Eric Adams won election as the city’s second Black mayor at a time when there is no longer a question of whether Black politicians can succeed in New York.
Today both the speaker of the Assembly and the state Senate are Black, as is the state attorney general, Letitia James. e City Council speaker, Adrienne Adams—no relation to the mayor—is Black, along with Jumaane Williams,
BY CAROLINE SPIVACK
The Adams administration is ratcheting up its protest against kicking in an extra $500 million to fund the cashstrapped Metropolitan Transportation Authority, in a rare public dispute between Mayor Eric Adams and fellow Democrat Gov. Kathy Hochul.
High-ranking members of the Adams administration have begun taking their pushback to a wider audience through TV news appearances while maintaining that the administration is hopeful for fruitful budget negotiations in the weeks ahead.
e mayor argued that the city is grappling with billions of dollars in unexpected spending for the migrant crisis.
the public advocate. e district attorneys of Manhattan and the Bronx are Black, as are the borough presidents of Queens and the Bronx. Remarkably, every Democratic county leader in the city outside of Staten Island is Black. And Hakeem Je ries, the Brooklyn congressman, was just elected House minority leader.
“It’s a watershed moment. Our political power—something that many of our ancestors struggled for, died for—is now reaching a zenith almost,” said Donovan Richards, the Queens
borough president.
e great rise of Black elected o cials in New York comes with a bittersweet dimension: e actual Black population in the city is diminishing as many working- and middle-class families leave their old neighborhoods, which have long been gentrifying. Housing costs have increased dramatically.
Black political power grew in New York
See WAVE on page 19
$500M
WHAT GOV. HOCHUL proposes the city kick in to salvage MTA nances
“ at is too much money to be part of New York City’s budget,” Adams said on Fox 5, questioning why other municipalities that bene t from the MTA’s networks aren’t being asked to kick in at least some additional aid. “We are in a nancial crisis, and I have to be scally prudent to navigate us throughout this turbulent period,” Adams added.
e city currently commits about
See BUDGET on page 22
These leaders are now looking to change conditions in housing, education, policing, health
New York has its work cut out for it to achieve the state’s ambitious climate mandates. But the mechanisms to invest in a clean energy economy have come into focus, thanks to a sweeping climate agenda laid out by Governor Kathy Hochul’s budget and the state’s Climate Action Council.
The challenge, according to Dorreen Harris, the president and CEO of New York State Energy Research and Development Authority, is moving quickly enough to build the infrastructure needed to reach net-zero emission by 2050.
Core pillars
Harris’ comments came during a live interview last week with Crain’s Editor-in-Chief Cory Schouten, at which she highlighted core pillars of Hochul’s climate agenda. These pillars included the advancement of a cap-and-invest program, as recommended by the Climate Action Council, that would require fossil-fuel emitters to purchase allowances for each ton of pollution over a gradually declining cap on greenhouse gas emissions, and to invest
the proceeds across sectors to achieve the state’s climate goals, along with new initiatives toward decarbonizing the state’s buildings.
“The governor’s executive budget is reflective of the fact that we in New York can now articulate what it takes to achieve our goals,” Harris said, referring to the 445-page blueprint approved by the Climate Action Council to comply with the 2019 Climate Leadership and Community Protection Act. “We have to act and we have to act in ways that are more expansive than ways we’ve have been working in today.”
Accelerating New York’s buildout of renewable energy is core to that work, Harris said, as by law New York has just eight years to more than double the share of electricity it uses that is generated from wind, solar and hydropower to 70%.
The state’s grid must grow to supply 75% more power by 2040, with infrastructure that allows it to be flexible with storing energy and drawing on it when the sun isn’t shining or the wind isn’t blowing, she said.
Inflation and recent supply-chain issues have only added extra challenges to hitting these
goals, Harris said.
“When I think about 2030 from the perspective of our grid readiness, it really is all about building out these renewables,” said Harris, who noted that there are about 120 renewable projects under contract with NYSERDA. The year “2030 isn’t that far away, and ultimately it has been a particularly challenging year for these projects, from the perspective of costs, inflation, delays.”
Transmission line projects and offshore wind rank highly in ramping up the state’s build-out, Harris said. For the state’s third round of solicitation for offshore wind projects, NYSERDA has received more than 100 proposals and plans to announce winners during the spring. Harris added that offshore wind in particular is “one of the main reasons that we can really advance goals,” especially toward greening the city’s grid. Fossil fuels currently power about 90% of the five boroughs’ electricity.
Making strides
Following the interview with Harris, Crain’s Publisher Fred P. Gabriel hosted a panel of sponsor-supported speakers who agreed that
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The city has invested deeply in life science infrastructure, such as laboratory space and incubator programs, to compete with heavyweights Boston and San Francisco. The approximate $1 billion in investments has thus far paid dividends: The city now boasts at least 10 incubator programs, including BioLabs@NYULangone, a 50,000-square-foot facility, and Johnson & Johnson’s JLabs, a 30,000-square-foot space, both in Hudson Square. But despite the windfall of investment, the industry still faces headwinds to attract top talent, secure enough space and endure a volatile public. Crain’s panel will bring together stakeholders representing the public and private sectors to discuss how the industry can weather the storm.
Time: 8 to 10 a.m.
Location: 180 Central Park S. CrainsNewYork.com/marchforum
the state is making strides in its energy development but must streamline approvals to move projects along quickly.
“I just want to underscore the fact that transmission [projects take] 10 years if you’re moving at lightning speed, right? And we have these goals that are 10 years out,” said Kelly Speakes-Backman, executive vice president of public affairs at Invenergy, which is one of three companies working on the Clean Path New York transmission project, which will stretch 179 miles from upstate to the city.
Ben Wilson, chief strategy and external affairs officer at National Grid, echoed Speakes-Backman’s concerns.
“We need to build, build, build,” said Wilson. “We really need to
Restaurant magnate Eli Zabar was handed a forceful defeat in his quest to block the construction of a homeless shelter next door to one of his Upper East Side properties, as a judge accused his lawyers of using “shameful” tactics to delay the beleaguered project.
The nearly two-year-long dispute centers on a safe haven shelter that the city is seeking to build on East 91st Street, between First and York avenues. The site is next door to a warehouselike building owned by Zabar, where he grows produce in a rooftop greenhouse to sell in his restaurants. He rents out the lower floors to a children’s gymnastics studio.
The city has enlisted a private developer, Bayrock Capital, to build the 7-story safe haven. But Zabar, like countless next-door property owners before him, has held up work by refusing to let the developer install roof protections on his own building.
Daniel Schneider, an attorney for Zabar, said in a statement that he was “surprised and disappointed” by the ruling and denied the judge’s
claims of deliberate delays.
Zabar’s attorneys have insisted that he harbors no ill will toward the shelter itself, arguing instead that the developer’s construction plans risk destabilizing his nextdoor building. But the developer claimed Zabar pledged privately to do “everything he could to delay” the safe haven—and Zabar himself admitted in sworn testimony that he disliked the project.
On Jan. 3 Justice Andrea Masley in state Supreme Court in Manhattan sided with the developer, ruling that Bayrock should be given access to Zabar’s roof—and assailing the restaurateur’s lawyers for “badfaith efforts to delay the project.”
“Respondents have engaged in shameful tactics that were anything but good faith,” Masley wrote, citing their requests for documents that they already possessed and repeated demands to adjourn the case.
In one instance, Masley accused Zabar’s attorney of misrepresenting facts about a roof inspection. The justice said Zabar should be forced to cover the developer’s $222,000 in legal fees as punishment for blocking “a development project essential to the community: providing
homeless services during a crisis.”
Zabar’s attorneys have filed a notice of appeal, although the eventual appeal may center only on the legal fees, not the construction access. As for the claim of misrepresentation, Schneider said in a statement that he had made an innocent factual error.
“I have been consistent: The structural safety of my client’s building has always been my focus, and in my view, it remains an issue,” he said. “Moreover, it is evident from the documents in the record [on the docket] of this matter that the court is simply not correct in accusing me of any misrepresentation. I take the ethical canon and my oath very seriously and would never mislead a judge.”
More hurdles remain for the project. Since March the safe haven has been beset by zoning complaints first raised by a group of neighbors opposed to the shelter, which prompted the city’s Department of Buildings to threaten to revoke the developer’s permits.
The city’s 15 “objections” included a claim that the safe haven had
think about forward-planning, and we need to think about permitting.”
Proactive community engagement is also key to ensure buy-in from locals for minimal friction in getting projects in the pipeline, the panelists said.
“One of the first things we did was buy a community van,” said Doug Perkins, president and project director of Community Offshore Wind, which is developing a project off the coast of New Jersey and Long Island.
“We want to learn, listen, so we can design our projects in the most responsible manner, because the success of our project and of our industry will come if we are active participants in the community and communities are active participants in our projects.” ■
been misclassified as a “hotel” when it was really a “rooming house”—a use not permitted by the block’s zoning.
Bayrock has submitted filings to resolve the complaints, but the threat of revoked permits remained active as of press time, a DOB representative said.
In addition, social services organization Goddard Riverside has withdrawn from the project. City officials would not say as of press time whether a new provider had been lined up.
Since his famous 1970s split with the Upper West Side store that bears his surname, Zabar has built his own restaurant empire on the East Side, including markets, wine bars and the now-closed Vinegar Factory, which sat down the block from the disputed shelter site. ■
HARRIS told Crain’s, “We have to act.”BUCK ENNIS GETTY IMAGES BY EDDIE SMALL
Despite the numerous, well-publicized woes New York’s office buildings have faced since Covid-19 hit, the buildings have already recovered almost all of their value from before the pandemic, according to the city Department of Finance.
The city has valued its office buildings at roughly $168 billion for fiscal year 2023–24, up from roughly $157 billion during the prior fiscal year. Prior to the pandemic, it valued the buildings at about $172 billion, meaning they are back to 97.6% of their 2019 worth.
The number certainly seems high, given the barrage of bad news hitting the sector, including Vornado’s writing down its Midtown portfolio by $500 million and Boston Properties’ warning that its office vacancy rate likely will keep rising.
But those trends, though concerning, are unlikely to be reflected in the value of the buildings themselves for quite a while, analysts said.
“Given the long nature of leases, the current market values don’t yet reflect most of the market activity that’s been happening of late,” said Sean Campion, director of housing and economic development studies at the Citizens Budget Commission. “It’s going to
take years for rising vacancy rates to get reflected in valuations.”
As long as companies are still paying their rent, in other words, it does not matter much whether they are subleasing space or filling offices with workers, as far as valuations are concerned. Larger decreases would be unlikely to start until companies decide not to renew their lease and landlords are unable to find replacement tenants.
“Unless companies fold and go out of business, it takes a while for those changes to filter their way through the market,” Campion said, “unlike, say, hotels, where occupancy can go to zero in a week, like it did.”
Hotels are indeed further than office buildings from hitting their prepandemic worth, according to the Finance Department. They have kept about 86.9% of their value, falling from a collective $32.7 billion to $28.4 billion. Retail buildings, which were struggling even before the pandemic, have kept about 92.8% of their value, falling from $63.8 billion to $59.2 billion, the department said.
But the city’s valuations for retail and hotel
properties still increased year over year. Retail properties were worth $56.1 billion for fiscal year 2022–23, and hotel properties were worth $25.9 billion, according to the department.
Overall, the agency valued the city’s commercial buildings at about $317 billion, roughly a 7.4% increase from fiscal year 2022–23, when they were valued at about $295 billion, but still down from their prepandemic valuation of $326 billion. Thus, commercial buildings have retained about 97.3% of their value.
Commercial property taxes represent an enormous component of the city’s budget, and they are based largely on the city’s calculations of the worth of those buildings. Higher property valuations are better for the city’s tax coffers, although property owners can appeal their values to the Tax Commission if they disagree with them. But it’s in the city’s best interest to record high valuations for as long as possible.
Elizabeth Brown, communications director at the Independent Budget Office, said the length of retail leases likely has helped prop up the value of buildings in the sector, similar
to what is happening with office buildings.
“Office and retail tenants in particular are still paying rent, which is helpful, and this might have a lot to do with the long-term nature of commercial leases,” Brown said. “Even if people are working from home, the leases are still being maintained.”
Campion noted that there is evidence of the “flight to quality” trend for office buildings, a phrase commercial landlords have used to argue that companies are interested in leasing newer, nicer office space. The values of the city’s trophy office buildings have declined by much less than the values of its older office buildings, he said.
But the fact that commercial buildings are close to their prepandemic values does not necessarily indicate that the sector has fully recovered, said state Deputy Comptroller Rahul Jain. Landlords typically want the values of their buildings to increase, after all, not stay flat.
“Comparing these percentages to the prepandemic market peak makes the comparison look better than if you were to compare them to the levels expected prior to the pandemic,” Jain said. “It will likely still be some time before we are all the way back to that prior trajectory.” ■
Christine d'Ornano, a globe-trotting vice president of the cosmetics company Sisley, has picked up a Greenwich Village flat.
The home, a three-bedroom condo at 134 W. 10th St., No. 2S, cost $4.3 million, property records show. With three baths, 1,800 square feet and a primary suite that opens onto a large terrace, the unit is part of a two-building development that has seven apartments and a second entrance on Christopher Street.
The 5-story complex, which is in a landmarked district and incorporates a former stable, wouldn't seem out of place in Paris–which is perhaps no coincidence. D'Orna-
count by marriage to his wife, Isabelle. He died in 2015.
Christine d'Ornano's new home appears to have traded as part of an off-market transaction, so no broker was available to comment, and an email sent to Sisley wasn’t returned by press time.
In Tribeca, meanwhile, Savannah Guthrie, a co-anchor of NBC's Today show, has listed her four-bedroom condo for $7.1 million. The deed was in her husband's name. The New York Post was the first to report the story.
no, who grew up in Paris, also owns a home in that city's fashionable St.-Germain-des-Pres neighborhood, a two-level apartment in a 17th-century building with a private garden, according to a 2021 profile in British Vogue Sisley, known for its skin creams and fragrances, was founded in Paris in 1976 and is still based there. Its founder was d'Ornano's father, Hubert, a son of the founder of the Lancôme cosmetics giant and a
POLITICSThe apartment, No. 5 at 12 Warren St., has a kitchen with a marble breakfast bar and a primary suite with a fireplace. The condominium opened in 2016 and is a boutique building with 13 units and a facade of Catskill bluestone.
Guthrie and her husband, Michael Feldman, a Democratic political consultant, bought the apartment in 2017 from the condominium's sponsor, developer DDG, after DDG marketed it for $7.3 million.
Cortnee Glasser, the Sotheby's agent who is listing the couple's apartment, which appeared Jan. 30 on StreetEasy, had no comment. ■
The owner of Madison Square Garden, tired of being nudged to move so the arena doesn’t forever entomb Penn Station, has asked the city to let it stay put permanently.
Now Mayor Eric Adams and other city officials must weigh the needs of an arena holding 20,000 Knicks or Rangers fans against the needs of 400,000 daily commuters. It’s one of the most consequential business and urban planning decisions facing the city, and the deadline is seven months away.
MSG last Wednesday filed for a new city-issued permit that allows it to hold big events (its existing permit expires in July). The Garden asked for a permanent extension in 2013, but the city gave it 10 years to find a new location. In the coming weeks Garden management will lobby city officials to let the arena stay put atop the nation’s busiest commuter hub.
Key players in this negotiation will be City Planning Commission Chairman Dan Garodnick, who will
recommend how long the permit should last to Rafael Salamanca, chairman of the City Council’s land-use committee.
MSG owner James Dolan has long said the stadium isn’t going anywhere. Yet there are compelling business reasons for him to build anew nearby. The new Yankee Stadium produces more revenue than the older one across the street and a new MSG would too, even if it’s a few blocks west, near Hudson Yards, where open space awaits and public transportation is also close.
A new Garden next to the Hudson could be a defining part of the skyline.
Adams said, “We’re going to be a hard negotiator for the people of the city, to get the best deal for the people of the city.”
In a statement Wednesday, MSG said “no realistic proposal or financial model for moving the Garden has ever been presented.”
It would be expensive to move the Garden, but keeping a sports arena safely above a railway station
isn’t cheap either. The cost of enlarging the Long Island Rail Road corridor in Penn Station cost $600 million because it involved replacing steel beams that support the weight of trucks delivering to the Garden. Also the forest of columns at train level, which support the Garden, gets in the way of basic passenger improvements, such as elevators to tracks.
Perhaps most important from Dolan’s perspective, the Garden needs a spark on the business end. The arena’s seats are full, but MSG Networks is steadily bleeding subscribers and has announced a restructuring plan. The cost of building MSG Sphere, a cutting-edge entertain-
ment venue in Las Vegas, is more than $2 billion and rising.
To raise cash, MSG said that it would consider selling minority stakes in the Knicks and Rangers, although Dolan would remain controlling shareholder. A spin-off of
MADISON SQUARE GARDENMSG Network and other assets is in the works to pay down debt, Garden officials said on a recent earnings call, although again Dolan will remain captain of the ship, no matter how the deck chairs are rearranged. ■
Registered nurse Sonia Lawrence is worried about what the outcome of the New York State Nurses Association strike at Montefiore and Mount Sinai Hospital last month will mean for public-sector nurses.
“The private-sector nurses did get a lucrative contract that has become the envy of most people in nursing. They set the bar really high,” said Lawrence, who works at New York City Health + Hospitals/ Lincoln and is the NYSNA president of the H+H executive committee. “We [the public-sector nurses] have always done more with less. This is a wake-up call—nurses find that it’s now more beneficial to work in the private sector than it is to work in the public sector.”
Before private-sector nurses won contracts that included a 19% wage increase over three years, new staffing ratios and enforcement parameters, public-sector NYSNA nurses made approximately $14,000 less per year than their private-sector counterparts, Lawrence said.
With the terms of the new con-
tracts, the difference could be more than $19,000, she said, potentially incentivizing nurses to switch sectors.
Her concerns are emblematic of a fear rippling across the city’s health care sector: That the more lucrative contracts private NYSNA nurses won could lure nurses away from parts of the sector, such as disability services, nursing homes, public hospitals and even schools.
Winifred Schiff is the chief executive the Midtown-based InterAgency Council of Developmental Disabilities Agencies that oversees 150 member organizations that provide services to New Yorkers with intellectual and developmental disabilities downstate. Many New Yorkers with disabilities, whether in group homes or in programs, need nurses for medical treatment or medication administration, with many depending on 24-hour nursing for their medical needs, she said.
Many disability service providers can only pay staff based on Medicaid reimbursement rates, and the sector has had difficulty attracting and retaining nurses for years because of low pay. That longstand-
ing challenge can worsen.
“The combination of increased wages and benefits and especially the staffing ratios that the hospitals have agreed to will certainly result in hospitals recruiting our nurses,” Schiff said. “If they’re in recruitment mode . . . our nurses would probably jump to the hospitals now.”
Patrick Paul, chief executive of the Anderson Center for Autism in Staatsburg, Dutchess County, said the outcome of the nurses strike could bleed into education. About 18 nurses provide residential and educational services to more than 300 students with autism at the center.
“Nursing is truly one of those fields where there’s always a ripple effect,” he said. “In general, all of the salaries [for nurses in other parts of the sector] would move up with whatever the salaries are in hospitals.”
Hospitals have always represented an opportunity for nurses to leave and make more money, he said, and New York’s omnipresent health care worker shortage pres-
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ents another challenge in retaining nurses. More nurses are choosing to become travel nurses as well, he said, which could further exacerbate the issue.
However, many of the center’s nurses have already worked in hospitals and come to the center specifically looking for a more stable, less intense role, potentially eliminating some competition.
Nursing home providers who depend on Medicaid reimbursements to pay staff are also concerned. Stuart Almer, chief executive of the Gur win Healthcare System on Long Island, said the industry has always lost staff to hospitals because of better pay, but now that problem has been worsened by staffing shortages.
“Retaining staff, that’s most challenging. And when hospitals are able to better compete in the market, that’s what makes it more difficult for us,” he added.
In light of these challenges, some providers have already retooled their benefits packages to attract and keep nurses. Almer said Gurwin, which operates two nursing home and rehabilitation facilities on Long Island, offers a free certi-
fied nursing assistant training program and has doubled funding for hiring and recruitment bonuses. While the moves have helped attract more nurses, Almer is concerned they won’t be enough.
Meanwhile, disability service providers asked for an 8.5% cost-ofliving adjustment for direct support professionals, including nurses, to be included in the fiscal 2024 executive budget. Advocates also asked for a $4,000 wage enhancement for DSPs. Neither provision was offered in Gov. Kathy Hochul’s proposed budget that was released last week.
Lawrence said about 9,000 H+H NYSNA nurses are seeking wage parity with their private-sector counterparts—the same percent wage increases.
“The only way we’re going to retain nurses in the public sector is by leveling the playing field,” Lawrence said.
Representatives from Montefiore and Mount Sinai Hospital, where NYSNA nurses went on strike for three days last month, declined to comment for this story. The NYSNA nurses’ contracts with H+H hospitals end March 2. ■
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Landlords who rent to illicit marijuana retailers are facing new legal action from the city, and hundreds of smoke shops suspected of selling cannabis without a license will be threatened with eviction by Manhattan’s top prosecutor, o cials said last week.
District Attorney Alvin Bragg’s o ce has sent letters to more than 400 stores suspected of illicit cannabis sales, threatening to force their landlords to evict them. Mayor Eric Adams announced four lawsuits against East Village smoke shops accused of selling marijuana to undercover o cers—also implicating each of the shop’s landlords as defendants.
e announcements, made in a joint news conference by Adams and Bragg, represent a major escalation in the city’s war against the unlicensed smoke shops that have proliferated around the ve boroughs in recent months, coinciding with New York’s legalization of recreational marijuana.
As the state sluggishly rolls out a licensing system for prospective cannabis retailers, hundreds of
businesses have outed that process entirely, openly selling marijuana products out of garishly decorated, unlicensed storefronts. e city has struggled to get a handle on the in ux, conducting raids on some stores but leaving a large majority uninspected.
Targeting landlords is a new tactic, and the city has already gotten the ball rolling by ling a series of lawsuits last week against the landlords and proprietors of four smoke shops in the East Village. e lawsuits allege that undercover, underage police o cers bought marijuana at each of the shops on three occasions in December.
A Dec. 15 sting at a shop at First Avenue and East First Street resulted in the o cer paying $30 for a bag of weed labeled “Dubz Garden Oreoz Cannabis Americas Favorite Nugz,” one lawsuit says. Testing at a New York Police Department laboratory con rmed that the substance was cannabis, authorities wrote.
In each ling the city demandsnancial penalties from both the landlords and store owners. e city is relying on its law against public nuisances, historically used to shut down brothels and drug dens—al-
though reports that the law had been disproportionately applied in communities of color prompted a series of reforms in 2017.
“ e East Village community raised complaints with the NYPD, and working with the Law Department, the city took action,” city Corporation Counsel Syliva Hinds-Ridix said.
While the lings also request court orders to shutter each shop for one year, Hinds-Radix said the city would seek to close the shops only if they continued to break the law.
Signi cant real estate players could be caught up in the proceedings. One of the buildings named in the lings, 24 Avenue A, is owned by the Sabet Group, a rm that owns properties across Lower Manhattan. A company representative did not respond to a request for comment on the lawsuit.
As for the district attorney’s letters, Bragg’s o ce said it would determine in the coming weeks whether there is enough evidence to start eviction proceedings against any of the hundreds of shops suspected of illicit sales.
Prosecutors will then use their authority under state law to require landlords to evict the shops—and authorities will start their own proceedings if the landlord fails to act, Bragg’s o ce said.
e city is walking “a delicate tightrope” in going after landlords as part of a cannabis crackdown, said Je Schultz, an attorney at Feuerstein Kulick who represents licensed cannabis operators.
“We’re probably past the point of locking people up for selling cannabis,” Schultz said. “But at the same time, failure to take action here is not consistent with the goals of the adult-use program”—which calls for awarding New York’s rst licenses to people a ected by the drug’s past criminalization.
As aspiring legal retailers watch the illicit boom with dismay, Schultz said he has called for authorities to focus on landlords. ere would
be precedent, he argued, pointing to a Los Angeles law that holds landlords liable for illegal marijuana businesses.
at law’s e ectiveness has been unclear, Schultz said—but he was heartened by New York’s beefed-up enforcement.
“It’s a good sign that the city is taking this seriously,” he said.
Bragg’s o ce did not say how it identi ed the hundreds of shops that received the eviction threats. But local o cials have publicly accused cannabis shops of operating illicitly in their districts. Among them is City Council member Gale Brewer, who represents Manhattan. Her o ce found 26 unlicensed retailers during a December survey.
“My hope is to not have to bring a matter,” Bragg said. “Hopefully the commercial landlords will understand that they’ve been put on notice.” ■
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The authority needs accountable leadership to turn it around
The chairman of the beleaguered New York City Housing Authority, Gregory Russ, will step down this month. Previously, as both chairman and CEO, Russ once earned more than $400,000 annually, far more than the mayor or the governor. Last year he left his CEO role, cutting his pay, and now he will be gone altogether.
What’s distressing about Russ’ departure is the announcement that the paid chair role he occupied will now be a volunteer position, with a mere $250 stipend to attend monthly meetings.
e Department of Housing and Urban Development, which is the federal oversight body for NYCHA and all other public housing in America, said the move to a volunteer post would re ect “public housing industry norm.” Discussions are continuing over the size of the stipend, which could be increased.
Traveling back and forth
e arrangement with Russ was far from ideal. Russ, based in Minneapolis, never moved his family to the city and attempted to manage the city’s public housing stock while traveling back and forth across the country. When he was in New York, he leased an apartment in a Tribeca high-rise with a doorman, a heated pool and a valet laundry service.
One-bedroom apartments listed for $6,000 monthly.
But there’s no reason to make the chair position voluntary now. HUD’s explanation doesn’t pass muster because NYCHA is not like any other public housing development in the country. More than 300,000 people live in NYCHA housing. New York is one of the last cities that has not walked away from its public housing stock. In the 20th century, municipalities pared down or demolished their public housing, hoping that would eradicate urban blight. Instead, the disappearance of public housing fed the a ordability crisis and homelessness. As much of a challenge as homelessness remains in New York, it would be exponentially worse if the working class and poor lost their cheap housing in NYCHA developments.
e public housing authority is both badly mismanaged and underfunded; there are tens of billions of dollars in capital needs that the federal government, under Republican and Democratic administrations alike, simply hasn’t met. In addition to more funds, NYCHA requires competent professionals to turn it around, and that would only be a greater challenge for a part-time executive collecting a paltry stipend.
e decision to make New York’s chair voluntary came out of a federal investigation that documented years of mismanagement and cover-up of deteriorating conditions.
An outside monitor was appointed in 2019 with an agreement to reshu e top management. In 2021 NYCHA put forth a plan that rst broached the idea, and after NYCHA split the CEO and chair positions in September, NYCHA began discussions with HUD, City Hall and the Department of Justice about changing the chair’s role. Perhaps this new arrangement will make a di erence, even if NYCHA’s problems run quite deep. Whoever is tasked to head the housing authority in place of Russ needs to be far more committed to the future of public housing in New York. It was bizarre that Russ divided his time between here and Minneapolis. NYCHA itself is larger than many American cities; the residents of Toledo or Sioux City would be rightfully aghast if their mayors were periodically ying across the country and living elsewhere. Public housing residents deserve far better.
Quick takes
● Gov. Kathy Hochul is going to have to decide how badly she wants to increase the number of charter schools in the city. Democrats in the state Senate are roundly opposed to the idea, and she’ll either have to horse-trade—sacri cing another policy priority—or eventually abandon the push.
● A new Quinnipiac poll showed that more New Yorkers disapprove of Mayor Eric Adams’ job performance than approve. At this point in his tenure, Bill de Blasio still had a positive approval rating. If Adams is going to experience a turnaround, the crime picture will have to improve. ■
Ross Barkan is a journalist and author in New York City.
While TCJA benefits are still in effect, Grassi advises clients to consider these strategies:
• Maximize gifting up to the 2023 annual exclusion amount of $17,000 per taxpayer ($34,000 for married couples).
• Depending on the value of the estate, consider strategies to keep it below the current exemption amount of $12.92 million (individual) or $25.84 million (married). An estate is not subject to federal estate tax if its value is less than the exemption amount.
• Make the maximum contributions to IRAs ($6,500 limit for 2023, or $7,500 for those over age 50).
• Plan charitable giving (including charitable IRA rollovers) to maximize the deduction on 2023 income tax returns. Qualified charitable distributions made directly from an IRA could satisfy required minimum distributions and exclude them from taxable income.
• Set up 529 Plan accounts for children and grandchildren and consider including five years’ worth of annual exclusion gifts, taking into account any gifts made during the year to children and grandchildren.
• Submit tuition or nonreimbursable medical expenses directly to the school or medical provider to avoid these amounts counting toward the annual or lifetime gift tax exemption.
• Consider creating and funding a grantor retained annuity trust, which is an irrevocable trust created for a certain amount of time. Assets are placed under the trust, and an annuity is paid out every year. When the trust expires and the last annuity payment is made, assets are passed to beneficiaries outright or (preferably) remain in a trust for the beneficiaries.
• Find out if a qualified personal residence trust is a good fit. This irrevocable trust allows homeowners to transfer the home at a significantly discounted rate.
• Explore the option of intrafamily lending, which transfers partial wealth earnings to family members without lowering the lifetime estate tax exemption or triggering gift taxes.
• Consider a freeze transaction, through which future growth in investments is removed from the taxable estate.
• Re-evaluate life insurance coverage, which presents significant opportunities to either defer or avoid income taxes, or both, as well as to provide assets to pay estate tax or replace assets used to pay estate tax.
• Owners of nongrantor trusts should consider making income distributions to beneficiaries. They may be taxed at a lower tax rate.
Not all taxpayers will need or want to take all 12 of these steps, but understanding their options and communicating with their tax and estate planning advisors will ensure they are implementing the most effective strategies for achieving their wealth preservation and transfer goals.
Rozleen Giwani is a tax partner in the Private Client Services Group at Grassi, where she specializes in tax planning strategies for highnet-worth individuals and businesses. grassicpas.com
VOLUNTEER POSITION, WITH A MERE $250 STIPEND TO ATTEND MONTHLY MEETINGS
Americans place a strong emphasis on the idea of second chances. We value the concept that with hard work and perseverance, people can overcome their mistakes and achieve success.
e idea is re ected in our celebration of rags-to-riches stories, as well as the concept of rehabilitation in the criminal-justice system.
We support the Clean Slate Act that is under consideration in the state Legislature this session, because it will o er people with a criminal conviction a second chance. For individuals, it would open up opportunities for stable employment, licenses to practice trades and decent housing. A larger labor pool would help employers hire for any number of jobs that aren’t always easy to ll.
e legislation would automatically seal a New Yorker’s conviction record once the individual became eligible. Eligibility would include completing a three-year
OP-ED
waiting period for misdemeanor convictions and a seven-year waiting period for felony convictions, not counting time served in prison. e individual would be required to complete probation or parole and not have pending charges in New York. Sex o enses would not be eligible.
ere is a long list of organizations that support the Clean Slate Act in New York, including organized labor, recovery groups, faith organizations, and racial and economic justice advocates. A number of business organizations back the bill as well: chambers of commerce in Brooklyn, Harlem, Rochester and Westchester, the Business Council of New York State, Verizon, Microsoft and JPMorgan Chase.
In fact, Jamie Dimon, chairman and chief executive of JPMorgan, published an op-ed in favor of the legislation in August 2021 in e New York Times. He noted that more than 70 million people have some type of arrest or criminal record, roughly equal to the number of Americans who have college degrees. One year after leaving prison, nearly half were unemployed.
“ at is a moral outrage,” Dimon wrote. “ is group is ready to work and deserves a second chance—an opportunity to ll the millions of job openings across the country.”
One study found that from 25 million to 30 million Americans with an arrest or conviction record are eligible to expunge or seal their records but have not done so. at comes from a lack of information about the process, the cost and the complexity. Automatic record clearing could stream-
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line the process and boost employment.
e Clean Slate Act would not limit background checks for law enforcement, prosecutors or the courts. For many types of jobs— police o cer, teacher, Uber or Lyft driver—background checks would still reveal the past criminal record. e same would apply to applications for a gun license.
Second chances o er people the dignity of being able to support themselves. We hope the Legislature will agree. ■
Mayor Eric Adams caused quite an uproar when he suggested during a recent radio interview that asylum seekers do not “fall into the whole right-to-shelter conversation.”
at assertion set o hysterics from the no-borders Left, who threatened to bring the administration “in front of a judge for contempt” if the city refused to pay for housing, food, health care and every other necessity for the nearly 45,000 migrants who recently arrived in our city.
We agree with the mayor. He should ignore the saber-rattling and perhaps let the issue go to court.
For months he has been ghting a battle in the court of public opinion to end the unwarranted, unfair and unsustainable policy of sheltering asylum seekers on the city’s dime. Maybe it’s time to take that
battle to a court of law.
In fact, while it is often referred to as law, “the right to shelter” is not based on legislation, but on the resolution of a landmark 1979 lawsuit.
e main argument made by the plainti s in Callahan v. Carey was that their right to shelter was guaranteed by Article XVII of the New York Constitution, which declares that “the aid, care and support of the needy are public concerns and shall be provided by the state and by such of its subdivisions.”
Callahan v. Carey was settled two years later with a consent decree that required the city to “provide shelter and board to each homeless man who applies for it provided that (a) the man meets the need standard to qualify for the home relief program established in New York state; or (b) the man by reason of physical, mental or social dysfunction is in need of temporary shelter."
rough numerous court challenges, the right to shelter has
evolved since that consent decree was signed in 1981. e most noteworthy resulted in a 2003 appellate court ruling that the city could terminate or deny shelter to homeless adults for not complying with administrative rules or social service plans.
ese legal precedents should allow the city to either seek to modify the Callahan consent decree or withstand any challenge to the assertion that it does not apply to new migrants.
Rights and privileges
e same state constitution cited by the plainti s in Callahan v. Carey as the basis for their right to shelter establishes rights and privileges for U.S. “citizens” and New York residents. Immigrants who just arrived here by bus or plane are neither.
To put it plainly: e consent decree was meant to provide a safety net for New Yorkers, not to create refugee camps.
e courts have also clearly established the consent decree does not extend the right to shelter to anyone, under any circumstances, for any period of time. e city must provide temporary shelter for those in need of housing due to “physical, mental or social dysfunction,” not those seeking asylum or economic opportunity.
e problems caused by an unprecedented number of migrants streaming across our borders and into our city were created by the federal government and its failed immigration policies. ey cannot be solved on the backs of the city’s taxpayers.
We are, and will always be, a city that welcomes the poor, tired, huddled masses “yearning to breathe free.” We just cannot a ord to give them everything for free. ■
Vito Fossella is Staten Island borough president. Joseph Borelli is minority leader of the New York City Council.
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“THIS GROUP IS READY TO WORK AND DESERVES A SECOND CHANCE ”SPEAKER ADRIENNE
With housing sitting firmly atop the political agenda in both Albany and City Hall, it appears that New York is taking serious steps to tackle the undersupply of new housing units that has led to affordability issues in the state. It is truly a historic opportunity that we cannot afford to miss.
Though these new housing proposals are primarily targeted on scaling up housing production, we cannot lose sight of the reality that much of our supportive housing portfolio is in danger of falling into disrepair without new investment from New York. Gov. Kathy Hochul and the Legislature should create a preservation fund for supportive housing before this crisis gets any worse.
Supportive housing, which provides a permanently affordable home equipped with on-site services, is critical in breaking the cy-
cle of chronic homelessness for many because it helps individuals manage and treat physical, mental and behavioral health challenges in a safe home environment.
Lawmakers at the state and city level understand the value of supportive housing and have invested historic amounts. Mayor Eric Adams’ Housing Our Neighbors plan commits to creating and completing 15,000 supportive homes by 2030, and the governor outlined her plan to create 3,500 supportive housing units for people struggling with severe mental illness as a part of her 2023 State of the State address. We applaud these efforts because new units are desperately needed.
We need more support, however, for the buildings that exist now. The earliest of the state’s supportive housing portfolio was created many years ago, often in older buildings that are today in need of major capital improvements.
That is often difficult for the undercapitalized nonprofit community, which in turn affects both the physical living conditions of
chronically homeless New Yorkers and the services that nonprofits provide. In today’s economic environment, it can be challenging for nonprofits to secure the capital for major renovation projects that are needed to preserve older supportive housing.
A state-run preservation fund seeded with an initial $50 million that is replenished and increased would unlock a new funding stream and supplement the significant capital needed to maintain and make repairs so that supportive housing can be preserved and services can be offered in a safe, healthy environment for those most in need. Aging facilities are standing in the way. Such a fund would directly affect thousands of lives across the state. As part of a broader renovation initiative, Volunteers of AmericaGreater New York was recently awarded a $960,000 grant from the Federal Home Loan Bank of New York to fund the replacement of aging structural beams at our Richard S Salyer House—a 146-unit facility that provides permanent support-
ive housing to a mixed population of singles and families. Many in this population have aged in place and are now elderly, formerly homeless individuals. These funding opportunities are a lifeline to organizations such as ours and, more important, for the vulnerable people whom we serve every day. We encourage our leaders in New York to expand these funding streams and preserve this
important supportive housing portfolio in the city and across the state. ■
Julia A. Oliver is chief operating officer and executive vice president for Volunteers of America-Greater New York. Adam Balasiano is assistant vice president of property management and real estate for Volunteers of America-Greater New York.
Many New York properties are ripe for redevelopment, and there is momentum around reinvigorating properties for today’s needs. Renovations, however, can take a lot of time, meaning buildings are left empty until they can be reopened to the public. That leaves the surrounding neighborhood at risk of becoming a dead zone.
While these massive renovations and repositioning efforts are underway, building owners should consider temporary solutions to activate vacant spaces to bring new energy to these underused areas.
As developers embark on various adaptations that have contributed to a rise in renovation work in architectural billings—soaring above the 50% mark in 2022—we need to
consider what happens to these spaces during the redevelopment process and if there is a way to breathe new life into them before large-scale repositioning projects are completed.
After all, creating even more dead zones isn’t good for our neighborhoods and city. Architects working on these rehabs can help brainstorm designs—both for the finished projects and for the time between now and then.
In general, temporary solutions that can add vibrancy in the near term depend on the context of the area and could include everything from an artist residency to a rotating pop-up retail space.
We know you don’t have to go far in New York to encounter a completely different neighborhood, so short-term initiatives should reflect the neighborhood. The goal is to introduce activations that are an authentic representation of what the community wants to see.
Collaboration with community
leaders, residents and businesses can help illuminate what could work. One of the first steps in facilitating this process is connecting with the community members who live and work in these neighborhoods to evaluate the best transitional uses for the vacant spaces.
Architects are uniquely positioned to facilitate these conversations between developers and community stakeholders. We often work as a liaison between private and public interests. What’s more, we often initiate dialogue that can look like community town hall sessions, surveys or simply a call for commentar y on proposed changes. This activity goes on as we work to explore creative tactics to temporarily update these spaces while continuing progress on long-term renovations.
During the summer of 2022, the City Council established an adaptive reuse task force to evaluate methods for reviving obsolete buildings, soliciting community input on legal and regulatory changes that can inform recommendations.
Though the intent is to discover ways to convert buildings into permanent uses, such as housing and schools, the effort is an example of how to formally engage with communities in a way that leads to actionable plans.
As New York undergoes its next evolution, navigating the interstitial space between past and future requires cooperation between all
stakeholders. For the city’s unique urban fabric to remain intact while we wait to meet its next iteration, community-oriented short-term solutions will ensure these neighborhoods endure. ■
Alex Lopatynsky is principal of the architecture and design firm Cooper Carry and a managing director of its New York office.
MUCH OF OUR SuPPOrTIVe HOuSING IS IN DANGER OF FALLING INTO DISrePaIr
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Jaime Rapps, CPA is a Partner in our New York City office. He specializes in financial reporting, audits, reviews and compilations for our clients in the Nonprofit and Healthcare industries. His guidance helps charitable organizations, museums, schools, skilled nursing facilities and other entities advance their missions and reach their financial goals.
GWI
Audience insights technology company
GWI has appointed Rhiannon Staples as Chief Marketing Officer. Staples brings over 15 years of experience leading marketing teams at high-growth tech companies including HiBob, NICE Actimize, and Sisense. Based in New York, Staples will oversee brand marketing, product marketing, and client communications as the company continues to grow its SaaS platform that connects the world’s top brands with insights from over 240M consumers across the U.S.
Swinerton
Bonnie Pfleiderer joins Swinerton as Director of Business Development for the Northeast market. Her primary area of responsibility is to build strategic relationships and create and implement a marketing and development plan to increase business and revenue. She brings her experience in the engineering and construction industry to service Swinerton’s clients in the New York market. She has represented a broad range of clients in the New York market including several Fortune 500 clients.
CONSULTING
Public Works Partners
Public Works Partners, a WBE/DBE/SBE
certified planning and consulting firm, welcomes Melissa S. Lee as a Principal. Ms. Lee will lead the firm’s Urban Planning practice, called Community Health, which focuses on creating stronger neighborhoods through planning, placemaking, economic development, and community engagement. She brings more than 25 years of experience delivering urban planning solutions in the government, nonprofit, and private sectors nationwide.
HNTB
Martha Bogle, PE, has rejoined HNTB, a leading transportation infrastructure firm, as vice president and project director in the New York office. Bogle brings nearly 25 years of industry experience, most recently as Chief of Design for the Port Authority of New York & New Jersey, where she oversaw design of projects to modernize, expand, maintain a state-ofgood repair, improve customer experience, and ensure operational excellence of the authority’s multiple air, rail, land and sea facilities.
LAW
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Fishawack Health
Fishawack Health
(FH) has announced that Mario Muredda is joining the global commercialization partner as itsnew President of Marketing.
Muredda will unite FH’s Global and North American teams to emphasize its data-driven and omnichannel service offerings for the biopharmaceutical, medical technology, and wellness markets. He brings a wealth of experience reinforcing the importance of integrating data, science, and strategy to present innovative solutions.
Nixon Peabody LLP is pleased to announce that Julia Casteleiro and Kathie Soroka from our Affordable Housing & Real Estate practice have been promoted to partner. Julia helps clients navigate all aspects of acquiring, financing, and developing multifamilyhousing, from the first steps of negotiating a purchase and sale agreement to reviewing and finalizing closing documents. She is a member of the National LGBTQ+ Bar Association.
Casteleiro Soroka
Kathie represents a variety of stakeholders in affordable housing transactions involving federal and state subsidy sources. She is one of the nation’s foremost professionals in public housing repositioning. She previously served as senior counsel to the general counsel at HUD during the Obama administration.
Nixon Peabody LLP is pleased to announce that Dr. Alper Tosun of our Complex Disputes practice and Ari Glatt of our Real Estate practice have been promoted to partner. Alper is a prominent practitioner in the field of international commercial arbitration proceedings related to disputes in the construction, energy, mining, and infrastructure industries. His practice also involves a wide range of high-end litigation and white-collar matters. Ari is a versatile attorney handling a broad array of commercial real estate transactions involving the acquisition, sale, development, leasing, and financing of properties nationwide, with a particular focus on condominium and cooperative projects.
Nixon Peabody LLP is pleased to announce that Jason Chimon has been promoted to partner. He represents buyers and sellers in the purchase and sale of businesses in a wide range of industries. He helps emerging companies grow their businesses and raise capital through seed, angel, venture capital, and private equity financing, and also supports the technology transfer and research operations of clients in negotiating various licensing, research and clinical trial agreements.
Foley Hoag LLP
partner Christina Hioureas (New York) has been elevated to Global Co-Chair of the firm’s International Litigation & Arbitration Department. Hioureas, who chairs the firm’s United Nations Practice, represents States and State-owned and private entities, in investment treaty arbitration and commercial arbitration and public international law matters, and advises States on matters before the UN and its bodies. She also serves as arbitrator in international arbitration disputes.
Animal Medical Center
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Kathryn Throo is a litigation attorney with Foley & Lardner LLP, where she is a member of the firm’s Securities Enforcement & Litigation Practice Group and Innovative Technology Sector. She represents clients in complex commercial litigation matters, regulatory investigations, and enforcement matters. Her practice is focused on representing companies, audit firms, and individuals in connection with investigations and proceedings by the SEC and the Public Company Accounting Oversight Board.
An accomplished leader and healthcare executive, Helen Irving, RN, MBA, has devoted her 30-year career to operational excellence in the delivery of healthcare services. As a trained RN with an MBA and over a decade as a healthcare CEO, her wealth of experience and expertise includes hospital operations, clinical care and management, and leadership in healthcare administration.
The developer behind a controversial Harlem rezoning is resurrecting his project months after it failed in the face of political opposition. The move is certain to test the City Council’s political will to build more housing and challenge its long-held tradition of giving members veto power in their own district.
Known as One45, the original $700 million project called for rezoning a corner of West 145th Street and Lenox Avenue to put up a pair of 363-foot-tall towers on a site now home to low-rise retail. In the pro-
In the wake of One45’s defeat, some officials called it a missed opportunity to create badly needed housing—especially when Teitelbaum raised the stakes in recent weeks by opening an unpopular truck depot on a portion of the site.
Mayor Eric Adams reportedly supported the first project, and Manhattan Borough President Mark Levine last month called for reviving One45.
The recent announcement of the surprise restart came in the form of a letter from Teitelbaum, addressed to Richardson Jordan. He said the new project, known as One45 Harlem for All, would contain the same number of apartments as the old proposal—but with a higher proportion pegged to 30% of the area median income, or about $28,000 for a single person.
posal’s final form, the two towers would have contained 915 apartments, half of which would have been income-restricted.
But the plan faced harsh pushback in the neighborhood last year—particularly from Councilwoman Kristin Richardson Jordan, who argued it would indirectly displace longtime residents by driving up surrounding rents. The socialist lawmaker was unmoved by last-minute additions of more affordable units, so developer Bruce Teitelbaum withdrew the project hours before it faced likely rejection by a council committee in May.
“It is time for you and all of those who have a say in whether One45 Harlem for All lives or dies to make a decision,” Teitelbaum, a former aide to Mayor Rudy Giuliani, wrote to Richardson Jordan.
One45’s revival puts pressure not only on the local council member but on Speaker Adrienne Adams, who has staked out a position as a pro-housing legislator. Her short tenure thus far has included the passage of major developments such as Innovation QNS and Halletts North in Astoria; Innovative Urban Village in East New York, Brooklyn; and the Lirio in Hell’s Kitchen.
Speaker Adams has hinted at be-
ing willing to overturn member deference, the informal practice in which individual council members are allowed to decide the fate of projects in their district. In a recent news conference, the speaker declined to comment on the new proposal or the future of member deference.
But Charles Lutvak, a spokesman for the mayor, said that New York City’s housing shortage was contributing to an “affordability crisis,” and he called for developers and communities to “work together to create more housing.”
“We will continue working with all of our partners on a comprehensive effort to bring much-needed affordable housing to Harlem and every neighborhood in New York
City,” Lutvak said.
Teitelbaum told Crain’s that “the mayor and his team have been helpful, which we appreciate.”
The battle over One45 has taken the form of an unusually public— and personal—dispute between the developer and the local council member, with each accusing the other of refusing to meet in good faith. Teitelbaum has suggested Richardson Jordan was determined to defeat One45 no matter what, while the councilwoman countered with a rubric showing the affordability levels needed to secure her support.
Richardson Jordan has criticized One45 in stark racial terms, saying
an influx of new residents would dilute Harlem’s “Black plurality.” She also has argued that a majority of the apartments would have been unaffordable to most households in the surrounding neighborhood, which in 2019 had a median income of $57,720, according to the American Community Survey. She did not respond to a request for comment on the new proposal. Richardson Jordan is facing a tough re-election bid this year, with challenges from Harlem Assembly members Al Taylor and Inez Dickens—both of whom have said they would support One45 a second time around.
“I am encouraged by this chance to create deeply affordable housing that will benefit our Harlem residents and families, especially in place of a dangerous and polluting truck depot,” Taylor said in a Twitter post.
Teitelbaum’s new plans would set aside 174 units at roughly 30% of the AMI—dozens more such units than in the previous version—plus 164 apartments between 60% and 80% AMI, he says. One hundred twenty units would be incomerestricted at unspecified levels, while the remaining 450 or so apartments would be market-rate.
It was not immediately clear when the project might begin the city’s monthslong review process for zoning changes. If a rezoning is never approved, Teitelbaum said, he and his partners will redevelop the site with a mix of market-rate housing, retail, a self-storage facility and parking. ■
BY C. J. HUGHES
RXR is planning to turn one of its landmark prewar office buildings in the Financial District into apartments as part of a broader portfolio review it has dubbed Project Kodak after the photographic film–maker, which also rethought its business model as its industry faced disruption.
The top office landlord is looking
The company is also considering converting 47 Hall St., a former prewar factory near the Brooklyn Navy Yard and one of the firm’s four Brooklyn properties.
RXR Chairman Scott Rechler told Crain’s that the company is reviewing all its buildings through Project Kodak. RXR will not invest in any buildings that are deemed to be obsolete “film” buildings, he said, and will focus instead on those properties that are up-todate “digital” buildings that can continue to attract office tenants.
to convert 61 Broadway, a 33-story tower with a high level of vacancy. The 753,000-square-foot building, built in 1916, currently has 16 vacancies, among the highest in RXR’s New York portfolio, according to the company’s website.
“I said to my team, ‘Let’s be intellectually honest with ourselves,’ ” he told Crain’s. “ ‘What are alternatives we should pursue relative to these film buildings?’ ”
Rechler added that if he could not work out some kind of deals with his lenders for properties struggling with vacancies in order
to restructure their loans, he would be forced to surrender some buildings.
“If you want to put new money in, you need to reset the deck to do so,” he said. “And if we can’t, we may have to hand back the keys.”
Rechler declined to discuss specific buildings in his company’s portfolio.
RXR bought 61 Broadway in 2014 from Broad Street Development for $330 million and later borrowed $240 million against the property from the Bank of China. The building, which extends through its
block to Trinity Place and has an alley along its southern edge, also features windows on all four facades, a selling point for a residential conversion.
Also, its ninth floor includes an 11,500- s quare-foot amenity lounge for office tenants.
But Rechler said conversions aren’t as easy as they might seem, because commercial tenants can’t just be evicted. Lease buy-outs are pricey, he added.
“Some might be happy to leave, but you can’t do anything without their consent,” he said, adding that “the most vacant buildings are the most compelling.”
An average weekly head count in New York offices is 52%, according to a report from the Partnership for New York City that came out recently. ■
“IF YOU WANT TO PuT NeW MONey IN, YOU NEED TO reSeT THE DECK TO DO SO”SHOP ARCHITECTS
Ranked by number of investments in New York metropolitan area-based startups in 2022
Last year’s list, which highlighted the watershed deal-making of 2021, raised the question of whether the trend would last. After 2022’s turbulent market conditions, which included layoffs, rising interest rates and inflation, the answer is clear: It won’t.
Deals and dollars nosedived in 2022, with the number of deals dropping by about 30% and the amount of venture capital poured into the city’s startups was nearly halved, according to data from Crunchbase. Although venture capital slowed nationally, the declines were the largest among leading metropolitan areas, such as Silicon Valley and Boston. While the deal count was the lowest since 2017, there was a bright spot: Investments were still higher than in 2020.
In addition to economic conditions, the drop in New York’s funding specifically could be attributed to an overall decline in funding for fintech companies, which make up a significant portion of the city’s startup scene. In addition, major players such as Coinbase and Robinhood went public during 2021, eliminating the opportunity for venture capitalists to get in on the action.
A shifting market has also played a role in the types of VC investments taking place in the city. While 2021 was defined by an environment ripe for initial public offerings, investors in 2022 pivoted to pouring dollars into younger companies, with 61% of deals taking place in early rounds. The move girds investments against public-market turbulence, as potential exits will be several years down the line, while ensuring investors’ dollars aren’t entirely tied up.
Both
About
As layoffs proliferate across the city’s tech sector after exuberant and perhaps premature hiring, now the question is, will New York’s startup sector reach its previous heights again?
— Amanda GlodowskiFifth Ave.
York, NY10011
Sutter St.
Francisco, CA94102
, General partner, New York
, Co-managing partners
Source:Source:PitchBook andCrunchbase;additionalresearch by Amanda Glodowski.Funded companies need to be headquartered in thegreater NewYork area..Funding types includedareallventure seriesplus angel, pre-seed,seed andundefined fundingrounds. Individual investorsare omitted. This listincludes some organizationsthat makeinvestments in startups but may nottechnically be consideredventurecapital firms. Onlycloseddealsthatare
platforms areincluded. In cases of ties, firms arerankedalphabetically.n/d-Not disclosed.
Alandmarked hotel in Midtown has sold at a huge loss compared to the last time it traded hands, reflecting the troubles still facing the city’s hospitality industry after the pandemic.
The deals got bigger in late January. After a fourth quarter where seed-stage funding dropped by 48% in total, according to a report from Primary Venture Partners, the first weeks of the new year saw substantial dollars invested in both new and later-stage firms. That includes the market-leading cannabis platform LeafLink and a big bet on improving clinical trials through automation and software.
LEAFLINK
FUNDING DETAILS $100 million
Series D
INVESTORS CPMG, L2 Ventures and Nosara Capital as well as existing investors
HEADQUARTERS Financial District
CO-FOUNDERS Ryan Smith (now executive chairman) and Zach Silverman (now senior adviser)
As the city’s legal retail cannabis industry takes off, a homegrown tech company is planting new seeds for growth. Seven-year-old LeafLink operates a platform for cannabis retailers to connect with brands and distributors and offers a product suite that includes payments, logistics and marketing services. LeafLink said it serves about 50% of the entire U.S. cannabis industry, processing around $5 billion in orders annually.
The new round of funding comes as the cannabis industry nationwide struggled with falling wholesale prices, due to an oversupply. LeafLink will receive the funding in two tranches, putting it toward new offerings on the platform and providing “a strong balance sheet that will enable continued innovation alongside our customers,” said Ryan G. Smith, co-founder and executive chairman. The company last raised $40 million in July 2021
at a valuation of $800 million.
The company made sweeping leadership changes at the same time, with both co-founders moving on to board or advisory positions. Smith, formerly CEO, became executive chairman on Feb. 1; at the same time co-founder and Chief Technology Officer Zach Silverman became senior adviser. The new CEO is Artie Minson, who joined LeafLink as president and chief operating officer in March 2022 after stints in the C-suite at WeWork, Time Warner Cable and AOL. Karan Gupta, formerly CTO at San Francisco-based Shift Technologies, joined LeafLink as the new CTO.
Paradigm seeks to speed up clinical trials and improve patient access to potential treatments. To do so, the company is building a single new product that can be used to
PARADIGM
FUNDING DETAILS $203 million
Series A
INVESTORS Arch Venture Partners of Chicago; General Catalyst of Cambridge, Massachusetts; American Cancer Society’s BrightEdge fund, which is based in Boston
HEADQUARTERS New York City, neighborhood unknown
CO-FOUNDERS Kent Thoelke, Milind Kamkolkar
connect physicians and health care practices with trial sponsors so that all potential patients can be screened for eligibility, according to a news release on its site.
This is no small shot.
“The system is broken,” CEO Kent Thoelke said in a statement on Paradigm’s site, “and the human cost of inaction is unacceptable. Paradigm is reimagining the entire drug development paradigm by upending the status quo and focusing on equitable access to clinical research at scale from the start.”
Chicago-based Arch Venture
Partners had been incubating the company since 2021. Paradigm’s leadership hails from leading health and health-tech companies. Thoelke was formerly chief innovation officer at clinical trial company Icon, and Chief Operating Officer Milind Kamkolkar led digital, data and artificial-intelligence teams at Cellarity, Sanofi and Novartis, respectively. Kenneth Frazier, a former chief executive at the pharmaceutical giant Merck, is a member of the company’s board.
According to its website, Paradigm’s headquarters are in New York City, and there is another office in Columbus, Ohio. So far Paradigm has three job openings, all remote.
For companies in the automotive, pharmaceutical and finance industries, using social media to market their wares is not as simple as signing up for an Instagram account.
Constellation, which was named one of the 50 fastest-growing companies in 2022 by Crain’s, is a platform that allows businesses in these sectors to launch and manage digital advertising campaigns while following their sector’s particular set of regulations by applying industr y-specific disclaimers as needed. The investment of $15 million will go toward hiring employees who can support an influx of clients, such as Volkswagen Group and Jaguar Land Rover, and toward expanding into the pharmaceuticals industry.
In addition to New York, Constellation has offices in Dubai, Seoul and Toronto. ■
FUNDING DETAILS $15 million
INVESTORS Newlight Partners of New York
HEADQUARTERS Financial District
CO-FOUNDERS Diana Lee, Nauman Hafiz, Matt Woodruff
Hawkins Way Capital and Värde Partners have purchased the property at 525 Lexington Ave. for about $153 million, according to property records and the companies. Ashkenazy Acquisition Corp. and Deka Immobilen had purchased the hotel for $270 million in 2015.
The 35-story property, built in the early 1920s, includes 655 rooms and spans about 400,000 square feet. It had operated as a Marriott hotel focused on business travel but closed early on in the pandemic. The buyers are ru-
ott, claiming that the giant hotel chain had misappropriated $12 million in revenue.
The mortgage on the building went into default in February 2021, at which point Deka filed foreclosure proceedings. Deka had owned 85% of the hotel, while Ashkenazy had owned 15%.
This is just the latest of several hotels to trade for a huge loss since the pandemic began. Two Kings Management bought the Holiday Inn at 125 W. 26th St. for about $80.3 million last year, much less than the roughly $111 million Watermark Lodging Trust had bought it for in 2013. And C-III Capital Partners bought the Lexington Hotel at 511 Lexington Ave. for about $175 million, compared with the roughly $335 million DiamondRock Hospitality bought it for in 2011.
mored to be considering turning it into student housing.
Representatives for Hawkins, Deka and Ashkenazy did not respond to requests for comment. A representative for Värde declined to comment.
The property has gone through several legal issues in recent years.
Deka and Ashkenazy had been trying to sell it since 2016, and Deka sued Ashkenazy in 2019, accusing its partner of backing out of a deal to buy the property for $174 million. After the pandemic hit, Deka and Ashkenazy both sued Marri-
This is not even the first Lexington Avenue hotel that Hawkins and Värde themselves have purchased at a steep discount since the onset of Covid. The firms also bought the DoubleTree by Hilton at 569 Lexington Ave. for $146 million, much lower than RLJ Lodging Trust’s 2010 purchase price of about $332 million.
A JLL team including Jeffrey Davis, Gilda Perez-Alvarado, Stephany Chen and Bob Knakal represented the seller in the 525 Lexington Ave. deal. JLL and the buyers both previously announced that the property had sold but did not disclose the price. ■
THE PROPERTY HAS GONE THROUGH SEVERAL LEGAL ISSUES IN RECENT YEARS
The owners of Manhattan office buildings are facing $12.7 billion in commercial mortgage-backed securities that will become due in full this year or next, according to data from Trepp.
Several of the loans are due in 2023 because they received a one-year extension from their lenders during the pandemic, but it’s not likely that they’ll be given the same treatment again. With higher interest rates, slow leasing activity and struggling occupancy rates, the upcoming loan maturities are ones to watch.
These 10 addresses hold the largest commercial mortgage-backed securities loans in the New York City office market that are set to mature in 2023 or 2024. Together, they comprise nearly $7 billion in debt, or 56% of all the CMBS debt owed by city office buildings, that must be repaid in less than two years.
280 Park Ave.: $1.1 billion
This 1.3 million-square-foot office property in Midtown East is owned jointly by SL Green and Vornado Realty Trust. The $1.1 bil-
lion loan on the property is due in full by Sept. 15, according to Trepp. The partners closed on the loan in 2017 to refinance a $900 million loan from Deutsche Bank that was scheduled to mature this May.
1290 Sixth Ave.: $950 million
Also owned by Vornado, this building measures 2.1 million square feet and sits by Rockefeller Center. In November 2021 Vornado closed the $950 million loan, which matures in November to replace another loan of the same size that was scheduled to mature in November 2022. Paris-based liquor company Remy Cointreau recently announced it would be relocating its 52,000-square-foot headquarters at the building to 30,000 square feet at Rudin’s 3 Times Square later this year.
1 New York Plaza: $835 million
This 2.6 million-square-foot Financial District building is owned by Brookfield Properties, China Investment Corp. and AEW Capital Management. The owners put the property on the market in early 2022 but pulled their listing months later. The owners refinanced the property late
in 2020 with an $835 million loan originated by Wells Fargo, Goldman Sachs and BMO Harris Bank that will mature in January. That replaced a $750 million loan obtained from Wells Fargo in 2016.
277 Park Ave.: $750 million
The Stahl Organization recently completed a $120 million revamp of its Midtown East office tower. Its $750 million mortgage will mature in August 2024. Trepp placed this building on its watch list last month—JP Morgan is the main tenant with over 40% of the space (down from 70% in 2021) and is opening a new office nearby that could reduce the need for this one later on.
230 Park Ave.: $670 million
This property, also known as the Helmsley Building, is owned by RXR Realty, which recently announced it would be giving some of its older, obsolete office properties back to the bank instead of continuing to make debt payments. The firm’s chief executive, Scott Rechler, didn’t specify which properties or how many, but this building was constructed in 1929. Its $670 million mortgage matures in December.
375 Park Ave.: $573.8 million
This iconic Manhattan office tower, also known as the Seagram Building, is owned by Aby Rosen’s RFR Realty. This year it also made it to Trepp’s watch list because of high tenant turnover and an occupancy rate that fell from 98% in 2018 to 95% most recently, Trepp reported. In December law firm Fried Frank announced it would be relocating from its offices there to 14,000 square feet at 535 Madison Ave. Its nearly $600 million mortgage will mature in May.
150 E. 42nd St.: $525 million
This office building is owned by the 601W Cos. A major tenant there, Dentsu, is reportedly trying to get out of its 112,328-square-foot lease. The $525 million mortgage on the building is due in September 2024.
620 Eighth Ave.: $515 million
Also known as the New York Times Building, this 744,000-squarefoot Brookfield Properties office tower in July closed on its $515 million mortgage, which matures in December. It has seen strong leasing traction in recent months. Software maker Datadog and jobs site
Indeed together took 330,000 square feet at the building in July.
330 Madison Ave.: $500 million Vornado Realty Trust owned this building until 2019; it’s now owned by German real estate group Munich Re Group. The owner’s asset management arm, MEAG, recently consolidated its three New York offices into 75,000 square feet at the building. The $500 million mortgage on the property matures in August 2024.
300 Park Ave.: $485 million
This Tishman Speyer building serves as the headquarters of Colgate-Palmolive, which occupies 242,000 square feet there. However, occupancy at the building fell from 99% in 2018 to 75% in 2020 before rising to 81%, Trepp reported. The $485 million mortgage on the property matures in August. ■
because so many future voters had arrived here from the Jim Crow South. ese days census data shows that the descendants of the Great Migration are often heading back to states such as Georgia and Alabama, where a single-family home with a backyard can be had for a fraction of the cost of property in Brooklyn and Queens. e city’s Black population has declined by nearly 200,000 in two decades.
For the voters that remain, expectations for the rising political class are raised: Can a Black mayor, two Black speakers, a Black majority leader, Black borough presidents, prosecutors and party bosses deliver tangible quality-of-life improvements? Can they make New York safer and more a ordable for the Black residents who have handed them their votes?
“What I don’t get caught up in is identity politics,” Richards said. “We now have an obligation. We have to make substantial change in the community, and that pressure is on.
“How are we addressing many of the systemic issues that plague our community?” he continued. “Whether it’s housing, policing, health care, education—how are we investing in the infrastructure in the community that has been historically disinvested in?”
Scene has changed
David Paterson, the state’s rst and only Black governor, is considering the same questions as Richards, even as he takes satisfaction in how much the political scene has changed in his lifetime.
“We’ve proven that we can win and get into decision-making capacities,” he told Crain’s. “What is still, I think, germinating is the ability to change conditions in communities.”
For a political observer in 2020s New York, it would be easy to forget
how challenging the 20th century and even the early 21st century were for the African American and Afro-Caribbean politicians, activists and voters who hoped to have a say in how the government operated.
In 1990, when David Dinkins became the city’s rst Black mayor, he was an outlier in the political rmament of the state. e governor and both leaders in the state Legislature were white. So were the district attorneys of the ve boroughs, the borough presidents and most of the Democratic Party bosses. In Harlem and central Brooklyn, Black political power was ascendant, but leaders from those neighborhoods only had so much in uence elsewhere.
Four years later a white, outerborough backlash would come for Dinkins, and Republican Rudy Giuliani would go on to lead the city for the rest of the decade.
Migrating from Harlem to Brooklyn and then to southeast Queens— and now to the Bronx, where Vanessa Gibson is that borough’s rst Black borough president—Black political power can be found all across the city today.
Comity among the power brokers is never guaranteed. Adams, a moderate mayor, has been at odds with the two state legislative leaders, Carl Heastie and Andrea Stewart-Cousins, over his push to weaken criminal-justice reforms passed under their watch. Je ries and Mayor Adams, if aligned these days, were long rivals in central Brooklyn. Speaker Adams, representing a largely liberal City Council body, has begun to push back on the mayor as well.
Unity, if not concrete action, did come when the Rev. Al Sharpton called a summit of Black political leaders last month at his National Action Network headquarters to discuss public safety. Mayor Adams, Speaker Adams, James, Stewart-Cousins and Antonio Delgado, the lieutenant governor, all attended. “ ey haven’t been in the room
BY THE NUMBERSBLACK VOTERS in Brooklyn and Queens became a pivotal, highturnout voting bloc in the 2010s.
23.8%
CENSUS DATA show the Black proportion of city residents has dropped from 25.1% in 2010 to 23.8% today.
together to talk about crime,” Sharpton told Politico. “Why are we not talking collectively?”
For much of the past century, Black political power was con ned to Upper Manhattan, where Adam Clayton Powell Jr. became the rst Black member of Congress from New York. In this period another product of the Harlem Democratic establishment, Hulan Jack, was able to get elected Manhattan borough president, becoming the highest-ranking Caribbean American elected o cial at the time.
In Harlem, which functioned for many decades as the very center of Black political power in America, the Gang of Four—Charlie Rangel, Percy Sutton, Basil Paterson and Dinkins— represented the peak of the legendary neighborhood’s in uence. Rangel took Powell’s seat in Congress and served for the next four decades. Sutton became Manhattan borough president. Basil Paterson was secretary of state under Hugh Carey, the Irish American governor from Brooklyn.
All of these achievements were paired, to some extent, with setbacks. David Paterson, Basil Paterson’s son, remembers being a young law school student in 1977, hoping desperately that Sutton would at least nish in the top two in the Democratic primary for mayor. Sutton was a top contender that year but was beaten back by a number of white candidates, including Mario Cuomo and Ed Koch. “I remember just how disappointed we were. We thought we could get a candidate into the runo ,” Paterson said.
Four years later Dinkins, then an assemblyman, tried to get elected Manhattan borough president. He lost to Andrew Stein, a white scion of a publishing dynasty, and would nally claim the post in 1985, when Stein ran for City Council president.
at victory allowed Dinkins to compete, in 1989, to defeat Koch in the mayoral primary.
Younger Black politicians such as Richards speak of the vital importance of Barack Obama’s 2008 campaign. Obama proved, at last, that a Black politician could be elected
president of a country with a long history of racial strife. For older Black politicians and activists, there is almost equal reverence for Jesse Jackson, who twice ran for president in the 1980s and attempted to assemble the multiracial coalition that Obama would later cement in the 21st century. Jackson could not ever get past Walter Mondale or Michael Dukakis in the Democratic primaries, but he organized the growing African American and Afro-Caribbean vote in New York City. Dinkins supporters credit Jackson’s campaigns with laying the groundwork for the historic 1989 bid.
“ ere are a lot of ways you can trace the growth of Black political power,” said Basil Smikle, a Demo-
Dinkins or Vann, or helped Major Owens get elected to Chisholm’s old House seat. Although the Black population of New York was no longer growing, Black voters in central Brooklyn and Queens had become a pivotal, high-turnout segment of the Democratic electorate. To win o ce, especially boroughwide and citywide, politicians had no way of circumventing them.
James, the attorney general, is another protégé of Vann. She rose from the City Council to the public advocate’s o ce in 2013, replacing Bill de Blasio, who ran and won an underdog campaign for mayor. Although de Blasio was white, he had a biracial family and campaigned aggressively on police reform, appealing to many Black voters in Brooklyn and Queens.
cratic strategist and former executive director of the statewide party.
“Jesse talking about his Rainbow Coalition opened the door for Dinkins to talk about the ‘gorgeous mosaic’ of the city.”
Brooklyn, the second center of Black political in uence in New York—and its ultimate heart today—came along later than Harlem. e civil rights movement gave way to redistricting that nally ended the blatant gerrymandering of Black voters in Bedford-Stuyvesant.
Shirley Chisholm, a charismatic and unapologetic liberal, won the new district and, in 1969, became the rst Black woman to enter Congress. In 1972 Chisholm ran a trailblazing campaign for president, and soon other Black Democrats were following her lead in Brooklyn. Al Vann, a Brooklyn assemblyman, methodically challenged the white-dominated Democratic machine of Brooklyn, winning elections and mentoring a new generation of leaders, including the future Mayor Adams.
e 2010s was the decade that Black activists dreamed of when they knocked on doors for Sutton or
On the same day de Blasio secured a commanding victory in the primary, Ken ompson, a young Black lawyer, unseated Charles Hynes, the longtime Brooklyn district attorney, who was white. Adams, a state senator, was elected the rst Black borough president of Brooklyn that same year. ( ompson died of cancer in 2016.)
Brooklyn—Bedford-Stuyvesant, Crown Heights and Prospect Heights in particular—had o cially supplanted Harlem. It was only a matter of time before the Brooklyn Democratic Party would get its second Black leader, Rodneyse Bichotte, who also became the rst woman to lead the party organization. Like her white predecessor, Frank Seddio, Bichotte has tangled with progressive reformers, but she’s managed to hold on to her post amid ideological divisions that won’t soon diminish.
“I’m the rst Black woman and rst woman to run the party. People were a little bit shocked; they felt I was new, but I’ve been around for some time,” said Bichotte, an assemblywoman. “ e Hakeems, the Erics, the Tishes have put in their time. ey’re rising with merit. is is not spoon-fed. ese are people who worked for years.”
And now that work has paid o . e work of acquiring community power is done. Now that power will be wielded. ■
“WHAT IS STILL, I THINK, GERMINATING IS THE ABILITY TO CHANGE CONDITIONS IN COMMUNITIES”BICHOTTE leads Brooklyn Democrats. PATERSON was the state’s rst and only Black governor.
Grassi fields an annual survey to help food and beverage manufacturers assess the state of the industry in New York and New Jersey. This year, we partnered with Crain Communications to produce and field it. The process was easy and the results could not have been better. Crain’s helped us capture feedback and report on the industry trends and outlooks that matter most to the businesses we support.
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76 WEST NYC 1251 LLC
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Part of a team delivering creative, sophistcatd & value based solutns for the Salesforce platfrm; work dirctly w/ clients to undrstnd source systms & gather detaild reqrments for data migratns. Reqs Bach in Comp Sci, Math, Engnrg, or closly relatd field 3 yrs exp in job offrd or as SAS Programmer Analyst. Bkgd in educ, traing or exp must incld exp w/ scriptd dataloader, ETL tools or similr data load techs, Jitterbit, SSIS, Informatica, Dataloadr.io, SF Data Loader & MuleSoft; exp w/ relational databases structre & functnalty & exp w/ major databases incldg MS SQL Server, MYSQL, postgreSQL or Oracle; demonstrtd solid understndg of data migratn considertns, design trade-offs, & ETL tools; bkgd must incld exp migrating data/systms into cloud relatd techs such as SAS, Informatica & Salesforce. Ability to work remotely from anywhere in the U.S. Salary $96,000 to $110,000 / yr. Resp to shanna.sandy@silverlinecrm.com; ref job title in subjct line.
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Project Managers (2) -Market
Research sought by RBUS, Inc., a Red Ventures Company, for its office in NYC, NY to manage digital advertising strategy executions across placements & platforms. Job duties incl: planning, executing, optimizing, & analyzing performance of digital advertising campaigns, & debugging reltd tech issues. 3 yrs of exp in the job offered or directly reltd occupation such as Campaign Manager is req'd & must incl: 3 yrs of exp using Google Ad Manager to plan, execute, & analyze performance of digital advertising campaigns, incl selecting the placement of ad creatives, configuring tracking pixels, & collecting user interaction data; 3 yrs of exp using Burt.hub, Maxifier & MOAT to optimize digital advertising campaigns to meet KPIs, incl budget pacing, click-through rates, viewability, & brand safety; 2 yrs of exp using Salesforce, Asana & Jira for digital campaign management incl ad product creation & live website troubleshooting; & 18 mos of exp inspecting HTTP/S traffic using Fiddler & Charles proxies to troubleshoot disruptions & debug digital campaigns on live websites. Employer will accept any suitable combo of educ, training, & exp. Sal: $100K-$125K/yr. Submit resumes & sal history to: RBUS Inc., 1101 Red Ventures Dr., Fort Mill, SC 29707, Attn: HR, Req #1024.
9/11 Memorial & Museum
Cleaning & Maintenance Services
Request for Proposal
LLC
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The National 9/11 Memorial & Museum (“9/11 Memorial”) is seeking a qualified cleaning and maintenance services company that can provide cleaning and maintenance services for the 9/11 Memorial—both on the Memorial plaza and within the Museum. A copy of the request for proposal may be obtained in person following submission of a NonDisclosure Agreement (NDA) signed by an officer of the company. NDAs should be requested via email to Mr. Abilio Guimaraes at aguimaraes@911memoria.org
The 9/11 Memorial will review all submittals and invite select companies for interviews. Additional questions can be submitted to RFP@911memorial.org no later than Monday, February 20, 2023,
Subject Line: Cleaning and Maintenance RFP Questions. All proposals will be due on Thursday, March 9, 2023 by 3 p.m. EST.
$2 billion per year to the MTA.
On CBS, First Deputy Mayor Sheena Wright warned that the extra $500 million in annual MTA support could come with consequences for the city’s residents.
“It is extremely difficult and really will harm the city in its ability to deliver services,” Wright said, adding that by and large the city was pleased with Hochul’s budget priorities, such as building housing and allocating greater resources toward mental health care.
“At a time when we are reeling from the asylum-seeker crisis—$1.4 billion of unbudgeted funds we had to spend this year, $2.8 billion next year,” Wright added. “And really trying to come out of Covid to try to have a real economic recovery for the city, this is the absolute worst time to put [in] an unfunded $500 million mandate, and it really will impact our ability to do lots of other things.”
Hochul’s plan to salvage the finances of the MTA includes a mod-
est raise to payroll taxes for downstate businesses, diverting revenue from in-the-works casinos and requiring an extra $500 million per year in city funding.
The division threatens to become a fault line between Adams’ and Hochul’s typically aligned administrations. The governor’s office did not immediately respond to Adams’ concerns.
MTA funding will be a crucial piece of lawmakers’ budget negotiations ahead of the new fiscal year, which begins April 1. The political tug of war over the $500 million in annual aid puts the MTA in a precarious position as it works to plug
ance the MTA’s books. At a state budget hearing, Lieber acknowledged that digging the agency out of its fiscal hole will likely have to happen without federal support.
Lieber said he has urged federal officials to come up with new relief dollars for the MTA and other cash-strapped agencies struggling to adapt to post-pandemic ridership trends, but “the politics in Washington doesn’t look like it’ll produce operating assistance for transit.”
a $600 million budget gap this year and prepares for a $1.2 billion deficit in 2024 due to pandemic-induced shifts in ridership.
“The discussion has to unfold,” said Janno Lieber, the MTA’s CEO and chair. “I hope and expect it will get worked out. It’s still on the table.”
The funding friction between the city and state speaks to the broader challenge of finding ways to bal-
Adams’ concern over Hochul’s fiscal rescue plan for the MTA finds him in uncommon alignment—though somewhat at cross-purposes— with left-wing Democrats in Albany. Queens Assembly member Zohran Mamdani, a Democratic Socialist who has proposed his own rescue package known as Fix the MTA, has slammed the state’s proposal for not providing enough funds to improve MTA service and grow ridership, thereby growing revenue.
Last year a panel jointly formed by Adams and Hochul issued a report, “Making New York Work For Everyone,” in which the panel’s members recommended improv-
ing mass transit’s reliability and offpeak service as part of a broader effort to encourage riders’ return.
Mamdani and his colleagues have bristled at the fact that Hochul’s plan does not avoid the need for an upcoming 5.5% fare increase—the MTA says it needs at least an additional $350 million in annual funds to avoid raising fares.
Hochul’s budget ultimately stabilizes the agency but fails to lay the groundwork for long-term solutions, Mamdani argued.
“New Yorkers cannot afford for Albany to disregard the MTA’s other crises,” he said. “We must return to NYC with a budget that really makes our transit system safer, more affordable and more livable.” ■
“WE MUST RETURN TO NYC WITH A BUDGET THAT MAKES OUR TRANSIT SYSTEM SAFER, MORE AFFORDABLE AND MORE LIVABLE.”
Retired Assemblyman Richard Gottfried of Manhattan first decided to pursue a career in public service at the tender age of 13. He was a 23-year-old student at Columbia Law School when he was first elected to the Assembly.
Swept into office on a wave of post-Watergate progressive fervor, Gottfried witnessed enormous changes in state government during his half-century tenure in the Assembly. He was an early champion of many once-fringe policies that have since become law, such as marijuana decriminalization and the legalization of same-sex marriage, as well as ones that have yet to pass both houses of the Legislature, such as single-payer health care.
Gottfried spoke with Crain’s about the value of public service and what he learned about building power in Albany.
What made you want to serve in the Assembly and want to stay for so long?
When I was 13 years old in 1960, John Kennedy was running for president. Like millions of others, I was very captivated with him and decided that I wanted to make public office my career. A year later, when I got into high school, I joined the debating team and found a group of friends who felt the same way, including my congressman, Jerry Nadler. And, lo and behold, nine years later, when I was 23, I was elected to the Legislature. And, particularly once the Democrats captured a majority in the Assembly in 1974, I found I was living out my childhood dream of being able to have the thoughts in my head turn into laws and lines in the state budget.
Adaptability and diplomacy were hallmarks of Gottfried’s career. A Democrat, he served with nine different governors, three of them Republicans, and three of whom did not complete their term; seven Assembly speakers; and an ever-changing cast of colleagues.
What are the biggest changes you saw in Albany during your career?
The makeup of the Legislature has changed dramatically, and for the better. When I arrived, most legislators saw it as a step in a political career, either on their way to higher office or to someday becoming a judge. And there was a relatively small handful who seemed to be there because they really cared about shaping public policy. It was overwhelmingly white, male and middleaged or older.
Since then, I think the overwhelming majority of legislators in New York state are there because they really care about shaping public policy, and the membership is overwhelmingly younger and more diverse in terms of racial and ethnic makeup and gender mix. Also, the role of individual legislators in legislative decision-making is much greater.
How did Gov. Andrew Cuomo’s resignation affect the balance of power?
The relationship between the Legislature and the governor has changed and improved under Governor Hochul. From the start, she and her administration were a lot more approachable and cooperative with the Legislature and individual members, almost more than I’ve ever seen and certainly much more than with Governor Cuomo.
I think it is largely a question of how Kathy Hochul as a human being deals with people. Under Governor Cuomo, particularly in dealing with the Covid-19 pandemic, we heard constant complaints from local health departments across the state about being ignored and trampled on by the state.
What power do legislators have to move forward on issues when they’re unable to pass legislation?
Passing legislation is obviously a central part of the job, but not the only part. Legislators can influence public actions by advocating both to their colleagues in the Legislature and to state and local government. Legislators at all levels are constantly writing letters and making phone calls and holding press conferences and meetings to try to shape state and local executive branch policies and actions. For example, if a developer is trying to put up an oversize building in a legislator’s community and the community is fighting against it, the people expect their state legislators to be involved in that fight, even though it is technically in the hands of the city planning commission and the city council.
What have you found most effective in trying to change a colleague’s mind?
Two things. One is organizing allies outside the Legislature, particularly likeminded organizations and interest groups. Another is working with them to lobby legislators, whether it’s through the news
media or meetings or other avenues, plus direct communicating, talking with colleagues.
When we were working to pass the marriage equality bill in New York, I sponsored that bill for several years and devoted a lot of my effort to recruiting organizations outside the Legislature to endorse marriage equality, as well as communicating with individual legislators. Assembly member Danny O’Donnell, who is openly gay, became the sponsor of the bill. And he spent a lot of time in one-on-one conversations with Assembly members, persuading them on the issue. And that one-on-one campaign by him helped turn that issue around in the Assembly and get it to the floor.
When the main obstacle to progress on a specific issue or bill is fellow Democrats, how do you work around that?
When you’ve got a grouping among Democratic legislators opposing the bill, you have to both build up a passion for it on your side of the issue while also trying to change minds on the other side. Very often, if there are a dozen or so Assembly Democrats who strongly oppose the bill,
ON HIS RÉSUMÉ State Assembly member (1971 to 2022); member of the New York Academy of Medicine, the National Academy for State Health Policy, the Public Health Association of NYC and the New York Civil Liberties Union
BORN Chelsea
GREW UP Flushing
RESIDES Upper West Side
EDUCATION Cornell University (1968) and Columbia Law School (1973)
BREAKING THE MOLD When Gottfried retired last year, he was the longest-serving state legislator in New York history.
that can stand in the way of the 80 or 90 Assembly Democrats who favor it. And that’s partly because any Assembly speaker has to do their best to make everyone in the majority as satisfied as can be. I’ve had bills of my own that had very strong support within the Assembly majority but were held up because a minority of Assembly Democrats either adamantly opposed it on the merits or felt strongly that it would hurt them politically in their district if we passed the bill. Sometimes you can turn that around, and sometimes you can’t.
What do you make of the new caucus of legislators who identify as socialists?
It’s certainly new, if you don’t count the socialists who were elected around the time of World War I and who were famously and disgracefully expelled by the Assembly in the early 1920s as part of the so-called Red Scare. I don’t know whether there will be an increase in the number of legislators who call themselves socialists. But certainly the very progressive makeup of the Democratic majorities in both houses has grown, and I expect will continue to grow.
What are the most and least effective ways for an outside group to change a lawmaker’s mind?
It varies, and it can depend a lot on the nature of the outside group. Some of them have influence because they can be strong forces in legislators’ re-election campaigns on one side or the other, whether it’s through campaign contributions or providing large numbers of campaign volunteers. Some are influential because their positions or the organization’s reputation carries weight with public opinion in the legislator’s district. And a lot of lobbying influence, much more so than is often given credit, is simply persuasion on the merits. ■
