Crain's New York Business, July 24, 2023

ou’re not having a 1980s ashback: Japan does indeed appear to be on a buying spree in New York once again.

Four decades ago Japan owned some of the skyline: Mitsubishi Estate Co., for example, once controlled Rockefeller Center. But the boom didn’t end well for many investors, who got wiped out by the early 1990s real estate market collapse.

As the Asian nation’s economy rebounds from its “lost decade” period, investors are

snapping up real estate across the city, from Midtown spires to SoHo storefronts to Alphabet City walkups.

Japanese investors bullish on NY again Y

e deals happening now are just as high-pro le as the Reagan-era Rock Center play. In late June Mori Trust, a developer that rose to prominence accumulating cheap land in post-World War II Tokyo, grabbed a major stake in 245 Park Ave., a commercial tower near Grand Central

co-owned by SL Green Realty Corp. and a top address of nancial rms. Landlords from the Land of the Rising Sun have made some key adjustments from the last go-round, however, including taking on more partners and less debt, which has some developers, brokers and professors saying the current wave is durable.

See INVESTORS on page 18

Why the weak of ce market is a boon for local nonpro ts

BY EDDIE SMALL

Although Midtown’s o ce buildings are best known for being home to law rms and nance companies, ABS Partners recently landed a di erent type of tenant in its building at 270 Madison Ave.: the New York Public Library.

“In the throes of the pandemic,

we made an aggressive deal that bene ted them,” ABS partner James Caseley said, “but, also, occupancy with a credit tenant bene ted us.”

e deal was structured as a leasehold condo, providing the library with an opportunity to essentially own the space outright, and it is indicative of the advantages nonpro t organizations are enjoying amid the most dismal market for

New York o ce landlords in recent memory. As owners struggle with high amounts of available space, resulting in low rents, nonpro ts are nding themselves able to break into the city’s nicer o ce buildings and secure concessions from landlords with increasing frequency.

In a healthier o ce market, landlords tend to focus on making a

splash with a high-pro le tenant and can a ord to be picky about what types of companies they want in their buildings, said Carri Lyon, a Cushman & Wake eld broker who focuses on nonpro ts. But in a market like today’s, simply nding a tenant who will occupy the space and pay their rent is often enough.

“Nonpro ts do bene t after a downturn,” Lyon said. “ e solidity

of some of these nonpro ts is extremely appealing when you’re hurting—or not even hurting, but you’ve just got to get your building lled up.”

Slow and steady

Charitable giving declined in 2022, according to the Giving USA

See LEASES on page 22

POWER CORNER

a congressman.

Former Trump impeachment prosecutor Dan Goldman talks life as

ASKED & ANSWERED Comptroller Brad Lander must toe a tricky line as both scal watchdog and unapologetic progressive.

RENEWED INTEREST: 150 E. 42nd St.

(left) was acquired in 1987 by a Japanese company and sold in 2014. In late June, Mori Trust took a major stake in 245 Park Ave. (right).

As the Asian nation’s economy rebounds from its “lost decade” period, its companies have returned to snapping up real estate across the city.

BY C. J. HUGHES

ANDY NATHAN’S MCRE works with Japanese rms.

City Council overrides mayor’s veto of housing bill, boosting tensions and setting up possible legal ght

BY NICK GARBER

The City Council voted earlier this month to override Mayor Eric Adams’ veto of four bills expanding access to rental aid for tenants at risk of eviction, escalating tensions within city government and setting up a potential legal battle.

e 42-8 vote marks the council’s rst override of a mayoral veto in a decade, showcases the deteriorating relationship between Adams’ administration and the council and demonstrates the two sides’ di erent perspectives on the city’snances, which grew visible in recent weeks during di cult budget negotiations.

Negotiations on the bills broke down weeks ago between lawmak-

tered with lower cost estimates and argued that the bills’ impact on vulnerable New Yorkers is reason alone to enact them.

“My hope is that after today, we can put aside our di erences with the administration on this issue,” Council Speaker Adrienne Adams said before the July 13 vote. e override ultimately passed by a virtually identical margin as the original bills did in May.

e legislation would greatly expand access to city-funded vouchers known as CityFHEPS that cover rent for people who are homeless or at risk of being evicted. ey would loosen income restrictions, end work requirements and allow people to apply for vouchers by showing rent-demand letters from their landlords to prove they are at risk of losing their homes.

THE COUNCIL’S LAST OVERRIDE OF A MAYORAL VETO WAS IN 2013

ers and City Hall, prompting the council to pass them in May in the face of Adams’ threatened veto— which he acted on a month later. Adams’ administration says the legislation would burden the city with up to $17 billion in new costs over the next ve years, but lawmakers and poverty advocates have coun-

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tration has advanced a newer claim that the council lacks the legal authority to expand vouchers—appearing to foreshadow a lawsuit if the bills are enacted. City Hall has o ered few details to support that claim, saying only that the state, rather than the council, has typically handled rent-subsidy programs.

e council, in its response, pointed out that it has passed four laws since 2021 to amend the CityFHEPS program.

Since the bills come with sixmonth implementation windows, it could be months before the Adams administration announces its next move.

Dueling estimates

Besides cost concerns, Adams’ administration also argues that the bills would make it harder for families in shelters to get vouchers by forcing them to compete with people who are housed but behind on rent.

In a statement after the July 13 vote, Mayor Adams said the administration is “reviewing our options and next steps.”

e mayor tried to throw the council a bone in June by enacting another change they had sought: scrapping a rule requiring people to stay in shelters for 90 days before becoming eligible for vouchers. But council leaders quickly called the move insu cient and blasted Adams for including an expansion of work requirements in his executive action.

On July 13, Adams touted progress since lifting the 90-day rule, which he said had made 500 households immediately eligible for the rental vouchers.

“Unlike the council, we do not, however, believe that New Yorkers should spend $17 billion on a package of bills that would put New Yorkers in shelter at the back of the line for a CityFHEPS voucher and make it harder for them to nd permanent housing,” the mayor said.

War of words

e ensuing weeks have seen an escalating war of words between the council and the administration.

Mayor Adams penned an op-ed published in the Daily News this month laying out his objections to the bills, only for the council to respond July 12 with a cheeky, lineby-line “correction”—accusing him variously of “gaslighting” the city and making “misleading” claims.

Since his veto, Adams’ adminis-

Compared to the mayor’s $17 billion estimate, the council projects its bills would cost a lower but still-considerable $10.6 billion over ve years. Both estimates assume 47,000 new households would qualify for vouchers each year, and both include expected savings from reducing costly shelter stays.

But other estimates, which advocates argue are more comprehensive, put the cost even lower. e nonpro t Community Service Society arrived at an estimate of $3 billion, accounting for shelter savings and the ability to keep people in cheaper apartments than the units they would occupy after leaving a shelter. And family shelter provider WIN argued this month that the bills would in fact save the city $730 million each year, taking into account the likely savings on education, child care and medical needs for people in shelters.

“It’s weird why you would be so dug in against reforms, and against funding that helps homeless people, when it is the issue of the moment,” WIN CEO Christine Quinn, a former council speaker, said in an interview last month.

e mayor, meanwhile, has the support of the independent Citizens Budget Commission, which

called on the council not to override Adams’ veto. Even the existing CityFHEPS program is missing $141 million in funding to sustain it for the next scal year, the commission noted, also rejecting the notion that an expansion could reduce overall spending.

“While vouchers are one component of a broader a ordable housing strategy, vouchers alone will not solve a crisis partly caused by undersupply, and the city cannot a ord a radically expansive city-funded voucher program,” Sean Campion, the commission’s director of housing and economic development studies, said in an email July 13.

e council’s last override of a mayoral veto came in 2013, when it overcame Michael Bloomberg’s rejection of two police reform bills.

Bill de Blasio did not issue a single veto during his eight years in ofce, and Mayor Adams has issued just one previously, striking a component of the SoHo/NoHo rezoning to little objection from lawmakers.

But this mayor and council appear to be having an increasingly tough time reaching deals. In a

Crain’s report this month about the mayor and council’s fraying connection, lawmakers pointed to the voucher-bill stando as a factor in driving the relationship to its current low point.

e basic question of why negotiations failed on the voucher bills has produced di ering explanations from both sides: City Hall has o ered proof that it tried to negotiate and accused the council of concocting a “false and sad rewrite of history” for suggesting otherwise.

e council, meanwhile, said those attempts were never made in earnest.

“At no point did they come to the table in earnest or support ending the 90-day rule, despite us postponing votes several times to leave space for their participation,” the council said this month in its response to the mayor’s op-ed recently. “Negotiating does not mean that the Council will just do what the administration wants. e counterproposals that the administration o ered were inadequate, and when given the opportunity to o er more reasonable proposals, they refused.” ■

In Notable Leaders in Advertising, Marketing and PR, the profiles of the following people were updated to more accurately reflect their roles and responsibilities: Stacey Ross Cohen Maxine Leighton, Ana Marengo, Natasha Mazeau, Gizem Ozcelik, Eric Rosenbaum and Rachel Rosenblatt. Please visit CrainsNewYork.com/notables.

Urban planning gets an AI-powered boost thanks to this Brooklyn startup

Co:census combines data from surveys, public hearings and online comments to identify trends and solutions

The upstart: Co:census

All through college, whenever Tiasia O’Brien returned home to Bushwick to visit her family, she was startled by changes in the neighborhood. New folks were displacing long-term residents and new buildings were rising, but it felt like no input came from the people who lived in the community.

A few years later, while working for di erent nonpro ts, O’Brien noticed further instances of developers and city o cials reshaping neighborhoods without meaningful input from residents. “No one came to the community,” she says. “So I was like, ‘I have no idea what I want to do. But I want to start a business that focuses on this.’”

e result is Co:census, an AI-assisted platform that helps urban planners, city o cials, architects and others gather and analyze community input to help shape their designs.

e software combines and analyzes raw feedback from sources ranging from surveys and online comments to public hearing transcripts. It identi es trends and suggestions from residents and sorts them into useful categories. A future version is being trained to understand regional dialects so that it doesn’t misinterpret slang and vernacular phrasing.

O’Brien says the technology cuts in half the time needed for data analysis.

e startup, based in the Brooklyn Navy Yard, has 16 enterprise clients ranging from Ford Motor Co. to cities large and small that pay, on average, $47,000 for a contract that includes consulting and survey design assistance. It also has 144 subscribers who pay up to $875 a month to access the software.

e company says it earned $650,000 in 2022 and should earn roughly twice that this year.

One early client was Lynn, Massachusetts, a city of 100,000 just north of Boston. It hired Co:census to analyze public input to shape its new master plan, which was adopted last month.

Lauren Drago, the city’s associate planning director, says the community is extremely diverse, with more than 30 languages spoken in the area’s public schools.

Co:census helped design an SMS survey, available in eight languages. e city also conducted in-person interviews and distributed paper surveys at places like delis and drugstores. e company’s analysis of extensive feedback from nearly 900 residents helped Drago and her team plan initiatives that the community identi ed as priorities—allocating $16 million to improve or replace existing amenities at six major parks, for example.

Community feedback typically comes from public forums where the most extreme voices drown out the nuance, or from check-box surveys that leave no room for open-ended responses, says Drago. “We get much better input from people when they can just tell you how they feel,” she says. “I get to have a one-on-one conversation with 900 people in the community.”

The reigning Goliath: Qualtrics

Qualtrics, co-headquartered in Seattle and in Provo, Utah, helps more than 19,000 brands around the world gather, analyze and act on customer sentiment. Before it was taken private last month, annual revenue topped $1.5 billion.

How to slay the giant

Once she identi ed her mission, O’Brien went back to school for her master’s degree in sociology. At the same time, she embarked on a road trip, interviewing city o cials and residents in communities around the country to better understand the barriers to community engagement. She also attended tech events around New York City. “I was just networking, bulldozing,” she says. “I’m not good at taking no for an answer.”

She raised about $75,000 from friends and family and hired two engineering interns. Her company’s rst product, launched in summer 2020, was an SMS-based survey chatbot.

e rst big client was the city of Oakland, which used the service to gather input from the community on how storeowners could best o er merchandise to outdoor shoppers during the pandemic. Additional cities soon signed on for annual subscriptions.

e next step was to build an AI platform that could analyze feedback—which required a lot of money.

O’Brien found success when she zeroed in on investors who shared her startup’s values and raised a $500,000 preseed round in 2021 funded in part by the Techstars accelerator. Last October, she closed a $1.6 million seed round led by New Age Capital, a venture capital rm that focuses on startups lead by Black and Latino entrepreneurs.

Ivan Alo, co-founder and co-managing partner of New Age Capital, says he was impressed that the company was already earning substantial revenue. “ e founder was showing us a lot of proof points at these early stages, on frankly not that much capital, and that’s what got us really excited,” he says.

And while everyone is hopping on the AI bandwagon these days, Co:census occupies a unique niche, says LaDante McMillon, co-founder and co-managing partner of New Age Capital. “ ey’re helping designers understand the vernacular and the context from which the community is communicating their concerns.”

Last year, Co:census rolled out its “Dubois” algorithm, which can analyze, visualize and classify community feedback. To win new clients, O’Brien and her team attend urban planning conferences and host an annual networking weekend of their own with “ reside chats” and workshops.

The next challenge

For now, Co:census will focus on urban planning and design clients—folks working on city development and transportation projects. But the technology could be used in any context requiring user feedback, from UX design to market research and focus groups, O’Brien says—a $9 billion market.

No rush. “Everyone in AI right now is in a race: ‘Let’s go faster, let’s push,’” says O’Brien. “But we are willing to be patient and move a little slower. What matters to us is building trust and a reputation with our clients, because that’s what matters to them.” ■

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

ANNE KADET

CO:CENSUS FOUNDER Tiasia O’Brien

WHO OWNS THE BLOCK

Major project in West Chelsea bets large offices have

BY C. J. HUGHES

Amassive conversion project in West Chelsea is set to test whether large offices can still find takers in a workfrom-home world where corporate tenants are downsizing.

Terminal Warehouse, a redevelopment of a full-block prewar warehouse by L&L Holding Company, Columbia Property Trust and Cannon Hill Capital Partners, is putting the finishing touches on the 1.2 million-squarefoot, $2 billion project and will start marketing it by the end of the year.

Much has changed since 2018, when the developers paid $880 million for the building, a hulking structure at 11th Avenue and West 28th Street cut through with a former railroad tunnel. But other than slightly tempering expectations about snagging a single major tenant for all the office space, the developers remain bullish that a mix of classic architecture, modern amenities and a trendy High Line-area address will be a win.

“The reality is, whether workers are in the office three days a week or five, they will be there on the same days and need space to interact,” said David Orowitz, a managing director at L&L.

The developers have not yet set rents for Terminal Warehouse, which has about 1.1 million square feet of office space and 75,000 square feet of retail and restaurant space. But Columbia Trust CEO Adam Frazier said prices will be comparable to some of the newest office skyscrapers nearby. At 50 Hudson Yards, which opened last year, asking rents average $125 per square foot annually, and the gleaming 77-story spire is 85% leased, according to CoStar Group.

But by creating a something-for-everyone medley of offices, restaurants and bike concierges inside an industrial relic, Terminal Warehouse seems to be aiming for tech tenants. Indeed, its layout is reminiscent of Chelsea Market, the nearby food hall and office complex owned and occupied by Google parent company Alphabet.

Yet tech tenants have not been immune to recent economic challenges. Meta, for one, has reduced its New York headcount in recent weeks, including at places like 372 Ninth Ave., a location consisting of the top floors of the former Farley post office whose base was converted into an Amtrak station peppered with retail offerings.

And there’s the macro environment. The average daily occupancy rate for offices in the New York region in late June was 49.1%, about where it’s been all year, according to Kastle Systems, a company that tracks building use. “Even if we don’t have tech tenants, a lot of employers are competing for talent that might otherwise go to tech companies, so our building can help with recruitment,” Frazier said. “Not everybody wants to work in a shiny glass-andsteel high-rise.” ■

613

The Ohm, a 369-unit, 34-story tower at 312 11th Ave. from Douglaston Development, was one of the first luxury high-rises in Hudson Yards when it opened in 2010. Bookending it in a way is 3Eleven, a new 938-unit, 60-story spire also from Douglaston across the street at No. 613. (The tower’s alternate address is 311 11th Ave.) Currently leasing its studios to two-bedrooms for prices that start at about $4,700 a month for market-rate units, 3Eleven occupies a large L-shaped site that once contained one of Manhattan’s few remaining gas stations (a Mobil) and a studio for sculptor Jeff Koons. Douglaston leased the site in 2018 for 99 years for $130 million and spent an additional $37 million on air rights. HSBC provided a $350 million mortgage. Handling the ground-lease deal on behalf of an unnamed family was a firm called Eight Points Asset Management that specializes in such transactions. 3Eleven’s 60,000 square feet of amenities include an outdoor pool and two dog runs.

281 11TH AVE.

Railroad companies once dominated this stretch of the West Side, including at this 3.6-acre site. In 1902, the full-block property was established as a transfer point for freight for the Erie Railroad, which ran to Chicago by way of the Southern Tier region of New York state. In 1909, the railroad added a “float bridge”-style barge to shuttle train cars back and forth across the Hudson to New Jersey. (The Hudson was still called the North River then.) In 1960, the Erie merged with rival Delaware, Lackawanna and Western Railroad and hung on until the mid-1970s. But Con Edison bought the site in 1978 from the railroad’s Ohio-based trustees for $1.2 million, public records show. Most of the property today provides parking for Con Ed vans, though members of the public who drive vehicles that run on compressed natural gas can fill up their tanks at pumps there. The filling station is one of six such Con Ed sites region-wide.

282 11TH AVE.

Perhaps the most significant example of repurposed railroad infrastructure prior to Terminal Warehouse (and a potential competitor) is this 19-story, 2.3 millionsquare-foot full-block edifice, the Starrett-Lehigh Building. Constructed in 1931 to serve a railyard below— some elevators are still big enough to fit train cars—the Starrett-Lehigh today is mostly offices, courtesy of a gradual transition that began in the late 1990s. Fashion businesses are mainstays today, including Ralph Lauren, Tommy Hilfiger and Under Armour. An ongoing renovation by owner RXR Realty is adding 10 floors of amenities including Hav & Mar, a restaurant from celebrity chef Marcus Samuelsson that should open this fall. There are 18 office spaces now for rent, with the largest being a third-floor, 103,000-square-foot berth, according to RXR, which bought the building in 2011 from Mark Karasick’s 601W Companies for $920 million. Karasick had purchased the Starrett-Lehigh at an auction in 1998 for $152 million.

HUDSON RIVER PARK

The Hudson River’s shores, once jammed with large cargo-laden ships and isolated by an elevated highway above West Street, were mostly a destination for workers. But after a reinvention that has played out over four decades, the strip now has much broader appeal as the four-mile, 550-acre Hudson River Park, which is on the verge of being completed, 25 years after Gov. George Pataki incorporated it. Required to self-fund, the park collects revenue from retail leases, air-rights sales and donations and had an income in its last fiscal year, which ended in March, of $28 million, according to its annual report. But the park has not come cheap. Since its 1998 creation, the authority that operates it has spent $915 million on construction and maintenance, according to its website. Among its refurbished maritime relics is Pier 66, which features a piece called Two Too Large Tables, steel-and-pipe creations by artists Allen and Ellen Wexler. One table is for sitting at, while the other is for sitting under for shade.

261 11TH AVE.

The tidal wave of development that washed over this High Line-adjacent enclave in the 2010s allowed AvalonBay Communities to gain a considerable beachhead, a large L-shaped site at the corner of West 28th Street that was once parking lots. Today it has not one but two Avalon rental towers. They are 2013’s AVA High Line, a 13-story, 405-unit development, and 2015’s Avalon West Chelsea, a slightly more upscale 30-story, 305-unit version. According to the City Register, AvalonBay leased the three tax lots that make up the site in 2007 for $173 million from Valeray Real Estate Company in a deal coordinated by the same third-party asset manager, Eight Points, of 613 W. 29th St. In 2018, Invesco Real Estate bought an 80% stake in five New York AvalonBay rental towers, including this pair, for $607 million, records show.

270 11TH AVE.

The industrial area boasts an automotive legacy as well. This five-story building houses a branch of Manhattan Motorcars, a dealership specializing in high-end models from Porsche, Bentley and Bugatti. The owner of both the business and the building is Michael Dezer, a Florida-based developer whose portfolio includes a Trump Towers complex in Sunny Isles Beach. Billionaire Dezer also owns one of the world’s largest car collections, part of which is in the process of being installed at a once-abandoned shopping mall in Orlando called Dezerland Park. In 1988, shortly after Dezer bought No. 270, he opened a 1950s-style club there called the Hot Rod Diner and Bar. Embedded car frames studded its facade.

William Rossiter, a former Civil War officer whose brother Edward Rossiter was an executive with New York Central Railroad, developed the oldest section of this full-block structure in 1891, at a time when rival railroads were constructing similar facilities nearby. Originally called the Terminal Warehouse Company, the seven-story site was a collection of two dozen walled-off storage areas under one roof served by trains that would enter a 689-foot tunnel from 11th or 12th avenues to discharge their goods. (The “cold storage” advertised on the facade referred to the site’s ability to stash furs.) In the 1980s, the Tunnel nightclub availed itself of the site’s cavernous through-block first-floor space. In later years, most of the floors featured self-storage units, though Uber also occupied a 54,000-square-foot column-lined berth. Currently being remade as a stylish office complex by L&L Holding Company with a design by CookFox, Terminal Warehouse has added several terrace-lined stories on its Hudson River side, a 10,000-square-foot courtyard and an auditorium. And the tunnel now features peek-a-boo-style floor openings to reveal the long-ago tracks.

an important future

Conceived pre-pandemic, Terminal Warehouse, a redevelopment of a full-block warehouse, will begin leasing within months

W. 29TH ST.

601 W. 26TH ST.

City Council’s bills would increase the number of homeless people who qualify for vouchers

Not since Michael Bloomberg’s mayoralty has the City Council overridden a veto from City Hall. Bill de Blasio, Adams’ predecessor, never vetoed a bill, and the council and the mayor enjoyed relative comity in the 2010s and early 2020s.

at came to an end July 13, when the City Council voted 42-8 to override Adams on a series of housing bills that they hope can prevent homelessness—and Adams believes will cost the city too much money. e clash between the council speaker, Adrienne Adams, and the mayor marked a low point in their relationship, which has deteriorated since last year. ( e two are not related.)

Some of the tension between the City Council and Adams is natural because the legislative body is, largely, more left-wing than he is. Some of it, though, is a function of Adams’ own hubris and inability to build relationships. e Democrat-run state legislature is not much friendlier to the mayor, and one of his only political allies is Gov. Kathy Hochul, who has echoed Adams’ rhetoric on bail reform al-

legedly fueling a pandemic-era crime spike.

At the heart of the clash between Adams and the City Council is how to solve homelessness. anks to both surging rents and an enormous in ux of migrants, nearly 82,000 people are living in city shelters, a record, with tens of thousands more in emergency facilities.

e City Council bills ease access to City Family Homelessness and Eviction Prevention Supplement, or CityFHEPS, vouchers, and increase the number of New Yorkers who would be eligible to receive them.

Currently, New Yorkers who are not in shelters have to meet strict quali cations to access CityFHEPS, but the City Council chose to expand voucher eligibility to any income-qualifying household “at risk of eviction,” which would be demonstrated with a rent demand letter. e City Council also codi ed the elimination of a 90-day waiting period for New Yorkers to qualify for CityFHEPS after entering a shelter. Adams had eliminated the requirement through an emergency rule in June. At the same time, he increased work requirements, which

the council bills ultimately struck down.

e major question hanging over all of this is cost. e Adams administration argues that the expanded voucher access and new rules will cost the city $17.2 billion over ve years. e City Council pegs the ve-year cost at a more manageable $10.6 billion. Other advocates, like Community Service Society of New York, predicted a much lower net cost of $3 billion over ve years, factoring in estimated shelter savings. e group also argues that it’s less expensive to keep low-income tenants in their homes than to place them out of shelters into pricier apartments on the open market.

Who’s right? We don’t know, but

it’s very hard to trust Adams—and that’s why you can’t blame the City Council for overriding his veto.

e Adams administration has already touted in ated costs for the migrant crisis and fudged facts there. And while there are plenty of mentally ill homeless, the true cause of such a surge of the unhoused—which has been decades in the making—is the lack of a ordable housing.

Sure, more supply must be created. But even if the YIMBYs had their way tomorrow and New York was transformed into another Tokyo, it would take many years for the new supply of units to create a downward pressure on rents. In the meantime, New Yorkers are su ering and need relief. Vouchers will help.

e Adams administration appears ready to bring a lawsuit against the veto override, arguing that the City Council exceeded its authority; the basis of the lawsuit would seem to be that only the state government, not the city’s, can determine how CityFHEPs money

gets spent. Even if the Adams administration lawsuit gains legal traction, the Democrats in the state legislature could pass bills to authorize the city changes—if such authorization is legally needed— and dare Hochul to veto that.

All of this would be simpler if Adams could be trusted to give an honest accounting of the City Council legislation. If these changes to the voucher program are eventually successful and homelessness declines, Adams will have looked quite obstinate.

Quick takes

● Will New York congressional maps be redrawn again? A new Democrat-funded lawsuit, now headed to the Court of Appeals, the state’s highest court, could trigger another unprecedented round of redistricting before the 2024 elections. Democrats may rejoice, but voters are bound to be deeply confused.

● If Adams does bring a lawsuit against the City Council and wins, Democrats there may not receive any help from the state legislature until January, when lawmakers are back in session. ■

Hell’s Kitchen condo conversion developer les Chapter 11 bankruptcy protection to halt foreclosure auction

BY C. J. HUGHES

The developer of a long-delayed condo conversion in Hell’s Kitchen has put its project into bankruptcy protection to stave o a foreclosure auction, in line with a recent trend to turn to the courts to buy time to work out soured loans.

On July 11, the day the auction was scheduled, the shell company that controls 343 W. 47th St., a walkup rental building near Ninth Avenue, asked the courts to step in. e company, whose managing mem-

will give the rm more time to straighten out its nances, said Jonathan Pasternak, an attorney for the owners, who have an outstanding balance of $4.6 million. A seven-story condo is planned for the four-story site, though no o ering plan has yet been led, Pasternak added.

Stop-work order

e building, which has been shrouded in construction netting for years, faces other challenges. ere’s a stop-work order on the prewar property, which sits next to a small playground, and it has nine open Department of Building violations, records show, most of which seem to have to do with site safety.

ber is listed as Fang Zou, led a petition with the U.S. Bankruptcy Court for the Southern District of New York to grant Chapter 11 protection to the four-apartment site.

Filing for bankruptcy protection put the brakes on the auction, which

But Pasternak said the developer, o cially listed as Midtown West 47 St LLC, has been talking with both the local community board and the Department of Buildings to try to resolve the issues.

“Covid slowed down my clients, but we believe this project will be back on track shortly,” he said.

Zou and the other owners pur-

chased the midblock building in 2018 for $6.1 million, according to the City Register. A California lender called 5 Arch Funding Corp. provid-

ed nancing, though the debt is now held by a di erent West Coast lender, CAF Bridge Borrower MC LLC, records show.

Zou, a Harlem resident, could not be reached. David Maling, the broker with Avison Young who was to run the July 11 auction, did not return a call.

Using bankruptcy protection to stave o creditors seems to be an increasingly popular tactic for landlords in the city’s rocky commercial real estate market. e troubled Jimmy Bu ett-inspired resort Margaritaville deployed the tool on July 9 to stop a foreclosure auction planned for the following day. But on July 12, two lenders on the 234-room project punched back, ling a lawsuit claiming the developers of the hotel, including Soho Properties founder Sharif El-Gamal, were personally liable for the $86 million loan. ■

“COVID SLOWED DOWN MY CLIENTS, BUT WE BELIEVE THIS PROJECT WILL BE BACK ON TRACK SHORTLY”

343 W. 47TH ST.

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

If changes to the program are eventually successful, the mayor will have looked quite obstinate

ROSS BARKAN

NEW YORK CITY COUNCIL/FLICKR

ERIC ADAMS and ADRIENNE ADAMS

BRAD LANDER New York City comptroller DOSSIER

INTERVIEW BY NICK GARBER

When the city enacted a $107 billion budget earlier this month, Comptroller Brad Lander had a more nuanced take than the City Council’s Progressive Caucus, which he co-founded during his dozen years as a lawmaker. Although he echoed their harsh criticism of Mayor Eric Adams’ cuts to social services, he acknowledged the reality of future-year deficits and advanced some wonkier solutions, including a four-year phase-out of noncritical programs to reduce headcount in the city’s workforce. That measured response reflected the tricky line Lander must toe as the city’s fiscal watchdog but also an unapologetic progressive—dual identities that Lander does not view as conflicting. Lately, his scrutiny of the mayor’s dealings have led Adams to lash out at Lander—and prompted speculation that Lander might make a run for City Hall himself one day.

How do you think the city handled this latest budget process?

I don’t think the budget conversation focused on many of the critical questions. We do have meaningful outyear budget gaps that need a thoughtful approach. But because [the mayor’s budget office] gave every agency just 10 days to make their cuts, the city made some cuts kind of wantonly—they made the library cut, but then they mostly restored it, but that masked the cut to CUNY. To me, cutting CUNY at this moment is the most pennywise, pound-foolish thing you could do. If we’re going to have a vehicle for connecting New Yorkers to economic growth in an increasingly unaffordable city, CUNY is the best one we have.

The Adams administration took a more fiscally conservative approach to this budget and openly criticized the council’s more liberal stance. Why do you disagree with the idea that progressive budgeting is at odds

WHO HE IS New York City comptroller, elected in 2021

AGE 54

GREW UP St. Louis

RESIDES Park Slope

EDUCATION Bachelor’s in fundamentals: issues and texts, University of Chicago; master’s in urban planning, Pratt Institute; master’s in social anthropology, University College London

ICE COLD Lander has taken the Polar Bear Plunge, braving the freezing waters off Coney Island on New Year’s Day, at least five times.

MAYORAL JOKES Although Mayor Eric Adams has singled out Lander as an adversary—even mocking his voice at a June press conference—Lander only smiled when asked about the criticism, pointing to his role as the city’s chief watchdog. “I take the duties really seriously; I try hard to do them respectfully. It’s not personal,” he said.

with fiscal responsibility?

We [progressives] are the only ones this year that I saw focused on the question of: Do we need more revenues? And if so, where will they come from? It’s progressive to say, “We want to be able to invest in affordability and long-term thriving.” The way to get those resources is to say to the wealthiest 1% of New Yorkers, “We need you to pay 1% more in income taxes.” If we just proceed blindly into out-years where we’re facing significant budget gaps, we won’t be able to deliver high-quality, effective government that meets its promises. That long-term view is prudent on the one hand. But on the other hand, it’s progressive, by saying, the future matters; our kids matter. A city that underinvests in CUNY, affordable housing, child care, mental health care—you might save money in the short run and be able to cut

taxes, but the city will suffer, not just from a values perspective but from a very practical perspective.

Do you have a different perspective on the city’s finances in your current role compared to when you served on the City Council?

Yes. It’s the comptroller’s job to take the long-term view on New York City. Politics is often a short-term business. People are thinking about, at best, the election cycle in terms of longterm time horizon and maybe just the news cycle or the Twitter cycle. The comptroller is managing pension funds that have obligations decades out. So you’re thinking in, at least, a 30-year time horizon. Then the comptroller has all these particular duties that make you think about the budget differently. Because we register all the contracts, you’re thinking about the contract budget a lot. We settle claims against the city prelitigation: Last year the city settled 12,000 claims totalling $1.5 billion in settlements.

The city seems to be in a precarious place. What’s your view on its future? These are times, not just in New York City but globally, of larger than usual uncertainty. It is worth emphasizing how much better the city is doing than many people thought it would be three years ago today. Watching tax returns and sales receipts keep coming in above our projections is evidence that we’ve got a really good shot at a thriving future. The thing that keeps me up at night is affordability. If we can keep New York affordable, if we can address the housing crisis, if we can make child care continue to be more affordable for young families and confront energy and transportation [costs], then I think the city continues to thrive, because no place else has the energy and vitality and agglomeration and density and diversity. But as costs go up, if people can’t stay here when they’re young and when they want to start a family, there’ll be real worries as a result. ■

Price for pool-topped Tribeca penthouse used in shoots for TV shows dips to $24 million

BY C. J. HUGHES

Even in the summer swelter, it might take more than a private pool to sell a Tribeca pad. Star turns on TV might not be enough either.

On July 12 the penthouse at the condo 1 North Moore St. came back on the market with a 20% dis-

door space, much of it located on the building’s roof, whose centerpiece is the trapezoidal pool.

A swimmer could sidle up to its infinity edge and gaze down at West Broadway or, if they squinted a bit, take in the ex-firehouse down the block on North Moore where parapsychologists prepped for pesky spirits in the movie “Ghostbusters.”

mon Posen, paid about $8 million for the 5,500-square-foot home in 2012, though that price was apparently adjusted downward to reflect that Posner had previously invested in the development of 1 North Moore alongside the firm VE Equities, according to a Wall Street Journal report.

Also marketed as rental

count, down to $24.3 million from the $30 million the unit was asking from June 2022 until April of this year, when it was temporarily delisted.

The triplex apartment has four bedrooms, three full and two halfbaths, and 2,200 square feet of out-

That the 5,500square-foot unit has a tie to Hollywood seems apt. Several TV series have rented out the North Moore penthouse for shoots, with the roof often a focal point. “Law & Order: Special Victims Unit,” the Starz crime show “Power” and Showtime romantic drama “The Affair” have all filmed episodes there, according to a source who helped book the productions.

The home’s owner, investor Si-

In 2010 VE Equities paid $8.8 million for the lot, the site of a failed previous project. A trade union’s pension fund kicked in $20 million in financing, public records show. The red brick building, which has a total of seven units, opened in 2012.

As the pandemic raged in December 2020, Posen relocated to Florida, according to the Journal. The following year he reportedly rented out his New York home for $85,000 a month, before listing it for sale last year.

But somebody interested in it as a short-term place to cool off can

possibly get the keys as well. The penthouse is simultaneously on the market as a rental for $90,000 a month, according to StreetEasy, a price that is down from the $100,000 rent it sought last winter.

Directors with scripts that call for swim scenes may be in luck as

well. The penthouse also continues to be marketed as a filming location, based on an online ad.

Khashy Eyn, the Platinum Properties broker who has been marketing the property, did not respond to a request to speak about the unit or to make his client available. ■

SEVERAL TV SERIES HAVE RENTED OUT THE NORTH MOORE PENTHOuSE FOR SHOOTS

1 NORTH MOORE’S TELEGENIC POOL

City Council’s rent aid expansion would hamper efforts to help the most needy

The recent City Council vote to override Mayor Eric Adams’ veto has sparked an essential conversation about housing a ordability in New York. In theory, the council’s plan to expand rental aid sounds like a solution. However, it is expensive, unrealistic and would hinder the city’s e orts to help those most in need.

even more concerning is the potential for unintended consequences. Under these bills, families already in shelters could be forced to compete for CityFHEPS vouchers with those who are behind on rent but still housed. is is not a solution but rather a reshu ing of hardship.

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EDITORIAL

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audience engagement editor Jennifer Samuels

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senior reporters Cara Eisenpress, Aaron Elstein, C.J. Hughes, Eddie Small reporters Amanda D’Ambrosio, Nick Garber, Mario Marroquin, Jacqueline Neber, Caroline Spivack

op-ed editor Jan Parr, opinion@crainsnewyork.com

CITY LEADERS SHOULD FOCUS THEIR ENERGY ON MORE SUSTAINABLE SOLUTIONS

For businesses in our city, the stakes couldn’t be higher. We only need to glance westward to San Francisco to see the specter of what happens when a housing crisis goes unchecked. A city once famed for its vibrancy is now mired in a “doom loop” of homelessness and economic stagnation. We cannot a ord to let New York follow suit.

New York’s housing voucher expansion in its current form could pile an unsustainable burden of up to $17 billion on the city over the next ve years. But

e council’s plan would allow New Yorkers who are simply a few weeks late on rent to qualify for aid. e essence of triage is not to spread resources thin but to prioritize those in most need. is is not to discount the immense su ering of those struggling with rent. But a reaction that creates competition for resources among the vulnerable is not a viable or compassionate solution. It amounts to treating a symptom while ignoring the disease: the city’s chronic and pervasive lack of a ordable housing.

City leaders should instead focus their energy on more sustainable solutions: addressing restrictive zoning policies, fostering public-private partner-

ships and working to expand the a ordable housing stock. ese are the long-term investments that will ensure a healthy housing ecosystem for all New Yorkers. Focusing on housing supply is not merely a response to a crisis;

it’s a strategic move that ensures the viability of our city for all residents and businesses. Let’s not lose sight of the ultimate goal—a New York City where every resident has a safe, a ordable place to call home. ■

New York City’s notorious public toilet shortage can be solved—quickly

BY MICHAEL OSSO

It will surprise exactly zero New Yorkers to know that the city doesn’t have enough public bathrooms. New York has among the lowest number of toilets per capita in public parks of all major U.S. cities, with just 16 “comfort stations” for every 100,000 residents. Our notorious restroom shortage signi cantly a ects the city’s local economy, livability and public health. But we believe that with the proper incentives, businesses can contribute signi cantly toward solving this public health crisis.

e Crohn’s & Colitis Foundation recently surveyed consumers nationwide and in New York City and found that 54% of New Yorkers don’t think there are enough public restrooms in their neighborhood or town, compared with 36% nationwide. Fourteen percent of New Yorkers report having had a urinary or bowel accident within the previous 12 months—nearly double the already shocking na-

tional gure of 8%. Importantly, the vast majority (83%) of NYC respondents who had bowel accidents also reported that they could have avoided their embarrassing accident if there had been a public restroom nearby.

NYC lawmakers have already shown a willingness to help solve the city’s restroom shortage. Led by Manhattan Borough President Mark Levine and Council Member Rita Joseph, the City Council passed a 2022 law requiring the city to identify and report on potential locations for a new restroom in each NYC ZIP code. Building on these e orts, the duo recently proposed two additional bills: one focused on developing capital funding for identi ed bathroom locations and the other on opening up existing ADA-accessible bathrooms in publicly owned city buildings.

We applaud their joint leadership to champion expanded restroom access, and we now urge the City Council to pursue an additional cost-e ective and scalable

strategy: creating incentives for businesses to open their restroom doors.

Cash or tax incentives

Given the scale of the shortage, tapping local businesses is a much faster and more e cient solution than exclusively focusing on public buildings or building new bathrooms. e retail businesses that line our streets already have the necessary facilities.

We urge legislators to consider direct cash payments or tax incentives to NYC businesses willing to make their toilets publicly available. Already successfully implemented across some German and British communities, municipal programs like these would reward businesses for voluntarily opening their facilities to the public.

To monitor compliance, NYC can partner with the Crohn’s & Colitis Foundation’s We Can’t Wait restroom nder app to display the participating businesses and collect feedback from patrons to ensure these restrooms are in fact

open. Such programs would immediately boost the number of clean, well-maintained restrooms, and as an added economic bene t, it should increase the appeal of many shopping districts.

New Yorkers are already on board with this solution: In our survey, 70% of NYC respondents say they think businesses that open their restroom doors to the public are showing good customer service, and 61% indicate they “denitely” or “probably” think it’s a good idea for governments to provide tax incentives or other benets for companies that make their restrooms publicly available. Plus, 63% of New Yorkers say they would “de nitely” or “probably” spend more money at a business that opens its restrooms to the public.

New York City’s insu cient toilet infrastructure remains a signi cant problem—but one within our collective reach to solve. Our leaders must make it happen. ■

Michael Osso is president and CEO of the Crohn’s & Colitis Foundation.

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Unaffordable housing threatens NYC’s future

BY JON SILVAN

New York City is at a crossroads. To maintain our prominence as the global economic and cultural capital and to continue to attract and retain top talent to our workforce, we must make a choice. Do we fully commit to creating affordable and accessible housing, modernizing our public transit systems and investing in the public realm, all critical components of a thriving, livable urban ecosystem, or do we continue to walk past our problems with our heads down?

As a lifelong resident and CEO of a public relations and research firm in Manhattan, I refuse to concede that reversing the rising cost of living and working in New York is an insur-

mountable task. To remain a beacon of opportunity and prosperity, we must first recognize that talent is New York City’s lifeblood.

In an era characterized by the rise of remote work, with residents and businesses leaving the city, we face a critical challenge. To remain competitive, we must prioritize the factors that invite a talented workforce and give people—especially young people—a reason to choose New York. It starts with housing.

Unaffordable housing threatens to impede the retention of talent that makes our city great.

Mayor Eric Adams and Governor Kathy Hochul outlined ambitious plans to prioritize housing options, but as lawmakers failed to find common ground during the recent legislative session, rents continue to rise and we face a shortage of rental housing units.

We must invest in policies that address our needs and the needs of our suburban neighbors. The governor’s suburban housing policies will

rightfully provide opportunities for affordable living while maintaining proximity to the city’s resources.

Transit funding

It is also our collective responsibility to advocate for dedicated funding streams for public transit that will reduce environmental impact and improve mobility for residents and tourists alike. Subway ridership is slowly rebounding, and investing in more robust and reliable 24-hour service, with improved safety measures, is necessary to revitalize New York City’s transit system. While the legislature made progress, there’s still more to be done in terms of major capital projects required to modernize the system.

The third step is investing in the public realm, which plays a crucial role in shaping the identity and livability of any city. By devoting resources to improving public spaces, parks and recreational facilities, we create vibrant and inclusive communities. I applaud the mayor for creating the post of Public Realm Officer. These investments enhance the quality of life for residents and stimulate economic growth by at-

tracting businesses and tourists.

Here’s the reality: We can’t force people and businesses to move to New York City. We need to create an environment where they want to.

I partnered with World Trade Center developer Larry Silverstein two decades ago to gain support to rebuild Lower Manhattan. Like then, I now choose a path forward.

Investing in New York City’s future will attract the brightest minds and ensure that we remain a global hub of innovation and creativity for generations to come. ■

Jon Silvan is founding partner and CEO of Global Strategy Group, a public affairs, communications and research firm based in Manhattan.

Adams’ budget leaves low-paid service workers who provide critical services in the lurch

BY LEIGH CONNER

If you live in NYC and are searching for a “competitively compensated” job in the nonprofit sector, I’ve got an offer for you. Qualifications include a master’s degree, fluency in two-plus languages and three-plus years of non-intern work experience. The location is NYC; the position is fulltime, and the salary? It’s $45,000 to $55,000.

The disparity between position requirements and compensation comes from an actual job listing at an international nonprofit. Unfortunately, it’s far from being an outlier.

If $55,000 sounds reasonable, consider the math. The monthly take-home pay after taxes would be $3,500. Take out $350 for bills and MetroCard. Factor in the average monthly student loan of $400, which leaves you with $2,450, around $1,000 less than the average monthly one-bedroom rent in Brooklyn. Never mind the cost of groceries and any other expenses.

These low wages are by design. America can collect lower taxes than most nations because it outsources social services to nonprofits rather than provide them and has done so as a cost-saving measure since the late 1960s. NYC alone contracts over 125,000 nonprofit human-service workers who pro-

vide critical services to the city’s most marginalized residents. Unlike the workers the city employs directly, their salaries receive no cost-of-living adjustments. Thousands of these workers have rallied and protested to make their demand heard for a 6.5% raise.

The city’s salary transparency law has placed a glaring spotlight on the compensation of those working to better their communities.

Salaries unacceptable

Two-thirds of NYC’s nonprofit workers earn at or below the city’s “near-poverty” threshold. These salaries are unacceptable on their own, but especially considering a deeply researched report the United Way released in April laying out the compensation required for New Yorkers to meet their basic needs. Their estimated minimum annual cost of living for a single person in lower Manhattan is $76,000, and numbers do not vary drastically across boroughs.

While no one enters public service for the wealth or the perks, what can these workers expect? Are these organizations, which exist to foster collective, public or social good, responsible for the welfare of their own workers? It’s a complicated ethical question: Is it acceptable to contribute toward one social problem while working to address another? Do nonprofits have any

choice? It’s an urgent, longstanding problem.

At a minimum, cost-of-living wage increases should be mandatory for the workers contracted by the city. Everyone whose labor contributes to the city’s ability to serve its citizens should receive the same basic wage protections.

With the latest budget, the mayor and city council were in the position to take this first step toward moving the city’s service workers further out of poverty. They chose not to.

Over the past couple of months the mayor has made agreements for both retroactive and future salary increases, averaging around 3%, to various labor groups including The Police Benevolent Association, the Uniformed Officers Coalition, DC37 and the United Federation of Teachers.

In his recently released budget, Adams claimed there was not enough money to do the same for the city’s human-services workers. Instead of the systematized cost-ofliving other groups received, service workers were allocated a set amount of money; $40 million toward a workforce enhancement for the 125,000 contracted workers in the sector, growing to $90 million next year.

The demographic differences between the workforces that did receive raises and those that did not

are noteworthy. Women and people of color comprise the vast majority of the city’s service workforce and earn significantly less than their white or male counterparts.

Michelle Jackson, executive director of the Human Services Council of New York, celebrates the raises that were given but notes complications arising out of teachers unions receiving cost-of-living increases while pre-K or daycare workers won’t. The result will be more educators choosing the position with higher pay, only adding to an already dire workforce shortage. Adams chose to forgo cost-of liv-

ing increases for the New Yorkers working as hard as possible to address some of the biggest issues the city has ever faced. With a skyrocketing homeless population, an increasingly aging population and becoming the most expensive place to live in the world, our city needs helpers, and those helpers deserve to have a decent quality of life. Hopefully the mayor will grow to agree by the time he formulates his next budget. ■

Leigh Conner is a master of public administration student at New York University.

THE LIST

LARGEST CONSTRUCTION FIRMS

Ranked

Construction industry continues to claw back after Covid pause

Following last year’s humble uptick, the top construction firms in the city are still struggling to gain solid footing.

The average New York-area revenue across the top 25 firms in the city was about $782 million, representing a 4% drop from 2021’s figure of $818 million. Globally, the firms saw a much steeper decline in companywide revenue: 19%. The top 25 firms are responsible for more than 650 of the city’s major building projects.

While revenue has slowed, a growing workforce is a bright spot; in 2023, the top firms in the industry employ about 8,000 workers, a 10% increase in workforce among the firms that submitted data for both years. The gains are relative compared to the industry’s setbacks from the pandemic’s pause in 2020, when 44,000 jobs vanished across the state. As of May 2023, the subsector was still down net 8,800 jobs compared to May 2019, according to data from the state comptroller’s office.

Midtown East-based AECOM Tishman | AECOM Hunt retained its top spot, bringing in just over $3 billion in revenue for 2022, a 3% increase from 2022.

Structure Tone/Pavarini McGovern also kept its second-place slot, with $2.9 billion in revenue, a 13% jump from the year prior.

— Amanda Glodowski

The number of permits in 2022 surpassed prepandemic numbers

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LARGEST CONSTRUCTION FIRMS

Offshore wind projects petition New York for additional subsidies

BY CAROLINE SPIVACK

Developers of offshore wind projects key to New York hitting its renewable energy mandates say they can’t get their projects off the ground without more subsidies from ratepayers.

The requests for additional money come from the developers behind all four offshore wind projects contracted by the New York State Research and Development Authority. In documents filed with the Public Service Commission, developers said inflation lies at the heart of the issue, along with persistent supply chain challenges and a sluggish permitting process.

Norway-headquartered Equinor and British Petroleum are building three of the projects: Empire Wind 1 and 2 not far from the Jersey Shore and Beacon Wind east of Montauk. Combined, the projects, which were awarded contracts in 2019 and 2022, are expected to produce more than 3,300 megawatts to power nearly 2 million New York homes and create thousands of high-paying jobs in the green economy.

The developments are essential to state efforts to build the largest

offshore wind pipeline in the nation and represent 12% of the energy generation needed for New York to reach its target of producing 70% of the state’s electricity from renewable sources by 2030.

But if state regulators agree to the price adjustments, consumers will face higher utility bills.

Other requests

The renewable developers are not alone in their requests; elsewhere in the country firms have put for ward similar changes owing to inflation. Teddy Muhlfelder, vice president of Equinor Renewables Americas, said the projects’ petition is “driven by a number of challenges.”

“Like other developers at the forefront of this emerging U.S. industry, Equinor and BP have seen the estimated costs of our projects rise sharply due to inflation, supply chain disruptions, permitting and interconnection delays, rising interest rates, and other outside factors,” Muhlfelder said in a statement to Crain’s

“While we have worked to manage these issues,” Muhlfelder said, “given the unique moment in our global economy, this is an industry-wide issue that cannot be over-

come at the project level.”

The Sunrise Wind development, a 924-megawatt joint venture by Ørsted and Eversource east of Long Island, made a similar motion for contract changes to state regulators. The project’s developers also want price adjustments on the agreement they negotiated in 2019 because of inflation, supply chain issues and logistical hurdles spurred by the war in Ukraine.

Ørsted and Eversource’s petition points out that New York has made similar price adjustments as part of the state’s third offshore wind procurement process and argues that the state should do the same retroactively for deals negotiated as part of the first two offshore solicitations.

“These unanticipated, extraordinary economic events beyond Sunrise Wind’s control have upended its careful financial and developmental planning for the project,” the companies said in their petition.

The developers insist in their petition that Sunrise Wind “will not receive any ‘windfall’ as a result of the requested amendment” and that instead, altering the contract to incorporate inflation and other costs “will merely allow the project to attain a level of financial viability that Sunrise Wind believes is suffi-

cient” to get a positive investment decision from the project’s board of directors.

In the meantime, the state’s offshore wind projects are bracing for delays: Sunrise Wind expects to be operational by 2025, while Empire Wind is targeting 2026 for phase one and 2028 for phase two. Beacon Wind anticipates it will be up and running by 2029. All of those dates are at least a year later from the projects’ original timelines.

Seeking comment

In an unusual step, the Public Service Commission is seeking public comment on the petitions. The move is a noteworthy one because the commission is not required to do so. Department of Public Service spokesman James Denn said the comment period formally closes Aug. 28 but that input on the motions will be accepted until the

commission reaches a decision. Despite the delays and financing issues, U.S. Secretary of the Interior Deb Haaland visited Albany earlier this month to trumpet investing in offshore wind and New York’s ambitious projects.

Haaland toured what will be the country’s first offshore wind tower manufacturing facility under construction in the Port of Albany, which is mired in its own permitting delays and funding issues due to losing a federal grant because work began before environmental reviews were complete.

Haaland acknowledged that the road to a green energy economy will have its bumps.

“We’re starting this transition,” Haaland said at a news conference. “We know that it hasn’t always been easy, but that doesn’t mean that anyone gives up. We’ll just keep working at it.” ■

PEOPLE ON THE MOVE

ACCOUNTING

Anchin

Brian Glavotsky, CPA, MST, has joined Anchin as a Tax Partner within the Firm’s Private Client Group. He specializes in providing tax advisory to high-net-worth individuals and families. Brian performs detailed research and analysis on complex tax issues, advising high-net-worth individuals as well as partnerships on the impacts of new tax law changes. Brian also specializes in fiduciary and gift tax returns and has extensive experience in international tax matters.

ACCOUNTING

Anchin

Elizabeth Zabludoff, J.D., has joined Anchin as a Principal within the Firm’s Private Client Group, and is the Leader of its Family Office Services Group. Elizabeth has more than 20 years of professional experience focusing on the needs of high-net-worth clients. She has significant experience working with wealthy individuals and families (including several Forbes 400 families) and has earned her reputation as a thought leader and trusted advisor in the highnet-worth community.

ACCOUNTING

Anchin

Philip Lebovits, CPA, has joined Anchin as a Tax Director within the Firm’s Financial Services Group. Philip has over 30 years of experience in the accounting profession, providing oversight of federal, state, local, and international tax matters to broker/dealers, private equity funds and hedge funds. His strong tax background and experience working with corporate clients, as well as high-net-worth individuals, speaks to his broad capabilities and enables him to extend a wide array of services.

ACCOUNTING

Prager Metis CPAs LLC

Prager Metis, a leading global accounting and advisory firm, is delighted to announce the appointment of Anson Loi, CPA, as a new Partner. With over 18 years of experience in the field of taxation as a highly accomplished tax professional, Anson has led engagements focused on corporate, partnership, and high net worth individual state income tax compliance. His specialized focus in State and Local Tax (SALT) further distinguishes him as a leading authority in the field.

EDUCATION

New York Medical College

Neil W. Schluger, M.D., has been appointed dean of the School of Medicine at New York Medical College (NYMC).

An internationally recognized pulmonologist, Dr. Schluger previously served as chair of the Department of Medicine and associate dean for clinical and translational research at NYMC, as well as director of medicine at Westchester Medical Center. He was recognized by Crain’s New York Business as a 2023 Notable Health Care Leader for his exceptional work and dedication to healthcare.

EDUCATION

Manhattan College

Milo Riverso, Ph.D., P.E., has been appointed the 21st president of Manhattan College. Dr. Riverso, an alumnus of the College and a highly accomplished leader in the engineering and construction industries, has a deep understanding of the higher education landscape, and has a long history of service to Manhattan College. For nine years, Dr. Riverso was president and CEO of STV Group Inc., one of the nation’s most prominent engineering, construction management, planning, and architectural firms.

TECHNOLOGY

Kivera

Joe Lea has joined cloud security company Kivera as Chief Executive Officer. In this role, he will oversee and manage the company in its mission to provide a generational leap in cloud security through proactive policy enforcement. A veteran in the enterprise and cybersecurity spaces, Lea’s 25 years of operating experience span Shift5, Armis, and Tanium. Lea will drive operations and strategic direction for Kivera, ensuring growth and success of its Cloud Security Protection Platform (CSPP).

EDUCATION

Manhattan College

Stephen J. Squeri, chairman and chief executive officer of American Express Co., has been named chair of the Manhattan College Board of Trustees. Squeri is an influential and distinguished business leader, an alumnus of the College, and has been a member of the Manhattan College Board of Trustees since 2013. In 2021, Squeri made a $10 million gift to the College to enhance facilities and infrastructure.

LEGAL Thompson Coburn LLP

Trish Lilley joined Thompson Coburn to drive strategic growth and amplify industry presence for the full-service, valuesdriven firm with 450 lawyers in seven offices. This month, the firm celebrates the two-year anniversary of its merger with New York’s Hahn & Hessen, which brought a century of experience representing clients in complex finance, bankruptcy, workouts and litigation to Thompson Coburn’s national platform.

LEGAL SERVICES

Barclay Damon LLP

Shawn Chowdhury, associate, has joined Barclay Damon’s Employee Benefits Practice Area. He focuses his practice on employee benefits, assisting employee benefit plan sponsors and fiduciaries in complying with the myriad of federal and state rules that impact the design, documentation, and administration of qualified retirement plans, health and welfare benefit plans, and nonqualified deferred compensation arrangements. Prior to joining Barclay Damon, Shawn was a senior at Ernst & Young.

PROFESSIONAL SERVICES

EisnerAmper

Blockchain/digital assets veteran Chris Brodersen has joined global business advisory firm EisnerAmper as a managing director in its Business Advisory Group. With approximately 40 years of experience, Chris has deep cross-industry expertise in harnessing the potential of blockchain technology and applying digital asset solutions. He also helps enhance the firm’s expertise and growth in the blockchain and digital assets domain and explores the connection between blockchain, the IoT and Web3.

Ex-Trump impeachment prosecutor talks life as a congressman

BY RAINA LIPSITZ

Aformer federal prosecutor who served as the Democrats’ lead counsel during the first impeachment of former President Donald Trump, Rep. Dan Goldman has frequently appeared on television as a legal analyst.

A moderate Democrat and heir to the Levi Strauss & Co. fortune with a net worth between $64 million and $253 million, he is one of the richest members of Congress. He campaigned on his record as a prosecutor and prominent antagonist of Trump and won the crowded 2022 Democratic primary in New York’s 10th Congressional District after pouring nearly $5 million of his own money into the race. Progressives split their votes among Assembly Member Yuh-Line Niou, U.S. Rep. Mondaire Jones and City Council Member Carlina Rivera. Goldman beat Niou, his closest rival, by just 1,306 votes.

He sat down with Crain’s at his Manhattan district office to discuss his constituents’ concerns, the debt ceiling deal and what impeaching Trump accomplished.

What are the top concerns of your constituents in NY-10 (lower Manhattan and western Brooklyn) and what are you doing to address them?

Takeaway for business professionals

Housing is a huge concern. I have 31 different NYCHA developments in my district, and the vast majority of those are in complete disrepair and falling apart. [We need to figure out] how to make sure that those who live in NYCHA housing can live with the proper dignity and respect that they deserve. Affordable housing continues to be a struggle in New York City, and that’s an area that we’re focusing a lot on. Transportation is always a big issue. I would put transportation and resiliency in the same bucket; obviously after Superstorm Sandy there’s a lot of work to ensure that that [damage] does not happen again. And streamlining our transportation system, boosting public transportation, bringing our current infrastructure up to date is [also] a big focus. We’re trying to be very proactive in engaging communities that have been traditionally underserved and who don’t always believe that the government is working for them instead of against them.

Goldman supports legislation that would prohibit members of Congress from trading individual stocks. He has also co-sponsored the Billionaire Minimum Tax Act, which would require households worth over $100 million to pay an annual minimum 20% tax rate on their full income.

POWER MARKS

NUMBER OF EMPLOYEES 18

ON HIS RÉSUMÉ Lead counsel in the first impeachment of former President Donald Trump; assistant U.S. attorney in the Southern District of New York; legal analyst on network and cable television; fellow at the Brennan Center for Justice; clerk for the Hon. Charles R. Breyer in the Northern District of California and Robert D. Sack in the 2nd U.S. Circuit Court of Appeals in New York

BORN Washington, D.C.

GREW UP Washington, D.C.

RESIDES Tribeca, New York City

EDUCATION Bachelor of Arts degree in history from Yale University and Juris Doctor degree from Stanford Law School

BREAKING THE MOLD Before running for office, Goldman served as lead counsel in the first impeachment of former President Donald Trump. In that role, he directed the strategy of the investigation and led the closed depositions and questioning of witnesses during the House Intelligence Committee’s open hearings.

TAKEAWAY FOR BUSINESS PROFESSIONALS

House Republicans blocked a Democratic resolution to expel George Santos. Aside from urging his constituents to vote him out, does Congress have any other recourse?

It is a complete abomination that the Republicans continue to protect George Santos, and it’s a reflection of the degree to which they will put power over honesty and integrity. George Santos lied to and deceived his voters into voting him into office. Given the depth and breadth of his lies, which are now additionally reflected in a criminal indictment, it is abundantly clear that George Santos does not belong in Congress and we are not going to stop advocating for his removal, because he is a blight on the institution. We were told that when the Republicans avoided the vote on his expulsion by referring the resolution to the Ethics Committee, where it had already been referred to, that they were going to expedite the ethics process, notwithstanding the fact that there is a criminal case, which ordinarily would be deferred to by the Ethics Committee. And we’re going to hold the Republicans to that promise.

Impeaching former President Trump failed to remove him from office and at least temporarily boosted his popularity. What did it accomplish in your view?

I don’t think it boosted his popularity. His approval ratings went up. After the first impeachment?

Yes.

Look, as many of the Republican senators who voted to acquit him acknowledged, we proved the case that he abused the power of his office for his own personal benefit, and I believe that that was something that many voters considered when they voted to put Joe Biden in the presidency. The reality is we unfortunately are in a situation where at least the Republican Party knows no boundaries of putting their own party over their country. And if that’s the case, then impeachment will be very difficult to be a source of accountability. So we’re left with the courts to hold Donald Trump accountable since the Senate did not do so, and we’ll

have to see how that plays out. What does the debt ceiling deal mean for older Americans on food stamps who are now subject to new work requirements?

It’s a real disgrace that the Republicans are so intent on protecting the tax cuts for the wealthy while trying to remove very minimal and basic food sustainability from Americans. It costs $6 a day for individuals to be on SNAP (Supplemental Nutrition Assistance Program). And the fact that the Republicans are so intent on making it more difficult for people to get food while making it easier for tax cheats to get away with it, and for the big corporations and wealthy individuals to get tax cuts, just reflects the disconnect between the Republican Party and the vast majority of Americans, who are often struggling to get by and looking for the opportunity to succeed.

You’ve co-sponsored the Billionaire Minimum Income Tax Act, which

Goldman supports legislation that would prohibit members of Congress from trading individual stocks. He has also co-sponsored the Billionaire Minimum Tax Act, which would require households worth over $100 million to pay an annual minimum 20% tax rate on their full income.

would require households worth over $100 million to pay an annual minimum 20% tax rate on their full income. Why exempt households worth $10 million to $99 million from this tax?

Any number that you draw is going to be arbitrary. The idea behind this bill is that there are a number of people in the 0.01% who have benefited tremendously from the American economy and are simply using a bunch of loopholes to avoid paying taxes. It’s good policy that will enable millions and millions of other Americans to get access to the opportunity that many of these billionaires have had. This bill is not trying to penalize people for being incredibly successful, but it is designed instead to prevent them from using loopholes to avoid giving back to the government and the country that has been so good to them. ■

ASHLEY HOLT

Upgrades slated for ground transportation to and from New York region’s airports

BY CAROLINE SPIVACK

With the summer vacation season in full swing, New Yorkers have the arduous task of planning their trek to the region’s airports. Be it booking a cab or navigating mass transit with luggage in tow, getting to the airport is no one’s favorite part of their travels.

To make those treks smoother, transportation agencies have a mix of projects in the works. From modernizing a decades-old light rail system to bolstering bus service, here’s a look at the initiatives poised to reshape how New Yorkers get to and from local airports.

Expansion of Q70 bus to LGA

Under former Gov. Andrew Cuomo, the plan was to build a gleaming new $2.4 billion light-rail link to LaGuardia Airport. The connection was meant to be a finishing touch on the Port Authority of New York and New Jersey’s multibillion-dollar modernization of LaGuardia. But the project was hugely controversial for its indirect route, environmental impacts and soaring cost estimates.

Gov. Kathy Hochul abandoned plans for the LaGuardia AirTrain in March. A review of alternatives by

transportation experts recommended improving bus service to the airport and creating a new shuttle geared toward riders departing the N/W subway line in Astoria.

In June the Port Authority’s board of commissioners advanced those recommendations by greenlighting $30 million to plan and design improvements to the Metropolitan Transportation Authority’s existing Q70 bus to LaGuardia—which Hochul made free in 2022—and to create a new direct airport shuttle from Ditmars Boulevard, the terminus of the N/W subway line.

Enhancing bus service might sound like a quick fix, but Port Authority officials estimate it will still take two to three years to roll out upgrades to the Q70. That is because the project goes beyond simply increasing frequency. The upgrades include the creation of a mile-long bus lane on the shoulder of the northbound BrooklynQueens Expressway and new pickup and drop-off zones to minimize congestion at terminals.

Once implemented, the Port Authority expects the Q70’s current annual ridership of 1.9 million to increase by 1.5 million people.

Meanwhile, building out a new express shuttle route is estimated to

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THE COMPETITIVE EDGE

take four to five years. The efforts are expected to cost a combined $500 million. John McCarthy, the MTA’s chief of external relations, said in a statement that the authority “looks forward to continuing to work with the Port Authority as it rolls out its new direct airport shuttle service” and collaborating on improvements to the Q70 in Woodside and Jackson Heights.

Progress on AirTrain upgrade

One rail project that hasn’t been derailed is the long-planned AirTrain replacement at Newark Liberty International Airport. Constructed in 1996, the system is overdue for an upgrade, transit officials say.

Most days the link carries 26,000 passengers, or nearly 10 million riders annually, providing a critical connection for those transferring from New Jersey Transit or Amtrak’s Northeast Corridor lines. Port Authority Executive Director Rick Cotton conceded in a statement that the “system is nearing the end of its useful life” and insisted it is “imperative to build a new 21st-century AirTrain” to serve the modern terminals being built at the airport.

The Federal Aviation Administration in 2021 granted the final environmental approval necessary to

build a new, 2.5-mile automated train system. But the $2 billion effort to reimagine the system won’t be realized until 2026 at the earliest.

Currently, the megaproject is snaking its way through the multiphase procurement process. The Port Authority has selected three “automated-people-mover system technology firms” to advance to the next phase: Alstom, Doppelmayr Group and Mitsubishi Heavy Industries America Inc. The firms are competing to design and construct the technology for the new system. The Port Authority expects to select a firm in the fall.

More highway access to JFK

John F. Kennedy International Airport has had a functional AirTrain since 2003. The Port Authority increased the fare for the 8-mile people mover in March by a quarter to $8.25—the second 25-cent fare increase in as many years. Officials have pointed to inflation and an effort to recoup $3 billion in lost revenue due to Covid-19.

The state’s Department of Transportation, meanwhile, says it is focused on improving vehicular access to the airport with a controversial project to widen the Van Wyck Expressway.

The $1.3 billion effort, currently underway, will add a fourth lane in both directions. The project also requires ramps and some bridges to be reconfigured. Transit officials say the undertaking could decrease JFK-bound car trips by 8 to 15 minutes. Construction is expected to be complete in 2025.

But transportation advocates argue that those benefits will likely be temporary because of induced demand—the concept that building wider roads attracts additional drivers. The project has faced criticism for bringing more cars to the road that will belch emissions and stand to reduce air quality for surrounding neighborhoods, which the city has designated as environmental justice communities.

“This has been seen as an unstoppable juggernaut to bring more cars to the airport, and given the constant heat waves, fires and floods— that seems totally insane,” said Danny Pearlstein, director of policy and communications at Riders Alliance, a public transit advocacy group. Pearlstein and project opponents have argued that the money being poured into the highway expansion could go toward improving rail and bus access or making the JFK AirTrain free to promote its use. ■

Six indicted in scheme to send campaign dollars to Eric Adams

BY NICK GARBER

Manhattan prosecutors indicted six people July 7 for an alleged scheme to steer public money to Eric Adams’ 2021 mayoral campaign using “straw donors” to skirt contribution limits.

The six defendants include an acquaintance of the mayor’s who worked with him at the New York Police Department. He teamed up with construction industry executives hoping to do business with the city who thought their support for Adams’ campaign could win them favors once he reached City Hall, according to authorities.

Prosecutors say they took advantage of the city’s matching funds program, which pairs every $250 campaign donation from a New York City resident with $2,000 in public funds.

The defendants sought to boost Adams’ campaign “as leverage in potential future requests of the mayor’s office,” District Attorney Alvin Bragg said in a press release July 7.

Neither the mayor nor his campaign is implicated in the indictment.

One of the defendants is Dwayne Montgomery, a retired NYPD inspector who knows Adams personally, representatives from City Hall and from Adams’ campaign con-

Adams’ campaign spokesman Evan Thies said there is “no indication that the campaign or the mayor is involved in this case or under investigation.”

After the website Hell Gate reported that Adams and defendant Montgomery had overlapped at the police department and once testified at the same trial, Thies conceded July 7 that the mayor knew Montgomery “socially” as a colleague at the NYPD.

prosecutors said. He went beyond the $2,000 personal limit by purchasing money orders and getting friends and family members to falsely identify themselves as donors, according to the indictment.

Prosecutors said the defendants made their intentions plain in a series of phone calls.

Riza said, according to prosecutors. “Make sure it’s $1000 in your name and $1000 in another person’s name because the matching funds is eight-to-one, so $2,000 is $16,000.”

In another instance, Riza named a construction contract that he hoped to secure by influencing Adams, according to the indictment. On July 21, 2021, authorities said he forwarded Montgomery an email about a construction project called Vital Brooklyn, adding: “FYI ! This is the one I want.”

“Please show to him before Event it will start when he’s in office,” Riza added, prosecutors said.

A fellow defendant, 77-year-old Millicent Redick, who works as Riza’s accountant, joined the plot to recruit senior citizens in Harlem’s Esplanade Gardens apartment complex to lend their names as straw donors, prosecutors said.

Peek, 65, advised Riza and others about how to donate money without being detected by the city’s Campaign Finance Board, prosecutors said.

Four of the defendants pleaded not guilty on July 7, while Yahya Mushtaq and Ronald Peek have not yet been arraigned, Bragg’s office said.

‘Attempt to gain power’

Here’s how New York’s return to the office compares to other cities’

BY JACK GRIEVE

After trailing the national average for most of the pandemic, New York’s return-to-office rate is now teetering around that of other major metropolitan areas.

firmed. Montgomery once led the department’s Central Harlem precinct and was recently listed as director of integrity for the municipal workers’ union Teamsters Local 237.

A City Hall spokesperson said Mayor Adams has spoken informally to Montgomery since taking office, but never discussed city business. Adams does not know the other five defendants, the spokesperson said.

City law limits individual contributions to $2,000, or a stricter $400 for people who own a business that vies for city contracts. The indictment alleges that the defendants recruited donors and falsely listed contributions in their names to go well beyond those limits.

Several of the defendants invited one another to a meeting with the future mayor in December 2020, prosecutors said, but the indictment does not specify whether the meeting ever took place.

The indictment also describes a July 2021 conversation between Montgomery and fellow defendant Shamsuddin Riza in which Montgomery said that Adams “said he doesn’t want to do anything if he doesn’t get 25 Gs.” At one point, the defendants were in touch with an unnamed “representative” from Adams’ campaign, the indictment says.

He added that “dozens of former police officers and criminal justice advocates hosted events for the mayor over the course of the campaign.”

“The campaign always held itself to the highest standards and we would never tolerate these actions,” Thies said. “The campaign will of course work with the DA’s office, the Campaign Finance Board and any relevant authorities.”

‘You could use a straw man’

Prosecutors said the scheme began in August 2020, when defendant Montgomery, 64, began planning a fundraiser for Adams’ campaign—and withdrew a combined $39,785 from his personal bank account. Within days, he enlisted nine straw donors to make contributions between $250 and $260 to Adams’ campaign, with Montgomery quickly reimbursing them, the indictment states.

Montgomery held the virtual fundraiser over Zoom on Aug. 20, 2020, authorities said. By December, Riza, a prominent 70-year-old subcontractor who is related to Montgomery, was in talks with Montgomery about organizing a second fundraiser for Adams’ campaign, which ultimately took place in Sunnyside, Queens on Aug. 25, 2021, prosecutors said.

In the run-up to that event, Riza approached donors and told them how to avoid contribution limits through the straw-donor scheme,

“ You could use a straw man,” Riza said during one Aug. 24, 2021 phone call to 28-year-old Yahya Mushtaq, who owns the Queensbased construction-safety company Ecosafety Consultants along with his brother and co-defendant Shahid Mushtaq, 29, according to prosecutors. The Mushtaqs ultimately made illegal donations to Adams’ campaign under their own employees’ names without their knowledge, authorities said.

In another call in July 2021, Riza told fellow defendant Ronald Peek that “I know what the campaign finance laws is, I understand that,” the indictment alleges.

“I’m trying to raise this money,”

Bragg, in a statement, said the indictment shows “a deliberate scheme to game the system in a blatant attempt to gain power.”

“The New York City Campaign Finance Board program is meant to support our democracy and amplify the voices of New York City voters. When the integrity of that program is corrupted, all New Yorkers suffer,” Bragg said.

The city’s landmark matching funds program has been a focus of fraud allegations in the past. Most notably, former Lt. Gov. Brian Benjamin’s 2022 indictment involved his alleged participation in a plan hatched by a supporter. The supporter allegedly used straw donors in order to secure more public money for Benjamin’s 2021 bid for comptroller.

Benjamin had his bribery charges dismissed in December, but he still faces charges of falsifying records.

John Kaehny, executive director of the ethics watchdog Reinvent Albany, said that the indictments actually point to the strengths of the city’s matching funds program, which involves audits of every participating campaign.

“This is the hardest of the hard targets of any kind of fraud, abuse, successful scams,” he said. “This is like the Fort Knox of government spending.”

Still, seemingly small-time dealings like those described in the indictment should not be conflated with the numerous legal ways in which people with business interests get favors and attention from public officials, Kaehny added.

“Using money to influence City Hall is not very hard,” Kaehny said. “So we couldn’t confuse the two.” ■

That’s according to data released July 6 from real estate technology firm Kastle Systems, which tracks badge swipes at commercial office buildings in 10 major U.S. cities.

The New York metro area reached 50% of its prepandemic in-office levels for the first time in early June and has remained within two percentage points of that threshold ever since. That comes nearly a year after the region first broke into the 40% range.

The 50% return-to-office rate puts the metro area in lockstep with the average of 10 major U.S. cities tracked by Kastle. Austin, Chicago, Dallas and Houston all have RTO rates higher than New York’s, whereas San Francisco, San Jose, Philadelphia and Washington trail behind. Los Angeles is nearly identical to New York with a RTO rate of 49.3%.

The hybrid effect

Hybrid work schedules are widely represented in the data, with certain days of the week standing out as popular in-office days. At 61.7% of pre-pandemic levels, Tuesday was the most frequented office day for New Yorkers. Friday, on the other hand, remains the lowest with just 25.1% swiping in compared to 2019.

While the in-office rate for the week ending in June 28 is consistent with that of week’s prior, the Fourth of July holiday will likely lead to a drop in office swipes in the next round of data. Over last year’s holiday week, New York dipped to 35% of prepandemic numbers.

The Kastle Systems data represents commercial office buildings equipped with Kastle Systems security technology in 10 major U.S. cities and does not reflect a national average of the entire U.S. workforce. ■

BLOOMBERG

MAYOR ERIC ADAMS. A former NYPD colleague of Adams is among the six people accused of perpetrating a fraud scheme to steer money toward his 2021 campaign.

THE PROGRAM HAS BEEN A FOCuS OF FRAuD ALLEGATIONS IN THE PAST

DWAYNE MONTGOMERY, pictured in 2018, overlapped with Mayor Eric Adams when the two served in the NYPD and knows him personally, the mayor’s office said. Montgomery is accused of playing a leading role in a scheme to make illegal contributions to Adams’ campaign with the goal of winning city contracts.

Crain’s researcher Sophie Rodgers contributed.

NEW YORK CITY reached 50% of prepandemic in-office levels in early June but has slipped slightly in recent weeks.

“There’s no question there’s a new sense of optimism,” said Andy Nathan, a co-founder of MCRE Partners, a four-year-old Midtown-based landlord that relies on Japanese investors for about a third of its capital. “They feel comfortable in New York again.”

If historic Midtown trophy towers were the favorite asset class in the 1980s, the Japanese money today seems spread more widely, including with property types that were a harder sell before: small prewar rental buildings.

“The Japanese often like the brand-new,” said William Crable, who runs the New York office of Tokyo-based investment group Efficiency Capital Advisors, a firm he founded in 1993 that initially focused on marketing debt that had soured when Japan’s real estate bubble burst. “While you and I might think a graffiti-covered older building is cool, they have sometimes been a hard sell. But then when you explain what kinds of rents the older buildings get, they eventually come around.”

In 1997 Crable moved to Tokyo to work on behalf of Lehman Bros. and ended up staying for 16 years.

In recent years, with Crable’s return to Manhattan, the focus of his low-profile company shifted, and it now consults a small and tight-knit group of Japanese corporations and individuals looking for opportunities in New York.

In June, for instance, ECA handled a pair of transactions involving two Upper East Side walk-ups: an eight-unit offering at 339 E. 75th St. that sold for $9.5 million and a 10-unit version at 506 E. 84th St. that traded for $12 million, according to public records. The buyer of both properties was a company called Sowa Kousan, records show. Crable declined to share specifics about the identity of the buyer or whether ECA itself had also taken a stake in rental buildings, though he would say that ECA deals often involve Japanese clients buying and selling properties among themselves.

Neighborhoods piquing the interest of Japanese buyers are the East Village, Chelsea and brownstone Brooklyn, he said.

“It’s not quite like it was in the 1980s, when all the Japanese banks had branches set up here and made tons of loans, sort of like it was the Wild West,” Crable said. “But they spent a lot of money badly on New York real estate. They didn’t worry about cash flows but only land values. And it took a lot of money to recover from all that.”

story property, which cost $98.3 million, public records show.

Athletic apparel brand Champion has a retail berth at the site, at Howard Street, and MPC Film, a British special-effects company, is an office tenant, though the 60,000-square-foot building is only about half-occupied, CoStar says.

Another milestone for Tokyo Trust came last summer, when the firm picked up its first multifamily building slightly farther afield.

Called The View on Nob Hill, the 416-unit complex is in the Westchester County village of Elmsford on a 23-acre parcel near the Saw Mill River Parkway. Offering market-rate units that start at $2,400 a month, Nob Hill cost $143 million in an off-market deal.

An email sent to Tokyo Trust’s corporate headquarters for comment went unreturned. But in a statement about the purchase, firm CEO Minoru Machida said the real estate industry in this country had appeal because of its “unparalleled transparency and liquidity, backed by the most vibrant economy in the world.”

For his part, Nathan of MCRE, which partnered with Tokyo Trust on both the SoHo and Westchester deals, said having some regional skin in the game is now key.

“At the end of the day, real estate is an extraordinarily local and hands-on business,” Nathan said, “and to execute properly and consistently with your goals, you need a local partner.”

How it all began

When former professor Taikichiro Mori founded his samenamed real estate company in 1951, the economy was about to enter its long-running “Japanese miracle” stage. As the nation stockpiled wealth, courtesy of electronics companies such as Sony and other success stories, and officials relaxed regulations, investors began gobbling up properties, sending real estate prices soaring.

In one commonly shared statistic, the land around the Imperial Palace was at one time worth more than the entire state of California.

“A lot of firms started investing in segments of real estate markets that weren’t a part of their production chains,” said Cameron

A new face

With reawakened interest has come a crop of new players, including Tokyo Trust Capital, an asset manager founded in 2016. In 2020 the firm, which previously had invested only in San Francisco and Washington, D.C., made its first acquisition in New York City, buying 434 Broadway in SoHo, a mixed-used prewar building in a landmark district.

The firm, which has backing from Japanese real estate giant Mori Trust, paid cash for the nine-

LaPoint, an assistant professor of finance at Yale’s business school who has studied the post-war period.

And the capital quickly jumped overseas. Although not all of it ended up in New York, non-financial business investment in real estate both in Japan and overseas, including New York, more than tripled over the course of the 1980s, from 2.5 trillion yen in 1980 to 7.1 trillion yen in 1991, according to LaPoint’s research, which used Development Bank of Japan data.

But inflation became rampant, forcing Japan’s government to raise interest rates and some developers to liquidate to service debt, LaPoint said. There also appear to have

been some misguided expectations.

When the Mitsubishi Estate Co. bought that Rockefeller Center stake in 1989 for $846 million, office rents at the 22-acre Art Deco complex in Midtown were around $30 per square foot annually. Mitsubishi assumed it could jack up rents to $100 a square foot, according to news reports. But then a recession kicked in, deflating those dreams and forcing Mitsubishi to walk away from the property in 1995. A Tishman Speyer-led group ultimately took control. (MCRE’s Nathan worked on that deal on behalf of Tishman.)

The 1989 deal, which was shadowed by accusations that U.S. interests had sold out to a foreign power, saw Mitsubishi also take control of the highrise office buildings 1221 and 1271 Sixth Ave., as well as development firm Rockefeller Group, all of which Mitsubishi continues to own today.

In recent decades Rockefeller Group has been fairly quiet. After developing 745 Seventh Ave., an office tower at West 49th Street, in 2001, it didn’t break ground again until 2019 for NoMad’s Rose Hill condo, the company’s first Manhattan multifamily project. A spokesman for Rockefeller Group declined to comment on Mitsubishi’s behalf.

Other deals also came and went.

In 1987 Hiro Real Estate Co., controlled by Masahiro and Yukihiro Honzawa, picked up the leasehold position on 150 E. 42nd St., a 42-story office tower known as the Socony-Mobil Building, for about $250 million, before selling it in 2014 to investor David Werner for about $900 million. The company also once owned a similar property, nearby office 650 Madison Ave., until 2008. Both properties reportedly racked up huge unpaid tax bills before Hiro let them go.

But developer Mitsui Fudosan America, which since 1986 has owned 1251 Sixth Ave., the 54-story Exxon Building at West 50th Street, has been a steady presence in New York in the years that followed. Today the company, which has roots in a Japanese clothing company formed in 1673, is an owner of developments including office spire 50 Hudson Yards, rental complex 555 West 22nd St. and condo tower 200 Amsterdam Ave.

A big deal

Japan’s new moves may be a two-way street. Mega investor Warren Buffett, for instance, has been recommending Japanese stocks since 2020 and ramped up holdings of the shares by his Berkshire Hathaway in the spring. (Mitsubishi, Mitsubishi Estate’s parent company, was one pick.)

“There’s a broad sense that, coming out of the pandemic, Japan is also finally coming out of the deflation that has plagued the

country for decades,” Yale’s LaPoint said. “But this time things aren’t looking as bubbly.”

If any deal has cemented the Japan-is-back narrative, it’s probably Mori Trust’s acquisition of 245 Park.

One of Japan’s largest private real estate companies, Mori Trust is helmed by Miwako Date, who took the reins as CEO in 2016 with an aim of globalizing the firm, according to news reports. Founded by Date’s grandfather, the aforementioned Taikichiro Mori, Mori Trust had been known for decades for focusing on office and hotel developments in downtown Tokyo.

In a reportedly all-cash deal, Mori Trust purchased $500 million in mezzanine debt from majority owner SL Green for a nearly 50% piece of the 44-story, 1.8 millionsquare-foot tower, whose tenants include JPMorgan Chase & Co., French bank Societe Generale Group and real estate finance firm Angelo, Gordon & Co.

The deal valued the full-block 1960s tower, which is at East 46th Street, at about $2 billion, slightly above where it was last fall, when SL Green took control from bankrupt Chinese conglomerate HNA Group. Its estimated value then was $1.8 billion.

LaPoint called the play “the hallmark of a new wave of Japanese developer interest in U.S. real estate that we haven’t really seen since the easy-money period of the 1980s.” ■

“THEY SPENT A lOT OF MONEY BADlY ON NEW YORK REAL ESTATE”

JAPANESE INVESTMENTS: 339 E. 75th St. (top), 506 E. 84th St. (bottom right) and 434 Broadway (bottom left) represent a newfound diversification in Japanese real estate investing.

Local health systems leverage AI for better outcomes, efficiency

BY JACQUELINE NEBER

Local organizations are taking their own bets on how to best deploy artificial intelligence as the technology takes root within the health care system at large.

Crain’s spoke with health systems in the area to understand how they are experimenting and investing in AI and found that using the technology to predict patient outcomes, expedite analysis of medical images and lighten the load of administrative tasks for physicians are some major use cases.

Medical imaging lends itself to using AI because the technology can help doctors interpret images faster and detect issues sooner, according to Dr. James Tsai, president of the New York Eye and Ear Infirmary of Mount Sinai.

Tsai is the founding director of the Center for Ophthalmic Artificial Intelligence and Human Health at the Icahn School of Medicine at Mount Sinai, which launched on July 3. The center’s goal is to use AI to diagnose eye diseases such as glaucoma, macular degeneration and diabetic retinopathy faster, which can help prevent vision loss, according to Sinai. Researchers will work with Icahn students and Sinai’s Windreich Department of Artificial Intelligence and Human Health to build

the infrastructure for using AI in critical care, which will let the system incorporate tools quickly as they are approved, Tsai said.

AI can also help health systems move patients out of the hospital faster by streamlining physicians’ work. At New York-Presbyterian, leaders have experimented with AI since 2017 to accomplish that goal.

Leo Bodden, the group vice president and chief digital and technology officer at NYP, said tools help track which tasks need to be done for patients, such as lab work, and “nudge” physicians to complete them.

The system has launched several initiatives recently to tighten workflow, Bodden said, with predictive machine learning, imaging, robotic process automation, conversational AI and general robotics. Some pilot programs strive to reduce the amount of documentation doctors must complete and help radiologists interpret images faster, for example.

NYU Langone, too, is using generative AI to read patient notes and tackle administrative tasks. The technology can help detect gaps in care, said Dr. Jonathan Austrian, associate chief medical information officer of inpatient informatics at NYU Langone Health.

If a physician notes that a patient needs blood clot prevention medication, for example, but the tech-

nology doesn’t see an order for that prescription, the system will alert the physician of the discrepancy, he said. NYU is beginning to deploy more sophisticated general language AI models in these cases.

Comb through data

Additionally, AI can be used to interact with patients, educate them during vulnerable periods and improve outcomes. On Long Island, Northwell Health is using AI to improve maternal health outcomes through a chatbot product called Pregnancy Chats, which aims to reduce maternal mortality rates by communicating with patients about their symptoms. The chatbot can encourage patients to go to the hospital or connect them with Northwell physicians. The tool is one of the health system’s Center for Maternal Health initiatives to address maternal health risks.

Northwell developed the chatbot in collaboration with Conversa Health, a software company based in Portland, Oregon. Northwell invested $5.5 million into Conversa before Conversa was acquired by Amwell, a virtual care company in Boston, according to Richard Mulry, president and chief executive of Northwell Holdings.

More broadly, AI can be used to comb through patient data to identify which individuals are at a high-

er risk for negative health outcomes and close care gaps. At Ascertain, Northwell’s joint venture with Aegis Ventures, scientists are using data from more than 100,000 records to help providers better understand patients’ maternal mortality risks and help patients better understand dangerous symptoms of conditions such as preeclampsia, said Dr. Michael Nimaroff, senior vice president of Northwell’s obstetrics and gynecology service line.

Northwell and Aegis committed to investing $100 million in launching Ascertain, Mulry said.

While the wealth of available medical data means the health care industry is ripe to benefit from AI, utilizing the data comes with watchouts.

Exposing sensitive data, such as patient and billing information, to new tools opens up already-vulnerable hospitals to data breaches, according to Marion Lewis, chief ex-

MOUNT SINAI’S new Center for Ophthalmic Artificial Intelligence and Human Health hopes to make diagnosing eye diseases faster using AI.

ecutive of Govenda, a governance management firm that works with several New York health systems. She noted patients’ privacy concerns and AI’s potential for bias when it comes to care disparities among underserved patients that already exist in the industry.

Additionally, despite AI’s potential benefits, doctors also warned of their concerns around the technology. Tsai called some potential AI algorithms a “black box” that makes it impossible for doctors to understand why they’re getting certain results.

He also has concerns about the technology’s limitations, how the health system will be reimbursed for using it, its financial sustainability and patient acceptance, he said.

To combat these concerns, Tsai said, human specialists will have to remain involved, checking AI’s conclusions at every step of the process. ■

CENTER FOR OPHTHALMIC ARTIFICIAL INTELLIGENCE AND HUMAN HEALTH

Notice of Formation of KATUSHA CAB LLC

Arts of Org filed with Secy. of State of NY (SSNY) on 6/9/23, Office

Location: NY County. SSNY designated as agent upon who process may be served and shall mail copy of process against LLC to 5456 Lagorce Drive, Miami Beach, FL 33140.

Purpose: any lawful act.

Notice of Formation of CROWNNCURLS LLC

Arts of Org filed with the Secretary of State of NY (SSNY) on 5/22/23. Office location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 401 E. 115th St, Apt 3n, NY, NY 10029. Purpose: any lawful act

Notice of Qualification of LONGEVITY HEALTH AGENCY, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/10/23. Office location: NY County. LLC formed in Florida (FL) on 06/16/22. Princ. office of LLC: 11780 N. US Hwy. 1, Ste. N107, N. Palm Beach, FL 33408. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. Cert. of Form. filed with Secy. of State, 500 S. Bronough St., Tallahassee, FL 32399-0250.

Purpose: Any lawful activity.

Notice of Qualification of RP

BRONX TERMINAL MARKET C, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/06/23. Office location: NY County. LLC formed in Delaware (DE) on 06/30/23. Princ. office of LLC: 423 W. 55th St., 7th Fl., NY, NY 10019. 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 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal State St., Dover, DE 19901. Purpose: All legal purposes related to renewable energy.

Notice of Formation of SKULLI PRODUCTIONS LLC

Arts of Org filed with Secy of State of NY (SSNY) on 3/8/2023. Office

Location: NEW YORK County.

SSNY designated as agent upon whom process may be served against LLC to: The Limited Liability Company 228 Park Ave S #525546, NY, NY, 10003, USA Reg Ag.: United States Corporation Agents, Inc. 7014 13th Ave, Ste 202 Bklyn, NY, 11228, USA.

Purpose: any lawful act.

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

Notice of Formation of BLOOM S.H. OASIS LLC.

Arts of Org filed with Secy. of State of NY (SSNY) on 3/27/23, Office

Location: NY County. SSNY designated as agent upon who process may be served and shall mail copy of process against LLC to 500 West 45th St, Unit 310, New York, NY 10036.

Purpose: any lawful act.

Notice of Formation of JIT MFT 923 5TH, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 05/11/23. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543.

Purpose: Any lawful activity.

Notice of Formation of Adaptive PQ Strategies LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 4/20/23. Office Location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against LLC to 516 E 78th Street #3-O, New York, NY 10075.

Purpose: any lawful act.

Notice of Formation of OMS 30C LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 5/26/23. Office Location: NY County. SSNY designated as agent upon who process may be served and shall mail copy of process against LLC to DGW Kramer LLP, One Rockefeller Plaza, Ste 1060, New York, NY 10020. Purpose: any lawful act.

PLAI Studio Architecture, LLC, Arts of Org. filed with Sec. of State of NY (SSNY) on 02/14/2023. Office location: New York County. SSNY desig. as agent upon whom process against it may be served & shall mail copy of process to 250 Mercer St C308, New York, NY 10012. Purpose: Architecture and Design.

Formation of IFD SPACEX LLC filed with the Secy. of State of NY (SSNY) on 6/21/2023. Office loc.: NY County. SSNY designated as agent of LLC upon whom process against it may be served. The address SSNY shall mail process to David Kungl, 300 Rector Pl., Apt. 9F, New York, NY 10280. The LLC is to be managed by one or more managers.

Purpose: Any lawful activity.

Notice of Formation of 215 SULLIVAN 5B LLC. Arts of Org filed with Secy of State of NY (SSNY) on 5/30/23. Office Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC to 201 Varick St. Frnt 1 #522 New York, NY 10014. Purpose: any lawful act.

Notice of Qualification of HUDSON 1705, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/03/23. Office location: NY County. LLC formed in Delaware (DE) on 06/29/23. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Alberto Smeke Saba, c/o CSC Coliving, LLC, 6 Saint John's Ln., 7th Fl., NY, NY 10013. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

POSITION AVAILABLE

Senior Tax Associate (work may be performed remotely from anywhere in the U.S.) - Prepare complex tax returns & projections for individual, trust, fiduciary, partnership, corporate & foreign tax clients. Prepare federal & state quarterly estimated payments. Assist w/ tax audits. Function as lead individual contributor on various tax projects. Train other tax associates & interns on assignments & provide assistance if necessary. Hold increased level of compliance responsibility in the review process, review tax returns prepared by assigned tax staff & make the necessary recommendations regarding accuracy, efficiency & applicable tax savings opportunities. Research & consult w/ supervisors on various client-related tax matters. Salary: $87,942/yr - $127,500/yr. Location: work may be performed from anywhere in the U.S. Req’d: Bachelor’s degree (US or foreign degree equivalent) in accounting plus 3 yrs public tax acctg exp and 3 yrs exp with: federal, state & local tax laws; corporate, individual, trust, gifts & partnership taxation; analytical, organizational & project management skills; Microsoft Office applications; CCH Axcess, CCH ProSystem fx, or a similar application; BNA & XCM. Email resume to Citrin Cooperman Advisors LLC (successor to Berdon LLP) at: kbennett@berdonllp.com.

PUBLIC & LEGAL NOTICES

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.

RPM6800 Home Inspections Services, LLC Art. Of Org. Filed Sec. of State of NY 5/8/2023. Off. Loc.:Richmond Co. SSNY designated as agent upon whom process against it may be served. SSNY to mail copy of process to The LLC, 56 E. Scranton Ave., Staten Island, NY 10308. Purpose: Any lawful act or activity

Notice of Formation of Clement King Executive Counseling LLC Arts of Org filed with Secy of State of NY (SSNY) on 05/09/2023. Office Location: NEW YORK County. SSNY designated as agent upon whom process may be served against LLC to: THE LIMITED LIABILITY COMPANY 228 PARK AVE S #790130, NEW YORK, NY, 10003, USA Reg Ag.: UNITED STATES CORPORATION AGENTS, INC. 7014 13TH AVENUE , SUITE 202 BROOKLYN, NY, 11228, USA

Purpose: any lawful act.

Notice of Qualification of Ogden Pond Realty LLC. Appl. for Auth. filed with NY Dept. of State on 3/10/22. Office location: New York County. NY Sec. of State designated agent of the LLC upon whom process against it may be served, and shall mail process to the LLC, c/o Baratta, Baratta & Aidala LLP, 546 Fifth Ave, 6th Fl, New York, NY 10036. DE addr. of LLC c/o Vanguard Corporate Services Ltd, 3500 S Dupont Hwy, Dover, DE 19901. Cert. of Form. filed with DE Sec. of State, 401 Federal St., Dover, DE 19901 on 11/9/21.

Purpose: any lawful activity.

Formation of NEXTSTEP CAP LLC filed with the Secy. of State of NY (SSNY) on 6/26/2023. Office loc.: NY County. SSNY designated as agent of LLC upon whom process against it may be served. The address SSNY shall mail process to David Gottlieb, 777 6th Ave., Apt. 16C, New York, NY 10001.

Purpose: Any lawful activity.

Notice of Formation of THE RUGGED CROSS FILM LLC Arts of Org filed with Secy of State of NY (SSNY) on 6/16/23. Office Location: NY County. SSNY designated agent of the LLC upon whom process against it may be served, and shall mail process to the LLC,330 W 28th St, Apt 1H NY NY 10001 Purpose: any lawful act.

report. Although certainly not good news for nonprofits, Giving USA Foundation chair Josh Birkholz pointed out that donations did not drop by very much and were falling from record highs.

“Unless there’s a big economic turn, I would expect the numbers to be going back up based on the stock market performance so far this year,” he said. “Probably the bigger macro concern in charitable giving is that our numbers have been climbing because of wealthy donors, and everyday donors just keep declining.”

Furthermore, the decline in giving is unlikely to have a particularly strong impact on nonprofits’ ability to afford new office space, he said, especially as rents also decrease.

Rents by and large remain lower than prepandemic levels. The average asking rents in Midtown and

office attendance in the city has recently cracked the 50% mark on an average weekday, nonprofits have been struggling more than other types of companies to get their employees back to the office, several brokers said. Many are thus looking to reduce their office footprint and finding that doing so allows them to upgrade to a newer building. This doubles as a way to entice their employees to come into the office more often.

“It’s important for them to make sure that the space is an active work environment and that it’s rightsized,” said Lawrence Briody, a CBRE broker who specializes in nonprofit leases. “One nonprofit I’m working with, they’re likely to reduce their space just because there’s no energy in the space that’s half-occupied.”

DEALS STRUCTURED AS

downtown were $78.61 and $58.81 per square foot, respectively, in May, both down sharply from March 2020, according to Colliers.

Favorable environment

Although lower rents would seemingly make it easier for all types of tenants to afford new office space, multiple nonprofit experts said that was not the biggest factor behind the organizations inking leases in buildings that would have likely been out of their price range before the pandemic. They pointed to landlords covering more moving costs and nonprofits downsizing as playing more significant roles.

Even as some reports show that

Moving offices tends to be expensive for nonprofits, and landlords eager for new tenants have been offering to help them cover these costs, said JLL broker Ellen Herman.

Rockefeller Philanthropy Advisors, for instance, recently inked a 10-year lease to move to Silverstein Properties’ 120 Broadway downtown, where it is downsizing to 14,000 square feet. The nonprofit is getting a full buildout at the tower to cover the cost of relocating and should be moved in by September, according to Herman, who represented Rockefeller in the deal.

A November press release announcing the lease touted the extensive renovations Silverstein has made to 120 Broadway, which included adding a tenant-exclusive lounge, café, food hall and rooftop terrace known as The Bankers Club. This has been a huge factor behind attracting interest in the property, said Keith Cody, head of leasing at Silverstein.

“That has been a big part of why

we’re bringing these tenants into that building in particular,” he said. “The amenities have been so well received.”

Rockefeller did not respond to a request for comment.

Indeed, the overall office environment is very favorable for nonprofits right now, and Herman said she does not see these advantages going away anytime soon.

“There’s just so much space on the market throughout the city that it will take a while for this higher vacancy rate to go away, where there’s more of a balance between landlords and tenants,” she said. “I’d expect more accommodations for the nonprofit world for the next few years.”

Owning it

The nonprofit New Alternatives for Children also recently inked a lease, moving to Vornado Realty Trust and Edward J. Minskoff Equities’ 825 Seventh Ave. earlier this year, said Herman, who helped broker that deal as well.

As with the New York Public Library, New Alternatives’ deal was structured as a leasehold condo, which is proving to be a key factor in

getting nonprofit deals done, Herman said.

“It allows that space to be more affordable to the tenant and attracts the interest of the nonprofits to those buildings,” she said. “Otherwise, we would never have given them a second look or a first look even.”

Representatives for the library, New Alternatives, Vornado and EJM did not respond to requests for comment.

Leasehold condos essentially allow nonprofits to be viewed as owning their office space on a long-term lease of at least 30 years. Because most nonprofits are exempt from real estate taxes in New York, that can lead to savings of 20% to 25% for the organization, noted Stephen Powers, co-founder at Open Impact Real Estate, which has done more than 1 million square feet worth of leasehold condo deals in the past four years. These were not popular across the board with landlords before Covid, namely because the amount of rent they could get would be locked in for 30 years, preventing them from raising it if the market turned in their favor. Now, however, 30 years of steady income is looking

pretty good.

“Before the pandemic, there were only a handful of landlords that would do it,” said Powers, “and now, when we’re searching for these spaces, there are dozens and dozens of landlords willing to do it.”

Powers is working on three large leasehold condo deals at the moment. They tend to be popular in neighborhoods including Midtown and the Financial District, where landlords have good relationships with their lenders and a good amount of empty space to fill, he said.

ABS is a fan of the leasehold condo structure and trying to figure out how to open it up to nonprofits that may not be able to make a multi-decade commitment, said ABS Partners’ Caseley.

“The question becomes, with several of them, whether or not they can commit for 30 years,” he said. “Not everybody can do that, so we’re trying to align ourselves with a method of accommodating even shorter commitments.”

Although ABS had done these types of deals before Covid as well, Caseley acknowledged that the strategy had increased recently as a way for commercial landlords to increase their tenancies.

“It doesn’t eliminate the possibility of accommodating for-profit companies in a traditional way,” he said, “but the reliability of the tenancy of not-for-profits long-term is attractive under the current market circumstances.”

Silverstein was not big on leasehold condo deals until Cody joined the company in September 2021 and made pushing for them a major priority, he said. They are now proving to be a key method of staying competitive in a tough office environment.

“In this marketplace, you have to really differentiate yourself from the competition,” Cody said, “and that was one way we were able to do it.” ■

SoHo-based PR firm Bevel acquired by Avenue Z

BY CARA EISENPRESS

Bevel, a New York City public relations firm that focuses on the technology and venture capital industry, was acquired by Avenue Z, a recently formed digital marketing and public relations firm led by Miami-based entrepreneur Jeffrey Herzog. Bevel’s operations will remain grounded in New York City.

BEVEl’S

The combined firm is valued at $75 million, according to a source who declined to be named in this article.

Bevel, founded in 2017, has its office in SoHo. It attracted tech companies for its ability to navigate both press opportunities and digital media, including video.

Companies tend to stay with Bevel from their seed round all the

way through an initial public offering, said founder Jessica Schaefer. In particular, the nascent fintech industry has flocked to Bevel, which represents several local companies in the industry, including online business banking company Lili, a group of women-led SPACs called Athena, the retail investing app Public and the alternative investment platform—and museum—Rally. Acorns, the Irvine, Californiabased investing app, is also a Bevel client.

Herzog, who sold a previous company called iCrossing to Hearst Corp. in 2010 for $450 million, approached Bevel about a year ago, Schaefer said, and discussions proceeded about what a combined company might look like. Schaefer will join Avenue Z’s board under the terms of the acquisition.

Avenue Z will look to acquire other businesses. At Bevel, the current plan is to branch out into several new sectors, including health-

tech and climate. Bevel is also focused on representing companies that are exploring the entire universe.

“We want to open an office in space,” said Morgan Borer, a part-

ner.

Bevel is hiring for 15 local positions following the acquisition, including a head of private equity and a head of investor relations, two areas where it hopes to grow.

Libbie Wilcox, an associate director at Bevel who previously worked on Capitol Hill for former congressman Sean Patrick Maloney, was named to Crain’s 2023 20 In Their 20s list. ■

THE NONPROFIT Rockefeller Philanthropy Advisors recently inked a lease at Silverstein Properties’ 120 Broadway in Lower Manhattan.

lEASEHOlD CONDOS ARE PROVING TO BE A KEY FACTOR FOR NONPROFITS

MORGAN BORER (LEFT) AND JESSICA SCHAEFER of Bevel, newly acquired by Avenue Z

OPERATIONS WILL REMAIN GROUNDED IN NEW YORK CITY

Investors join Public app for meme stocks and then stick around to build wealth

BY CARA EISENPRESS

For some, it was excitement about meme stocks and crypto that got them to sign up for investment app Public. For others, it was short-term government bonds with surprisingly high rates. For still others, it was the chance to buy into the articial intelligence boom by amassing shares of Nvidia, which makes hardware used by AI tools.

“In di erent economic cycles, di erent asset classes are the on-ramp or re-entry [point] into the markets,” said Leif Abraham, co-founder of Tribeca-based Public, a retail trading app that o ers access to a half-dozen assets, as well as information and community feeds, on an app built to be user-friendly.

e company had raised over $300 million at a $1.2 billion valuation by summer 2021. It reports it has 3 million members. e company makes money by charging users when they trade and by o ering a $10-per-month premium membership that includes more information and access to trading before markets open and after they close.

Abraham and co-founder Jannick Malling met in the New York City ntech startup scene in the 2010s. ey paired up to start Public to solve a two-fold problem: that playing in the stock market when Amazon cost nearly $200 a share meant you needed substantial cash and that many people had a mental barrier about investing.

ey sought to create a place where investors could nd good information and build trust with other members of the investor community, who, crucially, do not bene t nan-

cially from the advice they share. On the tech side, Abraham and Malling enabled fractional share investing so users could buy small percentages of high-priced stocks and hold them for the long term—the Warren Bu ett strategy writ small.

‘Very social and contextual’

Public launched the community in September 2019 and the fractional investment option a few months later. e two platforms worked in tandem, driving adoption quickly. Investors with large and small stakes in companies were able to use Public to chat about their investments.

After launch, each week saw 10 times the membership as the week before, the founders say.

Six months later the Covid shutdowns began and with them a sped-up cycle of trading trends. First, everyone wanted stocks catered to the remote-work crowd, like telehealth companies and Zoom. In early 2021 the mood shifted as participants in online forums drove up trading volume in unexpected stocks such as GameStop and Bed Bath & Beyond. When competitor Robinhood suspended buying on GameStop in January 2021, customers ooded Public. As members joined at ever-faster rates, investors clamored for a piece of the company. ough they had raised a $65 million Series C in December 2020, Abraham and Malling made the most of the moment and raised a $220 million Series D in summer 2021, using some of the investment to build robust trading systems that could withstand large volume and using the rest to extend the rm’s runway.

Sophia Amoruso,

founder and general part-

ner at Los Angeles-based Trust Fund, took part in that round.

“I think it’s really important that everyone invests their money,” Amoruso said about the reasons behind her investment. “But people need to educate themselves, not just follow trends. Public is very social and contextual.”

By 2022, as interest rates started to climb, Public’s users developed an appetite for Treasury bills.

Public gave them access, as it focused on being a one-stop shop for stocks, crypto, bonds and art. “ at’s how people should construct their portfolios,” said Abraham. “Highnet-worth people have exposure to all of these.”

ough trends come and go, the co-founders believe all trends have an upside for their app, seeing as they all drive interest in investing. Retail investing hit an all-time high earlier this year, with the percentage of total trading volume coming from retail investors at 23%, according to a note from JPMorgan. Public prioritizes the trust of its users. As Abraham and Malling incorporate AI chatbots into the experience, they are making sure that all data going into the bots is solid. ey decided not to use trading systems that pay brokers for order ow so as to align their interests with that of their customers.

Public user Sydney Dale, a 29-year-old dance teacher in Birmingham, Alabama, said she has been frugal all her life. But when she started earning a salary, she did not know where to invest her cash. On Public, where she is now an ambassador, she absorbs research and insight shared by others and explains her own thinking on investments in her feed.

FOCAL POINTS

COMPANY Public

FOUNDED 2019

MANAGEMENT Leif Abraham and Jannick Malling, co-founders

FULL-TIME EMPLOYEES 150, about half in New York City

USER COUNT 3 million

FUNDING Over $300 million in venture capital

PRODUCT MIX Registered users get access to stocks, crypto, exchangetraded funds, treasuries, investment plans and alternative assets such as ne art and collectibles. A premium membership costs $10 per month and provides users with additional information.

GROWTH STRATEGY Public’s plan is to continue adding asset types until customers can allocate their investments almost any way they choose. The company is also rolling out arti cial intelligence tools including conversational chatbots to help customers keep up with stocks on their watchlists.

WEBSITE public.com

“Especially for beginners, you can just scroll down on the app and see nancial statements and news articles about the companies you’re investing in,” she said. “So it’s easy to do the research.”

She said she tuned in to discussions in 2021 about the semiconductor industry, which piqued her interest because she also loves video games, whose consoles depend on the availability of computer chips. She bought a position in Nvidia in the fall of 2021, selling a small percentage of shares this past May after watching them rise 94.8%. “Still holding this gem,” she wrote on her Public feed, “trimmed 10%.” ■

The Tribeca company saw a wave of signups during the Covid pandemic

LEIF ABRAHAM (LEFT) AND JANNICK MALLING, co-founders of trading app Public BUCK ENNIS