than double since of socially conscious capitalism. On Thursday, Etsy told sellers the start of the pandemic,” he said. However, the company has butted about the price increase via email “Last time we raised fees, in 2018, heads with sellers before. In Novem- and promised to use the money to Etsy was spending about $70 milber 2019, Etsy reported sales growth market the site. lion a year on advertising. Last year below expectations—which it A thread on a Reddit page for we spent $500 million. Our sellers blamed partially on resistance Etsy sellers titled “YIKES … Etsy are asking us to invest in marketing, among sellers to a policy requiring raising transaction fees to 6.5%” service and product.” ■

ETSY SHARE PRICE FALLS FROM DIZZYING PANDEMIC HEIGHTS

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10 | CRAIN’S NEW YORK BUSINESS | MARCH 7, 2022

ENERGY

Con Edison’s soaring prices trigger AG inquiry BY BRIAN PASCUS

ASSOCIATED PRESS

CALLS FOR EXPLANATION Attorney General Letitia James wants Con Ed to clarify why customer bills at the start of 2022 were double or triple December invoices.

BUCK ENNIS

on Edison’s rising utility prices have gotten the attention of New York’s attorney general and other Albany officials, who are demanding an explanation for the soaring cost of energy bills levied by the public utility giant. Attorney General Letitia James wrote a letter to Con Ed on Feb. 28 asking the utility to provide an explanation for the sharp increase in monthly rates and to commit to increasing transparency for consumers in future rate increases. James’ office reported consumers have received bills from Con Ed in January and February that cost two or three times more than their previous bills. “Hardworking New Yorkers shouldn’t have to make sacrifices to keep the lights on or to stay warm during the coldest months of the winter,” James said. Con Ed is experiencing a huge number of delinquencies, with nearly half a million Con Ed customers in arrears. When one customer doesn’t pay the monthly bill and subsequent efforts to collect from the customer are unsuccessful, Con Ed spreads the cost out over all the other consumers to make up the difference and support the system. Data from the state Department of Public Service shows 482,034 of Con Ed’s 3.5 million customers (14%) are behind 60 days or more on their electric bills and owe nearly $1.3 billion. More than 411,000 residential Con Ed customers are behind, including the nearly 145,000 facing final termination notices this month. More than 70,300 commercial businesses across the city are in arrears.. However, Con Ed spokesman Allan Drury said the December-to-January price increases cannot be attributed to delinquencies. Instead, he said, the increases reflect a sharp rise in natural gas prices, since natural gas is the input into power plants that generate electricity for New York City. Drury said Con Ed encourages people to call to make payment arrangements if they fall behind. He noted the utility offers payment extensions, payment agreements, senior services and monthly installment options. “What we do is we encourage people all the time to call us, and we put them on a payment plan,” Drury said. “In other words, you spread your arrears out over a number of months. There’s also agencies that help customers pay their bills.” New Yorkers have been pummeled by high energy prices lately. Overall, the cost of fuel and utilities in the metropolitan area rose by 18.8% last month compared to January 2021, according to the U.S. Bureau of Labor Statistics' consumer price index. Electricity is up 20.2% since January 2021, and gas, at 16.7%, is also climbing. Drury couldn’t confirm whether the rate of delinquencies has ever

FORECASTING FAULT Con Ed says it’s hostage to market forces, but one energy expert admonishes the utility for failing to buy advance contracts to protect itself. been this high, but he did acknowledge that customers are hurting financially from the economic upheaval of the past two years. Inflation for basic consumer prices has reached levels not seen since 1982, and the city’s unemployment rate remained stubbornly high at 7.9% in December, more than double non-metropolitan counties. “As so many households suffer from lost income and higher expenses at this time, the cost of keeping the lights and heat on should not be another burden,” said Mark Levine, the Manhattan borough president. “And we're still waiting on answers from Con Edison about this outrageous billing cycle.” Con Ed is the city’s main provider of electricity, steam and gas, powering the five boroughs and

Westchester County. The utility's outsized influence across New York—which began in 1823 when it was known as the New York Gas and Light Company—is the only game in town when it comes to energy. “It’s a local monopoly,” said Paul Patterson, an energy analyst at Glenrock Associates, an energy research firm. “You pretty much have to use Con Ed to use electricity. You must use the wires of Con Ed to get the power to you, and that’s how it works no matter where you are.” The attorney general isn’t the only leader in Albany seeking an explanation. Senate Deputy Majority Leader Mike Gianaris fired off a letter to the Public Service Commission, the state entity that regulates energy prices, to investigate the rate in-

creases. Gianaris said some of his Queens constituents have seen their energy bills increase by as much as 300%. Gov. Kathy Hochul on Feb. 22 penned a letter asking Con Ed to review its billing practices. Hochul then announced a collection of measures and subsidy programs from the state to lower energy costs. But there’s only so much the state and Con Ed can do to lower energy prices that are dictated by the global fuel market. The Public Service Commission noted that it does not regulate commodity or supply prices. Drury attributed billing increases to market forces. “We buy the energy on the wholesale market and provide it to customers at the same price we paid,” Drury said. “Energy prices are volatile and can be affected by factors such as weather, demand and economic trends.” Roughly 70% of New York City’s electricity comes from fossil fuels—including 45% from natural gas—leaving the five boroughs hostage to fluctuations in the oil

Bedford-Stuyvesant foots the bill. “Higher natural gas prices are leading to higher electricity prices, and that’s what’s driving it,” Patterson said. But one energy expert thinks that Con Ed can’t simply blame the market and that the utility should have been better prepared for the volatile winter inflation that was forecast five months ago. Richard Berkley, executive director of the Public Utility Law Project of New York, a nonprofit watchdog and public interest law firm, said the federal Energy Information Administration warned as early as Oct. 13, 2021, that U.S. households would pay significantly more this year for propane, heating oil and natural gas. This warning was sent to utilities and regulators alike and came on the heels of Hurricane Ida's pummeling of natural gas suppliers on the Gulf Coast in August 2021 and the “Big Freeze” disrupting Texas’ natural gas production in February 2021. Berkley said Con Ed should have bought advance contracts to protect itself and customers from the winter market shocks. “[Con Ed is] required like all utilities to use its crystal ball, or the forecast from the feds, to execute a hedging strategy to protect consumers from increases in price,” Berkley said. “They have a duty to do that to the best of their ability and they might not have done that in this case. If you look at your bill, you’d be right to assume they didn’t do that.” ■

“CON ED IS REQUIRED LIKE ALL UTILITIES TO USE ITS CRYSTAL BALL TO EXECUTE A HEDGING STRATEGY.” and natural gas markets. Con Ed’s local power plants that produce electricity rely exclusively on natural gas, which they purchase on an open market. When the market price of natural gas increases—as it did by a record 70% in January— the two-bedroom apartment in

March 7, 2022 | CRAIN’S NEW YORK BUSINESS | 11

BLOOMBERG

HOSPITALITY

SUCH A THING AS A FREE DINNER? Based on the company’s projections, New York City should have at least one buyout each week of the promotion, which begins Tuesday, March 8.

AmEx wants to fill the city’s restaurants Every millionth reservation made through Resy will trigger a surprise free meal for everyone dining that night BY CARA EISENPRESS

wo years after New York City’s dining rooms emptied, following local public health orders to try to slow the spread of Covid-19, a monthlong promotion seeks to fill them up, especially spots still at lower occupancy on weekdays or in still-quiet business districts. American Express and the reservation firm Resy, which it owns, will launch a “reservation drive” beginning on Tuesday. The idea is to encourage diners to eat out, perhaps more than usual, at local indepen-

dent spots, with a group incentive: Every millionth reservation made through Resy will trigger AmEx to buy out a set of restaurants, a surprise free meal for everyone dining that night. Based on the company’s projections, New York City should have at least one buyout each week of the promotion. All reservations made across the U.S. count toward the 1 million goal, however. The restaurants that will be bought out are a surprise to diners. Resy accordingly declined to share the list of participants with Crain’s. “New York was one of the earliest

and hardest hit for small independent restaurants,” said Alex Lee, vice president general manager of Resy and the American Express Global Dining network. Such spots suffered more since they had to navigate the emergency loans, staffing shortages and frequently updated rules without the administrative staff of larger dining operations. Even in the most recent December-to-January wave, Lee added, small local restaurants had to endure a big downturn. New York’s recovery hit its stride in February, according to Resy’s

numbers, showing that reservations for that month were 30% higher than in January. That was a larger increase than the nationwide jump of 25%. January is always a slow month for restaurants, he added, especially when the weather is cold as it was last year. Still, the number of diners was down 22% in January across the country, compared to December, double the normal decrease between those months. In other words, the recovery has a way to go. “If you are in Midtown or downtown, the core business centers, lunch isn’t back, and midweek isn’t back the same way it

was,” Lee said. As of November, the restaurant sector still employed 30% fewer workers than in 2019, according to New York state Department of Labor figures. The credit card company thinks the promotion will put some gas behind the quickening pace, using the strength of its promotions and events. Resy users who are surprised with a buyout will be notified by the company. Others can follow along on social media channels and will get a chance to book a table during the comped meal if seats are still available. ■

total availability in the 2001 recession and 26.7% during the Great Recession. It was 24.5% of total availability in March 2021. But the availability of direct space on the market, which is being offered by a landlord and not a tenant, is outpacing the number of tenants putting their current space up for sublease, Wallach said. Direct supply is 74% higher now than

it was before the pandemic while sublet availability has increased 60% since then. New office construction is the highest it’s been since the 1980s, Wallach said, which is keeping the availability rate high. The new buildings have more efficient floor plans, which allows companies that move into these modern offices to use less space, he said. ■

REAL ESTATE

BY NATALIE SACHMECHI

he amount of office space that’s available in Manhattan reached 17.4% in February, up from 17.2% a month prior—a record for the city’s commercial real estate market as new construction continues and more space is being sublet, according to a report from Colliers. The borough’s overall availability has grown by 74.1% since March 2020 to 93.7 million square feet. One-fifth of that is thanks to office tenants putting their space on the market for sublease last month— nearly 1.3 million more square feet than in January. That’s the largest increase in sublet availability since March 2021, said Frank Wallach, executive managing director of research

and business development at Colliers. Meredith Corp. is among the tenants giving up the most space. The media company, which was acquired by Dotdash in December, is vacating its 332,000-squarefoot office at 225 Liberty St. as the

borhood in the borough. Midtown and Midtown South, which make up the bulk of offices in Manhattan, have availability rates below the levels seen elsewhere in the borough. Midtown South is the only submarket where rents have increased—they reached $78.65 per square foot compared with $68.69 in February 2021. Although the availability rate of sublease space is high in Manhattan, it’s been higher, Wallach said. In previous recessions, the percentage of sublease space on the market has gone well above 25%, the red line that indicates whether there is an official glut of offices, Wallach said. That number peaked at 41.5% of

MIDTOWN SOUTH IS THE ONLY SUBMARKET WHERE RENTS HAVE INCREASED company continues to cut jobs related to its print operations. Teach for America is also looking for takers for its 130,000-square-foot office at 25 Broadway. Both offices are in Lower Manhattan, where the office availability rate stands at 19.9%, the highest of any neigh-

BLOOMBERG

Manhattan office availability hits new peak, subleases rise

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ASKED & ANSWERED

INTERVIEW BY EDDIE SMALL

WHO HE IS President and CEO, Miller Samuel Real Estate Appraisers

onathan Miller’s reports on New York’s rental and sales markets have become essential reading for anyone trying to navigate the increasingly complex housing situation during the pandemic. With the apartment market turning from great for tenants to great for landlords at a rapid pace and housing demand hitting unprecedented highs, the Miller Samuel president and CEO is analyzing a market the likes of which he hasn’t encountered in about 40 years. “I’ve been doing this since the mid-’80s,” Miller said, “and I’ve never seen a more polarized housing market than I have right now.”

What made the rental market switch from tenants’ to landlords’ favor so quickly?

To say it was a quick switch would be an understatement. In 2020 we saw a collapse in leasing activity. That fall a 20% to 30% drop in rents pulled in tenants who were formerly priced out of the market, and rents just in the last few months have begun to reach parity with prepandemic levels. We’ve gone from famine to feast where there was this absence of demand, then a quick pivot to below-market rents, and then here we are today, almost back where we started.

Are there any signs that landlords are over-reaching? There has been an urgency to make up for lost rent, and I think that has caused rents to climb at a much steeper trajectory than will ultimately be supported. I

AGE 61 BORN Boston GREW UP Rehoboth Beach, Delaware RESIDES Darien, Connecticut EDUCATION Bachelor’s in hotel, institutional and restaurant management, Michigan State University FAMILY LIFE Miller has been married since 1994 and has four grown sons and two grandchildren. HISTORIC HOME Miller’s Connecticut home is 200 years old and was used as a stop on the Underground Railroad. “You can see the rock that was placed to seal the tunnel,” he said. “A relative of mine who has since passed used to play in it when he was a kid 40-some-odd years ago.”

would think the aftermath of this period is going to be more modest growth and not price declines. I don’t think the trajectory is sustainable. This is perhaps an overreaction, but it will result in a leveling out as opposed to the rocket ship that we’ve been seeing for the last six months.

Why is the sales market so active?

In the spring and summer of 2020, New York was supplying excess demand to the suburbs and obliterated suburban inventory levels. Manhattan didn’t start waking up until the end of 2020 and into the first quarter of 2021. The city was late to the party, and that party was characterized by plunging inventory, surging sales and rapidly rising prices. That narrative that overlaid the suburban markets is now being felt in the city. It’s just a six- to nine-month lag and simply a period of catching up to the rest of the region.

Does the active sales market just mean there is not enough housing?

There’s this insatiable demand because inventory can’t be created fast enough. For many neighborhoods in the region where a typical inventory level was 200 homes, a year ago it was down to around 50, and now it’s eight. It’s not a decline in inventory. It’s a collapse. Manhattan has product to sell because it’s six to nine months late to the party, but I think there’s going to be an inventory challenge in the city later in the year as heavy sales volume continues.

What would your advice be to house hunters looking for a good deal?

People who are waiting for a price correction are going to have a long wait because we’ve never in the modern era experienced such a chronic shortage. As affordability continues to deteriorate, we’re looking at a plateauing phenomenon for price trends as opposed to a correction based on the supply challenges. This is not a fun housing market for most. It’s very stressful. It’s very rushed. But if someone is looking to buy something in the next several years, I think we’re looking at more of the same barring some sort of economic event we can’t anticipate. ■

BUCK ENNIS

JONATHAN MILLER Miller Samuel

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3/3/22 3:58 PM

REAL ESTATE

JPMorgan joins companies shedding office space BY AARON ELSTEIN AND NATALIE SACHMECHI

BLOOMBERG

PMorgan Chase, which rents more commercial space in the city than anyone else, rented less last year, joining a parade of large companies that continued to shrink their office footprint. JPMorgan leased 400,000 fewer square feet in New York, a 4% decline. Spokesman Michael Fusco said long-term leases expired and employees were transferred to a nearby Midtown location. “We are committed to New York City and planning for the next 50 years with our new headquarters here,” Fusco said. The giant bank was one of several financial institutions to downsize its workspace last year. Wells Fargo cut office space in the New York area by 15%, or 600,000 square feet. Bank of New York Mellon reduced its footprint by 10% nationwide. Manhattan-based insurer Voya Financial leased 13% less space nationally and rents almost a third less than before the pandemic. MSCI, which created indexes used by investment professionals, plans to use a third less space in its World Trade Center headquarters. Media outfit AMC Networks shrank its office footprint nationwide last year by 12%. A Wells Fargo spokesman said the bank would reduce its real estate footprint by up to 20% nationally in 2024 “due to our underutilization of the space pre-Covid.” Bank of New York Mellon said, “Our real estate is sized and designed to support our new hybrid work model.” Voya, MSCI and AMC declined

THE BANKING GIANT leased 400,000 fewer square feet in New York last year, a 4% decline. to comment. The reductions, all disclosed in recent annual reports, illuminate how specific companies have reacted to the pandemic that emptied offices and raised questions about New York’s future. Office vacancy rates in Manhattan hit a record 17.4% in February, real estate services firm Colliers found. The vacancy surge may not be

over. Downtown, where almost 20% of office space lies empty, magazine publisher Meredith Corp. is leaving behind 332,000 square feet of space at 225 Liberty St. after being acquired in December. Meanwhile, the pace of new office construction is its highest since the 1980s, said Frank Wallach, executive managing director at Colliers, who added that not all of the

vacated office space reflects changes wrought by the pandemic. “Law firms used to have massive libraries,” he said. “As the world became more digital, they did not need that.” Yet Covid explains a lot of the shrinkage. After JPMorgan cut its New York office footprint by 300,000 square feet in 2020, CEO Jamie Dimon said

last year that the pandemic would “significantly reduce our need for real estate.” The bank remains New York’s largest commercial tenant, renting 8.7 million square feet. A new headquarters tower is under construction in Midtown. Perhaps encouraged by Amazon, Facebook and Google, which have signed on for large chunks of space in the past few years, Mayor Eric Adams estimates New York office properties have lost just 7% of their prepandemic value. Property taxes make up almost half of municipal tax revenue. The Independent Budget Office recently predicted that collections would increase faster than city forecasts, thanks mainly to rising values for apartments and hotels. Several large employers, including American Express, Citigroup and Verizon Communications, have started summoning employees back to the office, and ridership on the Long Island Rail Road and the Metro-North Railroad has been picking up. Meanwhile, some companies using smaller and reconfigured workspaces are thriving. After shedding more than 1 million square feet of office space in 2020, Omnicom Group, which owns BBDO and other ad agencies, said leasing costs fell by $30 million last year, or 10%, while revenue rose by more than $1 billion. “Forward-thinking, unassigned workspaces are designed to give employees flexibility without affecting productivity,” a spokeswoman said, “all while optimizing our square footage.” ■

TECHNOLOGY

BY RYAN DEFFENBAUGH

or Clayton Banks and Silicon Harlem, this was long in the making. Banks, CEO of tech infrastructure company Silicon Harlem, seven years ago envisioned a gigabit-powered Wi-Fi center to help create a tech hub in Upper Manhattan, where in some neighborhoods up to 40% of residents do not have broadband. Last Monday that center officially opened as a partnership involving the operator of the LinkNYC Wi-Fi kiosks, the city, Silicon Harlem and the C-Better Foundation. The center, at West 148th Street and Frederick Douglass Boulevard, provides what Silicon Harlem said is the fastest free public Wi-Fi in the city. “So many of us, from preschoolers to seniors, can use some help learning digital literacy,” Banks said. “That is what innovation centers can do.”

The Innovation Space for People, as the 2,800-square-foot center is called, offers coworking desks, after-school programing, event space and public access to 20 computers. It was designed by Silicon Harlem in collaboration with creative studio Ground Up. Matthew Fraser, Mayor Eric Adams’ chief technology officer, attended a ribbon-cutting for the center on Monday. He said the fast and free Wi-Fi “not only has the potential to transform Harlem into a tech and innovation hub; it can also serve as an engine for increasing quality jobs, lowering unemployment and reducing violent crime.” The opening of the Harlem gigabit center marks a new step in a restart of LinkNYC, the public-private effort to build a citywide network of kiosks providing free public Wi-Fi. The franchise agreement awarded to LinkNYC operator CityBridge in 2014 included a provision to build a

GROUND UP

New gigabit center in Harlem hopes to bridge digital divide

THE INNOVATION SPACE FOR PEOPLE offers coworking desks, after-school programming and access to 20 computers. gigabit center in each borough, which in Manhattan was to be done in partnership with Silicon Harlem. CityBridge stalled out in putting up the Wi-Fi kiosks in 2018, when the digital ad sales intended to finance the program fell well short of expectations. The gigabit centers never materialized. Last year ZenFi Networks, a telecom infrastructure company, agreed to invest $200 million in CityBridge to use the structures to expand 5G cellular coverage—positioning LinkNYC to build new kiosks for the first time in three years.

The city approved that plan during the summer. Banks said the center is opening as the conditions of the pandemic, working and learning from home, have more people paying attention to the digital divide. “Connectivity is still lacking in so many areas, and now since Covid, everybody has finally got what I've been saying for years, like, ‘Wait a minute, some people don't have internet?’ ” Banks said. Silicon Harlem was selected last year to work with the city on the former de Blasio administration’s In-

ternet Master Plan, installing broadband in three public housing buildings. CityBridge, meanwhile, is hoping to soon start installing the newly designed 5G-enabled LinkNYC kiosks, although it still needs final approvals to place the taller kiosks on residential streets. Four boroughs still do not have a gigabit center. “I’m proud of what we, the city and CityBridge did to make this happen. But we are going to stay on them still,” Banks said. “This is something that needs to be done in every borough.” ■

March 7, 2022 | CRAIN’S NEW YORK BUSINESS | 15

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ON REAL ESTATE

ne of the biggest contro- trit Group, sold their development versies to erupt in the sites to Brookfield Properties about South Bronx when I was three years later for $165 million. Just because the billboard is gone, covering the area for the late news site DNAinfo, was sparked though, doesn’t mean that development in Mott Haven has stopped. by nothing more than a billboard. Brookfield’s complex on the forKeith Rubenstein of Somerset Partners owned two huge develop- mer Rubenstein site is the most noment parcels along the Mott Haven table one by far, but major New York developer RXR Realty has waterfront at the time. In gotten into the game as 2015 he promoted the upwell, planning a 200-unit coming project he was project at 2413 Third Ave. working on by putting up a The median asking rent in billboard that dubbed the Mott Haven also hit a reneighborhood the Piano cord high last quarter at District. The sign caused $2,500, up from a median outrage in the community, of $2,000 during the 2015 as it seemed to crystallize Piano District controverall the longstanding fears sy, according to data from residents had about gen- EDDIE SMALL StreetEasy. trification. A wealthy deTenants at Brookfield’s veloper would come in, build a project for other wealthy New project, called Bankside, are likely to Yorkers and price out the people who pay significantly more than $2,500, had lived there for decades. And he however. Although 30% of the units wouldn’t even let Mott Haven keep are designated as affordable housing, people can now apply for apartits name. The sign itself came down quickly ments in the project’s building at enough amid all the controversy, and 2401 Third Ave., where rents for Rubenstein and his partner, the Che- available market-rate units range

COOPERATIVES FROM PAGE 1

People’s Choice Communications is part of a small but growing cohort of companies bringing an old model to the tech industry: the cooperative. Such entities are owned and governed democratically, either by workers, users or customers. In New York, the worker co-op structure is being applied to ride-sharing, apartment cleaning and music-streaming, among other services. The model faces a long path to challenging the status quo in the tech industry. But advocates pitch co-ops as a way to use tech to empower workers and solve local problems, as lawmakers from Albany to Washington, D.C., are scrutinizing the inequality and concentration of power left by Silicon Valley’s ascendance.

Giving people a voice Co-ops on this continent date back to Benjamin Franklin, who in 1752 founded the Philadelphia Contributionship, a mutually owned fire insurance company. Credit unions are consumer co-ops, owned by members. Bronx-based Cooperative Home Care Associates has more than 2,200 home health aides, placing it among the largest worker-owned co-ops in the country. “Cooperatives are seen, broadly, as something extremely positive, bringing a voice to people who don't always have a voice in the workplace. The question was how to bring that model to the internet,” said Trebor Scholz, founding director of the New School’s Platform Cooperativism Consortium, which supports research and entrepreneurship for technology-driven

cooperatives. New models are emerging. Food-delivery couriers have organized cooperatives throughout the globe, focused heavily in Europe. Stocksy, based in British Columbia, is an artist- and employee-owned provider of photographs online. Up & Go, created by Sunset Park nonprofit the Center for Family Life, provides apartment cleaning through an app that is collectively owned by the cleaners. “When someone hires me, they get the boss herself,” one of the workers, Maria Carmen Tapia, told The New York Times in 2020. Brooklyn’s Ampled is an artist- owned platform that allows users to subscribe directly to musicians’ work. Emmanuel Pardilla, membership director of the New York City Network of Worker Cooperatives, framed the worker co-ops as responding to the “precarity of the gig economy, which has utilized technology to the detriment of unions and worker power.”

The digital divide Both People’s Choice and the Drivers Cooperative, an alternative to Uber, launched in the city last year and are gaining momentum. People’s Choice hopes to help close the large gaps in internet access between the city’s wealthy and low-income neighborhoods, referred to as the digital divide. Because its goal is not to profit but rather sustain work for its members, Walcott said, People’s Choice can focus on areas long overlooked by telecom companies. Much of its early work is situated in the Bronx, where a third of residents do not have the broadband internet speed required for school and work.

from $2,943 for a studio to $7,434 for a three-bedroom, comparable to what apartment hunters would find in several Manhattan and Brooklyn neighborhoods. In other words, when developers salivate and longtime residents worry about Mott Haven becoming the next Williamsburg, projects like this are almost exactly what both sides have in mind. But predictions about Mott Haven turning into a Brooklyn-style hot spot have been going on for years without fully taking root. The Clock Tower, which is now a staple of the neighborhood’s housing stock, opened back in 2002, and, as a converted piano manufacturing building that also houses the trendy restaurant Charlies Bar & Kitchen, it seemed almost genetically engineered to lay the groundwork for a Williamsburg-style transformation. The anticipated broader changes never arrived, however, something largely blamed on the 2007 collapse of the housing market. But development and trendy businesses came back steadily throughout the 2010s, all operating under some version of “Everyone was home more during the pandemic,” Walcott said, “and so many struggled because they had no access to the internet.” People’s Choice has partnered with the startup BlocPower and the nonprofit MetroIAF to make highspeed broadband available to about 10,000 New York City Housing Authority residents at a cost of about $15 to $20 per month. As its customer count grows, People's Choice plans to hand over ownership of its network to the residents of each building. That will allow customers a vote in setting policies for the network, such as the amount of personal data that can be collected. The voting power provides what Walcott called a system of checks and balances. “Customers have a say in the system and fair rates,” he said. “Workers get a fair wage for a fair day’s work.” The Drivers Cooperative, meanwhile, is responding to complaints about the lack of benefits and stability in the gig-work model employed by Uber and Lyft—something that lawmakers in Albany have struggled to address. It pledges to offer a better deal for both drivers and customers. Mohammad Hossen has been driving for Lyft and Uber for six years in the city. He said the Drivers Cooperative offers not just a chance for more income but also a voice in the platform he relies on for his livelihood. Hossen said that drivers can have great reviews from customers on other platforms but be deactivated for a single complaint. “If you are relying on these apps and are deactivated, how do you survive?” he asked. Hossen is a founding member of an elected drivers’ advisory board for the cooperative that will vote on policies governing the app—includ-

ARX SOLUTIONS

Is the promised boom of the South Bronx real this time?

the premise that, this time, it’s different. The success or failure of Bankside will play the biggest role by far in determining whether or not this time really is different. It is not the first development in the neighborhood aiming to appeal to renters seeking higher-end apartments, but it is the most ambitious and the one that would most easily look right at home in neighborhoods like Downtown Brooklyn and the Financial District, which have already witnessed a slew of new luxury residential projects. It remains to be seen whether Mott Haven can support a project of this scale at these rents, but Brookfield is not known for being a company that takes huge risks on its real estate projects (nor is RXR, for that

matter). And the company is opening it at a good time for landlords, given how quickly and dramatically the city’s apartment market has swung from tenants’ favor back to theirs. Successful real estate projects tend to beget similar projects, as other developers hope to get a taste of some of that success for themselves. If Bankside is soon filled with occupied apartments and tenants taking advantage of the private outdoor swimming pool every weekend, look for other real estate firms to launch comparable Mott Haven developments and add momentum to the long-rumored South Bronx real estate boom as quickly as they can get shovels in the ground. ■

ing adjudicating complaints. “Our main mission is the empowerment of drivers,” he said. The Drivers Cooperative handles about 700 trips per day, helped by partnerships with the city and the Metropolitan Transportation Authority. The organization could begin to break even at around 1,400 daily trips, it estimates, though its ambitions extend beyond that. Uber and Lyft together dispatch about 500,000 trips daily in New York. Erik Forman, a labor organizer and professor studying how to apply the co-op model to tech, is a co-founder of both People’s Choice and the Drivers Cooperative. In conversations as a labor organizer, the same questions kept coming up, he said: “Why are we spending all our time and money fighting against these companies and their policies we don’t like? Why don’t we just start companies that are owned and run by the workers themselves?” Forman launched the Drivers Cooperative with Ken Lewis, a blackcar driver, and Alissa Orlando, a former operations leader for Uber— capturing feature coverage in The New York Times and social media promotion by Rep. Alexandria Ocasio-Cortez. Asked about the Drivers Cooperative, a Lyft spokesperson said the firm is “constantly working to improve the driver experience on our platform.” Uber pointed to a webpage detailing its policy on account deactivations, which said the company is “dedicated to reviewing each report fairly and promptly.”

Corp., at Company Ventures in Midtown and Brooklyn’s Newlab, respectively. “We want to show that this type of business model can grow to scale,” Forman said. “The belief in Silicon Valley is that only the venture-backed businesses can scale.” Achieving that as a cooperative is, of course, tricky. The entities often face challenges accessing capital, particularly in a tech industry largely funded by venture capital investors, who buy an ownership stake in a company. Cooperatives also have to try to break through what the tech industry calls network effects—the way platforms such as those of Uber and Airbnb become easier to use as more people join them. Scholz, of the New School, said it's a mistake to consider co-ops successful only if they somehow overtake the massive companies they are challenging. People's Choice Communications, for instance, can count its achievements based on how many New Yorkers it helps connect to high-speed internet over the next decade, not whether Spectrum or Verizon are still standing. He cited the rural U.S. electric cooperatives started in the 20th century as part of the New Deal as an example. Historically, electric companies had largely ignored rural America because there wasn’t much money in electrifying the sparsely populated regions. The co-ops that were formed have been a lasting success—still maintaining about half of all the U.S. electric distribution lines. “What’s important to understand is that these cooperatives were not started in Iowa or Montana to destroy the electric companies,” Scholz said. “People just wanted electricity.” ■

Measuring success Both People’s Choice and the Drivers Cooperative recently joined fellowship programs backed by the city Economic Development

March 7, 2022 | CRAIN’S NEW YORK BUSINESS | 17

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SNAPS

Most Powerful Women in New York luncheon On March 3 Crain’s New York Business celebrated the honorees on its latest Most Powerful Women in New York list with a luncheon at Manhattan Manor on West 52nd Street. The event included two keynote addresses and as a panel discussion of the best ways to welcome women back into the workplace who had left the labor force during the pandemic. More than 200 attendees took part in the sold-out reception. PHOTOGRAPHS BY BUCK ENNIS

Melba Wilson, a restaurateur and the president of the New York City Hospitality Alliance, delivered one of two inspiring keynote speeches.

The panel discussion was moderated by Crain’s managing editor Telisha Bryan (left), with speakers Nancy Hagans, president of the New York State Nurses Association; Kim Godwin, president of ABC News; and MaryAnne Gilmartin, CEO of MAG Partners.

Tarika Barrett, CEO of Girls Who Code, during the festivities

Katherine Farley, chair of Lincoln Center for the Performing Arts, also delivered a keynote address.

Godwin (center) and the team from ABC News

The celebration was attended by women from a variety of industries looking to network and learn about power from the honorees.

Crain’s publisher and executive editor Fred Gabriel (center left) with Wilson (center right), chef and Food Network host Anne Burrell (far right) and friends MARCH 7, 2022 | CRAIN’S NEW YORK BUSINESS | 19

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POSITION AVAILABLE Audit Senior II (New York, NY) Perform audits for prominent & highly successful clients in various industries, incl real estate companies, pension funds, & nonprofit orgs. Prepare corp, partnership, & trust tax returns & review & compile financial statements for various industries. Prepare financial statements & assist Partner/Mgr in audit planning. Prepare analytical reports incl credit card analyses & agreed upon procedures reports for litigation & business valuation grp. Develop analytical reports for variances in income & expense reports & consolidate subsidiary accts. Prepare client representation & engagement letters & be responsible for reconciling cash, bank, & other assets & vouching expenses & income. Review inventory & correspond w/ banks & mortgage companies for balance confirmations. Req’d: Bachelor’s degree (US or foreign degree equivalent) in accounting plus 3 yrs relevant audit exp w/at least 2 yrs working for public acctg firm & 3 yrs exp in: preparing partnership & corp business entity tax returns, real estate & affordable housing industry, internal control & risk assessment, using audit & tax software. Email resume to Berdon LLP at: kbennett@berdonllp.com

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NOTICE OF FORMATION OF Eugene Business Consulting, LLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 09/27/2021. 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: 8711 92nd Street, Woodhaven NY 11421. The principal business address of the LLC is: 8711 92nd Street, Woodhaven NY 11421. Purpose: any lawful act or activity.

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NOTICE IS HEREBY given that a license #1343094 for beer, cider and wine has been applied for by the undersigned to sell beer, cider and wine at retail in a restaurant under the Alcoholic Beverage Control Law at 53 Bayard Street, New York, NY 10013 for on premises consumption. Zhou’s Group, Inc. d/b/a Yunshang Rice Noodle House.

Notice of Qualification of DOUP PARTNERS LLC. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 01/13/22. Office location: NY County. LLC formed in Delaware (DE) on 09/17/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901. Purpose: Any lawful activity.

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Notice of Qualification of ESNY BEACON LLC. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 01/05/22. Office location: NY County. LLC formed in Florida (FL) on 08/29/19. Princ. office and FL addr. of LLC is: 900 5th Ave. South, Ste. 202, Naples, FL 34102. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. Cert. of Form. filed with FL Secy. of State, 500 S. Bronough St., Tallahassee, FL 32399. Purpose: Investments for profit of a general nature, including real estate, land, closely held business entities, and any other lawful business activity allowed by law.

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Application for Authority of ABL RPC RESIDENTIAL CREDIT ACQUISITION LLC filed with the Secy. of State of NY (SSNY) on 2/1/2022. Formed in DE on 7/22/2020. Office loc.: NY County. SSNY is designated as agent of LLC upon whom process against it may be served. The address SSNY shall mail copy of process to 30 Montgomery St., Ste. 215, Jersey City, NJ 07302. The office address required to be maintained in DE is The Corporation Trust Company, Corporation Trust Ctr., 1209 Orange St., Wilmington, DE 19801. Cert. of formation filed with the Secy. of State, 401 Federal St., #4, Dover, DE 19901. Purpose: Any lawful activity.

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EVENTS With that, the pitter patter of conventions, trade events and business meetings has begun to seem more like a cascade. The return of work travel is critical to the city’s recovery. Business travelers account for just 20% of city visitors, but groups arriving for conferences fill hotels, and independent business travelers spend the most per day of any visitor, said Vjiay Dandapani, president of the Hotel Association of New York. “When the company is footing the bill,” he said, “people open their wallets.” Still, the initial comeback is measured. The Javits Center, the largest convention center in the city, has 40 events booked between January and June, after holding 48 between August, when it reopened for events, and December. It used to host about 175 gatherings annually. Although NYC & Company, the city’s marketing agency, foresees domestic business travel reaching prepandemic levels by 2025, it counts an additional year before international business travel is back in full. For this year, it predicts there will be about 65% of prepandemic business arrivals. Large hotel groups have likewise forecast that robust demand for business travel will not be back until the fourth quarter, said Yariv BenAri, co-chair of the real estate hospitality group at the law firm Herrick,

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THE COTERIE SHOW at the Javits Center Feinstein. “It takes time to get a convention center or a food and beverage program at a hotel up and running,” Ben-Ari said. “It’s not just overnight.”

What’s on Last year, in something of a coup for New York City, investor Anthony Scaramucci left Las Vegas to hold his SALT conference in a new venue at the Javits Center. He plans to return to the venue in September, his company shared with Crain’s. Likewise, the New York International Auto Show, which was canceled two years in a row, is on for April.

At LegalWeek, the turnout has surpassed Carter’s expectations. “After two years of waiting, we’re fortunate that we have an enthusiastic appetite among attendees to get back to in-person events,” he said. This year he expects that sponsor and exhibitor revenue will match ALM’s February 2020 numbers, with registration fees reaching about 80% of 2020 levels. LegalWeek is at the Hilton on Sixth Avenue, where many guests also stay. In addition to the official schedule, there are lunches, dinners and parties at venues around the city, Carter said. At the Plaza, bookings are gradually building into a strong spring, said

Mike Warren, director of catering for CPS Events at the Plaza. Although weddings have been strong since the hotel reopened, nonprofit events have since joined the comeback. Corporate is last, but Warren said he has begun to get more inquiries from companies each week.

Cancel culture This isn’t the first wave of optimism about a business travel comeback; the tenor was similar last spring as restrictions eased. But some scheduled gatherings ended up not happening. “Every time there is a shock to the system, people cancel,” Dandapani said. The 24-hour cancellation policy

at hotels means that robust bookings can evaporate. Some corporations have kept a ban on business travel; others await the return of a full schedule of flights. Still other would-be business visitors have avoided New York because of pandemic rules such as the Covid-19 vaccine mandate, Dandapani said, and the U.S. requirement that international arrivals show a negative Covid test taken within 24 hours. He noted that European countries no longer ask for that. Javits operators think the convention center will see more events booked when safety protocols are rescinded, added Tony Sclafani, senior vice president and chief communications officer. As of this week, the city will no longer require indoor venues to check for proof of vaccination. At Coterie, organizers have seen the slow build firsthand. The February event was observably quiet but still represented an increase in attendance from its September market. “We are still getting back on track like the rest of the world,” said Kelly Helfman, president of Informa Markets Fashion, which runs Coterie. “Some things are out of our control.” Shalant, who designs occasion wear, set up in a larger space at Coterie than she had booked in September. She had recently attended bustling shows in Atlanta and Dallas and expected the same crowds here. “Business in Dallas is enormous,” she said. “They are partying, and they need clothes.” ■

CRAIN’S NEW YORK BUSINESS 2022

LEADERS IN ADVERTISING, MARKETING & PR Help Crain's New York Business recognize the efforts of advertising, marketing and PR leaders by nominating them to be honored as an expert in this competitive industry!

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SMALL- BUSINESS SPOTLIGHT

VENGO LABS machines are in Grand Central and Penn Station, among other locations, Shimmerlik says.

FOCAL POINTS

Vending machine firm makes a new kind of sale Long Island company pivoted to hawking ad space on its devices when supply woes tanked revenue BY BRIAN PASCUS

uring the early throes of the pandemic, when numerous businesses in New York were going under, Brian Shimmerlik decided the company he co-founded needed to make significant changes to stay afloat. In 2013, with $17,500 in seed funding from an Economic Development Corp. competition victory, the former JPMorgan executive had helped launch Vengo Labs, a software company that develops compact touchscreen vending machines for the 21st century. Slim, digital, cashless and able to be placed on walls as well as subway turnstiles, Vengo’s machines can dispense products as diverse as cell phone chargers and protein bars. Before Covid, the company, headquartered in Bethpage on Long Island, was growing. By purchasing products wholesale and selling them retail, Vengo generated more than $1 million in sales annually. “We got some pretty great traction,” Shimmerlik recalled. “We had 1,500 vending ma-

chines around the city and country, Penn Station, Grand Central, New York City subways. But a funny thing happened on the way as we got pummeled by Covid.” The company’s 2020 revenue fell to zero as most commuters stopped coming into the city. On top of that, the supply chain was disrupted by the pandemic, holding up consumer goods, and the cost to produce the company’s vending machines skyrocketed. Unable to fill its machines with products stuck on ships at port, Vengo’s team decided instead to tap in to an emerging sector to find its second life. The company stumbled upon digital outof-home media, often referred to as DOOH, a $3 billion space that refers to any screen that consumers might encounter outside of their house in a public or semi-public location. Think of all the digital billboards glowing in

Times Square or the screens used on restaurant tables in airports. Vengo began using the screens on its vending products to host advertisements. It prioritizes placing the ads on its machines in spots with high foot traffic, such as the ones on college campuses and in hotels. In doing so, the company has partnered with companies including Cheddar and Estée Lauder to tout their wares through Vengo. “The adoption of technology has been accelerating like crazy,” Shimmerlik said. “The industry is doubling every year.” Vengo’s business model requires constant supervision of what’s happening on its thousands of screens. Anthony Gelsi, director of operations, monitors and assesses each to make sure it’s online and receiving media ads in real time. Vengo projects that its annual revenue for

“A FUNNY THING HAPPENED ON THE WAY AS WE GOT PUMMELED BY COVID”

COMPANY NAME Vengo Labs FOUNDED 2013 EMPLOYEES 16 full time CO-FOUNDERS Brian Shimmerlik, CEO, and Steve Bofill, chief of design 2021 REVENUE $3 million PROJECTED 2022 REVENUE $12 million PRODUCT MIX Vengo has vended everything from Clorox Disinfecting Wipes to Skullcandy Headphones. PARTNERSHIPS Companies that have partnered with Vengo include news and entertainment firm Cheddar and food and retail service company Canteen. WEBSITE vengolabs.com 2022 will hit $12 million. The company of 16 full-time employees and hundreds of contractors is now expanding, placing more than 1,200 screens on different college campuses around the U.S. “It’s a lot of hard work—countless hours,” Gelsi said. “It’s a testament to the team that we were able to build this sort of infrastructure from scratch to be able to support, technically, two different types of strategies.” ■ MARCH 7, 2022 | CRAIN’S NEW YORK BUSINESS | 23

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UPCOMING EVENTS CRAIN’S NEW YORK BUSINESS

B R E A KFAST Breaking news live on stage with the city’s most powerful people.

CRAIN’S NEW YORK BUSINESS

Gregory Russ, Chair & CEO B R E A KFAST NYCHA April 6

Ritchie Torres US Representative April 29

Janno Lieber, Chair & CEO MTA May 11

Commercial Real Estate Networking Event

The Race to Build Affordable Housing April 27: Panel discussion on New York’s 421-a program.

Brad Lander, Comptroller NYC

Ron Moelis, Chair & Co-founder Brenda Rosen, President & CEO Breaking Ground L+M Development Partners

May 5: Crain's Forum talks in-person on health equity and how all New Yorkers can get the care they need. Additional speakers will be announced soon.

Dr. Kam Doobay, Organizer NYC Coalition to Dismantle Racism in the Health System

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