Crain's New York Business, January 20, 2025

COMEBACK MAYOR?

Despite his criminal indictment, Adams’ business ties, crime- ghting image and labor support could buoy his re-election

By Nick Garber

If there were any lingering doubts that Eric Adams was serious about running for re-election while up against a federal prosecution, dismal approval ratings and a growing list of serious challengers, they weren’t on display earlier this month at the Apollo eater.

MTA advances Second Avenue subway expansion to Harlem

By Caroline Spivack

e start of congestion pricing has the Metropolitan Transportation Authority hitting the gas on the long-anticipated expansion of the Second Avenue subway Q line to Harlem.

e agency plans to award a $100 million, four-year contract to design, engineer and build new tunnels and the shell of the new 125th Street station, one of

Transit of cials will soon award a contract for major work on the East Side megaproject.

three planned new stops for the subway extension, by the summer. e MTA has issued a re-

quest for proposals that are due in March.

e latest phase of the Second Avenue project is expected to cost a total of $7.7 billion, including a $3.4 billion grant that the MTA must match with $4.3 billion in local funds to access. e MTA’s main revenue stream for the matching funds was in doubt up until the launch of congestion

STATE OF THE STATE Hochul’s 2025 agenda: Tax cuts, subway safety, faster permitting for homes.

2

“There was a perception that Eric is in deep, deep trouble — maybe nished. I don’t think that’s right.”

Chris Coffey, Democratic strategist

Adams’ annual State of the City address functioned as a warning shot to his challengers, reminding them of the advantages he still maintains: an image as an avatar for the working class, alliances with powerful labor unions and business interests, and the ability to spread his message through the far-reaching channels of city government. e gathering underlined a truth that might have seemed unthinkable a few months ago, in the immediate aftermath of his criminal indictment: Adams still has a ghting chance at winning re-election.

“ ere was a perception that Eric is in deep, deep trouble — maybe nished,” said Chris Co ey, a Democratic strategist. “I don’t think that’s right.”

The latest phase of the Second Avenue project is expected to cost $7.7 billion. BUCK ENNIS

Mayor Eric Adams faces federal prosecution and a host of challengers as he runs for re-election. But his advantages as an incumbent include being able to spread his message through the far-reaching channels of city government. BENNY

Hochul’s 2025 agenda includes tax cuts, subway safety, faster permitting for some housing projects

By Nick Garber and Caroline Spivack

Gov. Kathy Hochul on Jan. 14 unveiled a populist 2025 agenda built around tax cuts, subway safety and more investment in mental health care. The proposals come as she faces voter unrest about crime and the cost of living and looks ahead to a tough re-election fight next year.

In her fourth State of the State address, the governor proposed cutting $1 billion in annual income taxes for about 8 million residents, allowing doctors to more easily commit and treat people with serious mental illness, and spending money on new platform barriers, fare gates and police deployments in the New York City subway system.

She also outlined some new housing policies, like streamlining reviews for small projects and cutting taxes for affordable developments in the city — but stopped short of advancing any wide-ranging reforms as she had in recent years. And the governor pledged to support a $68 billion capital plan for the Metropolitan Transportation Authority, ahead of what may be a tough fight with the state Legislature.

“Worries about crime and struggles to make ends meet are too

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common,” Hochul said during her Jan. 14 speech at The Egg theater in Albany. “Our state has to be livable, and people have to be able to afford to live in it.”

The governor will put price tags on her proposals later this month, when she releases her budget proposal for the next fiscal year that starts April 1.

Tax cuts and $500 checks

Continuing a “money in your pockets” theme that Hochul has emphasized for months, the governor said she will seek to slash personal income taxes for people who earn up to $323,200 per year as joint filers. The precise changes were not specified, but Hochul’s office said they would begin taking effect this year, cutting rates across five of the state’s nine tax brackets and affecting about 77% of filers.

Hochul also reiterated a proposal she unveiled in December to send residents $3 billion in “inflation rebates” this year — consisting of $500 payments to joint filers who make less than $300,000, or $300 payments to individuals who earn below $150,000. Hochul also proposed significantly expanding the state’s child tax credit to $1,000 per child under the age of four, up from the current $330 for low-income families.

By advancing the people-pleasing policies, Hochul is taking advantage of New York’s solid finances, which the state comptroller deemed “relatively stable” in a July analysis — although budget gaps total about $14 billion over the next three years.

More involuntary commitments, changes to discovery law

As Hochul promised in the wake of a spate of frightening subway violence around the end of 2024, her State of the State agenda includes

law changes intended to expand providers’ ability to involuntarily hospitalize people with mental illness.

She proposed updating the state’s Mental Hygiene Law to clarify that clinicians and other professionals can commit a person who is “at substantial risk of physical harm to themselves or others” due to their inability to meet basic needs like food and shelter — changes that would bring New York in line with other states, according to her policy book. The proposal roughly aligns with the Supportive Interventions Act, a piece of legislation that

also revisits, once again, the state’s 2019 criminal justice reform laws. While not seeking to roll back bail reforms as she did in 2022 and 2023, Hochul instead wants to change the 2019 reforms to the discovery process — which were designed to share more evidence with defendants, but which have forced some district attorneys to drop cases based on technicalities.

Her State of the State speech includes proposals for financial relief and changes to mental health laws.

Mayor Eric Adams plans to push for this year.

Hochul said she will also propose expanding involuntary commitment authority to psychiatric nurse practitioners, and amend the 1999 measure Kendra’s Law to “reduce barriers” to assisted outpatient treatment — although few details were provided.

“We cannot allow our subway to be a rolling homeless shelter,” Hochul said during her speech. She alluded to expected criticism that involuntary commitments are inhumane — a belief she called “flat-out wrong.”

To house vulnerable people, Hochul will propose increasing funding for two programs: the New York State Supportive Housing Program and the Empire State Supportive Housing Initiative, the latter of which was found to suffer from lax oversight in a September audit by State Comptroller Thomas DiNapoli.

Hochul’s public safety agenda

vironmental reviews for some “modestly sized” residential projects by allowing multifamily buildings below 10,000 square feet to qualify as “Type II” under the State Environmental Quality Review Act — a designation that assumes they will not significantly impact the environment.

Hochul’s agenda also includes banning real estate management companies from using algorithms to fix rent prices — an apparent response to the federal government’s similar allegations against RealPage. New York’s ban would be the first in the country, Hochul said.

To shore up the state’s Mitchell-Lama affordable housing program, Hochul wants to expand an existing abatement on the buildings’ shelter rent taxes. Hochul said her proposal, which would slash the taxes by at least half on Mitchell-Lama buildings within the city, would ensure that complexes have the money to cover insurance and utility costs.

Hochul wants to narrow the current law, which penalizes prosecutors when they are found to have waited too long to share information with defendants. Hochul’s changes would ensure that challenges are limited to the “error itself,” rather than resulting in an entire case being dismissed, according to her office. It’s unclear whether that change will go over well with state lawmakers, who have proposed their own legislation that would streamline discovery by giving prosecutors direct access to police records.

The plan drew quick criticism from legal defense groups. The Legal Aid Society said in a statement that New York’s old system had led to wrongful convictions and case delays, and called her new plan a distraction from more effective ways of combating crime.

Housing: Speedier environmental reviews, but no new mandate fight

Hochul is not reviving her unsuccessful 2023 push to impose mandates for housing construction on cities and towns. Nor is she revisiting last year’s deal that paired eviction protections with tax breaks for new development that left the real estate industry less than thrilled.

Instead, Hochul’s new housing agenda includes speeding up en-

As she already previewed this month, Hochul will separately propose making it harder and less attractive for institutional investors like hedge funds to buy single-family and two-family homes — forcing them to wait 75 days before making an offer on such properties and banning them from using tax provisions like depreciation deductions on the properties.

In hopes of expanding homeownership opportunities, Hochul wants to set aside $50 million to incentivize the construction of starter homes and another $50 million in aid for down payments. Both tenant and landlord groups expressed disappointment Jan. 14 that Hochul had not proposed a more wide-ranging housing plan. Housing Justice for All said the plans do “nothing to keep costs down for renters,” while the New York Apartment Association said Hochul was ignoring the state’s “severe lack of supply” that is driving up prices.

Subway platform barriers and a $68 billion capital plan

On the heels of congestion pricing’s launch, Hochul is now gearing up for a fight with state lawmakers to find cash for the Metropolitan Transportation Authority’s $68 billion proposed capital plan, which the agency sends to Albany every five years for approval and which would go toward modernizing the region’s mass transit. Hochul stressed that she “fully supports” the MTA’s proposed capital plan; it would be the largest in state history.

To fund the effort Hochul said she intends to propose a mix of federal, state, city and MTA contributions, alongside new revenues to be hashed out during budget negotiations this spring. In the shorter term, the

Gov. Kathy Hochul’s 2025 State of the State speech, delivered Jan. 14 in Albany, included proposals to cut taxes, speed up environmental reviews for housing and increase involuntary commitments for mental illness. | MIKE GROLL/OFFICE OF GOV. KATHY HOCHUL

Elizabeth “Betsy” Smith

Mobile medicine unit directors on challenges of treating homeless New Yorkers in the cold

By Ethan Geringer-Sameth

As the winter months get colder, little stands in the way of the elements for the thousands of people living unsheltered on the streets and subways.

An estimated 4,100 people were unsheltered, according to the city’s last annual count in Jan. 2024. The next so-called Homeless Outreach Population Estimate, the city’s tally of people living outside, will take place later this month.

The public hospital system’s street outreach program is one of the few among the city’s litany of initiatives that offers direct medical care through its fleet of mobile vans and roving clinicians. The service is often the only form of care for the people they encounter, who have been disconnected from the mainstream health care system, a problem exacerbated by unstable housing. The exposure can lead to severe physical and mental ailments and underpins the mental health crisis that has become a key focus of the Adams and Hochul administrations.

Most of the work of Health + Hospital’s Street Homeless Outreach + Wellness, or SHOW, is wound triage, especially in the winter months when hypothermia and frostbite are rampant. But beneath the surface is an attempt to use medical care to get people in the door and connected to other safety net services.

Health + Hospital’s Street Homeless Outreach + Wellness program provides direct medical care to people living unsheltered during the coldest months of the year.

Not everyone accepts services. Since it launched in the spring of 2021, SHOW teams have had 250,000 interactions with homeless New Yorkers and provided on-site medical care in 32,000 of those cases, according to data provided by H+H. In January of 2023, the program began linking clients to H+H safety net clinics, which have seen 1,200 primary care referrals.

The program had a modest $14.5 million budget in fiscal year 2024, including $2.2 million from opioid settlement funds, said Operations Director Andy Cook. It also receives philanthropic donations and targets an additional $2 million in revenue from patients covered by Medicaid and other health plans.

Crain’s spoke with Cook and the program’s medical director, Dr. Yinan Lan, about the needs of the people they serve and the challenges of their work.

What are the main health care needs of the unsheltered people this time of year?

Cook: In the winter, we do special training with our team and prepare ourselves to be on the lookout for hypothermia, frostbite and skin tissue injuries…Is it something that we can handle? Is it something that someone should really go to the hospital for?

Lan: The extremity injuries are so common that I'm trying to think of a patient, or maybe a handful of patients…who don't have exposure injury.

What do you do in those situations where someone really needs shelter to avoid more serious medical issues?

Lan: It's tricky when it comes to someone who really needs to be either inpatient or somewhere that's indoors, a little bit safer, but we're kind of questioning whether [the client has] the capacity to make the right call. And that really comes up and it’s very different for very different situations. Even just hypothermia alone, or just

Developer behind Barneys condo conversion plans Astoria project

By Eddie Small

The developer and architect behind the plan to turn New York’s original Barneys department store into luxury condos has a project in store for Astoria.

The new development from Flushing-based Raymond Chan would rise at 23-04 32nd St. between 23rd and 24th avenues in the Queens neighborhood. It would span about 35,000 square

feet and stand 7 stories and 75 feet tall with 29 residential units and a 14-car parking garage, according to plans recently filed with the city's Department of Buildings. There would be retail space on the first floor of the building and a health care facility on the second floor, while the remaining floors would be residential, according to the filing. The site is also addressed as 31-16 23rd Ave.

A representative for Chan did

not respond to questions about the project by press time.

A limited liability company linked to the prominent developer and architect purchased the site in June for $2 million, according to property records. This is the only transaction that the city register has on file for the address, indicating that the property belonged to the previous owner for quite some time.

in cold weather alone, it's a very normal human response to have cognitive clouding, and it's very challenging to think.

Cook: Securing emergency housing or emergency placement isn't always guaranteed, but there is a pathway for us to request placement, working with [the Department of Homeless Services] and the shelter providers. There are also drop-in centers that we can connect people to. We try to employ all avenues to clinically assess and take care of a person, and then find the option, the solution that will work best for them and what they're willing to do.

Mayor Eric Adams and Gov. Kathy Hochul have emphasized involuntary removal and treatment as a response to unsheltered people with untreated mental health needs. How does involuntary removal come into play in your work?

Lan: There are a lot of citycontracted street outreach teams that we kind of tag team with…

it depends on who's got a better bridge, and who might be more appropriate to do the engagement on any given day. We as a team do not do involuntary removal… For us, it’s all just relationship building…Every situation comes to a point [where a] certain intervention might break that bridge, break that trust or bond and whatnot, and then we have to decide for this case specifically, what's the benefit that outweighs the risk here?

Have the people you work with shown more reluctance to be engaged by you or by strangers given the recent high-profile incidents of violence on the subway? Cook: We're very visible and very known to our patients and to others who are around. So, I would say that we haven't seen any sort of, you know, negative impact or drop in engagement or utilization of services in that regard, and I think it stems from the history and relationships that our staff built with the people in the community.

The site is currently home to a 3-story building that stands 36 feet tall and spans 2,700 square feet, according to demolition permits that were also recently filed for the site with the Department of Buildings.

Chan's portfolio includes sever-

al residential developments across neighborhoods in Queens. In late 2023 he purchased the former Barneys at 115 Seventh Ave. in Chelsea for $21.5 million with plans to convert the building into luxury condos.

Sci-fi screenwriter lands West Chelsea condo

The Cortland, from a team led by Related, appears to be 75% sold since sales began in spring 2022

By C. J. Hughes

Award-winning movie maker Akiva Goldsman, who has helped create Star Trek spin-offs, has beamed down in West Chelsea.

The writer, director and producer and his wife, actress Joann Goldsman, have purchased a four-bedroom unit at the Cortland, a West Chelsea condo from The Related Cos. and Mitsui Fudosan America that has flown somewhat under the radar since its pandemic-era launch.

$11M

The 3,000-squarefoot unit, which has four and a half baths, floor-to-ceiling windows and three exposures, cost $11 million, according to a deed that appeared in the city register Jan. 9.

The unit’s price per square foot, $3,700, puts the deal in the upper tier of new condo sales. In fact, in the fourth quarter of 2024 in Manhattan, the average sale price was about $2,800 per foot, up 32% in a year, according to data from the brokerage Douglas Elliman.

With the sale, the 144-unit Cortland now appears to be about 75% sold, more than three years after sales began in April 2022. Indeed, on Jan. 9 106 of the 144 units had found takers, according to an analysis of sales data in the regis-

ter, a decent result at a time when high interest rates continue to weigh on activity.

$906 million in revenue

Related and Mitsui, a subsidiary of one of the top developers in Japan, stand to make $906 million in revenue from sales of the studio to five-bedroom units at the Cortland, according to the condo’s offering plan, which was filed in 2019 and approved in 2021, state records show.

Robert A. M. Stern Architects designed the exterior of the 26-story condo, which has a 75-foot-long indoor pool, a squash court and a driveway for discreet pickups and drop-offs. Seattle-headquartered architecture firm Olson Kundig styled the interiors.

In 2002 Akiva Goldsman won an Oscar in the adapted screenplay category for his script for the drama A Beautiful Mind, though he’s perhaps best known for his science-fiction work, including helping develop the streaming Star Trek franchise Star Trek: Picard for Paramount+. Other credits include Stephen King adaptations, Batman movies and the Fox supernatural series Fringe. Goldsman could not be reached by press time.

The Jeff Blau-led Related, which declined to comment by press time, first listed Goldsman’s apartment for $11.3 million in May before ultimately inking a contract for it in October for slightly less, according to StreetEasy. The deal closed Dec. 27, the register shows.

On Jan. 10, 13 sponsor units were listed, ranging from a two-bedroom for $3.9 million to a four-bedroom for $12 million, StreetEasy showed, though one resale was available as well.

Part of Midtown tower that’s home of Fox News sells at 33% discount

By Aaron Elstein

A piece of the Manhattan office tower that’s home to Fox News was sold Jan. 8 by its Canadian owner at a 33% discount, a price that startled New York real estate experts.

Caisse de dépôt et placement du Québec, a pension fund that manages $330 billion in assets, agreed Jan. 8 to sell 49% of 1211 Sixth Ave. to RXR Realty at what Bloomberg News said was a $1.2 billion valuation. The previous valuation was $1.8 billion for the 2 million square-foot tower at West 47th Street, according to credit-rating agency KBRA.

CDPQ declined to comment on the sale, which comes when President-elect Donald Trump is threatening to raise tariffs on goods from Canada, a nation with many billions worth of pension wealth invested in U.S. assets. For instance, the Ontario Municipal Employees Retirement System is a partner with Related Cos. in Hudson Yards. CDPQ has $33 billion invested in real estate, about half in the U.S.

In addition to 1211 Sixth, where Rupert Murdoch’s family business has been a tenant since 1992, CDPQ’s New York portfolio includes the office towers 3 Bryant Park, 1411 Broadway and 85 Broad St. It’s also an owner of Stuyvesant Town and Peter Cooper Village, Manhattan’s largest apartment complex.

Heads are turning over the big property investor’s decision to sell when New York’s bruised office market is thought to be on the mend. In a report Jan. 9 Fitch Ratings said “some green shoots” are emerging.

“The hope is the market is bottoming out. No one wants to sell,” said Ruth Colp-Haber, chief executive of Wharton Property Advisors. But “it’s really burdensome to own an aging property now.”

Alexander Goldfarb, a commercial real estate analyst at Piper Sandler, said the partial sale of 1211 Sixth Ave. doesn’t necessarily reflect current market conditions.

Large pension funds, he said, tend to move slowly.

“Decisions about office manifesting today may have been made

six months ago,” he said. The fund may have chosen to sell because it has some big bills looming. Specifically, a $1 billion mortgage is due next month for 3 Bryant Park, known as Salesforce Tower, and 1211 Sixth’s $1 billion loan comes due later this year. With banks demanding higher down payments for office loans, it makes sense for even super-creditworthy borrowers like CDPQ to stock up on cash.

Control 51% of the building

CDPQ and Beacon Capital Partners acquired 1211 Sixth at a $1.8 billion valuation in 2013 and the fund bought out Beacon in 2016 at a similar valuation. After the sale to RXR the pension plan will control 51% of the building.

Developed in 1973, 1211 Sixth needs work. Colp-Haber said it might be the last Class A tower in Manhattan with subway-style turnstiles at security. RXR pledged to invest $300 million repositioning the property. The AIA Guide to New York City isn’t impressed with the building and similar ones near

Related and Mistui have teamed in the city before, including 50 Hudson Yards, a 58-story office tower at the Hudson Yards megaproject. Mitsui, whose roots date to a clothing company founded in 1673 and which has invested in New York since the 1970s, also has rental towers and hotels in its portfolio.  Related has recently sold several small rental buildings in Brooklyn at a loss, after tough pro-renter laws appear to have dashed efforts to upgrade the sites and boost

their rents. A push to build a casino in Hudson Yards has also hit hurdles. This month Manhattan Community Board 4 voted to reject the zoning changes that Related, among the country’s biggest and best-known developers, says it needs to construct the three-towered complex that would house the gaming facility.

it, describing them as “posturing, bulbous boxes.”

RXR’s hefty investment could pay dividends because 1211 Sixth comes with a valuable asset: An anchor tenant with a long-term lease. In 2022 Fox Corp. and News Corp. extended leases for nearly 1.2 million square feet until 2042. CDPQ described the combined lease at the time as the largest in more than three years. Under the old lease Murdoch’s minions paid about $80 a square foot for Fox News studio space and the Wall Street Journal newsroom. They’re probably paying less now, which helps explain the building’s lower valuation, ColpHaber said, though the long-term lease with Murdoch also makes it

a better candidate for refinancing at an attractive rate. 1211 Sixth was 94% leased early last year but since then law firm Ropes & Gray said it would move out of 300,000 square feet in 2027 for space at 1285 Sixth, another RXR-owned building. In a press release, RXR said the law firm’s exit “creates a rare opportunity” to lease 600,000 square feet of space near Rockefeller Center. In 2023, CDPQ’s real estate division, Ivanhoé Cambridge, opened a New York office and hired Tishman Speyer executive Michael Caracciolo to run it. The head of Ivanhoé, Nathalie Palladitcheff, said at the time the fund was considering “all the ways in which we can enhance the resilience and performance of our portfolio.”

Sale price for Cortland, West Chelsea condo

1211 Sixth Ave. | BUCK ENNIS

A living room (left) and a kitchen (inset) at the Cortland, West Chelsea CORE REAL ESTATE

Flatiron dental startup raises $17M for expansion

By Amanda D’Ambrosio

A Flatiron-based dental supply startup that helps clinicians procure equipment and medications has raised $17 million to fuel its nationwide expansion.

Torch Dental, which announced its recent fundraise Jan. 7, will use the funds to open a new office in Austin, Texas, as a part of its growth strategy. The office will serve customers in the South, Mountain and West Coast regions

ners and Health Velocity Capital.

A spokesperson from Torch Dental did not respond to multiple requests for comment before publication.

Torch Dental founded in 2017

Torch Dental has raised more than $65 million to date, according to data from research platform PitchBook.

as the startup expects to boost the number of practices it works with in 2025, it said in a press release.

Amex Ventures, Alumni Ventures and Parameter Ventures contributed to the fundraise alongside existing investors Raga Partners, Bessemer Venture Part-

Brothers Khaled Boukadoum and Yassine Boukadoum founded Torch Dental in 2017 after hearing gripes from their sister, who is a dentist, about keeping track of her dental equipment purchases and negotiating with vendors. The co-chief executives partnered with Drew Werner, co-founder and chief technology officer, to create an artificial intelligence-powered platform to help dentists manage their equipment purchases and find the best deals.

Torch offers customized dashboards with more than 100,000 SKUs from thousands of dental brands, the company said. The software takes into account price, quality and availability, which can

cut practices’ budgets by 32% and save hours of time, it noted in the press release.

More than 3,000 dental practices nationwide use Torch Dental’s platform, up roughly a third from its last funding round in July 2023.

Torch Dental has raised more than $65 million to date, according to data from research platform PitchBook.

The company isn’t seeking additional capital for now. Khaled told Axios that he expects Torch Dental

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Lifting SALT cap is no sure bet under Trump

New York Republicans may fail in their push to raise the GOP-imposed cap on state and local tax deductions

Will New York’s congressional delegation be able to raise the SALT cap?

For both Republicans and suburban Democrats, this is a primary concern heading into Donald Trump’s new term. In 2017, when Trump was president, congressional Republicans successfully passed tax-cut legislation that also capped the state and local tax deduction at $10,000, in a bid to make up for revenue that was lost in the overall bill. It was also designed to punish voters in the Democrat-heavy Northeast, where property and state income taxes are relatively high.

local tax deduction.

Since 2017, suburban Democrats and Republicans alike have been charging hard to raise the SALT cap. e Biden administration showed little interest, though, and Northeast Republicans found themselves in con ict with members of their own party who reside in lower-tax states. For them, the cap was ne, and they weren’t interested in helping out the Northeast and California.

is has put New York’s congressional Republicans in an awkward position. Representing, largely, suburban and home-owning constituencies, they need Trump and Speaker Mike Johnson to undo a law that their party championed. Trump, for now, appears on their side. When the New York Republicans came to visit the president-elect at Mar-a-Lago recently, he told them to come up with a plan for increasing the state and

During the presidential campaign, Trump himself said he would “get SALT back,” never mentioning that he was the one who capped the deduction in the rst place. If the New York Republicans have new momentum now, with a former New Yorker on their side, there’s still no agreement on how the limit would be increased. e trouble for them is that Republicans barely control the House — once two of Trump’s federal nominees, Elise Stefanik and Michael Waltz, are con rmed, their majority will be shrunk to one — and Johnson has no margin for error.

If scally conservative Republi-

cans in other states balk, the new tax package, which is expected to pass during the budget reconciliation process, could easily keep the $10,000 cap in place. In the meantime, Republicans and Democrats have di erent ideas for SALT. Some want to raise the limit for the deduction as high as $200,000. Others are seeking a smaller increase that would be paired with gradual hikes over time that match the pace of in ation.

e $10,000 current cap applies to both individuals and married couples, and lawmakers who want the cap raised may be in agreement that couples should take a larger deduction than individuals.

Lifting cap will be expensive

Ultimately, lifting the cap on the deduction will be quite expensive. e tax bill Republicans are exploring this year could further raise the de cit, putting pressure on other Republicans to back keeping the cap in place. Lawmakers have mulled limiting the ability of businesses to deduct state and local taxes from their federal bills to try to cover the cost of any changes.

Another challenge will be pro-

gressive Democrats. If conservatives in other states don’t want to lift the cap, viewing such a move as a rank giveaway to a uent liberals, progressives aren’t necessarily excited about o ering homeowners with valuable properties the ability to dodge local taxes. Alexandria Ocasio-Cortez, for example, has not joined her New York colleagues in advocating for anything related to SALT.

What will actually happen? In Washington, life is forever unpredictable, especially with Trump in charge. All eyes will be on Johnson, who barely has a majority and seems to be constantly ghting to save his speakership. Getting the votes for anything, let alone SALT, will be a major struggle of the new year.

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

Reach of controversial hotel licensing law will be limited after series of carve-outs, analysis nds

By Nick Garber

anks to a series of last-minute carve-outs, New York City’s controversial new employment rules for hotels will have a far more limited impact than critics originally feared, according to a new analysis.

Approved by the City Council in October and signed into law by Mayor Eric Adams weeks later, the Safe Hotels Act will require city hotels to obtain licenses to operate, contingent on meeting a number of new requirements — including directly employing

ment policy.

The Safe Hotels Act could have upended hiring rules for hundreds of hotels, but will have a smaller impact instead.

public-facing workers rather than subcontracting them. Following outcry by the owners of small, nonunion hotels who said it would increase costs, the hotel workers’ union backing the bill agreed to soften it, days before it passed, by exempting hotels with under 100 rooms from the direct-employ-

at change had a big impact, according to an analysis released Jan. 13 by the Independent Budget O ce. Of the roughly 300 hotels outside Manhattan, about 95% would have originally needed to make changes to comply with the direct-employment rule, but just 27% — or 80 total hotels — will now be a ected following the exemption for small facilities. e new employment rules were a victory for the Hotel and Gaming Trades Council labor union, a powerful force in city politics which is expected to use the policy as leverage during contract negotiations with hotel owners. e union endorsed and campaigned for many members of the current council, who passed the bill in a 45-4 vote in October. It is also a key supporter of Mayor Adams.

But last year’s push to pass the bill was bumpy, forcing HTC and the bill’s sponsor, Manhattan Councilwoman Julie Menin, to make numerous amendments to pacify the hospitality and hotel industries. e subcontracting ban was narrowed multiple times — rst to clarify that hotel-based restaurants and

bars would not be a ected, then to exempt technical jobs like engineers, and nally to exempt all small hotels.

Deal assured passage

ose latter changes e ectively carved out low-cost budget hotels, which tend to be nonunion, located in the outer boroughs and immigrant-owned. ose owners railed against the legislation for months and continued to oppose it after the carve-outs, sharply criticizing the Hotel Association of New York City — a trade group that mainly represents large, union hotels — for striking a deal with HTC that assured the bill’s passage.

“ e entire bill favors powerful special interests at the expense [of] the small, independent entrepreneurs — many of whom are immigrants and people of color — who power New York City’s economy,” said Mukesh Patel, the owner of six hotels concentrated in Brooklyn, following the bill’s passage in October.

Midtown Manhattan, home to more than half of the city’s hotel rooms, will see some impacts from the new employment rules. Some 105 Midtown hotels will need to change their hiring poli-

cies under the enacted law, a drop from 158 under the original, pre-carveout bill, according to IBO. e analysis was based on data from CoStar, city and state agencies, and both HTC and the Hotel Association. e IBO report does not take any position on the stated goal of the bill: to improve hotel safety. To obtain a license, hotel owners

must now provide “panic buttons” to employees who enter guest rooms, maintain a continuous front-desk or security presence, and meet certain cleanliness standards for guest rooms, among other rules. Hotels are also barred from accepting bookings of less than four hours — shortened from eight hours in the original proposal.

Ross Barkan

New York Republicans like Rep. Nicole Malliotakis are leading the charge to lift the cap on state and local tax deductions, which was set at $10,000 in the 2017 tax law signed by Donald Trump. AL DRAGO/BLOOMBERG

Carve-outs to the Safe Hotel Act passed in October mean it will only force a fraction of nonunion hotels to change their hiring practices, a new analysis found. A previous version would have affected 95% of outer-borough hotels. | BUCK ENNIS

Gowanus could get 121-unit building for low-income housing

By Julianne Cuba

An 8-story supportive housing building could rise on the site of what’s now being used as a parking lot for an adjacent retirement home in Gowanus, records show.

The development arm of Downtown Brooklyn-based organization Catholic Charities Brooklyn & Queens has submitted plans to the Department of Buildings to erect a roughly 96,780-square-foot low-in-

Peoples Development Corp., submitted the permits, which were initially rejected by the agency because of missing documents but will likely be approved upon resubmission. Swift did not return a request for comment by press time.

Amenities being offered

The plans were submitted by the development arm of Downtown Brooklyn-based religious nonprofit Catholic Charities Brooklyn & Queens.

come apartment building with 121 dwelling units at 366 Bond St., according to the recent filing. Records show Jennifer Swift, director at Catholic Charities Progress of

The proposed building, which would include a 25,586-squarefoot community facility on the ground floor, offering amenities such as outdoor and office space, and television, gaming and computer rooms, would rise between Carroll and First streets on what appears to be the roughly 42,000-square-foot parking lot of Mary Star of the Sea, a 101-room senior living home at 41 First St. that’s owned and operated by the same nonprofit organization, records show. The retirement home is un-

likely to be affected by the construction.

Local design firm Shakespeare Gordon Studio, which is based in the same south Brooklyn neighborhood along the fetid Gowanus Canal, is listed as the architect of record, according to the applica-

tion. The below-market-rate apartment building, if approved by the city, would be just about 500 feet from the area’s contaminated waterway, which is in the midst of an extensive, more than $1 billion cleanup led by the federal Environmental Protection

Agency with the help of the city. The site, however, sits just outside the special Gowanus mixeduse district, which was rezoned in 2021 with the goal of bringing more than 8,000 new apartments online to the otherwise industrial area surrounding the canal.

366 Bond St. in Gowanus | GOOGLE STrEET VIEW

Hochul must now forge pathways for suburban housing development

Gov. Kathy Hochul is tuning into the public’s mood with acuity, addressing critical issues like a ordability and public safety that resonate deeply with New Yorkers. Her State of the State proposals, geared toward tax cuts, bolstering subway safety and enhancing mental health care, demonstrate a keen awareness of the electorate’s immediate concerns as she steers toward re-election. Yet, the real test of her leadership lies not just in reading the room but in utilizing this accrued political capital to champion transformative changes, particularly in housing development.

Hochul’s past advocacy for increasing suburban housing through mandates must not dwindle into mere rhetoric. As she rightly pushes for substantial investments in Metro-North, enhancing transit connectivity, a parallel push for multi-family housing around these transit hubs is essential. e synergy between improved transit and accessible housing could alleviate the pressure on New York City’s in ated rental and housing market, making suburban areas more appealing

PERSONAL VIEW

and a ordable for city workers. However, the governor’s track record shows a cautious approach where bold strides are necessary. e 2023 breakdown in housing negotiations highlighted the delicate dance Hochul faces with suburban lawmakers. Avoiding statewide housing mandates for the second year in a row in her address was perhaps a tactical retreat but must not signal a conclusion. e governor’s $650 million incentive program launched last summer, aimed at sparking suburban development, shows promise yet demands more than just monetary incentives — it requires advocacy from the executive.

Decisive action leads to success

Hochul has demonstrated through initiatives like congestion pricing that decisive actions, even those initially unpopular, can cultivate public support and lead to successful outcomes. It’s time she applies the same unyielding determination to resolve the state’s housing crisis. One idea is the MBTA Communities Law that

Massachusetts adopted in 2021. It requires cities and towns to allow multi-family housing near public transit with the goal of addressing that state’s housing shortage.

Another possibility would be creating a City of Yes-style plan statewide.

As Hochul harnesses her political capital, she must forge alliances and craft policies that not only address immediate concerns but also lay the groundwork for long-term solutions. e success of her tenure will ultimately be measured not by the applause of today’s speeches but by the sustainability and inclusivity of tomorrow’s neighborhoods. New York

doesn’t just need a leader who navigates through crises — it needs a visionary who builds New Yorkers’ futures, one home at a time.

Here are 3 steps New York City can take to unleash the full economic potential of AI-powered innovation

New York City is poised to bene t from an increasingly AI-powered economy, but its position is far from guaranteed. e Bay Area remains the global leader and other cities are competing hard for New York’s number-two spot. As AI becomes enmeshed with nearly every facet of the global economy, cities that become hubs for AI-powered innovation are poised to deliver well-paying jobs, more e ective municipal services, and a better quality of life. But as the pace of technological change accelerates, New York City’s economic development playbook will have to keep up. By focusing on what AI builders need to succeed—and how their success can bene t all New Yorkers—policymakers can maximize NYC’s opportunity in an increasingly AI-powered world.

ere’s no time to waste: Other cities and regions are aggressively courting AI companies and talent, while trumpeting their signi cantly lower housing prices, of-

ce rents, electricity costs, and taxes. Cities from Montreal to Dubai are creating AI-focused innovation districts and embracing AI solutions to civic problems. Austin is building on its strength as an AI hub by adopting AI-powered building permitting tools to speed up housing construction. And Taiwan has broken ground on a major new AI business park, which has already attracted interest from computing giants AMD and NVIDIA.

Capturing a growing share of the global AI economy could help spark thousands of new, well-paying jobs at a time when much of the city’s job growth has been in low-wage occupations and private sector employment is up just 2.5 percent since before the pandemic hit.

Our new report, Maximizing NYC’s AI Opportunity, puts forward a handful of fresh ideas to attract and retain these innovative companies; property tax abatements and help nancing capital improvements just won’t cut it. To realize the full

potential for job creation and societal bene t that AI can unleash, New York City leaders will need to craft a di erent economic development playbook than has been used in the past—one that plays to New York’s unique strengths and addresses the speci c needs of AI builders.

FIRST, the city should leverage its greatest asset: the opportunity to deploy AI solutions at massive scale in one of the world’s most complex urban environments. e city should launch three major challenge-based AI procurements in areas such as housing a ordability, street safety, and social services, attracting AI innovators with the opportunity to propose innovative solutions to signi cant problems, rather than bid on a narrowly de ned scope of work. If the AI solution is successful in a pilot phase, then the company would receive a signi cant prize: a scaledup city contract.

SECOND, the city should dramatically expand access to public data through application programming interfaces (APIs) and real-time feeds. No tax incentive is as valuable to AI innovators as access to rich, real-world data for developing and testing solutions, but while New York has been a pioneer in open data over the past decade, it’s past time for an upgrade. A major new e ort to unlock access to real-time city

data would be a beacon to AI builders from across the globe, allow technologists to propose novel solutions to perennial problems, and potentially enable the city to develop a new revenue stream if that data is used to create commercially viable products and services.

THIRD, the city should o er subsidized computing power to AI start-ups that move to or add jobs in New York City. Demand for compute exceeds supply by a factor of ten, with many small start-ups devoting half or more of any capital raised to compute alone. By o ering subsidized compute to start-ups that meet speci c goals—from adding jobs to participating in paid internship and training programs—the city can attract more AI builders here and help start-ups compete with bigger players.

e race to de ne the AI era is on. To ensure that New Yorkers bene t, policymakers need to develop a new economic development playbook to maximize the city’s AI opportunities. Failing to seize this moment could mean losing talented workers, seeing companies move away, and watching entrepreneurs build the future elsewhere. By acting now, New Yorkers will secure a central role in shaping and bene ting from an increasingly AI-powered world.

Gov. Kathy Hochul | MIKE GROLL/OFFICE OF GOV. KATHY HOCHUL

Eli Dvorkin is editorial and policy director of the Center for an Urban Future. Winston Fisher is a partner at Fisher Bros., CEO of AREA15, and co-chair of New York City’s Regional Economic Development Council.

What urban doom loop? NYC is stronger than ever.

New York City is at record-high employment. We’re the nation’s top destination for young talent, with half a million college students and as many recent graduates from across the country. With each passing day, there are more small businesses and tourists, and fewer vacant stores and offices.

These facts were unimaginable just a few years ago, when economists, journalists, and pundits warned of a post-pandemic “urban doom loop” and a fiscal crisis on par with the 1970s. They said people and companies would flee. That our streets would hollow out.

They were wrong. As a lifelong New Yorker, I might be biased. But the data in the New York City Economic Development Corporation’s new “State of the Economy” report is not.

The tourists are back, too. Nearly 65 million came to New York City in 2024 and a record 68 million are predicted for 2025. Our finance sector is more robust than before the pandemic (remember how all those jobs were going to move to Miami and Dallas?). Emerging sectors like technology, life sciences, and the green economy are vibrant. And New York City is rapidly emerging as the applied AI capital of the world, with new AI tools being developed across every industry.

Andrew Kimball is the president and CEO of the New York City Economic Development Corporation.

Just look at the numbers. New York City is at record highs in employment and workforce participation. There are more small businesses open today than ever before. We’ve had back-toback quarters of declining storefront and office vacancy rates. New Yorkers are back in the game.

Counter to predictions of financial ruin, City tax revenues are at an all-time high. So what accounts for this remarkable comeback?

It starts with Mayor Adams, who was elected on a pro-growth and public safety platform with a commitment to partner with the City’s economic engine: its private sector. He appointed seasoned professionals to oversee economic development, housing, planning and small business. He worked with city and state elected leaders to implement policies to spur private investment. He made tough calls to restrain public spending, boosting the City’s bond rating

while avoiding draconian layoffs.   Of course, too many New Yorkers are still struggling. From 2011 to 2023, New York City added 895,000 jobs but just 353,000 new homes. Top earners in New York City are beating the rest of the country, but lower earners aren’t doing much better here than they could elsewhere. Black unemployment is down 20 percent since Mayor Adams took office, but it’s still more than double white unemployment.

Thankfully, New York City has taken decisive action. In the first months of his administration, Mayor Adams released the “Blueprint for New York City’s Economic Recovery” and the “‘New’ New York” Action Plan to fuel New York City’s comeback. Most recently, the Mayor’s “City of Yes for Housing Opportunity” plan — the most significant zoning reform in half a century — passed the City Council and will lead to 82,000 new housing units. And his bold “Axe the Tax” proposal aims to eliminate city income taxes for working-class New Yorkers.

To re-activate offices, the Mayor launched the “MCORE” program to transform older buildings into modern workspaces, while creating a new pathway to convert offices into homes. To address longstanding disparities, city agencies

have prioritized minority-and-women owned businesses for procurement, awarding them a record $6.4 billion last fiscal year.

The Mayor’s “Harbor of the Future” vision is catalyzing job-generating initiatives from South Brooklyn to Kips Bay to Willets Point, while his “Blue Highway” vision will move more goods along our waterways and take trucks off our streets, improving our economy and our health.

Four years after COVID, New York City has roared back to life. The morning subway platforms teem with commuters. The cafes, bodegas, and boutiques buzz with customers. The sun rises over cranes building new neighborhoods, from the North Shore of Staten Island to the South Bronx. There is a new optimism on our streets. The doomsayers were wrong. New York City is stronger than ever.

PEOPLE ON THE MOVE

To place your listing, visit www.crainsnewyork.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

The NHP Foundation

The NHP Foundation (NHPF) announces the promotion of Eric W. Price to President and CEO. Price, who has served NHPF for nearly six years, most recently as President, led significant achievements, including NHPF’s first $75M social bond and AArating from S&P. Price will lead NHPF in expanding affordable housing nationwide, succeeding CEO Dick Burns, who becomes a senior advisor.

LAW

Nixon Peabody LLP

COMPANIES ON THE MOVE

CONTRACT FURNITURE

Empire Office Empire Office, a leader in workplace furniture and design solutions, announces Michael Gerla as EVP of Sales. With over 20 years of experience in furniture and commercial real estate, Michael brings expertise in creating cost-effective, highquality workspaces. His focus on long-term client relationships and seamless project execution aligns with Empire’s 79-year legacy of delivering innovative solutions that transform work environments.

FINANCIAL / TECHNOLOGY

DailyPay

Nelson Chai is a seasoned financial executive with over 30 years of experience in leadership roles at notable public companies. Most recently serving as CFO of Uber, Nelson spearheaded the company’s journey to profitability and a successful IPO. Prior to Uber, Nelson held prominent positions such as CEO of Warranty Group, President of CIT Group, and CFO of Merrill Lynch, NYSE Euronext, and Archipelago Holdings. He currently serves on the boards of Chubb and Thermo Fisher Scientific.

LEGAL

Nixon Peabody LLP is pleased to announce that Elizabeth Taraila has joined the firm as partner in our Corporate Trust Team. Liz has more than 16 years of experience representing financial institutions in their roles as corporate trustees and agents. She handles matters involving complex debt structures and risk management and has participated in nearly all facets of global finance in connection with capital markets debt transactions. Liz earned her JD from Fordham University School of Law.

Kilpatrick Townsend & Stockton LLP

Kilpatrick is proud to share that Bradi Smith was elected to its 2025 Partner Class. Bradi is a Trademark attorney in New York. She focuses her practice on global trademark portfolio management, including domestic and international trademark clearance, global trademark prosecution, global portfolio audits, and global registry disputes and enforcement for clients that intersect in the fields of entertainment, finance, software and technology, and consumer goods.

To place your listing, visit crainsnewyork.com/ company-on-the-move

EisnerAmper

Global business advisory firm EisnerAmper announces it has combined with HDA Accounting Group (“HDA”). Founded in 2011 and based in the Denver area, HDA provides tax compliance and planning, monthly accounting, benchmarking, profitability analytics, and revenue advisement exclusively to dental practice owners in all 50 states.

Hertz Herson CPA LLP

Hertz Herson CPA LLP proudly announces that, effective January 1, 2025, it has merged into its operations Richard J. Lynne CPA, P.C. of White Plains, New York. Richard J. Lynne CPA, P.C. is a diversified multispecialty tax and accounting firm providing a full suite of high-quality services to entrepreneurs and businesses. The deal compliments Hertz Herson’s expertise in serving high net worth individuals and families and closely held businesses and expands our team into the Westchester market.

REAL ESTATE

Block Renovation

Julie Kheyfets has been appointed Chief Executive Officer at Block Renovation, the AI-first renovation platform empowering homeowners and contractors to build better together. Kheyfets previously served as the company’s Chief Operating Officer, steering the company’s operations as it evolved its offering from a one-stop shop for renovations to an AI-first marketplace platform.

PROMOTE.

Why not?

Celebrate your success with promotional products!

• Digital Reprint

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Contact: Lauren Melesio Sales Manager lmelesio@crain.com

Home of ‘Good Morning America’ at 1500 Broadway joins growing list of defaulted commercial properties

By Aaron Elstein

The high-profile office tower at 1500 Broadway was presented last October with a bill it couldn’t pay when its $335 million mortgage came due. London-based owner Tamares Group was unable to refinance, and the 500,000 square-foot Times Square tower, home to the studios of “Good Morning America,” defaulted. Tamares didn’t return an email seeking comment.

Office-landlord misery like that at 1500 Broadway got a lot more company in 2024. Fully 15% of a pool of commercial mortgages tracked by KBRA weren’t paid off at maturity last year, a steep increase from 2023’s 6%, according to a report Jan. 9 from the credit-rating agency. About 40% of office loans in the pool weren’t paid off, twice the rate of 2023.

In addition, fewer maturing mortgages were granted extensions, which is how lenders prefer to handle the problem when feasible. Just 10% of expiring commercial loans were granted more time, KBRA said, well below the 22% that got a grace period in 2023 to work things out.

The data show that beneath headlines proclaiming commercial real estate is back, stress is quietly building. Particularly in the office sector, property owners face the daunting task of refinancing loans at higher rates while cash flows and rent rolls sag. Borrowers who can’t refinance or restructure their defaulted loans face losing their properties via foreclosure.

$3 trillion worth

This state of affairs could linger over the sector for years, considering between now and 2029 $3 trillion worth of commercial mortgages come due, according to research firm Trepp. Credit performance “deteriorated further” last month, Federal Reserve officials said in their December meeting, according to minutes released this month.

Lower interest would give borrowers and lenders more breathing room, but the odds of that took at least a short-term hit after the government Jan. 10 reported unexpectedly strong monthly employment data. A robust economy combined with uncomfortably

high inflation is no formula for interest rate cuts and the market is starting to believe the Federal Reserve won’t cut again any time soon. That would be particularly bad news for commercial landlords because mortgage rates are tethered to the 10year bond, whose yield rose Jan. 10 to its highest in more than a year, at 4.8%.

“Markets that tried to front-run the Fed on the level of interest rates are now paying the price,” said Jamie Cox, managing partner for Harris Financial Group.

It’s not all gloom. Tishman Speyer Jan. 10 announced it had completed the $2.85 billion refinancing for The Spiral, a 2.8 million square-foot tower in Hudson Yards. That deal came a few months after Tishman refinanced Rockefeller Center’s $3.5 billion mortgage.

“Together, The Spiral and Rockefeller Center demonstrate that premier properties with the

right amenities, strong occupancy and established sponsors continue to outperform the market,”

Tishman CEO Rob Speyer said.

But for every building that crosses the refi finish line, some fall short.

For instance, the 42-story tower at 150 E. 42nd St. was unable to refinance its $525 million mortgage when the loan came due last September, KBRA said. Although the 1.7 million square-foot stainless

steel tower is attractively located across the street from Grand Central Terminal, its vacancy rate is 11%, S&P Global said, and the property hasn’t been renovated since 1998. Its largest tenant, Wells Fargo, has said it would move out of 500,000 square feet by 2028 and head to Hudson Yards. 150 E. 42nd is owned by Mark Karasick and David Werner. Neither could be reached for comment.

1500 Broadway | BuCK EnnIS

Brooklyn real estate family sells mixed-use portfolio

By Eddie Small

Brooklyn’s Pintchik family has sold a 26-building portfolio of mixed-use properties in the borough for about $103 million, according to Michael Pintchik and an announcement from the brokers.

The Pintchiks sold the buildings to brothers Michael and Edward Ostad, parting with them “to address some family-planning issues,” Pintchik told Crain’s. The portfolio consists of buildings rel-

“The

business with additional purchases and projects on the horizon. He described the deal as “bittersweet” but said the properties were hopefully in good hands.

‘Artfully curated’

A representative for the Ostads did not respond to a request for comment by press time. Pintchik said he was unaware of any major plans they had to change the buildings but expected the brothers to operate them largely as is while potentially finding some opportunities to increase their value.

buildings have been part of generational family ownership, so opportunities like this for a purchaser are truly once in a lifetime.”

Rich Velotta, Raven Property Advisors

atively close to Barclays Center in Prospect Heights and Park Slope, and it spans about 115,000 square feet overall with 28 retail stores and 84 residential units.

Pintchik stressed that this deal represented only a portion of the family’s portfolio — he estimated slightly less than 40% — and they were staying in the real estate

“They explained to me their purpose in buying [the portfolio] was because these are, in their words, ‘artfully curated’” he said, “so that’s my greatest hope, that they preserve that and continue in that vein.”

The properties include 458-480 Bergen St., which spans a full block in Park Slope, and 220, 243 and 266 Flatbush Ave. Raven Property Advisors’ Rich Velotta and Danny Handweiler represented the Pintchiks and the Ostads in the deal.

“Portfolios like this, consisting of small- to midsized mixed-use buildings, are rarely aggregated on

this scale, particularly in the same neighborhood,” Velotta said in a statement. “The buildings have been part of generational family ownership, so opportunities like this for a purchaser are truly once

in a lifetime.”

The Pintchik family’s business dates back to 1912, when Nathan Pintchik launched it as a series of paint and hardware stores. The family acquired dozens of build-

ings over the years, according to a 2008 article on the family in the New York Sun. The piece estimated that, at the time, the family owned up to $100 million in development and air rights.

Plaza District’s Solow Building hires restaurateurs behind one of world’s best bars for tenant-only eatery

By C. J. Hughes

A tower that for decades was considered one of the city’s premier corporate addresses may be acknowledging that it’s no longer the only game in town.

The high-rise 9 W. 57th St., a 50-year-old, slope-faced Plaza District tower that’s also known as the Solow Building, has added a tenants-only restaurant from the trendy Kent Hospitality Group on its 27th floor that opened Jan. 9. With Vista Restaurant and Bar, which replaces unused office space that has views of Central Park, landlord Soloviev Group becomes the latest owner of an older building to beef up its in-house culinary offerings as a way to attract and retain tenants, and perhaps boost rents.

Newer, rival office towers tend to have snazzy on-site eateries right out of the gate. For instance 1 Vanderbilt, the SL Green Realty-developed skyscraper that opened in 2020 and is now fully leased at prices that in some cases are reportedly $300 per square foot a year, features two food-focused amenities from chef Daniel Boulud: the restaurant Le Pavillion and the gourmet food hall Epicerie Boulud.

The developer of 9 W. 57th, the late Sheldon Solow, did operate the well-reviewed French restaurant Brasserie 8 ½ in the tower’s basement for decades. And Solow

exhibited a knack for getting top dollar for some spaces. A decade ago Solow managed to land a private equity tenant at a then-lofty rent of $200 per square foot annually even though deals like that were few and far between. Indeed, the 50-story skyscraper reportedly faced a 30% vacancy rate for years.

Brasserie 8 ½ closed at the start of the pandemic and never reopened. An Italian-themed version, Cucina 8 1/2, opened in its place in 2022.

Revamping 9 W. 57th

After Solow died in 2020, his son Stefan Soloviev (who prefers to go by what he claims is the original spelling of the family name) took over as chairman of the firm and appears to have made revamping 9 W. 57th a priority. The occupancy rate of the 1.7 million-squarefoot travertine-and-dark-glass site near Fifth Avenue is currently 92%, according to data provider CoStar, much stronger than it’s been in years.

Investment firm Apollo Global Management, fashion house Chanel and theater chain owner Loews Corp., as well as Soloviev Group itself, are on the tenant roster.

For its part, Kent Hospitality Group, which has won financial backing from hoops superstar LeBron James, has earned awards and high praise recently, even as

its founder, Jamal James Kent, died of a heart attack in June at 45. The two restaurants it runs in another distinctive Manhattan tower, the Art Deco former AIG headquarters 70 Pine St. downtown—their names are Crown Shy and Saga—have both earned Michelin stars in the past few years. Similarly, KHG’s cocktail lounge on the 64th floor of 70 Pine, Overstory, has scored nods as one of the world’s best bars. All are open

to the public, unlike Vista. Vista, which serves breakfast and lunch, offers a turkey club for $22 and cod with mushrooms for $28. Cocktails include Strawberry Gold Rush, a bourbon-based drink, and Midtown, with rye and vermouth.

It’s not the only new KHG offering for 9 W. 57th, which was recently rebranded as 9W57. The company will also install two smaller, more casual eateries, the

and

Soloviev, who could not be reached by press time, has also hired KHG to reinvent the subterranean space, known for its sweeping staircase and deep banquettes, where Cucina 8 ½ is now based. That replacement is scheduled to open later this year, a Soloviev spokeswoman said.

Park View Cafe, also on the 27th floor,

Cafe V, near the West 58th Street entrance of the blockthrough building.

458-480 Bergen St. | GOOGLE STREET VIEW

9 W. 57th St., Midtown COSTAR

New York cannabis retailers sue state over store proximity rules

By Adam Jackson, Green Market Report

Four licensed cannabis retailers filed a lawsuit Jan. 9 against New York state regulators, challenging recent approvals that allow some dispensaries to operate within 1,000 feet of existing stores — a move they say undermines recent state rules designed to prevent market saturation.

The Article 78 lawsuit, filed in New York Supreme Court by dispensary operators L.O.R.D.S., Actualize Dispensary, Astro Manage-

lawsuit claims the CCB improperly waived these protections by citing “public convenience” without proper analysis or evidence.

During the Jan. 9 CCB meeting, several dispensary owners voiced strong opposition to the waivers.

“If a certain store was completely sold out of all our products, I could understand the need for additional locations, but we’re nowhere near that point,” said Vanessa Yee-Chan, owner of Alta Dispensary, during public comments.

Another licensee, Berkay Sebat, co-owner of Flowery Soho, criticized the lack of transparency around the waiver process.

“By ignoring proximity protections and granting waivers without due process, communities will be oversaturated and CAURD operators will fail.”

Vaughn Jefferson, owner of L.O.R.D.S. LLC

ment and R&R Remedies, targets the Cannabis Control Board and Office of Cannabis Management over waivers granted to at least six dispensaries, according to court documents.

Two CCB resolutions from late 2024 approved new dispensary locations within protected buffer zones, including one just 522.9 feet from an existing store. The licensees argue these “Public Convenience and Advantage” (PCA) waivers were granted “without notice, analysis or due process.”

“It’s as though the rug were pulled from under us without notice or reason,” Jillian Dragutsky, CEO of Astro Management, said in an emailed statement. Her company was weeks from launching when a waiver was granted for a nearby competitor.

“The Public Convenience Waiver recently issued by the CCB to an applicant seeking to open a dispensary in a location less than 1,000 feet from Astro Management’s already proximity protected location has put our company in an untenable position,” Dragutsky said.

The state’s buffer rule was established to prevent clustering of dispensaries and provide market stability for new businesses. But the

He cited particular concern about a waiver granted to multistate operator Curaleaf near his location.

“We don’t know how they’re being given out, what data and what decisions are being made,” he told the board.

Sebat, who operates his CAURD-licensed dispensary adjacent to Alta Dispensary, warned that the board’s approach to waivers would only trigger more legal challenges.

“The CCB, in particular, and OCM go through so many lawsuits and just lose every single time because they keep making decisions like this,” he said during public comments Jan. 9. “I guarantee you with the amount of PCAs that are being given out to these multibillion dollar companies, you’re going to get Article 78, you’re going to go to court, there’s going to be another injunction.”

He urged regulators to establish clear standards through regular legislative channels rather than what he characterized as arbitrary decisions.

“I really don’t think you need a Curaleaf between me and Vanessa’s store — they’re a billion-dollar company,” Sebat said. “If it was another small business, that could be kind of understood. But that is not a small business. They’re just here to wipe us out.”

A contentious rule

The buffer rule has been contentious since its implementation, with the argument that location

protection has led to other nearby applicants getting disqualified in the process.

Gracious Greens LLC, a service-disabled veteran-owned business, sued regulators in March after one of its proposed locations was disqualified when proximity protection was granted to a competitor within 600 feet of their site.

Thirty-eight other CAURD licensees have signed affirmations supporting the legal challenge, including Yee-Chan and Sebat’s stores, as well as prominent retailers like Housing Works Cannabis Co. Industry groups, such as the New York Cannabis Retail Association and National Hispanic Cannabis Council, have also backed the lawsuit.

“The CCB continues to act with capriciousness and in violation of its own proximity regulations,” Osbert Orduña, CEO of The Cannabis Place dispensary and co-chair of the National Hispanic Cannabis Council’s Tri-State Chapter, said in a statement.

Britni Tantalo, president of the New York CAURD Retail Association, said that the group isn’t opposed to waivers but wants “concrete rules” requiring public input and appeal processes, similar to alcohol licensing.

Adding to the in-fighting tension is the most recent push by established operators to prevent review of thousands of applications and “slam the doors behind themselves,” according to Beck Hickey, owner of Zen + Leaf, a Hudson Valley cannabis-friendly boutique hotel with an onsite retail store. The board approved just 31 new licenses across various categories on Jan. 9, citing an existing court injunction and holiday scheduling for the reduced volume.

The latest lawsuit seeks to overturn the waiver approvals and restore proximity protections for the affected dispensaries.

“By ignoring proximity protections and granting waivers without due process, communities will be oversaturated and CAURD operators will fail,” Vaughn Jefferson, the majority owner of L.O.R.D.S. LLC, one of the plaintiffs, said in a statement.

This article originally appeared in Green Market Report.

City to close 13 more migrant shelters, including in Clinton Hill

By Caroline Spivack

The Adams administration will shutter 13 more emergency migrant shelters, including a massive Brooklyn facility where 3,500 migrants currently reside, as the number of asylum seekers traveling to the city continues to recede, Mayor Eric Adams said Jan. 10. The closures will dismantle shelters in every borough but the Bronx, along with one in Yonkers, by June, and marks an escalation of the mayor’s efforts to streamline the city’s rapidly deployed network of migrant shelters. The new batch of closures comes a month after Adams announced that the city had already begun to wind down 25 shelters dedicated to newly-arrived migrants.

But even as the city works to close dozens of emergency shelters the Adams administration said Jan. 10 that it will open a new migrant facility on Bruckner Boulevard in the Bronx dedicated to single men who are being transferred from the tent-based emergency site on Randall’s Island. Set to open later this winter, the new Bronx center will house up to 2,200 people in a seven-story warehouse building, according to the city. The city’s Housing Recover Operations office will operate the new space. The 2,000-person migrant shelter at Floyd Bennett Field and the problem-plagued relief center on Randall’s Island are among the other shelters set to close in the coming months. All told, the series of closures will cut the city’s capacity to shelter migrants by 10,000 beds, according to the Adams administration.

“The additional closures we are announcing today, provides yet another example of our continued progress and the success of our humanitarian efforts to care for everyone throughout our system.”

Eric Adams, NYC mayor

Most notably among the list of closures is a former warehouse turned sprawling migrant shelter on Hall Street in Clinton Hill, which opened in 2023 with no public announcement to the dismay of locals. Emergency shelters at 99 Washington Street in Manhattan, Hotel Nedia in Queens and the Holiday Inn in Staten Island are included in the closures.

“The additional closures we are announcing today, provides yet another example of our continued progress and the success of our humanitarian efforts to care for everyone throughout our system,” Adams said in a statement.

The swell of shelter closures follows a shift in Adams’ rhetoric on how the federal government should treat migrants in the boroughs. Adams has recently questioned whether undocumented immigrants accused of crimes are entitled to due process, and said he is considering using his executive powers to change the city’s sanctuary laws to enable more cooperation with the federal government.

Closed 150 hotels

More than 150 hotels that were converted to shelters by the city have closed since the migrant crisis began in 2022. It’s unclear what will become of the former shelters, but a developer plans to convert at least one site into a new apartment building.

Last summer, real estate giant RXR Realty submitted plans with the city to turn the Clinton Hill relief center into a mixed-use residential and retail complex with more than 600 apartments.

The Holiday Inn Express in Brooklyn is among 13 more emergency migrant shelter sites the city intends to close by June. | BLOOMBERG

Touro University continues to grow, snaps up a Harlem site

By C. J. Hughes

The rapidly expanding Touro University has just gotten bigger.

The private nonprofit institution, which held its first classes in 1971 in a donated ex-Ivy League club and now has a nearly $300 million real estate portfolio, has purchased 153 E. 124th St. in Harlem.

The property, which is home to the nonprofit New York College of Podiatric Medicine, whose tall painted sign is a familiar sight from the nearby Metro-North station, traded for $42 million, according to a deed that appeared in the city register Jan. 9.

With the purchase of the 5-story, 56,000-square-foot site, which was built in 1927 for the podiatric school, Touro also absorbs the school’s 350-person student body, effective immediately, a Touro spokeswoman said.

The acquisition comes on the heels of other recent property plays for Touro, a nonsectarian university that had been founded with a focus on Jewish heritage; it’s named in part for Judah Touro,

a Jewish New Orleans-based merchant injured by a cannonball in the War of 1812.

In 2022, the same year that Touro shed its “college” moniker as it increased in graduate-level academic offerings, it leased seven floors encompassing 250,000 square feet at the office tower 3 Times Square to create its health care-focused Cross Rivers campus. It added an additional nearly 100,000 square feet at the highrise, which is co-owned by Rudin Management and longtime occupant Thomson Reuters, in 2023.

Made big regional moves

Touro, whose president since 2010 has been Dr. Alan Kadish, has also made big regional moves recently. In 2022 it developed a new academic building on its existing campus in Central Islip, on Long Island, that offers classrooms for law, education and medical graduate students.

In addition to classrooms, No. 153, which sits between Park and Madison avenues, also offers a

foot clinic that serves 25,000 patients a year, according to its website. Touro will continue to operate the clinic after renovating it, the university spokeswoman, Ellie Schlam, said.

Touro, which began life teaching 50 students at 30 W. 44th St., the former Yale Club and current Penn Club, today has a $37 million endowment, according to its Form 990 tax return for 2023, the most recent year publicly available. That

year Touro valued its total real estate holdings at $289 million before accounting for depreciation, said the form, which added that the university also owned about $17 million worth of land.

No. 153 has a current market value, in the eyes of city appraisers, of $6.5 million, though as a nonprofit its assessment is zero, tax records show. Properties owned by schools and similar groups often pay nothing in the

way of property taxes, a situation that critics have taken aim at in recent years at a time of major growth for many colleges. Touro, whose enrollment is 19,000, offers classes at 35 sites, including in seven states and two countries. One of its main locations is close by in Harlem at 230 W. 125th St., a 148,000-squarefoot block-through former department store that the school has leased since 2007.

153 E. 124th St., Harlem | BuCK EnnIS

HIGHEST-PAID STATE EMPLOYEES IN NEW YORK

HIGHEST-PAID CITY EMPLOYEES IN NEW YORK CITY

Poll after poll shows that New York City voters are unhappy with Adams’ leadership and concerned about the state of the city. Sixty-four percent of voters disapproved of Adams’ performance in an October New York Times-Siena College survey, which ranked crime as residents’ top concern — followed by immigration and the cost of living. Voters across the country and around the world have been rejecting incumbents in favor of their challengers, frustrated by inflation and post-Covid malaise.

But even if some voters blame the mayor for crime rates that remain elevated since the pandemic, the sour mood might favor Adams — the centrist former police captain — over his more left-leaning declared challengers. The wild card remains former Gov. Andrew Cuomo, a fellow moderate who is clearly relishing the will-he-won’the speculation over his possible City Hall run.

“History has shown us that when public safety is a dominant issue — 1977, 1993, 2021 — it tends to favor the moderate candidate,” Coffey said. “When folks feel safe, people are more willing to take a chance, like Bill de Blasio in 2013.”

Adams’ credibility on crime has been weakened by high-profile subway attacks and an increase in some offenses under his watch, such as felony assaults. And the law-and-order mayor has overseen turmoil at the New York Police Department: discord and scandal led to the departure of two commissioners in three years, and federal authorities are now investigating a former top officer whom Adams had championed.

Still, shootings and overall subway crime are on the decline, and Adams believes he maintains an upper hand over his rivals. “When others wanted to defund the police, we defended them,” he reminded his audience at the Jan. 9 State of the City speech.

The mayor has also developed a more nuanced message on public safety compared to his first year in office, when he defied statistics and proclaimed, “In my professional career, I have never witnessed crime at this level.” (Adams made that remark in May 2022, months after taking office — creating the awkward impression that he was questioning his own leadership on crime.)

These days, Adams toes a different line, stressing that crime is generally decreasing but quickly acknowledging that New Yorkers have yet to feel the benefits.

“Perception is reality for folks,” Adams said in December. “No matter how good our numbers are, people got to feel safe.”

‘The default is sticking with the mayor’

Adams is a greatly diminished figure compared to when he was first elected. At the behest of Gov. Kathy Hochul, he has largely purged his administration of the high-level staffers who were swept

up in a web of federal probes while others have departed on their own — an exodus so stark that Adams began his State of the City speech by thanking the staffers who remained.

Yet for all his woes, the mayor has not been abandoned by two groups whose support could prove decisive: organized labor and big business.

“The business community has shared most of the mayor’s priorities, whether it’s public safety or affordable housing, or challenges with mental health and homelessness,” said Kathryn Wylde, president and CEO of the Partnership for New York City. “From that standpoint, he’s hit all the right notes, and they feel that he’s taking the city in the right direction. Obviously, his legal problems and the cloud that’s put over his administration is unfortunate and hopefully will be resolved relatively quickly.”

Here, too, Adams may benefit from the electorate’s rightward drift, embodied by Donald Trump’s well-documented gains in the five boroughs last fall. Al-

“The business community has shared most of the mayor’s priorities, whether it’s public safety or affordable housing, or challenges with mental health and homelessness.”

Kathryn Wylde, president and CEO of the Partnership for New York City

though some progressive challengers like Assemblyman Zohran Mamdani have cast Adams as beholden to the real estate industry, his pro-business posture has so far not emerged as a major issue in the race.

“In marked contrast to the de Blasio era, there’s no one who’s out there aggressively demonizing business and real estate,” Wylde said. “We’re grateful for that because it sets a much better political tone in the city.”

Instead, ably riding the shifting political winds on housing, Adams has embraced new development as the center of his affordability agenda, embodied by his City of Yes plans and newly announced goals to build aggressively in Manhattan. Those initiatives have endeared Adams to the real estate industry — no small consideration for him politically, since real estate developers could be a key source of campaign donations now that he has been denied millions of dollars in public

“There were some who said, ‘Step down.’ I said, ‘No, I’m going to step up.’ Even dark moments are not burials. They’re plantings.”

Eric Adams, NYC mayor

matching funds due to allegedly illicit fundraising.

Adams’ emphasis on the city’s affordability crisis has also kept him in the good graces of the labor unions that endorsed him in 2021, whose members worry constantly about being squeezed by the rising cost of housing, one union official told Crain’s . Unions’ mass-mobilization power could make or break Adams’ re-election, and he has delivered on some of their top priorities: signing a hotel-licensing bill long sought by the Hotel and Gaming Trades Council, and raising wages for city workers who make up the union DC37.

“Looking at the landscape the way it is, you’d be hard-pressed to make a decision to endorse against him,” the union official said. “The default is sticking with the mayor.”

Adams’ biggest threat

Much could change between now and the June 24 primary election. Federal prosecutors have suggested they may file additional charges against Adams, further harming his image. His trial, set to begin in mid-April, could result in convictions on felony charges including bribery and fraud — although President-elect Trump has suggested he may pardon Adams.

Then there’s the possible candidacy of Cuomo, widely seen as Adams’ biggest threat due to his high name recognition, centrist credentials and expected popularity among the same Black voters that Adams needs to win.

But assessing the race today, the notion of Adams winning a second term after being indicted seems plausible. Never missing a chance to paint himself as the underdog, Adams went off-script at the end of his Jan. 9 speech to predict a comeback.

“There were some who said, ‘Step down.’ I said, ‘No, I’m going to step up,’” he said. “Even dark moments are not burials. They’re plantings.”

Mayor Eric Adams tours a recently closed migrant shelter on Jan. 11 at Floyd Bennett Field in Brooklyn. JUSTIN PERSAUD/MAYORAL PHOTOGRAPHY OFFICE

New York City Mayor Eric Adams delivers his fourth State of the City address at the Apollo Theater in Harlem on Jan. 9. | BLOOMBERG

SUBWAY

From Page 1

pricing this month.

The new contract covers a lot: The work includes the rehabilitation of an existing, unused Second Avenue subway tunnel built in the 1970s that runs from roughly 115th Street up to 120th Street, the use of massive boring machines to dig out two tunnels — one for uptown and one for downtown service — between 120th Street and Second Avenue

located in Midtown, with the Chicago-based Walsh Construction Co. and the Evansville, Indiana-headquartered Traylor Bros., Inc.

Transit officials say they expect to award the contract by the third quarter of this year.

Early last year, transit officials awarded an initial contract for a project to relocate utility lines that run under and along Second Avenue and neighboring streets.

Queens-based C.A.C. Industries secured the $182 million agreement, which was briefly paused last summer while congestion pricing was on hold until Hochul kicked in $54 million in state funds to keep the utility work going.

In hopes of avoiding more delays and the cost overruns it encountered in the earlier phase, the MTA says it is doing some things differently.

to west of Malcolm X Boulevard and 125th Street, and the creation of a cavern that will house the new 125th Street station.

The MTA has already pre-qualified two teams of contractors who will compete for the new contract: A joint venture by Nanuet, New York-based construction firm Halmar International and the Miami-headquarter Civil & Building North America; and a second joint-venture led by infrastructure juggernaut Skanska USA, which is

The first three stations of the Second Avenue subway line opened in 2017 at a cost of $4.5 billion, nearly 90 years after the subway extension was first proposed.

In hopes of avoiding more delays and the cost overruns it encountered in the earlier phase, the MTA says it is doing some things differently. That includes acquiring street-level properties and advancing utility relocation work earlier on in the process, retrofitting previously built tunnels, reducing station sizes and streamlining the number of contracts.

Transit officials say these strategies have the potential to shave more than $1 billion off the second phase.

Hotel Elysée to close in March for renovations, reopen for centennial

By Julianne Cuba

One of the city’s most storied hotels will shutter for renovations in the coming weeks with plans to reopen in 2026 to celebrate its centennial.

Hotel Elysée at 60 E. 54th St. will close its doors March 31 for about 18 months of interior construction work slated to be done in time for its 100th year of operation. Through the decades, its guests have included stars such as Marlon Brando, Tennessee Williams and Tallulah Bankhead.

The 49 employees who work at the nearly-century-old, 15-story Midtown inn, between Park and Madison avenues, will be affected by the temporary shutdown, according to a notice filed with the state’s Department of Labor Jan. 10. A representative for the hotel, however, told Crain’s that the workers will be “well looked after” throughout the duration of construction. The Hotel and Gaming Union, AFL-CIO 709, which represents the hotel’s employees, did not return a request for comment by press time.

Work on the 103-key hotel, which was built in 1926 and largely retains its classic charm after first

undergoing some renovations in 1993, includes increasing the size and number of its suites, and “transforming the property into a beautiful, luxury boutique hotel,” the representative said, who declined to provide a price tag for the renovation work.

Monkey Bar will be

open

Monkey Bar, the hotel’s swanky restaurant on its ground floor, is expected to remain open, the hotel representative said.

Hotel Elysée’s name and ownership structure will remain the same. It was bought by hoteliers Henry Kallan, Richard Born and Ira Drukier for $55 million in 2016, records show, and is leased to a private entity named after its address, which is a subsidiary of European-based Hera Hospitality, according to information from the representative. The management firm is HK Hotels. Chicago-based Hogsalt Hospitality, which operates Monkey Bar, will also remain the same.

The bedroom of the presidential suite at Hotel Elysée. | HOTEL ELySÉE

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Notice of Formation of KAYS4PRES LIMITED LIABILITY

Zebra Tech Corp has an opening in Holtsville, NY for RF Antenna Eng, Advncd: Dsgn & test portble, battry-pwrd hndhld dvcs w/ embd wirlss rdio tech. BS+5 yrs exp reqd. Salary: $140,109-$183,200. Salary offered will vary w/in range based on variety of factors. All Zebra roles eligible for cash incentive programs. Telecom may be prmtd. When not telecom, mst rprt to wrkste. To apply email resume to Jobs@Zebra.com & ref job #8201145. If you are an indvdal w/a disbility & need asstnce in aplyng for psiton, contct us at workplace.accommodations@zebra.com. The EEO is the Law. The posters are avalble here: https://www.eeoc.gov/sites/ default/files/2023-06/22-088_EEOC_KnowYourRights6.12.pdf; https://www.dol.gov/sites/dolgov/files/ofccp/regs/compliance/posters/pdf/OFCCP_ EEO_Supplement_Final_JRF_QA_508c.pdf

Loans and Structured Credit Associate (The Carlyle Group Employee Co., LLC – New York, NY); Mult. Pos. Avail. Offering salary range of $130,000$170,000 / year. Develop & conduct industry research on healthcare trends, drivers & expected macro-economic performance. Source investment ideas through industry relationships & network of contacts, monitoring portfolio positions & compiling relevant information necessary to successfully brief the investment team on proper asset allocations. F/T. Position based in New York, NY; telecommuting permitted up to once per week. To apply, send resumes to HR3@carlyle.com & Reference Job ID: 8076238.

REQUEST FOR PROPOSALS

The New York Racing Association, Inc. (“NYRA”) is soliciting bids from qualified vendors to provide comprehensive turn-key Technology SystemsCNS/VOIP; Audiovisual; Video Production; LED Videowalls & CCTV Video Cameras and Mounts at the new Belmont Park Racetrack located in Elmont, New York, USA. The resulting project will be owned and operated by NYRA. Please be advised that the Authorized Contact Person for all matters concerning this RFP is Allan Howell:ahowell@nyrainc.com The bid document may be obtained from: procurement@nyrainc.com¬ or please register as a vendor on NYRA’s bidding portal at no cost. www.bidnetdirect.com/new-york/nyra

A nonprofit organization in FAR ROCKAWAY is seeking sealed bids Security Personnel. The election criteria will be based on knowledge of security, adherence to work schedule, prior experience, references and cost. Specifications and bid requirements can be obtained by contacting us at hsgfarrockaway@gmail.com. All interested firms will be required to sign for the proposal documents and provide primary contact, telephone and email address. Bids will be accepted until January 31st, 2025 and work is to commence by January 21,2025 and completed by August 31, 2027.

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governor vowed to double down on safety-minded investments to grapple with the stubborn challenge of high-profile crimes in the subway. Hochul intends to throw more law enforcement at the problem with a promise to bolster the NYPD’s already robust presence in the system, with more cops on platforms and in trains, and by adding police patrols to every overnight train (from 9 p.m. to 5 a.m.) for at least the next six months.

Physical infrastructure investments are also part of Hochul’s subway safety strategy. The governor said recently that she intends to kick in state dollars for MTA crews to install platform barriers at an additional 100 stations — up from the current 15 — by the end of 2025. The fixed, waist-high steel barriers are designed to give riders protection from being pushed or accidentally falling into subway tracks.

The investments come after a spate of brutal crimes, including a woman who was set on fire in a Brooklyn station and a man who was pushed into the path of a train in Manhattan. The events earlier this month rocked the subway and put many riders on edge. The timing couldn’t be trickier for Hochul and the MTA, as the authority works to lure travelers out of cars

Kathy Hochul’s climate agenda noticeably lacked any mention of how she intends to achieve the state’s flagging clean energy goals in the face of president-elect Donald Trump’s open hostility to renewable energy. GOVErnOrKaTHyHOCHuLOFFICE/FLICKr

and onto mass transit with the start of congestion pricing.

During her speech, Hochul did not even mention the congestion pricing program that she famously “paused” last year. But her policy book notes that the new tolling revenue will fund the Second Avenue Subway’s extension to East Harlem and new signal systems on the A/C and B/D/F/M lines, along with other transit investments.

Sparse detail on clean energy goals

Hochul’s climate agenda noticeably lacked any mention of how she intends to achieve the state’s flagging clean energy goals in the face of president-elect Donald

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Notice of Formation of SHARAWADGI, LLC Arts of Org filed with Secy of State of NY (SSNY) on 10/31/24. Office Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 19 STUYVESANT OPAL, APT 12A, NY, NY 10009 Purpose: any lawful act

Trump’s open hostility to renewable energy. Trump vowed this month that “no new windmills” will be built along the country’s coasts once he’s back in the White House.

Her State of the State agenda describes addressing climate change as “a moral imperative and an enormous economic opportunity.” Hochul announced Jan. 14 that she plans to direct $1 billion in state spending toward a more sustainable future and growing New York’s green economy.

Among those efforts is broadening the role of nuclear energy in powering the state’s electric grid. New York will develop a so-called Master Plan for Responsible Advanced Nuclear Development that

will guide any future nuclear projects in the state, according to Hochul’s office. The state also intends to support a request for federal grant dollars by the Baltimore-based Constellation Energy, the owner of New York’s operating nuclear plants, to explore bringing “a small modular reactor” online — such infrastructure is a significantly scaled-down version of a conventional nuclear power reactor.

To help fund these and other climate investments, Hochul has directed her agencies to advance the state’s ambitious cap-and-trade program to raise billions of dollars toward reducing greenhouse gas emissions. The system, which Hochul signed into law at the eleventh hour in December, would create a market in which polluting companies can purchase or obtain allowances for their emissions. Proceeds from the envisioned auctions would then go toward developing renewable energy and other climate-adjacent projects. Hochul’s office said she aims to propose regulations for the program by the end of year.

Under her climate agenda, businesses would also have an easier time recovering after disasters, such a flood or fire, with easier access to the Jobs Retention Tax Credit Program. A newly proposed grant would similarly support businesses in modernizing their dated refrigeration equipment with new, low-emissions alternatives.

AI layoff notices and faster procurement

The State of the State agenda includes a grab-bag of dozens of other policies that Hochul’s office says are designed to improve safety and affordability.

After seeking to harness artificial intelligence through the Empire AI consortium that launched last year, Hochul now wants new regulations on the technology. Under a new proposal, employers who are required to submit layoff notices through the state’s WARN system would need to disclose whether a layoff is related to the business’s use of AI.

On the development front, Hochul wants to expand the use of “alternative delivery” procurement methods that can speed up planning for infrastructure projects. While not offering many details, the governor’s office said it wanted to allow government agencies to use methods like progressive design-build and construction-manager build, which pair builders with architects earlier in the planning process — systems that the Adams administration has successfully pushed more within the city.

And with an eye toward boosting the state’s workforce, Hochul pledged to make community college free for students aged 25 to 55 who are pursuing associates degrees in high-demand fields like nursing, teaching, engineering and technology.

Notice of Qualification of DAVANTI LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/11/24. Office location: NY County. LLC formed in Delaware (DE) on 03/21/22. Princ. office of LLC: 32 Ave. of the Americas, 26th Fl., NY, NY 10013. NYS fictitious name: DVTI NY LLC. 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 DE Secy. of State, 1351 W. North St., Ste. 1014, Dover, DE 19904. Purpose: Any lawful activity.

Notice of Qualification of HMSHOST JFK T5 PARTNERS LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 12/16/24. Office location: NY County. LLC formed in Delaware (DE) on 12/03/24. Princ. office of LLC: 1 Meadowlands Plaza, E. Rutherford, NJ 07073. 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. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Airport operator of retail stores.

After stormy years, long-struggling residential real estate broker Compass finally turns a profit

By Aaron Elstein

Last year couldn’t end soon enough for most residential real estate brokers.

Existing home sales nationwide in September hit their lowest level since 2010, thanks to scant inventory and mortgage rates of nearly 7%. Also in 2024, the National Association of Realtors agreed to pay $418 million and change members’ compensation practices after a jury found that brokers had unfairly forced customers to pay artificially inflated commissions when selling their home.

But 2024 was also when one long-struggling real estate broker, Compass, finally turned profitable in the second quarter, seven years after the Japan-based SoftBank Vision Fund showered it with venture funding. On Jan. 15, Flatiron District-based Compass said it would report record annual earnings on an “adjusted” basis and free cash flow — thanks in large part to years of painful cost-cutting. Its stock price leaped by more than 20%.

Compass says its 33,000 brokers have a hand in 4.8% of all U.S. home sales. Its sales force is about a tenth that of industry giant Any-

where Real Estate Group, owner of Century 21, Better Homes & Gardens Real Estate, Coldwell Banker, Corcoran, and Sotheby’s International Realty. But Compass brokers are strong at the high end of the market and home sales they had a hand in averaged $1 million in the third quarter, double that of Anywhere franchisees.

Getting to profitability has been a long, arduous voyage for Compass, which CEO Robert Reffkin co-founded in 2012 and five years

later raised $450 million from SoftBank, the same firm that famously backed another Manhattan real estate startup, WeWork. SoftBank’s strategy, described by executives as “blitzscaling,” was to give startups enormous sums to turbocharge growth and knock out competitors, with profits to be worried about later. Over 2018, 2019, and 2020 Compass piled up nearly $1 billion in operating losses.

The brokerage firm went public in 2021 at $18 a share and a $8.2

billion valuation, or about $2 billion less than SoftBank had been aiming for. A year later the Federal Reserve started raising interest rates and the housing market started to cool off after more than a decade of non-stop growth. Reffkin hunkered down and slashed costs.

He replaced much of top management and eliminated other roles, including chief business officer and chief product officer. Unprofitable ventures were wound down, including a title and escrow startup acquired in 2020, and headquarters were scaled back, with the firm moving out of 100,000 square feet at 90 Fifth Ave. for about 80,000 square feet two blocks away at 110 Fifth, a building designed by the architects McKim Mead & White. Since the year it went public Compass has lopped off $700 million in annual operating expenses, or 14% of overhead.

All the cuts started showing dividends last summer when Compass posted $20.7 million in second-quarter net income. The firm had a net loss of $1.7 million in the third quarter, but reported $52 million in “adjusted” earnings for the quarter and $109 million for the first nine months of last year.

Costs excluded from adjusted earnings include its $57.5 million settlement over broker commissions.

Will home sales cooperate?

Now that Compass is getting its house in order, the question is whether home sales will cooperate. Economists have their doubts because mortgage rates remain uncomfortably high for many would-be home buyers.

“Unless rates fall significantly— something in the order of a full percentage point or more—we do not expect inventory of existing homes to come on the market in large numbers, limiting supply,” Freddie Mac said last fall. “We expect home sales to remain muted in…2025.”

Such uncertainty explains why Compass stock still trades for less than $7 a share even after a recent rally. But executives are confident they’re positioned for whatever the market may bring.

“We worked hard and never gave up,” Rory Golod, the firm’s president of growth and communications, recently told Crain’s “And now we’ve got a company that will be around for decades.”

A Compass office at 851 Madison Ave. | BUCK ENNIS

FOCAL POINTS

Digital banking service appeals to recent, Spanish-speaking immigrants

Neobank Comun nds niche with services for the U.S. Latino population

By Olivia Bensimon

One of the biggest obstacles

Andres Santos faced upon moving to the United States from Mexico for graduate school was signing up for a bank account. He tried to do it online but kept getting rejected, and when he visited a bank branch in person, he was asked to provide paperwork he didn’t have. e process took weeks, and when he nally obtained an account, he was required to keep $1,500 in it at all times or risk a $14 monthly fee.

“ at’s hard to go through,” he said. “Some people just prefer not to go through that ordeal because it is so full of friction, only to end up with a card where you’re paying fees.”

Santos knew he was not alone in struggling with this when he co-founded the neobank Comun with Abiel Gutierres, chief technology o cer, in 2022. e idea was to nd a way to reach the Latino community across the country and allow many of them to bene t from bank services for the rst time.

Startup neobanks, which provide digital banking services to their users through partnerships with traditional banks, enter an enormously crowded market. As of 2022, more than 400 neobanks exist worldwide and serve more than 1 billion users, according to a report by the consulting rm Simon-Kucher. e rm reported that 50 neobanks launched worldwide in 2021 alone.

Comun’s strategy is to focus on a “niche” by targeting the sizable U.S. Latino population — more

than 60 million people according to data from the Census Bureau — a large number of whom are unbanked or underbanked.

Another strategic angle for Comun was to make transactions easier for the recipient. Users can send international remittances without the receiver needing to have a debit card or bank account — they can pick up cash at more than 300,000 locations across Latin America.

Comun has raised $30.5 million since its founding, including a $21.5 million Series A round over the summer. Santos said the company is currently handling more than $1 billion in transactions a year and has processed more than $1 million in remittances to users’ home countries since launching the service in March 2024. He said the company currently has more than 100,000 users, mostly based in Texas, California, Florida, Illinois, Arizona and New York, and that it is growing by 50% each month. He declined to share the company’s revenue.

Using a valid ID

Comun allows people to sign up for a checking account, debit card and direct-deposit services using a valid ID from the applicant’s country of origin online on their app. No Social Security number is required. Clients can send money to relatives in 17 Latin American countries at lower prices than institutional competitors, Santos said. In addition to their online services, he added, clients can de-

posit cash at more than 100,000 locations nationwide. Most of the people on Comun’s sta of over 45 employees speak Spanish.

Comun, as its name implies, was built on the concept of community. People who are unbanked pay high fees for check-cashing services, wait longer to receive funds, and encounter di culties saving money, paying bills or qualifying for credit.

“Our view of what we’re trying to do is a better version of a community bank that’s not limited by geography but by community,” Santos said. “ ere’s a lot we’re building to improve services to the families that are in Latin America. We’re building to help them continue to scale in the U.S. So that means getting access to building credit, better services at lower prices, and just being a goodnancial partner for that family.”

Hermene Gildo signed up for Comun in June after being unable to register for a bank account at other U.S. banks. Gildo, who lives in Staten Island and works as a cook at a Mexican restaurant, mostly uses Comun to send money to his relatives in Guatemala.

“If I need to send money to my wife and family quickly, they receive it in minutes,” Gildo said in Spanish. “In an emergency, I will receive fewer charges.”

He appreciated how easy it was for him to sign up — ve minutes through the app, he said — and that the sta spoke Spanish. He was once charged for something without consent, and Comun’s sta helped him recover his

Full-time employees 45

Funding Comun has raised $30.5 million since its founding, including a $21.5 million Series A round over the summer.

Product mix Customers can access checking accounts, debit cards and direct-deposit services through Comun’s app.

Growth strategy Connecting to the Spanish-speaking immigrant community; Comun touts itself as “Your nancial ally in the USA.”

Website en.comun.app

money.

Over 33% of all unbanked households in 2023 were Hispanic despite that ethnicity making up 14.8% of households, according to the 2023 FDIC National Survey of Unbanked and Underbanked Households. e report found that Hispanic households were ve times as likely to be unbanked compared to white households.

“It’s been a demographic that has completely been underserved by the traditional banks out there,” said Antonio Osio, a general partner at ANIMO Ventures, one of Comun’s early investors. He added that co-founders Santos and Gutierres have been able to understand their customers in a way that sets them apart because they are building a product for people with similar backgrounds and experiences.

“ ere’s a huge need for them and for nancial services. And not just banking accounts but also remittances, cash deposits, insurance and investment products,” Osio said. “To that end, Comun wants to build that nancial hub for the Latino community and eventually the immigrant family.”

Founded 2022 Management co-founders Andres Santos, CEO, and Abiel Gutierres, CTO

Comun co-founders Abiel Gutierrez and Andres Santos | BUCK ENNIS