Crain's New York Business, September 11, 2023

AS MANHATTAN’S OFFICE MARKET LAGS, RETAIL IS PERKING UP

Elevated vacancy rates are coming down as shoppers slowly return

Betting that more than a few passersby would buy a scoop of Peanut Butter Brownie Honeycomb or Vegan Oat Milk Brown Sugar Chunk, Van Leeuwen Ice Cream inked a rich deal to open a new shop in Times Square.

“It’s more rent than we’ve ever paid anywhere,” said CEO Ben Van Leeuwen, who is paying $35,000 a month for 600 square feet near West 47th Street for the store, which opened Aug. 24. “But it’s a way to engage with a potential grocery store shopper or a potential franchisee.”

After a frigid three years, the market for retail space in Manhattan is warming up. Business

Burst water main was 50 years past due for an upgrade

By Caroline Spivack

A 127-year-old water main ruptured above Times Square early Aug. 29, gushing nearly 2 million gallons of water into the city’s busiest subway station. e break brought service on multiple lines to a crawl and upended the morning commute as the city’s Department of Environmental Protection needed 90 minutes to shut o the water. e burst occurred at 40th Street and 7th Avenue and spilled into the Times Square-42nd Street subway station.

Debra Laefer, an associate professor at NYU’s Tandon School of Engineering, said the morethan-century-old infrastructure is emblematic of larger city infrastructure challenges.

NEARLY 40% of New York City’s water mains were installed before 1941.

By Aaron Elstein

may lag 2019 levels, but it’s good enough—and rents are down enough—to start luring merchants back into storefronts that were empty for a long time. ere were more than 40 fewer “direct ground- oor availabilities” on the best shopping streets last quarter, according to brokerage rm CBRE, a 17% decline from last year, and the Real Estate Board of New York declared in a July report that retail is “in a healthy place”—a statement no one would make about the o ce market.

“Rents are at a healthy level for both tenants and landlords,” said Matt Chmielecki, a senior vice

president at CBRE. “And that’s all you need.”

To be sure, full recovery remains a ways o . In prepandemic times Manhattan’s retail vacancy rate was a bit more than 5%, a 2019 report by the city Comptroller’s O ce found. Today, the Times Square Alliance says 12% of storefronts are vacant, down from 18% a year ago. e 34th Street Partnership reports the retail vacancy rate on that corridor is 14%, down from 19% a year ago.

Signs of progress are visible on store signs. Century 21 emerged from bankruptcy and reopened in the Financial District, although with a smaller footprint. PC Richard & Son recently leased 31,000

Former Bath & Body Works manager brings data to the fragrance industry with startup Scent Lab. PAGE 3

e chaotic episode gave New Yorkers a tangible taste of what can happen when the city doesn’t keep pace with upgrading its roughly 6,800 miles of decaying water mains—enough to stretch from New York City to Tokyo if laid end-to-end. City o cials said the pipe in question had been in use since 1896, which is eight years before New York’s subway system launched and when horsedrawn carriages were still a common sight on city streets.

“Typically the life expectancy for one of these pipes would be 50 years, and at the rate that we and other communities are replacing them, there’s a mismatch so that they will never catch up unless they start putting in new pipes more quickly,” Laefer told Crain’s. “While, yes, some pipes can last 127 years, we shouldn’t be counting on that; we really need to invest in them more.”

Nearly 40% of New York City’s water mains were installed prior to 1941, despite the average design life of these pipes being estimated between 50 and 70 years, according to a 2022 infrastructure report card from the American Society of Civil Engineers. e report card gave New York a Con its investments in drinking

See

WATER MAIN on Page

GOTHAM GIGS

At 89, D’yan Forest, the ‘oldest working female comedian,’ aims to entertain a younger crowd. PAGE 23

Water main repairs at 40th Street and 7th Avenue | BUCK ENNIS

The 127-year-old pipe above Times Square shines a light on the logistical headache that is overhauling the city’s water infrastructure

Century 21 reopened in the Financial District, although with a smaller footprint, after emerging from bankruptcy. | BUCK ENNIS

City to open large-scale migrant shelter in Long Island City of ce building

The former Queens warehouse on Austell Place will serve as the city’s 16th major relief center

By Nick Garber

A vacant o ce building in Long Island City will become the city’s newest large-scale shelter for newly arrived migrants, City Hall ocials announced Sept. 7.

e o ce building on Austell Place, near the sprawling train yard that juts through the Queens neighborhood, will ultimately hold about 1,000 asylum seekers, Mayor Eric

town’s Roosevelt Hotel or the Wingate by Wyndham, also in Long Island City—or other sprawling facilities like the Creedmoor Psychiatric Center in Queens and the Randall’s Island soccer elds where the city opened a tent shelter last month.

Property records show the veoor Austell Place building is owned by an LLC based in New Jersey. e building was at one point managed by Columbia Property Trust, a company spokesperson said. e city has contracted with private companies to oversee the large-scale relief centers, under the supervision of New York City Health + Hospitals.

Adams’ o ce said. It has already been serving as a smaller-scale “respite site,” one of several shelter categories that the city has created to tackle the growing crisis, but will be expanded to become the city’s 16th large-scale “humanitarian response and relief center.”

A former warehouse converted to o ces in 2020, the Long Island City building di ers from many of the other relief centers the city has opened thus far, which have tended to be either hotels—like Mid-

As of last week, more than 110,100 migrants had entered the city since last spring, with 59,700 remaining in the city’s care, Deputy Mayor Anne Williams-Isom said Sept. 7. In addition to the 16 relief centers, the city has opened 206 emergency shelters for migrants.

News of the new relief center came hours after City Comptroller Brad Lander announced that he was rejecting a $432 million migrant-services contract that the city signed with onetime urgent-care company DocGo. e contract’s size, the company’s relative inexperience with migrant issues and re-

ports of mismanagement at its shelters led to criticism of the Adams administration—but City Hall o cials have defended their handling of the di cult crisis.

“ e speed at which the city is rapidly scaling capacity to meet the needs of this crisis is nothing short of Herculean,” Adolfo Carrión Jr., commissioner of the city’s Department of Housing Preservation & Development, said at a news conference where the new relief center

was announced.

Illustrating the tall task of converting a slew of buildings into shelters, omas Foley, the commissioner of the Department of Design and Construction, said his agency had to partially demolish and reconstruct the building’s boiler room to provide a proper emergency egress, install new stormwater drains, and build a new exterior landing before letting asylum-seekers move in.

Lower East Side to get 47,000-square-foot, 46-unit mixed-use residential project

The Horizon Group is planning an 11-story development on a site at 125 Chrystie St.

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By Eddie Small

A new residential project is coming to the Lower East Side.

Brian Hamburger of Britt Realty, the construction arm of Brooklyn-based developer the Horizon Group, recently filed plans with the Department of Buildings for a development with 46 residential units at 125 Chrystie St., close to the intersection of East Houston Street and Bowery. The project will stand 11 stories and 137 feet tall and span about 47,000 square feet.

The project will feature retail space on the ground and second floors and space for a community facility as well. Fischer Makooi is the architect.

The property has been owned by the Lintien Corp. since 1971 and is currently home to a 2-story industrial building that was built in 1950 and spans about 7,000 square feet, according to city records and CoStar Group. The Horizon Group filed demolition plans for the site in July.

The Horizon Group, led by David Marom, was founded in 1985 and has developed more than 30 projects in and around the city since then, according to the company’s website. Its other projects in New York include The Library, a condo project at 61 Rivington St. on the Lower East Side, and 378 Weirfield St., a luxury residential building in Bushwick.

Representatives for the Horizon Group did not respond to a request for comment by press time, and a representative for the Lintien Corp. declined to comment.

Manhattan’s residential pipeline has been very slow lately, although there have been some

signs

of life. Developer Guy Peleg recently filed plans for a 12-unit residential project in Kips Bay, while the Naftali Group secured

a 99-year ground lease at 301 Third Ave. in the neighborhood where it plans to build a multifamily project.

“The speed at which the city is rapidly scaling capacity to meet the needs of this crisis is nothing short of Herculean.”

Adolfo Carrión Jr., commissioner of the city’s Department of Housing Preservation & Development

A warehouse-turned-of ce building in Long Island City will serve as the city’s latest large-scale migrant shelter, of cials said. | GOOGLE

property at 125 Chrystie St. was built in 1950 and spans 7,000 square feet. | COSTAR GROUP

Scent Lab brings data to the fragrance industry

The upstart: Scent Lab

When Queens native Ariana Silvestro worked as a store manager at Bath & Body Works and then as a corporate manager focused on customer insights, it was her job to ensure shoppers found candles and personal care products in scents they loved. Not so easy!

The chain relied heavily on training and education so that sales associates could guide shoppers through the options, but Silvestro didn’t think it was a reliable strategy because customers sometimes wound up frustrated by the vast selection.

“Shopping for fragrance should be enjoyable and fun and lighthearted,” Silvestro says. “And it gets overwhelming, really easily.”

Her solution? Scent Lab, her scented-candle startup based in the Meatpacking District, employs a data-driven recommendation engine to help shoppers find the right fragrance for their home.

The company has raised approximately $1 million in its first institutional round and is actively seeking new investment this year.

Customers undertake a 60-second, video-based “scent discovery process” to determine which fragrances will appeal. A recommendation engine then calculates individualized scores for each of Scent Lab’s fragrance blends. A shopper might score a 93% match on Blend No. 2223, “Lavender Smoke,” for example, and a 15% match on Blend No. 1226, “Dewy Days.”

Shoppers can choose a $30 candle sample pack that includes their three top-scoring fragrances or buy a full-size 14-oz candle—in the jar color of their choice—for $45.

Upon receiving their order, customers can complete a detailed feedback survey. Over time, Scent Lab uses machine learning and artificial intelligence to refine the scores and create new fragrance blends.

Launched online in November 2022, Scent Lab has delivered candles to more than 5,000 unique customers, the majority of whom make a repeat purchase, Silvestro says.

Among them is Ali Kriesgman, a Fort Greene-based writer and entrepreneur. She first spotted Scent Lab on Instagram and enjoyed the online scent discovery test. Her familiarity with BuzzFeed quizzes on Facebook drew

her to the company’s personalized approach.

She’s since bought the full-size version of her top-scoring Scent Lab blend, “Breezy Bay,” four times. “I was really well matched with my initial scent—they did a good job,” she says.

The reigning Goliath: Bath & Body Works

The Columbus, Ohio-based personal and home fragrance retailer operates more than 1,800 company-owned locations in the U.S. and Canada along with more than 425 international franchised locations. Sales of products including body lotion, candles, home fragrance diffusers and liquid hand soap topped $7.5 billion in 2022.

How to slay the giant

Silvestro, who worked at several New York City startups after leaving Bath & Body Works, launched a beta test for what would become Scent Lab in 2021 while still employed full-time as head of strategy and marketing at a dentistry startup.

Working weekends and evenings, she created a bare-bones website featuring the first iteration of the fragrance discovery quiz and sent notice to friends and family, hoping to generate perhaps 50 to 100 responses. Word got out and she was soon deluged with more than 700 orders. She spent many late nights making candles by hand and shipping them from her Hell’s Kitchen apartment. Silvestro initially gave customers two options: They could create their own custom candle, choosing from a list of scent options, or take the quiz and buy a customized blend Silvestro created based on their responses.

To her surprise, the “create your own scent” option was a flop. Shoppers found the long list of fragrance options overwhelming. “Or they would do it and it wouldn’t smell very good, and then they would never come back,” she says.

But the overall results were promising. Shoppers loved the quiz and left positive reviews of the scented candles Silvestro created based on their preferences.

In 2022, she left her job and devoted herself to Scent Lab, relying on small checks from friends and family—totaling

less than $200,000—to get started. She brought on a head of product and teamed up with a fragrance house to design a line of 10 original scents based on her customer research. She also partnered with a small U.S.-based candle manufacturer. It wasn’t easy to find a company willing to accept her small orders, she says.

She soon faced the opposite problem. Sales began to grow and the manufacturer struggled to keep up with demand, resulting in long delays.

Silvestro scrambled to keep customers happy—posting on social media to keep followers updated on the supply chain snafu and sending gift cards to make up for the long waits. The response was overwhelmingly supportive, she says. Scent Lab has since paired with a larger manufacturer, which will allow it to scale up.

Silvestro also created a team of data scientists, engineers and fragrance experts to devise a more sophisticated, algorithm-based version of the scent discovery quiz that takes into account the customer’s scent preferences, moods and memories. The system gets smarter over time as the company collects more data. “We went through 100-plus iterations of the quiz before landing where we are today, and it’s fluid,” she says. “We’re always learning, adapting and tweaking.”

Another challenge for any consumer product startup— cutting through the noise and getting attention. Claire Cherry, an investment partner in Joyance Partners, the venture capital firm that led Scent Lab’s institutional round, says the startup’s unique recommendation technology made it stand out in a crowded field.

Cherry was further impressed when she learned that Silvestro had generated additional interest in the brand by launching several pop-up stores in Manhattan and offering its candles in-store at Neighborhood Goods in Chelsea Market. “I was amazed at how much they’ve been able to achieve with such a small amount of money,” says Cherry.

The next challenge

The online candle shop is just the first step, Silvestro says. Next year, Scent Lab will expand into new product categories, starting with a perfume mist. It also plans to expand its in-store presence by teaming with a retail partner.

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

Anne Kadet

Scent Lab CEO Ariana Silvestro’s experience at Bath & Body Works inspired her to create a data-driven way for customers to find the perfect scent. bUCK eNNIS

Landlords split over law fining them for illegal pot shops

By Eddie Small

The smoke shop leasing a small amount of space in one of New York landlord Jim Wacht’s buildings had been there for years. Though he had never been thrilled about renting to a store selling tobacco, describing it as “not a great look,” he only recently became suspicious that the business was breaking the law.

“They didn’t advertise that they were selling cannabis products, but I was concerned,” said Wacht, president of brokerage and management firm Lee & Associates’ New York City office. “So we had somebody go in there covertly and ask if they could buy any cannabis. The answer was yes.”

Wacht, who said the property is in Midtown but declined to provide its specific address, warned the business that it could not keep selling marijuana without a license from the state, but it continued to do so anyway. His firm is now pursuing legal action against its tenant.

“It’s a violation of every lease that’s written because it’s illegal,” he said. “If they’re operating illegally, it’s a lease default, so a landlord could take action to shut them down.”

Wacht’s firm is acting how the city would presumably like all landlords of smoke shops found to be operating illegally to act, especially given how rapidly they have spread throughout the city since the state legalized recreational marijuana sales in 2021. But officials are no longer just hoping that property owners will choose to

“If the illegal activity is prostitution or selling hard drugs, a landlord will very quickly try to evict. We’ve helped many landlord clients do that,” he said. “But it’s a little different here because cannabis has been decriminalized, and the stores are on the thin gray line between legal and illegal.”

Illegal opportunities

State officials have faced plenty of criticism over how long it has taken to launch New York’s recreational weed retail program. The law legalizing cannabis sales passed in March 2021, but the first dispensary did not open until December 2022, and even now there are just 23 licensed stores throughout the state. This has created an opportunity for unlicensed stores to open, and estimates for their total number in the city have ranged from about 1,500 to 8,000.

Government agencies have taken steps to crack down. In July, for instance, the Manhattan district attorney’s office fined the owner of 11 unlicensed shops $400,000 and ordered him to stop selling weed.

But such efforts have yet to make much of a dent in the number of illegal shops, many of which can simply change locations even if they get shut down.

“The city knows that going after these tenants is like playing a game of Whack-a-Mole,” Davidson said. “They can shut down one, and Exotic Vape Clouds Three will show up the next day somewhere else as Exotic Vape Clouds Four.”

This is the main reason the City Council’s law was necessary, says Councilwoman Lynn Schulman, who sponsored the bill and represents Queens neighborhoods including Rego Park and Forest Hills.

upon himself to find out whether the smoke shop in his building was selling weed, the law does not require landlords to spy on tenants, Schulman stressed. It is up to law enforcement agencies to both determine if the tenant is breaking the law and inform the landlord if that is the case.

“This is a game-changing bill,” she said, “and it’s another tool in the toolbox to hopefully shut these businesses down.”

Industry opposition

take action. Under a law that the City Council passed 48-0 in late June, landlords who continue to lease space to unlicensed pot shops after being warned by law enforcement that the stores are operating illegally could now face fines of up to $10,000.

Wacht views the explosive growth of unlicensed pot shops as a blight on the city and is a supporter of the new law, but support is not universal. Some landlords see it as the city pawning off on them a problem it has been unable to solve through its own law enforcement agencies. And given that the overall retail market is still struggling to recover from the pandemic and evicting and replacing a tenant can be difficult, many could still be inclined to quietly look the other way.

This is the fork in the road that landlords are now facing. That the sale of marijuana is legal only in very specific circumstances makes this decision more complicated, says Harris Davidson, an attorney at the law firm Rosenberg & Estis.

“All the other efforts that were being conducted by the city and state focused solely on those businesses,” she said, “and those businesses haven’t been going away.”

Under the new law, which took effect Aug. 14, if a raid on a store uncovers illegal activity, city officials will first tell the landlord it is renting to an illegal business. If later inspections show that the business is still operating, the landlord could be fined $5,000, followed by a $10,000 fine for each subsequent failed inspection.

Evicting a tenant in New York is a long and difficult process, and many landlords have expressed concerns that a second or third raid could reveal the unlicensed store is still selling weed even though the landlord is actively trying to get rid of the tenant. However, the legislation specifies that the landlord will not face fines if this is the case.

“They have to show in good faith that they’ve at least initiated the proceedings,” Schulman said. “That’s an affirmative defense, and they won’t be subject to fines.”

And although Wacht took it

Although the law has the support of the Real Estate Board of New York and some individual landlords, it faces plenty of opposition in the real estate community. The Rent Stabilization Association and the Community Housing Improvement Program, two lobbying groups representing smaller landlords, are both against it, as are several others in the industry.

“It won’t end this business, and it only hurts property owners,” said CHIP Executive Director Jay Martin. “Those who want to sell black market weed products will still do so, and the real solution is robust enforcement and rapid licensing.”

One Lower East Side landlord said he is currently dealing with illegal cannabis stores at three of his properties. The landlord, who asked not to be named because the stores are still operating, argued that the new law traps him in a no-win situation. He doesn’t like these shops and knows that their being open puts him at risk of incurring steep fines, but he will also lose sorely needed income streams if he kicks them out.

“You’re between a rock and a

hard place. It bothers you. You want to do the right thing. But at the same time, if you want to get rid of this tenant, who’s going to compensate you for the money that you spend?” he asked. “You get cheated, and then you have to be the police yourself? I can’t be the victim and the police.”

Retailers generally do not tell property owners they want to open an unlicensed weed store in their building. Many come in saying they want to run a deli, then slowly add tobacco products and then cannabis products to their inventory, according to the landlord.

This ends up being bad not only for the landlords but also for prospective tenants that actually do just want to run a deli but now face added suspicion, he said.

“I have a new building right now where a deli guy has been calling me every day to lease my store,” the landlord said. “I have a vacant store, and I’m not comfortable leasing a store to him. He wants the space. I have to lease the space, but I cannot trust that he’s not going to end up doing a business that is not allowed.”

Bill Abramson, director of sales and leasing at Buchbinder & Warren Realty Group, said his company has also been getting a lot of interest from businesses it suspects want to sell unlicensed cannabis products. Many of the firm’s commercial spaces are on the smaller side, which is what these stores tend to like, but it has turned down every offer.

“We get a ton of calls, but we wouldn’t accept them as a tenant even though, frankly, they offer above-market rent,” said Abramson, who supports the new law. “I understand why a landlord would

be attracted to that, but it’s illegal.”

Rough retail

The proliferation of unlicensed pot shops is happening against the backdrop of a retail sector that was struggling even before the pandemic hit and has yet to fully bounce back from Covid. Although the latest Manhattan retail report from CBRE found that the average asking rent had risen for the fourth quarter in a row, rents and leasing activity both remain far below their prepandemic peaks.

This makes it all the more painful for landlords to evict an unlicensed store, especially one that has no financial issues, notes Rosenberg & Estis attorney Adam Lindenbaum.

“These tenants typically pay their rent. They’re doing well, and that’s something not to cast aside,” he said. “Landlords are not going to jump to throw a tenant into default when they’re paying rent over something that’s non-monetary.”

But Wacht said he had no sympathy for landlords who opt to look the other way when they discover they are renting to an unlicensed cannabis store, no matter the financial hit they might take. He stressed that if a property owner finds out they are renting to an illegal business, it is their responsibility to shut it down.

“If your tenants are acting illegally and you’re aware of it, you have an obligation to do something about it. I feel very strongly about that,” he said. “It’s one of the risks of being a landlord, the cost of doing business. You have an illegal tenant? Get rid of them.”

“If they’re operating illegally, it’s a lease default, so a landlord could take action to shut them down.”

Jim Wacht,

president of brokerage and management firm Lee & Associates’ New York City

office

Bill Abramson of Buchbinder & Warren Realty Group supports the city’s new law fining landlords who knowingly rent to illegal cannabis shops. | BUCK ENNIS

Let Staten Island pay the price for secession talk

The borough’s leaders are renewing a threat they’ve made for years, but leaving the city might bring unwelcome surprises

Talk of Staten Island secession is back in the news. Nicole Malliotakis, the Republican congresswoman representing the borough and parts of southern Brooklyn, said the migrant crisis should prompt Staten Islanders to break away from New York City entirely.

“If you’re not gonna do your job, mayor, then let Staten Island secede,” she said at a recent rally opposing a small shelter for asylum-seekers that city ofcials opened on the island. “We didn’t vote for your policies. We should not be subjected to your policies, and we’re gonna keep on turning out. Let Staten Island secede.”

Other Staten Island Republicans have long supported these calls. ey argue Staten Island is too distinct politically and culturally to belong to the rest of the city and that City Hall forces policies on them that they don’t support. ey point to Nassau and Westchester, counties bordering the ve boroughs that have their own local governments and county executives.

ere is logic to secession. With a population of nearly 500,000, the independent city of Staten Island would be larger than Tulsa,

Oakland or Minneapolis. at’s enough taxpayers to form a county government and elect an independent mayor or county executive. Given the conservative politics there, the Staten Island government would be Republican-run for the foreseeable future.

It’s worth pointing out that secession calls have inevitably been bound up in racism or xenophobia. irty years ago, more than 60% of Staten Islanders voted in a referendum to leave the city when David Dinkins, the rst Black mayor, was running for re-election. Today, it’s the migrant crisis driving these calls, and a single shelter at a former school site that housed, at its peak, only 50 migrants. (Far fewer are there now, according to the city.)

Hispanic migrants are too much for some of these locals to stomach. e vitriol of certain Staten Islanders has been outright heinous—and it’s been encouraged, every step of the way, by elected o cials.

Perhaps Malliotakis is right. Maybe Staten Island should leave New York City. It might be what they deserve.

Among the Staten Island political class, there’s been a long

“maker or taker” view toward the rest of the city. In this formulation, Staten Island is the home of honest, hardworking middle-class taxpayers—cops, teachers, reghters, sanitation workers—who give back to the city and get little in return. It doesn’t matter that the municipal government subsidizes a free ferry to Manhattan, paves the local streets and heavily funds all of the local public schools. Staten Island is home to the makers—and the city takes. If Staten Island left tomorrow, New York City would lose a tax base. But Staten Island is still, by far, the smallest borough. A citywide population trending toward 9 million would dip back closer to eight. Certainly, the municipal budget would have to be recalibrated for the loss of Staten Island taxpayers. Secession, though, cuts both ways. Staten Island’s prized public schools—Staten Island Tech, Susan Wagner, Tottenville High— would lose all of their city funding. It would be up to the new City of Staten Island to keep the doors open and pay the teachers.

All of the NYPD precincts would close. New York City Transit would withdraw bus service, and it would be up to the new county to negotiate, with the Metropolitan Transportation Authority, what bus routes should look like

Historic saloon P.J. Clarke’s to reopen upstairs party room

By C. J. Hughes

Slowly, and with an occasionally di erent vibe, Midtown Manhattan is beginning to resemble its pre-Covid self.

A party room popular with the business crowd atop historic bar P.J. Clarke’s is reopening this week, more than three years after it closed for the pandemic.

But the restaurant’s owners, which had included late real estate developer Arnold Penner, will be serving up some changes in the Sidecar, the name of the low-ceilinged, second- oor space.

No longer will the 90-seat room

der a bacon cheeseburger and gin martini at Sidecar, provided they make a reservation rst. e original downstairs space, which has anchored the corner of ird Avenue and East 55th Street since 1884, allows walk-ins.

And don’t expect to party into the wee hours at Sidecar, as was often the case at P.J. Clarke’s in the middle of the last century, when Marilyn Monroe, Buddy Holly and Frank Sinatra often turned up (the latter preferring table No. 20). Sidecar will shutter at 8 p.m. and be open just Tuesday through Friday nights. Downstairs, known for its dim, wood-accented room and checkered tablecloths, stays open till midnight most nights.

existential threats over its 139 years. In the late 1960s, developer Tishman Realty sought to raze its home, at 915 ird Ave., which was then a four-story tenement building owned by Daniel Lavezzo, in order to construct a soaring o ce tower. But Lavezzo refused to sell. In the end, his holding out allowed him to score a long-term lease for the site. He also won more than $1 million in payments for lopping o two stories of its brick building to secure Tishman additional rights for the tower, the 47-story, 1.5 million-square-foot spire at 919 ird today.

Owned by SL Green

and what the county government could feasibly pay for.

City sanitation workers would stop garbage pickup. e city’s Department of Transportation can readily cut all funding for paving and road repair. It would be the new government’s problem.

Staten Islanders who complained about the property taxes they pay to New York City may encounter a new reality: the tax bill of a Westchester or Nassau County resident. e suburbs of the city pay the highest taxes in America. Perhaps this is the price of independence locals are willing to pay. Either way, it may be time to let Staten Island nd out.

Quick takes

◗ e City Council will give Madison Square Garden a new, ve-year operating permit. James Dolan, MSG’s mercurial owner, wanted the permit to last forever, and some politicians and local activists demanded an even shorter window— two or three years. Five years is a tough pill for Dolan to swallow.

◗ Will Mayor Eric Adams really shut down Rikers Island by 2027? He is wa ing on what he is required to do by law—and in the meantime, federal receivership for the jail complex seems likely. Ross Barkan is a journalist and author in New York City.

be the domain only of dues-paying members, a vestige perhaps of the business district’s old power-lunch era.

Now, in a more democratic approach, anyone will be able to or-

“Sidecar’s hours are tailored to accommodate the rhythms and preferences of our predominantly corporate clienteleirst seeking a lunchtime oasis and a lively post-work destination for socializing,” P.J. Clarke’s owner, Phil Scotti, said in a statement.

ough the pandemic undoubtedly rocked P.J. Clarke’s business, the restaurant has faced greater

Its owner is SL Green Realty Corp., the city’s largest owner of o ces, which presumably is heartened by P.J. Clarke’s now giving employees another reason to come back to work. SL Green acquired 919 ird as part of its 2007 acquisition of Reckson Realty for $6 billion. In April SL Green renanced 919 ird in a $500 million deal.

Penner, who died in July, bought P.J. Clarke’s with Scotti and other partners in 2002 after Lavezzo’s

son, also named Daniel, led for bankruptcy amid a dispute with Reckson over unpaid rent. e new owners renovated 915 ird, including converting the second oor, which was an apartment before it became a gambling den, into the Sidecar space. A few years later, the owners expanded the brand into a small national chain. An outpost opened on the Upper West Side, across from Lincoln Center, in 2007. Battery Park City also has a P.J. Clarke’s.

Penner was director at landlord Philips International, which was an owner of 250 Church St. in Tribeca and holds other Manhattan properties. He also served as a director at investment rm United Capital, which he sold to Goldman Sachs in 2019 for $750 million in cash. Goldman announced last month that it would sell the division formed around that business, which controls about $29 billion in assets.

Sidecar reopens Sept. 12.

Ross Barkan

An independent city of Staten Island (foreground) would be bigger than Tulsa, Oakland and Minneapolis. | GETTY IMAGES

Now anyone will be able to order a bacon cheeseburger and gin martini at Sidecar, provided they make a reservation rst.

P.J. Clarke’s in Midtown | BUCK ENNIS

New York will soon play host to a new pro sports team

By Jack Grieve

A new professional women’s hockey league will break ice for its inaugural season in January, and the New York area is among its six founding markets.

The Professional Women’s Hockey League (PWHL) has emerged as the sport’s new governing body in North America. The league promises to reimagine women’s hockey and ignite a much-needed spark to a sport that has long struggled to find its footing.

The PWHL has not named a stadium or practice facility for the New York squad, nor has it confirmed whether the team will play within the city limits. That information is expected to come next month, a league spokesperson told Crain’s.

1031 EXCHANGES

Can a partnership pursue a 1031 exchange if some partners want to cash out?

Regardless of where exactly the team practices and plays, it hopes to establish an identity within the city. “We are going to be New York’s team,” said PWHL board member Stan Kasten. “The challenges that we will have, finding facilities and putting games on, are worth it when you realize the exposure and the level of hockey interest in that city.”

Kasten said it was a no-brain -

er to position one of the franchises here. “Of course we have to be in New York. It’s the center of the world for economics and for sports.”

Pascal Daoust, who hails from Montreal and has long coached hockey at the junior level, will lead the New York team as general manager.

The five other founding markets are Boston, Minneapolis-St. Paul, Montreal, Ottawa and Toronto. The PWHL has not yet announced the names for any of its teams.

An initial free agency period is already underway, and the official draft will take place on Sept. 18. Although the schedule has not yet been released, the inaugural season will consist of 24 games and run from January through May. Future seasons will start in November and span 32 games.

The establishment of the PWHL comes after years of turmoil surrounding professional women’s hockey in the United States and Canada. The league that previously dominated the region lost support from many of its own athletes and struggled to ink a long-term agreement with the players’ union.

The PWHL, however, offers a much more promising future thanks in part to its big-dollar backing from Los Angeles Dodgers co-owner Mark Walter.

“We took a very cold hard look at what it would take economically, and we are prepared to invest what it will take to survive and to thrive not just for the short term or the long term but permanently,” Kasten said.

The league is also set up to operate under a more centralized structure, which Kasten sees as a strategic advantage. “We are a single entity where we can ensure the proper level of competition,” he said. “We do not have owners with different egos and different agendas and different levels of resources. We won’t have any of those kinds of problems.”

Perhaps most importantly, the league has been able to gain back the support of some of the sport’s best players. “We have all of the best women’s players in the world competing together and against each other for the very first time, and that’s an exciting prospect,” Kasten said. “We’re generating a lot of excitement, both by the players and by people who are looking to follow the action as soon as we start in January.”

EVAN FOX, JD, LLM, CA

Partner, Real Estate Tax Leader

212.223.5073

efox@grassicpas.com

While the 1031 exchange is one of the most popular mechanisms to defer tax on the sale of real estate, circumstances often arise where some partners in a venture would rather take their cash and move along. In these situations, I’m asked what mechanisms or structures can be utilized to facilitate a cash out of those partners, and what the corresponding tax results will be.

Three of the most common strategies for cashing out members include:

Cash redemption. This option often involves first selling the asset and then sending to the qualified intermediary (“QI”) only the amount of funds that the remaining partners intend to use in a 1031 exchange. Importantly, when this strategy is undertaken, the amount of cash that circumvents the QI is treated as boot, and each dollar is taxable gain. While the partnership may want to allocate 100% of this gain to only the redeemed members, and possibly even alter its partnership operating agreement accordingly, such allocations may lack substantial economic effect. As such, the departing partners are typically permitted to receive gain allocations so their ending capital account equals the cash received on redemption. Any remaining gain is allocated to the continuing partners - a negative result for those who were seeking tax/gain deferral via a 1031. Furthermore, while there is less cash in the QI from the sale, any amount of debt on the relinquished property must be fully replaced (not only the ratio of debt to continuing partners), or there could be mortgage boot gain.

Drop & Swap. This strategy involves changing the ownership structure of the asset so the redeemed members receive tenants in common (“TIC”) interests prior to any sale and cease to be members of the partnership. With this technique, the earlier this structure change occurs pre-sale, the better. Furthermore, it is recommended for the TIC owners to negotiate with the buyers directly. This strategy allows members to cash out in a transaction that circumvents the partnership entirely, so the tax results of any proceeds not involved in a 1031 remain only with those members.

Redemption for an installment note. This technique involves cooperation of the purchaser. In this strategy, the buyer provides some of the consideration via a Purchaser Installment Note (“PIN”), where proceeds are to be received in a subsequent tax year. This PIN exits (or never goes into) the QI and is distributed to the cashing out members in full redemption of their interest. Although the PIN would be treated as taxable boot, the gain is only recognized when the funds are received from the purchaser. Once again, the partnership is responsible to replace the full amount of any mortgage on the relinquished property, or risk gain from mortgage boot (which should be allocated to the departing members as well, thus accelerating some of their recognition). There are other complexities and nuances in this strategy that should be further discussed with your tax advisor.

Regardless of the strategy that is ultimately chosen, it’s best to take a proactive approach and begin the analysis when partners first indicate they may want to cash out rather than stay in the partnership following a 1031 exchange.

Evan Fox is a Partner at Grassi and leads the firm’s real estate tax practice. He provides tax planning and structuring advice to the residential, commercial, mixed use, and infrastructure sectors. grassicpas.com

The establishment of the PWHL comes after years of turmoil surrounding professional women’s hockey in the United States and Canada.

“It’s best to take a proactive approach and begin the analysis when partners first indicate they may want to cash out rather than stay in the partnership following a 1031 exchange.”

Team USA forward Hilary Knight (center) celebrates after defeating Canada in the gold medal game at the women’s world hockey championships on April 16. Knight is a member of Boston’s PWHL team. ASSOCIAteD preSS

the professional Women’s Hockey League’s inaugural season will launch in 2024 and consist of 24 games played from Januar y through may

The PWHL offers a promising future thanks in part to its big-dollar backing from Los Angeles Dodgers co-owner Mark Walter.

Make the terms of the deal clear with migrant crisis contractor DocGo

Comptroller Brad Lander took the unusual step last week of declining to endorse the city’s $432 million no-bid contract with medical services provider DocGo, which is helping the city respond to its worsening migrant crisis.

As Lander noted in a letter explaining the move, it was the rst time his o ce has withheld an approval for an “emergency contract” as designated by city leaders; out of 30,000 contracts overall, the comptroller has agged only 75 in this way.

City leaders have been squishy about the potential costs of the migrant crisis response from day one and should show their math.

Lander said there’s “little evidence to show that this company has the experience to provide the services it has been contracted for,” including case management, housing and social work.

e move was largely symbolic as Mayor Eric Adams has the authority to approve the deal anyway, and he quickly made clear he intends to do so. But that doesn’t

settlement

By Luke

One person dies of an overdose every 90 minutes in New York State [“City’s use of opioid settlement threatened by lax oversight, limited funds,” Sept. 4].

Funding provided in the opioid settlement lawsuits is desperately needed to support the stressed infrastructure of community-based providers. We face increasing demand for services from families, a depleted workforce and challenges related to justice-system reform.

As longstanding neighborhood providers of substance-use disorder treatment, we advise a multipronged approach to embracing the overdose pandemic.

We suggest a re-examination of the current emphasis on harm-reduction approaches. is is not the only method to slow the escalation of overdose deaths and turn the tide of drug misuse in New York. Community-based nonpro t organizations know how present and future spending can be most e cacious.

mean there aren’t some course corrections the city ought to consider as it continues working with the Midtown-based rm.

e DocGo agreement includes minimal details on how the parties arrived at

e fastest and most cost-e ective way to get resources to the community is to reinforce the existing provider network. An established contracted program is best situated to attract and maintain a harm-reduction counseling workforce. is is obviously more e cient than the startup time and money necessary for newly contracted service providers.

New York State funds a variety of services, most of them su ering from a lack of annual adjustments to keep pace with in ation and update infrastructure. It doesn’t make sense that New York State

the total dollar amount, as Lander notes. City leaders have been squishy about the potential costs of the migrant crisis response from day one and owe it to taxpayers to show their math: No city contractor

should get a blank-check deal.

e agreement also includes negligible oversight, including little to no accountability for subcontractors DocGo brings in to help with the work. ose side deals should be disclosed and thoroughly vetted.

Another of Lander’s points, however, veers from constructive watchdog territory toward that of mayoral critic. It’s not unreasonable to question DocGo’s quali cations for the deal, but it would be di cult to argue that the mayor doesn’t get to make that call in a moment of crisis. Time was not a luxury the city enjoyed in this case.

Lander’s letter appeared to knock down DocGo’s shares as investors sorted out what it meant—before bidding them back up by the end of the day when it became clear the mayor stands behind the vendor.

“We can’t change the rules in the middle of the game,” Adams told reporters. “I think the comptroller saw an opportunity to just get in the conversation. But we have a ruling from him and his o ce on doing emergency contracts, and we’ll just continue to do that as we deal with this humanitarian crisis.”

DocGo will have to sink or swim on its results if the city holds it accountable, as it should.

Aviation career awareness critical

By Sharon DeVivo

is placing an emphasis on new programming and new organizations instead of reinforcing existing services with enhanced sta ng and programming.

Also, it is our understanding that if the settlement dollars are not spent on a timely basis, they will be subject to renegotiations through the court. e agree-

ments could be lost to delays and bankruptcy proceedings. It would be catastrophic for New York State to lose any previously committed dollars in the face of an ever-increasing surge in overdose deaths. If these deaths are largely attributable to individuals not in care of any sort, then the counties and the O ce of Addiction Services and Support should use the funding now available to focus on access to treatment. Consequently, OASAS should nd ways to fund services that show the smallest percentages of overdose deaths.

Services should be provided across the spectrum of treatment, prevention, harm reduction and recovery in every type of community setting. at would be a true harm-reduction approach.

Iread with great interest your recent article “Hochul decries air-tra c controller shortage’s impact on New York airports.” e aviation industry is facing unprecedented challenges as air travel volumes surge past pre-Covid levels, especially in New York, which is home to the busiest airspace in the country. While the reduction of ights without penalties is a short-term x, it doesn’t solve the larger, long-term problem of not having enough aviation professionals, not just air tra c controllers, but also pilots, mechanics, airport managers and more, to keep people and our planes moving.

In fact, experts predict a need for 1.3 million aviation professionals worldwide in the next decade. at’s why education and awareness about careers in our industry are so critical, especially at a young age, to ensure we provide gateways for future generations to pursue the life-changing opportunities for all skill levels in an industry hungry for talent.

Sharon DeVivo is president of Vaughn College of Aeronautics and Technology in East Elmhurst, Queens.

New York City Comptroller Brad Lander | BLOOMBERG

Nasta and Seep Varma

Seep Varma is chairperson of the Coalition of Community Services.

Luke Nasta is the organization’s public policy o cer.

Opioid

funds should go to existing providers

The fastest and most cost-effective way to get resources to the community is to reinforce the existing provider network.

LETTER

State regulators must retain flexibility in health plans

By Sagine Pierre

All New Yorkers deserve health and financial security, regardless of where they live and work.

I know that addressing health care cost concerns and how to ensure access to quality, affordable prescription drugs are a priority for the Legislature and the Hochul administration. As an employer who provides benefits to my employees, I appreciate our state leaders’ attention to an issue that’s crucial to us.

Currently, the Department of Financial Services is working to implement a law passed by the Legislature in 2021, which focuses on reporting and transparency requirements for pharmacy benefit managers. Pharmacy benefit managers work with employers and unions to help them provide prescription drug benefits to their employees.

Transparency is essential to good decision-making when it comes to health care for both employers and patients, but it’s also important that DFS does not accidentally do more harm than good as they implement this law. As hospital and pre-

PERSONAL VIEW

scription drug prices continue to rise, employers rely on flexible health benefit options that allow us to address the unique needs of our employees, ensuring that they receive quality, affordable coverage. A small business with 10 employees has much different needs and resources than a major company—a one-size-fits-all system just won’t work.

I encourage DFS to commit to staying within the scope of the law passed by the Legislature and not take action that will have consequences. Any regulation that dictates how and which benefits employers and unions can offer must be off the table. Otherwise, these new mandates will increase costs and make it harder for employers and unions to provide coverage to their New York employees, undermining the robust health care options currently available to employees, regardless of their location or work environment.

Another way that DFS can help employers and unions is by protecting the Employee Retirement Income Security Act, or ERISA. For decades, this law has played a critical role in safeguarding the interests of employees and beneficiaries in pri-

Climate investment should prioritize areas most in need

By Daphany Rose Sanchez

We are currently living through our planet’s hottest recorded year. Climate disasters have become a frequent reality for millions of people globally. In Hawaii, we saw powerful wildfires in Maui destroy entire communities and change lives forever. Nobody can hide from the impact of climate change, but we repeatedly watch communities of color and low-income families experience the worst effects of extreme heat, severe storms and constant flooding.

I was raised in a proud, hard-working Puerto Rican family in Williamsburg, Brooklyn. We lived in NYCHA housing for a good part of my upbringing. Eventually, my family had an opportunity to buy a home on Staten Island. Homeownership was a pinnacle moment for us—our dream had become our reality. But less than one year later, Hurricane Sandy hit, and like thousands of others our home was decimated. We lost everything.

the only ones on my block met with extra hoops to jump through to receive help from the authorities. To them, our brown skin was a sign that we didn’t actually live in the neighborhood.

vate-sector health and retirement plans. It requires employers and unions to provide consistent and reliable benefits to their workforce by standardizing regulations across states. This approach enables businesses to continue to grow without compromising the quality of benefits they offer.

Preserving ERISA is crucial

Most importantly, ERISA ensures that every patient and family member, no matter where they live or work, receives equal care under the benefit plan. Preserving ERISA is crucial to upholding the continuity of benefits across state lines, while also avoiding the complexities that may arise from navigating a patchwork of state-level regulations, which would increase bureaucratic costs for employers and unions. Any attempt to undermine ERISA, and the protections it provides to employers and

workers in New York, demands urgent attention and decisive action.

New York policymakers should be doing everything they can to control rising health care costs, not raise them. It is crucial that DFS regulators consider the implications of new regulations on how health plans, unions and employers offer benefits, as well as any action that will erode the patient protections under ERISA—both of which will weaken unions’ and employers’ ability to deliver affordable benefits to workers and their families.

New York State needs to take a proactive stance in safeguarding workers’ benefits, and to ensure the financial security and well-being of residents and businesses. Unions and employers are proud to offer health care benefits, and ERISA helps protect equal access to those benefits. New York policymakers should strengthen our system rather than work to undermine it.

At Kinetic Communities, we actively cultivate talent from the communities we serve. We work to build trust, provide long-term education and connect families with the resources they need to retrofit their homes, lower their energy costs and reduce their carbon footprint.

Daphany Rose Sanchez is executive director of Kinetic Communities Consulting in Maspeth.

For decades, environmental redlining has exposed neighborhoods of color to pollution, while a systemic lack of public infrastructure investments wore down our roads and backed up our sewers. Now, these populations have a higher risk of respiratory diseases, underscoring the need for clean air. With the rise of extreme rain weather events, these neighborhoods face extreme flood damage.

The climate crisis affects everyone, and New York must prioritize investment in protecting those they have not protected in the past.

through what I went through and to fight for communities like mine to be recognized as equally deserving of protection from the effects of climate change.

Community engagement

We weren’t the only ones who had to put our lives back together, but we were

Kinetic Communities is an organization dedicated to connecting people in low-income communities—including residents of public housing, immigrants and communities of color—to make the green energy transition. When I started this company it wasn’t just a business for me. It was a deeply personal mission: I wanted to make sure that no one else ever has to go

For years—as a City Council aide, an organizer and then a clean-energy advocate—I noticed that none of the city planning initiatives, clean-energy companies or large environmental nonprofits I worked with were meeting community members where they were—both in their communities and at their level of understanding. Currently, less than 40% of U.S. clean-energy economy workers are people of color. This is unacceptable.

As long as we continue treating events like Ida, wildfires, extreme rain and extreme heat as strange, oneoff events that won’t happen again, we do so at the expense of the Black and brown communities already bearing the brunt of natural disasters. Climate change isn’t coming. It’s already here.

New York’s concurrent crises deserve a robust investment strategy, which we’re seeing the beginnings of through the allocation of $5 billion toward energy efficiency and building electrification proposals by the New York State Public Service Commission. But it means more than making green energy more accessible to New Yorkers; it means long-term community engagement, demonstrated investments in the neighborhoods that need it most, and prioritizing those neighborhoods in preparedness and recovery efforts. That’s the work I’ve been proud to do in the climate justice space—and it’s the work I know the entire city must take up. The best time for lasting action on climate change was yesterday; the second best time is now.

Sagine Pierre is president and executive director of the West Hempstead Chamber of Commerce.

The areas identified as at-risk include large swaths of the city’s coastline, much of the Bronx, upper Manhattan, central Brooklyn and parts of Queens. NYS CLImAte JUStICe WOrKING GrOUp

Medly Pharmacy | COUrteSY

Hard times await city, warns commercial real estate broker

Myers Mermel has been a leading commercial real estate dealmaker for more than 30 years. His rm, Mermel & McLain Management, has bought and sold 1 million square feet of of ce space, including 660 Madison Ave. and 104 W. 40th St. He’s the city’s leading air-rights broker and advised Gov. George Pataki on Lower Manhattan’s post-9/11 recovery. When at Morgan Stanley in the 1990s, Mermel acquired a Times Square building out of bankruptcy that serves as Morgan Stanley’s headquarters. He says New York of cials are in denial over how working from home has changed the city’s economy for the worse.

How does the city feel nowadays?

A number of things have happened in Manhattan over the last few years that have been hostile to growth, including Local Law 97, congestion pricing, the lack of 421-a, crime without consequences and uncontrolled migration. Work from home has caused a systemic change in the commercial real estate market that we haven’t seen the full e ect of. Building sales are down 60%. Land and air-rights sales are down 50% to 60%. ere’s very little construction nancing, so almost nothing is moving forward. e economics of the city have changed, and we know we’ll have less tax revenue. On top of that, hundreds of thousands of predominantly wealthy people have left the city.

If people are leaving, shouldn’t housing prices be going down instead of up? at’s a function of work from home. It used to be you worked in an o ce, then people moved into

| Interview by Aaron Elstein

Dossier

Who he is: Managing partner, Mermel & McLain Management

Born: McLean, Virginia

Resides: Manchester, Vermont, with an apartment on the Upper East Side

Education : Bachelor’s in political science, University of Vermont; master’s in divinity, Yale University; master’s in American history, Columbia University

Political chops: Mermel ran for the Republican nomination for governor of New York in 2010. He ran for U.S. Senate in Vermont last year and won 18% of the vote in the GOP primary.

Deep roots: He is a direct descendant of Ethan Allen’s Green Mountain Boys. Another ancestor, Jacques Cortelyou, produced the first map of New Amsterdam in 1660.

WeWorks, and now apartments have become personal WeWork o ce spaces. e hot residential market doesn’t o set the nancial hit the city will take from the change caused by work from home.

Will of ce buildings get taken down?

I don’t think it’s economic to take buildings down. It’d be best to seek tenants who can cover a property’s operating costs. A lot of these buildings are highly leveraged and won’t be able to pay debt service, so there will be an accounting at some point.

The state wants to develop of ce towers around Penn Station. Is that a good idea? e project doesn’t make sense because tenants who wanted new o ce space have moved into Hudson Yards and, because of work from home, there isn’t enough demand to ll the size of buildings being discussed. ere’s no way the architecture and engineering rms that historically

have been the neighborhood’s tenant base could a ord to rent in new buildings without massive subsidies. If heavily subsidized space is built, it could make the rest of Midtown South worse o because buildings there couldn’t compete against the subsidized rents. What can city leaders do to avoid the dire scenario you spell out?

ey need to get rid of persistent anti-growth policies that are hollowing out the city. One thing they can do is create free market zones in Midtown with zoning and tax incentives for companies to rent space.

Perhaps you’re underestimating New York’s strengths? New York has emerged from crises in the past, but the underlying forces against the city are great and aren’t appreciated. Silicon Valley investors have bought 55,000 acres in northern California, and if they develop that land into an economic freemarket zone, that means they are intending to replace New York City as the nation’s nancial capital. Global power is moving to the Paci c rim, so there’s certainly a need for a global nancial center on the West Coast.

What makes you optimistic about the city?

New York has attracted and continues to attract some of the brightest people. At some point there will be an assessment that things have to change. But for now there’s a general denial that New York has to change in order to be successful.

Lawsuit hits landlord for alleged demolition by neglect

By C. J. Hughes

An Upper Manhattan landlord infamous for collecting cans when not acquiring multimillion-dollar townhouses is in the hot seat again.

Lisa Silversmith, who owns 451 Convent Ave. in Hamilton Heights, has been sued by the owner of the next-door property, MTA architect Projjal Dutta, for allegedly letting her property become so run-down that it has caused leaks and cracks to Dutta’s home as well as infesta-

smith’s husband, Mark Silversmith, works for the city, Dutta says in the suit, No. 451’s demolition approval came about as part of a governmental conspiracy, which is why the suit also names the city itself as a defendant.

Dutta is seeking at least $20 million in compensatory and punitive damages.

“Defendant’s conduct has been and continues to be wanton, reckless and malicious,” the suit says, adding the “city of New York is purposefully causing or are [sic] grossly indi erent to causing injury to plainti and others to bene t defendant Lisa.”

ployee of the city. He worked as a special counsel with the city’s Economic Development Corp. through 2021, and he’s currently secretary of the New York City Land Development Corp., a decade-old group that dispenses with city-owned land, according to public payroll records.

But if 451 Convent stays in private hands and is redeveloped as housing, the EDC or Land Development agency would seem to have little jurisdiction over it.

E orts to reach Silversmith through both the EDC and the Land Development agency were unsuccessful. e EDC, also named in the suit, had no comment.

tions of raccoons around it.

e wide-ranging suit, led Aug. 29 in Manhattan Supreme Court, has more explosive elements. It says Silversmith is letting the place go on purpose in order to make its site, in a protected landmark district, more attractive to developers in order to enrich herself.

Likewise, the suit rails against the decision by o cials last year to green-light a demolition of No. 451 to deal with the problem of its decrepit state. And because Silver-

e Silversmiths have not yet led a legal response. E orts to reach the couple at their co-op in Prospect Heights, Brooklyn, were unsuccessful.

But since the Department of Buildings issued an emergency order to raze the structure in summer 2022 because its roof was on the verge of collapsing, the Silversmiths have secured permits to x some of the hazards at the address, records show. No. 451 is currently cocooned in sca olding. e Department of Buildings had no comment.

For his part, Mark Silversmith does indeed appear to be an em-

In 2000 Lisa Silversmith, who has used her maiden name, Lisa Fiekowsky, on property records, bought 451 Convent, a four-story, townhouse-style edi ce zoned for 10 apartments, for $231,000, according to the city register.

Owns nearby properties

Meanwhile Dutta, who handles sustainability issues for the MTA, bought next-door 453 Convent, also a townhouse-style property, in 2014 for $1.3 million, records show, and then undertook a renovation. Around that time, 451 Convent started becoming the subject of regular complaints about collapsed

oors, missing windows and piles of garbage, as well as the occasional intruder, according to DOB records. When reached by phone, Dutta’s lawyer in the case, Reena Rani, declined to comment or make her client available.

Records show that No. 451 still has not addressed more than a dozen of the most severe kinds of violations, those that potentially make the site a danger to the public.

Silversmith, who once worked as a stockbroker and whose parents are Washington, D.C.-based economists, began spending her days collecting cans a few years ago, a “hobby” that earned her about $30 a day, according to a 2018 pro le in the New York Post.

But she’s fond of collecting real

estate as well. Silversmith also owns two properties around the corner from 451 Convent: 47 Hamilton Terrace, a stoop-fronted property worth $3.2 million, according to city estimates, and 60 Hamilton Terrace, a $3.5 million townhouse site.

But she’s also cashed out some properties along the way, including 46 W. 130th St., part of Harlem’s celebrated Astor Row complex. Silversmith bought it for $60,000 in 1994 and sold it for $210,000 six years later, records show.

And despite 451 Convent’s extremely dilapidated condition, Silversmith might still come out ahead. e city puts its market value today at $463,000, about double what she paid.

“Defendant’s conduct has been and continues to be wanton, reckless and malicious.”

Lawsuit against Lisa

Silversmith

451 Convent Ave. | BUCK ENNIS

LARGEST ACCOUNTING FIRMS

Ranked by number of New York-area professionals

Area’s biggest accounting firms see modest growth after watershed year

The New York area’s biggest accounting firms grew their headcounts by an average of about 12% this year. The modest growth comes after a year marked by rampant consolidation that increased firms’ fleets of accountants by 34% last year, according to Crain’s annual list of the top firms.

The average firm size across the list, which is ranked by the number of New York-area accountants, is 2,270, an uptick from last year’s figure of 2,191. In all, the largest accounting firms across the area employ a total of about 57,000 tax professionals. Globally, that number is nearly 664,000, with most firms housing an average of 39% of their workforce in the New York area.

The average firmwide revenue for 2022 was $6.9 billion among companies that disclosed figures to Crain’s, a 27% increase from 2021.

—

Amanda Glodowski

#1 EY

#3 KPMG

#4 DELOITTE

#2 PWC

NewNewYorkYork areaarea includes NewYorkCity andNassau, Suffolk and Westchester countiesinNewYork and Bergen, Essex,Hudson and Union countiesinNewJersey. Crain'sNew YorkBusiness uses staffresearch, extensive surveys and themostcurrent references available toproduceitslists, but there is no guaranteethat thelistings are complete. To qualify for this list,firmsmust havean office in the NewYork area. n/d-Not disclosed. 1 Crain's estimate, based onotherBig4 average percent change. 2 Mergedwith Friedman inSept.2022. 3 Mergedwith Raich Ende Malter &Co.inJune2022. 4 Mergedwith ParthenonCapital in Jan. 2022. 5 Acquired Untrachtrarly inAug.2022 and BerdoninFeb.2023. 6 Figure from AccountingToday. 7 CBIZ and Mayer HoffmanMcCannareassociated through an alternative-practice structure. CBIZ acquiredMarksPaneth on Jan. 12022. 8 Acquired Bader Martin in May 2022. 9 UHY is an independent CPA firm organized under an alternative practice structure with UHY Advisors Inc. 10 Previously listed as PBKD CPAs and Advisors.

City firms make changes to help neurodiverse workers

By Ana Altchek

When Jeanne Fitzsimons, who has attention-deficit/hyperactivity disorder, entered the workforce 10 years ago, she struggled with memory and concentration issues—factors that made seemingly simple tasks daunting and came across as red flags to employers who did not know about her issues.

She started taking part in employment program CAI Neurodiverse Solutions, run by global technology firm CAI, which helped her get hired into an inclusive workplace at a leading New York City consulting firm that she declined to name for privacy reasons. Her new company

founder of Integrate Advisors, an organization in Midtown East that works with Fortune 500 companies to assimilate neurodiverse talent into the workplace, said that with a growing number of the population classifying as neurodivergent, companies have a vested interest in altering their practices to accommodate them.

“It’s a talent pool that can offer a lot of value to their organization,” Scheiner said. “So if you can make a more inclusive environment, you make life better for them, and you make life better for your organization.”

In 2017 The Simons Foundation, a science and mathematics research firm in Gramercy, launched its Autism in the Workplace program, which offers early career internships and outreach.

provides written directions on tasks, lets her work in a cubicle instead of at an open desk so she can avoid distractions and schedules regular check-ins with her manager.

“It’s good to have that sort of internal support,” Fitzsimons said. “I feel like I’m in a safe space.”

The Centers for Disease Control and Prevention defines ADHD as a neurodevelopmental disorder, a condition that affects how the brain develops and functions. Other such conditions are autism spectrum disorder and obsessive compulsive disorder.

Marcia Scheiner, president and

Scheiner said increasing inclusivity requires various tweaks to the talent search, interview and onboarding processes and then throughout employment. Such changes may include refining the list of required characteristics for candidates, asking more direct questions during an interview, building quiet spaces and providing ongoing coaching and training for employees.

Implementing initiatives

Large corporations such as Microsoft, JPMorgan and Deloitte have been leaders in implementing neurodiversity initiatives. Deloitte, which started its program in 2019, says it saw a nearly 4% increase in its neurodiverse employee population between 2021 and 2022. And smaller businesses across the city have started to invest in these programs in the past few years as inclusivity has become increasingly prioritized.

Maria Adler, director of special projects at Simons, said the company has changed its hiring process to focus on skills assessment. Traditional interviews, Adler said, are a test of social skills and could divert attention from a candidate’s qualifications. The company’s new process instead gives a candidate an assignment to complete before the interview. After finishing the project, the interview is a discussion about the candidate’s abilities rather than a test for social skills.

“We met many qualified candidates who had never had the opportunity to gain work experience in their field,” Adler said. “We hired someone in our finance department who had graduated with a master’s degree nine years before but had not been able to find a job in the finance field.”

Adler said the program has helped Simons hire workers for its finance, office operations, technology and hospitality divisions. The company also created an internship program to prepare candidates for future employment.

The New York Stem Cell Foundation, in Hell’s Kitchen, is another research firm that recently kicked off neurodiversity initiatives. The foundation this summer expanded its 10-week internship program to include people with autism. The firm’s 120 employees went through six hours of training to learn about neurodiversity in the workforce before the interns’ arrival. The retooled internship

program offers shorter hours and other accommodations for individuals with autism, based on their specific needs.

“We need [to hire] 100% of available brain power to reach cures,” David McKeon, the foundation’s chief of staff, told Crain’s.

Challenges in hybrid work

HOK, a global design and architecture firm with an office in Midtown, is working to make inclusivity a part of its strategy. To that end, the company created a report in 2019 projecting future trends in the workplace based on the accelerated use of technology and other shifting cultural factors. The report found that efforts must be made to help people with neurodevelopmental disorders adapt to the challenges inherent to hybrid work, such as how to interact with coworkers both virtually and in the office, because picking up on and reading social cues can be dif-

ficult for some people with neurodevelopmental conditions.

The company says firms should provide separate spaces for collaboration and individual work as well as soundproof areas. And using neutral and muted colors throughout an office can create an environment conducive to varying needs and sensitivities.

Kay Sargent, a senior principal and director of workplace for HOK, said the company now incorporates these sorts of design needs into all of its projects to best serve companies with neurodiverse workers.

For people like Fitzsimons, having a workplace that offers provisions for her needs can make all the difference.

“Accommodations to improve my job performance such as a quiet workspace, a white noise machine and noise-canceling headphones are subtle,” Fitzsimons said, “but can greatly improve my productivity in the office.”

The angel investing world is now about 40% women

A sharp increase in the number of women angel investors drove funding to more early-stage, women-led companies, a new report shows.

Angel investors often write the first check to nascent companies, even for founders who have savings or raise some money from friends and family. Angel funding can make or break an entrepreneur’s ability to get to the next level—finish a product, hire a salesperson or make another important investment.

In 2022, women angels ac-

has been tracking the industry for more than 40 years. That marks an increase from 2021, when women angels accounted for just one-third of the market.

The fundraising environment is difficult. Startups raised $55 billion from investors in 2021, according to data from research firm CB Insights, but only half that in 2022. Early-stage companies were not immune from the downturn: In the second quarter of this year, for example, the average amount raised by seedstage companies dropped by 13% compared to the same quarter last year.

Still, women shaped by a decade-long tech boom seemed undeterred from striking out on their own with companies that were enticing to funders.

“This high percentage . . . indi

cates that there were more wom

en-led deals and these deals were of a higher quality, both encouraging trends for women entrepreneurs,” Sohl writes.

The founders’ ambitions were matched by a major financial change among women who had built careers on Wall Street and in other high-paying industries and were ready to make investments with their own capital, said Loretta McCarthy, co-CEO and managing partner of Golden Seeds, an investor consortium that allocates angel funding to women-run businesses.

Personal relationships

counted for just under 40% of the angel market, according to a report by Jeffrey Sohl at the Center for Venture Research at the University of New Hampshire, which

Investors put their money into a greater number of potential companies than they had previously, the study found. About a quarter of women who sought angel funding got it in 2022, compared to just under 20% in 2021.

“The most recent batch of women [in the consortium] are people who have made their own money, and made enough to be able to do this kind of investing in a risky asset class,” she said.

In 2004, when Golden Seeds kicked off, very few women were raising funding, even though they were starting around one-quarter of companies. The collective now has eight chapters; New York is its largest, with

250 companies funded. Other groups of angels investing in women have followed suit, McCarthy said.

As to why women angels make good funders of women-led businesses, McCarthy said the data shows that personal relationships matter a lot in early-stage funding deals.

“For a long time, the world of investors was men investing in

men,” she said. “It’s a personal thing—they are pulling out a personal checkbook to write the checks, and they want to form a bond, help grow the business or serve on the board.”

When women start businesses, she said, “the products and services are born of their own experiences and might be readily understood by investors who are also women.”

By Cara Eisenpress

“It’s a talent pool that can offer a lot of value to their organization.”

Marcia Scheiner, Integrate Advisors

“For a long time, the world of investors was men investing in men.”

Loretta McCarthy, co-CEO and managing partner of Golden Seeds, an investor consortium that allocates angel funding to women-run businesses

Boosting inclusivity requires tweaks to the talent search, interview and onboarding processes and then throughout employment, says Marcia Scheiner of Integrate Advisors. | UNSpLASH

Angel funding can make or break an entrepreneur’s ability to get to the next level. IStOCK

Lobbying ‘shattered’ records last year. These are the top spenders.

By Nick Garber

New York may face fiscal trouble in the next few years, but its lobbying industry is healthier than ever. Lobbying spending soared to $331 million in 2022 and “shattered” previous records, according to a report released late last month by the state’s ethics commission.

While lobbying spending has risen most years over the past decade, 2022 saw a greater jump than usual, with dollar figures rising 13% compared to 2021 and 11% over the previous record high, set in pre-pandemic 2019. Lobbying at both the state and munici-

top-spending clients reflects which issues were at the forefront of last year’s policy debates. The seventh-highest spender, at $1.4 million, was Homeowners for an Affordable New York, the real estate-industry coalition that formed in 2022 to successfully lobby against “good-cause eviction” legislation in Albany. (The group helped kill the bill again in this year’s budget fight.)

Homeowners also doled out the state’s biggest payment to a single lobbyist: $1.4 million to Manhattan-based Fontas Advisors.

was taken up by expenses like advertising, advocacy and social events.

The top 10 lobbying clients, ranked by their total compensation and expenses:

w 1199 SEIU Labor Management Initiatives Inc. Healthcare Education Project: $5.7 million

w Greater New York Hospital Association: $3.5 million

w Genting New York: $2.5 million

w 1199 SEIU United Healthcare Workers East: $2.3 million

w AARP: $2.3 million

pal levels is included in the report, released by the Commission on Ethics and Lobbying in Government, an ethics agency created by the state last year to replace its troubled predecessor.

As is often the case, the list of

Despite the lobbying frenzy surrounding the awarding of three casino licenses for the New York City area, only one casino bidder cracked last year’s top 10: Genting, the Malaysian corporation that owns Queens’ Aqueduct Racetrack and is now vying for a full license. But its presence on the list may not be entirely attributable to the downstate process; Genting was among the top 10 spenders in 2021 and 2020 as well.

More than 90% of clients’ overall lobbying spending went to paying lobbyists’ salaries. The remainder

w United University Professions Inc.: $1.6 million

w Homeowners for an Affordable New York: $1.4 million

w Trial Lawyers Association: $1.4 million

w Public Employees Federation: $1.2 million

w Charter Communications Operating LLC: $1.2 million

The health care industry’s strong presence on the top-spenders list is nothing new. The “Healthcare Education Project,” which ranked as last year’s top spender, is a joint effort of labor union 1199 SEIU and the Greater New York Hospital Association, which also both

made the list on their own. (The initiative advocates for expanding access to affordable health care, supporting programs like Medicaid and the Affordable Care Act.)

Among outside firms, the top-compensated lobbyist was Brown & Weinraub, a firm with offices in Albany and New York City. Brown & Weinraub has topped the list for three years running, and its $18 million in compensation last year put it ahead of fellow top lobbyists like Kasirer, Bolton-St. Johns and law firm Greenberg Traurig.

Brown & Weinraub also had the most total clients, at 300, including the New York Yankees, Fox Corp. and Pace University. This year, the firm’s work has included lobbying on behalf of Nassau County casino bidder Las Vegas

Sands and prospective Penn Station developer ASTM.

The Commission on Ethics and Lobbying in Government, which oversees lobbying and released the report, was formed last year as part of the state budget to replace the famously dysfunctional Joint Commission on Public Ethics, or JCOPE, which was blamed for failing to investigate some Andrew Cuomo-era scandals.

“New Yorkers have a right to transparency in government and to know what entities may attempt to influence government decision-making,” Sanford Berland, the commission’s executive director, said in a statement. “This is especially true in a year when lobbying spending shattered all previous records.”

“New Yorkers have a right to transparency in government.”

Sanford Berland, executive director, Commission on Ethics and Lobbying in Government

Lobbying spending at the state and municipal levels in New York surged 13% last year to a record $331 million. | bLOOmberG

State launches $650M in housing production incentives

By Eddie Small

The state’s $650 million program to incentivize housing production launched Aug. 31, according to an announcement from Gov. Kathy Hochul’s office.

The program, which makes discretionary money from the state budget available for communities that commit to increasing their housing supply, was one of the executive actions on housing Hochul unveiled in July after she and the Legislature failed to reach an agreement on a broader package during

ing Communities Program.

To receive priority for the money, municipalities will need to provide the state information about their zoning rules and approvals for housing permits over the past five years. Areas that have already met the growth targets will qualify to be certified as a pro-housing community, while those that have not met them can still be eligible if they pass a resolution affirming they are committed to increasing their housing supply.

Cities and towns start the application process by emailing a letter of intent to prohousing@ hcr.ny.gov. The state’s Division of Housing and Community Renewal will review the applications and approve or deny them within 90 days.

this year’s budget and legislative sessions. Downstate communities that meet annual growth targets of 1% and upstate communities that meet targets of one-third of a percent will get top priority for receiving the money.

The Hochul administration has dubbed this initiative the Pro-Hous-

Communities the state certifies as pro-housing will need to resubmit information on their housing permits and zoning annually to keep the designation.

Discretionary fund programs that these communities will receive priority for include the Downtown Revitalization Initiative, which focuses on redeveloping the state’s

downtown neighborhoods, Market New York, which focuses on projects supporting tourism, and the Public Transportation Modernization and Enhancement Program, which focuses on public transportation improvements. The Long Island Investment Fund and Mid-Hudson Momentum Fund, which support new projects in parts of the city’s suburbs that have been notorious for slow housing

growth, are included as well.

Other housing actions

Other executive actions Hochul announced earlier this summer were a pilot replacement program for the 421-a affordable housing tax break in Gowanus and a requirement for state agencies to identify which state-owned sites could be used for residential projects.

Hochul had originally wanted to require communities throughout the state to increase their housing supply in the plan she unveiled early this year. That ran into opposition in the Legislature, where members proposed a $500 million incentive program instead. Hochul would not sign on to that plan, saying then “that merely providing incentives will not make the meaningful change that New Yorkers deserve.”

Casino process advances with replies to bidders’ questions

By Nick Garber

The state’s slow-moving process to open as many as three new casinos in and around New York City took a step forward late last month, when officials released long-awaited answers to hundreds of questions from prospective applicants.

The high-stakes process has been at a relative standstill for months. The roughly dozen known contenders for a potentially lucrative downstate casino license have been awaiting answers to a raft of questions, most of them procedural queries about what needs to be included in the voluminous ap-

ument, running over 100 pages, provides clues about what’s on the minds of the real estate giants and gaming companies vying for one of the scarce licenses. Each license will come with a $1 million application fee, followed by a $500 million license fee for the winning bidders. But the rewards could be great: as much as $600 million in annual profits, according to estimates by CBRE.

Many applicants seem to be concerned about the still-unresolved question of how New York City will bring future casinos in line with its zoning code. That is no small consideration, as the state’s guidelines require every applicant to show “evidence of compliance” with local zoning before being considered for a license.

plications they will submit to the state. After the questions were submitted in February, a state gaming official predicted answers would be shared by March, but the process instead dragged through the summer.

Finally, on Aug. 30, the state’s Gaming Facility Location Board published answers to the 613 questions they had received. Now, a second round of questions will be due from applicants Oct. 6. Once the board takes an unspecified amount of time to respond, the all-important applications will be due within 30 days of that second round of answers.

The question-and-answer doc-

Mayor Eric Adams’ administration has said it might mass-legalize all future casinos through a citywide zoning-code rewrite that could be enacted next spring. The alternative would be for each casino proposal to undergo its own monthslong land-use review.

Given that slow timeline, multiple applicants asked how they will be able to prove compliance with New York City’s zoning anytime soon. The board, responding to one such question, said it will create a timeline giving all applicants “an appropriate amount of time to navigate NYC zoning” before the deadline.

“It is the commission’s current understanding that the City of New York is considering citywide zoning code changes that would

deem casinos licensed by the state as compliant with zoning,” the board wrote.

Several other questions focused on community advisory committees: the six-member panels of local officials that will convene to review each casino application and will have the power to sink any bid if it receives fewer than four votes. The powerful but under-the-radar CACs will be made up of members appointed by lawmakers who represent each proposal’s neighborhood and by members appointed by New York’s mayor and the governor.

Queries on timing, lobbying

Casino bidders asked when each CAC will be formed (“no earlier” than the deadline to submit

applications, the board replied), whether there is any ban on a person serving on CACs for multiple proposals (there is not), and whether applicants can revise their bids in response to concerns raised by CAC members (yes, as long as the overall proposal is not “materially” changed).

Applicants also asked about lobbying, such as whether it would count as “impermissible contact with a governmental entity”—one of the lobbying no-gos laid out by the board in its application rules— for a bidder to work with local authorities as they develop basic plans for a casino. (The board responded that contact is “impermissible” only when it is intended to influence the ultimate award choice.)

If it takes the board a similar

amount of time to answer the second round of questions, applications would likely be due early next spring, roughly the same time frame that insiders watching the process have been predicting lately.

Once applications are released, they will be posted publicly—“as quickly as possible,” according to the gaming board—and sent to the CACs, which will hold hearings, potentially request changes and then vote on the final proposals. Once the projects are submitted to local zoning authorities, the three-member Gaming Facility Location Board will hear presentations and select winners based on a weighted formula considering applicants’ “economic activity and business development,” “local impact siting,” “workforce enhancement” and “diversity framework.”

The program makes money available for communities that commit to increasing their housing supply.

On Aug. 30, the state’s Gaming Facility Location Board published answers to 613 questions.

The program is among several executive actions on housing that Gov. Kathy Hochul unveiled in July. OFFICE OF GOV. KAtHY HOCHUL

SL Green and Caesars, which are pushing a Times Square casino (rendering above), are among the roughly dozen applicant teams that waited months for the state to publish answers to a first round of questions. | RENDERING pROVIDED BY SL GREEN

NEW YORK CANNABIS SUMMIT Green Market Report

The New York Cannabis Business Summit brings together industry professionals focused on the New York region. Panelists representing licensee categories will engage in discussions pertaining to the current state of business.

Featured Speakers

BRITTANY CARBONE Co-Founder

Tricolla Farms

JOE LUSTBERG CEO

Upwise Capital

ARANA HANKIN-BIGGERS

President & Co-Founder

Union Square Travel

Agency: A Cannabis Store

FRANK TICE

Senior Director

Legal & External Affairs

RIV Capital / Etain Health

September 13, 2023 | 11:30AM - 5:30PM | Jay Conference Center

Short-term rentals at FiDi’s former W hotel list for $24M

Investor offers three entire floors containing 24 apartments at 123 Washington St.

By C. J. Hughes

An investor who bet on corporate travelers booking long-term stays near the World Trade Center is calling it quits, as remote work continues to take a bite out of business travel.

The investor, Albert Loh, has listed three entire floors containing 24 apartments at 123 Washington St., a 57-story tower that is part condo and part hotel, for $24 million, according to an ad. The trio of floors have been offered for years as furnished sublets by Zeus Living, an Airbnb-style booking service and management company for the corporate crowd that Loh has retained to manage the units.

In 2015 Loh, by way of two California-based shell companies, purchased the three floors in two transactions for a total of about $25 million, suggesting he’s prepared to take a slight loss on the deal.

“It’s a personal decision on his part to liquidate now,” said Nick Parker, the Douglas Elliman broker who’s marketing the property. On Sept. 6 he said Loh was overseas and not available to comment.

Featuring eight apartments per floor, on the 27th, 28th and 29th floors, the listing is in a tower developed in 2010 by the Moinian Group that was originally called the W New York Downtown Hotel and Residences. The upper 33 stories have 223 apartments, and the lower 23 floors feature 214 hotel rooms.

But the relationship between the two parts of the building is different from when it opened.

The W closed in fall 2020 and was replaced last year by a new offering, The Washington hotel. Originally, condo residents were allowed and even encouraged to take advantage of the W hotel’s amenities, though it’s not clear if that freedom still exists.

In fact, the condo portion of the tower, which overlooks 1 World Trade Center at Albany Street, can seem to operate more self-sufficiently than back then. For its residents, it offers a roof deck, a lounge and a game room with a pool table, all of which were renovated earlier this year, according to Parker.

Still, the possible downsides of having two unrelated businesses under the same roof seems evident in a cautionary note on Zeus’ website directed at potential renters. “The elevators in this building tend to break down frequently and can be unreliable,” it says, adding “you may need to use the stairs to gain access to your unit.”

On Sept. 6, the least-expensive of the Zeus-run, Loh-owned units, which are leased for a minimum of a month at a time, was No. 27A, a studio with a washer and dryer for about $6,000 per month, though the apartment isn’t available till late November. Indeed, many of the units seem to be booked through the fall, a promising sign even as data suggests many workers are still not coming to New York offices as regularly as in 2019.

FiDi has been particularly hard hit by changing work patterns. And in the last week of August,

occupancy in New York-area office buildings dipped to 38%, according to Kastle Systems, a security company that tracks certain buildings.

Funding from Airbnb

Zeus, founded in 2015 and headquartered in San Francisco, has raised $90 million in startup funds including from Airbnb, according to its website. The firm, headed by Kulveer Taggar, did not return an email for comment.

Meanwhile, The Washington is owned by LuxUrban Hotels, a company that says its mission in-

volves “acquiring distressed assets at favorable economics and reopening hotels closed during the pandemic.” Its Nasdaq-traded stock was around $3 on Sept. 6. A message left with the company was not returned.

Moinian, which appears to still own the hotel real estate at 123 Washington, at first expected a sellout of $210 million for the building’s studios and one-bedrooms, but as the residential market improved ultimately hauled in $403 million, according to the condo’s offering plan. A Moinian spokesman had no comment.

Buyers interested in Loh’s listing can retain Zeus to continue to rent them out, Parker said, or they can end the contract with Zeus and turn them into Airbnb units to be leased for at least 30 days, as per local housing laws. Other condo units in the tower, subject to stricter condo rules, require a minimum stay of 180 days, Parker said.

Similarly, Loh’s units can be rented out without prior approval from the condo’s board, Parker added. “They could also be combined into a very large home without special approval,” he said.

Naftali Group inks 99-year ground lease at Kips Bay property

the company plans to build a multifamily development on the site a t 301 third Ave.

By Eddie Small

The Naftali Group has secured a 99-year ground lease at a Kips Bay property and plans to construct a multifamily project on the site, according to property records and the building owner’s broker.

Naftali inked the ground lease at 301 Third Ave. from Snake River Development, which is managed by BNS Real Estate, for $21.5 million, according to Avison Young, which represented the owner in the deal. Snake River purchased the site in April 2001, records show.

Snake River was interested in a ground lease so it could retain ownership of the property without taking on the risks involved with redeveloping it, said Avison Young Principal Charles Kingsley. He noted that the transaction allows the firm to remove management burdens and gives it access to a long-

term annuity.

Representatives for Naftali did not respond to a request for comment.

The current two-story property at 301 Third Ave., between East 23rd and East 24th streets, was built in 1960 and spans about 15,000 square feet, according to CoStar.

Plans unclear

It’s unclear what type of residential project the Naftali Group plans to build at the development site, but given how well the company is known for its luxury condo projects, another one of those is a distinct possibility. The firm has long been trying to build a condo project at 211 W. 84th St. on the Upper West Side but had been in a lengthy legal battle with a tenant who refused to leave his apartment. The tiff concluded at the end of last year with a settlement.

Its other projects include the

Bellemont at 1165 Madison Ave. on the Upper East Side and the Seymour at 261 W. 25th St. in Chelsea, both luxury condo de -

velopments. The firm has a presence in Brooklyn as well and is at work on a three-tower residential

project at 470 Kent Ave. in Williamsburg. It landed a $385 million construction loan for the development in November.

The current property at 301 Third Ave. was built in 1960 and spans about 15,000 square feet. I COStAR GROUp

The floors at 123 Washington St. have been offered for years as furnished sublets by Zeus Living. I COStAR GROUp

Has the state cannabis market reached a breaking point?

By John Schroyer

Cannabis industry executives and aspirants once salivated at the possibility of selling marijuana in one of the most populous markets in the world, but New York has morphed into a total quagmire, with not a single stakeholder clear on what the path forward now is.

After a state judge completely froze the legal retail marijuana licensing system with a court injunction, many of those who have conditional adult use retail dispensary licenses are calling for

Association of New York on LinkedIn. Tantalo then called on others to hammer Gov. Kathy Hochul’s office with demands to “codify the CAURD program and prevent its destruction.”

But Speaker of the Assembly Carl Heastie ruled that out in mid-August, saying at the time that he prefers to let the issue work itself out in the courts before the legislature intervenes.

“I think it’s always difficult when there’s a pending court case to ask the Legislature to fix something,” Heastie told North Country Public Radio. “When you don’t know what the resulting decision won’t be by the courts.”

Heastie added that the 2021 Marihuana Regulation and Taxation Act— which is at the heart of the lawsuit that stalled retail permitting—was “really to try to help those communities that were over-policed, over-incarcerated.”

Four of the RO’s—Acreage Holdings, Curaleaf, Green Thumb Industries and PharmaCann— sent their own missive to Hochul last week, complaining about the state Office of Cannabis Management and what they called “a demonstration of ‘worst’ practices rather than best.” The quartet argued that New York’s marijuana market is “in dire need of a new direction.”

“OCM has put New York’s cannabis program on a clear course for failure,” the four companies wrote, and begged the governor to order the OCM to allow them to “begin adult-use cultivation and dispensary operations without delay.”

Conference on lawsuits

Currently, the big medical marijuana companies have to wait until December to begin recreational retail operations, and it’s unclear when the OCM will be allowed to resume licensing.

New York state lawmakers to return to Albany for a special session in order to right the ship.

“Our beloved conditional adultuse recreational dispensary program is on the verge of collapse, and we can’t let it happen,” wrote Jayson Tantalo of the Cannabis

“It wasn’t trying to exclude other people,” Heastie said.

But exclusion is exactly what many stakeholders—including the 11 “registered organizations” that are licensed to sell medical cannabis in New York—say is happening.

The two intertwined lawsuits are both scheduled for a conference on Sept. 15 in Albany Supreme Court under Judge Kevin Bryant. That includes the March lawsuit filed by the Coalition for Access to Safe and Regulated Cannabis (CARSC), which is backed by the same four multistate oper-

ators that sent the letter to Hochul last week, and the August lawsuit filed by four service-disabled military veterans.

There may be some clarity offered three days before that, when the state Cannabis Control Board is scheduled to hold its next meeting, since Bryant ordered regulators to finalize adult-use regulations so that so-called “universal” licensing could begin in October.

But overall, the situation has left every stakeholder wondering what will happen next and how regulators may get a hold of the market, which is currently being run by thousands of unlicensed businesses, smoke shops, bodegas and delivery services, with little in the way of enforcement to crack down on bad actors. This article originally appeared in Green Market Report.

“Our beloved conditional adult-use recreational dispensary program is on the verge of collapse, and we can’t let it happen.”

Jayson Tantalo, of the Cannabis Association of New York, on LinkedIn

A state judge’s injunction froze the legal retail marijuana licensing system. | bLOOmberG

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Notice of Formation of SAS FAMILY ASSOCIATION LLC. Arts of Org filed with Secy of State of NY (SSNY) on 3/10/23. Office Location: NY County. SSNY designated as agent upon whom process may be served against LLC to: 1967 Wehrle Dr. Ste 1 #086, BUF, NY 14221, USA.

Purpose: any lawful act.

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 DD KINGSBORO DEVELOPER I

LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/31/23. Office location: NY County. Princ. office of LLC: 7 Penn Plaza, Ste. 600, NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: Any lawful activity

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.

Notice of Formation of LOUIS L. SHAPIRO LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/10/22.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543, regd. agent upon whom and at which process may be served.

Purpose: Any lawful activity.

Aquarian Productions, LLC filed Arts. of Org. with the Sect'y of State of NY (SSNY) on 8/4/2023. Office: New York County. SSNY has been designated as agent of the LLC upon whom process against it may be served and shall mail process to: c/o The LLC, 186 Pinehurst Ave, NY, NY 10033.

Purpose: any lawful act.

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.

Notice of Formation of 1982 WEST BEIRUT, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 9/28/21. Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to 373 Wyeth Aave, 503, BKYLN, NY 11249.

Purpose: Any lawful activity.

Notice is hereby given that license #1353542 for beer, wine, and cider has been applied for by the undersigned to sell beer, wine, and cider at retail in a restaurant under the ABC Law at 1154 1st Ave Middle Store New York NY 10065 for on-premises consumption. UME NY INC. dba UME.

Notice of Formation of HOSPITALITY QUOTIENT, LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/18/23. Office location: NY County. Princ. office of LLC: 853 Broadway, 18th Fl., NY, NY 10003. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Union Square Hospitality Group at the princ. office of the LLC. Purpose: Any lawful activity.

Notice of Formation of NEW AGE HOUSE OF LIFE LLC Arts of Org filed with Secy of State of NY (SSNY) on 5/11/23. Office Location: NY County. SSNY designated as agent upon whom process may be served against it may be served. SSNY shall mail process to: 1492 Park Pl 4F, BK, NY, 11213 Purpose: any lawful act.

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 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.

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

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 MAIALE LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/16/23.

Office location: NY County. Princ. office of LLC: 37 W. 21st St., Apt. 1106, NY, NY 10010. 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.

THE BLACK LINKUP LLC. Arts. of Org. filed with the SSNY on 03/03/23. Office: New York County. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 775 Riverside Drive, Unit 1C, New York, NY 10032.

Purpose: Any lawful purpose.

Notice of Formation of HARLEM LOCKS LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 3/2/2023. Office Location: NY County. SSNY designated as agent upon whom process may be served and shall mail copy of process against to Legalcorp Solutions, LLC, 11 Broadway, Ste 615, NY, NY 10004.

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 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 Formation of BREAKBEAT FILMS, LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/03/23. Office location: NY County. Princ. office of LLC: 200 Park Ave. S, Fl. 8, NY, NY 10003. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Joshua Work at the princ. office of the LLC. Purpose: Any lawful activity.

Notice of Formation of SURGE DIGITAL MARKETING LLC. Arts of Org filed with Secy of State of NY (SSNY) on 5/29/2023. Office Location: NY County. SSNY designated as agent upon whom process may be served against LLC to: The Limited Liability Company 228 Park Ave S. #868409, NY, NY, 10003, USA, RA: United States Corporation Agents, Inc. 7014 13th Ave, Ste 202 BK, NY, 11228, USA.

Purpose: any lawful act.

Notice of Formation of HUDSON HEALTH LONGEVITY MANAGEMENT SERVICES LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/17/23.

Office location: NY County. Princ. office of LLC: 281 Broadway, Second Fl., NY, NY 10007. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Jonathann C. Kuo, MD at the princ. office of the LLC.

Purpose: Any lawful activity.

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 Formation of MONTICELLO ACQUISITION, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/16/23. Office location: NY County. Princ. office of LLC: 30 Hudson Yards, 72nd Fl., NY, NY 10001. 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.

Notice of Qualification of MACELLUM ADVISORS, LP

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 7/13/23. Office location: NY County. LP formed in Delaware (DE) on 09/27/11. NYS fictitious name:

MACELLUM ADVISORS, L.P.

Duration of LP is Perpetual.

SSNY designated as agent of LP upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. Name and addr. of each general partner are available from SSNY. DE addr. of LP: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of LP filed with Secy. of State, 401 Federal St., Ste. 3, Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of AAI UNSCRIPTED LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/02/23.

Office location: NY County. LLC formed in Delaware (DE) on 07/31/23. Princ. office of LLC: 1359 Broadway, 21st Fl., NY, NY 10018. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of State of DE, Corp. Dept., Townsend Bldg., Dover, DE 19901.

Purpose: Any lawful activity.

Notice of Qualification of DRP SOLARIS MULTISTATE, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/11/23. Office location: NY County. LLC formed in Delaware (DE) on 07/06/23. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, Div. of Corps., John G. Townsend Bldg., 401 Federal St., Ste. 3, Dover, DE 19901.

Purpose: Any lawful activity. CRAIN’S

Purpose: Any lawful activity.

Notice of Qualification of 60 CENTRAL AVENUE ENERGY STORAGE 2 LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 07/10/23. Office location: NY County. LLC formed in Delaware (DE) on 07/05/23. Princ. office of LLC: 7 Times Sq., Ste. 3504, NY, NY 10036. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to c/o Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. 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 Qualification of AJAX BBC, LLC

Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/03/23. Office location: NY County. LLC formed in Delaware (DE) on 02/25/22. 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 122072543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.

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.

Notice of Formation of BRIX MANAGEMENT LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/01/23.

Office location: NY County. Princ. office of LLC: 1407 Broadway, 3rd Fl., NY, NY 10018. 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.

Purpose: Any lawful activity.

Notice of Formation of CVE US NY BREWERTON 108 LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/02/23. Office location: NY County. Princ. office of LLC: 109 W. 27th St., 8th Fl., NY, NY 10001. 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 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 BOTTLE HILL PROPERTIES LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 09/10/21.

Office location: NY County. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, 12 Overhill Dr., Madison, NJ 07940. The regd. agent of the company upon whom and at which process against the company can be served is U.S. Corp. Agents, Inc., 7014 13th Ave., Ste. 202, Brooklyn, NY 11228.

Purpose: Any lawful activity.

Notice of Formation of CVE US NY LOWVILLE 334 LLC

Arts. of Org. filed with Secy. of State of NY (SSNY) on 08/02/23. Office location: NY County. Princ. office of LLC: 109 W. 27th St., 8th Fl., NY, NY 10001. 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 DD VELEZ KINGSBORO JV LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 07/31/23. Office location: NY County. Princ. office of LLC: 7 Penn Plaza, Ste. 600, NY, NY 10001. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC at the addr. of its princ. office. Purpose: Any lawful 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.

UWS landlord drags condo board to court for allegedly blocking retail plans

By C. J. Hughes

An enduring mystery of the retail landscape is why so many storefronts remain empty for so long.

But as the case of a long-vacant Upper West Side property suggests, the answer might be no more complicated than a dispute over vents.

The landlord of the storefronts at 2373 Broadway, a full-block, mixed-use building whose retail spaces have been dark for years, has sued the board representing the upstairs residents for supposedly killing a pair of retail deals by delaying approval of new equipment.

The owner, which based on public records is a Midtown limited liability company called Texwood Investment, claims that it was on the verge of inking a pair of deals with expanding grocery chain Lincoln Market and an outpost of New York-Presbyterian hospital for a combined $1.8 million in rent a year.

RETAIL

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square feet on Broadway at West 79th Street.

And in the spring a Bangladeshi man named Hassan reopened his coffee pushcart near Grand Central Terminal after a three-year hiatus.

“Yeah, business is good,” he said, handing over a coffee in a blue cup, light and sweet. “Three dollars, boss. Look out, there’s a line behind you.”

Manhattan’s average asking rents, at $645 per square foot, remain about 20% below 2019 levels, CBRE data show, and more than 40% below the high set back in 2014. On a rolling four-quarter basis, retail leasing activity is 11% lower than a year ago and 36% below 2019 levels.

Earlier this year, Vornado Realty

WATER MAIN

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water infrastructure.

The sheer scale of the city’s network of water mains, coupled with what the ASCE report describes as insufficient replacement budgets, yields between 100- and 200-year upgrade intervals across the system. Those timelines can be further complicated when replacements take a back seat to other seemingly more urgent work.

For instance, in the first four months of fiscal 2023 the Department of Design and Construction’s replacement of water mains was down 71% over the same period in 2022 because the agency redirected staff to focus on “several large initiatives,” according to the Preliminary Mayor’s Management Report published in January. Those projects include making the city more ac-

But the board, on which Texwood has a seat, allegedly has dragged its feet for almost five years on approving a key ventilation system that needs to be in place before any tenants can commit. Texwood is seeking at least $10 million in lost rent.

“The board has continued to this day to unreasonably withhold, condition and delay its approval of the plans relating to plaintiff’s installation and maintenance of the new cooling equipment, rendering the commercial unit unrentable and causing plaintiff millions of dollars in economic loss,” says the suit, which was filed Aug. 28 in Manhattan Supreme Court.

Roots of conflict

The board at the building, a 350unit cond-op called the Boulevard that was built in 1987 at West 86th Street, has not yet filed a legal response in the case. But based on court filings, the conflict seems to have roots that stretch back years

Trust wrote down the value of its Midtown retail properties, including the theater inside the Marriott Marquis Hotel, by $500 million and has written down the portfolio by 30% since 2020. The 300,000-strong ranks of retail workers citywide are 15% fewer than in 2019, according to the New York State Comptroller’s Office.

Even so, New York’s retail corridors are less empty than in most other cities. In San Francisco, for instance, the vacancy rate at Union Square is 16.2%, higher than last year’s 15.5%, and Cushman & Wakefield said in a recent report that downtown San Francisco “is facing challenges now more than ever.”

Still, some shop owners are stepping up in Midtown, as keen to hunt down a bargain as their customers.

In July, Abercrombie & Fitch

cessible, with pedestrian ramps, and green infrastructure to help manage floods.

The situation boils down to city officials striking a delicate balance of priorities. Ripping up streets to access the infrastructure below also comes with implications for the traffic and businesses above. The disruption can fundamentally chal -

and that stems from problems with previous retail tenants.

For years the retail tenants at the Boulevard included a Banana Republic store and a Gristedes supermarket. (There was also a branch of Capital One Bank, a space that is also now vacant. Texwood apparently reconfigured the three spaces to offer them as a pair instead.)

Residents of apartments at No. 2373 took issue about odors and noise emanating from the ventilation systems serving the Banana Republic and Gristedes, complaints that eventually led to Department of Buildings violations, court filings show.

When the two retailers shuttered around 2018, Texwood agreed to upgrade the vents to make them less offensive while also paying the board $100,000 for access and additionally throwing in a new bike room, according to the lawsuit.

But even though the board appears to have agreed in principle

opened a new store on Fifth Avenue between East 52nd and 53rd streets. The multi-level store features illuminated walls, sconced columns and “eccentric” chandeliers intended to “showcase the evolution and strength of the brand,” CEO Fran Horowitz said.

Tourism on the rise

On West 34th Street, foot traffic is improving thanks to a 20% increase this year in tourists to the neighborhood’s big attraction: the Empire State Building observatory. Ulta, a chain of 1,300 beauty stores, has its busiest location in the country on West 34th Street, which, along with the array of cosmetics sold at Macy’s and Sephora, is making for what neighborhood officials call a thriving makeup district.

“We believe we own the beauty category,” said Richard Cohan, a

ing allocated on an emergency basis,” said Laefer, “which is the most expensive way to do repairs because you’ve got people out there at 3 in the morning on an emergency contract instead of, you know, putting it out to tender and getting the best bid.”

to the upgrades at the time, it never formally signed off on construction plans, the suit claims.

The issue appears to have come to a head at a meeting last summer, when board members apparently reversed course and requested that the new system no longer be located on a low floor, as initially proposed, but instead sited on the roof of the 23-story

consultant to the 34th Street Partnership.

Even if retail’s recovery isn’t running at full boil, it’s livelier than the forlorn office sector. Shopping-center owner Kimco Realty has agreed to acquire RPT Realty in an all-stock transaction valued at about $2 billion. RPT’s retail portfolio is mostly stores like Home Depot and T.J. Maxx, mostly in the South, and the deal “highlights the lucrative economics retail is now exhibiting,”

Piper Sandler analyst Alexander Goldfarb said in a client note.

tower, a change that Texwood says would be prohibitively expensive.

Texwood adds that keeping the spaces vacant is costing the company $5,000 a day.

An email sent to Matthew Kasindorf, a Texwood attorney, went unreturned, and contact information for Texwood could not be tracked down by press time.

billion projected back in 2017. The outlook is much better on the Upper East Side. The opening last fall of Hermes’ flagship U.S. store on Madison Avenue marked a turning point for a neighborhood that was practically a ghost town three years ago.

AVERAGE ASKING RENT $645

per square foot, which remains about 20% below 2019 levels

Malls remain a trouble spot, though, foremost among them the American Dream Mall in New Jersey, which reported $422 million in total sales last year, Bloomberg News said, well below the nearly $2

“Aging infrastructure is not always bad,” Rohit Aggarwala, DEP’s commissioner, told reporters Aug. 29. “They built stuff to last 120 some-odd years ago, and it did its job for 125 years— that’s pretty good.”

“It was really a ‘whew’ kind of moment,” said Matthew Bauer, president of the Madison Avenue Business Improvement District.

The vacancy rate along the avenue is about 12%, down from 14% a year ago, Bauer said. He’s confident it will fall more because shops selling watches, fine art, and apparel will soon open. Jeweler Van Cleef & Arpels will open on Madison Avenue this fall.

“We’re seeing major investment from major players,” Bauer said.

Robert Freudenberg, vice president of energy and environment for the Regional Plan Association

lenge how the city approaches upgrading pipes, Laefer said.

“Instead of systematically going through the system, most of the capital funding ends up be -

That said, the city has invested significantly in maintaining the city’s water mains and sewers: In fiscal year 2023 the city allocated $769.5 million toward the work, up from $567.3 the previous year. Compared to peer cities, New York has a solid track record, with an annual average of about five bursts for every 100 miles of pipe. That compares to an average of 25 breaks for every 100 miles in other major U.S. cities.

New York experienced 402 water main breaks this past fiscal year, which may sound like a lot but is actually the second-lowest year on record, behind the 370 pipes that ruptured in 2020, according to DEP officials.

Travelers left scrambling

But the Aug. 29 break happened to occur at the Crossroads of the World. It affected more than 300,000 rush-hour travelers, and nearly 200 train trips had to be canceled, according to Metropolitan Transportation Authority officials. Seasoned New Yorkers and tourists alike were left scrambling for new routes through the city.

Aggarwala said precisely why the water main broke is unknown and won’t be for several weeks; a section of the pipe will undergo a forensic exam in a laboratory to determine the cause.

“Part of the challenge here is

that you don’t know a pipe is bad until it breaks,” Robert Freudenberg, vice president of energy and environment for the Regional Plan Association, told Crain’s. “There’s no great way to prioritize and understand which pipes are going to need to be repaired, but the city does need to do a better job of really understanding the entire system and updating the way it manages those pipes.”

As is often the case with infrastructure, solving the issue becomes a question of resources and investing in new tools and systems to modernize how the city overhauls its network of water mains.

“It’s where is the funding allocated to pay for the staff that can do this and the technology that’s needed to do a better job?” Freudenberg said. “Incidents like [at Times Square] show us that there will be consequences by not staying ahead of this.”

“Part of the challenge here is that you don’t know a pipe is bad until it breaks.”

2373 Broadway on the Upper West Side | GOOGLE StREEt VIEW

‘Oldest working female comedian’

The rst time Boston native D’yan Forest tried her hand at stand-up comedy, in 2002, she was 69 years old. After that performance, she knew she wanted to stick with it for the rest of her career.

Now 89 and after reinventing her onstage persona, Forest has found her target audience: Gen-Z. She looks to entertain a younger crowd through telling her life story.

“It’s a whole new life I never thought I’d have, and it’s keeping me young,” Forest said of comedy. “I gotta keep pushing.”

Forest has tried on di erent hats in the industry for about 65 years. She sang at clubs in Paris, played songs on her banjo in nine languages and wrote a memoir in 2021 titled I did It My Ways, documenting her decades of adventures. But comedy has given her a new sense of excitement.

“I’ve worked in piano bars and cocktail lounges, and maybe people would listen to me for one second or for 10 minutes,” she said. “On the comedy stage, whether I do eight minutes or I do an hour, I

have the attention of everybody. It gives me a thrill that I can hold the audience.”

Forest has become a regular at Joe’s Pub and Kraine eater in the East Village, where she routinely sells out her one-woman show. She also performs at Gotham Comedy Club, with a usual crowd of about 200 to 300 people, and has made appearances on e Drew Barrymore Show and Saturday Night Live. In January she earned the title Oldest Working Female Comedian from Guinness World Records.

Reluctant to settle down after college and enchanted by French culture, Forest escaped to Paris for two years. Although her traditional Jewish parents didn’t necessarily approve of her decision, theynancially supported her. Forest said she enjoyed her time there, but it was di cult to build her entertainment career: Cancellations were common, and she even had a lm contract broken the day before shooting started.

She moved back to New York City in 1966 and has lived in Greenwich Village ever since. By the time Forest was in her early 30s, she started working as a substitute teacher across the city by day and singing, playing piano and performing cabaret shows at hotels,

By | Ana Altchek

restaurants and clubs at night. Although her evening performances paid as much as $500, the industry always came with instability, so she juggled both roles for the next 35 years.

Although she has found opportunities, she says aging in the entertainment industry presents challenges for women.

“You become invisible as you get old,” Forest said. “You reach a certain age and the phone stops ringing like it did before.”

Shares experiences

She said that when she performs at new comedy clubs, she feels she isn’t taken seriously by the announcers introducing her. ough she describes herself as sensitive to these kinds of judgments, she said such moments give her content to talk about onstage. She shares her experiences as a way to connect with others, including to nd common ground with a younger generation.

At her 89th birthday show at Gotham Comedy Club in July, she was met with a line of audience members in their 20s, who chanted her name and gave her a standing ovation.

“Older ladies, older ladies, older ladies,” Forest sang in unison with an audience of 200 people. “We’re divine.”

Managing editor Telisha Bryan

Assistant managing editors

Anne Michaud, Amanda Glodowski

Director of audience and engagement Elizabeth Couch

Audience engagement editor Jennifer Samuels

Digital editor Taylor Nakagawa

Creative director Thomas J. Linden

Associate creative director Karen Freese Zane

Digital design editor Jason McGregor

Art directors

Kayla Byler, Carolyn McClain, Joanna Metzger

Senior digital news designer Stephanie Swearngin

Photographer Buck Ennis

Notables coordinator Ashley Maahs

SENIOR REPORTERS

Cara Eisenpress, Aaron Elstein, C.J. Hughes, Eddie Small

REPORTERS

Amanda D’Ambrosio, Nick Garber, Mario Marroquin, Jacqueline Neber, Caroline Spivack

CONTACT THE NEWSROOM editors@crainsnewyork.com www.crainsnewyork.com/staff

ADVERTISING

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Senior vice president of sales Susan Jacobs (312) 649-5492 or susan.jacobs@crain.com

Sales director Laura Lubrano laura.lubrano@crainsnewyork.com

Account executives

Miriam Dreese, Paul Mauriello, Philip Redgate

People on the move manager Debora Stein

Classi ed sales Suzanne Janik, (313) 446-0455 or sjanik@crain.com

Sales assistant Ryan Call

Inside sales Isabel Foster

CRAIN’S CONTENT STUDIO

www.crainsnewyork.com/custom

Senior director of Crain’s Content Studio Kristin Bull, (313) 446-1608 or kbull@crain.com

Crain’s Content Studio manager Sophia Juarez

EVENTS

www.crainsnewyork.com/events

Senior manager of events Michelle Cast Manager of conferences & events Ana Jimenez

PRODUCTION

D’yan Forest

Grew up: Boston Resides: Greenwich Village Education: Bachelor’s in drama, Middlebury College; master’s in physical education, Boston University

Single lady: Forest was married earlier in her life, but she says she is currently single and ready to mingle. Travel bug: She said she has been to approximately 20 countries. France was her favorite.

Favorite memory: Forest performed standup on the TV show France Has Incredible Talent in 2018 in front of an audience of 600 people. She recalls feeling nervous before the performance began, but she was pleasantly surprised because, “within a minute, the audience started laughing at me.” She calls it “the most unbelievable experience in my life.”

Vice president, product Kevin Skaggs

Product manager Tim Simpson

Production and pre-press director Simone Pryce

Media services managers Chris Bard, Nicole Spell

CUSTOMER SERVICE

customerservice@crainsnewyork.com or (877) 824-9379

Director, reprints & licensing Lauren Melesio, (212) 210-0707 or lmelesio@crain.com

D’yan Forest | BUCK ENNIS/CRAIN’S NEW YORK BUSINESS

The target audience D’yan Forest, 89, aims to entertain: a younger crowd

“It’s a whole new life I never thought I’d have, and it’s keeping me young.”

D’yan Forest on comedy