Crain's New York Business

THE CLOSER From selling high-end pens to closing deals for Louis Vuitton PAGE 14

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COOKING UP CHANGE Female chefs look to reform kitchen culture PAGE 3

MAY 9, 2022

FINANCE

A SPACtacular hangover

Special-purpose acquisition company boosters remain in the black even as investing mania stalls

COLES, a former magazine editor, is one of dozens of big-name sponsors to lend her brand to a “blank check” firm.

BY AARON ELSTEIN

J MACKENZIE STROH/THE TIMES MAGA ZINE/NEWS SYNDICATION/REDUX

oanna Coles is the very model of a modern, major magazine editor. She heaved Cosmopolitan into the digital age while starring in the E! channel reality show So Cosmo. She also joined the board of Snap and was executive producer of the Netflix series The Bold Type.

But she left the glamour of magazines behind in the summer of 2018 after a power struggle at Hearst.

“My route is being recalculated,” Coles announced from her office treadmill. “It’s time for a VALUE OF new adventure.”

Coles’ stake Adventure she found in a SPAC for on Wall Street, where she which she and got involved in a celebria partner paid ty-driven investment fad $25K for shares called SPACs. SPACs, or special-purpose acquisition companies, were one of the pandemic’s great financial manias, along with dogecoin and meme stocks. After an 18-month binge, the inevitable hangover has struck as regulators snap to attention.

$20M

See SPAC on page 19

POLITICS

How pay transparency could shake up the city’s job market

BY RYAN DEFFENBAUGH

E

mployers have gotten a slight delay, but big changes are coming to the way workers hunt for jobs in New York City.

After a City Council vote on April 28, a city law will require almost all job ads to include a salary range starting Nov. 1, rather than May 15.

Local Law 32 of 2022 will make it il-

NEWSPAPER

VOL. 38, NO. 18

legal for any firm with more than four employees to advertise a job without a “good faith” salary range.

The law was initially approved in December, but a push from businesses brought the delay and a series of amendments.

Labor and employment attorneys have been busy publishing guidelines suggesting how employers can prepare, including by con-

© 2022 CRAIN COMMUNICATIONS INC.

ducting pay-equity audits.

For firms, the challenge “is not just a matter of posting ranges,” said Ian Carleton Schaefer, chair of the New York employment and labor practice for the law firm Loeb and Loeb. “It is the second- and thirdtier consequences that may be difficult to grapple with internally.”

Employees will have the ability to compare their current pay against

what the company is offering at similar positions—creating the potential for dissatisfaction and in some cases litigation. Workers will also be able to look around at what other companies are willing to pay someone with their skills and experience.

“There will be opportunities for many employers, particularly those who are very well positioned and

pay at the top of the market, to use this to their advantage,” Carleton Schaefer said.

To prepare, businesses should review existing salary ranges and those of market competitors to ensure fairness for existing employees. Employers also need to “train supervisors … on the implications See PAY on page 22

PINGPONG STARTUP SERVES UP 24/7 ACCESS

The city’s largest real estate financings

PAGE 23

PAGE 10

TECH SPOTLIGHT

HEALTH CARE

BY AMANDA GLODOWSKI

H

ealth leaders across industries gathered last Thursday morning to discuss health equity in the city and how to best tackle upcoming challenges.

The Crain’s-sponsored event at the New York Athletic Club featured a fireside chat between New York City’s health commissioner, Dr. Ashwin Vasan, and Cory Schouten, editor-in-chief of Crain’s New York Business, along with a panel discussion.

Vasan, who heads the New York City Department of Health and Mental Hygiene, a nearly 7,000-member entity with a $2 billion budget, spoke to the challenges of navigating messaging around a virus that is “no longer binary,” as masking guidelines are shifting across the city. Vasan also noted that, after establishing an “unprecedented pandemic response,” it will be important to ensure that exposed inequities do not perpetuate as the end of federal funding looms and the health system is tasked with taking on more of the everyday burdens of the pandemic.

“It is concerning, of course, as to how we’re going to mount that response for what this virus may or may not throw at us in the future,”

Vasan said. “We can all agree this virus has been somewhat unpredictable. So I am concerned that turning off the federal relief dollars in the future may compromise aspects of our response.”

Vasan also said he found the leaked opinion revealing that the Supreme Court planned to overturn Roe v. Wade “a disturbing revelation,” adding that “reproductive rights, women’s rights, the rights of pregnant people to make decisions about their own bodies and reproductive choices is a foundational cornerstone of public health, a foundational cornerstone of human rights.”

Vasan said he isn’t sure if there will be an expectation for people to come to the city specifically to access abortion care, but he “wants them to know that they are welcome here in New York City.”

Need for collaboration The discussion was followed by a panel composed of Dr. Lynne Richardson, founding co-director of the Institute for Health Equity Research and professor of emergency medicine at the Icahn School of Medicine at Mount Sinai; Cesar Herrera, CEO and co-founder of Yuvo Health; LaRay Brown, CEO of One Brooklyn Health System; and Judy Wessler, former di-

rector of the Commission on the Public’s Health System and now an advocate.

The lively discussion, moderated

by Crain’s health care reporter Maya Kaufman, touched on the need to collaborate across sectors and with communities, make use of the abundance of health care data available and restore trust with marginalized populations.

“There’s people racism and there’s institutional racism,” said Brown, who leads a health system where more than 50% are insured

by Medicaid and less than 10% of patients have commercial insurance.

“I think there have been overt actions to not address the inequities of institutions— FQHCs [federally qualified health centers], public hospitals, safety hospitals—that serve racially diverse populations," Brown said. "And there has been, I believe, decades of structural disinvestment. And now we have to deal with those things as well.”

Richardson brought up the importance of gathering correct population information when it comes to a patient’s race, ethnicity and language preferences to make better use of the abundance of medical data available to providers, noting that “once you start looking, the data will lead you to where there

BUCK ENNIS

City health commissioner, industry stakeholders discuss closing the equity gap at Crain’s event

PANEL: (From left) Kaufman, Richardson, Herrera, Brown, Wessler and Vasan needs to be interventions.”

Herrera’s company, Yuvo Health, offers administrative and managed-care contracting services to FQHCs, which provide primary care for underserved populations.

He said that it’s not simply a matter of having enough data, but rather, having it in one place.

“Everyone’s collecting it; it’s just being collected piecemeal,” he told the audience.

“No one is making it easy for the ecosystem to look at the entire picture,” Brown added. “But we really need to be able to have … information that tells us something we can do.”

Building trust The discussion closed on the note of trustworthiness in the health system among marginalized populations.

“Trust requires building relationships, which takes time,” Richardson said, adding that the marginalized communities shouldn’t be faulted for not trusting the health care system.

“We need to look at ourselves and ask how we can behave in a more trustworthy fashion,” she said. “If you take the time and work with communities, they come to trust you, but there are reasons why they don’t trust the system." ■

FINANCE

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We will discuss identifying funds, partnership opportunities and program initiatives that help maintain the arts sector, an essential part of New York City’s competitive edge.

NEW YORK ATHLETIC CLUB 180 Central Park South Time: 8:30 to 10 a.m.

CrainsNewYork.com/arts_culture

New York’s publicly traded tech firms take a beating as stock market sinks

BY RYAN DEFFENBAUGH AND AARON ELSTEIN

T

he share values of nearly all of New York’s publicly traded tech companies took a beating last Thursday amid a broader market sell-off that ranks among the worst single-day performances since the early months of the pandemic.

At one point the S&P 500 Index lost 4.2%, the most since June 2020, and the tech-heavy Nasdaq 100 dropped 5.7%, the most since March of that year.

The sell-off came a day after the Federal Reserve raised its benchmark short-term interest rates by half a percentage point.

Henry Weingarten of the Astrologers Fund says the stars show the market will fall further. Rising interest rates and stagnating corporate earnings growth are also factors.

“Sell in May and go away,” ­Weingarten said, applying an old Wall Street adage to new times.

“I expected some sell-off, but the great puking that’s happening, I didn’t expect,” Kim Forrest, founder and chief investment officer at Bokeh Capital Partners, told Bloomberg.

Hardest hit Technology industry stocks that soared during 2020 and most of last year are the hardest hit, continuing a trend that started late last year.

• Brooklyn-based Etsy ended last Thursday down 17% following earnings Wednesday that showed sales growth has slowed.

• Midtown-based DigitalOcean, which provides cloud computing infrastructure largely to technology startups, closed the day down 18%.

• Midtown-based cloud services company Datadog, the most valuable public tech company launched in New York, closed down 6%, moving its market value to $34 billion.

• Tech-driven residential real estate firm Compass, based in Union

BLOOMBERG

ARTS & CULTURE

Square, closed with a 7% slide, to $5.44. The company’s shares debuted 13 months ago at $20.

• Peloton continued its steady fall, down 9% on the day Thursday to $17, roughly half the value it started the year with.

This was not a problem limited to New York firms, of course. Apple (down 5.6%), Amazon (down 7.6%) and Google (down 4.7%) each slumped Thursday as well. ■ With Bloomberg wire reporting

Vol. 38, No. 18, May 9, 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 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.

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2 | CRAIN’S NEW YORK BUSINESS | May 9, 2022

HOSPITALITY

NURDJAJA is a chef and owner of two Mediterranean restaurants, Shuka and Shukette.

7 women chef–created best practices for reforming kitchen culture The changes are being pushed along by labor shortages; some also dangle better pay and benefits

BY CARA EISENPRESS

R

estaurant work is filled with hazards: kitchen injuries followed by sharp warnings not to seek medical care until after the shift ends.

Unwelcome advances in the hallway. Complete dismissal of any request for mentorship. All sorts of prejudice.

“I was once told the restaurant almost didn’t call me because of the name on my résumé—they said they thought I was a dishwasher,” Melissa Rodriguez said at a discussion hosted by restaurant wholesaler Baldor Bites. Rodriguez is the chef and owner of three restaurants: Mel’s, the soon-to-open Al Coro and Discolo, all in the former Del Posto space in Chelsea.

Those are the kinds of moments that have long made restaurants difficult, even toxic, workplaces, especially for women chefs in the past decades, even as the chefs themselves morphed into celebrities and New York diners flocked to an increasingly large set of high-quality eateries. Behind the scenes, twothirds of women workers and more than half of men had experienced some form of sexual harassment from management, according to a 2014 survey by the worker group Restaurant Opportunities Center.

Now the chefs who came up through some tough workplaces are at a point where they have the know-how and financial support to open their own restaurants. In their kitchens, these chefs, many of them women, say they are committed to overhauling the restaurant culture and tweaking operations, menus and schedules to improve life at work. Their efforts have been sped along by a changing dynamic in the industry, as labor shortages have pushed restaurant owners to improve pay and conditions to attract and retain the workers they need.

puts a dish on a blue plate instead of a yellow plate, do you need to send it back?”

She said that changing the atmosphere from one where bosses repeatedly overreact to one where everyone is at least slightly more relaxed has led to a kitchen where workers appear much happier.

Open the kitchen

Set drop-in hours

For Ayesha Nurdjaja, chef and owner of two Mediterranean restaurants, Shuka and Shukette, part of the solution has literally been to bring the kitchen into plain sight.

“When we moved to open up Shukette,” she said, “I wanted to have an open kitchen.”

Taking the kitchen out of the basement and making it visible to guests meant that she needed to think really seriously about creating “an atmosphere of happiness,” she said.

That meant no more meltdowns by the chefs when someone in the kitchen made a minor mistake.

“It’s not that you sacrifice consistency or quality,” she said. “But if your garde manger

Nurdjaja noted that employees really wanted time with her or other experienced chefs to learn on the job. She created daily office hours from 2:30 to 4 p.m. when anyone can drop in for advice. That fosters relationships and is especially important to newer women employees, who, she said, do best when they find a kitchen where they can forge a connection to the person leading it.

Hire for potential Rodriguez said she now hires for potential more than for experience. Then she teaches the skills that are needed, acknowledging that employees will learn at different paces.

Offer the benefits you can Only about one-third of restaurants surveyed by restaurant-tech firm Toast offered health insurance benefits, according to its 2019 Restaurant Success Report. Insurance is

out of reach for many restaurant employers.

Still, Victoria Blamey, chef and owner at Mena, in Tribeca, said that she provides what benefits she can afford, notably stipends for health and wellness spending.

Raise wages Fair pay matters for the culture too. Rodriguez said that in anticipation of her second spot, Al Coro, opening soon, she has upped entry wages from $20 an hour to $25.

Schedule downtime To address burnout, Nurdjaja has instituted a four-day workweek once a month, giving employees some extra time for themselves without reducing their pay. Similarly, Rodriguez enforces 30-minute breaks during shifts.

“No one will allow you to fail here,” she said.

“If you can’t sit down for 30 minutes, then you need to say something so we can get it together.”

Be a role model Finally, simply being a model of what is attainable in the industry has been important in reforming the culture. “Because I’m a woman, I attract a lot of women,” Rodriguez said. “I never had a line cook job where I showed up and saw someone like me.” ■ MAY 9, 2022 | CRAIN’S NEW YORK BUSINESS | 3

RESIDENTIAL SPOTLIGHT

A savvy short-seller looks to unload his UES condo The hedge fund manager who got rid of his Enron shares before the firm collapsed bought the triplex in 2008

BY C. J. HUGHES

A

n investor with a knack for spotting financial weakness while others are bullish has decided to part with his New York home.

James Chanos, the hedge fund manager known for unloading shares in Enron months before the energy company collapsed, has listed his triplex penthouse condo on the Upper East Side for $23.5 million. It cost Chanos $20.4 million in 2008.

With a contemporary look that belies its setting, 3 E. 75th St. No. PH is spread across 7,800 square feet—which includes five bedrooms, a home theater and a primary suite with a fireplace. It features an additional 3,600 square feet of landscaped terraces.

The 50-foot-wide building is a 1904 beaux-arts landmark designed by C.P.H. Gilbert, the architect behind many similarly ornate

$23.5M

LISTING PRICE for Unit PH at 3 E. 75th St. The 6-story building, carved into rentals in the early 1940s, went condo in the mid-2000s. It has eight apartments today.

For-profit whistleblower In 1985 Chanos founded Kynikos Associates, which recently renamed itself Chanos & Co. He has made his wealth as a sort of for-profit whistleblower, exploiting the overly rosy projections of publicly traded companies, inconsistencies that often turn out to be fraud.

In the case of Enron, Chanos was troubled by quirks in the company’s accounting practices, which suggested “Enron wasn’t really earning any money at all, despite reporting profits to its shareholders,” he once told Congress.

In November 2000 Kynikos began shorting Enron— that is, betting the value of its shares would soon plunge—while most investors were still snapping them up. A year later Enron went bankrupt.

More recent short positions for Chanos included in sports-betting company DraftKings; delivery app DoorDash; and Coinbase, a crypto­ currency exchange.

Whether the sale of his penthouse represents a shrewd wager

former mansions. It was built for Stuart Duncan, whose family firm, John Duncan and Sons, imported jams and wine from England before merging with Lea and Perrins, the Worcestershire sauce company. The limestone edifice was sold in 1920 to Clarence Mackay, who made a fortune from a silver mine in Nevada before losing everything in the Great Depression.

COMPASS

THE ORNATE, 50-FOOT-WIDE BUILDING IS A 1904 BEAUXARTS LANDMARK

3 E. 75TH ST. NO. PH includes five bedrooms, a home theater and 3,600 square feet of landscaped terraces.

by Chanos against New York is unclear. He does not own any other homes in the city, at least accord-

ing to property records.

A request sent to his company for an interview went unanswered.

Richard Steinberg of Compass, who is listing the apartment, had no comment. ■

HEALTH CARE

State data spotlights best- and worst-performing hospitals for patients to have cardiac procedures

BY MAYA KAUFMAN

H

eart disease is the leading cause of death in New York, and two new reports from the state Department of Health shed light on the hospitals with the best and worst patient outcomes after interventional procedures.

The reports, released in midApril, capture the period from 2016 to 2018. They track risk-adjusted readmission and mortality rates for percutaneous coronary interventions and various types of cardiac surgery at dozens of hospitals across the state.

For percutaneous coronary interventions, a common procedure also known as angioplasty that is performed on patients with coronary artery disease, five hospitals had risk-adjusted mortality rates

that were significantly lower than the statewide rate: Lenox Hill Hospital, Maimonides Medical Center, Mount Sinai Beth Israel, Mount Sinai Morningside and New York-Presbyterian at Weill Cornell.

In 2018 Maimonides and North Shore University Hospital had lower-than-average risk-adjusted mortality rates, and risk-adjusted readmission rates were lower than average at Maimonides, Mount Sinai Hospital, NYU Langone Brooklyn, Staten Island University Hospital and Vassar Brothers Medical Center.

The analyses drew on data from more than 153,000 patients across 65 hospitals. About 1,900 deaths were recorded after percutaneous coronary interventions.

The state also examined the outcomes of about 12,600 patients who

4 | CRAIN’S NEW YORK BUSINESS | May 9, 2022

received a transcatheter aortic valve replacement, a newer technique for valvular heart disease that delivers a valve replacement using a catheter rather than a surgical incision. Lenox Hill Hospital and New York-Presbyterian/Columbia had the best outcomes across the state as far as risk-adjusted mortality rates from 2016 to 2018.

For coronary artery bypass graft surgery, another common procedure for coronary artery disease, Montefiore Health System's Weiler Hospital was marked as having a significantly higher risk-adjusted mortality rate than the statewide average for 2018.

Of the 38 hospitals that performed valve repair or replacement surgery from 2016 to 2018, either with or without coronary artery bypass graft surgery, Lenox Hill Hos-

pital, South Shore University Hospital and Vassar Brothers Medical Center had among the lowest risk-adjusted mortality rates. NYU Langone Hospital was flagged for a significantly higher mortality rate.

Informed decisions The Department of Health compiled the reports using data from hospitals and clinical guidance from the state’s Cardiac Advisory Committee, which comprises nationally recognized cardiac surgeons and cardiologists. The information is meant to help clinicians understand the health risks that adversely affect outcomes after interventional cardiac procedures. It is also meant to improve cardiac care and help patients make decisions about where to seek care.

Dr. Jeffrey Kuvin, senior vice

president of cardiology for Northwell Health’s central and eastern regions, said hospitals should use the state’s reports to understand how they are performing relative to their peers.

“It comes down to understanding where your opportunities for improvement are,” he said.

Kuvin, who is also co-director of the Sandra Atlas Bass Heart Hospital and chair of cardiology at North Shore University Hospital and Long Island Jewish Medical Center, said Northwell does this work through systemwide task forces that meet quarterly.

The Department of Health launched its first cardiac data registry in 1989, reportedly in response to variations between hospitals in short-term mortality and complications after cardiac surgery. ■

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IN THE MARKETS

Rising interest rates raise blood pressure at Vornado The Fed is expected to boost rates repeatedly this year

THE GIANT OFFICE LANDLORD HAS A BALANCE SHEET THAT ISN’T MADE FOR THESE TIMES

remainder of this year and into 2023,” Evercore ISI analyst Steve Sakwa said in a client note last Wednesday.

That explains why Vornado’s stock price last week fell to its lowest level since December 2020.

Mitigating damage Roth has been at the real estate game a long time and is doing what he can to mitigate the damage of rising rates. Management expects to soon refinance the mortgage for 770 Broadway and is buying TreaROTH sury bonds so its investment portfolio can benefit from the higher yields. The firm is selling properties to borrow at floating rates. raise cash, and it recently agreed to “The fixed-rate strategy, while it sell a 498,000-square-foot office seems safer, it’s for certain much building in Long Island City for more expensive, for certain [offers] $173 million, for a $15 million gain. much less flexibility,” he said on Vornado plans to sell an additional the conference call. “We still be$750 million in assets described as lieve—I still believe in the floatnon-core soon. ing-rate strategy as being a superiEven with rates rising fast, Roth or strategy.” still thinks it’s best for Vornado to

BUCK ENNIS

V

Roth said on a conference call last ornado Realty Trust CEO Tuesday. “But this is the 10th year.”

Steven Roth has more Nearly two-thirds of the $6 bilskin than just about anylion in mortgages carried one in the popby Vornado are floating ular parlor game of prerate, according to reguladicting how high the tory filings, compared Federal Reserve will raise with 20% at rival SL Green interest rates.

Realty and 5% at Empire Like most developers, State Realty Trust.

Roth operates using lots The weighted average of borrowed money. Unrate paid by Vornado rose like some, he prefers 16 basis points in the first loans with floating inquarter, to 2.24%, and instead of fixed rates because their monthly pay- AARON ELSTEIN terest expense rose by $2 million, to $52 million. ments are lower. But now That’s easily manageable considerthat interest rates are rising fast, so ing Vornado’s vast office portfolio are Vornado’s borrowing costs. The includes 280 Park Ave. and 1290 Sixth Ave., 30% of which the Trump Organization owns. But the Fed is expected to raise rates repeatedly this year to tame giant office landlord finds itself inflation, which analysts expect with a balance sheet that isn’t will erode Vornado’s cash flow and made for these times. earnings.

“We have more floating rate debt “We continue to model a sharp than most, and that strategy is corincrease in interest expense for the rect nine out of every 10 years,”

He added that he’s betting higher interest rates won’t last long.

“We expect rates to climb quickly up a mountain, slow the economy and inflation, and then quickly fall down the other side,” he said.

That’s a refreshing contrarian view. If he’s wrong, well, Roth has a lot of real estate to sell. ■

ON POLITICS

NEW YORK COURT OF APPEALS Chief Judge Janet DiFiore

State court tries to take the politics out of political mapping

N

The Court of Appeals' 4-3 ruling ew York’s highest court has thrown out the new went quite far. Several judges, inelection districts drawn cluding the cohort of current and

by Democrats in the Leg- former Republicans on the bench— islature. The decision to reject the the chief justice, Janet DiFiore, Democratic-friendly maps will set switched parties in the past—believed both the U.S. House back Democrats’ ambiand state Senate maps tions and cause chaos this were gerrymandered, in year for candidates and violation of a 2014 constiordinary voters. tutional amendment.

Did the court do the Undoubtedly, both sets right thing? of maps favored DemoThe answer is complicrats, and there were sevcated. Five of the seven eral districts drawn in Court of Appeals judges strange configurations. found that the Legislature They were engineered to had no standing at all to ROSS BARKAN maximize the number of draw new districts after D e m o c r a t- c o n t r o l l e d rejecting the offerings from the deadlocked, quasi-inde- House seats in New York and propendent redistricting commission. tect the supermajority in the state This was a surprise; attorneys for the Senate. But the state is also overDemocrats were sure they could whelmingly Democratic, and some draw the lines—and so were many of the new districts had a degree of outside experts. At the minimum, if logic baked into them. The 11th New York’s highest court scrapped House District, in Brooklyn and the new districts so deep into the Staten Island, extended north to election season, it was believed can- Park Slope and Gowanus rather didates could compete under the than deeper into southern BrookDemocrat-drawn lines in this cycle. lyn, which gave Democrats a signif-

6 | CRAIN’S NEW YORK BUSINESS | MAY 9, 2022

icant edge but joined Brooklyn neighborhoods linked by a subway line.

A special master will now draw new districts, with final House maps to be delivered on May 24. A truly independent commission would be preferable to an independent individual expert—the special master, Jonathan Cervas, a political mapping expert, has inordinate power now—but there’s a real argument to be made, in the spirit of good government, that this is a fine outcome. The trouble is that Republicans across America have gerrymandered many of their own House seats and have actively fed the lie that the 2020 election was stolen. New York’s gerrymander was a bulwark against greater Republican gains. Now that is gone.

The Court of Appeals also had little regard for the state’s election calendar and the disruption its decision will cause at the ballot. Since the lawsuit against the Democratic-drawn lines didn’t include the Assembly maps, the primary date for all Assembly races will remain

in June. So will statewide primaries, including Gov. Kathy Hochul’s.

State Senate and congressional primaries will be shifted to Aug. 28.

Bifurcated primaries aren’t new to New York, but different state races have never been held on different days. A voter will have to remember to show up in June for an Assembly primary and again in late August for a Senate primary. Turnout may plunge.

A better option, if the Democrats’ maps were truly unacceptable, would have been to use one of the draft proposals created by the independent commission. These districts could have been implemented for the next election cycle. Bifurcated election dates should have been avoided at all costs, as well as forcing candidates to petition anew.

In New York City, the Democratic leaders added two state Senate districts that could be eliminated by the special master. Candidates who petitioned to reach the ballot in those districts and raised money might be forced to suspend their campaigns, alienating supporters

AP PHOTO

A voter will have to remember to show up in June for an Assembly primary and again in late August for a Senate primary; turnout may plunge and voters. If the Courts of Appeals’ ruling had merit, ultimately, it gave too little attention to logistics. This will be a befuddling year for local democracy.

Quick takes ● Does Mayor Eric Adams have a plan for congestion? City streets, in the wake of lackluster mass-transit ridership numbers, are increasingly clogged and dangerous. ● It appears state lawmakers may be cutting a deal with Hochul to pass legislation dropping her former lieutenant governor, Brian Benjamin, from the ballot. His resignation came hours after his arrest last month on corruption charges.

The new backroom agreement deserves full scrutiny. ● State lawmakers should shut down an invasive proposal from Hudson Valley Democrat James Skoufis that would allow bars and restaurants to use facial recognition technology to check for ID. ■

Ross Barkan is an author and journalist in New York.

HEALTH CARE

BY SHUAN SIM

A

s evidence of psychedelic substances for treating psychiatric conditions grows, local practitioners are noticing increased interest from the public. Accessing such treatments, however, remains challenging.

In recent years, psychedelic substances have been closely studied for psychiatric conditions such as depression and trauma. Though ketamine is currently the only psychedelic therapy commercially available and not through a clinical trial, its access is cost-prohibitive.

“It’s historically expensive for patients because it was usually not covered by insurance,” said Dr. Amanda Itzkoff, CEO of Curated Mental Health, a clinic that offers ketamine therapy. Today, though there are instances where insurance can cover ketamine therapy, reimbursement structures might reserve that access only for the affluent, she noted. Otherwise, patients have to resort to self-pay.

Clinics in the city providing psychedelic therapy say such treatments should not be reserved for

the rich, and they are devising ways to lower the cost of sessions, or ways to engage with insurance. In laying the groundwork to bridge access to ketamine for now, they’re also setting the stage for the future when other psychedelic therapies, such as with psilocybin or MDMA, become available.

Expensive treatment Ketamine is the only psychedelic substance that has an approval from the Food and Drug Administration—albeit not for use in the treatment of psychiatric conditions. In its label, ketamine is approved as an anesthetic in surgical procedures only.

Using ketamine for psychiatric conditions would be considered “off-label,” Itzkoff said. “But off-label use means insurers have the liberty of not covering it should they choose not to, because the FDA has not backed it.”

Ketamine will almost certainly never receive “on-label” status because it has been a generic drug for decades, and no drug company will want to undertake the expense of putting the drug through trials for that approval when there is no

exclusivity to be enjoyed, Itzkoff added.

Self-pay is common for ketamine infusions, and the price tag in the city can range between about $500 to $1,000 per session, according to rates posted by local clinics.

It can be an uphill battle to get insurance to cover ketamine treatments. “We worked really hard on our relationships with payers to ensure we’re delivering evidence-based care, and they’re finally coming around,” Itzkoff said.

“The burden falls on the provider to supply the evidence to the payer to cover the treatment off-label, and that requires a lot of staff and infrastructure to compile that evidence,” Itzkoff said. Medical literature includes clinical trials that have shown ketamine’s benefit in depression, anxiety and post-traumatic stress disorder.

Nushama and Curated have payment arrangements for patients who are unable to afford their services, but they’re trying creative approaches to lower barriers further.

“Psychedelic treatment should not be reserved only for the rarefied few who can afford it,” said

COURTESY OF NUSHAMA AND COSTAS PICADAS

Psychedelic therapy providers across the city are getting creative as high costs trip up patients

NUSHAMA offers ketamine and wellness services Richard Meloff, co-founder of Nushama, which offers ketamine and wellness services.

Cost savings Ketamine therapy is typically done in a one-on-one setting, including its infusion and integration—where a therapist provides counseling support afterward.

Nushama is exploring group settings for both components. Using

one room for six to eight people rather than for one person provides operational savings, which can be passed on to the patient, Meloff said. Group therapy can also be highly effective for people with shared experiences or trauma, Meloff added.

“We’re not looking to make a killing,” Itzkoff said. “We’re looking to deliver this service for people who need it and keep our doors open.” ■

Northwell is on a mission to fight food insecurity in New York. That’s why we created Wellness on Wheels: a program that brings healthy food and nutrition guidance to thousands of school kids. Because when it comes to raising the health of our communities, well can’t wait.

Learn more about how we’re taking on food insecurity at RaiseHealth.com

WE’RE DRIVEN TO FIGHT HUNGER BECAUSE WELL CAN’T WAIT MAY 9, 2022 | CRAIN’S NEW YORK BUSINESS | 7

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

EDITORIAL

publisher/executive editor

Fix emergency rental assistance rules to give public housing tenants equity legislation in early 2021, Gov. Andrew Cuomo’s office insisted on putting public housing residents and other federally subsidized tenants last on the list to receive benefits—effectively excluding them.

“The governor’s office wanted to say that residents in those programs would be excluded entirely. They insisted on that,” said state Sen. Brian Kavanagh, who chairs the Senate housing committee.

There doesn’t seem to be a rationale for the policy except for the prejudice that poor people receive too many government subsidies and don’t deserve another one—even during a crippling pandemic.

The federal government intended ERAP to provide significant economic relief to low- and moderate-income households by paying for rent and utilities.

Under the heading “Keeping Families in Their Homes,” the U.S. Treasury states that affordable housing disparities threaten the strength of an economic recovery “that must work for everyone.”

PUSHING NYCHA RESIDENTS TO THE END OF THE LINE ONLY DEEPENS DISPARITIES tenants. New York’s ERAP statute says that they should be the last priority.

As reporter Brian Pascus details on CrainsNewYork.com, when lawmakers drafted the ERAP

EDITORIAL editor-in-chief Cory Schouten,

cory.schouten@crainsnewyork.com managing editor Telisha Bryan assistant managing editor Anne Michaud data editor Amanda Glodowski digital editor Taylor Nakagawa audience engagement editor Jennifer Samuels art director Carolyn McClain photographer Buck Ennis senior reporters Cara Eisenpress,

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

Brian Pascus, Natalie Sachmechi, Caroline Spivack op-ed editor Jan Parr,

opinion@crainsnewyork.com executive assistant Brittany Brown to contact the newsroom:

editors@crainsnewyork.com ALAMY

O

ur make-your-ownbreaks mindset in America causes some to scorn poor people as too lazy to improve their circumstances.

Such scorn is not only uncharitable, but it also can be dangerous when it leads to policies that push people further into poverty.

That’s the case with how Albany lawmakers crafted New York’s Covid-19 emergency rental assistance program.

The program, known as ERAP, has distributed more than $2.4 billion in federal funds to landlords and tenants since the pandemic began. It had received 304,657 applications as of Feb. 1 and had paid nearly 113,000.

None of the money has gone to New York City Housing Authority

Frederick P. Gabriel Jr.

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

Pushing NYCHA residents to the end of the line only deepens disparities, making the poor poorer. As of November, more than 68,000 NYCHA households, or roughly 42%, had rent overdue, the agency reported. NYCHA confirmed last week that it had bundled emergency rental assistance program applications for 30,727 households, totaling $117.4 million, and that it had not been reimbursed for any of it.

Kavanagh and his counterpart, Steven Cymbrowitz, who chairs the Assembly housing committee,

say they are working to amend the ERAP statute to authorize rental assistance funds to tenants of public housing on the same timeline as other applicants.

New York has a new governor now. Will Gov. Kathy Hochul support the Kavanagh-Cymbrowitz amendment? Her office declined to comment for the Crain’s article.

Half a million people live in public housing in the city. Many of them make up our lower-paid, essential workforce. They deserve an affordable place to live and a basic measure of respect. ■

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OP-ED

Ana Jimenez, ajimenez@crainsnewyork.com

Climate Mobilization Act is a disaster for owners of affordable cooperatives

senior manager of events Michelle Cast,

michelle.cast@crainsnewyork.com REPRINTS director, reprints & licensing Lauren Melesio,

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

BY BOB FRIEDRICH

T

he intent of Local Law 97, also known as the Climate Mobilization Act, is admirable. It calls for most buildings of more than 25,000 square feet to meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits going into effect by 2030.

Unfortunately, it endangers the affordability of co-op housing. The co-ops that line the outer boroughs are the last bastion of truly affordable housing in New York.

The Manhattan-centric City Council views all co-ops as multimillion-dollar prewar residences on Fifth Avenue or high-rises near Billionaires Row. But the overwhelming majority of affordable New York co-ops can be purchased for less than $300,000 in a city where rents and housing prices are out of reach for most families.

In the absence of any scientific evidence demonstrating that residential co-ops are even marginal

contributors to fossil-fuel pollution, the City Council has imposed crippling financial costs and penalties on co-op families.

And it has inexplicably exempted its own office buildings, New York City Housing Authority housing, and from one- to three-family homes from the punitive penalties destined to impoverish the rest of us. Local Law 97 is the greatest unfunded mandate and penalty ever imposed by the City Council on co-op residents.

LL97 requires older co-ops to undertake costly retrofitting of heating, hot water and ventilation systems to meet current building standards, regardless of need or ability to pay for such equipment.

The burden of compliance sits on the shoulders of working-class families living in older housing stock; newer, multimillion-dollar buildings are already constructed to current energy codes.

We know what the costs and penalties are because many co-ops have already spent tens of thou-

8 | CRAIN’S NEW YORK BUSINESS | MAY 9, 2022

sands of dollars on LL97-mandated studies of their heating plants. Glen Oaks Village, the largest garden apartment co-op in New York, conducted such a study. The devastating news in its 180-page report shows that to comply with the law, Glen Oaks Village needs to spend $24 million on new boilers. If it doesn’t spend the $24 million now, the annually recurring penalties imposed under the law will reach $1,096,200 in 2030. These fines would raise the monthly maintenance on each family by 5%.

Exempt affordable co-ops To make matters worse, even if money is spent on the most efficient boilers available today, the fines will still not be eliminated.

They will only be reduced to $818,000 annually. That is because the one-size-fits-all algorithms used to determine greenhouse emissions do not work for many buildings.

A new boiler will cost each family $9,133. A 10-year loan to finance

this project would require a monthly maintenance increase of 26% for 10 years—and that’s in addition to skyrocketing property taxes and water and heating bills.

Since the penalties are not fully eliminated, an additional 4% monthly maintenance increase will be necessary just to cover the remaining annual fines. Compliance with LL97 mandates to avert all penalties cannot be accomplished with any boiler equipment currently available.

The sensible solution is to exempt affordable co-op housing from LL97 and reassess the units when more data is available, after many co-ops will have retired their older boilers and made the natural transition to newer ones. If this solution is not implemented, we will see devastation to our most affordable co-op communities. ■

Simone Pryce

Bob Friedrich is president of Glen Oaks Village co-op in New York City. He is also co-president of the Presidents Co-op & Condo Council.

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OP-ED

How to bring longoverdue transit to LaGuardia

BY SCOTT R. SPENCER

L

aGuardia Airport was opened for business before World War II, and yet it remains the only major airport in the Northeast without a rail transit line to provide fast, efficient, traffic-free access for airport workers and airline passengers.

For the past 30 years, various proposals have been made to build a rail transit link to LaGuardia, but most have not been sensitive to the concerns of the neighborhood residents in Queens, who bear the brunt of the noise and pollution of the traffic congestion and flights to the airport.

AmeriStarRail sent a letter to Gov. Kathy Hochul proposing an innovative new AirTrain LaGuardia solution that is also designed to bring neighborhood benefits for Queens residents and businesses.

AmeriStarRail is developing a private-sector initiative to improve Amtrak’s Northeast Corridor with expanded high-speed, higher-frequency, high-performance service.

Improving Northeast Corridor connections to airports in the Northeast is an important strategy to growing Amtrak ridership. For this reason, AmeriStarRail has been studying solutions to bring rail transit access to LaGuardia Airport.

We have proposed an innovative solution to extend rail service to

west tracks at Ditmars Boulevard above 31st Street and 19th Avenue in Queens to serve all LaGuardia terminals and a new neighborhood station: Louis Armstrong-East Elmhurst at Ditmars Boulevard and Astoria Boulevard.

In addition, the existing New York City subway station at Astoria-Ditmars Boulevard would be rebuilt into a new station complex, Astoria Exchange Station. This new station would serve city subway trains, all Amtrak Northeast Corridor trains and Metro-North Penn Station Access trains to provide rail access to AirTrain LaGuardia from southern Connecticut, Westchester County and the Bronx, and a nonstop connection to Penn Station. Queens residents would benefit from service at the new Amtrak-Metro-North and AirTrain stations and the construction of the AirTrain SkyTrail linear park above the AirTrain tracks. Elevators would provide trail access for hikers, runners, bicyclists, strollers and wheelchair users.

Phase Three: The AirTrain LaGuardia would be extended over the Van Wyck Expressway to AirTrain JFK at Jamaica.

The AirTrain connection at the new Astoria Exchange Station would provide Amtrak-Metro-North passengers with rail service directly to Kennedy Airport. All Long Island Rail Road passengers would also have rail service to LaGuardia.

The New York region would also have rail service to Citi Field and Mets games.

Three new AirTrain stations would be built at Mets-Willets Point, Jewel Avenue and Briarwood. Another benefit: the extension of the AirTrain SkyTrail to Jamaica built above the AirTrain tracks, which would create an elevated linear park more than 10 miles long above traffic and street intersections.

AmeriStarRail’s AirTrain LaGuardia-JFK System would provide Manhattan and the New York region with a bigger, bolder, better way to finally bring rail transit service to LaGuardia Airport. Trains are the most sustainable, climate-friendly form of transportation. With the New AirTrain LaGuardia-JFK System, airport passengers and workers from the New York region and Queens communities along the way would have an innovative way to go easy on the environment and go by train. ■

Transitional housing for the homeless comes with costs

BY MARIO G. MESSINA

W

here do the residents, homeowners and local businesses fit into the equation when Midtown hotels convert to “transitional housing”?

They don’t.

Brick by brick, the Department of Homeless Services is dismantling city neighborhoods. Some local elected officials and community boards participate by handing DHS the chisels used to chip away and erode their own constituents’ public safety and quality of life. DHS does not conduct studies to determine if its new sites are suitable.

Oddly, neither do City Council members nor community boards.

Their inaction has rippling community consequences and costs.

“Transitional housing” is spin-doctor phraseology. Transitional housing is a euphemism for “homeless shelter.”

The Hotel at New York City is in the process of becoming transitional housing at a staggering cost of $265,000 per room.

The hotel at 161 Lexington Ave.,

operated by the Bowery Residents’ Committee, will house chronically homeless, chronically mentally ill and chronically chemically addicted men who refuse to enter into the traditional shelter system.

What incentivizes this reluctant population to leave the streets and enter into this hotel conversion?

There are no regulations at 161 Lexington Ave. No curfews, no sobriety requirements and no criminal background checks. No drug prevention programs and no mental health supervision.

‘Hope for the best’ The BRC model seems to be hope for the best. But can the community also hope for the best? Should the senior no-income housing development next door hope for the best? The three special-education schools within 100 steps? The coops, condos and rental buildings next door? The supportive housing facilities (with residents who are struggling to remain sober) within 1,000 steps?

For those thinking this is a notin-my-backyard situation, the Bel-

levue Men’s 850-plus bed shelter and Main Chance, the city’s largest drop-in shelter, are just steps away from the proposed transitional housing site.

Shamed for speaking out While the landlord cashes his DHS contract payment and service providers score millions more dollars for their nonprofit and for-profit organizations, we—the community—are left to confront the day-to-day realities of this hotel conversion. We and the police who will field the 911 calls. Yet we are ignored, belittled and shamed for speaking out.

Getting this trauma-laden population off the streets at any costs has costs to the community. Mental illness and addiction don’t get checked at the front door of transitional housing. Some of these men will continue to be a danger to themselves and others. ■ Mario G. Messina, president of the 29th Street Neighborhood Association, has written this op-ed on behalf of that organization.

LUXURY HOME OF THE WEEK Advertising Section

A RAIL PROPOSAL DESIGNED TO BRING NEIGHBORHOOD BENEFITS TO QUEENS LaGuardia Airport and dramatically increase the number of transit trips to LaGuardia and Kennedy airports for airport workers and air passengers from Manhattan and the New York region.

AmeriStarRail’s AirTrain LGAJFK system proposal could start to be implemented immediately and completed in three phases: Phase One: Operating within the available track capacity of the N route, dedicated AirTrain LaGuardia trains could provide express service from City Hall to Astoria-Ditmars Boulevard. From there, AirTrain shuttle buses could provide nonstop service to terminals.

The phase could be implemented this year by using existing trains, tracks, stations and buses.

Phase Two: The new AirTrain LaGuardia, using the same train technology as AirTrain JFK, would run on newly built elevated tracks from the current end of the north-

Scott R. Spencer is chief operating officer for AmeriStarRail.

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.

EXQUISITE, SEVEN BEDROOM CHATEAU 2528 TREMONT ROAD UPPER ARLINGTON, OHIO The Jane Jones Team | 614.273.7717 thejanejonesteam@herrealtors.com May 9, 2022 | CRAIN’S NEW YORK BUSINESS | 9

THE LIST LARGEST REAL ESTATE FINANCINGS City properties ranked by loan amount in 2021 ADDRESS NEIGHBORHOOD

AMANDA.GLODOWSKI@CRAINSNEWYORK.COM LOAN AMOUNT (IN MILLIONS)

TRANSACTION TYPE

DATE

OWNER(S)/BUYER(S)

LENDER(S)

1 2

1 Vanderbilt Ave.

$3,000 Refinance

6/23

SL Green Realty

Wells Fargo

400 E. 111th St., 220 South Street, 5030 Broadway, 28 Second Ave. and 633 W. 44th St.

$1,706 Acquisition

12/16

StorageMart

Barclays

3 4 5

4 World Trade Center

$1,364 Refinance

9/14

Silverstein Properties

New York Liberty Development Corporation

261 11th Ave.

$1,250 Refinance

7/23

L&L Holding Company, Columbia Property Trust

Balckstone, Goldman Sachs, KKR & Co.

601-635 Lexington Ave., 601-635 Lexington Ave., 601-635 Lexington Ave. and 601 Lexington Ave.

$1,000 Refinance

12/10

Boston Properties

Wells Fargo

6 7 8 9 10 11 12 13

1290 Sixth Ave.

$950 Refinance

11/16

Vornado Realty Trust

JPMorgan Chase

76 11th Ave.

$910 New

12/23

Witkoff Group|Access Industries

JPMorgan Chase

24 Vandam St., 161 Sixth Ave. and 233 Spring St.

$785 Refinance

7/9

Stellar Management

Goldman Sachs

1133 Sixth Ave.

$768 Refinance

4/20

Durst Organization

Wells Fargo

1301 Sixth Ave.

$710 Refinance

7/29

Paramount Group

Morgan Stanley

230 Park Ave.

$670 Refinance

11/12

RXR Realty

Morgan Stanley

390 Madison Ave.

$600 Initial

5/26

NYS Common Retirement Fund

NYS Common Retirement Fund

1155 Pennsylvania Ave., 1260 Croton Loop, 1266 Pennsylvania Ave., 1325 Pennsylvania Ave., 1426 Freeport Loop and others

$567 Refinance

6/30

Rockpoint Group

Wells Fargo

14 15

389 Ninth Ave.

$530 New

9/27

Brookfield Properties

Wells Fargo

109-05 120th St., 98-51 Queens Blvd., 94-02 35th Ave., 41-46 43rd Ave., 2225 Fifth Ave. and others

$529 Refinance

6/8

A&E Real Estate Holdings

JPMorgan Chase

16 17 18 19 20 21 22 23 24

1 Park Ave. and others

$525 Refinance

2/26

Vornado Realty Trust

Deutsche Bank

441 Ninth Ave.

$507 Acquisition

12/17

CommonWealth Partners

Deutsche Bank

425 Park Ave.

$467 Refinance

12/17

Tokyu Land Corporation

Otera Capital

49 E. 52nd St.

$460 Refinance

10/8

Fisher Brothers

Morgan Stanley

1177 Sixth Ave.

$450 Refinance

10/8

Silverstein Properties

Wells Fargo

415 10th Ave.

$428 New

11/23

The Related Cos.

Wells Fargo

28-10 Queens Plaza South

$425 Refinance

8/19

Tishman Speyer

Bank of America

51 West 52nd Street

$420 Acquisition

10/13

Harbor Group International

Goldman Sachs

845 Schenck Ave., 785 Schenck Ave., 443 Barbey St., 2211 Pitkin Ave., 255 Bradford St. and others

$401 Rehab

12/28

Property Resources Corporation; the Hudson Companies, Duvernay + Brooks

JPMorgan Chase, NYC Housing Development Corp.

25 26 27 28 29

West St., Eagle St., and others

$400 New

7/23

Brookfield Properties

Blackstone Mortgage Trust

229 W. 43rd St.

$396 Refinance

12/3

PIMCO

Goldman Sachs, Deutsche Bank, CitiBank

1440 Broadway

$392 Refinance

3/5

CIM Group

JPMorgan Chase

30 Hudson Yards

$391 Acquisition

9/30

The Related Cos.

Carlyle Group

215 Wortman Ave., 195 Cozine Ave., 520-530 Stanley Ave., 270 Wortman Ave. and 696 Stanley Ave.

$390 Rehab

12/28

L+M Development Partners; Douglaston Development

Wells Fargo Bank, NYC Housing Development Corp.

30 31

595 Dean St.

$385 New

6/24

TF Cornerstone

Wells Fargo

920 E. 149th St., E. 141st St., 940 E. 149th St., 980 E. 149th St. and E. 141st St.

$381 New

8/27

Turnbridge Equities

KKR & Co.

32 33 34 35

245 W. 17th St. and 249 W. 17th St.

$367 Refinance

12/3

PIMCO

Goldman Sachs, Deutsche Bank, CitiBank

315 Park Ave. South

$353 Refinance

12/3

PIMCO

Goldman Sachs, Deutsche Bank, CitiBank

909 Third Ave.

$350 Refinance

3/26

Vornado Realty Trust

Citibank

70 20th St., 73 20th St., 50 21st St. and 20th Street

$341 New

11/24

DH Property Holdings

JPMorgan Chase

RANK

Grand Central

THE TOP FOUR

East Harlem

Financial District Chelsea

Midtown Midtown Chelsea SoHo

Times Square Midtown West Midtown

Grand Central

construction

1 Vanderbilt Ave. (Grand Central) LOAN AMOUNT $3 billion

Brooklyn Chelsea

construction

South Ozone Park

Hell's Kitchen Midtown East Midtown East Theater District/Times Square Chelsea

Long Island City Midtown

East New York Brooklyn

Times Square Times Square Chelsea

East New York

Prospect Heights

Mott Haven Chelsea

Flatiron District Midtown East

Greenwood Heights

construction

construction

construction

construction

construction construction

construction

SOURCE: PincusCo. with additional research from Amanda Glodowski. Properties may have additional mezzanine debt that is not counted here. Data includes acquisition and refinancing transaction and excludes construction debt and leased fee/land only.

10 | CRAIN’S NEW YORK BUSINESS | May 9, 2022

400 E. 111th St. (East Harlem) LOAN AMOUNT $1.7 billion

4 World Trade Center (Financial District) LOAN AMOUNT $1.4 billion

PHOTOGRAPHS BY BUCK ENNIS

Kips Bay

261 11th Ave. (Chelsea) LOAN AMOUNT $1.3 billion

REAL ESTATE

Demand for Manhattan offices heading in the right direction

A

t 2.7 million square feet leased in April, Manhattan’s monthly office leasing activity has decreased by 11.5% since March, according to a report by Colliers released last Monday. However, demand for office leasing has more than doubled since last year.

“Demand is moving back in the direction of prepandemic levels of leasing activity,” said Franklin Wallach, an executive managing director at Colliers. But, he said, “supply continues to outpace demand.”

Leasing activity is currently 25% down from 2019, which is a substantial improvement from 2020, when leasing activity was down 50%, and 2021, when leasing activity was down 40%, Wallach said.

Manhattan’s office leasing availability rate has been stable since March, at 17.3%, but overall availability has grown by 73.2% since Covid-19 was declared a pandemic in March 2020, to 93.2 million square feet, according to the report.

When the market reaches a 10% availability rate, it will experience recovery, Wallach said.

The average asking rent for offices has increased by 0.7% since March, to $75.64 per square foot in April, which is still lower than in March 2020, when it was $79.47 per square foot.

Midtown’s availability rate, at 16.5%, was lower than Midtown South’s, at 16.8%, for the first time since 2002, according to the report.

For the second consecutive month, Midtown South’s $81.56 per square foot average asking rent was higher than Midtown’s, at $79.60 per square feet.

The demand is being driven by tenants looking for Class A, newly constructed or renovated spaces; the hope of workers returning to the office; and Covid’s move from a pandemic to an endemic stage, Wallach said. There has been a shift from tenants signing short-term leases at the beginning of the pandemic to longer-term ones now, he noted.

Pent-up demand is also driving the market, Wallach said. In 2020 there was a 50% drop-off in leases being signed, leading to a bump in 2021 and 2022, he said.

Eye on subleases Another boon for the market is the sublet sector, which is currently averaging a 30% discount, said Wallach. In a healthy market, there is a decrease in subleasing in the city, but during an economic recession, there tends to be a sizable increase in the subletting market, as is being seen today.

The sublet sector has increased by two-thirds in the past two years, increasing competition between landlords and driving prices down, Wallach said.

Downtown’s sublet inventory increased for the fourth consecutive month this year by 30,000 square

feet, to 5.4 million square feet—the highest sublet total since March 2021, the report said.

Manhattan saw a nearly 75% increase in the total supply of office space in the past two years, which is equal to roughly 40 million square feet of additional space added over that same period.

“That doesn’t go away magically even with two strong quarters of leasing,” said Wallach. “The market

is going to have to contend with this for quite some time before it can finally absorb it.”

Looking up It is still unclear when the office leasing market will return to prepandemic levels, said Wallach.

But looking at the first few months of 2022 in terms of demand, it is “absolutely pointing in the direction.”

BLOOMBERG

BY BETH TREFFEISEN

Colliers is a commercial real estate agency with offices located in Midtown. The company operates in

62 countries and provides real estate and investment advice to ­ ­clients. ■

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May 9, 2022 | CRAIN’S NEW YORK BUSINESS | 11

REAL ESTATE: THE CLOSER

‘No bluffing’: How one broker went from selling high-end pens to closing deals for Louis Vuitton Jeff Peck started out working in his family’s sneaker stores; now he makes sure his clients win and landlords lose

J

eff Peck has been making deals since he was 12 years old, working out of his family’s chain of sneaker stores, the City Athlete. The family had five stores on the Lower East Side and two in the South Bronx.

“Part of our This is the fifth [Jewish] culture is edition of a new to become a showCrain’s series in man. So you either which reporter become a rabbi or Natalie Sachmechi a salesman,” he speaks to city said. “It came very brokers about what naturally. To be 12 makes them tick. years old working in a shoe store on the Lower East Side, you earn your stripes.”

At 24, he made the bold move to leave the family business and pursue a career selling athletic jackets from Champion and Starter.

From there, he spent six years selling luxury Italian pens before jumping headfirst into the world of New York commercial real estate.

“I started my career like every junior broker does, other than the fact that I was 35 years old,” he said. “I had three kids, a house, a mortgage, two cars and a wife making calls in the bullpen.”

Since joining Savills NATALIE in 1999, he’s representSACHMECHI ed ultra-luxe clients such as Louis Vuitton, Hermès and Burberry alongside law firms Belkin Burden and Epstein Becker & Green.

What’s your secret sauce for getting clients?

The clients believe—and they’re right— that I’m relentless. They know once they meet me that there’s nothing I will not do for them.

I’m very real, I’m very honest, and I say things that the potential client may not want to hear. The only time I’m taking someone out for dinner or lunch is after a closing. I don’t think the client wants to spend as much time with their broker.

If you want to go to a Knicks game, go buy yourself tickets.

Why do your clients choose you?

I win, and the landlord loses. That’s the way a negotiation goes in my real estate transactions.

If you want to all be friends and make a fair deal, that’s not me. I’m not here to be friends with everybody, and, by the way, the landlords love me because they know I can make a deal.

Is signing leases for your real estate clients like 12 | CRAIN’S NEW YORK BUSINESS | May 9, 2022

BUCK ENNIS

PECK

selling pens or sneakers?

It all comes down to trust. Bloomingdales and Neiman Marcus needed to trust that the lines of pens I was selling—new to America at the time—were going to work and sell through.

When the game is amped up, instead of selling $500 pens, you’re advising on a $50 million transaction. There’s a lot more trust that needs to be had in this situation.

How did you celebrate your first big real estate deal?

I paid off my credit card debt.

Mikimoto was my first deal. I made a cold call to the CFO and was compelling enough to have him meet with me and the senior broker on my team, Dan Horowitz.

At the time I knew much more about pens than I did about real estate. Dan did his thing and impressed the hell out of the guy, and we closed a deal six months later. We did their office headquarters, which in those days was at 40 W. 57th St., and moved them to 680 Fifth Ave.

“THE ONLY TIME I’M TAKING SOMEONE OUT FOR DINNER IS AFTER A CLOSING”

How has your work experience prepared you for real estate?

I understand that the company I am representing may work on a lease every 10 or 15 years.

And although I work on leases on a weekly basis, I know that the process could be new and anxiety-inducing to my clients. Therefore, it’s imperative that I put myself in their shoes.

A client is about to walk out the door. What’s your Hail Mary to keep the deal intact?

If a deal is not going the way I want it to, we pivot and go to a different building. If I have to hurt a landlord because the negotiations are

not going in a way that’s good for my client, we go to another one. I’ve worked deals where I toured 15 different buildings with ­clients in order to negotiate the best deal. There’s no bluffing in New York City real ­estate.

What’s it like working with French couture houses?

Most of the people that I deal with are U.S.based. They are very nice, and somehow my career has gravitated to luxury brands. I’ve done deals for Burberry, Valentino, Tory Burch, Hermès, [and I am] currently in the market for Louis Vuitton.

What work are you doing for Louis Vuitton?

We’re in the midst of a transaction now.

Companies like that look for office space that will excite their people. This has been a change over the past couple of years where office space is no longer about the taxes, operating expenses, subletting rights, etc.

Now office space has to be about your people. Post-pandemic, it’s even more important. ■

RESTAURANTS

BY CARA EISENPRESS

A

delivery company is getting into the food hall business in New York.

San Francisco–based DoorDash will open DoorDash Kitchens, a shared commercial kitchen in Downtown Brooklyn with seating for customers. Five restaurants—some locally owned and others that are national or regional—will use the space at 383 Bridge St. to increase their delivery radius in the broader neighborhood as well as to welcome diners.

“Our Williamsburg location is just a few miles away from the new DoorDash Kitchens location,” said Josh Grinker, chef and co-owner of Kings Co Imperial, one of the restaurants that will operate in the space. “Yet this new location will make our food even more accessible to our customers.”

Kings Co, which offers a vegetable-focused Chinese menu, also has a location on the Lower East Side.

Demand for delivery food has

kept up even as restaurants reopened their dining rooms following pandemic closures. DoorDash’s total orders grew to 369 million for the three months ending Dec. 31, 2021, a 35% increase over the same quarter in 2020, with an equivalent jump in revenue, according to its most recent quarterly filing.

Yet delivery is always limited by location. Fulfilling orders beyond a relatively small city radius is ex-

“BUILDING OUT YOUR OWN BRICK-AND-MORTAR IS SO EXPENSIVE” pensive, and operators say food quality can suffer in transit. That has led to an increase in so-called ghost kitchens, in which brands have no retail presence but can offer expanded delivery service. It has also given rise to a seemingly unlimited number of food halls, where smaller, already built-out kiosks offer a turnkey solution for restaurants to create new locations without laying out hundreds of

thousands of dollars.

This play is a mix of the two.

DoorDash has been trying out different ways to tie its delivery-ordering services to brick-and-mortar locations and launched its first two DoorDash Kitchens in California in 2019 and 2021. The New York space is intended to offer a relatively easy and inexpensive route to expansion for restaurant brands, according to DoorDash’s blog.

Nimbus Kitchen runs the space, which has 19 kitchens in total. Within that, DoorDash has taken over 2,400 square feet and is responsible for developing and maintaining relationships with the restaurant partners as well as supporting their pickup and delivery operations. Each restaurant does its own cooking.

In Brooklyn, Nimbus Kitchen had come to a similar conclusion in the past several years.

“The capital expenditure of building out your own brick-and-mortar is so expensive,” Nimbus co-founder Camilla Opperman told Crain’s in July.

In addition to offering commercial kitchen access, Nimbus decided

DOORDASH Kitchens in Brooklyn it would be a good idea to welcome diners into the space, in part as a perk for restaurants that signed subleases. They would then be able to offer to host events and have at least some brand presence in a physical space. The Brooklyn hall will also offer Birch Coffee and pastries to those who dine in.

More options For DoorDash, the move is also about ensuring a wide food selection for people who use its app, said Ruth Isenstadt, senior director of DoorDash Kitchens. The Brooklyn opening brings “more options for

food lovers to choose from in their neighborhood,” she said.

In addition to Kings Co, the restaurants opening at DoorDash Kitchens are Jersey City–based sushi and handroll restaurant Domodomo, Brooklyn-based fried chicken spot Pies ’n’ Thighs, national Korean rice bowl chain Moonbowls and Little Caesars. The space is open from 7 a.m. to 10 p.m., but takeout orders are available until 11 p.m. The delivery radius encompasses Dumbo, Park Slope, Cobble Hill, Fort Greene, Brooklyn Heights, Gowanus, Clinton Hill and Prospect Heights. ■

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The first program of its kind in the nation helps to rid the workplace of the stigma surrounding addiction and increase employment opportunities for New Yorkers in recovery.

Employers can apply to receive up to $2,000 of tax credit per eligible employee for the current tax year.

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Office of Addiction Services and Supports

MAY 9, 2022 | CRAIN’S NEW YORK BUSINESS | 13

NIMBUS KITCHENS

Delivery giant DoorDash opens Brooklyn dining space

ASKED & ANSWERED

CHRIS LEONARD

DOSSIER WHO HE IS Noted author and business journalist

INTERVIEW BY AARON ELSTEIN

V

BORN: Kansas City, Missouri

eteran business journalist Chris Leonard is the author of The Lords of Easy Money: How the Federal Reserve Broke the American Economy, which is, as far as is known, the only monetary-policy book ever deemed “a fascinating page-turner” by The New York Times. Now that the Fed is raising interest rates again, Leonard thinks it’ll be challenging to wean the nation off the slow drip of easy money.

RESIDES Kansas City, Missouri EDUCATION Bachelor’s degree in journalism, University of Missouri PROLIFIC WRITER Leonard reported on agribusiness for the Associated Press and Arkansas Democrat-Gazette, and his bylines can be found in The Wall Street Journal, Bloomberg BusinessWeek and Time. He previously wrote Kochland, a best-selling investigation into how the Koch brothers made their fortune and bought political influence.

HOUSE DIVIDED Not only is Congress divided; so are his family’s baseball loyalties. He roots for the Kansas City Royals. His wife is a St. Louis Cardinals fan.

Why did the Fed lower interest rates to zero and create so much easy money?

Dysfunction in Congress was a big driver. The Fed’s zero interest rate policy, which people inside finance call ZIRP, started as an emergency measure after the 2008 crash. But when the Tea Party won majorities in 2010, Congress couldn’t do anything regarding economic policy or much else. Unemployment was still high, and Fed Chairman Ben Bernanke felt he needed to act.

It’s interesting that an unelected body like the Fed acted alone.

It’s categorically bad. Congress and the White House have the power to tax and spend. Economic policy is their job. The Fed’s mandate is confined by the Federal Reserve Act of 1913. It wasn’t supposed to be an engine of job growth.

So how did the Fed make rates go to zero?

The Federal Reserve Bank of New York does business

with 24 banks called primary dealers. Every day Fed traders would buy billions’ worth of Treasury bonds and mortgages from the primary dealers. The Fed’s power comes from the fact it can pay for bonds or mortgages by minting the money. It bought whatever was necessary to bring interest rates to the desired level. Some of the cash poured into the primary dealers flowed into the economy. Some was deposited back with the Fed.

What’s wrong with ZIRP? Markets soared; real estate went way, way up.

ZIRP widened inequality, and you can’t have a stable democracy with this kind of inequality. Wealthy people own most of the assets that have appreciated so much under ZIRP, but incomes for most everyone else haven’t moved all that much. ZIRP fueled a massive and unsustainable run-up in debt for households, corporations and governments. Wall Street traders are ZIRP’s loudest critics, even though they benefit more directly than anyone else. They see what it’s doing.

What could the Fed have done differently?

They could have shown more restraint. The minutes of their 2010 meetings show they understood ZIRP would create short-term gains in exchange for long-term risks.

Tom Hoenig, the Kansas City Fed president, warned turning an emergency measure into a permanent part of the financial system was new territory and was outvoted 11-1. If the Fed had listened, we’d be in a better position today.

Do you think a recession is likely now that the Fed is starting to raise rates?

The minute I predict a recession, the economy will boom for 10 years. But there’s no easy way to go from 0% interest rates to 3%, because the economy has rooted itself into zero rates for so long. There is so much leverage embedded in the economy, and the servicing cost is going higher.

What do people at the Fed think of your book?

Their public relations office has been totally silent. They tend not to engage with critical coverage. ■

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14 | CRAIN’S NEW YORK BUSINESS | May 9, 2022

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POLITICS ULRICH during a meeting of the City Council’s environmental protection committee in 2018

Adams creates a small-business commission to help cut red tape

BY CARA EISENPRESS

ing real relief to the entrepreneurs who have made their dreams a reality and keep our local economy strong.”

Mayor appoints senior adviser to lead Department of Buildings

BY BRIAN PASCUS

M

ayor Eric Adams has selected Eric Ulrich, a former city councilman from Queens and a current senior adviser in his administration, as the new commissioner of the Department of Buildings.

The selection of Ulrich, a moderate Republican, puts a City Hall veteran at the wheel of a crucial agency. He served for 12 years on the City Council, where he represented neighborhoods including Ozone Park, Lindenwood, Howard Beach and Woodhaven in Queens.

Ulrich grew up in Ozone Park and resides in Rockaway Park.

The Department of Buildings enforces the building codes and zon-

ties—is expected to lose 81 positions in the next year. During testimony before the City Council in March, current DOB leadership described staffing challenges, notably a 20% vacancy rate for inspectors and an 11% vacancy rate for plan examiners.

The leaders expressed concern during the hearing that their agency could not compete for the limited pool of qualified candidates in a competitive job market.

“We continue to struggle with this demographic of skilled folks,” said Sharon Neal, Department of Buildings deputy commissioner for finance and administration.

“The pool of qualified candidates is shrinking, overall, and we’re competing with private construction companies.”

ERIC ULRICH TAKES OVER DURING A CRITICAL TIME FOR THE AGENCY ing regulations of more than 1.1 million buildings and affects various aspects of the construction trades and real estate industries.

Adams’ deputies praised the selection of Ulrich, who has been advising the mayor on policy since January.

“I have known Eric for many years, and during his time in public service, he has shown his dedication to cutting through red tape and solving complex problems New Yorkers face with pragmatism and compassion,” said First Deputy Mayor Lorraine Grillo.

Staffing challenges Ulrich takes over the Department of Buildings during a critical time for the agency.

The department—which also manages the inspections as well as planning and construction of residential and commercial proper-

Safety focus

Ulrich said he will prioritize raising safety standards on job sites and advancing the city’s climate change sustainability goals under Local Law 97.

He is the former chair of the City Council veterans committee and member of the council’s committee on housing and buildings. He ran for public advocate in 2019, finishing second to Jumaane Williams.

His selection to lead the DOB drew wide praise from various interest groups, including all five chambers of commerce and various borough presidents.

“Eric Ulrich will help bring greater accountability, transparency and efficiency to the Department of Buildings,” said Manhattan Borough President Mark Levine.

“Especially after Hurricane Sandy, Eric understands the importance of cutting through the red tape of the construction process and getting New Yorkers into safe buildings.” ■

Delayed evaluation

NYCMAYORSOFFICE/FLICKR

JOHN MCCARTEN/CITY COUNCIL

M

ayor Eric Adams has formed a commission of leaders to advise him on how to improve the climate for doing business in the city, Adams made the announcement last Monday, at the start of a week dedicated to helping and celebrating small businesses.

The mayor will appoint at least 30 members to the group, whose chair will be the commissioner of Small Business Services. The commission will meet every two months, according to an executive order that contains the details of the new group.

“We want them to look at, how do we stop the red tape,” he said.

The announcement comes four months after Adams tasked six city agencies with identifying the 25 violations in their domain that result in

Although Jonah Allon, a press representative for Adams, had told Crain’s two weeks ago that the list of violations would be shared last Monday, Adams did not make any reference to this previous attempt to reduce red tape.

“Our small businesses have been through so much during the Covid-19 pandemic,” said Adams, when he announced this initiative on his fourth day in office in January. “The last thing they need to deal with are unnecessary fines.

We’re cutting the red tape and bring-

THE MAYOR WILL APPOINT AT LEAST 30 MEMBERS TO THE NEW GROUP the greatest number of summonses and fines issued to businesses.

The deadline for their report was March 31. After that, they have until May 13 to share a plan to accomplish their recommendations.

The Department of Buildings, the Department of Environmental Protection, the Department of Sanitation, the Fire Department, the Department of Consumer and Worker Protection, and the Department of Health and Mental Hygiene were supposed to submit the violations they most frequently need to enforce with small businesses.

They were also asked to evaluate whether each provision could be amended or repealed, or if its penalty could be reduced or turned into a warning, at least for the first violation.

The mayor’s office did not immediately reply to a request for comment about the cause of the delay for the release of the agencies’ findings.

The new business commission is part of the mayor’s overall economic plan, intended to help improve the city’s recovery, and it will start immediately.

It has a much longer timeline for action than the January order, with its first annual set of recommendations and findings to be published in June 2023. ■ PAID ADVERTISEMENT

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ARTS & CULTURE

BY CARA EISENPRESS

B

ryant Park has announced its lineup of free summer shows as the centrally located space prepares for its most ambitious season.

Although Bryant Park has put on programs for decades, the summer of 2021 brought about a change in its role. Arts organizations with indoor venues that did not meet Covid safety guidelines sought outdoor spaces to put on performances.

The upcoming schedule in-

mances last summer, bringing new eyeballs to some of the institutions. As a result, they were eager to return this season.

New gear The pandemic also changed Bryant Park’s role in booking events. “We went from being a presenter and producer to being a platform for New York City’s arts institutions to do their work,” Fishman said.

This was not entirely the result of Covid, however. In 2019, with support from its longtime sponsor, Bank of America, the park added a covered stage, hung a sound system and added lights. The new gear gave Bryant Park the infrastructure and staff to put on an array of events. The timing was perfect for when the pandemic struck.

When places such as Joe’s Pub came looking for outdoor music space, the Bryant Park Corp. was able to offer the park. It could even say yes when the New York City Opera suggested putting on a full

“WE WENT FROM BEING A PRESENTER AND PRODUCER TO BEING A PLATFORM” cludes the New York City Opera, classical music and dance.

“That introduced us to institutions who didn’t think of a park as a place to do their work,” said Dan Fishman, director of public events at the Bryant Park Corp. “We were the place to be last summer.”

Audiences flocked to the perfor-

opera with costumes and sets for the summer season.

“Opera isn’t really done like that outdoors in New York City,” Fishman said.

The lineup begins just before Memorial Day weekend. Besides the New York City Opera, it includes Carnegie Hall, Rafiq Ghatia and Ian Chang, and Steinway, which is bringing pianos.

The programs bring in MYKAL KILGORE audiences that might not performs on the buy tickets for opera or stage at Bryant dance, said Dan BiederPark last man, executive director summer. of the Bryant Park Corp.

The schedule serves classical music or dance fans who find a lack of performances live music, curated by Tiffany during July and August, he said.

Rea-Fisher. Performances include “The city isn’t empty!” Bieder- Ballet Hispánico, tap dancer Ayoman said. “I always thought there dele Casel and Emerge125, a conwas a void in the summer for mu- temporary modern company sic and dance.” whose executive artistic director is Rea-Fisher.

Dancing shoes “It’s crazy I have booked eight There is also a slate of contem- years in New York without doing porary dance performances with hip-hop,” Rea-Fisher said, adding

CHRIS LEE

Bryant Park kicks off its most ambitious season of outdoor shows, to include opera and dance

that recent audiences have been notably receptive to smaller groups and new genres.

During the summer of 2021, entry required vaccination proof and masks, but the Covid rules are gone this year. All the events, which begin at 7 p.m., are free.

About 20 of the performances will be livestreamed. ■

2022

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FROM PAGE 1

Coles seems positioned to emerge as a SPAC success story, though. While her SPAC’s stock price has fallen by nearly 70%, her stake is still worth $20 million. She and a business partner paid $25,000 for their shares and an additional $7 million for warrants conferring the right to buy more.

SPACs first emerged nearly 30 years ago, and they were a favorite tool of the original Wolf of Wall Street, penny-stock huckster Jordan Belfort. They underwent a remarkable reputational shift starting just before the pandemic. Tom Brady, Ciara, Sammy Hagar, Jay-Z, Danny Meyer, Alex Rodriguez, Paul Ryan and Sam Zell all backed SPACs. President Donald Trump sold his social media platform to one.

SPACs are shell companies that raise money from investors and list on a stock exchange. Their sponsors then use their connections to hunt down and acquire a worthy takeover target within two years or investors get their money back. SPACs raised $250 billion and accounted for more than half of all initial public offerings in the past two years.

“They were this perfectly evolved species for their particular market environment,” said Michael Ohlrogge, a law professor at New York University who is advising the Biden administration on comprehensive reforms.

Now that the spell is broken, class-action lawyer Darren Robbins is busy. His $7.2 billion recovery from Enron is still the record for shareholder settlements. He has filed dozens of securities-fraud lawsuits against SPACs, which remind him of the manipulated IPOs of the dot-com era. Shareholder lawsuits against SPACs rose by more than six times last year, Cornerstone Research found.

“SPACs were rife with perverse incentives involving a lot of money,” Robbins said. “Charlatans saw opportunity.”

The new black After resigning as Hearst’s chief content officer, Coles was introduced to New York Islanders co-owner Jonathan Ledecky by a mutual friend, NBC News analyst Stephanie Ruhle.

“She said, ‘Joanna, SPAC is the new black,’ ” Ledecky recalled in an interview with JPMorgan.

Coles contacted Ledecky’s prior business partners for references and one, Ashton Kutcher, assured

Three months after conception, in late 2020, their SPAC made a deal for Bark, a Chinatown-based company whose mission is “making all dogs happy” by selling to their owners subscriptions for bones and chew toys. Bark claims to have more than 2 million customers and went public at a $2 billion valuation on the New York Stock Exchange.

At Bark’s high-water mark, Coles’ and Ledecky’s stake was worth $113 million on paper. The founders paid just 0.003 cents per share, a typical arrangement in SPACs. Public investors paid $10 a share, also typical. The arrangement was disclosed, in dense legalese, in the prospectus.

Since going public, Bark has been a dog. Although it generated nearly $400 million in revenue in the nine months ending Dec. 31, 2021, Bark chewed up $150 million in cash while amassing $60 million in operating losses.

Coles declined to comment on Bark, one of four SPACs she’s started. Bark’s depressing stock performance is par for the course. Data from Ohlrogge show the nearly 200 SPACs that made a deal last year have underperformed the S&P 500 by an average of 36%.

Even though they’ve made mostly bad deals, SPAC insiders are still sitting on millions of dollars in gains because they paid essentially nothing for their shares. Regulators question if outside investors were adequately informed about what they were getting into.

‘Pure profit’ SPACs earned a dodgy reputation straight from the cradle. Founding father David Nussbaum, a Financial District broker, breathed life into the first SPAC back in 1993.

Four years after creating the first one, he was suspended for 30 days and his firm fined $2 million for charging excessive markups. SPACs were popular for a hot minute in 2007, then went dormant until 2019, when Richard Branson launched the party by merging his space-travel outfit, Virgin Galactic, into a SPAC. Suddenly it dawned on the boldfaced names in the worlds of entertainment, finance, media, and politics that there was little reputational risk and significant financial gain in using their names to pitch stocks in blank-check companies. While Trump administration regulators looked the other way, one especially enthusiastic private-equity billionaire, Alec Gores of Malibu, California, started 13 SPACs. Money flowed in from stuck-athome speculators using SPACs to supplement their diet of cryptocurrency and GameStop.

“You stick a famous name on it and you can sell almost anything,” Warren Buffett marveled at his annual meeting last year.

Wall Street bankers were delighted by the opportunity. A $1 billion SPAC offering could deliver underwriters $20 million in fees that went straight to the bottom line, Ledecky said. “This is pure profit,” he gushed.

Fuel for the frenzy was provided by unicorns that hadn’t gone public since Congress enacted the Jumpstart Our Business Startups Act of

“YOU STICK A FAMOUS NAME ON IT AND YOU CAN SELL ALMOST ANYTHING” her that Ledecky was a genius.

“Jon called me about six months later,” Coles recalled during the same JPMorgan interview, “and said, ‘Oh, I’m going to be in East Hampton. Do you want to have coffee?’ And we sat and had coffee outside Jack’s in Amagansett in pouring rain. And we were talking about what Covid had done to us. And he suddenly said, ‘Why don’t we do a SPAC together?’ ”

GETTY IMAGES, AP PHOTO, BLOOMBERG

SPAC

BARKBOX (top) merged into a SPAC sponsored by Coles. Other well-known SPAC sponsors include (clockwise from top left) Tom Brady, Ciara, Danny Meyer, Sam Zell, Jay-Z and Donald Trump.

2012, which boosted the maximum number of shareholders a private company could have to 2,000 from 500. Another boost came from a securities-law loophole that permits companies going public via mergers to make financial projections that inevitably envision a wonderful future. Companies going public via traditional IPOs can’t engage in such speculation.

With so many SPACs flooding the market at once, financial projections veered from aggressive to absurd.

When Latch, a maker of phone-activated locks, prepared to merge into a SPAC from Tishman Speyer CEO Rob Speyer, the fledgling Chelsea-based firm predicted revenue would grow from $18 million to $877 million by 2025. That 91% compounded annual growth rate would dwarf the 59% rate produced by Facebook at the same stage. Actual revenue at Latch last year came in 16% below target and adjusted operating losses, 16% above. The stock has lost nearly 70%.

BuzzFeed, another SPAC target, predicted its 2021 revenue would hit $521 million. When the actual figure came in at $398 million, BuzzFeed said it would let go of 30% of its Pulitzer Prize–winning newsroom to cut costs. Its stock has

dropped by 50%.

‘Private-equity necrophilia’ The big winners in this financial flywheel were private-equity firms.

For them, SPACs were a useful dumping ground for companies that couldn’t be fobbed off another way. Exhibit A: MultiPlan, a Flatiron District–based health-services management firm.

In 2004 General Atlantic invested in the company, then sold it for $1 billion to the Carlyle Group two years later. Carlyle kept MultiPlan for four years, then sold it for more than three times as much to BC Partners and Silver Lake. They held on for four years before selling it to Starr Investment Holdings for $4.4 billion in 2014. Starr handed it off to Hellman & Friedman for $7.5 billion two years later. Short-seller Muddy Waters Research called it “private-equity necrophilia.”

The hot potato was handed to public investors in 2020, when Hellman merged MultiPlan into a SPAC run by former Citigroup investment-banking chief Michael Klein.

MultiPlan’s stock has fallen in half, and shareholders have complained that Klein really should have mentioned that MultiPlan risked losing a customer accounting for

45% of its revenue. In January a Delaware judge agreed that MultiPlan had been “materially misleading” and let an investor lawsuit proceed.

A MultiPlan attorney didn’t respond to a request for comment.

“Klein essentially said there should be no judicial review for SPACs,” said Ohlrogge, the NYU law professor. “The judge didn’t see it that way.”

Ohlrogge said promoters have reacted to the court decision by incorporating SPACs in the Cayman Islands. That may not matter when Gary Gensler, chairman of the Securities and Exchange Commission, is finished writing the new rules of the SPAC road. He wants SPACs regulated by the 1940 law governing mutual funds and believes investors deserve protections similar to those of traditional IPOs. As for Coles, she has found another adventure, although she remains on Bark’s board. In April she was appointed chairman of Grover, a Berlin-based startup that rents consumer electronics and recently raised $330 million in venture funding at a $1 billion valuation. It’s unclear if the firm will merge with a SPAC. Although if it goes that route, Coles has three others waiting to make a deal. ■

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PUBLIC & LEGAL NOTICES Notice of Formation of CLAREMONT HOMEOWNERSHIP LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/18/22.

Office location: NY County. Princ. office of LLC: 116 E. 27th St., 11th Fl., NY, NY 10016. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207.

Purpose: Real estate development.

Notice of Qualification of DERBY COPELAND EQUITY FEEDER I, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 04/22/22.

Office location: NY County. LLC formed in Delaware (DE) on 04/13/22. Princ. office of LLC: 41 Madison Ave., 40th Fl., NY, NY 10010. 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., Dover, DE 19901.

Purpose: Investing.

PUBLIC & LEGAL NOTICES Notice of Qualification of BOW STREET SPECIAL OPPORTUNITIES GP XVIII, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/15/22.

Office location: NY County. LLC formed in Delaware (DE) on 01/26/18. Princ. office of LLC: 595 Madison Ave., 29th Fl., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, State of DE, Dept. of State, Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of 10X DIVERSITY CARRY VEHICLE I, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 04/04/22.

Office location: NY County. LLC formed in Delaware (DE) on 01/24/22. Princ. office of LLC: 1 World Trade Center, 85th Fl., NY, NY 10007. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543.

DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808.

Cert. of Form. filed with Jeffrey W. Bullock, Secy. of State - State of DE, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of 1898 HEALTH, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/18/22.

Office location: NY County. LLC formed in Delaware (DE) on 01/28/22. Princ. office of LLC: 6205-B Peachtree Dunwoody Rd., Atlanta, GA 30328. 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: CSC, 251 Little Falls Dr., Wilmington, DE 19808.

Cert. of Form. filed with DE Secy. of State, Corps. Div., 401 Federal St., Ste. 4, Dover, DE 19901.

Purpose: Health care sales.

Notice of Qualification of PEARL PRIMARY CARE NETWORK LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/18/22.

Office location: NY County. LLC formed in Delaware (DE) on 03/16/22. Princ. office of LLC: 520 Broadway, 4th Fl., NY, NY 10012.

SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

NOTICE OF FORMATION OF Kelsey Dunn Mental Health Counseling, PLLC. Arts of Org filed with the Secy. of State of NY (SSNY) on 02/16/2022. Office loc: NY County. SSNY designated as agent upon whom process against it may be served. Address to which the SSNY shall mail a copy of any process against the PLLC served upon him/her is 119 W. 72 St #102 New York, NY 10023. Principal business address of the PLLC is the same. Purpose: any lawful act or activity.

Notice of Qualification of 263 W 34TH STREET LENDER, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/18/22. Office location: NY County. LLC formed in Delaware (DE) on 11/09/21. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Marathon Asset Management L.P., One Bryant Park., 38th Fl., NY, NY 10036. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St., Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of PEARL NETWORK LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/18/22.

Office location: NY County. LLC formed in Delaware (DE) on 03/16/22. Princ. office of LLC: 520 Broadway, 4th Fl., NY, NY 10012.

SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of CANNON HILL CAPITAL PARTNERS LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/16/22.

Office location: NY County. LLC formed in Delaware (DE) on 02/24/22. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., #4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Formation of 44 DIGITAL ENTERPRISES LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/07/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543.

Purpose: Any lawful activity.

S O d

Notice of Formation of PJ HOUSING ACQUISITION, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/20/22.

Office location: NY County. Princ. office of LLC: 30 Hudson Yards, 72nd Fl., NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co, 80 State St., Albany, NY 12207-2543.

Purpose: Any lawful activity.

C o N

Notice of Formation of NEUMANN BROOME ST. LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/22/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Jeffrey Neumann, 971 Huron Rd., Franklin Lakes, NJ 07417.

Purpose: Any lawful activity

PBTEX PR LLC filed w/ SSNY on 2/4/22. Office: New York Co. SSNY designated as agent for process & shall mail to: c/o Smith & Shapiro, 116 E. 27th St., 3rd Fl, NY, NY 10016. Purpose: any lawful.

Notice of Formation of 1 CENTRAL PARK WEST 38B LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 02/15/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to M. Nader Ahari, 200 Park Ave. South, Ste. 1608, NY, NY 10003.

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PUBLIC & LEGAL NOTICES Notice of Formation of GREEN MOUNTAIN PARTNERS, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/21/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to David S. Blatteis, Norris McLaughlin, P.A., 400 Crossing Blvd., 8th Fl., Bridgewater, NJ 08807.

Purpose: Any lawful activity.

Notice of Formation of MBY WOOSTER LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/26/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543, regd. agent upon whom and at which process may be served.

Purpose: Any lawful activity

Notice of Formation of 250 EAST 21 STREET 3F LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/27/22.

Office location: NY County. Princ. office of LLC: 19 Half Moon Ln., Sands Point, NY 11050. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: To purchase, own and sell real estate in New York

Notice of Formation of SONNY PRODUCTIONS LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/19/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 146 Central Park West, 10D, NY, NY 10023.

Purpose: Any lawful activity.

Notice of Formation of THE FORT UES LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/22/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543.

Purpose: Any lawful activity.

Notice of Formation of EC Pietanza Consulting, LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 02/21/2022.

Office location: NY County. SSNY designated as agent upon whom process may be served. The address SSNY shall mail process to Elizabeth Pietanza, 454 W 54th St., Unit 3F, NY, NY 10019.

Purpose: Any lawful activity.

670 THURSTON ROAD LLC. Arts. of Org. filed with the SSNY on 11/27/20. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 1221 Fteley Avenue, Bronx, NY 10472.

Purpose: Any lawful purpose.

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COHN GROWTH, LLC filed Arts. of Org. with the Sect'y of State of NY (SSNY) on 3/18/2022. Office: NY County. SSNY has been designated as agent of the LLC upon whom process against it may be served and shall mail process to: c/o Greenberg Traurig, LLP, 54 State St., 6th Fl., Albany, NY, 12207. Purpose: any lawful act.

Notice of Formation of QTD SYSTEMS 1 LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 04/15/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Scott Markowitz, Esq., Tarter Krinsky & Drogin LLP, 1350 Broadway, NY, NY 10018.

Purpose: Any lawful activity.

Notice of Formation of 46TH STREET CALLAGY FAMILY LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 03/17/22. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 72 Glendale Rd., Rye, NY 10580.

Purpose: Any lawful activity.

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FROM PAGE 1

of the disclosure obligation and take steps to ensure that recruiters are prepared to comply with the impending law,” Melissa Camire, a partner in the New York office of employment law firm Fisher Phillips, wrote in a client note published online.

An end to wage secrecy Prompting employers to evaluate the fairness of their pay structure was one of the goals of the new law.

“By ending wage secrecy and listing salaries, you are ending a practice that hasn’t benefited employees and hasn’t really helped employers either,” said Beverly

in New York state, according to data from the National Women’s Law Center.

New York City is not the first place to require pay disclosure, but its role as a global economic power could help accelerate a “wave or even [a] tsunami” of similar legislation, Neufeld said. There is already a bill in the state Senate to make this a New York–wide rule. Lawmakers in California have also offered a bill requiring pay ranges in job ads.

Making the switch The Corporation for Supportive Housing, a national nonprofit based in Lower Manhattan, began posting salary ranges in all job ads in the spring of 2021. CEO and President Deborah De Santis said the ranges were part of an effort to be more transparent and attract diverse talent.

But listing salaries wasn’t as simple as punching numbers into a job ad. CSH has employees across several cities, and its pay policies can vary by geography.

To ensure its listed pay ranges are fair and easy to understand, the nonprofit regularly performs a pay-equity audit and benchmarks its pay against that of competitors.

The purpose of the audit is to assess “that the person we are bringing on has an equitable salary and whether there are people in the role

“WE ARE GETTING HIGHQUALITY CANDIDATES AND A DIVERSE CANDIDATE POOL” Neufeld, president of PowHer New York, a statewide network of organizations and individuals focused on economic equality.

Studies show that discrimination and fear of backlash in the negotiation process have contributed to the fact that women and people of color earn less on average than white men. Women make 85.6 cents for every dollar a man earns

currently [whose pay is] no longer equitable,” De Santis explained.

CSH’s job ads include specific ranges and context around how to understand the information. For instance, a community investment officer position in New York lists an expected salary between $100,000 and $140,000, although a senior-level candidate could expect between $115,000 and $160,000.

The ad notes that “it is uncommon for salaries to fall above the midpoint at the time of hire.”

“We negotiate actual salaries with final candidates based on their exact location, experience in similar roles and expertise related to the qualifications,” it added.

De Santis said the policy has helped with recruitment as the nonprofit seeks to grow its headcount from about 150 to 185.

“We are getting these high-quality candidates and a very diverse candidate pool,” De Santis said. “I have to believe this has only helped.”

In January, between 25% and 30% of all job listings on LinkedIn included salary information, up about 50% from the same month in 2021, according to data the company provided earlier this year.

LinkedIn did not immediately re-

BLOOMBERG

PAY

turn a request for updated data.

The City Council itself did not have any salary ranges included in the 20 or so open positions posted on its website as of last Monday. A representative said the council expects to add ranges soon.

Recent job ads from the city’s two largest private employers, Northwell Health and JPMorgan Chase, typically did not include any salary information, Crain’s found.

JPMorgan declined to comment.

Maxine Carrington, senior vice president and chief people officer at Northwell Health, said the health system started reviewing its pay and career advertisements before the pandemic. Northwell “contem-

plated the advertisement of pay ranges at some point, so we would have gotten there in the absence of pay transparency laws,” Carrington said in an email.

What’s next To officially push back the law’s start date, the amended bill the council approved needs a signature from Mayor Eric Adams. Alternatively, he could opt not to sign it and let it lapse into law after 30 days—an option mayors commonly choose for bills passed by the City Council. The press office for the mayor did not return emails asking whether Adams planned to sign the bill. ■

2022

WOMEN IN SPORTS Crain’s New York Business’s 2022 Notable Women in Sports recognizes top women from professional firms specializing in sports business in NYC.

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BUCK ENNIS

TECH SPOTLIGHT

SILBERMAN says PingPod locations can turn a profit quickly thanks to limited labor costs.

FOCAL POINTS

Pingpong studio startup serves up 24/7 access

COMPANY NAME PingPod FOUNDED July 2019

Flatiron District’s PingPod recently raised $10 million to expand its autonomous retail business

MANAGEMENT Max Kogler, chief executive officer; David Silberman, chief financial officer; Ernesto Ebuen, chief product officer

BY RYAN DEFFENBAUGH

FULL-TIME STAFF 15 employees, along with 25 coaches

O

ver the pop and thwack of bouncing pingpong balls on the Lower East Side, David Silberman noted that table tennis is wildly popular in New York. “But for so many, there is nowhere to play.”

After all, pingpong tables are most associated with basements and garages—not the one-bedroom apartments many New Yorkers call home. Silberman is a co-founder and the chief financial officer of Flatiron District startup PingPod, which hopes to make the sport more accessible by opening 24-hour, autonomous table tennis studios. The company in March raised a $10 million venture capital investment round led by Sequoia Heritage to expand its tech-enabled pingpong model throughout New York and to more cities.

The first PingPod opened on the corner of Allen and Hester Streets at the start of 2020, and the company now has launched locations near Penn Station on West 37th Street and in Williamsburg and Astoria, with one opening soon on the Upper East Side.

Other than a cleaning crew in the morning, there are no employees at the locations. Pingpong players book a time slot online for between $15 and $40 per hour, use their phone to unlock the door and play with paddles and balls provided on-site (though many players

bring their own paddles).

In the studios, high-definition cameras serve as security, in place of actual employees, but they also record each game and can send an instant replay to players’ phones. A good rally may also make a good Instagram post, giving free advertising to PingPod. The founding team has a championship pingpong pedigree. Chief Product Officer Ernesto Ebuen is a six-time Philippine National Table Tennis champion and in 2016 was ranked the top player in the U.S. Ebuen oversees a team of coaches that offer private lessons and programming for children.

Silberman and CEO Max Kogler have a background in finance. Kogler also previously served as chief operating officer for Super Soccer Stars, a youth development program.

Going autonomous With almost no labor costs, PingPod locations, which are all owned and managed by the company, can quickly turn profitable, Silberman said. Revenue is limited somewhat by the lack of food and bar revenue that similar recreational businesses can rake in, but he countered that PingPod’s locations are cheaper to launch and require less space.

The firm is part of a growing sector that is using technology to launch autonomous retail and entertainment businesses. The most prominent are the cashierless Amazon Go

stores. One block north of PingPod’s Lower East Side location is a Sharks Pool Club, which offers autonomous billiards rooms. There are two other Sharks Pool Clubs in Manhattan and two in Brooklyn.

Ben Borton, an early investor in PingPod, said he views the company as a tech-driven way to find new uses for the types of brickand-mortar retail spaces challenged by the shift to online shopping.

“I can’t go on Amazon and play a game of pingpong,” Borton said. “So this seems like a really smart repurposing of these [vacant retail] spaces.”

The honor system There are challenges to the model. Landlords must be convinced that it is safe to leave ground-floor storefronts without any supervision. There are occasional parties who stay past their time and the always-present threat of theft. But Silberman said the honor system has mostly worked. The studio’s security cameras are monitored, and there is an intercom for security staff to communicate with customers who stray from the guidelines.

With the funding round, PingPod is focused on opening locations in New York and along the East Coast. Its first Philadelphia location opened in February. The firm is also investing in expanding its technology, including AI sensors that will automatically keep score and of-

FUNDING PingPod has raised $14 million from venture capital investors in three separate deals.

PRODUCT MIX Users can book a PingPod table tennis studio by the hour. An $80 monthly membership offers discounted hourly pricing or free play during off-peak hours.

REC TECH PingPod’s founders and investors view the business as a new, tech-driven model for pingpong and less as a competitor to table tennis–driven social clubs, such as the popular Spin.

WEBSITE pingpod.com

fer feedback on the efficiency of shots.

“So many people just think of this as a parlor game—the pingpong table is for fraternities and beer pong,” Silberman said. “We’re trying to disassociate that a little bit. This is an Olympic sport. You break a sweat, and it’s fitness.”

But, he added, PingPod also recognizes the sport’s main draw.

“I always felt like wherever there’s a pingpong table,” Silberman said, “there’s fun happening.” ■ MAY 9, 2022 | CRAIN’S NEW YORK BUSINESS | 23

ARTS & CULTURE