Crain's New York Business

MAYORAL PROGRESS REPORT

MIXED SUCCESS

Political experts, business leaders and Crain’s readers offer a varied assessment of Eric Adams’ rst year as mayor

BY ANNE MICHAUD

Mayor Eric Adams started his term in o ce with a concession to Covid-19: He split his inauguration into two parts. He had originally planned an indoor ceremony at the Kings eatre in Brooklyn. But at that time, because of the omicron variant, the city was experiencing its highest number of cases since the start of the pandemic.

PERCENTAGE of 278 Crain’s readers saying they approve of Adams’ work in his rst year ALSO: A breakdown of 11 of the mayor’s promises and the progress he has made on them

So Adams held his swearing-in minutes after midnight in Times Square on the rst day of 2022. In a televised address from City Hall a few hours later, Adams said he chose the amboyant, internationally televised New Year’s Eve setting to send the message that “New York is not closed. … New York can and should be the center of the universe again.”

POLITICS

Hochul lays out vision for mental health care, housing

BY CARA EISENPRESS, JACQUELINE NEBER, EDDIE SMALL AND CAROLINE SPIVACK

Gov. Kathy Hochul introduced an ambitious set of plans to tackle the mental health crisis, increase the state’s housing stock and transition New York to a green economy during the annual State of the State

address last Tuesday in Albany.

e state’s rst female governor begins her rst full term in o ce after a closer-than-expected gubernatorial race that saw Republicans make signi cant gains across the state while economic headwinds tempered New York’s recovery from the pandemic.

Hochul projected a message of unity in the

midst of economic uncertainty and pledged to make investments to create more opportunities for the state’s vulnerable populations.

A rundown of the policy and plans introduced during the State of the State address: $1 billion to tackle mental illness

Ahead of the address, Hochul unveiled a $1

billion, multiyear mental health investment plan to increase the capacity for treatment, expand outpatient services and strengthen insurance coverage.

e plan would create 1,000 beds to treat psychiatric patients and fund 3,500

Cornell research: Under 30% of New Yorkers earn enough to afford basic household expenses

BY OLIVIA BENSIMON

More than 70% of city residents are not making a living wage, according to research released last week by Cornell University.

e Living Wage Atlas, which combines data from the latest U.S. Census Bureau American Community Survey and information from the Massachusetts Institute of Technology Living Wage Calculator, found sharp disparities between wage earnings and what it calls a living wage. It de nes a living wage as how much workers

$123,000 before taxes, according to the Living Wage Calculator.

According to the research, about 39% of white workers in the city earn a living wage, more than 10 percentage points higher than Black workers (28%) and 17 percentage points higher than Hispanic-Latino workers (22%). Almost 41% of white men in the city earn a living wage.

In ation issues

e research was released a day before Gov. Kathy Hochul’s State of the State address, in which she proposed linking the minimum wage to the rate of in ation in an attempt to address the impact of high in ation and the affordability crisis affecting New Yorkers.

need to make to a ord basic household expenditures, such as food, clothing, housing, health care, child care, transportation and taxes.

A household with two working adults would need to earn about $70,900 before taxes per person to earn a living wage, while a living wage per adult for a household with two working adults and two children should be at least

Experts say that although the move is a step in the right direction, it may not be enough for workers’ wages to catch up to the quick pace of in ation.

“It’s a positive in that she recognizes that there’s a need, but I don’t think it's an adequate increase,” said James Parrott, director of economic and scal policies at the Center for New York City Affairs at the New School. “It will still leave New York workers far short of what a minimum wage should be.”

As the pace of price increases in

ECONOMY

the New York region ticked up to 6.3% in December from 5.9% in November, the cost of goods and energy has disproportionately affected low-income households in the city. Because wages have not kept up with in ation, especially for workers earning the minimum wage who are less likely to get raises, more New Yorkers have struggled to make ends meet.

Low wages are most prevalent in industries where people of color make up a signi cant portion of the workforce, the research found. Among retail trade workers, 46% of

them earn below a livable wage. For accommodation and food service workers, part of the state’s important tourism and hospitality sector, that gures is about 53%.

“[Food service and accommodation] is one of the industries that we can subsidize heavily, so we use a lot of public resources to incentivize rms to engage in new projects in that industry,” said Russell Weaver, director of research at the IRL Bu alo Co-Lab and part of the team of researchers behind the Living Wage Atlas.

“So what that means is that we're

In ation rises in New York as national gures begin to cool

BY CARA EISENPRESS

Consumers in the New York area paid more for goods and services in December than they did in November, as increasing prices for cars and housing pushed the closely watched consumer price index back up after a threemonth decrease.

monthly national index fell 0.1%, the rst decline in more than a year.

CRAIN’S POWER BREAKFAST

e index rose 6.3% compared to 12 months earlier, according to gures released last ursday by the New York–New Jersey o ce of the Bureau of Labor Statistics, up from 5.9% in November and back toward the area’s 2022 peak of 6.6% in August.

By contrast, in ation for the U.S. as a whole declined for the sixth straight month, to 6.5% annual growth, a positive indicator that the Federal Reserve might slow the pace of interest rate increases it has been deploying to cool the economy. In ation had peaked much higher nationwide than in the New York region, at 9.1% in June. e

In New York, rising prices for cars and rent drove the local index higher in December than in November, even as residents paid less for gas and electricity than they had the month before. New York created a statewide gas tax holiday in the second half of 2022 that has since ended.

e price of household gas service, however, was up 4.4% month over month and a whopping 23.2% year over year. Gov. Kathy Hochul said in her State of the State speech that she expected New York households to have energy bills 20% to 30% higher than last winter “due to the in ated costs of polluting fossil fuels.” Nationwide, gas service prices were up 19.3% year over year.

Hochul said she would spend $200 million on electric bill relief for 800,000 customers who make under $75,000 per year. About 4 million households use natural gas heat. Hochul also said in the speech that

she wanted to ban gas heaters, dryers, cooking ranges and other appliances for small new buildings in 2030 and for large new and all existing buildings in 2025.

e costs for rent were also up— 4.9% for the year and nearly 1% month over month.

Some relief

Prices for groceries, however, appeared to level out. Although the index for food eaten at home is up 10.1% over December 2021, it was at for the month and down in some subcategories including meat, dairy and nonalcoholic drinks.

Some of the relief in goods prices comes from a relaxing of shipping costs for businesses. e average price for a freight container has dropped vefold from a ninemonth peak that lasted from July 2021 until April 2022, according to data from Freightos Baltic Index, which tracks the shipping industry.

at the national numbers are

probably using public dollars, in many cases, to support the creation of sub-living-wage jobs,” he explained.

To more appropriately address wage disparities, experts suggest coupling the minimum wage increase not only with in ation but with labor productivity, a relationship that existed up until the 1970s.

“If we had had a minimum wage in this country that re ected prices and the cost of living and productivity," Parrott said, "we would be a lot closer to a living wage today than what we are.” ■

falling may mean more to New Yorkers’ pocketbooks and businesses than the upward prices.

“Fed o cials will likely take comfort in a sharp downward trend in year-over-year in ation as well as softness in CPI [excluding] food, energy and shelter,” wrote David Kelly, chief global strategist at JPMorgan Asset Management in a note on LinkedIn. “ is morning’s report increases the likelihood that the Federal Reserve further downshifts its pace of tightening.”

e Fed’s Board of Governors raised the federal funds rate by three-quarters of a percentage point, to 4.4%, in mid-December. e next meeting will be held Jan. 31 and Feb. 1. Following the release of the in ation gures, Philadelphia Fed President Patrick Harker said that he thought quarter-point interest rates would be appropriate going forward. ■

BLOOMBERG

BLOOMBERG

ABOUT 53% of food service workers earn below a living wage.

BY CARA EISENPRESS

Aveterinary care startup in Manhattan has raised $40 million to fuel its next stage of growth and a handful of new in-person locations, as pet parents who adopted during the pandemic boom settle into more regular routines of care.

Small Door uses telemedicine and other technology alongside a membership model to make veterinary care more personalized. e company said it already has conducted tens of thousands of client consultations, which have generated “healthy” cash ow for the company.

“You have people in love with their pets, and we serve those people who want the best for their animals,” said Josh Guttman, co-founder and CEO. “ ey come more often and engage more deeply.”

Membership costs $169 per pet per year and includes one annual exam, telehealth at any time of day and a guarantee of same- or next-day appointments. But some super pet lovers come in more frequently, Guttman said, to the point where the company has among the highest engagement rates in the industry, measured by frequency of visits and the average rev-

enue for every Spot or Max.

Small Door is not alone in making a play in the burgeoning pet-care sector. In a 2021–2022 American Pet Products Association survey, 70% of U.S. households reported that they owned a pet, compared with 67% in 2019. Spending on cats and dogs (and sh and birds) soared to $123.6 billion in 2021,

132 employees, including a tech team of 10 people who run the mobile site.

“We felt that the only way to build the kind of business we wanted was to invest in tech,” Guttman said. “Every medical record is digitized. ere are no paper les.”

e Flatiron company’s last funding round, $20 million in April 2021, was an example of how tech-enabled rms are delivering a boost to retail real estate in New York and other metropolitan areas. In 2020 Small Door had just one clinic, in the West Village. Since mid-2021, it has opened four more in New York City—in Gramercy, the Upper East and West sides and Williamsburg—and is adding several in Boston and Washington D.C.

up from $97.1 billion two years earlier, according to the APPA. Several New York City companies have taken part in the growth, including publicly traded dog-product brand BarkBox and direct-to-consumer pet food rms Cat Person, e Farmer’s Dog and Smalls.

e latest round brings Small Door’s total funding to $63 million and puts the startup ahead of its goal to open 25 locations by 2025. e company has about 10,000 customers and

e new round of funding will go toward six additional locations outside of New York City, with the rst Boston grand opening happening in the next several weeks, Guttman said. He added that the company plans to open 11 more next year and at least that many in 2025.

at will include locations in pet-dense areas of the New York metro area, likely including spots in Brooklyn and Queens, he said.

“ ere is de nitely capacity to open several more in those markets,” Guttman said. ■

BUCK ENNIS

SMALL DOOR staffer Natalie Vegas with Rue, a patient.

Musician

parts

near Central Park

BY C. J. HUGHES

Can we expect a song about it?

Singer-songwriter-musician Suzanne Vega, who has artfully mined mentions of New York real estate ranging from Lower East Side nightlife zones to Central Park South celebrity spreads to Morningside Heights diners for her songbook, has said so long to her Upper West Side home.

courtesy of virtual staging.)

“‘Prewar’ can go different ways. It can mean old and sort of junky, or it can mean well preserved, and in this case, it meant well preserved,” said Roger Abounader, the Corcoran Group agent who marketed the home on Vega’s behalf. “It’s a great space.”

Multiple moves

Her three-bedroom co-op, No. 18 at 37 W. 93rd St., closed for $1.8 million on Dec. 19. The price was the same as that for which Vega had listed the corner unit in July and slightly higher than the $1.6 million the neo-folk musician paid for it in 2006.

The apartment near Central Park West features a formal dining room, a windowed kitchen and two baths.

In addition, it boasts eye-catching prewar details, such as beamed ceilings, paneled walls and picture-rail molding. Add to that a few chandeliers, although the unit did not have any furniture in its rooms when buyers toured it. (The pieces that appear in the listing photos are

Vega, a city resident since she was 2, appears to have relocated regularly over the years. She has lived in Chelsea, Harlem and Tribeca. She lived in Morningside Heights in the late 1970s, when she attended Barnard. Her debut self-titled album came out in 1985.

The city’s landscape has been fertile ground for her song ideas. Vega’s “Frank and Ava,” a song about a drunken dustup between Frank Sinatra and Ava Gardner, was apparently based on a true story from Central Park South. Similarly, revelers wake up “painted in nicotine” after big party nights on “Ludlow

Street,” the address of Vega’s half-brother, Tim, who died in 2002 after struggling with alcohol abuse. Vega has said she came up with

It is always nice to see you

But Vega’s best-known ditty is perhaps her clearest snapshot of the city, “Tom’s Diner,” an ode to

Vega, perhaps expectedly, does not seem to be going far. Her new address is just around the corner in a Central Park West rental, public records show. ■

BY EDDIE SMALL

Mayor Eric Adams’ administration last Monday released a set of specific recommendations that are meant to help convert the city’s office buildings to residential, in an effort to move forward on one of the most buzzed-about ideas since the pandemic began.

The recommendations would provide an additional 136 million square feet of the city’s office space with the most flexible regulations around conversions. They would have the potential to create up to 20,000 new homes for 40,000 New Yorkers over the next 10 years, according to the Adams adminis-

tration.

The recommendations are as follows:

• Expand the age of office buildings with the most flexible residential conversion regulations from those constructed through 1961 to those constructed through 1990

• Expand the most flexible regulations to every high-intensity office district in the city, including the Hub in the Bronx and Downtown Flushing in Queens

• Look for opportunities to build or convert housing in high-density areas of Midtown where residential development is currently banned

• Let office buildings be converted into several different types of residential space, including supportive housing

• Eliminate rules that incentivize partial conversions, giving landlords more flexibility to make their entire buildings into residential

space

• Look into a program that would provide a tax incentive for converting office buildings into affordable and mixed-income residential buildings

• Develop a property tax abatement program that incentivizes converting offices into space for child care centers

Officials would implement these reforms by changing city regulations and state laws. A prior office-to-residential tax incentive called 421-g helped spark the conversion of about 13 million square feet of office space in Lower Manhattan, according to a report from the Citizens Budget Commission.

Figuring out how to convert office space into residential space has emerged as one of the thorniest issues amid the pandemic, as New York deals with both a glut of offices and a severe housing shortage. Adams recently announced an ambitious goal of building 500,000 new homes in the city over the next 10

years, and rethinking the city’s office districts was a central component of the Making New York Work for Everyone plan Adams and Gov. Kathy Hochul unveiled in December.

The office-to-residential conversion recommendations come from the city’s Office Adaptive Reuse Task Force, a 12-member panel led by Department of City Planning Director Dan Garodnick. ■

“Luka,” about an abused child in a second-floor apartment, because that was the name of a child in her old building in Chelsea. (The actual Luka was never harmed.)

the types who hover in the background but still make impressions, such as the patrons of Tom’s Restaurant at Broadway and West 112th Street.

NEWSCOM, CORCORAN GROUP.

37 W. 93RD ST. (left), where Vega had a prewar three-bedroom co-op

VEGA

Winklevoss brothers accuse crypto foe Silbert of running a ‘ nancial Hotel California’

Why wait for another article about the epic feud between two of the cryptocurrency world’s leading players when you can read this one now?

In one corner are the Winklevoss twins, who became famous for insisting they were the rightful inventors of Facebook. After that claim didn’t pan out, they became crypto entrepreneurs and launched a Midtown-based exchange called Gemini.

In the other corner is Barry Silbert, one of the world’s largest Bitcoin investors. His conglomerate, Digital Currency Group, owns a large Midtown-based crypto broker called Genesis Global Capital.

hedge funds, and in return Gemini clients would get paid fat 7% yields.

But the nancial ywheel fell apart in November 2022 with the collapse of FTX. Genesis, which had $175 million worth of exposure to FTX, stopped paying Gemini customers and is alleged to have sti ed them out of $900 million.

e leadership of Gemini did what crypto folk do when they’re upset: ey went on Twitter.

Public spat

AARON ELSTEIN

Once upon a time the Winklevosses and Silbert cooked up an idea to make crypto investing even more popular with the masses. e deal was that 340,000 Gemini customers would lend their crypto to Genesis, which would forward it to

In a letter published Tuesday, Cameron Winklevoss called on Digital Currency Group’s board to replace Silbert with a new CEO “who will right the wrongs that occurred under Barry’s watch.”

Nuh-uh, Silbert’s side shot back.

Digital Currency Group tweeted that the Winklevoss letter was “another desperate and unconstructive publicity stunt” and warned it was “preserving all legal remedies in response to these malicious, false and defamatory attacks.”

I have no idea who’s in the right here, but applaud the adversaries for highlighting one of the most serious problems with crypto.

With hundreds of thousands of Gemini customers unable to get their money, Winklevoss accused Silbert of running a “ nancial Hotel California”—a place where you can

check out but you can never leave. I’m sorry the Eagles got dragged into this ti , but it’s de nitely true that putting money into crypto is much easier than getting it out.

Last week a bankruptcy judge ruled that customer cash deposited in the bankrupt Celsius Network is the property of the exchange. e

folks who wanted to check $4.2 billion out of that particular hotel are out of luck, as probably are customers of other failed exchanges.

Flying solo

I don’t see a happy ending here. Gemini and Genesis were enthusiastic partners before everything went sour. Sometimes arrangements between consenting adults don’t work out. ere are no laws or regulations to protect crypto depositors, and everyone knew or should have known the risk. e only sure thing here is the Winklevosses and Silbert will be at each other’s throats on Twitter, and probably in court, for a long time.

As Neil Sedaka once sang, breaking up is hard to do. ■

What will happen to good cause eviction this year?

Ever since the far-reaching legislation was dropped from an enormous package of protenant bills in 2019, it has kicked around the Democratic-run Legislature, lining up support in the state Senate but stalling out in the Assembly. Progressive activists were con dent this time last year that they had the numbers to ram good cause through.

Instead, real estate and landlord groups lobbied ercely against it, and Carl Heastie, the Assembly speaker, never brought up good cause for a vote.

Will 2023 be any different?

Good cause is not as radical as either its most fervent backers or detractors say. e legislation would extend the bene ts rent-stabilized tenants enjoy to market-rate tenants everywhere. Under good cause, landlords could not terminate a tenancy except in cases of lease violations, such as failure to pay rent or

other infractions. Allowable annual rent increases would be possible but not extreme; they would give tenants a degree of stability in a volatile market. Vacant apartments could still be rented for high rates. Developers and landlords would still nd plenty of pro t-making opportunities in a post-good cause world.

e real estate industry remains deeply wary of good cause, especially smaller landlords who worry about the ability to evict problem tenants. Other landlords don’t want to be denied 2022-style opportunities, when rents skyrocketed and a lease renewal could net double the rate of what was paid a year earlier.

At the same time there’s a large contingent of upstate and outer-borough, moderate Democrats who represent homeowners renting out part or all of their properties. is class has become more vocal in its opposition to good cause. If progressives are going to win the day, they’ll have to sway them or nd votes elsewhere. e

legal defeat of some good cause laws at the local level has only increased the urgency for progressives to get it done in Albany.

One boon for the left is the elevation of Linda Rosenthal, a Manhattan Democrat, to chairmanship of the Assembly’s housing committee. Committee chairs don’t matter as much in Albany—power is concentrated in the speaker’s o ce and central sta —but Rosenthal, a staunch supporter of pro-tenant bills, may be better positioned to advance good cause, especially because she’s replacing a more conservative Democrat who was defeated last year, Steve Cymbrowitz.

For tenant activists reading the tea leaves, Rosenthal’s rise may be a sign Heastie is growing more receptive to their side. e taciturn speaker didn’t have to choose her but did so anyway.

If the votes for good cause are lined up in the Assembly and Senate, will Gov. Kathy Hochul sign the bill? Hochul has yet to tip her hand. She has spoken, generally, about combating the a ordability crisis in New York, and she is expected to come out for the construction of much more housing when she de-

livers her State of the State address. Can the passage of good cause be part of that equation?

Left-leaning Democrats have been more willing to horse-trade over renewing a version of 421-a, a large tax break for a ordable housing that’s expired. e real estate industry would rather oppose good cause than see it pass the Legislature with a 421-a renewal. is is another challenge for the good cause forces: e enticement of renewed tax breaks hasn’t been enough to get the real estate lobby to end its fervent opposition to good cause.

ere is a rhythm to the passage of bills in Albany, and if good cause is going to happen, it will come at one of two points this year. ere is the budget-making process, which begins in March and always ends with unrelated legislation jammed in at the last minute in the dead of night. Good cause could end up as part of a budget compromise. Or it will be saved for the end of the ses-

sion in the late spring, when lawmakers haggle over bills and pass them in rapid succession before adjourning for the summer.

It’s also plausible good cause dies once again. Hochul and Heastie could decide they would rather not attract the ire of one of the state’s most powerful players.

Quick takes

● Mayor Eric Adams recently railed against former aides to Bill de Blasio for publicly criticizing him. Adams’ thin-skinned routine is tiring; New Yorkers want to see him govern the city, not complain more about relatively powerless political operatives.

● Will crime fall this year? Adams’ political future will depend on a fast turnaround. He’s staked much of his mayoralty on numbers he can only, at best, partially control. ■

BLOOMBERG

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

ROSS BARKAN

HEASTIE

BUCK ENNIS

TYLER WINKLEVOSS (left) and Cameron Winklevoss speak during the Bitcoin 2021 conference in Miami on June 4, 2021.

ALEXANDROS WASHBURN

Grand Penn Community Alliance

INTERVIEW BY AARON ELSTEIN

Alexandros Washburn is an architect who served as the city’s chief design of cer during the Bloomberg administration, where he helped design the Harlem Children’s Zone, the High Line and Hudson Yards. Previously he helped convert the Farley Post Of ce into the magni cent Moynihan Train Hall. He is now leading the Grand Penn Community Alliance, a group advocating for a new, improved rail hub that isn’t entombed by Madison Square Garden.

Everyone agrees Penn Station is terrible, but what should be done?

We need a station worthy of New York. That means building a station in which commuters have as good an experience as Amtrak riders, with a waiting hall as good or better than Moynihan. The new station needs 21st-century transportation capacity, and every platform and train must be accessible to everyone.

Couldn’t a station like that be built while leaving Madison Square Garden alone?

No, the forest of columns at track level makes it impossible. Those columns support Madison Square Garden and stand in the way of basic passenger improvements, like installing elevators and ramps. Until the columns are removed, there is only so much you can do to Penn Station.

DOSSIER

WHO HE IS Executive director, Grand Penn Community Alliance

BORN Washington, D.C. RESIDES Red Hook, Brooklyn EDUCATION Bachelor’s in art and biology, University of North Carolina at Chapel Hill; master of architecture, Harvard University

ON HIS CV Washburn was the chief urban designer for the New York Department of City Planning and president of the Pennsylvania Station Redevelopment Corp. He also served as public works adviser to Sen. Daniel Patrick Moynihan. His work to make Moynihan Train Hall a reality made him a Crain’s 40 Under 40 honoree in 1997.

NEW URBANISM No surprise, he’s a Jane Jacobs fan— and he has his own fans as well. In 2007 New York magazine described Washburn as a man of “urbane Greek god looks that had most of the Janeheads at the pub cruising him in that discreet New Urbanist way.”

Madison Square Garden owner James Dolan seems to like its location, though.

A new Garden would make more money than the existing one. The next generation of Madison Square Garden would t in the western, unbuilt half of Hudson Yards. I made sure that was the case when serving [as chief urban designer] in the Bloomberg administration.

What pressure can the government bring?

In 1963 the city granted Madison Square Garden a permit to operate for 50 years and in 2013 renewed it for 10. The permit expires in June, and the city should give the Garden four more years at the existing site while it builds a new arena. Four years is how long it took to design and build Barclays Center in Brooklyn.

What if the Garden still refuses to move?

The Garden is aware of the better economics a few blocks west. The new Yankee Stadium makes more money than the previous one across the street.

Apart from keeping the Garden in place, what else is wrong with Gov. Kathy Hochul’s plan to pay for a new Penn Station by developing of ce towers?

Establishing a private goal rst and then trying to get the public around it is back-asswards. Also, the market for commercial space is uncertain. The developer, Vornado, doesn’t want to build.

What’s an alternative?

Look at the High Line. In that case, the city invested $100 million to build the park and rezoned the surrounding area. That resulted in $3 billion worth of private investment and buildings that are generating property taxes. There’s lots of development that can be done in the Penn Station neighborhood without supertall towers blocking the light.

Wouldn’t it be expensive to rebuild Penn Station with public money?

The current situation isn’t cheap, either. ■

Founder Ran Eliasaf’s learned lessons keep Northwind Group on successful course

On Dec. 6 Citrin Cooperman’s Real Estate Practice leader, Mark Mindick, hosted the rm’s virtual CEO Evolution Series.

e CEO Evolution Series is an annual seminar series that takes place in several regions where Citrin Cooperman operates. is informative series identi es and recognizes CEOs and leaders who have risen to the top and have grown as industry leaders. is annual event brings together some of the most notable and dynamic CEOs to share their experiences, strategies and best practices to help others gain insight into becoming successful leaders.

Mindick sat down with Ran Eliasaf, founder and managing partner of Northwind Group, to learn more about his unique journey from Israel to New York City to become a founder and CEO of a successful real estate private-equity rm with $3 billion in assets under management. Northwind has been a Citrin Cooperman client for more than a decade, working collaboratively with Mindick and professionals from the rm’s real estate practice to achieve its goals and plan for continued success and growth.

THE JOURNEY INTO REAL ESTATE

Eliasaf was born and raised in Israel in a military family. His father was a general in the air force, and Eliasaf was a captain in the country’s navy, serving for more than six years in various active combat duties. From a young age, Eliasaf moved many times with his family, experiences that would ultimately de ne and shape his passion for real estate.

His entry into building businesses came circuitously—a result of his passion for sur ng. To decompress from the pressures of the army, Eliasaf took a year o to surf and opened a sur ng school while bartending in the Dominican Republic.

“I think I was making maybe $150 a week, but I was spending $100, so I was cash ow positive with a pretty good margin,” he reminisced with a laugh.

After deciding that the sun-washed lifestyle of a surfer was not for him, he moved back to Israel to attend law school, not necessarily to be an attorney, but to gain a deeper understanding of contract law in business. To gain real-world work experience during law school, he initially worked as a chau eur and secretary to an attorney who showed him the ropes of real estate investment and deal making. Eliasaf became his right-hand man.

THE EVOLUTION OF NORTHWIND

Knowing that he wanted to do business and make investments in the United

MARK MINDICK Partner and Real Estate Practice leader, Citrin Cooperman

States, Eliasaf ew back and forth from Israel to the U.S. in his early years.

Following the nancial crises of 2008, he began buying distressed debt secured by grocery-anchored shopping centers in Florida and Texas, identifying highquality operators and raising capital from institutions and family o ces.

Eliasaf named his company Northwind— known as the best wind in Israel for windsur ng and kitesur ng.

He quickly realized that he didn’t want to focus his career and business on investing in other people’s deals. He began structuring Northwind to be an on-theground owner-operator and, to remain heavily involved, used a hands-on management approach by establishing o ces on his properties for his sta .

“ e story of Northwind has been one of constant evolution,” Eliasaf said, speaking about his lessons learned from building a company of its magnitude.

Eliasaf and the company constantly explored new areas of industry from ground-up development to buying o ce buildings and land and eventually

RAN ELIASAF Founder and managing partner, Northwind Group

moving to lending, which Northwind has been focused on for the past six years. It manages three closed-end debt funds that, during the past year, provided more than $1 billion in loans. e company further evolved into the health care space in 2016, when it purchased a building with the intention of converting it into condos, but through market analysis and research, Eliasaf decided that the space would best be used as assisted living. From that rst building the rm expanded tremendously, providing both debt and equity in the health care space. Northwind is invested in 106 senior living and health care properties totaling more than 12,000 beds-units in 10 states.

PEOPLE: THE HEART OF THE DEAL

e pivot into health care created a lasting relationship with the lender, which allowed Northwind to have its rst expansion outside of New York City. As a key to his personal and professional success, Eliasaf cannot emphasize enough the power of building lasting relationships. Developing and nurturing relationships with peers, colleagues and businesses are vital to the growth and stability of any company and can open

doors to unique opportunities.

Eliasaf’s management philosophy was, in many ways, shaped by his time in the navy, where he was commander of a battleship but worked as one with his crew. He attributes his success and the rapid growth of Northwind to the power of the collective voice of the company and leadership that gives each team member equal footing and lets each voice be heard.

Without talent, Eliasaf maintains, there can be no successful business.

Although Eliasaf runs a multibilliondollar company, he attempts to be home every night to have dinner with his family, get his children ready for bed and spend quality time. He focuses on creating an environment at Northwind where there is a positive work-life balance for his team. Caring for the family is an integral part of how he runs Northwind, both internally and externally, as demonstrated by the company’s commitment to many philanthropic initiatives.

In addition, the art of delegation has provided Eliasaf with the time and space required to run the company and best use his skill set. Assigning speci c jobs and tasks to those with the abilities and knowledge to e ectively carry them out helps to create internal e ciencies—a well-oiled machine.

Eliasaf noted that business owners should be able to acknowledge that they don’t know everything and be willing and able to seek specialized knowledge and skills from other professionals, whether this is delegating internally or outsourcing.

e relationship built between Mindick and Eliasaf has been mutually bene cial in this way and has helped provide Northwind with the time needed to focus on what counts: growing its business and crafting thoughtful, e ective deals.

For more information on how Citrin Cooperman can help your real estate business thrive, please contact Mark Mindick at mmindick@ citrincooperman.com.

“Citrin Cooperman” is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA rm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two rms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America, which is itself a regional member of Moore Global Network Limited.

MODERATOR

GUEST SPEAKER

If Hochul can ful ll her State of the State promises, New York is set to rebound

As Gov. Kathy Hochul sees it, New York’s future is bright—but there is still much work to do.

In this year’s State of the State address, delivered last week, New York’s 57th governor highlighted the strides she’s made, including signing 840 bills and strengthening gun-safety laws in light of the mass shooting that occurred at a supermarket in her hometown, Bu alo. She also mentioned that the state managed to pad its rainy-day fund last year thanks in part to aid from the federal government.

But there have, of course, been challenges. She pointed out that the social isolation and economic challenges of the pandemic have led to an increase in crime and gun violence nationwide.

“My number one priority has always been, and will always be, to keep New Yorkers safe,” she noted. “And not a day has gone by that I haven’t been laser-focused on this objective. e pandemic caused so much havoc in our state, country and society itself. And it had a profound e ect on public safety.”

Acknowledging that crime is New Yorkers’ chief concern, with

OP-ED

many residents feeling anxious on the subway and in public spaces, she called on legislators to let a “shared understanding” of that fact lead them to discuss how to improve the bail-reform law. She added that adequate mental health care plays a role in New Yorkers’ feelings on public safety.

“When it comes to keeping people safe and protecting their well-being,” she added, “ xing New York’s mental health care system is essential—and long overdue.”

She also outlined challenges for New Yorkers in a ording the local cost of living and mentioned that not being able to a ord the rent or the mortgage stresses out residents, inspiring some to leave the state altogether. She said a priority will be replacing the 421-a tax-abatement program, meant to boost a ordable housing production. It expired in June.

e local business community seemed to be on board with the governor’s assessment of what needs to be done in the coming year.

“Gov. Hochul’s priorities—public safety, a ordable housing and the mental health crisis—are in line with the top concerns of New York’s major employers,” Kathryn

Wylde, president and CEO of the Partnership for New York City, said in a statement responding to the speech. “ ese issues represent the biggest postpandemic threat to the livability and economic vitality of our city and state.”

Indeed, a focus on public safety, mental health care and a ordable housing will be paramount to local businesses seeking to lure sta back to the o ce on a more-regular basis and talented workers to the area. Helping the city shed what the governor called

a “pervasive unease” will inspire more residents and tourists to avail themselves of all New York has to o er, thus boosting the economy.

“To recap,” she said, “my goals are straightforward and clear. We will make New York safer. We will make New York more a ordable. We will create more jobs and opportunities for the New Yorkers of today and tomorrow.”

e governor’s remarks inspired hope. If she can follow though, the city will be well on its way to recovery. ■

Proposed changes to the real estate development process are long overdue

BY JODI STEIN

In the span of one week, the city and state made a handful of announcements regarding plans to roll out imminent changes to the real estate development process to encourage development and tackle the city’s a ordable housing crisis. As a practicing city land-use attorney for almost 20 years with business experience at a privately held real estate development company, I feel compelled to say,  “It’s about damn time.”

I started practicing law in the Mayor Mike Bloomberg’s “we can build it” era. ere were issues, but there were solutions.

After Bloomberg, development became more challenging.

en came a national pandemic, a mayor and governor who could not see eye to eye and a state Legislature that allowed the 421-a tax abatement program to expire.

e development world faced never-ending hurdles for even the smallest of matters.

e recent past, however, signals the beginning of hope and recovery.

Promising steps

Mayor Eric Adams and Gov. Kathy Hochul formed two groups, the Building and Land Use Approval Streaming Task Force and the “New New York” panel, that have now released their ndings, identifying the most serious issues hindering development in our city and recommending actions to address them. Of the more than 100 issues that were identi ed, some are procedural and technology-related; others require substantive changes to the city’s zoning, building, environmental and tax regulations.

e ndings also call for re-envisioning commercial districts and vacant o ce buildings to allow for live-work environments, which would increase the city’s housing stock and reinvent o ce spaces that have sat empty since the start of the pandemic.

E orts do not stop with the may-

or and governor; the City Council joined in by proposing to upzone neighborhoods to spur housing development. e council set forth planning and land use guidelines and identi ed the serious understa ng of the Department of Housing Preservation and Development, the city agency tasked with overseeing a ordable housing programs.  Such steps could not be more on the nose.

Devil’s in the details

Whether it is the inability to obtain information from online platforms, the months spent analyzing potential impacts when we know none exist or the wait for a response from city sta ers who, through no fault of their own, are underwater, understa ed and under-resourced (and quite frankly, doing their best to keep up)— things need to change.

e mayor, the governor and City Council have recognized that because of the city’s limited budget and other scal constraints,

much of the road to recovery must be placed in the hands of private developers, as has been the case for many of the economic downturns this city has experienced.

I am not so naïve to believe that our problems have been solved now that the issues have been identi ed; the devil is surely in the details and in the speed of the implementation of solutions. Assuming these changes can be implemented post-haste, we cannot ignore this fact: Without 421-a or a similar program, these initiatives will not be enough to spur the development of a ordable housing.

So we are left back in the hands of the Legislature. e multibillion-dollar question is, will state-elected o cials step up to the task?

Let’s hope so. Too many of our neighbors’ livelihoods are riding on this to imagine any other outcome. ■

Jodi Stein is a land-use partner in Sheppard Mullin’s New York o ce.

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HOCHUL

BLOOMBERG

City’s new Airbnb restrictions will hurt hosts and neighborhoods tourists don’t usually visit

BY MARIBEL SCHUMACHER

As a longtime resident and Airbnb host in central Harlem, I am concerned about the new short-term-rental rules recently proposed by the city’s Office of Special Enforcement. The rules will prevent me from sharing my home; they will hurt my family and my whole neighborhood. They will hurt New Yorkers in circumstances similar to mine.

Under these new rules, which say guests must have full access to the living space, I would be required to stay in the same unit that guests stay in, with no locks on the doors, in-

Many of them have told me they would be unable to visit if they had to pay exorbitant hotel prices during their stay, and that staying in my central Harlem short-term rental allows them to experience New York like a real New Yorker. Hotels simply cannot provide this kind of authentic experience. I enjoy helping my guests make their dream vacations become reality.

Bringing new visitors

Though my guests certainly benefit from staying in my home, my neighborhood in Harlem benefits even more. My short-term rental brings an influx of visitors who otherwise might never have ventured beyond 42nd Street. After all, hotels in this wonderful, historic neighborhood are few and far between.

HOTELS SIMPLy CannOT PROVIDE THIS KIND OF AUTHENTIC EXPErIEnCE

cluding the door to my own bedroom. I typically rent out a separate unit in my brownstone, but under these ridiculous new rules, I would be required to host guests in the unit where my family and I live.

My home caters to mostly international tourists who are fulfilling lifelong dreams of visiting the city.

OP-ED

I happily recommend local shops and restaurants to my guests, and in turn this helps support our neighborhood’s economy by bringing income to local businesses. Everyone benefits!

Short-term rentals such as mine are one of the only things bringing tourists uptown to experience the unique food, culture and history of Harlem. If not for short-term rent-

als, visitors—and their money—would otherwise stay downtown, where the bulk of the city’s wellknown tourist attractions and hotels are.

The city’s proposed short-term rental rules will hurt many other neighborhoods and boroughs where tourists infrequently visit. My neighborhood has so much to offer, and it would be a shame if fewer people were able to experience it simply because there is no place to stay.

I understand that there is an affordable housing crisis. But those who blame short-term rentals are wrong.

Thoughtful regulation

The bulk of our city’s housing problems are a result of the thousands of vacant affordable housing apartments caught up in a slow approval system, not with a real New Yorker putting one floor of a home on Airbnb. Removing my ability to host a short-term rental will not ease the city’s housing crunch.

Although I understand that short-term rentals need to be regu-

lated, the proposed rules do not differentiate between regular New Yorkers sharing their home and illegal de facto hotel operators who should be banned. The majority of responsible hosts support a ban, and they are disappointed that the city has decided to pursue rules that also affect hosts such as myself.

I am at a loss as to how to move forward. Losing my short-term rental will hurt my family and my

neighborhood. We deserve carefully thought-out short-term rental regulations that benefit regular New Yorkers.

I call on Mayor Eric Adams and other city lawmakers to reconsider these ridiculous de Blasio-era regulations before irreversible damage is done to our city’s economy. ■

BY ROCCO J. LACERTOSA

Extreme weather events are on the rise. The Northeast grid’s performance during a single December weekend of frigid weather and significant snowfall did not bode well for its ability to handle the onslaught of 100% electrification the New York State Climate Action Council is recommending.

If we adopt the proposed accelerated pace of electrifying homes, businesses and vehicles, New Yorkers will face the threat of more dangerous outages such as those we saw over Christmas 2022, when extreme storms coupled with frigid cold forced utilities to ask customers to lower thermostats and turn

drop-in replacement fuels for petroleum diesel.

Threats to reliable power

The independent system operators in New York and New England, charged with ensuring there’s enough power to keep the lights on in their respective coverage areas, have made it clear that mounting demand on the already taxed electric grid could result in significant threats to reliability. Renewables simply aren’t coming online fast enough to keep pace. In fact, on Dec. 26, the ISO-NE Grid was 24% powered by heating oil, while the figure in New York was even higher, at 30%.

tection Act.

These options provide an immediate reduction in all greenhouse gas emissions of over 80% CO2e versus petroleum diesel, depending upon feedstock, and 74% on average savings based upon EPA and Argonne National Laboratory data. Biomass-based diesel also reduces particulate matter and co-pollutants.

off holiday lights to conserve power.

There is another way. Instead of being forced into an all-electrification model, New York consumers should be able to choose from a var iety of clean fuels. For example, biodiesel and renewable diesel, known together as biomass-based diesel, are renewable

At midnight Dec. 22, New York utilities instructed their interruptible customers (those who use both natural gas and heating oil as a backup) to switch over to alternate fuel to ensure that customers who use natural gas as a sole source of fuel would have enough heat and power.

Combating climate change must be a priority, but there are other options that can—and should—be considered to meet the goals established by the 2019 Climate L eadership and Community Pro-

Trinity Consulting has studied the benefits of replacing petroleum diesel with 100% biodiesel in select census tract areas. It found its use in space heating alone reduces cancer risk by 85% in thermal heating applications and by 45% in the transportation sector. Concurrently, there are dramatic reductions in cases of asthma, premature deaths and lost workdays due to reductions in particulate matter and criteria pollutants.

Biomass-based diesel

Biomass-based diesel works seamlessly in home heating oil appliances—even at high blends. This year new appliances will be manu-

factured that will be rated by Underwriters Laboratories for up to 100% renewable fuels.

The 1.4 million New York homes that use biodiesel blended heating oil already have a clean renewable fuel choice. New York laws will require a 20% biodiesel blend by 2030, and this percentage can be increased to 100% over time. The home heating industry has asked the governor and the Legislature to mandate this 100% switch to biomass-based diesel to give heating oil customers a clean, reliable ener-

gy future.

New York can lead the way with a smart, methodical and diverse approach to clean energy adoption that preserves both reliability and the environment. Failure to do so will undermine our progress and hurt the very consumers the state claims it wants to protect. ■

Rocco J. Lacertosa is chief executive officer of the New York State Energy Coalition, a trade group that represents the home heating oil industry.

Maribel Schumacher is an Airbnb host in Harlem.

Manhattan College president pushes to revive community in higher education

INTERVIEW BY JUDY MESSINA

Brother Daniel Gardner is the president of Manhattan College, a 170-year-old, 3,500-student, independent Catholic liberal arts college in Riverdale. Gardner, a member of the teaching order De La Salle Christian Brothers, began his career as a high school teacher but soon moved into administrative work, where he said he found his true skills. He was named interim president this past July and president in September.

This year Manhattan College celebrates the 170th year since its founding, the 100th anniversary of its Bronx campus and the 50th anniversary of admitting women students. The college, founded in Manhattanville in 1853, counts among its notable alumni New York Stock Exchange President Lynn Martin, American Express Chairman and CEO Stephen Squeri, former Chairman and CEO of Con Edison Eugene McGrath, former Mayor Rudy Giuliani and former Police Commissioner Raymond Kelly—along with 28 former members of the baseball team who made it to the major leagues and eight basketball players who played in the NBA.

How did you come to your present position of leadership?

I was in academic affairs, advising students looking to go to medical school, law school, Ph.D. programs and fellowships. Dr. [Brennan] O’Donnell, who had been president for 13 years, decided to retire one year earlier than expected. The board of trustees asked me if I would consider becoming interim president. I was honored to do that. I was really enjoying my job, helping students unlock their potential. It goes to the definition of power—having the ability to help people unlock their own potential.

Takeaway for business professionals

Manhattan College has been racking up distinctions this year, receiving $15 million from alumnus Michael Kakos and his wife for a School of Science and $828,000 for tuition scholarships from the Steven and Alexandra Cohen Foundation.

You have a lot of different constituencies that have a stake in the college’s success—students, parents, staff, the church. How do you keep all of them happy?

You can’t keep everybody happy all the time. The real ability to exercise power is to wade through all those voices and understand that the real mission of Manhattan College is to look at the needs of students and bring them to their fullest potential. There’s going to be a lot of varying voices about how that should happen, particularly postpandemic. My ability as president is to keep an institutional eye on the ball, zeroing in on the needs of individual students and bringing them to their fullest potential. The key to being a leader is to help all those constituent groups get on the same page as best we can.

How do you exercise leadership in a nonprofit, educational environment versus at a firm?

When working in higher education, it has to be a combination of being in the C-suite at a for-profit company and an individualrelationship approach to people in the community. This is a community of people. Yes, we have to be attentive to balancing the books, to new programming. But we are also responsible for people here, and that’s what motivates my own position and responsibility here. I have a pretty good grasp on knowing almost everyone’s name here on a campus of several thousand people. Being able to know them and being able to understand what their goals are in life—and pushing the focus of the entire institution to that—that’s where it is at in this nonprofit level.

What’s on your agenda? We are in the process of completely

renovating our residence life facilities, changing the feel and quality of residential halls, trying to turn dorms into 21st-century living environments. We’re also constantly looking for additional partnerships off campus, looking to expand in the area of health care and preparing students in those areas. We just received word of the approval of a new master’s program in health informatics, combining math, data science and health management. To be able to continually challenge ourselves to be excellent for our students is one of my goals. The role of the president is to challenge us daily to live up to our reputation of excellence.

What is the most important thing you’ve accomplished as president? A couple of initiatives. One is that we created the Jasper Corps. It’s a federal financial work-study program [in which Manhattan College] students are going off campus, working in internships at nonprofits, business improvement districts, chambers of commerce, hospitals, museums, social service agencies— and, at the same time, being paid for it.

Generally, they are Pell-eligible students who can really use the money and may not have the opportunity to give hours to an internship if they are not paid. It gives them money to help with tuition and gives them experiences that have value.

What are the benefits of being in a position of power in an institution of higher education?

For me, the greatest advantage of this is that all of us want to be able to contribute to society, but in this role I can not only contribute to society but can really be part of transforming it, educating and interacting with students who are going to go out and change the world.

What are the frustrations or disadvantages?

Every day is a challenge. We certainly need to balance the budget, and for people in a world where the population of college-age students is decreasing, there’s competition from many other institutions of higher education and a massive inflation rate taking away people’s buying power. To come to a tuition-based college is a real

DOSSIER

NUMBER OF EMPLOYEES 750 (1,250 counting “indirect” employees, for example, adjunct professors)

ON HIS RÉSUMÉ Teacher of English and religious studies, Christian Brothers Academy, Lincroft, New Jersey (1996–99); associate principal, Christian Brothers Academy (1999–2004); principal, Resurrection School, Harlem (2004–06); principal, St. Raymond High School for Boys, Bronx (2006–14); assistant director of admissions, Manhattan College (2016–18); assistant director of the Center for Graduate School and Fellowship Advisement, Manhattan College (2018–22); president, Manhattan College, (2022–present)

BORN Buffalo

RESIDES Riverdale, the Bronx

EDUCATION Bachelor’s, La Salle University; master’s, La Salle University; doctor of ministry (ABD), the Catholic University of America

BREAKING THE MOLD Even as president, Gardner eats lunch every day in the school cafeteria and regularly walks the campus, where he engages with students, faculty and staff.

sacrifice for people. The alumni network is able to help, but at the end of the day, it’s frustrating because some people cannot benefit from Manhattan College because of financial constraints.

Another thing very frustrating to us, certainly since Covid, is that with the Great Resignation, it’s been challenging to reassemble the community that was here before Covid. We’re doing it, but it’s a challenge because people have been profoundly changed by that. We’ve decided to conduct everything live and in person because we see the importance of the human connection in the classroom. To be able to find people willing to be part of that as faculty, staff and administration these days is a challenge.

What have you learned over the years about power? About people?

The most important thing I’ve learned is about the goodness of people: It needs to be unlocked. As a leader, you have to work with people on how they are able to allow their inner light to shine. Everyone has potential and goodness inside, and we work with them on how they can demonstrate that in the community. That’s what we’re here for. ■

ASHLEY HOLT

19 Dutch St.

Financial District

330,609Ponte Gadea USA

Partners 9/23 3 160 Riverside Blvd. Multifamily Upper West Side

$415 524,469A&E Real Estate Holdings Equity Residential 7/14 4 685 First Ave. Multifamily Midtown East

Solow Building Company 9/23 5 570 Washington St. Land Hudson Square

$387.5 449,958GO Partners

Westbrook Partners, Atlas Capital Group7/8 6 1330 Sixth Ave. Office Midtown

$350 1.26 acresZeckendorf Development, Atlas Capital Group, Baupost Group

$320 459,500Empire Capital Holdings, Hakimian Capital, Creed Equities, Nassimi Realty

RXR Realty; Blackstone 11/21 7 885 Third Ave. Office Midtown East

$300.4 414,317Memorial Sloan Kettering Cancer Center

SL Green Realty 11/15 8 200 Fifth Ave. Office Chelsea

L&L Holding Company, JP Morgan Asset Management 11/17 9 175 Water St. Office Financial District

$280.2 870,000Boston Properties

$185 98,500Memorial Sloan Kettering Cancer Center

Joy Construction, MADDD Equities8/30

$252 684,50099c Vanbarton Group 10/6 10 321 E. 61st St. Office Upper East Side

43-45 E. 53rd St Office Midtown East

234 W. 42nd St. Hospitality Midtown

780 Greenwich St. Multifamily West Village

$102.5 130,740ZG Capital Partners, Rialto Capital Management MEK Management Services 7/15

$85 970,000Newbond Holdings, Apollo Global Real Estate Management Torchlight Investors 9/12

$80.4 70,350Stonehenge Partners Heller Realty 8/17

$73.7 102,824Watermark Lodging Trust Barings 9/30 15 830 Third Ave. Office Midtown East

307 W. 37th St. Hospitality Hell’s Kitchen

$72 147,068Namdar Realty Group, Empire Capital Holdings AEW Capital Management 8/29 16 237-247 Eighth Ave., 229 W. 20th St., 300 W. 21st St.1 Multifamily Chelsea

$69.85 67,875Slate Property Group Zev Feldstein 7/12 17 58-72 Avenue A Multifamily East Village

$64 79,956Derby Copeland Capital Arthur and Janet Zinberg 9/12 18 310 E. 12th St. Multifamily East Village

$57.8 101,800Meadow Partners Emor Management 8/19

BY CAROLINE SPIVACK

Con Edison has charged the Metropolitan Transportation Authority estimates on several of its electric bills for years, leading to millions of dollars in overcharges, according to an audit from the MTA inspector general's office.

To date, MTA officials have recovered $7.1 million in incorrect billings from the utility. That includes overcharged payments

out of service or if a utility inspector is unable to access a meter—for example, if it’s in a tricky location that requires MTA staff to escort an inspector. When the utility can’t rely on specific readings from a meter, Con Edison said, it uses prior electricity usage to estimate a bill.

But that can result in inaccurate bills, and in the case of the transportation authority, potentially millions of dollars in widespread overages, according to the MTA inspector general’s report.

made to Con Edison while service on the subway was significantly reduced at the start of the pandemic, according to the report. Auditors with the MTA inspector general's office, a state entity that monitors the agency, also found that several of the authority’s accounts have received estimated bills on a longterm or even permanent basis.

State law allows Con Edison to estimate electric bills if a meter is

“Meter reading underground can be fraught with logistical problems, but given the money at stake, MTA has to ensure the accuracy of electrical bills and raise questions when there are discrepancies,” acting MTA Inspector General Elizabeth Keating said in a statement.

In 2021 the MTA spent $570 million on utilities—77%, or $429 million, of which was spent on roughly 3,300 electric bills.

Auditors zeroed in on

94 MTA electric accounts with the most consecutive estimated bills during a 24-month period from October 2019 to September 2021. Of the billing periods, 20 of 24 were based on estimates representing more than $139 million.

The inspector general’s office said it initiated the audit, given the potential that the MTA could be overpaying.

After visits to 60 meters linked with 21 accounts with large shares of estimated bills—tallying up

to $118 million in billings in the two years—auditors were concerned by the results. Of the meters, 10 were out of service, and 21 couldn’t be found at their assigned location.

In some cases, “agency personnel could not tell [the inspector general’s office] whether the meters listed in the records had ever existed, had been replaced with new meters, or were no longer needed and therefore had been removed,” according to the report. Final readings for meters that weren’t found, the report said, could not be located and “will never be known.”

Con Edison representative Allan Drury said the agency would continue to work with the MTA to resolve the issue found in the report. “Should billing adjustments be required, they will be done in a timely manner,” Drury said in a statement.

Belt tightening

The report stresses that the meters reviewed cover only a sliver of the MTA’s bill accounts, and it urged the MTA to examine more accounts for possible widespread overpayments. The audit comes as transit officials seek to tighten the authority’s belt as it faces a looming fiscal crisis.

MTA representative Michael Cortez said the agency was working to reduce estimated bills by installing smart meters that could send energy usage data remotely to the utility.

“As older electric meters are replaced, the percentage of estimated bills has declined and continues to trend down,” Cortez said in a statement. “Wherever estimated billing is greater than actual usage, the MTA identifies the difference, proactively requesting and receiving appropriate credits.” ■

BY CARA EISENPRESS

Gov. Kathy Hochul has signed a version of a two-year-old bill that ensures consumers can take their household electronic devices to any repair shop they choose, an attempt to bridle the power of the big technology companies. Tech firms and business groups, however, shrunk the scope of the rules by the time the measure left the governor’s desk.

The so-called Digital Fair Repair Act requires the original manufacturers of certain devices to make parts, equipment and information available to all repair shops and consumers in the same way they provide this to their own authorized repair providers. The idea of the bill, originally introduced into the Assembly by Albany Assembly member Patricia Fahy in early 2021, was to protect competition and keep prices for repair low, even as consumer devices have become more complex and often difficult to fix.

As an example, if an Apple-made iPhone can be fixed only at the Apple Store, the iPhone owner has no choice but to pay Apple’s price for repair. But if Apple must, by law, share tech specifications and sell equipment or parts to a local repair shop, the iPhone owner gets to choose who will do the work.

The governor’s office said that

the legislation as originally drafted “included technical issues that could put safety and security at risk, as well as heighten the risk of injury from physical repair projects,” according to the approval memo.

With the bill’s passage, New York is at the forefront of a movement whose importance has been underscored all the way up to President Joe Biden, who asked the Federal Trade Commission early in his term to establish federal rules about the consumer right to repair.

During the summer the FTC settled with grill maker WeberStephen Products and motorcycle manufacturer Harley-Davidson Motor Co. Group on alleged violations of existing federal law prohibiting manufacturers from invalidating warranties after consumers

proprietary in recent years.

Not all devices

Back in New York, the measure the governor signed in the final days of last year covers a far smaller group of devices than had been put forth in the bill passed by the Legislature in June, an update that could diminish the intent, advocates say.

“They took out the government, industrial and business-to-business users,” said Gay Gordon Byrne, executive director of the Repair Coalition, a group of independent repair shops and consumer protection groups.

make repairs. Recently Deer & Co. signed a memorandum of understanding with a group representing American farmers to ensure that farmers can make their own choices about repairing their equipment—which has also become increasingly high-tech and

At first, the wording covered all electronic devices with chips, a category, Gordon said, that includes iPhones, video game controllers, garage door openers and smart thermostats. The original bill also covered devices used in businesses, where maintenance contracts can be expensive. As signed, the new law appears to exempt devices that consumers already own and would apply only to fixing consumer electronics bought after the law goes into effect in July.

As originally proposed, the bill had many detractors. TechNet, a technology industry group based in

Santa Clara, California, which represents major tech companies, lobbied against the bill throughout last year, according to disclosures with the state Commission on Ethics and Lobbying in Government.

TechNet approached a handful of New York state senators and Assembly members, including Fahy, and the executive chambers of the governor.

The Business Council of New

York State opposed the bill when it was being considered by the Legislature in the spring.

“Despite provisions claiming the bill would not require manufacturers to ‘divulge a trade secret,’ companies would be obligated to send significant amounts of data related to highly sensitive and technical aspects of equipment to almost any repair provider who requests it,” the business group wrote in a memo.

TECHNOLOGY

State board failed to consider potential costs before approving project to revamp Penn Station

BY AARON ELSTEIN

Rebuilding Penn Station is one of Gov. Kathy Hochul’s top priorities. Yet the state panel charged with making it happen didn’t consider the project’s potential costs before giving the green light.

During the summer, the Empire State Development board approved a plan to pay for a massive new rail hub by teaming up with Vornado Realty Trust, which wants to develop 18 million square feet of office and residential space around the station. The state hopes the ensuing tax revenue will pay for a new Penn Station.

The developer and the state hired Ernst & Young to prepare a report that would detail the expected costs, revenues and steps needed to achieve the desired outcome. For instance, the report was to examine

whether 50-story towers would generate sufficient tax receipts or whether 100-story towers would be necessary.

But the ESD board never looked at Ernst & Young’s work before voting to approve the Penn Station redevelopment plan during the summer, lawyers for the state acknowledged at a recent hearing.

“These numbers weren’t even before them,” acknowledged Ira Lipton, an attorney for the agency that serves as Hochul’s economic development arm. In-house counsel Anthony Semancik added that Ernst & Young’s estimates “were not relied upon” by ESD and that the approved plan “did not contain an analysis of the cost of renovating Penn Station, [or] the cost of expanding Penn Station.”

Chuck Weinstock, an attorney who represents community groups and landlords fighting the Hochul-Vornado redevelopment plan, called the state’s admission “damning.”

“They made a decision without

any rational basis,” he said. “In other words, they had no idea.”

Legal action

The revelation came out during a recent hearing concerning a lawsuit filed by Weinstock and the law firm Emery Celli Brinckerhoff Abady Ward & Maazel demanding the release of the Ernst & Young report. ESD officials refused, saying only final reports must be released and they didn’t consider Ernst & Young’s work to be the final word.

“It is a projection in a moment of time, Your Honor,” Semancik said.

“So?” said state Judge Lucy Billings, who is overseeing the case and may order the projection released.

In a statement, ESD said directors were provided with “detailed board materials,” including an assessment from staff informed by “extensive input solicited over a two-year period, including cost projections by rail partners, feedback from stakeholders and at public hearings, and independent evaluations, such as E&Y’s work.”

The current state of the redevelopment plan remains in flux. Vornado announced plans in November to delay constructing towers

around Penn Station this year in an effort to protect itself from the current economic headwinds and cited weak demand for commercial space in the area. ESD responded by reaffirming its support for the project and its ability to pay for rebuilding the dilapidated rail station.

In these days of rising interest

rates and stagnating demand, financial models for new office development tend to be gloomy. Shares prices in major office landlords Vornado and SL Green Realty trade below or near their 2020 lows. Boston Properties, owner of the GM Building and other top-shelf properties, expects vacancy rates to continue rising this year. ■

Story,

Way

RESEARCH

BUCK ENNIS

PENN STATION

PEOPLE ON THE MOVE

ACCOUNTING

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BY ANNE MICHAUD

Any job applicant is going to make promises about what he or she can and will do, and a mayor is no exception. Now that Mayor Eric Adams has been on the job for a little more than a year, Crain’s took a look at the statements he made and the positions he took as he campaigned as well as in the early days of forming his administration. He is, after all, the self-proclaimed “get stu done” mayor.

What you won’t see here are issues that became more urgent as 2022 progressed: rat infestation, the clearing of homeless encampments, migrants bused into the city, a mandate for police to help get seriously mentally ill people o the streets.

Here, in his words, are the mayor’s early stated goals and the progress he has made toward them—or not.

Getting workers back in the of ce

ADAMS’ VISION: “We have to open up. I need my city to open. It is time to open up, and feed our ecosystem, our nancial ecosystem. You can’t run New York City from home.”

Jan. 4, 2022

ACTION TAKEN: Adams said these words in his rst week on the job and repeated them many times afterward. He joined Gov. Kathy Hochul in urging employers to bring their workers back to city o ce towers.

A survey by the Partnership for New York City found that, as of the end of October, just 28% of Manhattan o ce workers were at the o ce on an average weekday.

Late in 2022 Adams conceded that hybrid work isn’t going away. He and the governor endorsed a “New” New York report drafted by a special panel that calls for turning business districts like Midtown Manhattan into 24/7 neighborhoods by adding more residential buildings and amenities.

Managing Covid

ADAMS’ VISION: “We have to be safe. We have to double down on vaccinations and booster shots. We have to double down on testing. But we have to reshape our thinking of, how do we live with Covid?” —Jan. 4, 2022

ACTION TAKEN: e city Health Department reported that, as of Dec. 22, 90% of city residents had received at least one vaccination dose. Adams increased the rate through some policies he upheld in the past year.

e mayor maintained one of the strictestin-the-nation rules for private sector employees, requiring them to show proof of vaccination in order to come to work. He nally lifted that rule as of Nov. 1.

However, he kept the mandate in place for the city’s roughly 300,000 workers. In February the city red 1,430 workers who declined to get the shot. One result is the city is struggling with double-digit vacancy rates in “mission-critical areas” such as building housing, collecting fees and administering children’s programs, according to a December report by City Comptroller Brad Lander.

Reducing city spending

ADAMS’ VISION: “It means weeding out the waste and eliminating the ine ciencies. It’s about accountability. is may seem like an

obvious approach, but it is so practical that it has been forgotten.” —Jan. 1, 2022

ACTION TAKEN: On his rst day in o ce, Adams was already speaking about cutting spending. He instituted a 3% to 5% interagency PEG—program to eliminate the (budget) gap—to trim the $104 billion city budget. By year’s end he credited the program with reducing the projected de cit for scal 2024 (which begins July 1) to $2.9 billion. e mayor called that “manageable.” In June the projected de cit stood at $4.2 billion.

Adams also ordered most departments to cut 50% of the jobs listed as vacant as of Oct. 31. Uniformed and public safety positions were among the exceptions.

Leading the jobs recovery

ADAMS’ VISION: “It’s time we get our city back in order to a prepandemic employment place, especially in the hard-hit areas like tourism, hospitality and our creative economy.” —March 10, 2022

ACTION TAKEN: Adams said this as he unveiled an economic recovery “blueprint.” ough the nation has grown past its prepandemic employment by about 1 million jobs, the city has regained only 85% of the jobs lost.

Industries such as hospitality, the performing arts and entertainment are still missing large chunks of their pre-2020 workforce. For example, hotels’ employment in November was down 26% from November 2019.

Eliminating business regulation

ADAMS’ VISION: “People are afraid to do business in the city—too bureaucratic, too expensive and too di cult. My agency heads are going to get a new mandate; instead of walking into a business [to] gure out how to close it down, we are going to gure out how to keep it open.” —Nov. 3, 2021

ACTION TAKEN: For businesses, this may be the most notable accomplishment of the mayor’s rst year. In May Adams directed departments to o er a grace period to x issues that violated 39 regulations, to eliminate nes on 30 other regulations and to reduce the ne amounts on 49 additional rules.

For example, the city eliminated the violation for a failure to conspicuously post an electrical work permit while work is in progress.

Adams formed a commission of small-business leaders to advise him and produce recommendations on improving the climate for doing business in the city. e group met for the rst time in October, but o cial recommendations are not expected until June.

Creating a one-stop permitting shop

ADAMS’ VISION: “[Businesses] will be able to better manage paperwork and have direct access to permitting agencies, such as the Department of Buildings,” candidate Adams’ website read. “ ose who opt-in can use a chip-enabled City ID to sail through in-person interactions with agencies, instantly have access to a bank account and even get loyalty discounts at participating local businesses. In sum, this is a 311 for the digital age.”

—November 2021

ACTION TAKEN: When asked about the initiative in September, the Department of Small Business Services could not give a clear time frame of when it is expected to be completed.

e occasion for Crain’s inquiry was a bill passed by the City Council that appeared to be a parallel and competing vision: a One-Stop Shop NYC Business Portal, which is required— on paper—to be up and running by Nov. 1.

Making government more accessible

ADAMS’ VISION: “MyCity will allow users to type just one number into a secure app or website to instantly received [sic] every service and bene t they qualify for—such as SNAP— without an abundance of paperwork,” Adams’ campaign website stated. —November 2021

ACTION TAKEN: Adams’ proposed MyCity app was his single-biggest idea on the campaign trail. It would be a one-stop shop where New Yorkers could sign up for virtually all government services. He also o ered the portal as a solution to health disparities.

e mayor’s O ce of Technology and Innovation has not yet released a version of the MyCity portal.

Addressing gun violence

ADAMS’ VISION: “Gun violence is a public health crisis that continues to threaten every corner of our city. Public safety is my administration’s highest priority, which is why we will remove guns from our streets, protect our communities, and create a safe, prosperous and just city for all New Yorkers.” —Jan. 24, 2022

ACTION TAKEN: Adams has made it a priority to work with federal law enforcement to stop the illegal trade of guns. In an e ort to improve public safety, he has reinstated the Neighborhood Safety Teams, a plainclothes unit that Mayor Bill de Blasio disbanded in 2020. e new version of the team consists of o cers wearing uniforms with visible identi cation but traveling in unmarked vehicles.

In 2022 shootings declined by 17.5%. e numbers are far below the historic highs of the 1990s, but they are still higher than before the pandemic.

Even as shootings and murders dropped signi cantly, increases in robberies, burglaries and other crimes drove a 22% increase in over-

all major crime in New York City in 2022.

Re-examining school admissions

ADAMS’ VISION: “We need to look at that [Gifted and Talented] exam. I don’t believe a 4-year-old taking the exam should determine the rest of their school experience. at is unacceptable.” —Oct. 20, 2021

ACTION TAKEN: Adams has expanded the city’s Gifted and Talented program for elementary school kids and ended the random lottery for middle schools. Many families, especially in the Asian American community, were vocal in arguing that the lotteries excluded their children from opportunities they had worked for.

Adams’ policies are a major shift from those of the de Blasio administration. For a time the former mayor and school o cials suspended the use of grades and test scores in school selection. City leaders have been trying to cope with the signi cant underrepresentation of Black and Latino students at selective schools.

In June Adams slashed $215 million from school budgets based on expected enrollment drops, but the cuts were wildly unpopular. e City Council objected, and after a monthslong court battle, a state appellate court allowed the cuts to remain in place.

en in the fall thousands of migrant children entered the school system.

Tackling climate change

ADAMS’ VISION: “ is past year alone, we have experienced extreme weather anomalies and rising sea levels, which have endangered New Yorkers’ lives, their homes and their livelihoods. e remnants of these di erent calamities are still being repaired to this day, but my administration is committed to transforming the city’s quality of life and ghting for environmental justice.” —Jan. 31, 2022

ACTION TAKEN: Early in 2022 Adams announced the new Mayor’s O ce of Climate and Environmental Justice. e idea was to better integrate justice work within the city’s comprehensive approach to climate.

CRIME STATS: Adams and NYPD Commissioner Keechant Sewell (both center) reporting 2022 numbers

BUCK ENNIS

1 year in

ADAMS

FROM

en he posed the question, “How can we get our city back?”

Adams took o ce as the pandemic was straining the city’s health care system, unemployment was high and business districts looked ghostly as many private sector employees had not returned to the o ce. Canceled events and disruptions to businesses and transportation were common occurrences. Outbreaks of the virus caused shortages of workers, resulting in the closure of restaurants and other businesses.

Year one for the mayor has resulted in a cautious reopening. Streets are lively again, but they’re also rat-infested and lled with foul-smelling piles of trash. Job numbers haven’t fully rebounded, unlike in the rest of the country. Subway ridership lags, and fear of crime is a contributing factor. Shootings and murders have declined from pandemic highs, but robberies and other major crimes have risen. O ce vacancies remain high, and historically elevated housing costs are a crisis for many residents.

But “New York City’s not coming back; New York City’s back,” Adams declared on TV station WPIX 11 in December. For this story, Adams’ o ce didn’t make him available for an interview.

ight to San Juan on a bitcoin billionaire’s private jet and for heading to the World Cup match in Qatar not entirely on his own dime.

In addition, Adams is unapologetic about his connections to individuals with a criminal past and has appointed a series of friends and supporters to high-paid government posts. ose controversies have New York’s denizens quietly wondering if Adams will eventually step into a scandal he can’t overcome.

For now, as he enters year two, people in the know are watching for increased signs of life in the city as well as the mayor’s intention to adapt to new, postpandemic economic realities.

New York in real life

If the city is going to welcome back workers and tourists at prepandemic levels, rst it will have to be cleaner. It took Adams nine months to appoint a sanitation commissioner, amid interagency ghts about who is responsible for cleaning and maintaining areas around and under bridges—the spots where homeless New Yorkers set up encampments.

Additionally, Adams will need others to pass many of the permitting bills he needs.

Our subway system is cleaner, and we have made real strides in dealing with those [with] mental health illnesses.”

Smikle noted that reducing crime can be a factor largely outside of a mayor’s control.

“For Adams, who campaigned on crime reduction, many of the contributing factors, resources needed to implement and national trends in the economy are well beyond his sphere of in uence,” he said. “ us the challenges to reduce crime and make New Yorkers feel safe will be di cult.”

Loeser said Adams has made good progress by restoring mayoral relations with the NYPD, by responding to questions about crime and by taking steps to get seriously mentally ill people o the streets and into care.

“ ere are [improved] crime numbers, but the feeling is not there yet,” Loeser said. “He hasn’t sold people yet, but he has put the pieces in place. I’m pretty optimistic.”

Relationship with lawmakers

e administration issued a report in November that was supposed to be a comprehensive plan to defend the ve boroughs from the varied threats of climate change. e report, called AdaptNYC, was a response to a City Council directive passed in 2021. However, climate advocates panned it, saying it simply reported on city actions without looking forward to recommend what else is needed.

Boosting affordable-housing production

ADAMS’ VISION: “To deal with our housing crisis in New York, the city must rapidly build new a ordable housing while protecting existing apartments everywhere. at means bold, aggressive measures.” —November 2021

ACTION TAKEN: e bottom line is there are many proposals but little concrete action to date.

e mayor’s “City of Yes” plan, announced in June, proposes changes to city zoning laws. It is one prong of an e ort to make basement apartments legal and safe. State legislation is also needed, but Adams’ advocacy in Albany didn’t propel the basement apartments issue forward. Adams also released a plan called “Housing Our Neighbors” to break down silos among city agencies so more homeless-shelter residents are eligible for permanent housing.

In September the city launched a pilot program at four single-room occupancy , or SRO, buildings in Brooklyn and Manhattan for 80 formerly homeless New Yorkers. e mayor also announced an updated plan for Willets Point in Queens that would add 2,500 income-restricted housing units.

In December came an initiative called Building and Land Use Approval Streamlining Taskforce, or BLAST, to speed housing development through the city bureaucracy.

On Jan. 9 Adams released more speci c proposals to transform o ces to residences. Again, the ideas need the buy-in of the City Council and the state Legislature.

As the end of his rst year came around, the mayor assessed his own progress.

“We inherited a city in crisis,” Adams said. “Shootings and homicides are down by double digits, subway ridership is back at prepandemic levels, our hotels are lling back up, and tourists are piling back in by the millions. We’ve got more to do in 2023, but I can condently say that next year will be our Aaron Judge year. New York City’s best days are ahead of us.” ■

No one else has been willing to go as far as to say the city is back, but there is optimism. Adams, 62, is a retired police captain who entered politics in 2006. Even as he’s pledged to ght for blue-collar New Yorkers, he has reached out enthusiastically to the city’s business leaders. It has been a winning strategy for changing the tone from City Hall.

“His willingness to back the role that business plays in the life of the city and to listen to their concerns is a very welcome change and has been indispensable to the city’s relatively rapid recovery from the challenges of the pandemic,” said Kathryn Wylde, president and CEO of the Partnership for New York City. “ e real estate industry is quite happy with him. I can’t think of anybody who doesn’t think we’ve traded up.”

However, Wylde’s isn’t the only opinion. An informal poll of Crain’s readers conducted at the start of this year showed less optimism about the new administration: 71.5% of the 278 who responded said they disapprove of the mayor’s rst year in o ce.

“You know, there is no job that prepares you for doing something like being mayor of New York,” said Stu Loeser, who worked as a spokesman for Mayor Michael Bloomberg for 12 years. “It’s a hard job. We live in a crowded city. ere’s really nothing that prepares you for constantly being in-your-face criticized.”

Crain’s readers left notes with their poll responses to the e ect that Adams has promised quite a number of initiatives, without much concrete to show for it in year one.

“He’s making tough decisions, pointing his people in the right direction,” Wylde said of Adams’ moves on workforce development and budget-cutting. “Is city government a well-oiled machine? No. We’re not going there.”

Adams’ style has forti ed his e orts to revive the city. A self-professed mayor of “swagger,” he’s made it an article of faith in the city to be seen at private clubs such as Zero Bond and mixing with celebrities including model Cara Delevingne and hip-hop artist A$AP Rocky.

However, the glamor circuit comes with a downside. He’s been criticized for accepting a

“He needs help from a City Council and state Legislature that are more progressive than he appears to be and ercely protective of their own agendas,” said Basil Smikle, former executive director of the state Democratic Party and director of the public policy pro-

e mayor had a di cult time working with Albany legislators during last year’s session Although the governor has expressly supported Adams’ desire to build more housing and convert some o ce buildings and hotels to residences, the pair will need the Legislature in order to move forward.

gram at Hunter College.

When it comes to public safety, New York saw a 22% increase in major crimes such as robbery and burglary last year, despite a decrease in incidents of shooting and murder. ere was an increase in major crimes, including categories such as robbery, burglary and grand larceny. In the coming year, in response to the numbers, Adams has said that retail theft and subway safety are among his main priorities.

However, he has also been somewhat unrealistic when analyzing the statistics.

“ ere’s several things that we learned in 2022, and I don't see [them] as failures. Failures are just your way of learning how to do things better,” he told WBLS radio’s “Caribbean Fever” on Jan. 9. “We came into the year where crime was on a steady increase. We’re leaving the year with crime on a decrease. …

Despite having experience as a state senator, Adams has encountered resistance. He has publicly called for the repeal of the state’s 2019 bail reforms, though there is no clear evidence linking these reforms to the city’s rise in crime. e Legislature did not go as far as Adams had hoped, but it did pass changes allowing judges to have more discretion in setting bail. Adams also su ered setbacks, such as receiving only a two-year extension of mayoral control of city schools. In addition, the 421-a tax-abatement program, which some saw as key to inspiring developers to create a ordable housing, expired in June without a replacement.

On the other hand, Adams was successful in securing an increase in the earned income tax credit and funding for child care subsidies.

Analysts and legislators agree that Adams will need to work on improving his relationship with lawmakers. However, that’s a not-uncommon challenge in year two.

William Cunningham, a political strategist who advised Bloomberg, noted Adams’ progress in establishing a team and building initial, if imperfect, connections with the City Council and the state Legislature.

“For any mayor, the rst year is training wheels,” he said. ■

“HE HASN’T SOLD PEOPLE YET, BUT HE HAS PUT THE PIECES IN PLACE”

ADAMS promised a lot on the campaign trail, Crain’s readers note.

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Airbnb hosts share futile final pleas as law requiring short-term-rental registration looms

BY CARA EISENPRESS

Operators of short-term rentals have an extra six weeks before they have to register their units with the city, giving thousands of hosts additional time to grapple with life after Airbnb.

The City Council passed a bill that became Local Law 18 in 2021. It requires registration of shortterm rentals. To register, hosts must agree to comply with the

Estimates put the number of available short-term units on rental platforms between 25,000 and 40,000.

The mayor’s Office of Special Enforcement had a year to write the rules and build a portal for registration, and in late December the office held a hearing as part of the rule-making process.

tors who want to be near family in the outer boroughs, rather than near tourism hotspots, often have few lodging options.

city’s housing code, including that the homeowner or leaseholder be on site at all times and that guests have full access to the living space at the property.

The city said it expected about 10,000 would not successfully complete registration, which had been set to begin on Jan. 9, with enforcement starting in May.

Then, because of a too-short notice period before the previous hearing, the city added a second hearing, held last Wednesday. The text of the rule did not change since the previous hearing. Typically, there are six weeks between a rule-making hearing and the start of the law, which would peg the new start date to sometime in late February.

Defending hosting

At both hearings, hosts from around the city mounted a defense of hosting, sharing stories of how short-team leases of basement units allow them to pay the mortgage or pointing out that city visi-

But all of the new requirements come from the law, the city argued, and from longtime provisions of the city’s c om plex, wide-ranging building code.

In the past two years, short-term rental platform, Vrbo, which is owned by Expedia Group, has pulled almost all of its home-based city listings.

Speakers at the Office of Special Enforcement’s Wednesday hearing spoke of how hosting had made them more financially solvent, even in otherwise difficult times. Several urged Christian Klossner, executive director of the Office of

Special Enforcement, not to proceed with the measure.

“The law has been passed by the City Council, and it was adopted,” Klossner said. “There is no vote after this.”

A speaker whose name was listed as “Chyanne” expressed the

emotions of the attending hosts best. “There’s not much more to say at this point,” she said. “Rules are rules, I guess you can say. But rules can be changed and looked at with the full picture. These [rules] affect good people trying to live and survive in this city.” ■

“THESE [RULES] AFFECT GOOD PEOPLE TRYING TO SurVIVE IN THIS CITY”

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Purpose: Any lawful activity.

Bright Power, Inc. seeks Sr. Data Analyst in NYC. Req. BS in eng or rel. + 1 yr exp performing building science data analysis or research. $70,658/yr. Resume to talent@brightpower.com

VP, Portfolio Manager (Pacific Investment Management Company LLC (PIMCO) – New York, NY); Mult. Pos. avail. Assist with the eval, execution, & monitoring of complex fund & investment-level financing. Source & dvlp financing arrangements for investments including residential mortgage assets, consumer finance products, & aircraft leasing. F/T. Offering a salary range of $165,000 to $240,000 per year. To apply please submit resume by email to lupe.rubalcaba@pimco.com and reference Job ID: 6542817.

Notice of Qualification of COLBECK STRATEGIC LENDING III CARRY VEHICLE, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 01/04/23. Office location: NY County. LLC formed in Delaware (DE) on 11/09/22. Princ. office of LLC: 888 Seventh Ave., 29th Fl., NY, NY 10106. SSNY designated as agent of LLC upon whom process against it may be served.

SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of DE, Dept. of State, Div. of Corps., John G. Townsend Bldg., Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of HAZA PROPS LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 01/05/23. Office location: NY County. LLC formed in Delaware (DE) on 08/12/22. Princ. office of LLC: 4415 Hwy. 6, Sugar Land, TX 77478. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Real lease property management.

1330 CONSULTING LLC. Arts. of Org. filed with the SSNY on 01/04/23. 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, 77 7th Avenue, Apartment 4, New York, NY 10011. Purpose: Any lawful purpose.

Notice of Formation of ONE GOD LLC Arts of Org filed with the Secy of State of NY (SSNY) on 11/1/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to One God LLC p.o. box 660102 Fresh Meadows, NY 11366.

Purpose: For any lawful activity.

Notice of Formation of 76 WEST NYC 1251 LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 12/23/22.

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 Schulson Collective, 1525 Sansom St., 2nd Fl., Philadelphia, PA 19102. Purpose: Own and operate restaurant.

Notice of Qualification of VOTORANTIM LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 12/22/22. Office location: NY County. LLC formed in Delaware (DE) on 03/18/22. Princ. office of LLC: 1330 Avenue of the Americas, 30th fl., NY, NY 10019. 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: 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 FERRADO HOTELS, LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 01/04/23. Office location: NY County. LLC formed in Delaware (DE) on 03/17/06. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 20411 SW Birch St., Ste. 360, Newport Beach, CA 92660. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Formation of Limited Liability Company (LLC). NAME: WOLF COVEN LLC -

Articles of Organization filed with the Secretary of State of New York (SSNY) on 12/15/2022. Office location: NEW YORK County. SSNY shall mail a copy of process to: The LLC, 98 E BROADWAY STE 309 NEW YORK NY 10002.

Purpose: Any lawful purpose.

units for New Yorkers with mental illness. It would direct community hospitals to open 850 inpatient psychiatric beds. In addition, the state would add 150 new adult beds in state psychiatric hospitals—including 100 in the city alone—in addition to the 50 open beds Hochul announced in November.

Another element of the plan seeks to increase accountability for admissions and discharges. Emergency departments and inpatient providers would be required to discharge high-risk, high-need New Yorkers into immediately available

800,000 homes in the next decade

Hochul introduced a plan dubbed the New York Housing Compact to add 800,000 new homes across the state in the next decade. e program would target every locality in New York and require upstate counties to boost housing stock by 1% every three years, while downstate counties would be required to increase the number of units by 3% every three years.

In addition, municipalities with one or more Metro-North stops would need to rezone the area within a half-mile of a station to allow for new housing within three years, and the state would o er $250 million in new funds to help build the necessary infrastructure, such as schools and roads, to support the additional housing.

services, such as housing or job support. Outpatient programs would be required to provide immediate and continuing appointments for high-risk patients during the discharge process.

e governor said she plans to prohibit insurance companies from denying adult and child patients access to medically necessary, high-need acute and crisis mental health services.

“When communities have not made good-faith efforts to grow, when proposed housing projects are languishing for no legitimate reason, the state will implement a fast-track approval process,” Hochul said. “Because doing nothing is an abdication of our responsibility to act in times of crisis.”

e fast track would let developers appeal a rejected project to a new state Housing Approval Board or through the courts. ese projects would be approved unless the

locality demonstrates a valid safety or health reason for denying them.

Cap-and-invest plan

An extensive green-energy agenda was introduced in an e ort to move the state closer to meeting its ambitious emissions-cutting mandates.

A key proposal is a cap-and-invest program recommended by the state’s Climate Action Council last month. Hochul is calling on the Department of Environmental Conservation and the state Energy Research and Development Authority to design a program that would set increasingly strict caps on green-

house-gas emissions. It would require fossil-fuel emitters to purchase allowances, with the proceeds invested back into emissions-reduction programs. e cap-and-invest program seeks to create a mechanism for New York to comply with a 2019 state climate law requiring it to reduce emissions by 40% by 2030 and to 85% below 1990 levels by 2050.

In addition, Hochul plans to launch Empower Plus, a program designed to help 20,000 low-income families retro t their homes with new insulation, energy-ecient appliances and electric alternatives to fossil-fuel heating.

Households that qualify would also be eligible for the “energy a ordability guarantee” once they are fully electri ed. e pilot seeks to ensure that those participating wouldn’t pay more than 6% of their income for electricity.

A minimum wage boost

New Yorkers earning the minimum wage would nd their pay increase in line with the cost of living, should another Hochul proposal become reality.

“If we really want to tackle the a ordability crisis head-on, we must recognize that low-wage workers have been hit hardest by high in ation,” she said.

As a result, Hochul wants the state to peg the minimum wage to the consumer price index for urban wage earners and clerical workers for the Northeast region, which has risen around the city more than the index for a smaller region.

New York would become the 14th state to link the minimum wage to in ation, according to the Economic Policy Institute. Only Washington and California have higher minimum wages; Massachusetts also requires employers to pay at least $15 per hour. e federal minimum wage has been $7.25 since 2009. ■

CRAIN’S NEW YORK

Tap into New York.

Crain’s is now in the app store.

“DOING NOTHING IS AN ABDICATION OF OUR RESPONSIBILITIES TO ACT”

HOCHUL delivering the 2023 State of the State address

FOCAL POINTS

Drone racing gives tech fans a league of their own

BY CARA EISENPRESS

In a darkened arena in San Jose, California, four pilots pulled down their glasses and picked up their drone controllers. Suddenly, their drones, each lit with thousands of tiny red, yellow, green or blue LED bulbs, zoomed through the curves and gates of the course before 5,000 audience members, who cheered while holding up their phones to catch clips.

Around the world, millions more fans caught the action of the 2022-2023 season kicko of the Flatiron District–based Drone Racing League on their devices, arguably the natural environment for spectators of the eight-year-old professional league for a sport that can feel like a simulation.

“When fans started calling us a real-life video game, we knew we had realized our expectations,” said league founder Nicholas Horbaczewski. “We had so many examples of it from Hollywood and video games for decades”—including iconic examples such as “podracing” in Star Wars, a fantasy generated by computers. “ at is a high bar.”

Now weeks away from its Miami World Championship on Feb. 25, DRL is meeting the bar. It expects 10,000 live fans in Miami— the largest in-person showing yet. Events now air in 320 million households around the world, and DRL has 5 million fans on TikTok, more than the National Hockey League and approaching the audience size of Major League Baseball.

About 85% of DRL fans are under 35 years old, a prime demographic for advertisers; many say they do not watch any of the big sports leagues, according to DRL.

Horbaczewski does not disclose revenue, but in 2021 the league began a $100 million, ve-year partnership with Boston-based blockchain-tech company Algorand for title rights to the league’s world championship circuit and has signed on sponsors including Google, T-Mobile, the U.S. Air Force and New Balance. e company has raised around $100 million in capital, including a $22 million Series D round last summer, and has about 65 employees.

Technology hurdle

In 2015 Horbaczewski was working in business development at endurance event Tough Mudder when he took note of drone racing, then an amateur-run underground sport growing in popularity. “I thought it was the most amazing thing,” he remembered.

When he launched a league for the sport shortly after, he followed a traditional model for sports leagues, with a season of multiple live events broadcast on television and other live-streaming platforms and sustained by sponsorships and advertising.

e hardest hurdle was the tech itself. Hobbyist and consumer drones were too slow for the league, and they didn’t have the tracking, diagnostic or transmitting abilities needed for an exciting race. Unable to buy drones that met its speci cations, DRL built its

high-performance drones from the ground up, in its own lab on a oor of the Manhattan o ce. Each drone is the same, which highlights the skill and techniques of the 12 young, male pilots who come from around the world to compete each season.

“If tech is the center, and it breaks down, it ruins the sport,” Horbaczewski said. “ e tech has to be so good, it’s invisible.”

About half of the sta works directly on the drone tech, manufacturing and maintaining a eet of 600 that can go from zero to 90 miles an hour in less than one second, while maintaining a nearly instantaneous transmission to the pilot, who is on the ground reacting to a remote camera feed in real time. e drones must work both inside and outside. (New York City prohibits most outdoor drone ying, so testing outside the lab occurs elsewhere in the region.) e league has to track and score each drone in real time, to be able to display winners and losers immediately. In the early days, nearly every race led to a step forward, tech-wise.

Now the ease of doing deep tech integrations is part of what attracts sponsors to the league. e season opener in San Jose on Oct. 11, for example, integrated sponsor Google Cloud Platform by releasing live drone data that allowed Cloud developers to analyze race data and help pilots optimize their techniques. With T-Mobile, DRL built out the tech to enable a drone to y on the company’s 5G network. Part of the partnership with Algorand includes a way for players to y drones

FULL-TIME EMPLOYEES About 65

PRODUCT MIX In-person and livestreamed events that include immersive, technology-based integrations with sponsors

GROWTH STRATEGY Drone Racing League plans future seasons of largescale live events, in both the U.S. and international markets. DRL is fully centralized and owns the drones that race, all the tech the league uses and data it creates, and even the management contracts of the pilots. DRL believes it can use this proprietary information to pivot to custom projects and in other directions. Many of the pilots are becoming celebrities in their own right, a boon to the league. Others have started a career lming movies and music videos with drones.

WEBSITE thedroneracingleague.com

in the metaverse while earning rewards like digital collectibles. All are ways to relate to a very tech-friendly demographic, according to Horbaczewski.

“Our fans hang on every Elon [Musk] tweet and iPhone release rumor—they don’t care how far Tom Brady can throw a football,” he said. “Now they get all the great things that come with sports fandom in a way that they can relate to.” ■

COMPANY Drone Racing League FOUNDED 2015

MANAGEMENT Nicholas Horbaczewski, co-founder and chief executive of cer

The Flatiron-based sports business has raised around $100 million thanks to its events and data

HORBACZEWSKI (right) says good tech is essential to the league, so the rm’s workers build and maintain its drones.

BUCK ENNIS