Vornado inches toward the finish line, close to selling all units at 220 Central Park South

BY C. J. HUGHES

Vornado Realty Trust has sold another apartment at the condo 220 Central Park, a rare bright spot for the landlord as it grapples with tough markets elsewhere.

No. 22B at the Midtown luxury high-rise, a three-bedroom sponsor unit, sold for $14.8 million, according to the city’s register. The buyer appears to be an executive with AMTD, a Hong Kong-based financial company, according to its deed, which was signed by New York lawyer Justin Marques. His clients include “high-net-worth foreign and domestic individuals” according to his website.

Last summer an AMTD fintech platform spin-off called AMTD Digital debuted on the New York Stock exchange at about $8 per share.

About a month later the company’s stock price suddenly surged by 21,000% for still-unknown reasons, though the share value has since come back to earth. On Wednesday AMTD Digital, which has a market capitalization of $1.6 billion, was trading around $8.

Six units left

With the sale of No. 22B, which closed March 3, Vornado appears to have just six units left at the 117unit tower, though some owners of apartments have been selling their homes there too. Most of what Vornado has left are smaller units on lower floors of the 70-story high-rise, which should ultimately generate a haul of $3.4 billion for Vornado when every sponsor unit has traded, according to the condo’s offering plan.

For example, No. 20F, a studio that presumably will be taken as a staff room, remains unsold, according to public records. Also available is No. 22A, a two-bedroom.

Sales appear to have been slow since last summer, when there were 10 unsold sponsor units at the address, according to a Crain’s analysis, though Vornado may be intentionally holding back some units from the market until conditions improve.

It’s been a challenging few months on other fronts. In February the company, which is primarily a commercial landlord, announced it would put all new development on hold. Vornado also recently wrote down its Midtown portfolio, which is mostly retail real estate, by 30%.

And a highly anticipated plan to build up to 18 million square feet around Penn Station appears dead in the water because of the econo- my’s “headwinds,” according to a statement from chairman Steven Roth last fall. On Wednesday Vornado’s stock was trading around $16 a share, a recent low.

Though Vornado may no longer be able to count on 220 Central

Park South as a revenue stream, it can still boast the priciest home ever sold. In 2019 Vornado unloaded a four-floor berth to hedge fund executive Kenneth Griffin for $239 million, a record that appears to still stand. ■ of entrepreneurs fueling growth and how the sector is providing opportunity to a diverse swath of the city’s workforce. ere were about 348,000 tech workers spread among roughly 25,000 tech companies and tech teams at the city’s traditional rms as of 2020, according to a report on tech talent by CBRE. By comparison, the Bay Area has about 25% more companies, 7% more workers and more than double the investment dollars.

From 2018 to 2020, an average of 431 rst-time founders raised money for their startups in New York, according to data by Pitchbook. Two years ago, the number jumped.

In 2021, 643 rst-time founders closed rounds totaling $3.3 billion. In 2022, in spite of less optimism, 621 rst-timers raised funds of $2.9 billion for their startups.

“Every year for the last 15 years, [the New York scene has] been getting bigger,” said Kevin Ryan, who’s often referred to as the Godfather of New York City’s tech sector and who now nances and builds startups as the founder of AlleyCorp. After one successful company trains a group of future leaders, the theory goes, some of them start or nance more successful companies and repeat the same pattern. Called a virtuous cycle, it’s ultimately a numbers game. If each year a steady percentage of employees leave to nd something new—“maybe 5%,” Ryan estimated—the total number of new founders grows, and the strength of the sector compounds.

And despite the crash in venture capital dollars last year amid a major cooling o for the industry, some say there is no better time to take advantage of the knowledge and relationships they have built on their way up.

“It’s a di erent time to be at a tech company today, with the layo s, and internally things become di erent when that is the case,” said Arthur Leopold, who left a job in Chicago to co-found a stealth startup in the entertainment industry in New York. Dollars for seed-stage companies are still relatively accessible, even as some rms have struggled to close larger rounds. “It felt like the perfect time to take the leap,” he said.

Fertile ground

Raymond Roach grew up in Bedford-Stuyvesant, Brooklyn. e 39-year-old’s parents, Jamaican immigrants, never earned more than about $12 an hour.

In June 2022 he became general manager of Amazon’s largest ful llment center in the world, on Staten Island. Amazon would not disclose the salary range for his position, but estimates from Glassdoor put it at $300,000, including bonuses and stock options.

Although Roach expressed no plans to leave Amazon for something new, his position at the top of the local logistics organization is emblematic of the kind of generational growth possible within the city’s tech ecosystem and the breadth of opportunity within industry companies.

“Google, Amazon—those are great training grounds for entrepreneurs,” said Julie Samuels, executive director of industry group Tech:NYC. eir scale in New York has been instrumental to the sector’s growth. A small local startup might employ hundreds here; Google and Meta have more than 10,000 each, adding to the total numbers and lowering the risk of entering the industry, as Samuels put it.

“As the larger tech companies really doubled down on New York,” Samuels continued, “that created a sense of security that you could come here and build a tech career that allowed you to work somewhere large, or small, or be a founder of your own startup.” ere is even an o cial company that brings former Google members together. e company, called Xoogler, has gained traction during the winter’s layo s.

Networks of tech employees stay in touch post-Amazon, Meta or Google, founding companies together and investing in each other.

Roach said he credited his meteoric rise in ve and a half years at Amazon to the company’s methodical training and mentorship systems, giving him the ability to support a team of 6,000 who ful ll more than 500 million customer orders annually.

Local entrepreneurs are also tapping into a lineage of a small number of founders and investors who paved the way. Much of the growth in the city’s tech sector can be traced to Ryan of AlleyCorp, who in 2007 was the head of the digital adtech rm DoubleClick and brokered a $3 billion sale to Google.

DoubleClick’s technology laid the bedrock for the digital ad industry of today and gave Ryan the ability to fund and co-found a dozen tech rms. ose include Gilt Groupe, DataDog and MongoDB.

Flatiron Health is a newer company known for minting founders.

After its acquisition by Roche in 2018 for $1.9 billion, leaders working in product, business development or engineering at Flatiron formed ve or six early-stage companies, said Zach Weinberg, threetime co-founder of Invite Media, Flatiron and Curie.Bio.

Similarly productive terrain for startups includes doctor-listing site ZocDoc, health-tech insurance e experience is common. A look through the two recent fellowship classes at Primary are a LinkedIn album of high-performing tech talent from across the big companies. (Some join the program experimentally before alerting their bosses of their big leap.)

Company in 2021. ere were about 100 employees when she joined. Ramp founders Eric Glyman and Karim Atiyeh, she said, put trust in employees’ potential, not just their age or experience.

“ ey believed a 25-year-old could start and lead a team,” Brown said. e company now has 10,000 employees around the globe, and last year its fundraising round of $750 million put the company’s value at $8.1 billion.

Leopold, the CEO of the stealth entertainment startup, said he had been harboring the idea for his rm for more than ve years. After working in nance, he joined video-sharing startup Cameo in 2017 as its chief operating o cer and eventually moved to Chicago, where the company, now worth $1 billion, is based.

“I really missed New York,” he remembered. “I’m an early bird—I like to get to the o ce early. At 7 a.m., New York is humming. In Chicago, you could re a cannon.” provider Oscar, e-commerce leader Jet, clothing company Rent the Runway and expense-management rm Ramp. Similar cycles have been going on longer out West— PayPal, for one, has famously produced Tesla, SpaceX, Palentir and Founders Fund.

Last year he began to feel ready to take the leap. In January he and co-founder Jonathan Meyers, formerly an engineering manager at Spotify, started their new company from a co-working space in Williamsburg, Brooklyn. Meyers left Spotify this month. So far, the two are funding themselves and expect to launch publicly by summer, possibly raising capital around then too.

“A lot of folks told me that if I was considering tech, I should go work at Ramp,” said Sarah Brown, who is now the Union Square-based rm’s head of enterprise platforms. Brown joined the company after three post-college years at Bain &

“When you are exposed to that growth, it’s an unbelievable training opportunity,” Weinberg said. “You see so many problems in such a short time, which you are thrown into the mix to solve.”

Taking the leap

Jumping ship to start a new venture is not only the standard in the city, but it’s also encouraged.

“ ere is a sense of pride in being one of those companies that churns out the next generation of incredible founders,” said Emma Balin, who runs a fellowship program for founders at Primary VC.

Balin noted that earlier-stage companies usually want to hold onto their talent, but “we do see Primary portfolio companies valued in the billion-dollar-plus range tend to encourage a culture of entrepreneurialism and celebrate those who set out on the journey.” e opposite wouldn’t really make sense, Weinberg said.

“You get a combination of really smart, self-selected people, paired with a bit of cash that gives them a risk appetite, paired with exposure to a lot of complicated problems in a small period of time,” he said.

At Ramp, Brown said, it is basically a given that people come to the company for entrepreneurship training. In less than two years, she already has a number of former colleagues who have launched startups. Brown is an angel investor in some.

Many founders stay in close touch with the city’s robust network of funders, whom they meet along the way. “When the market was hot, investors were throwing money at people before they left [their fulltime jobs],” said Melody Koh, a partner at NextView, which makes pre-seed investments. “We’ve even backed concepts. You can’t wire money until they’re incorporated though—these are handshake deals—but we tell them that when and if you guys leave and incorporate, we’ll be an investor.”

However, working at tech companies is not the only way to get ready to be a founder. e proximity of tech to local behemoth industries such as health care, nance and social services is a feature of New York’s ecosystem whose cross-pollination makes its virtuous cycle unique, Tech:NYC’s Samuels said.

Eli Polanco, who started payroll-tech rm Nivelo, went to college with the idea of becoming an entrepreneur like her parents. But as an immigrant from the Dominican Republic, she needed the assurance and visa sponsorship that came with employment at a big company. She worked in mergers and acquisitions at JP Morgan before joining a team then called New Product Development and Emerging Technologies. It was tiny, almost like a startup.

Suddenly, at the largest payments provider in the world, she was working with a small team to build new products in ntech. Her colleagues went on to become founders and venture capital investors themselves—even without the messy glory days of early startup life.

Polanco was then equipped to start serving a speci c niche: payroll. With her deep subject-matter knowledge, she looked at which industries had not yet modernized their payments processing.

“I couldn’t see a more interesting or needed industry to build for than payroll,” she said.

She founded Nivelo in 2020, raising $5 million. With an eight-member team, Nivelo is planning more hires. Several former colleagues have invested, including Charley Ma, head of growth at Alloy, a ntech platform for onboarding customers and a well-known angel investor. (Ma also made a stop at Ramp as an early hire.)

“I think it’s interesting that a lot of us have not only become operators outside the bank but also investors,” Polanco said. “Not just because paying it forward is important, but because I believe we can recognize talent with deep industry knowledge in nancial technology and are not afraid of backing folks with nontraditional backgrounds like ourselves.”

Future diversity

Compared to other hubs, New York has more tech workers from underrepresented backgrounds.

Black and Hispanic New Yorkers already make up 20.8% of New York’s tech sector, compared with 8.5% in the San Francisco Bay Area and 9.7% in the Boston-Cambridge area, according to research from the Center for an Urban Future.

So far, that has not been re ected in fundraising, where the vast bulk of money is invested with white male founders. Only 5% of venture funding goes to Black and Latino founders in the New York region, according to Crunchbase data. Women are also disproportionately underrepresented, bringing in about 2% of funding nationally. A list of the 30 founders who have started the most companies locally is all male, although not all white. e question now is whether a new class of founders is bound to change the numbers. Tech employment is more diverse at junior levels, so if trends hold, underrepresented groups such as Black and Latino workers could make inroads in senior teams and, eventually, increase the diversity of rst-time founders. Of the employees in 2018 who held equity—something of a proxy for tech industry workers—6% were Black. By 2022 that had risen to 11%, according to data shared by Carta, which manages equity o erings for companies.

A growing number of rms and funds are dedicated to investing in diverse and female founders. Harlem Capital, a venture capital rm, has announced a plan to invest in 1,000 diverse founders over the next two decades. ere are a handful of fellowship and accelerator programs such as the city’s Founder Fellowship program, created by the New York City Economic Development Corp., that reserves 100 spots for startups with minority founders to receive mentorship, build community and improve access to capital.

Regarding diversity, Ryan noted that there are many nonwhite workers—many are of East Asian and Indian descent—on both coasts. However, there is a limitation early in the talent pipeline: Computer science departments still mostly attract men, and startups, especially early ones, tend to need a lot of engineers. Women make up just one-quarter of computer and math professionals, according to the National Girls Collaborative Project, which tracks women in the science, tech, engineering and math elds.

For Roach and the dozens who sit just below him at Amazon—including “four powerhouse women” on his senior leadership team—the opportunity to have a career like his at a mammoth tech company in the city where he was born is a breathtaking feat, even now. He credits open access to the mentors he needed to help him along on a leadership track. He pays it forward by o ering the same advice and help to leaders in line below him. “It’s emotional,” Roach said. ■

Nicola Antonazzo Photography Llc

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Purpose: Any lawful activity breaks Hochul raised and alter her controversial plan to bring more housing to the city’s suburbs. Neither house’s proposal includes tax exemptions meant to encourage accessory dwelling unit construction, and the Assembly’s does not include the tax exemption for office-to-residential conversions. The Legislature omitted Hochul’s tax incentive meant to spur affordable housing production outside of the city as well.

The state Senate’s budget proposal does include a loose commitment to examine a potential alternative program to the affordable housing tax exemption known as 421-a “outside of the budget process.” It similarly pledges to address the deadline for current 421-a projects “on an individual basis outside of the budget process.” The Real Estate Board of New York has estimated about 33,000 affordable housing units are at risk of not coming online due to 421-a’s current construction deadline of June 2026.

The Assembly and state Senate also proposed sweeping changes to the governor’s plan for building more housing in the suburbs, which would require all downstate communities to grow their supply by 3% every three years and rezone areas around many Metro-North and Long Island Rail Road stops to permit more homes.

The Legislature’s budget proposals remove the state mandates and the state’s ability to override local zoning laws, which Hochul has slammed as “the most restrictive in the nation.” They instead seek to incentivize towns outside of the city to build more housing through a $500 million fund.

The Assembly budget specifies that the city will receive $125 million to take part in this program and that projects centered on affordable housing, transit and renovating abandoned buildings would receive special consideration toward hitting the growth target. Towns that receive funding but do not hit their targets could have the payments rescinded.

The Assembly also gets rid of Hochul’s requirement to have towns rezone areas around commuter rail stations. The state Senate proposal appears to do the same.

Neither house included the governor’s plan to let the city establish a program legalizing basement apartment conversions.

The Assembly and state Senate do include “good cause” eviction pledges in their plans, albeit vague ones. The Assembly’s budget says members “will continue to explore pathways to protect tenants from arbitrary and capricious rent increases and unreasonable evictions of paying tenants. This has long been a major priority for tenant activists, and recent court rulings have made it clear that it likely needs to be passed at the state level to be viable.

Transportation

On the transit front, the Senate and Assembly have proposed freezing subway and bus fares at $2.75 and funding a pilot program to eventually make bus rides free.

Legislators rejected virtually all of Hochul’s fiscal rescue package for the financially strapped Metropolitan Transportation Authority. Hochul has laid out a plan that, among other proposals, would see fares rise to $3.

Instead, the Senate and Assembly each recommended other ways to fund the MTA.

The Assembly suggested providing the MTA with $196.6 million to stave off the 5.5% fare increase and $50 million to set up a pilot program to try free bus routes. Other ideas include repealing the Madison Square Garden tax exemption, creating residential parking permits for the city, adding a transit surcharge for Uber and Lyft, and raising the corporate franchise tax.

The governor’s proposed fiscal rescue package includes roughly $1.3 billion in new annual revenue, funded in large part through an increase in payroll mobility taxes— which the Legislature also opposed—and earnings from casinos, along with $500 million from the city to cover student MetroCards and paratransit.

Both the Senate and Assembly rejected the governor’s plan to raise the payroll mobility tax to 0.5% from 0.34% on downstate employers. Hochul’s office estimated that the relatively modest payroll tax increase would generate $800 million in new annual funding for the MTA.

Health Care

For the health care sector, the one-house budget resolutions recommend modifications to the executive budget proposal to give a larger Medicaid reimbursement rate increase to hospitals.

The governor’s initial proposal allocated a record $35 billion for the state’s share of Medicaid funding. Her proposal was met with criticism from health care providers, who said a 5% Medicaid reimbursement rate for hospitals, nursing homes and assisted living providers was not sufficient for struggling organizations.

The Senate’s resolution would add about $412 million to support a 10% reimbursement rate increase for hospitals—exactly what they asked for—as well as reduce the state’s share of the indigent care pool so more high-need facilities can get funding. This part of the res- olution would add $624 million for the state’s share of taking over local Medicaid costs and make the state Health Department’s ability to award temporary payments to distressed facilities permanent as well. According to the Assembly’s summary of aid to localities, meanwhile, it would provide $425 million for that 10% increase.

Safety-net hospitals that care for a high percentage of Medicaid patients can be particularly vulnerable to reimbursement rate shortfalls. The Senate’s resolution adds $1 billion in state funding for distressed safety-net hospitals, and the Assembly’s summary adds $850 million.

Furthermore, the Senate and Assembly have added $187 million and $100 million, respectively, to support distressed nursing homes. Providers raised concerns throughout 2022 about their ability to continue providing care as staffing shortages and low reimbursement rates forced some facilities to leave beds empty.

In the Assembly’s summary, just over $157 million has been added to support a 10% reimbursement rate increase for nursing homes. The Senate document notes that the Department of Health should find solutions to ensure that New York’s staffing shortages do not create nursing home bed underutilization.

Overall, Hochul spokesman Justin Henry said, the governor “looks forward to working with the Legislature on a final budget that meets the needs of all New Yorkers.” ■