Crain's New York Business, June 26, 2023

Here’s why Lower Manhattan of ces are struggling

Downtown’s older buildings and relatively cheap rents in other neighborhoods haven’t helped, but opportunities remain

BY EDDIE SMALL

Virtually no one would say Manhattan’s overall o ce market is doing well these days, but the downtown neighborhood is hurting even more than its counterparts in other areas of the borough.

Downtown has consistently fared worse than Midtown and Midtown South this year in terms of leasing activity, asking rents and available space. May was no exception: Downtown’s availability rate was the highest of the three neighborhoods at 20.8%, while its average asking rent and leasing activity

were the lowest, at $58.81 per square foot and 336,528 square feet, respectively, according to data from Colliers.

“Downtown, historically since the end of World War II, really has been one of the more sensitive areas of the market,” said Colliers Executive Managing Director Frank

Wallach. “It’s usually the rst to have an increase in direct and sublet availability, and it’s usually the one that takes longer for demand to catch back up to supply.”

ere are several factors at play behind the relative weakness of the market, ranging from the area’s older o ce buildings to opportunities

for good deals in other neighborhoods. But even as downtown struggles and becomes a prime target for the trendy idea of ofce-to-residential conversions, experts anticipate o ce buildings will continue to be a major component

See

on page 22

business.

The banker who still makes house calls

At a time of great uncertainty, it’s comforting to know the babka business is thriving.

BY AARON ELSTEIN

“It’s true not only for chocolate babkas but also cinnamon,” said Martin Werzberger, chief nancial o cer at Williamsburg’s Green & Ackerman Bakery, a family-run business whose babkas New York magazine called “more or less perfect”; they are sold at Whole Foods and other retailers.

ASKED & ANSWERED

e uber-tasty desserts are the legacy of Chana Green, an immigrant from Hungary a century ago whose heirs built a business with revenue exceeding $10 million. Today 60 employees churn out 5,000 babkas, rugelach, layer cakes and other pastries daily from a compact 12,500-square-foot factory. e company recently got a

See BANKER on page 19

GOTHAM GIG

His nonpro t charter schools serve at-risk kids PAGE 23

“The fact that people can go broke from getting sick is just insane to me”

An old-school style of lending vital to small businesses faces rounds of upheaval as regional banks struggle

GREEN & ACKERMAN BAKERY is a family-run

Dream of park over BQE in Williamsburg revived by politicians who want state to back the plan

BY CAROLINE SPIVACK

Brooklyn politicians are trying to keep the dream of parkland over a sunken stretch of the BrooklynQueens Expressway alive by calling on the state to throw its weight behind the plan.

Brooklyn Borough President Antonio Reynoso and a coalition of local elected o cials want to reconnect the Williamsburg neighborhood divided by the BQE with a new park over the six-lane highway, reviving a more than decade-old project priced at roughly $200 million.

But to do that the state must back the e ort and partner with the city on grant applications for federal infrastructure dollars to nance the undertaking, the o cials said at a news conference last week. e state owns the section of freeway lawmakers aim to transform, and without the support of Gov. Kathy Hochul’s administration, the e ort isn’t likely to get o the ground.

“Once in a generation dollars are set aside by the federal government for infrastructure projects, just like this project,” Reynoso said at the news conference alongside the BQE in Williamsburg. “If we miss this opportunity right now to address the

harms of the past, to postpone justice for park-starved and polluted Williamsburg, make no mistake, New York state is to blame.”

e project, known as the BQGreen, would run a concrete platform over the BQE between South ird and South Fifth streets and expand existing parkland that currently runs along the expressway to create a 3.5-acre park. e space would be out tted with a playground, baseball diamond, an indoor pool, gardens and grassy areas. South Fourth Street would be demapped.

First proposed in 2010

Under the proposal, designed by DLANDstudio, environmental harm caused by the highway would be partially mitigated with new greenery that would help sop up air pollution generated by the six-lane highway and new recreational space for residents to enjoy.

BQGreen was rst proposed in 2010 by then-City Council member Diana Reyna, for whom Reynoso served as chief of sta . Renya commissioned a study to show the feasibility of the project, which said it could raise nearby property values and promote local business. e project, the report estimated, would cost $100 million. Reynoso said it is

HEALTH CARE

now expected to cost at least double that amount.

U.S. Rep Nydia Velázquez said at the news conference last week that now is an ideal moment for o cials to jump on federal dollars available through both the In ation Reduction Act and the Bipartisan Infrastructure Law to fund the project. Velázquez singled out the U.S. DOT’s Reconnecting Communities and Neighborhood Grant Program, which is expected to pour hundreds of millions into communities damaged by past infrastructure decisions.

“It’s not an issue about the budget, it’s an issue about priorities,” said Velázquez, who represents the area. “And so the governor and the city have to decide if they are going to prioritize communities of color, like this one here in Williamsburg.”

Reynoso conceded that the BQGreen is “a small start, but an essential one” toward reimagining the wider BQE corridor. To date, the bulk of city and state attention has been focused on the crumbling triple-cantilever section of the BQE that runs through Brooklyn Heights.

Despite vows by Mayor Eric Adams for a “corridor-wide vision,” which doubled down on a pledge made by former Mayor Bill de Blasio, the state has e ectively quashed

a comprehensive overhaul of the highway. A state Department of Transportation representative said in February that the agency has “no plans” to redesign state-owned sections of the BQE.

Hochul’s o ce referred questions about the BQGreen to the state DOT. Agency spokesman Glenn Blain did not give a de nitive answer on whether the state supports the BQGreen proposal. Instead Blain said “when the details of this proposal become available we will review them, along with New York City DOT.”

Blain added that the state DOT is “committed to working with our partners at the New York City Department of Transportation to advance the environmental process for the Brooklyn-Queens Expressway.”

Adams told reporters in 2021 before taking o ce that his adminis-

tration would prioritize federal infrastructure dollars, in part, for the BQE. He speci cally called out the BQGreen proposal at the time, stating that “I love the concept.”

And a park over a freeway is far from an untested idea. In Texas, for instance, a ve-acre park was created in downtown Dallas in 2012 by decking over a highway. New York state has kicked in funds to study a portion of the Cross-Bronx Expressway to do just that.

“NYC DOT has been working with New Yorkers along the BQE corridor in Brooklyn to develop a vision to reconnect communities long divided by this highway,” said city DOT spokesman Vincent Barone. “As always, we will work closely with NYSDOT to consider proposals that advance our corridor-wide approach to delivering a safer, greener BQE.” ■

Adams registers Medicare Advantage contract for retirees, bypassing opposition

BY JACQUELINE NEBER

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Mayor Eric Adams has registered the city’s Medicare Advantage contract with Aetna despite legal opposition from municipal retirees and city Comptroller Brad Lander’s refusal to register the agreement earlier this month.

Adams’ move means the implementation of the Medicare Advantage plan will progress, for now, automatically enrolling more than 250,000 municipal retirees by September unless individuals opt out. However, judgment in a class-action lawsuit could still potentially jeopardize the plan.

In the lawsuit, which names the city, its O ce of Labor Relations and other parties as defendants, retirees argue that the Medicare Advantage plan will threaten their health care and nancial security. Lander also

cited the lawsuit in his decision, along with policy concerns about the privatization of Medicare plans, potential overbilling and barriers to care — sentiments that echo retirees’ complaints — to decline registering the contract this month. Marianne Pizzitola, president of the retiree organization, said the group aimed to meet with the judge on the case June 16.

Aetna and the city’s Municipal Labor Committee both led motions to intervene in the lawsuit this month; Aetna countered that the Medicare Advantage plan will not threaten retirees’ care. According to Aetna’s proposed plan released earlier this year, the Medicare Advantage plan includes zero-dollar copays for primary-care physician visits, Medicare preventive screenings and immunizations, and routine hearing and eye exams that ar-

en’t typically covered by Medicare. e city has emphasized that the switch would move coverage to the federal government, potentially saving the city about $600 million in premiums annually.

According to a release from Adams’ o ce, Lander did not have any statutory basis for declining to register the contract, as is required under the city charter, adding that failing to register the contract could increase confusion and misinformation for retirees around the plan.

“As we’ve said repeatedly, this Medicare Advantage plan improves retirees’ current plans, including offering a lower deductible, a cap on out-of-pocket expenses, and new bene ts, like transportation, tness programs, and wellness incentives,”

MUNICIPAL RETIREES have fought against the switch to Medicare Advantage for years.

Adams said in a release that also reiterated the plan’s bene ts. “We are clearly within our authority under the charter to deem this contract registered.”

Jake Gardener, the attorney working for the retiree group in the lawsuit, said the group will continue as planned with the case. He added that the city’s response to the suit was due June 16, the plainti s have a few days after that to submit reply papers, and the court will hear both parties’ arguments soon. ■

A RENDERING of the BQGreen project in Williamsburg, Brooklyn.

Real estate data is messy and archaic.

This Brooklyn startup has a solution

The upstart: BHR

After launching their rst real estate startup, homebuying platform Torii, Zach Gorman and James Rogers ran into the same problem over and over: it was insanely di cult to obtain comprehensive property data. Existing providers were typically highly specialized, expensive and demanded multi-year contracts. Many provided data only for speci c states or regions.

e only solution, they concluded, was to create the data service they were looking for.

In April 2022, they launched BHR, a new startup aiming to “organize the world’s real estate data and make it universally accessible.”

Easier said than done. To assemble information on more than 150 million U.S. homes, BHR has partnered with dozens of data providers ranging from public agencies like the EPA and FBI to private services like AirDNA, which provides short-term rental data, and Zonenomics, for zoning and land-use information.

e Brooklyn-based team of three — Gorman, Rogers and Director of Partnerships Lauren Locks — intends to raise a $1.5 million seed round and has $500,000 committed thus far from investors including Moderne Ventures, Launch, CMS Holdings and more.

BHR’s agship product is its RealReports. Available for any home in the U.S., the reports include tens of thousands of data points including building and site information, estimated valuation, income potential, environmental factors such as air quality, ownership history, community statistics and local market trends.

A premium version includes an AI “co-pilot,” based on existing large language models, that answers question about the property so customers don’t need to comb through a lengthy report. It can also be used to generate detailed property listings. Single reports cost $10 to $50 depending on the detail and level of data included. BHR also o ers a monthly subscription option.

It’s hardly a glam operation: “It’s not sexy to people, it is sort

of a snore, and the problems are immense,” says Gorman, the company’s COO.

But this gave the company an advantage. “We are not turned o by the non-sexiness of the problem,” he says. “In fact, I think for us, it means there’s this immense opportunity here — and we’re the ones who are tailor-made to solve it.”

The reigning Goliath: CoreLogic

Secaucus, N.J.-based CoreLogic, with its 5,000 employees, is the nation’s largest property and ownership database. Now privately owned, it generated $1.6 billion in 2021, the year it was delisted from the New York Stock Exchange. How to slay the giant Gorman and Rogers met at Tufts University and became moutaineering partners. “We’ve been in some pretty harrowing situations together, and in some cases, life-threatening,” says Gorman. eir rst big hurdle was convincing existing providers to share their data. “It’s a very protectionist, archaic industry,” says Gorman. He met with them multiple times in an e ort to convince them that a partnership would expand the overall market for their information. “Sometimes we’ll have to talk with twelve di erent executives at the company,” he says.

While Gorman, a former touring musician and music producer, was out generating partnerships, fundraising, designing the interface and helping with business development, Rogers, who has an engineering background, was busy coding the entire platform— guring out how to extract data from dozens of sources, clean it up and package it in an instantly generated report.

When the company launched, they initially aimed their service at individual homeowners, and BHR stood for “Blockchain Home Registry.”

e idea was that homeowners would “claim” their property and BHR would issue an NFT representing their home along with a proprietary data report. But consumer demand

for brokers and homebuyers

was underwhelming, and as the cryptocurrency world got embroiled in scandal, the blockchain angle didn’t help. at induced a pivot to a B-2-B approach. Real estate verticals ranging from mortgage lenders to property insurers would likely bene t from their service, they imagined. After some trial and error, they discovered the greatest demand came from fellow prop tech companies, real estate brokerages and MLS associations that could use BHR data to enrich their own o erings. e company says it now has 30 partnerships with rms using its platform and services. e startup got a boost in March when it was accepted into the Passport Program of venture capital rm Moderne Ventures. e VC rm, which focuses on real estate and related industries, introduced BHR to its network of 700 companies that led to a series of pilot programs that Gorman hopes can lead to long-term partnerships.

Moderne Ventures Director Carolyn Kwon says her rm selected BHR from thousands of applicants because it provided a service that is clearly in demand. “What we focus on is how to address gaps and challenges we’re hearing from our network,” she says.

BHR is unique in not only making real estate data streamlined and accessible, but layering on the AI component. “ ere are a lot of companies putting in similar co-pilots. e di erence is BHR is pulling from the data they’ve collected themselves, so that makes it more credible,” says Kwon.

The next challenge

BHR is generating strong interest from additional verticals including mortgage lenders and insurers. But given its tiny team, it’s reluctant to spread itself thin. “When you only have three people, there’s just only so much you can get done,” says Gorman. “You got to be really careful with how you spend your time, money and energy, just to keep going and stay alive.” ■

Anne Kadet is the creator of Café Anne, a weekly newsletter with a New York City focus.

ANNE KADET

BHR co-founder Zach Gorman

Gucci family sticks to its asking price for a Midtown penthouse despite no takers for years

The fashion dynasty has switched to a new broker but is not changing the listing price for the duplex condo $35M

BY C. J. HUGHES

The Gucci family has shown a knack for future trends. But when it comes to a New York apartment, the Italian fashion dynasty seems to favor a throwback approach.

Alessandra and Allegra Gucci, great-granddaughters of company founder Guccio Gucci, have relisted a duplex penthouse in Midtown at $35 million, the same price that the 9,450-square-foot condo has been asking on and off with different brokers since 2016.

The constancy of the target suggests Covid, inflation, shifting tastes and other market-altering forces have never been factors in the valuation.

Douglas Elliman have all tried to sell the home before.

In family since ’70s Straddling the 50th and 51st floors at Olympic Tower, a 51-story blackglass spire at East 51st Street, the apartment features floor-to-ceiling windows, eight bedrooms and 10 baths, as well as fireplaces, skylights and two spiral staircases. Monthly costs, for common charges and taxes, are $28,314.

THE CONDO DOES NOT APPEAR TO HAVE HOUSED ANY GUCCIS FOR YEARS

But the Gucci sisters have made one notable change with No. PH 4/5 at 641 Fifth Ave. They’ve enlisted the firm Serhant to market the property, after previous efforts by nearly every major city brokerage. Brown Harris Stevens, Corcoran Group, Sotheby’s International Realty and

Deeds indicate the apartment has been in the Gucci family since the 1970s, around when Greek shipping tycoon Aristotle Onassis and partners developed the tower. Greece’s white-andblue flag flutters by the 51st Street entrance to the building, which has 224 apartments across its top 29 floors.

At its base are fashion boutiques, including outposts of Jimmy Choo, Armani Exchange and the jeweler HStern. A Gucci store was at the ad-

dress four decades ago, but one isn’t there today. French luxury goods conglomerate Kering owns Gucci, which was founded in 1921 in Florence and is known for designer handbags, sunglasses and shoes. Maurizio Gucci, the sellers’ father, reportedly bought the two apartments that make up No. PH 4/5 and later combined them. In 1995, while on his way to work, he was gunned down on the steps of his office. His ex-wife, Patrizia Reggiani, was later convicted of orchestrating the murder, an incident depicted in the 2021 film “House of Gucci.” Lady Gaga played Reggiani, while Adam Driver starred as

City to raze, rebuild 2 Manhattan NYCHA complexes in historic move

BY NICK GARBER

The city will tear down two aging public housing developments in Chelsea and replace them with new buildings for both low- and mixed-income tenants— the first time such a step has ever been taken, officials announced last week.

A survey of tenants at the Fulton and Elliott-Chelsea Houses earlier this year found majority support for the $1.5 billion rebuild, which will be led by developers Related Cos. and Essence Development, the New York City Housing Authority said.

All 2,055 existing public housing apartments will be replaced in new buildings on both campuses, along with about 3,500 new mixed-income apartments—of which 875 will be below market-rate, officials said.

“No one knows better than the residents what they and their neighbors need, and they were smart to recognize the potential benefits of completely rebuilding their campus,” Mayor Eric Adams said in a statement.

The cash-strapped authority

needs about $40 billion to cover repairs in its 2,400 buildings across the city and has long sought to open up some of its sprawling campuses to private developers as a means of raising money. But tenants have risen up to defeat so-called infill plans amid fears that they could lead to displacement—including a similar 2019 plan at Fulton Houses.

Rezoning required

This time, NYCHA and developer Essence held 35 information sessions, spoke to thousands of tenants and mailed information to each household ahead of the vote, asking whether they wanted to reside in renovated or newly constructed buildings.

NYCHA has torn down only two previous developments in its history and never before embarked on a full-circle teardown and rebuild.

Essence and Related had previously been selected in 2021 to renovate the two developments through a program that has facilitated upgrades in other NYCHA campuses. But the developers later discovered “structural, systemic and environ-

mental” issues that would have tripled the cost from its initial $366 million estimate and required residents to relocate temporarily— making the rebuild option more appealing, according to NYCHA.

The option chosen by residents will require a rezoning to allow for taller buildings, meaning it will need to go through a monthslong public review and be approved by the City Council. Tenants had considered another rebuild option that would have limited the new buildings to current height caps but would have meant a longer construction timeline.

Built in the 1960s, the Fulton and Elliott-Chelsea developments sit a few blocks from each other along Ninth Avenue. The new buildings will include in-unit dishwashers, washers and dryers, resident-controlled heating and cooling, community spaces and rooftop access. Health care facilities, grocery stores and other retail will move into the new buildings, the city said.

“We are grateful to the hundreds of Fulton and Elliott-Chelsea residents that participated in this first-

Maurizio Gucci.

The Guccis’ penthouse first hit the market in 2015 at $45 million, but the following year the price dropped to $35 million, where it has stayed ever since, according to listings website StreetEasy.

Listed for rent in ’90s

But the top-floor aerie, which is being shown unfurnished, does not appear to have housed any Guccis for years. In the 1990s the family listed it as a rental for $25,000 a month, at a time when a neighbor in the building was billionaire Saudi Arabian arms dealer Adnan Khashoggi, whose duplex was made from a

combination of 16 apartments. Around 2010 a renter reportedly took the Gucci pad for $60,000 a month.

Broken down, the penthouse is asking about $3,700 per square foot. In the first quarter in Manhattan, the average sale price for condos in the luxury segment (the top 10% of the market) was $2,900 per square foot, according to the firm Douglas Elliman, which did not look at penthouses specifically.

“ Yes, the price was a little high before,” said Loy Carlos, the Serhant agent marketing the apartment, who declined to comment on the sellers’ identity. “But now in comparison to the last few years it’s become quite competitive.” ■

of-its-kind selection process, helping to bring NYCHA and our city’s public housing to the next generation,” Miguel Acevedo and Darlene Waters, tenant leaders at the two developments, said in a statement.

Still, some residents remain wary, Gothamist reported, with some fliers appearing across the two campuses warning tenants to “Keep the wolf from the door!”

Construction will last about six years, and most residents will be able to stay in their current homes until the new buildings are ready, according to the New York Times,

which first reported on the plan. Tenants in the new buildings will continue to pay rent at 30% of their household income, according to the city.

Earlier this year, City Council Speaker Adrienne Adams expressed support for the notion of building new public housing on NYCHA campuses. Meanwhile, the city also has moved to sell air rights at various NYCHA campuses and last year sold land from a West Harlem NYCHA complex to a private developer, who plans to construct a mixed-income tower on the site. ■

641 FIFTH AVE., No. PH 4/5, virtually staged at left. At right is the same space as it is today. BUCK ENNIS

THE FULTON HOUSES in Chelsea, along with nearby Elliott-Chelsea Houses, will be demolished and rebuilt along with market-rate apartments under the city’s plan.

SERHANT

Manhattan office landlord Paramount Group slashes its quarterly dividend by 55%

The move saves the tower owner $40M; it’s an unmistakable signal that earnings are coming down

Paramount Group has slashed its dividend payout by more than half, a concrete signal that the office landlord doesn’t expect business to recover any time soon.

Paramount owns several prime office towers, including its namesake building at 1633 Broadway. Its portfolio is entirely in Manhattan and San Francisco, and its largest single tenant is the failed First Republic Bank. The landlord cut its quarterly dividend by 55% last week in a move that will conserve $40 million in cash annually.

its peers, at 57% of adjusted funds from operations. He noted that the $40 million dividend reduction would offset the $42 million loss of rental income should JPMorgan reject the lease for First Republic’s headquarters in downtown San Francisco. Paramount has been unable to find tenants to take all the 500,000 square feet vacated by Barclays at 1301 Sixth Ave. last year.

AARON ELSTEIN

Analyst Steve Sakwa of Evercore ISI was surprised by Paramount’s announcement because its payout ratio was conservative compared to

“Known move-outs such as Uber and Clifford Chance, and vacant space remaining at the old Barclays space, in addition to other holes in the portfolio, will hurt the company near term,” Sakwa said in a note to clients.

In a statement, the company described the dividend cut as “further enhancing Paramount’s already

strong financial position.” Another struggling Manhattan office landlord, Vornado Realty Trust, suspended its dividend in April for the rest of the year.

Paid out $73M last year

Last year Paramount paid $73 million in dividends and holds $450

million in unrestricted cash. By law, real estate investment trusts distribute 90% of their taxable earnings as dividends, so a cut or suspension in the payout is an

unmistakable signal that earnings are coming down. Paramount carries $2.5 billion worth of debt that matures within five years. The stock trades for about $4.50 a share. ■

Why Adams has a problem with well-respected professionals

administration

New York’s first female police commissioner, Keechant Sewell, will soon officially depart her powerful post. The move came as a shock to most members of the public—police commissioners rarely exit so soon—and raised fresh questions about how Mayor Eric Adams is managing the talent in his administration.

Sewell has yet to declare publicly why, exactly, she is resigning. But stories in several media outlets indicated she was tired of being undercut by Philip Banks, the deputy mayor for public safety. In retrospect, none of this was surprising. Banks, a scandal-scarred former chief of department, was elevated into his newly created deputy mayor role because he is a close ally of Adams. His brother, David, is the chancellor of the Department of Education.

Sewell apparently reached a breaking point when she decided

to discipline the NYPD’s highest-ranking uniformed officer, Jeff Maddrey, for his role in voiding the arrest of a cop who was accused of flashing a gun at three children in Brooklyn in November 2021. Maddrey appealed the discipline with the backing of Adams. A former police captain, Adams was known for micromanaging the department, and Sewell, according to various reports, was fed up.

All of this would be only so newsworthy if there hadn’t been, already, a massive exodus of top officials from the Adams administration. Some, like Eric Ulrich, an ex-city councilman and Adams’ first pick to head up the Department of Buildings, left in a cloud of scandal. Others, including Jessica Katz, who was tapped to oversee Adams’ housing initiatives, seemed to be, like Sewell, sick of the lack of autonomy granted to them by City Hall.

This is a problem for Adams because his administration is increasingly stuffed with patronage hires who have kept their jobs because they’ve shown sufficient loyalty to the mayor. Every City Hall has its

share of loyalists, those who arrived in plum positions because they’ve been in the right place at the right time.

Unsettling prospect

But Adams has taken the practice much further than Bill de Blasio and Michael Bloomberg, his two 21st-century predecessors. Each of them had little trouble retaining well-respected professionals for years at a time to head up the city’s various departments and agencies.

Bill Bratton, de Blasio’s first police commissioner, remained on the job

for more than two-and-a-half years. Ray Kelly, meanwhile, was Bloomberg’s sole police commissioner for 13 years.

At some point, Adams will find a new police commissioner, but the best individual for the job may not materialize at all after watching what happened to Sewell. Who would want to put up with a mayor who meddles so frequently and opposes even minor attempts at discipline and reform? Sewell was an outsider recruited to run the department and ran afoul of various Adams-aligned factions.

One front-runner for the job is Edward Caban, the first deputy commissioner. He’d be the NYPD’s first Hispanic commissioner; he’ll fill in temporarily for Sewell and could be permanently promoted. Caban, who is close to Adams, may end up having the job full-time. Banks could be in the running as well. Either way, governance will probably be secondary, as well as any kind of reform of the police department. Adams has made it clear that only those closest to him will go far in his administration. For New York City, that’s an unsettling prospect.

Quick takes

● Summer is arriving, which usually means an uptick in gun violence. Shootings and murders are down, but it will be important to see whether progress can be made over the next two months.

● Will New York state face a budget hole next year? Declining tax receipts and the end of pandemic funds could force Albany Democrats to curtail school aid and Medicaid spending, which surely would anger many. ■

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

leaving his

The best person to be his new police commissioner may not materialize after watching what happened to Sewell

ON POLITICS

ROSS BARKAN DE BLASIO AND BLOOMBERG HAD LITTLe TROuBLe KEEPING PEOPLE

THE COMPANY DESCRIBED THE PAYOUT CUT AS “FuRTHeR enHAnCInG” ITS “ALREADY STRONG FINANCIAL POSITION”

1633 BROADWAY COURTESY OF PARAMOUNT GROUP

SEWELL

BUCK ENNIS

GUSTAVO RIVERA State senator DOSSIER

INTERVIEW BY AMANDA D’AMBROSIO

Since he was appointed chair of the state Senate’s health committee in 2018, Sen. Gustavo Rivera has aimed to push New York closer to a state-funded health system. Rivera, who represents Kingsbridge Heights, Riverdale, Fordham, Belmont and other parts of the Bronx, has advocated for medical debt relief and sustainable funding for safety-net hospitals. During the last session, which ended June 8, one of his main priorities was advancing Coverage for All, a bill rst introduced in 2019 that aimed to authorize state of cials to ask the federal government to allow undocumented immigrants to be included in the Essential Plan, the state’s basic health insurance program. The legislation passed the Senate but died in the Assembly. Rivera says the bill would have moved New York closer to a universal health care system.

What were your biggest wins during the legislative session that just ended?

Coverage for All was a very big win—not only getting that over the nish line in the Senate, but getting clarity from the federal government on what kinds of resources we can use to cover [the migrant] population, which is something that we did not have before, was a very positive step. Also, we did get a couple of bills on medical debt over the nish line. And I believe that we’ve made some good progress internally on [overdose prevention centers] as a conference.

What were your biggest disappointments?

I think that number one is [also] Coverage for All, with no question about it. There was just a failure of leadership in the Assembly. And I was particularly disappointed at

WHO HE IS Senator and chair of the health committee, New York state Senate GREW UP Santurce, Puerto Rico RESIDES Kingsbridge, Bronx EDUCATION Bachelor’s in political science, University of Puerto Rico; Ph.D. in political science, the Graduate Center at the City University of New York POLITICAL CAREER Before joining the state Legislature in 2010, Rivera worked as an organizer on the campaigns of several local and state candidates, including Jose Marcos Serrano’s and Andrea Stewart-Cousins’ state Senate campaigns and Fernando Ferrer’s 2001 run for New York City mayor. He was also hired by SEIU in early 2008 to manage activities on behalf of then-presidential candidate Barack Obama. HOBBIES Rivera considers himself a comic book a cionado.

the consistent misinformation coming from the governor.

What were the major hold-ups?

Issues about cost were a complete misunderstanding. We got clarity from the federal government that we could use future money [to fund coverage of undocumented immigrants under the Essential Plan]. Then, people said we might get stuck with additional costs. So we amended the bill to make sure that the Health Department and the

commissioner could shape the regulations, to make sure we could cap it as far as dollars or population. Then they said, “It’s going to be completely unruly. We’re never going to be able to afford it.”

Some estimates showed that the state would have saved funds by using federal money to pay for coverage of undocumented people instead of relying on emergency Medicaid. How did the state respond to this?

Some of the conversations that we had told me that they were a little skeptical about the whole concept. And I said, “That’s cool. Let’s send a letter to the federal government and get some clarity.” They responded and they said, “You can’t use past money, but you can use the future money.” So there it is.

How are you restrategizing around this legislation?

Speaking only for myself at this point, without having had any conversation about future strategy, I think one of the things that we need to do is reach every single one of our colleagues who were on the fence. Go to the folks that have questions about it. Correct all of the myths and misinformation out there these last couple of days. I’m very proud of my colleagues in the Senate for getting this thing done. And I’ve been around long enough to understand that when you’re trying to do good things and you’re trying to do hard things that haven’t been done before, it takes a couple of rounds. So I’m looking forward to the next one.

What are your biggest health care priorities moving

My bigger and ultimate goal is to pass the New York Health Act. All of this is based around the notion that health care as a commodity is an obscenity. The fact that people can go broke from getting sick is just insane to me. We have some bills that help to get that to a better place. It’s not going to erase it, unfortunately. That’s what the New York Health Act is for, but one step at a time. ■

Legislature passes pair of rent-regulation bills during extended session of Assembly

The state Legislature has passed a pair of rent-regulation bills, indicating that some housing laws could still emerge from Albany despite the high-pro le collapse of two broader packages.

One law would prevent landlords from increasing rents by combining two regulated apartments, closing what had been dubbed the Frankenstein loophole. e other would amend the 2019 rent law to clarify that tenants can use it to reset rents that were previously set in violation of the Rent Stabilization Law.

e state Senate had passed the bills at the tail end of the legislative session, and the Assembly followed suit during its brief extension of the session last week.

“We had to deliver something to

protect tenants,” said Assemblywoman and Housing Committee Chair Linda Rosenthal, “and both bills did that and I think clari ed certain issues.”

Housing has been a particularly divisive issue between Gov. Kathy Hochul and the Legislature this year, and it remains unclear whether she will sign or veto the bills. Hochul spokesman Justin Henry said only that she would review the legislation.

Lawmakers were roundly criticized for their lack of action on housing issues during the budget and legislative sessions. Hochul had pushed for a major package in the budget geared toward increasing the state’s housing supply, but that collapsed amid opposition from both parties. Her proposal to mandate growth targets across the state proved particularly controversial, with Democrats criticizing its lack of a ordable-housing requirements and Republicans viewing it as an attack on the suburbs.

A housing package collapsed once again during the legislative session, this time with “good cause” eviction emerging as the most contentious issue. Political leaders’ public statements were much more pointed then, with Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins speci cally calling out Hochul for not getting on board with the Legislature’s agreement. Hochul’s o ce responded by not-

ing that nothing was stopping the Legislature from passing its package, which never reached her desk.

Legal Aid praised both bills in a statement and urged the governor to sign them immediately, calling it “especially urgent given Albany’s failure to enact any signi cant policies this session to address New York’s unprecedented housing crisis.” e bills provide some much-needed clarity around the 2019 rent law and close a loophole

that was encouraging landlords to keep apartments vacant in hopes of combining them and getting higher rents, according to the group.

CHIP ght

But the Community Housing Improvement Program, a landlord group that has been a staunch opponent of the 2019 rent law and remains in an ongoing legal ght against it, blasted the bills as “destructive and unconstitutional.” CHIP urged Hochul to veto them, framing them as an attempt to make it easier for tenant attorneys to sue rent-stabilized buildings into bankruptcy.

e bills “will have a devastating e ect on the nancial stability of New York housing if they are allowed to become law,” said CHIP Executive Director Jay Martin.

State Sen. Brian Kavanagh defended the bills against such charges.

“ ese are pretty modest changes,” he said, “and the Legislature, as always, is trying to create clarity and fairness in the system. And we think that both of these bills balance those goals well.” ■

REAL ESTATE

BY EDDIE SMALL

“WE HAD TO DELIVER SOMETHING TO PROTECT TENANTS”

ASSEMBLYWOMAN and Housing Committee Chair Linda Rosenthal

If the mayor wants to keep good leaders, he should let them do their jobs

When Mayor Eric Adams introduced Keechant Sewell as police commissioner before he took o ce, he told the city that she carried “a sledgehammer,” crushing every glass ceiling that was put in her way.

Earlier this month, Sewell, the rst Black woman to hold the position, resigned. During her 18-month tenure, she successfully made inroads in earning the trust of the biggest police force in the country amid a climate where public disdain for cops runs high and public safety remains a top concern for businesses and individuals alike.

But there was one major obstacle she couldn’t circumvent: her micromanaging boss.

Adams, a retired NYPD captain, has been particularly keen to exact control over the agency he once served, reportedly stripping Sewell of basic authority by demanding that even low-stakes decisions earn his signo .

OP-ED

Additionally, he created a deputy mayor of public safety—a role that has not existed in recent administrations and appointed his buddy Phil Banks to the position. Banks resigned as chief of the department, the highest uniformed member of the NYPD, in 2014.

Soon after, a scandal surfaced in which Banks was named as a co-conspirator in an extensive investigation into police corruption (but was never charged).

Undercutting Sewell and her squeaky-clean track record with a friend with a shady past adds insult to injury and further undermined Sewell’s authority. Adams’ inability to allow the person he deemed the best for the job to actually do it ultimately drove her from her post altogether.

Such meddling caused Adams to lose a relatively straightforward feather in his cap. Much worse, the city lost a well-respected leader who had thus far proved capable of guiding the city through an especially tumultuous period.

e move comes as the stakes are high for the business community, which is still getting back on its feet from the pandemic.

Qualms about crime must be assuaged before workers can be coaxed back to the o ce, which has taken much longer than anticipated. at comfort level hinges on public safety.

Sewell’s departure is not an anomaly among the mayor’s ranks; last month Jessica Katz, the chief housing o cer, announced her resignation as the city continues to endure a housing crisis. In February the city’s social services commissioner, Gary Jenkins, gave his notice. Replacing Sewell, who is to

remain in her post until the end of the month, will be no small task.

Adams can still make the most of a sour situation and restore faith in the integrity of the administration with his pick for Sewell’s replacement. As a mayor who campaigned on a platform of cleaning up crime, Adams would be wise to avoid tapping his scandal-ridden pal and instead conduct a thorough and fair search for a commissioner up to the task.

And then, the mayor should allow that person to do the job. ■

We need to re-imagine the college Federal Work-Study Program

BY DENISE SCALZO AND DANIEL GARDNER

As new college graduates enter the workforce, too many are unprepared for what lies ahead. College students know this: Only one-third report being condent they will graduate with the skills needed to succeed in the job market. Employers know it, too: ree in four say they have a hard time nding graduates with the skills their companies need. .

It’s time to re-imagine the college Federal Work-Study Program. e program has helped middleand low-income students earn some money to o set college costs, but for the more than $1 billion the federal government invests, the program can and should do better.

e Center for Research on College Workforce Transition recently found that just 30% of college students take part in internships. Black, Hispanic and rst-generation students are half as likely to

participate. Too many internships remain unpaid. Forty percent of students who want an internship report they can’t take one because they need a paid job. Furthermore, 40% of students with internships felt that what they did was not at all, just a little or only somewhat similar to tasks in entry-level jobs. We could use the Federal WorkStudy Program to provide career-related internships, but its structure would need to change.

Most students in the Federal Work-Study Program don’t get the training and experience they need to succeed in the job market. at’s largely because the program funds only 75% of student salaries, with colleges funding the rest.

At Manhattan College in the Bronx, we’re piloting Jasper Corps, a work-placement program that tapped into additional federal funding and developed partnerships with nonpro ts to secure meaningful work opportunities related to students’ areas of study.

e additional funding we received—$400,000 for this school year—covers 100% of students’ salaries. e school covers additional expenses, including a sta member charged with building relationships with organizations, placing students and tracking their internship experiences and results. Nonpro ts get eager interns at no cost.

To help our students better adjust to career-track jobs, we created an online tutorial that includes how to present in a professional manner, communication and “customer” service skills, time management and more.

We’ve placed students into paid, relevant internships. At the Bronx Overall Economic Development Corp., Arianna, a communications major, drafts marketing content and newsletters, participates in strategy meetings and more. Her boss, Rob Walsh, previously commissioner of the New York City Department of Small Business Ser-

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vices, says programs like Jasper Corps o er students the best advantage in hiring because they have relevant work experience.

Data back this up, showing that relevant internships boost rst-job salaries by about $3,000 a year and, not surprisingly, make job applicants more attractive candidates.

We hope to have 100 students in Jasper Corps next September and to partner with for-pro t organizations to o er more options. But without structural changes to the Federal Work-Study Program, we will have to hope for the federal funding. An updated Federal Work-Study Program with full funding for relevant internships would help us scale these programs more quickly. ■

Denise Scalzo is director of nancial aid administration, Manhattan College. Daniel Gardner is president of Manhattan College.

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SEWELL’S DEPARTURE IS NOT AN ANOMALY AMONG ADAMS’ RANKS

BUCK ENNIS

MAYOR ERIC ADAMS

KEECHANT SEWELL

Vague antitrust bill would derail NY’s economic future

BY CAMERON D. MILLER

One of New York State’s leading legislators is once again pushing misguided policy that would devastate the Empire State’s economy and open the floodgates of speculative and politicized litigation. As I note in a new analysis released by the New York Civil Justice Institute, the legal climate created by state senate Deputy Majority Leader Michael Gianaris’ 21st Century Antitrust Act

services to market. Gianaris’ bill is the antithesis of this clarity.

For decades, American antitrust jurisprudence has focused on protecting consumer welfare. This bill proposes sweeping amendments that have no precedent in state or federal antitrust law. Instead of focusing on maximizing positive outcomes for consumers, the bill creates an “abuse of dominance” legal standard that gives businesses little explanation for what constitutes a violation under the law or how the market that one might dominate is defined.

on the bill’s legal ambiguity to extract quick settlements and leave businesses thinking twice about growing their market share or increasing offerings. Why would management invest in new products and services when it could transform into liability-inducing activity?

would undermine business growth, investment and entrepreneurship.

An ideal antitrust framework should establish clear and predictable rules that foster competition and protect consumer welfare, including bringing new products and

OP-ED

Under the ambiguous legal standard proposed in this bill, local businesses and medical practices would take on collateral damage. Successful businesses that may be the top players in a given region would be open to new liabilities in the form of strategic lawsuits from their less-nimble competitors.

Class-action lawyers would seize

An upstate company that sources milk from local farmers to make yogurt may find itself subject to the legislation’s perplexing rules if it buys too much milk from the same region. The bill stipulates that indirect evidence for “dominance” includes a 30% share as a buyer in a relevant market.

Nebulous rules

Such a low threshold, along with the ambiguity of what defines abuse of said dominance puts the dairy producer at risk of violating the law. If the business is a leading purchaser of milk from farms in a single market, it likely falls under the bill’s nebulous rules. Now the business has to decide whether to stop offering the product line or

spend more to import milk from elsewhere.

When it comes to enforcement actions brought by the state attorney general, the industries and focus of antitrust litigation would depend on the office holder’s politics. Democrats and Republicans both have their corporate bogeymen.

It would not be surprising to see antitrust litigation become a new way for headline-hunting politicians to boost their bonafides with their bases. Plenty of legal observers already level that criticism

against various enforcement decisions. Under this bill’s open-ended legal standard, it would be even easier for partisan AGs to file questionable lawsuits.

The 21st Century Antitrust Act would create a legal environment hostile to business activity in New York, and if signed into law, it would derail the Empire State’s economic future. ■

More bus-only infrastructure to the tunnel is key to easing Midtown congestion

BY JOEL EPSTEIN

Sometimes I miss something big. That is certainly the case with Covid and the rise of remote work. Back in 2017, I also crowed about a big but elegant super-tall being built employing a quid pro quo deal that let SL Green build bigger in exchange for a $220 million payment to the MTA to help fund construction of Grand Central Madison.

While I am all for developers paying their share for public in-

I also still believe that One Vanderbilt can serve as a model of how the MTA and developers can work together to bring critical transportation infrastructure to a city so long as the MTA, state and city make sure the deal pencils out for the public and isn’t just corporate welfare for the developer.

THE CITY SHOULD GIVE A SUPERTALL MIDDLe FInGeR TO THE OBSOLeTe CENTRAL BUSINESS DISTRICT WORK MODEL

frastructure, in hindsight it was shortsighted of me to think such deals are the golden ticket to getting needed transit built in NYC.

Still, I didn’t get it all wrong back in 2017. I hit the nail on the head when I wrote that “too many of those new buildings are super-talls, tricked out residential toothpicks that bring little to the city apart from longer shadows over Central Park and a third, fourth or fifth pied-à-terre to the world’s uber rich.”

In 2017, a strong regional economy and a seemingly insatiable appetite for urban living à la New York created a transit and suburban rail ridership boom. Today, that appetite for urban living remains, though hybrid work has replaced 9 to 5 in the office for those smart enough to recognize that no one likes commuting no matter how plush the subway, bus, train or car seat.

Rather than dragging workers back to the office to keep profits flowing to the REITs, banks and hedge funds that overinvested in commercial real estate, the city should give a super-tall middle finger to the obsolete central business district work model and invest in hybrid work and adaptive reuse of as many office buildings as it can. A more pedestrian- and bike-friendly Midtown is already

taking shape and that is an approach we can all get behind.

It is time we ditch the pipe dream of super-tall office towers paying for the renovation of Penn Station and further improve Midtown West by finding a creative solution to the private bus depots that have emerged in recent years.

Recently I took a FlixBus from 31st Street and 8th Avenue to Baltimore and the Department of Motor Vehicles. From my seat near the driver I watched as he wore out his horn begging taxis and Ubers to give him a minute to maneuver his rig into the congested westbound lane of traffic.

Meanwhile, real estate behemoth Vornado Realty Trust has evicted tenants and is warehousing many of the small buildings between Penn Station and Hudson Yards in the ship-has-sailed illusion that these sites will be

turned someday into super-tall office towers for unlucky bridge and tunnel commuters.

Second terminal

Eureka! With New York transformed by remote work, the city should use eminent domain to create a second, no-frills bus terminal with dedicated bus lanes to the tunnel. Or better yet, Vornado should gift the city a couple of the decrepit buildings south of the

Moynihan Train Hall that it has already taken out of service.

Easing congestion in Midtown can be achieved if we think creatively about more bus-only infrastructure to the tunnel. While this is a modest idea for a city facing monumental challenges, it is a decongestant that deserves a try. ■

Joel Epstein is a consultant and advocate for public transit, livable cities and public space.

Cameron D. Miller is an associate professor at Syracuse University’s Whitman School of Management.

THE FOCUS OF LITIGATIOn WOULD DEPEND ON THE POLITICS OF THE STATE’S ATTORNEY GENERAL

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Here’s what to know about the city’s online data privacy bill

BY CARA EISENPRESS

THE ISSUE

1A bill that would require companies to disclose more information to consumers about how they collect, use and share their data picked up momentum at the end of the New York State legislative session earlier this month, passing in the State Senate and being referred to committee in the Assembly. “Privacy is a fundamental right and an essential element of freedom,” begins the bill, known as the New York Privacy Act.

This is not the first time a variation on such a bill has been proposed, but support for it came as a surprise to some in the local technology industry, where giants like Google and Amazon and startups all depend on collecting, buying or selling customer data to make money. The bill seeks to give New York consumers a clearer understanding of how their data is used, as well as a right to have their information deleted or corrected. State Sen. Kevin Thomas of Nassau County sponsored the bill, and Assembly member Nily Rozic is the champion in the Assembly.

Gov. Kathy Hochul has not commented on the bill. In January, she launched a Data Privacy Week statewide and underscored consumers’ role in protecting themselves online, especially from scams. “[We are] urging all New Yorkers to protect themselves and their personal information to avoid becoming a target of these unscrupulous actors,” she said in a statement.

The New York State Attorney General would be in charge of enforcement, should the bill pass. The office could initiate special proceedings or bring them following consumer complaints; a court would then assess the amount of a penalty.

WHAT’S NEXT?

5With the legislative session ending, tech companies have up to nine months to regroup and try to fight the bill from advancing further. Samuels said they are up for it.

To pass the Assembly, the bill would need 50 votes. If Assemblymembers amend the bill, it would go back to the Senate. Then Hochul would need to sign it into law.

“The data privacy bill that came close to passing this year would have reordered much of how companies and nonprofits operate online and I’m glad we’ll have time before the session in 2024 to work with the legislators working on these matters to find a path forward that works for everyone,” she said, adding that she hoped Congress would take up the mantle in the meantime. “At the end of the day, it’s unfortunate we are dealing with it in Albany.”

SOME BACKGROUND 4

THE PLAYERS

2Consumers have handed over a great deal of data to companies in exchange for the pleasure of browsing Facebook for free or the convenience of scanning their credit card to ride the subway. Not everyone is happy with the status quo. In 2021, New Yorkers said that internet issues including data privacy were their chief consumer complaint. Attorney General Letitia James said her office has received 8,000 reports related to data privacy. “During the pandemic, we have seen a substantial rise in bad actors seeking to take advantage of us by exploiting our personal data and invading our digital privacy online,” James said in early 2022. The complaint dropped to number six on the list in 2022 in terms of number of complaints received, with retail price gouging and tenant harassment emerging ahead.

The federal government has urged lawmakers to pass legislation that brings more oversight to technology companies. “We need serious federal protections for Americans’ privacy,” President Joe Biden wrote in a January op-ed for the Wall Street Journal. “It’s not enough for companies to disclose what data they’re collecting. Much of that data shouldn’t be collected in the first place.” A handful of bills and hearings followed, but none have yet come to a vote.

Smaller tech firms are concerned the hodgepodge of laws will be challenging, especially for startups that do not have compliance departments, said Julie Samuels, executive director of Tech:NYC, a membership organization that represents the industry.

Larger firms have already had to act in accordance with privacy laws in Europe and other states including California, Colorado and Connecticut to name a few. In December, a French agency fined Google 50 million euros on charges that it had violated privacy rules in its ad personalization. In May, Ireland’s Data Protection Commission fined Meta, Facebook’s parent, $1.3 billion for sharing data collected in Europe with the United States.

YEAH, BUT... 3

In 2018, the European Union implemented the strictest standards around consumer data privacy, called the General Data Protection Regulation. City companies with global operations may have already decided to set their data privacy to GDPR standards, making a New York law possibly moot.

Kait Stephens, co-founder and CEO of Brij, a company that allows consumer brands to connect directly with their customers, said her team decided to adhere to Europe’s rules from the beginning. Brij’s conceit is that brands can reward customers with information, warranties, discounts or entrance into sweepstakes in exchange for them willingly providing email addresses and other personal data. Stephens said that the company seeks to protect the interest of the consumer and ensures the privacy of all information they decide to share.

Redmond, Washington-based Microsoft has also come out in support. “We have supported privacy legislation in New York and appreciate the leadership of Senator Thomas and Assemblymember Rozic in advancing consumer data privacy protection at the state level,” a Microsoft spokesperson said. “We will continue working with both houses of the legislature and stakeholders to support the enactment of comprehensive privacy legislation.”

Arguments about regulating data collection on the internet are almost as old as the public internet itself. In 1998, the Federal Trade Commission wrote in a report to Congress that 85% of websites surveyed collected personal information from consumers, with just 14% notifying users of this fact. The report established the idea of “notice and choice,” as a guiding principle for governing online data privacy, an extension of the philosophy around fair information practice before the internet.

“These core principles require that consumers be given notice of an entity’s information practices; that consumers be given choice with respect to the use and dissemination of information collected from or about them; that consumers be given access to information about them collected and stored by an entity; and that the data collector take appropriate steps to ensure the security and integrity of any information collected,” reads the report. Consumers, companies and lawmakers have been trying to figure out how this works in practice ever since.

“IT’S nOT enOuGH FOR COMPANIES TO DISCLOSE WHAT DATA THEY’RE COLLECTING. MUCH OF THAT DATA SHOuLDn’T Be COLLeCTeD IN THE FIRST PLACE.”

KEVIN THOMAS NILY ROZIC

Lawmakers playing the blame game doesn’t fix the state’s litany of housing problems

It’s tough to find a sector of New York real estate that isn’t going through a crisis right now. Rents hit new records every month; office buildings remain shadows of their pre-Covid selves; housing production is plummeting; the shelter system is bursting at the seams; and that nice apartment you had your heart set on just got snatched up by someone else.

And the state has once again responded to this litany of problems by doing virtually nothing, once again ensuring that nothing will improve anytime soon. It is an incredibly frustrating state of affairs.

EDDIE SMALL

sion, in April. There was a lot of talk about the importance of passing housing legislation, fragments of hope that a deal might come together, and then a last-minute collapse killing almost all major priorities across the political spectrum. There’s still a slight chance for something to come together later in the summer, given the unpredictable nature of Albany politics. But as of now, a housing package looks dead.

Hochul called out

If you’re experiencing déjà vu, you’re not alone. The end of this year’s legislative session earlier this month was depressingly similar to the end of this year’s budget ses-

The main difference this time around was that state leaders seemed much more eager to play everyone’s favorite political pastime: the blame game. Though the collapse of a housing package in the budget was more vaguely attributed to a general lack of agreement, Assembly Speaker Carl Heastie and state Senate Majority Leader Andrea Stewart-Cousins specifically called out Gov. Kathy

Hochul this time in a joint statement, saying the Legislature had come close to a housing package but could not get her on board.

“It takes all three parties — the Senate, the Assembly and the governor — in order to enact legislation into law,” they said.

Executive orders pledged Hochul’s team responded in kind. Her communications director, Julie Wood, stressed that nothing was stopping the Legislature from passing a housing package and accused them of “blaming the governor for their own failure to act.”

It’s tough to see how these comments will improve the working relationship between the Legislature and the governor’s office, which, as the statement from Heastie and Stewart-Cousins helpfully reminded us, are both required to pass legislation. They rather seem to acknowledge that after spending the bulk of the year talking and hearing

about the housing crisis gripping the state, leaders had to at least explain why they weren’t passing any major housing legislation. And the explanation both sides settled on was, essentially, it’s the other side’s fault.

So what happens now, apart from a whole bunch of nothing?

Hochul’s office has pledged to ad-

THE CITY AND THE SUBURBS HAVE BEEN TAKING ACTIONS ON THEIR OWN

dress the housing crisis through executive orders in the coming weeks, so the state may still enact some new programs. And there are actions that the city and the suburbs can and have been taking on their own to address housing as well.

But the impact of these measures will likely pale in comparison to the

impact of a comprehensive legislative package from the state. There are plenty of unlikely things that would need to happen for this to occur, namely finding a compromise on “good cause” eviction, which was reportedly the main issue derailing talks this session. It is tough to see how a housing deal moves forward as long as progressives view including good cause as essential and real estate groups view stopping good cause as essential, but maybe another year of watching New York’s housing issues get worse could move the needle on the contentious topic. It is incredibly disappointing that the high-profile push for a state housing deal has so far resulted in not much more than rhetoric and finger-pointing. Unlike the legislative session itself, these issues are not going to end anytime soon. ■

They

Leaders on both sides seem more concerned with pointing fingers than passing comprehensive legislation

De Blasio ordered to pay $475K for misusing NYPD detail during presidential run

BY NICK GARBER

Former Mayor Bill de Blasio must pay a $155,000 ne and repay more than $319,000 in taxpayer money for improperly using city police as his security detail during his ill-fated presidential run, a watchdog agency ruled June 15.

e order—the largest ever issued by the city’s Con icts of Interest Board—stems from de Blasio’s four-month-long run for the 2020 Democratic presidential nomina-

overtime, the board found. at “plainly” violates a city law barring o cials from using city resources for private purposes, the board wrote.

“ ere is no city purpose in paying for the extra expenses incurred by that NYPD security detail to travel at a distance from the city to accompany the mayor or his family on trips for his campaign for President of the United States,” the board wrote in its order. “ e board advised [de Blasio] to this e ect prior to his campaign; [de Blasio] disregarded the board’s advice.”

THE FORMER MAYOR’S ATTORNEYS SAID HE WOULD APPEAL ANY RULING THAT HE OWED THE CITY MONEY

tion, during which he made 31 outof-state trips from May to September 2019. An NYPD detail accompanied him and his wife, rst lady Chirlane McCray.

Bringing the detail on those trips cost the city $319,794 in travel expenses—not including salary and

e board said de Blasio must pay the combined $474,794 within 30 days, though he could appeal the decision in state court.

Lawyers for de Blasio immediately said they had led a lawsuit to block the decision, arguing it would put elected o cials at risk.

“In a time of unprecedented threats of political violence, the COIB’s reckless and arbitrary ruling threatens the safety and security of our democratically elected public

servants,” Andrew G. Celli Jr., an attorney at the rm Emery Celli Brinckerho Abady Ward & Maazel, said in a statement posted on Twitter.

A 2021 probe by another city watchdog already concluded that de Blasio had misused the NYPD during his campaign — and also by getting police to help his daughter move apartments and drive his son to and from college. But de Blasio’s attorneys said he would appeal any ruling that he owed the city money.

Campaign failure

In the June 15 order, the board said it held a trial in December 2022, taking witness testimony and relying on an interview de Blasio and McCray gave in 2021, for the initial probe by the Department of Investigation.

De Blasio announced his presidential campaign just one day after the Con icts of Interest Board responded to questions from his counsel about whether the city could pay for de Blasio’s NYPD detail. e board said the city did need to pay for the o cers’ salaries and overtime but not any other expenses like airfare and lodging, according to the report released June 15.

In an interview published this month in New York magazine, de Blasio was frank about the failure of his campaign, which he ended before entering a single primary.

“It was a mistake,” he said. “I think my values were the right values, and I think I had something to o er, but it was not right on a variety of levels. And I think I got into a place of just extreme stubbornness and tunnel vision.”

De Blasio was knocked several

FORMER MAYOR Bill de Blasio must pay a $155,000 ne and repay the city $319,794 in travel expenses, the Con icts of Interest Board ruled.

times for ethical infractions during his eight years as mayor, including for soliciting donations from people with business before the city, and for circumventing donation limits by routing money through two separate political action committees during his presidential run. Meanwhile, a Queens restaurant owner admitted to trying to bribe de Blasio by hosting free fundraisers for his mayoral campaign, though de Blasio called the claims made-up. ■

Mayor’s business-zoning plan eases restrictions on casinos, corner stores, microbreweries

BY NICK GARBER

The city recently rolled out details about its planned rewrite of zoning laws aimed at easing restrictions on businesses—revealing for the rst time that it might fold in a measure to permit casinos within the ve boroughs.

Known as City of Yes for Economic Opportunity, the measure is one of three zoning text amendments that Mayor Eric Adams is pushing in an e ort to grow the city’s housing stock, boost businesses and accelerate climate change projects.

e Economic Opportunity initiative would make more than a dozen changes to zoning laws that limit where businesses can be based and how large they can grow.

ose changes include allowing “clean” manufacturing businesses like microbreweries and clothing makers to open up in regular commercial districts instead of industrial zones, permitting dance studios to occupy ground- oor storefronts instead of only upper oors, and removing a Prohibition-era restriction on dancing.

Notably, the city is now considering adding a policy that would put casinos in line with the city’s zoning code as the state prepares to permit up to three casinos in and around the city, o cials from the City Planning Department said during a June 13 info session on the Economic Opportunity plan.

O cials have said for months that the city might need to change its zoning to accommodate the planned casinos, but had given no signs before June 13 that such a change would be included in Adams’ City of Yes package.

“[We] are continuing to work with City Hall and the New York City Council to understand whether there are zoning implications that would need to be addressed to enable this process,” said Matt Waskiewicz, a City Planning o cial, during the brief mention of casinos during the meeting. He promised more details “at a later date.”

Corner stores and dancing

June 13’s presentation marked an early step in the roughly six-monthlong public review that the Economic Opportunity text amendment must go through before it is voted on by the City Council next spring. In April, the climate proposal became the rst of the three City of Yes measures to enter its public review, while the nal, housing-focused measure will kick o its own review next spring.

Other changes described June 13 include an e ort to allow small shops like corner stores to open up in residential areas—an idea long championed by reform-minded planners—instead of the commercial zones where they are currently con ned. Store owners could get that exemption by applying to the

City Planning Commission for a special authorization, instead of going through the onerous ULURP process that is now needed for any zoning change.

e city wants to pierce the residential-commercial binary in other ways, including by allowing businesses to open up next to or above apartments in multi-story buildings. As it stands, a business like a doctor’s o ce can only be based below residential oors.

Dancing, comedy and live music, currently prohibited in many commercial areas, could be allowed in small buildings around the city— though still subject to regular permits such as occupancy limits and re codes.

More than 100 meetings

Wholesale and storage businesses, including “micro-delivery”

hubs, could be given a blessing to operate in neighborhood commercial districts under the administration’s plan. at would apparently resolve claims by some City Council members that the rapid grocery delivery hubs popping up around the city are violating zoning rules.

Another proposed policy would smooth out “arbitrary” di erences between di erent zoning districts. On some neighborhood commercial streets, for example, movie theaters and bike repair shops might be allowed on one corner but barred across the street—a distinction that the city wants to discard. e city would also take aim at buildings themselves. Some businesses that construct their own buildings, such as lm studios, face structural constraints such as street-wall height caps, which could prevent the construction of a

soundstage. Instead of pursuing a time-consuming rezoning, businesses could apply for a City Planning exemption.

Waskiewicz, the City Planning ofcial, said the Economic Opportunity plan was shaped by more than 100 meetings in recent months with chambers of commerce, business improvement districts, and other groups who described how current zoning hinders economic growth. e administration says its plan could cut down on storefront vacancies, make room for emerging industries, and enliven neighborhoods where New Yorkers are now spending more time thanks to the rise of remote work.

First previewed last year, all three City of Yes plans could have a major impact on the city’s streetscape, though they remain months away from being enacted. e climate component would peel back restrictions that make it harder for property owners to use green technologies like solar panels, while the housing package would reduce density limits in low-rise districts, scrap minimum sizes for apartments, and reduce parking requirements for new residential projects.

“With our administration’s vision, New Yorkers and visitors alike will be able to dance, laugh, and have a beer; businesses will grow and create good jobs; and fun will drive an inclusive recovery for our city,” Adams said in a statement. ■

BLOOMBERG

BUCK ENNIS

MORE BUSINESSES would be allowed in residential areas and within apartment buildings under the Adams administration’s plan.

MTA union slams brakes on one-person train operation

BY CAROLINE SPIVACK

The Transit Workers Union Local 100, which represents some 40,000 MTA employees, was quick to take a victory lap on social media in May when it struck a tentative contract agreement with the Metropolitan Transportation Authority for the city’s subway and bus workers.

Amongst the Twitter celebration over a compounded pay increase and other provisional wins, which must be rati ed, was labor leaders’ less-noticed boast of seemingly shutting down the MTA’s consideration of running more subway trains with one conductor.

One-person train operation is a cost-saving measure (potentially to the tune of hundreds of millions annually) that would shift the MTA from sta ng most trains with a driver and a conductor, who operates train doors and makes announcements, to only a driver. Currently, the MTA utilizes driver-only train operation on the G and M lines on weekends and on some train shuttles, but a systemwide switch has proved controversial due to labor and safety concerns.

New York’s subway is a straggler in its continued reliance on two-person train operation, and that’s largely because of two key factors: the might of the Transit Workers Union Local 100 and state labor laws that bolster their bargaining power. A lengthy list of major cities operate transit agencies that have embraced single-person train operation on all or parts of their networks, including London, Paris, Tokyo, Chicago, Washington, D.C., and Boston.

Transportation and policy advocates have long urged the MTA to trim its ranks of subway conduc-

REAL ESTATE

tors—of which there are 3,127 as of May 31—for more cost-e ective train operation. As of November 2022, the minimum salary for a New York City Transit conductor was $24.32 per hour for a 40-hour work week, increasing to $34.74 in their sixth year of service. e amount a conductor can earn varies greatly depending on their work experience, hours and overtime.

“We are in fact an outlier here,” said Andrew Rein, the president of the Citizens Budget Commission, a scal watchdog group. In 2021, the Citizens Budget Commission urged the MTA to reduce its number of subway conductors by 50% to achieve an estimated annual savings of about $221 million; that gure would increase with the approval of an expected pay increase in the latest contract, said Rein. And the transition wouldn’t need to happen all at once, he added.

“We suggest phasing it in because the best way to change the system is when you have time so you can reduce sta by attrition,” said Rein. “No one wants layo s in this economy or on a human factor.”

In the capacity that one-person train operation has been utilized by the MTA, a practice it rst began in 1996, authority spokesman Michael Cortez said the single train crews are “reducing costs that have been reinvested in better, more ecient service.”

e MTA sought to explore an expansion of one-person train operation in the latest round of contract negotiations, people familiar with the talks said, but the conversations didn’t get far. More driver-only trains are technically still in the realm of possibility, but labor leaders say they are dug in against the change. e MTA would not comment on whether or how it will continue to push to expand one-person train operation.

Other cities

In Boston, the Massachusetts

Bay Transportation Authority’s T system began a gradual implementation of one-person train operation in 1996 that culminated in all trains on its three subway lines being operated by one person in 2012. At the time, some conductors were reassigned to di erent jobs while others took retirement. e change came with investments in security cameras, station lighting, equipment for announcements and new trainings.

e Chicago Transit Authority switched to the model through a mix of attrition and layo s between 1997 and 2000. A CTA representative said conductors were responsible for “duties that have all since been improved with new technologies” or were assigned to a mix of rail operators, eld supervisors and station sta .

e calculus is a bit di erent for New York’s sprawling subway, where trains tend to be longer, carry more passengers and operate 24 hours a day. TWU Local 100 President Richard Davis described conductors on the subway as “an important set of eyes and ears in the system.”

“Riders want and deserve more sta in the subway, not less,” Davis said in an emailed statement. “Cutting train crews in half would be terrible customer service, make riders feel less safe and in fact, make them less safe.”

Conductors, Davis said, play a critical role in emergency situations. He pointed to last year’s shooting at the 36th Street station in Sunset Park, Brooklyn. Train crews helped direct riders to safety. Blackouts, oods, track res and other emergencies can also require train crews to evacuate travelers.

“All these policy wonks and transit advocates can say what they want, but when working New Yorkers are on trains doing shift work, every single one of them advises their husbands, advises their wives to stay in the conductor car,” said TWU International President John Samuelsen, who is also a MTA board member. “It’s the rst thing

that I told my children when they were riding the subway, and I still tell them every day, and my boys are 20 and 21 years old.”

Battle of wills

Advancing one-person train operation in New York comes down to a battle of wills with the TWU Local 100, which has historically not played out well for the MTA. In 2005, after four months of implementing single-person operation on the L line, a labor arbitrator determined that the MTA had not properly bargained for the work rule change.

Ken Girardin, a fellow at the Empire Center for Public Policy, says the crux of the debacle is the Public Employees’ Fair Employment Act, commonly known as the Taylor Law, which covers most public employees in the state. Experts say the Taylor Law has historically empowered labor unions by requiring many policies to be hashed out in collective bargaining.

“If you brought New York’s approach to public sector collective bargaining to most other state capitals, it would be just as shocking as if you brought a life form from Mars,” said Girardin, whose work focuses on organized labor’s e ect on government policy.

“In most other states a question like this would be settled by the legislature, not negotiations,” added Girardin. “In simpler terms, the legislature could x subway e ciency issues with a few pages of legislation.”

at could be, according to Girardin, in the form of a bill simply mandating that the number of employees on a subway car shall not

Naftali Group settles with holdout tenant at Upper West Side condo project

BY EDDIE SMALL

The Naftali Group can move forward with an Upper West Side condo project after settling with a tenant who had been refusing to leave his Upper West Side apartment at the site.

Naftali had sued Ahmet Ozsu in February 2022, saying it had ended his month-to-month lease on West 84th Street at the end of 2021 and his refusal to leave was delaying construction of the new building.

e developer sought $25 million in damages.

However, Naftali and Ozsu have settled the case, which was discontinued at the end of 2022, court records show. e amount of the settlement is con dential, but one source familiar with the deal said Ozsu received enough money to purchase a home.

Naftali had long been attempting to build a condo project on the site and led plans with the city last year for an 18-story building at 211

W. 84th St., between Broadway and Amsterdam Avenue, that would include 45 residential units and span about 227,000 square feet. e developer bought the site in June 2021 for about $70.3 million, according to property records.

Filed demolition plans

e rm attempted to move forward with the project even while Ozsu was still in the building, ling demolition plans for the property in July. Ozsu’s attorney, Adam Leit-

man Bailey, argued at the time that the developer was harassing his client by cutting o electricity in parts of the building and curtailing his supplies of gas and hot water, telling Crain’s Naftali was trying to make Ozsu’s life “as miserable as possible.”

A judge allowed Ozsu to stay in the building in August pending a decision on his emergency rental assistance application. Naftali had o ered him $30,000 to leave, Bailey previously told Crain’s

be subject to collective bargaining. But in a union town like New York, that’s a tough sell politically.

Few lawmakers wish to be associated with anything that could be labeled anti-union.

Gov. Kathy Hochul was notably backed by the TWU Local 100 in her gubernatorial bid. Her o ce said it would not speculate on hypothetical legislation.

“Politically, today in New York there’s no good time to do these things,” said Nicole Gelinas, a senior fellow at the Manhattan Institute, a think tank. “Where does that leave the MTA? Do we have the political support to enact new tax revenues for the MTA every ve years to try to keep up with their rising labor costs?”

“It all comes down to the political will of whether the governor and the legislature would back the MTA in asking for substantial changes in the labor agreement?” added Gelinas. “And frankly be willing to take a strike, if it came to that.”

e Taylor Law limits public workers’ right to strike in return for contract protections, but strikes are not unprecedented. After a citywide transit strike in 2005, the TWU Local 100 was hit with a $2.5 million ne and the union’s leader at the time, Roger Toussaint, was issued 10 days in jail.

“People have no idea what the power of the TWU is in the New York City subway and bus system,” said Samuelsen. “You know why [the MTA] can’t get [one person train operation]? You can’t get it because the TWU is not giving it to you. at’s why. I don’t want to be a smart ass, but that’s a real answer to the question.” ■

Ozsu moved out at the end of December, according to Bailey.

“Only guts, courage and creative lawyering kept him in his apartment,” he said of his client. “We are very glad that this had a happy ending.”

Naftali’s attorney, Y. David Scharf, declined to comment on the settlement and did not know the overall cost of the project. Representatives for the developer did not respond to a question about the overall cost by press time.

Naftali is well known for its luxury condominium projects in Manhattan, with developments including the Seymour at 261 W. 25th St. in Chelsea and the Bellemont at 1165 Madison Ave. on the Upper East Side. ■

“RIDERS WANT AND DESERVE MORE STAFF IN THE SUBWAY, NOT LESS”

A SUBWAY CONDUCTOR peers out of the window of a train at the Hoyt-Schermerhorn Streets station in Brooklyn.

Investing platform that trades in digital shares opens real-life museum with collectibles on display

BY CARA EISENPRESS

Rally, a SoHo company that lets investors buy shares in alternative assets like memorabilia and collectibles, has opened up the ground oor of its New York City o ce to the public.

When Rally leased its o ce at 446 Broadway in early 2022, the company took the 3,000 squarefoot ground- oor space in addition

company expects to have the museum open for at least ve years.

“We want the neighborhood to be a part of it,” he said. e space will hold events like panels and “lunch and learns.”

Unlike other museums, “the assets are always for sale” here, said Petrozzo.

Broken into shares

Petrozzo and co-founders Maximilian Niederste-Ostholt and Chris Bruno founded Rally in 2016 after becoming enamored with all kinds of collectibles, from sports cards to classic cars.

charging a sourcing fee on each IPO that is less than the going premium at traditional auction houses and by taking small positions in each asset. Rally has raised about $60 million to fund growth and operations.

to about 7,500 square feet of builtout o ce space above.

at space opened June 17 as a museum to display some of the real assets that members jointly own.

“We wanted to do the digital experience in a physical way,” said Rally’s co-founder, Rob Petrozzo. “We have these crazy collectibles and they make more sense when you’re in person.” Petrozzo says the

ey came up with a model where each collectible is registered with the Securities & Exchange Commission as a company and then broken into shares. Users buy into the initial public o ering and then are free to trade shares, or—if enough shareholders agree— sell the full asset. ere are about 450 collectibles in total, totaling about $70 million, and hundreds of thousands of users.

e company makes money by

A Rally user could buy a share in a turquoise Porsche 356 Speedster from 1955, the model’s rst year, for about $150 as of the morning of June 15. at share sits, virtually, on their app, hopefully appreciating while its owner enjoys having a bit of history. Now, that owner—or anyone at all—can walk into Rally’s museum and see the actual Porsche. ere are also dinosaur fossils and one of only 60 Honus Wagner—a famous Pittsburgh Pirates player— baseball cards ever made. A signed Andy Warhol print of Marilyn Monroe—that had a market cap of $152,200 on the morning of June 15—is on display, overlooking a display case of Michael Jordan memorabilia. In the back, visitors can create their own non-fungible

token from scratch to have a digital souvenir. ere is also real-life merchandise to buy.

Experience economy

Petrozzo said he hoped the museum would t into the experience economy that has ourished in SoHo. It is on the same strip of Broadway as the Museum of Ice Cream, the recently opened House

of Cannabis and the Sloomoo Institute, where children make their own slime.

“You see lines down the block of people who want to spend money to have an experience,” he said.  e museum has been open weekends only. By July, Petrozzo said, he expects the ground- oor space to be open noon to 6 p.m. six days a week. ■

UNLIKE OTHER MUSEUMS, “THE ASSETS ARE ALWAYS FOR SALE”

A PORSCHE SPEEDSTER and dinosaur fossil greet visitors.

Prioritizing the use of free-for-all curb space could help tame New York’s chaotic streets

BY CAROLINE SPIVACK

Any New Yorker on the street can see how navigating the city’s curb space is often a free-forall: Double-parked delivery trucks unloading goods, e-hail vehicles picking up passengers, deliveristas and bike riders weaving around obstacles.

A new report from Open Plans, a Manhattan-based nonprofit aimed at improving city streets, examines how the narrow strip of land between the sidewalk and the travel lane has evolved, and offers recommendations for how New York and other cities can better manage these spaces to meet their rapidly growing uses.

“To date we’ve just thought of the curb as a place for parking and whatever else might work there, but this is really abundant and valuable

public space,” Sara Lind, co-executive director of Open Plans, told Crain’s. “So thinking about how we manage it effectively is really important.”

One approach the report calls for is the development of a curb management strategy that allows transportation officials to comprehensively plan how a city operates its curb space.

Such a document creates an opportunity for cities to define the diverse uses of the curb and what is prioritized in certain parts of the city. It can serve as a roadmap to reforming and improving current curb management, Lind said.

For example, the report highlights how in 2020 San Francisco’s transportation agency adopted a framework that identifies a hierarchy of curb space and features an exhaustive section devoted to improving existing and implementing new curb rules. Beyond vague goals, the report set targets with a level of effort, potential impact and a timeline.

The curb data and cataloging gathered revealed that 90% of San Francisco’s curb was used for parking while just 1% was used for things like bus stops, bikeshare and paratransit. The takeaway highlighted a mismatch between the city’s goals and the realities of the curb, which enabled the city to make strategic changes.

Differing access

New York’s Department of Transportation says it is working on a similar document for the five boroughs.

“In a commercial district, you’re going to prioritize access for goods, but in a residential neighborhood you’re going to prioritize access for people,” said Lind. “From there you can dig down even a layer below looking more at individual streets, but right now it’s just totally piecemeal [in New York]. So this allows the DOT to look more holistically.”

Taking stock of the city’s curb space through a digital inventory is another core recommendation of Open Plan’s report.

That can be a massive undertaking, but cities can look to what’s known as the Curb Data Specifica-

tion, developed by the Open Mobility Foundation, which creates urban mobility management tools. The open-source data standard essentially provides cities with the digital infrastructure needed to assess and improve their curbs.

A digital curb inventory also creates the opportunity to display such data publicly, allowing shipping

companies and researchers to utilize the information, to provide a fuller picture of the space the city is working with.

“Frankly, nobody even knows how many parking spaces there are in the city,” said Lind. “We estimate 3 million parking spaces, but no one knows for sure. This would allow us to have that data.” ■

“NOBODY EVEN KNOWS HOW MANY PARKING SPACES THERE ARE IN THE CITY”

PACKAGES are unloaded from a tr uck at a curb in Manhattan.

request from a big customer to produce another 5,000 babkas every day, but executives say they don’t have room to make more.

Two bankers from Citizens Bank dropped by one recent afternoon to see if there was anything they could do to help get more of Green’s babkas into the world. Citizens took the unusual step of permitting a Crain’s reporter to follow along on a day of client visits in an attempt to demonstrate its bankers’ value at a time when the business model of regional lenders is deeply out of favor on Wall Street. e visits also provide a glimpse into the concerns of small business owners grappling with rising costs for labor and materials and ongoing supply-chain snarls.

At Green & Ackerman, the bankers asked if the owners would consider moving the bakery to a larger facility in New Jersey. Or how about a loan to build a second oor atop the existing place? Whatever the family decides, Citizens executives emphasized that they’rea reliable partner, despite the multiple bank failures that shook the nancial system a few months ago.

“Traditional regional banks are always disciplined, diversi ed and have better deposit relationships,” said Citizens CEO Bruce Van Saun. “Multiply that by 15 more large regionals, 4,000 other banks that know their communities, and this is

tors reveal their new rules of the road. Citizens has more than tripled its small-business clientele in New York in the past two years after acquiring HSBC’s local branches and Investors Bank for about $4 billion.

e challenge now is to keep those customers and maybe pick up a few more left behind by SVB, Signature and First Republic Bank.

Veteran foot soldier

In this battle eld, Richard Stern is a veteran foot soldier.

He is Citizens’ market manager for the New York metropolitan area and brings 35 years of experience. Tough as times are now, he said, they’re nothing like 2008 or 2009, when he was at Bank of America and small businesses saw revenue plunges of 40% or more. In retrospect, he said, maybe he was “naive” when it came to realizing how close the banking system came to a complete collapse, but then again, he’s not an economist. What he brings to the table, Stern said, is the ability to spot potential landmines by examining a client’s nancial statements.

“I can tell them I’ve seen this movie before and help with a better ending,” he said. “ at’s my value-add.”

Stern supervises a team of eight relationship managers who collectively serve 200 businesses around the city with revenue ranging from $5 million to $25 million. At least one day a week he gets out of his Midtown o ce to make house calls.

to be manufacturers or distributors. Most of their money is invested in inventory, so they don’t have millions in spare cash parked in the bank.

the backbone of the U.S. economy.”

e prevailing winds of the market are blowing strongly against Citizens, a Rhode Island-based lender with $225 billion in assets. Its stock has lost nearly 40% this year and trades at a paltry 6.5 times estimated earnings, or about a third that of the S&P 500, Wedbush Securities said in a report this month.

It’s been tough ever since Silicon Valley Bank and Signature Bank failed three months ago. Customers got worried about losing money in the event of another bank failure and transferred hundreds of billions of uninsured deposits to too-big-tofail JPMorgan and Bank of America.

e likes of Citizens have raised the interest rates paid to depositors, but that depresses pro t margins and share prices. A second source of earnings pressure is brewing because regulators want banks better protected against deposit ights and are expected to force them to keep more cash on their balance sheets rather than lend it out.

“What we learned is that when there’s a problem with one regional bank, it spreads everywhere,” said banking industry consultant Mayra Rodriguez Valladares. “It’s not just too-big-to-fail banks who are vulnerable.”

Van Saun told Crain’s last month that regional banks had “weathered the storm” but acknowledged they may be “uninvestable” until regula-

On a recent morning, wearing a white shirt, a red tie with blue stripes and a gray jacket with the bank’s logo on the lapel, he entered a quirky Fifth Avenue o ce building with an elevator that could t three people so long as nobody moved.

Waiting in his fourth- oor corner o ce was Paul Sinaly, Stern’s mentor when both worked at Citibank in the 1990s. Sinaly, who runs an accounting rm, is a source of client referrals and did nearly all the talking for the next hour. He started by saying he represents commercial property owners whose tenants have vacated.

“ ey’re not coming back,” he said. “You know that.”

He’s advising clients to pull their money from small or midsize banks like Citizens whose commercial real estate exposure worries him.

“Are there a lot more banks out there still at risk? e answer is yes. You can do analytics on any bank you need to. It’s free information.

F-R-E-E,” Sinaly said.

“We’re being very cautious with diversifying deposits if [clients] have not done that already.”

Sinaly was hitting Citizens’ pain points. Analysts say the bank’s $4 billion in exposure to o ce loans is weighing down the stock price, even though it accounts for less than 3% of loans. Citizens lost about 5% of deposits in the rst quarter, which is nothing like the 42% drop in a single day that crushed SVB, but other regional banks have reported continued deposit erosion in recent weeks. Stern said he hasn’t seen a lot of out ows because clients tend

Stern gently brought the hourlong meeting with Sinaly to a close by inviting his old friend to speak to Citizens colleagues. en he walked three blocks east to the 6 train for his next meeting at a branch in Chinatown. e small-business banker prefers to get around the city by subway and pounds the pavement in rubber-soled Johnston & Murphy brown leather shoes.

“It’s like wearing a sneaker,” he said.

Watch those spoons

e Chinatown client was an important one: Gideon Wong, president of Green Wave International, a Brooklyn-based maker of compostable utensils with $22 million in annual revenue.

Business thrived during the pandemic because Wong was one of the few who could reliably supply inventory, but now that supply-chain problems are easing and lower-priced competition is coming, it’s time to adjust. at could mean making utensils out of rice stalks instead of bamboo and perhaps manufacturing them in the U.S. instead of China as political tensions rise. Wong just rented new warehouse space at the Brooklyn Army Terminal in Sunset Park and is thinking of building a factory there.

“I think the terminal has a good future,” he said.

Wong, who emigrated from Hong Kong in 2001, banked for a long time at BofA or Citi but switched to Citizens last year. He’s been assigned a personal banker who understands that Chinese business leaders prize discretion.

“ ey like to be in and out,” said Arthur Chiu, a Citizens vice president. “ ey don’t want a lump of money passed through a teller window.”

Citizens tried to expand into the world of white-glove banking when it bid for the busted First Republic a few months ago. Executives thought they had a shot if government ocials didn’t want the $4 trillion-in-assets JPMorgan to get even

bigger. But under a law enacted 32 years ago after the savings and loan crisis, the Federal Deposit Insurance Corp. must resolve a failing bank in a way that costs its insurance fund the least money, so JPMorgan won the auction.

“We couldn’t compete with that,” Van Saun said.

Citizens snagged a consolation prize by picking up about 50 former First Republic bankers this month. Although Citizens can’t compete with JPMorgan on size, sometimes rich clients want more from a bank than a piece of its balance sheet; attention is important too. Near the end of the meeting, Wong reminded that, unlike his rivals’ wares, his company’s name is stamped on all its products. Stern picked up on the cue right away.

“Every time I pick up a spoon, I’ll have to look for your logo,” he said. The bursting babka baker

After taking the J train to an ultra-Orthodox Jewish part of Brooklyn where nearly everyone dresses in black and white, Stern stopped for lunch at a dairy-only kosher restaurant, where a Hebrew blessing was posted next to the sink thanking the almighty for the ability to use the bathroom.

Stern knows neighborhood restaurants like this one all over town. Ahead of meeting his next client, he described how to make meetings productive. Team members who ask a potential client to talk about their business can expect a kick under the table from Stern, who feels colleagues must understand such things beforehand. It’s better to ask a client how they got into their business, instead.

After nishing his pizza, he walked a few more blocks to an unmarked building that for more than 30 years has been home to the Green & Ackerman Bakery.

Stern’s colleague, Red Kabir, was waiting outside. Werzberger showed them a new machine paid for with a loan from Citizens that cut production costs by 60%. Lower overhead is vital because sales have attened a bit this year, perhaps a sign of a weakening economy or maybe because the bakery raised prices to o set rising labor and

commodity costs. Recently the bakery heard from a large customer asking if it could make another 1 million babkas a year, but Green & Ackerman doesn’t have the space to boost production.

“Tomorrow is the phone call where we say if we’re committing or not,” Werzberger told the bankers.

One possibility is baking more babkas in a nearby warehouse, but getting the necessary equipment from Germany takes months. Another solution could be moving to a larger space in New Jersey, which Kabir said o ers $6,500 in incentives for every employee. But there are trade-o s, the banker said, starting with power outages, which tend to last longer after storms in New Jersey because in New York electric cables are often underground.

Werzberger and other family members live ve minutes from their bakery and didn’t like the idea of a long commute. Ben Ackerman, head of sales, said he’d looked at a building 15 minutes away. Kabir said Citizens would provide a loan covering 90% of the cost.

“What do you need for it?” Ackerman demanded.

“If you buy a $5 million building and put another $3 million worth of equipment in there, it would be 90% of that $8 million. So you’d need to come up with $800,000,” Kabir said. “We want to make it simple. Any questions?”

ose terms could be risky for Citizens, according to a veteran banking investor who requested anonymity. A 10% down payment isn’t unusual for a home loan but could be low for a commercial bakery exposed to rising labor and input costs. If Green & Ackerman were to fall delinquent or default, Citizens wouldn’t have much of a cushion to protect against losses.

After hearing Citizens’ pitch, patriarch and company president Joseph Ackerman nodded in approval, giving his son-in-law Werzberger space to end the meeting on a lighter note.

“I always ask bankers, ‘Can you add one zero at the end of our balance?’” Werzberger quipped.

Stern countered: “Maybe we could add a zero at the end of your interest rate.” ■

STERN SAYS HE BRINGS TO THE TABLE AN ABILITYTO SPOT POTENTIAL LANDMINES BY EXAMINING A CLIENT’S FINANCIAL STATEMENTS

LEFT TO RIGHT: Red Kabir, Michael Werzberger, Joseph Ackerman, Richard Stern and Ben Ackerman

WEDDLE & GILMORE

ARCHITECTS, PLLC filed an App. for Auth. with the Dept. of State of NY on 5/1/2023. PLLC formed in AZ on 8/21/1998. Office located within NYS: New York County. The Sect'y of State of NY is designated as agent upon whom process against it may be served and shall mail process to: Goetz Fitzpatrick LLP, Attn: John B. Simoni Jr. Esq., One Penn Plaza, Ste 3100, NY, NY 10119. Purpose: Architecture.

Notice of Formation of 80TH 12J, LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 05/02/23. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Daniel Sperling, 300 Manida St., Bronx, NY 10474.

Purpose: Any lawful activity.

Notice of formation of GARCI HOME IMPROVEMENT

LLC Articles of Organization filed with the Secretary of State of New York (SSNY) 05/09/2022

Office in BRONX Co. SSNY designated for service of process. SSNY shall mail a copy of any process served against the LLC to 3800 Independence AVE 4M, Bronx, NY, 10463, USA.

Purpose: Any lawful purpose

PUBLIC & LEGAL NOTICES

Notice of Qualification of BRSP BLANCHARD LIC, LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 05/12/23.

Office location: NY County. LLC formed in Delaware (DE) on 04/27/23. Princ. office of LLC: c/o

BrightSpire Capital, Inc., 590 Madison Ave., 33rd Fl., NY, NY 10022. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Dover, DE 19901.

Purpose: Any lawful activity.

NOTICE OF FORMATION OF Psychotherapy Counseling Services LCSW PLLC. Arts of Org filed with the Secy of State of NY (SSNY) on 5/2/23. Office location: NEW YORK County.

SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the PLLC served upon him/her is: 418 Braodway ste N, Albany, NY, 12207. The principal business address of the LLC is: New York.

Purpose: any lawful act or activity.

Notice of Formation of Cosmetic Eye Surgery, PLLC. Arts. Of Org. filed with Secy. of State of NY (SSNY) on 5/8/2023. Office location: New York County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to: The LLC, 1 Central Park West, #41C, NY, NY 10023. Street address of principal place of business: 1 Central Park West, #41C, NY, NY 10023. Purpose/character of LLC: Any lawful purpose.

POSITIONS AVAILABLE

Associate, Principal Structured Finance (Apollo Management Holdings, L.P. –New York, NY); Mult. pos. avail. Offer’g a salary of $200,000 to $200,000. Partner w/ sr. leaders in High Grade Alpha on new ideas for investm’ts that fit the portfolio companies & credit funds. Prepare high quality internal & external presentat’ns. F/T. Apply w/ resume to dhorton@apollo.com. Ref. Job ID: 6578952.

Notice of Qualification of 744 Madison Sale Center, LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 05/08/23. Office location: NY County. LLC formed in Delaware (DE) on 04/04/23. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with State of DE, Secy. of State, Div. of Corps., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

Trading Assistant (Citadel Americas Services LLC – New York, NY); Mult. pos. avail. Offering a salary range of $162,000 to $230,000. Ensure accurate trade capture & pos. mgmt w/ trad’g systems. Reqs a bachelor’s degree (or foreign equivalent) in Finance, Econ., Applied Math., Comp. Sci., Comp. Eng., or rel. quant. fields plus 5 yrs of experience in the job offered or in 1 of the follow’g fields: fixed income, equities securities, derivatives middle office, or a financial control environment. Education, experience, or training must include the follow’g: Fin. Markets; Fix. Income Deriv.; Cash Instruments, incl. FX, Swaps, Swaption., Sovereign Debt., equity, or commodity; 1st Order interest rate risk, incl. duration & curve; Swap yield curve; and database entry and mgmnt. inc. Excel & Microsoft Word, or related software. Experience may be gained concurrently. F/T. Apply w/ resume to citadelrecruitment@citadel.com. Ref. Job ID: 6934125.

Real Estate or Senior Real Estate Officer

(Focus: RE Funds, Co-Investments) STRS Ohio

The State Teachers Retirement System of Ohio (STRS Ohio) is seeking a Real Estate Officer or Senior Real Estate Officer for our International Real Estate Funds team. The successful candidate will analyze investments, write recommendations, monitor and report on the fund and co-investment portfolio, and provide relevant data analysis with the Managing Director, contributing to maximizing the value of this STRS Ohio portfolio.

STRS Ohio’s real estate fund portfolio has an international focus and is comprised of a diverse array of vetted value-add and opportunistic managers. STRS Ohio’s investment returns for the one-, three-, five- and 10-year time periods ending June 30, 2022, ranked in the top 10% of Callan’s public fund sponsor database of more than 200 public funds. STRS Ohio also outperformed its benchmark for each of these time periods. For more information on this position and others, visit jobs.crainsnewyork.com

of Lower Manhattan going forward.

“Downtown will remain a solid, important office market,” said Bruce Surrey, a veteran downtown broker at CBRE. “It will take time for it to return to a degree of vibrancy and level of demand in the overall market that we may not see for another two years.”

Aging properties

Although the city’s office buildings are struggling across the board, newer ones have been holding up better than older ones overall, a trend many in the industry have dubbed the “flight to quality.”

This has sparked a multi-pronged problem for the downtown market. It has a smaller number of newer office options than Midtown and Midtown South, and because office rents are depressed across the board, many of these newer buildings are more attractive and easier for companies to afford than ever, according to Transwestern research manager Corrie Slewett.

“There are a lot of opportunities to get into these new buildings at a better price point than there would have been before Covid,” she said.

May rents for downtown office space were still about $20 cheaper per square foot on average than rents in Midtown and Midtown South, according to Colliers. However, the opportunity to get into a prime Midtown building at a lower price seems to have proved too tempting for some firms that may have otherwise considered Lower Manhattan.

“Downtown for many decades served as a release valve from a pricing standpoint when rents became escalated or too high or spiked in Midtown and Midtown South,” said Cushman & Wakefield Executive Vice Chairman Ethan Silverstein. “And in this type of marketplace, it’s increasingly difficult for downtown to play that role.”

Crazy commutes

“Downtown, there’s really not a lot of new construction, and there hasn’t been in quite some time.”

The focus downtown has been much more on renovations than new construction, and although upgrades could make some of the buildings more attractive for companies, Slewett expects the neighborhood to continue lagging moving forward.

One of the strongest factors behind the resilience of remote work more than three years since Covid first took its toll on the city has been the reluctance of workers to resume their often long and stressful daily commutes. Midtown and Midtown South both have major transit hubs in Grand Central Terminal and Penn Station to make these commutes somewhat more palatable for workers coming from outside the city, including New York’s suburban counties as well as Connecticut and New Jersey. But there is not really an equivalent downtown apart from the World Trade Center Oculus, which serves multiple subway lines and the PATH for commuters from Hoboken, Harrison, Jersey City and Newark in New Jersey.

This gets to why Midtown became such a dominant office market in the first place during the mid-20th century: the rise of suburban commuters. Midtown first became a huge office destination during that time because that’s when the suburbs really started growing, which made an easy commute into Grand

Central or Penn Station very desirable. In the 1990s and 2000s, however, suburban commutes started becoming less common, and more people started commuting to Manhattan from their homes in other parts of the city, lessening the importance of working near one of the major transit hubs. By 2017, 75% of Manhattan’s workforce commuted from within the five boroughs, according to Wallach. But the resurgence of the suburbs during the pandemic could magnify the importance of working near Grand Central or Penn once again.

“Some people did move out to the suburbs in the pandemic era,” Wallach said, “so it remains to be seen, but it is a factor that the market is watching.”

Others pushed back on how much of an impact Grand Central and Penn Station have on the strength of their proximate office markets. Slewett noted that there are still plenty of places to live in and around the city where commut-

ing to downtown is faster than Midtown, namely parts of Brooklyn and New Jersey.

“Certain points, it’s easier to get downtown, so I don’t know that it makes a huge difference,” she said. “A lot of it depends on where you come in from.”

JLL Executive Managing Director John Wheeler echoed this and stressed that downtown would be a particularly attractive commute for younger employees more likely to live in Brooklyn or on the New Jersey waterfront than in Fairfield or Westchester counties.

“Those transit hubs, they’re more desirable than having to rely on Grand Central,” he said. “[With] that younger workforce, high-value talent is more proximate to Fulton Center and World Trade Center.”

Downtown differences

Downtown’s office market has certain inherent distinctions from Midtown’s, namely when it comes to size. It is only about half as large

as Midtown’s, so Midtown will almost always have more activity even in leasing environments that are strong across the board, Wallach said.

And the neighborhood’s office market could get even smaller moving forward, especially if office-to-residential conversions actually take off as a way forward for the beleaguered buildings. Downtown has generally been viewed as a stronger market for these changes. The older age of many of the buildings makes them better suited to multifamily conversions, according to Slewett, and downtown has already been through a wave of residential conversions spurred on by the 421-g program.

That program, which the state enacted in 1995, focused on Lower Manhattan and gave a tax break to landlords who converted their commercial buildings into residential buildings. The program sparked about 13 million square feet of office conversions and 12,865 residential units, according to an analysis from the Citizens Budget Commission.

If downtown is to see another wave of new residential buildings, another incentive program would likely play a key role, Wheeler said.

“The first conversion wave in Lower Manhattan was also supplemented by some incentives,” he said, “and I don’t think that would be viewed as a negative development if more incentives were considered.”

It may be that some downtown office buildings have simply reached the end of their useful lives as office buildings, but that does not mean Lower Manhattan as a neighborhood is over, according to Silverstein. It just might be time for another round of changes.

“I wouldn’t really bet against downtown,” Silverstein said. “New York being what it is, I have no doubt that these landlords, investors and buildings will be able to reinvent themselves.” ■

City comptroller reaches $500K settlement with construction firms over wage theft, payroll fraud

BY EDDIE SMALL

Aquartet of construction firms has reached a more than $500,000 settlement with City Comptroller Brad Lander’s office over wage theft and payroll fraud, Crain’s can exclusively report.

The investigation stemmed from an August 2015 accident during work on P.S. 195 in the Bronx, when a construction worker fell from a ladder and broke his ribs, according to the comptroller’s office and medical records. He spent five days in the hospital, but his supervisor would not give him the name, address and phone number of Sphinx Construction, the company working at the job site, the medical report says.

Sphinx was a subcontractor for the Department of Education, which referred this case to the

comptroller after seeing that the injured worker did not appear in the payroll reports submitted to it, an indication of potential payroll fraud.

The bureau of labor law in Lander’s office ultimately found instances of payroll fraud and prevailing wage violations on about 20 different projects, largely at public schools, spanning from 2014 to 2016, on which Sphinx was the subcontractor. Contractors and subcontractors under public work contracts are required to pay their workers the prevailing wage rate, which is set by law for labor on public projects. The wage varies by job. For example, the prevailing wage for an asbestos worker is $44 per hour in the city.

Although Sphinx itself essentially vanished and became completely unresponsive during the course of the investigation, New York labor

law holds contractors liable for their subcontractors’ violations, so the comptroller pursued the prime contractors, according to Claudia Henriquez, director of workers rights in the office.

‘Powerful message’

The comptroller settled with the four prime contractors—D&K Construction Co., Geomatrix Services, Gridspan Corp. and Volmar Construction—over the course of about a year, starting in May 2022 and ending in April. The settlement with Volmar was the highest by far at about $409,000. The settlements still permit the office to go after Sphinx as well.

“Our city and its projects cannot allow predatory business practices, violate labor rights or deprive workers of their rightfully deserved wages,” Lander said in a statement.

“With the restoration of over

$516,500 in unpaid wages, New York sends a powerful message to Sphinx C onstruction and other companies committing wage theft that every worker must be treated with dignity.”

R epresentatives for the construction firms did not respond to requests for comment by press time.

Wage theft issues are very common in the construction industry, according to Henriquez.

“A lot of workers don’t know about their rights, and I think because prevailing wage can be a little bit complicated, it gives employers

more opportunities to get sneaky,” she said. “When workers are employed on public projects, they need to be getting paid the prevailing wage, but sometimes what employers will do is pay the workers $25 an hour, which is more than minimum wage but lower than the prevailing wage.” ■

BUCK ENNIS

BLOOMBERG

DOWNTOWN’S OFFICE MARKET HAS CERTAIN INHERENT DISTINCTIONS FROM MIDTOWN’S

RICH BERLIN is co-CEO of Dream, a six-school, 2,000-student charter system serving Harlem and the South Bronx.

RICH BERLIN

FROM: Washington, D.C.

RESIDES: Harlem

EDUCATION: Bachelor’s in political science, University of Wisconsin

SIGNIFICANT OTHER: Kara

Logan Berlin, founder of Harvest, a consultant to nonpro ts; a previous job was with Dream handling corporate giving

PARENTS’ CV: Berlin’s father taught African American history at the University of Maryland, and his mother was a marketresearch executive.

PATH NOT TAKEN: In 1995

Berlin moved to England to brie y study political philosophy at the London School of Economics. “But I think I liked the idea of having a Ph.D. more than working to get the Ph.D.”

CEO goes to bat for at-risk youth

Coaching a baseball team showed Rich Berlin the bene t of offering kids structure

BY C. J. HUGHES

Three decades ago Rich Berlin came to Harlem to teach line drives. Today he goes to bat for thousands of poor and potentially at-risk Black and brown children in his role as the co-CEO of Dream, a six-school, 2,000-student charter system serving Harlem and the South Bronx.

“Poverty crushes people,” Berlin said. “But the missing link with these kids, more than anything else, is schools.”

Like many arriving college graduates, Berlin was a bit unsure of where he’d wind up careerwise after moving to New York in 1992. But a TV ad urging people to get more involved with America’s youth led him and his roommates to a dirt lot at East 100th Street and First Avenue, where a group called Harlem RBI, for Reviving Baseball in Inner Cities, had formed a few teams.

But rst the volunteers had to help pick up syringes, old appliances and even animal carcasses. Still, Berlin found himself more excited by putting together elding positions and batting lineups than his day job with a polling company. “I

kind of got hooked,” he said. Baseballwise, there were early successes. From a 1-and-10 season in 1994, Berlin’s team rebounded to make it to the 1995 league championship in Yankee Stadium. But the team lost that game 17 to 3.

Still, at the time fewer than 100 teenagers were involved in the program, and they took the eld only in the spring and summer, sometimes no more than two days a week. In other words, most of their time was not lled with the kind of structure and support o ered by the sport, Berlin said.

Intent on making a bigger di erence, Berlin soon added a literacy program that the kids had to complete before showing up and began welcoming every age and gender to attend. en in 2003 the baseballonly model gave way to a broader after-school program that ran for the entire year. e results seemed striking: “We had no teenage pregnancies, no one joined gangs, and no one went to jail,” he said. “We thought we were pretty great.” But once his kids hit college, they often “reverted back to the mean” and dropped out.

“It was like we were giving kids

screwdrivers for their toolboxes and then saying, ‘Hey, good luck hammering nails with those screwdrivers,’ ” Berlin said.

Evolution

In 2008 the rst Dream school opened for 100 kindergartners and rst-graders in borrowed space in a public school on East 102nd Street, a long-home-run ball away from those early games. (One of the site’s two elds is still there; an apartment building takes up the rest of the property.)

Today, Dream has its own facilities, six of them grouped at three sites. e newest, a $50 million offering for 1,300 students in a former ice factory in Mott Haven designed by David Adjaye, opened to rave reviews in January.

Another, at Second Avenue and East 120th, was the rst new public school to open in East Harlem in 47 years when it cut its ribbon in 2016. Another site is under construction at East 168th Street and River Avenue in the Highbridge section of the Bronx for students who are currently learning in a temporary space nearby; it will open in 2024.

Today, 98% of Dream’s students

are Black or brown, with two exceptions being Berlin’s two children, who are ages 8 and 10. “If these schools aren’t good enough for my own kids, then what are we doing?” he said.

Like with nonpro t charters, Dream is open to all but can create its own curriculum. Taxpayers pick up about two-thirds of its $66 million budget, with the rest from donations from individuals, corporations and foundations. Dream’s special sauce is o ering a six-week summer program attended by about 80% of its students that keeps students from slipping through the cracks.

ough there haven’t been that many Dream graduates yet to analyze, 99% of seniors so far have gone on to college. And to make sure they stay there, Dream provides case managers who regularly check in with students for six years after graduation—the touch-all-the-bases philosophy he learned years ago.

“If you put our kind of programs together in partnership with families and communities,” Berlin said, “you really have the chance for generational and transformative change.” ■