Crain's New York Business, April 8, 2024

HOUSING’S NEW POWER BROKERS

By | Nick Garber

e ght for housing reforms in New York is often described as a battle between tenants and landlords. But any action on the state’s housing crisis this year may actually be decided by another group: labor unions.

After an ambitious set of housing policies collapsed in Albany last year, some observers attributed the failure to the fact that labor organizations were not closely involved in the discussion. Now, with the

Anxiety grows over banks’ big real estate exposure

By Aaron Elstein

ere was pretty much only one thing anyone wanted to talk about when Morgan Stanley analysts made the rounds visiting investors last month: commercial real estate. e mounting anxiety was captured best in a Fitch Ratings report on April 2 alarmingly headlined “Global Contagion Risk Growing from Rising CRE Losses, Led by O ce.”

If global contagion does emerge, there’s nowhere for banks to hide because, collectively, they’ve loaned nearly $3 trillion to o ce buildings, hotels, shopping centers and everything else that makes up commercial real estate in the U.S. Every bank has a piece of this business, from JPMorgan Chase and its colossal $140 million CRE loan book to several New York lenders who are

state budget stalled through at least April 8 amid thorny negotiations on housing, unions have become more involved than ever, according to o cials in both labor and government.

“We negotiate contracts for a living,” said Candis Tolliver, vice president and political director for the powerful service workers’ union 32BJ SEIU. “We understand what it takes to bring people together, to actually get things done.”

CHASING GIANTS

Fintech startup

Propel for SNAP recipients eyes pro tability with improved features.

Gov. Kathy Hochul made the arrangement explicit in her budget plan this year. Instead of drawing up her own proposal to replace the 421-a tax break for a ordable housing construction, Hochul simply put in what she called a “placeholder,” which left it to the real estate industry and labor unions to hash out a deal on wage standards for eligible projects.

Unions are trying to stake out the middle ground, hoping to unite developers who want a new 421-a and left-wing lawmakers who are insisting on tenant protections such as “good cause” eviction. Labor’s involvement has been encouraging to many in

Husband and wife nd success with focus on organic, durable bedding.

Nonpro t backed by Facebook co-founder plans big lobbying, election push for more housing in the

state

e group behind a surprise community board takeover has unveiled plans to spend much more on lobbying and electing leaders to upend the state’s status quo on housing.

Open New York, a nonpro t backed by a Facebook co-founder, on March 25 launched an “independent expenditure committee” whose goal is supporting lawmakers who support housing develop-

CB5’s board was in the thrall of NIMBYs bent on slowing muchneeded development.

Open New York says it has 600 dues-paying members across 12 chapters. Members will knock on doors and hand out literature for three legislators seen as allies to boosting housing production: Assembly members Democrat Micah Lasher of the Upper West Side and Sarahana Shrestha, a democratic socialist representing the Hudson Valley, along with state Sen. Rachel May of Syracuse.

“There is a growing cohort of legislators in New York who are proposing serious solutions to our housing crisis.”

Annemarie Gray, Open New York’s executive director, in a statement

ment. e committee, Abundant New York, will target races in the state legislature, “as well as in cities, towns, and villages throughout New York,” a statement read.

e group’s creation underscores the ambitions of Open New York, which last month ignited a boardroom battle at Community Board 5 that ended with one of Open New York’s employees winning the chairman’s gavel. CB5 is the most powerful of the many such advisory boards across the city because it represents the heart of Midtown, from Eighth to ird avenues and 14th to 59th streets. Open New York members believed

EVENTS CALLOUT

JUNE 5

POWER BREAKFAST

Mark your calendar to hear from all ve borough presidents on one stage — Vito Fossella, Staten Island; Vanessa Gibson, Bronx; Mark Levine, Manhattan; Antonio Reynoso, Brooklyn; and Donovan Richards Jr., Queens. They’ll discuss big issues facing the city, ranging from housing and development to public safety, in a conversation moderated by Crain’s New York Business Editor-in-Chief Cory Schouten.

DETAILS

Two borough presidents, Manhattan’s Mark Levine and Queens’ Donovan Richards, endorsed Open New York in the press release unveiling its political action group. Gray said on a Slack shared with Crain's that “Abundant New York will help us take our electoral in uence to another level.”

Abundant New York cautioned not every endorsed candidate will get its money.

“Our organizing capacity is the heart of Open New York’s electoral strength,” member Sal Franchino wrote in a Slack the morning of March 25 shared with Crain’s. “Please turn out even if you’ve never done it before. It can be fun and rewarding!”

“ ere is a growing cohort of legislators in New York who are proposing serious solutions to our housing crisis,” Open New York Executive Director Annemarie Gray said in a statement. "We intend to support those legislators, and to build on that momentum.”

Gray served as a senior adviser for land use at the O ce of the Deputy Mayor for Economic and Workforce Development from January 2020 until the fall of 2022, when she took the helm at Open New York.

e group has received $2.5 million over the last two years from Open Philanthropy, a foundation funded by the Facebook billionaire Dustin Moskovitz. Other backers include Trinity Church, one of the city’s largest landowners, West Side Spirit reported. Abundant New York has not publicly named its backers other than to note it is supported by a “diverse group of members and individuals.”

at sort of secrecy has upset some current and former board members of CB5 who accuse Open New York of being sneaky about the true intentions for board seats.

In a statement, former CB5 Chair Vikki Barbero said: “After serving the board for over three decades, including 15 years as chair, I resigned due to external inuences altering the board's dynamics. Persistent attempts to undermine CB5's core values and direction drained our resources.

e arrival of new members, in uenced by undisclosed agendas, raised concerns among members

about decision-making integrity. e lack of transparency and the alignment with special interests rather than community voices con icts with my commitment to integrity.”

Hints

at

bigger battles

“What concerns me is not Open New York’s policies; there may be bene ts to them,” Joseph Ma a, a CB5 member who remains on the board, told Crain's last month. “What I don’t like is their lack of transparency. ey don’t tell you who they represent, that they are here to read from talking points verbatim, and vote as blocs to advance the interests of their employer.”

e dispute hints at larger battles

awaiting in Albany.  In a Substack post headlined, “Why my community board is in the news,” Open New York and CB5 board member Sachi TakahashiRial o ered her response to recent events. She said the state of “high con ict” in which the board nds itself could be defused by “leaning into the nuance.”

“My perception is that the majority of CB5 members still see nuance, but are concerned about the brewing animosity,” she wrote, presumably a reference to the need to review development proposals based on their individual merits rather than rubber-stamping new housing projects.

Takahashi-Rial could not be reached immediately by phone to elaborate.

Gallery space next to the High Line faces foreclosure after landlord’s steep rent cuts

A chic gallery space next to the High Line is facing foreclosure after the landlord slashed rents during the peak of Covid to keep art dealers from leaving.

e owner of the ground-level retail space at 525 W. 22nd St. granted tenants steep discounts after occupancy tumbled to 42% in late 2020. e rent reductions stopped the bleeding, and today the Chelsea building’s 16,000 square feet worth of gallery space is 100% occupied, according to Moody’s. Tenants include Miles McEnery, which showcases contemporary painting, and Yancey Richardson, which specializes in

Corrections

20th century and contemporary photography.

Unfortunately, the steep drop in rental income has caused trouble for the property’s landlord, Midtown-based real estate investor Savanna, according to CoStar. A $14 million mortgage for the posh storefronts was transferred in November to special servicing, the nancial equivalent of intensive care, a month before it came due.

“ e borrower is working toward a modi cation that could involve a principal paydown,” Moody’s said in a report issued last month. “And the special servicer is dual-tracking foreclosure while negotiating resolution options.”

e pro le of Lynn Martin that ran in the April 1 edition has been updated to correct a company name.

One company that was named as a Women-forward Workplace in the April 1 issue, Jones Day, should have been included in the category for companies with more than 250 employees.

David Peltz’s title in the March 18 issue has been updated.

e pro le of Julie Tighe in the April 1 issue has been corrected to re ect her organization’s budget and the status of legislation.

Savanna didn’t reply to requests for comment.

e rm owns several older Midtown buildings, including 521 Fifth Ave., a 460,000 square foot o ce tower acquired in 2019 for $381 million from SL Green. Savanna acquired 1375 Broadway for $435 million in July 2020, ve years after the 500,000 square-foot building changed hands for $310 million.

Savanna is led by co-chairmen Nicholas Bienstock and Christopher Schlank. e U.S. art market, which is centered in New York, had a down year in 2023. Sales fell by 10%, to $27 billion, according to a report by Art Basel and UBS. Globally, 48% of dealers expect sales to be about the same this year and 16% expect a decline.

Known as the Spears Building, 525 W. 22nd St. was built in 1893; its upper oors are condominiums that aren’t subject to the foreclosure threat faced by the groundlevel retail.

Bond-rating rm KBRA said “several” tenants vacated in 2020 due to the pandemic but by late

2022 the spaces were fully occupied after Savanna lowered rents and the McEnery gallery expanded. e price paid by the landlord to ll the vacancies was steep: Cash ow from the gallery tenants came in at $720,000 in 2022, down from $1.2 million in 2013, when the mortgage was packaged into a security sold to institutional investors, KBRA said.

A January appraisal showed the value of the gallery space had fallen by 32% over the past decade and is “marginally” above the mortgage’s $14 million balance, Moody’s said.

Aaron Elstein

Aaron Elstein

Vanessa Gibson Mark Levine

GETTY IMAGES

Fintech startup Propel for SNAP recipients eyes pro tability as it improves its latest offerings

2024 is the year the company will do ‘break-even or better,’ says founder and CEO Jimmy Chen

The upstart: Propel

Over the past 10 years Propel, a nancial services provider aimed at low-income individuals, has transformed the way people access SNAP bene ts, commonly referred to as food stamps.

e company’s no-frills mobile app eliminates the time-consuming task of calling a 1-800 number to check an EBT balance and provides resources to help people save money. And the results speak for itself. More than 5 million of the nation’s 21.6 million eligible households use Propel’s app, and the company has raised $68.2 million from investors.

But this year, founder and CEO Jimmy Chen has his sights on pro tability as Propel improves its latest features, including fee-free online banking, tax ling services and a job board tailored to low-income workers.

is is the year that Propel will do “break-even or better,” says Chen, a former Facebook product manager who launched the company in 2014 with a $10,000 Kickstarter campaign. “ at’s one of the opportunities that we think we have in 2024 — to get to that point of true nancial sustainability.”

that reduces operating expenses, and a deep understanding of its users needs. “People really love the app,” he says.

The reigning Goliath: Capital One

e McLean, Virginia-based bank, which focuses largely on consumer services, serves more than 100 million customers, “But it still does not o er products that are really tailored to the needs of low-income Americans,” says Chen. Its 2023 revenues topped $36.8 billion.

It’s a lofty goal given the nature of the business. Propel, which is a not a government contractor, makes money by collecting a portion of the interchange fees retailers pay on debit card transactions. It also makes money by selling ads on the app.

Based in Downtown Brooklyn, the company employs 98 and has partnered with roughly 100 consumer brands who advertise services such as a ordable home internet.

Hans Morris, a managing partner at venture capital rm Nyca Partners, said he was initially skeptical that a for-pro t nancial services company could pro tably serve low-income Americans. “Historically, many companies that cater to poor people were, particularly in nancial services, not in the interests of those people,” he says, citing poor service, usurious rates and high fees. But Propel, according to Morris, backs its good intentions with innovative technology

How to slay the giant

Chen says his company spent the last two years focused on expanding its product o ering rather than acquiring new customers, and the size of its user base has remained at as a result. e goal — to create a service that’s so useful, all of the nation’s 40 million EBT cardholders will adopt it.

Propel launched its banking function — which includes checking, ATM and debit card services — in 2022, “and it’s become a core part of the app,” says Chen. e next goal—convince users to make it their primary bank. Higher debit card spending means more interchange revenue for Propel.

Toward that end, Propel launched a tax service last year that allows users to le tax returns within the app using a tool similar to TurboTax but tailored to low-income taxpayers. Folks who receive an earned income tax credit can have the lump sum deposited directly in their Propel bank account.

Another new feature predicts the date and time users will receive the electronic deposit of their government disability check. This information is crucial for individuals who time all their payments — from groceries and utilities to the rent — around this deposit. “There’s a lot riding on it,” says Chen. “When they know when they’ll be funded, there’s a lot less stress.”

Propel still acquires users largely by word of mouth, he says, but it has done some advertising. Digital ads, primarily

through Apple and Google’s app stores, have proven most e ective, says Chen.

“I don’t think we’re running a Super Bowl ad anytime soon,” says Chen.

On the revenue side, Propel has focused on companies that o er deals exclusively to EBT card holders. Scooter company Lime, for instance, advertised its Lime Access program on Propel, which o ers free rides to low-income New Yorkers. Walmart and Amazon o er 50% o their Walmart Plus and Amazon Prime programs, respectively, to SNAP users. “We can package them up and present them to our users in a way that does not feel stigmatizing,” says Chen of these discount o ers.

It took a while for Propel to develop these advertising partnerships, says Morris, the investor. “A lot of those partners didn’t believe that this was going to be a very useful use of their marketing dollars.”

But the sales cycle has sped up, he says, now that the company has proven results to share with potential advertisers.

e company would not share revenue gures.

e app’s job listings, which also generate revenue, were recently reformatted so that the gig’s hourly wages are more prominently displayed. “Most job boards you have to click in and hunt it down,” says Chen. “But our users care a lot about that. ey want to know!”

The next challenge

Consumer-focused companies

nd it challenging to research low-income households, but Propel has the connections, says Chen: “Our users love to take surveys.” He envisions partnering with a market research rm to provide paid survey opportunities to low-income consumers, “who are really unrepresented when it comes to market research.

New features to help users choose and use Medicaid and Medicare plans are also in the works. “We know it’s a big pain point, and a big opportunity for us to build something,” says Chen.

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

Anne Kadet Propel founder and CEO Jimmy Chen. More than 5 million households eligible for SNAP bene ts use Propel’s app, which lets them check their EBT balances and provides resources to help them save money. | BUCK ENNIS

Ex-Manolo Blahnik exec sells co-op at big discount

The apartment sold for $14.5 million, more than 40% less than the $25 million asking price in 2021

son, also must fork over 2% of the sale price to the co-op as a ip tax.

Aformer Manolo Blahnik executive’s Central Park home was seemingly a tough t for the market.

Anthony Yurgaitis, the former U.S. vice president of the luxury footwear brand, sold his co-op at 115 Central Park West for $14.5 million, more than 40% less than the $25 million he was asking in 2021.

$14.5M

Sale price for No. PH18EF a t

115 Central Park West

No. PH18EF, a six-bedroom corner unit that went into contract in the fall, closed March 5, according to a tax ling that appeared in the city register last month.

It isn’t clear from public records what Yurgaitis and his late husband and business partner, George Malkemus, originally paid for the artfully designed property, a combination of two side-by-side units that features ve full and two half-baths, four terraces and a 170-square-foot closet in the primary suite. Malkemus, who served as president of Manolo’s U.S. business, died in 2021.

Maintenance costs for the home are nearly $15,000 a month. And the buyers, attorney Shirley Sarna, the former head of the state’s consumer protection bureau, and her husband, arts patron Steven Nel-

e apartment is the latest to trade at a considerable discount at the building, a two-towered, Art Deco complex called the Majestic that is one of the premier addresses on a desirable street. Indeed, Susan Weber, the ex-wife of billionaire George Soros, nally sold her ve-bedroom home there in the fall for $20.5 million after initially seeking $50 million way back in 2012. Similarly, a three-bedroom at the 29-story Majestic, which has been home to members of families including the Zeckendorfs, Nederlanders and Sacklers, is now asking $9 million after being introduced at $11.5 million in September.

e higher cost of borrowing money is dragging on all sectors of the housing market, including the luxury segment, where mortgages are not always used, brokers say. Unlike with some exclusive coops, the Majestic, which is at West 72nd Street, does allow buyers to nance their purchases with mortgages.

Chase Landow, an agent with the rm Serhant, who represented Yurgaitis in the transaction, did not respond to a request for comment. Landow co-marketed the

Became household name

In 1982 Malkemus bought a license to sell Blahnik’s shoes in the U.S. But it wasn’t until the late 1990s, when the show Sex and the City introduced its millions of viewers to the London-based brand, that the strappy and stiletto-heeled o erings, which can sell

for $1,000 a pair, became a household name. Malkemus later partnered with the show’s star, Sarah Jessica Parker, on her own footwear line, the SJP Collection.

But in 2019 Malkemus and Yurgaitis ended their long-running relationship with Blahnik after the company reportedly sought unacceptably steep licensing fees. ese days Yurgaitis seems to be

focusing most of his attention on the couple’s other business endeavor, a Connecticut-based restaurant and ice cream business tied to Arethusa Farm, a Litch eld property they bought in 1999 and then revitalized.

Penn Station-area developer buys 2 parcels, plans condos

C. J. Hughes

Vornado Realty Trust may have put the brakes on plans to reinvent the Penn Station area, but a smaller developer, Hiwin Group USA, does not seem so constrained.

Fresh off a quick sell-out of its 300 W. 30th St., a 16-story, 69unit condo that took in $90 million in less than a year, the Flushing-based builder has bullishly snapped up two more sites around the train hub with plans to create similar projects.

In December Hiwin acquired the rst property, 250 W. 30th Street, which is currently a small

a potentially deep pool of buyers in the neighborhood, courtesy of technology rms such as Facebook owner Meta, which controls the o ces atop Moynihan Station at the Farley Building. “ ey are my target demographic,” Hu told Crain’s. “I think this neighborhood is moving in the right direction.”

One-bedrooms for $1 million

Hu’s two new condos, which won’t arrive till at least 2027, will be about the same height and size as 300 W. 30th St., which launched sales in 2022 and sold out in nine months. As with No. 300, Nos. 250 and 245 plan on offering smaller-sized units, including one-bedrooms for around $1 million, he added.

“They are my target demographic. I think this neighborhood is moving in the right direction.”

Anthony Hu, Hiwin Group USA CEO

o ce building, for $15.9 million. en on March 18 the rm closed on the second site, 245 W. 34th St., a long-empty patch of dirt, for $15 million, deeds show.

ough high interest rates have dragged on the sales market, Hiwin CEO Anthony Hu said there’s

In the most recent deal, for 245 W. 34th St., Hiwin picked up a parcel that once contained a Conway clothing store but has been vacant since before the pandemic. Records indicate that the seller was Charles D. Cohen, a Brooklyn-based retail investor who acquired the site in 2015, the peak of the last residential boom, for $22.6 million from the Chetrit Group and

Cornell Realty Management.

Cohen and his partner, the Conway family, sought to build a hotel on the lot, which is between Seventh and Eighth avenues and faces Vornado’s revitalized Penn 1 o ce tower. But the team reportedly had trouble locking down hotelnancing and ultimately decided to unload the parcel instead. Neither

Cohen nor the Conways could be reached for comment by press time.

(Cohen does not appear to be related to Charles S. Cohen, a member of a well-known real estate family who owns many o ce sites in Midtown.) Vornado, which controls much of the area around Penn Station,

was on the verge of an ambitious plan to put up as many as 10 o ce towers before the hybrid-work trend forced a rethinking. at proposal would also have helped underwrite a long-desired overhaul of the station itself, though Gov. Kathy Hochul has said the state will take on the project instead.

home with John Burger of Brown Harris Stevens.

115 Central Park West, Upper West Side | SERHANT

C. J. Hughes

245 W. 34th St., Midtown | GOOGLE STREET VIEW

Broadway continues slow start to 2024, but much hinges on a dozen new shows set to open in the coming weeks

Nick Garber

Leaders in New York’s theater industry have warned that Broadway will not soon return to prepandemic attendance levels. But recent data shows the industry is down in some respects even compared to last year.

Broadway drew about 230,000 people and raked in $28.5 million across 26 shows during the week that ended on March 24, according to the latest gures released by the Broadway League. Both are down somewhat from the same

numbering 31.

is season, which began at the end of May, is also not keeping up with last year’s. Broadway’s $1.2 billion in revenue is down by 4.6% compared to the same point last year, while total attendance, at 9.9 million, is down 1.7%, the data show.

‘Too soon to tell’

“There is a lot of demand pent up for upcoming shows, so the story has yet to be fully written until we see where we are when all the shows have opened up.”

period in 2023, when attendance stood at 260,000 and shows grossed $32.6 million, although there were also more total shows,

e picture could start looking better in the coming weeks, when more than a dozen new shows are set to open — including the Alicia Keys-inspired musical “Hell’s Kitchen,” a production of “Uncle Vanya” starring Steve Carell, and revivals of “ e Wiz” and “Cabaret.” at will bring the total number of shows on Broadway to 38 by April, the New York Times reported.

“It’s really too soon to tell where we’re going to end up as a season,” said Jason Laks, interim president and general counsel of the Broadway League, which

represents producers and theater owners.

“

ere is a lot of demand pent up for upcoming shows, so the story has yet to be fully written until we see where we are when all the shows have opened up.”

Day to day, the week ended March 24 was a modest improvement over the week before, with overall revenues growing by 1.6% and attendance by 4.5%. e top-grossing shows were the juggernauts “ e Lion King,” “Wicked” and “Hamilton,” followed by newcomer “Merrily We Roll Along,” a Stephen Sondheim revival whose limited run was recently extended from March to July.

Charlotte St. Martin, who stepped down in February after a long tenure as the Broadway League’s president, told Crain’s shortly before her retirement that this season was unlikely to be as

successful as the last prepandemic season in 2018-2019. But that was also a record year for the entire industry.

“ e last year before Covid was

the biggest year in our history by a long shot, so anything that’s compared to it looks like we’re really o ,” St. Martin said in January.

Jason Laks, interim president and general counsel of the Broadway League

“Hadestown” was among the top-grossing shows on Broadway during the week that ended March 24. BUCK ENNIS

Morgan Stanley cautiously bullish on offices

With new development all but impossible, the rm says, existing buildings will rise in value and the best will gradually ll up again

Bulls in the o ce market are about as common on Wall Street as oysters in the desert, owing to the rise of hybrid work and higher interest rates. But in a new report Morgan Stanley, which has $4 billion in exposure to o ce loans, took a walk on the sunny side of the street. Its thesis: Because new development is all but impossible, existing buildings will become more valuable and the best will gradually ll up again.

for existing higher quality o ce space.”

“ e amount of new supply hitting the market will begin to fall over the next several years,” the

To that end, Morgan Stanley upgraded shares in Vornado Realty Trust to “equal weight” — which means buy, but in sensible quantity — from “underweight,” which e ectively means sell. Vornado shares have fallen 36% over the last two years, compared to 22% for SL Green, due to a 17% drop in core funds from operations that ranks among the largest in the business. Vornado declined to comment.

Vornado’s retail portfolio has rebounded, and a building or two might be “opportunistically” sold to pay off debt or raise cash.

report from real estate analyst Ronald Kamdem read, “which would be a positive development

However, Morgan Stanley thinks better times are ahead because Vornado is delivering renovated space in buildings that, while not new, are considerably improved. ey include Penn 2, the former 2 Penn Plaza. Madison Square Garden leases corporate space in the tower and Morgan Stanley said “we would expect” its rent to jump

by 40%, to about $105 per square foot. e bank also said Vornado has had success lling about half the largest spaces soon to be vacated across its large portfolio, which includes 1290 Sixth Ave. and the Farley O ce Building.

Possible residential play

Vornado’s retail portfolio has rebounded, the bank said, and a building or two might be “opportunistically” sold to pay o debt or raise cash. O ce development is o the table at the Hotel Pennsylvania site unless an anchor tenant emerges, but Morgan Stanley said the space “could potentially become a residential play,” meaning an apartment tower.

It’s a similar story for Boston Properties, which owns the General Motors Building and would like to build a 900,000-square-foot tower at 343 Madison Ave. to go toe-to-toe with JPMorgan’s new supertall. But the developer won’t develop unless bottom oors are pre-leased at prices exceeding $200 per square foot, Morgan Stanley said.

at’s a tough sell when so much quality space is already available. O ce vacancy rates fell along Park Avenue last year but rose elsewhere in Midtown, including on Sixth Avenue, Times Square, along ird and Fifth avenues, Morgan Stanley said. Kastle Systems data shows return-too ce in New York has plateaued; other sources, including banks with lots of skin in the game, tell a more encouraging story.

Costs are sure to rise in the months and perhaps years ahead for Manhattan landlords, because mortgages written when interest rates were low will have to be refinanced at higher rates. For that reason alone, Morgan Stanley’s enthusiasm for office is actually pretty muted.

“We would need to see more progress on asset sales or lender negotiations before turning more constructive,” Kamdem said.

New York chooses a park over transformative subway line with the QueensWay project

The High Line-style proposal, which would run over defunct railroad tracks, is a missed opportunity to x gaping holes in an outdated public transit grid

It was bitter news wrapped in celebration: Queens was getting $117 million from the federal government for a new park, the city announced last month.

e QueensWay, a High Linestyle proposal that would run over defunct Long Island Rail Road tracks from Rego Park to Ozone Park, is now much closer to becoming a reality. Local advocates, who pitched the project more than a decade ago, had hoped the abandoned tracks could be transformed into a 3.5-mile haven for pedestrians, cyclists and park-related programming. Meera Joshi, the deputy mayor for operations in the Adams administration, called the federal cash an “amazing opportunity,” and she’s not wrong. e city could always use more green space.

select number of local elected ocials have been trying to revive the Rockaway Beach Branch of the LIRR, which once connected Rego Park and the Rockaway Peninsula. e line was abandoned in 1962 and north-south commutes in Queens have been a tremendous challenge since.

e QueensLink proposal would reactivate the rail as a subway line, taking the M from Rego Park down to the Rockaways and connecting with the A train. Queens residents who’ve relied on buses or automobiles would have a train line that could meaningfully move them through the borough. QueensLink organizers suggest 47,000 riders would use the line every day.

But there’s one crucial di erence between the High Line and the QueensWay: e latter is probably standing in the way of viable public transportation.

For as long as park advocates have been pushing for the QueensWay, transit wonks and a

e proposal would also return the G train to Forest Hills, adding much-needed subway capacity in central Queens.

If such a subway line ever existed, outer borough residents would have every incentive to get out of their cars and not drive to Manhattan. Congestion pricing, which is set to begin later this year and should help to cut

down on some automobile traffic, would be stronger with supplements like these: genuine, long-lasting improvements to outer borough transit.

Lack of enthusiasm

Gov. Kathy Hochul and the Metropolitan Transportation Authority do not seem enthusiastic about the QueensLink. Members of Congress take their cues from them. If Hochul had prioritized the project, it’s possible Senate Majority Leader Chuck Schumer and the House delegation would have done more to secure federal funds to kick-start it. Instead, the park will go forward and the subway line will likely never come to fruition.

is is a failure. Hochul deserves credit for reviving the Interborough Express, a new rail line that will travel over existing freight tracks and eventually — probably in the 2030s — connect Brooklyn and Queens, dramatically easing east-west and north-south commutes in both boroughs. If Hochul’s predecessor, Andrew Cuomo, ever cared as much for public transit as he did ashy car-centric projects, the Interborough Express might be here already.

It should be noted parkland can coexist with the QueensLink. But the federal funds, which would fund about a mile of the greenway near Forest Park, have nothing to do with transit and therefore no new trains will thunder up and down the borough. e QueensWay, I imagine, will look very pretty and be popular in the neighborhoods. at’s all well and good.

But what does Queens need more: additional parkland or a way to commute easily into Manhattan and shuttle north-south in the borough? e 500-acre Forest Park is one of the great underrated gems of Queens. It o ers everything the QueensWay might someday.

New York’s public transit grid remains woefully out of date. e subway system hasn’t been meaningfully expanded in a century. Extra Q stops on the East Side of Manhattan don’t count. e subway does its job if you want to travel into and out of Manhattan — hence the logic of congestion pricing — but fails if a worker has a job in southern Queens and wants to travel four miles north. Fixing these gaping holes in the grid should be the goal of Hochul, the MTA and local politicians. Otherwise, New York will continue to trail its global competitors. Ross Barkan is a journalist and author in New York City.

Aaron Elstein

Ross Barkan

A rendering of the QueensWay linear park, which received $117 million in federal funding last month. Construction may foreclose a competing plan to reactivate a train line along the same route. | TRUST FOR PUBLIC LAND AND FRIENDS OF THE QUEENSWAY

BUCK ENNIS

East Village parking garage shuttered for structural problems trades for $14M, poised for luxury housing

C. J. Hughes

Manhattan-based landlord Walter & Samuels has unloaded a troubled East Village parking garage, which now seems poised to become luxury housing.

e rm, which is headed by chairman David Berley, has sold 220 E. Ninth St., a 5-story beigebrick structure near ird Avenue that has been closed since an inspection uncovered structural problems in spring 2023. e city ordered the inspection following the deadly collapse of a Financial District garage that was operated by the same company that ran No. 220.

Arcus Development, a rm headed by Roger Bittenbender, who has previously crafted houses in the Hudson Valley and condos in SoHo, bought the site for $14 million. When reached by phone, Bittenbender declined to comment.

But Berley, whose rm also shed 225 W. 39th St. this month, a struggling o ce building in the Garment District, said the deal didn’t require much deliberation. “ e parking company got in trouble with the city, and then we were

approached by a broker,” he said. According to the city register, Berley, who frequently invests with partners, acquired the 22,500square-foot midblock site in the late 1970s. Arnold Penner, a major real estate investor and an owner of the popular Midtown eatery P.J. Clarke’s, appears to have once controlled a stake in No. 220 alongside Berley, property records show. Penner died in July.

Saddled with empty oors

Walter & Samuels has holdings across the city but is probably best known for older side-street commercial structures in the Garment District and Chelsea. ese Class B and Class C sites generally had little trouble nding tenants in the years after Berley invested in them in the 1960s and 1970s, he has said, but have been saddled with empty oors during the Covid era.

e rm is also stressed after vigorously embracing WeWork as it rushed to set up coworking spaces across the city. Indeed, Walter & Samuels installed WeWork locations at addresses including 315 W. 36th St., 410 Park

As head of community and business development for the northeast division of JPMorgan Chase, Jason Patton leads the nancial health implementation of the rm’s $30 billion investment to drive inclusive economic growth across the Northeast region. In his role, Patton oversees a team of 40 Community Managers – out of 150 nationwide -- who are dedicacted to cultivating local partnerships ocused on helping residents improve their nancial health and resilience.

Avenue South and 130 Madison Ave., though all three sites have since been vacated.  And WeWork, after ling for bankruptcy protection in the fall, is seeking to rip up many leases as it attempts to restructure, a move that would leave

landlords in a major jam.

In April 2023 a garage at 57 Ann St. collapsed, killing one person, destroying dozens of cars and prompting neighborhood evacuations. e tragedy also led to mandatory inspections of city garages.

After nearly 80 of them were inspected in the ensuing weeks, three were shut down in May, including No. 220. Its inspection uncovered cracked concrete, including in an elevator shaft that brought cars to the roof.

NOTABLE SPOTLIGHT with Jason Patton

Sponsored

Advancing racial equity and inclusive growth through community engagement

Interviewed by Brooke Bilyj for Crain’s Content Studio

How are you engaging with the community as part of Chase’s $30 billion investment?

We do a lot of listening to understand the challenges facing our communities and develop meaningful partnerships with local organizations, churches, hospitals, colleges, universities, nonpro ts, civic associations, and other groups to drive sustainable change. Through our branches and in close partnership with community leaders, we’re bringing the nancial health tools, resources and expertise to put people on path to long-term nancial health.

For example, we partnered with the Roc Nation School of Music, Sports & Entertainment at Long Island University to bring rst-ever creditearning nancial health course into the classroom.

How is the role of banks changing?

We believe that thriving communities start with nancial empowerment. We build trust by building relationships, by listening, by engaging with the local residents, small businesses, community and nonpro t groups and by showing up in the communities we’re in.

There are too many people in commiunities disconnected from opportunity, lacking information and access to tools and resources to manage their nancial lives. We’re working to change that. Chase’s Community Center branches are locally-inspired and built with extra space to host complimentary community events and nancial health workshops, provide skills training and offer a storefront for small business pop-ups. You don’t have to be a Chase customer to join one of our workshops to learn about buying your rst home, saving for emergency expenses, managing credit responsibly or investing.

Additionally, we’re going beyond the branches by bringing the nancial workshops directly to the local areas. Creating a more inclusive economy is not only the right thing to do, it’s the smart thing to do.

What’s the value of banking in-person in this increasingly digital age?

The choice to bank in person or digitally is not binary; customers want both the convenience of digital and the comfort of a human interaction when their needs are more complex. In fact, 64% of our customers prefer to open an account in a branch, and it’s even higher (85%) for younger

populations like Gen Z. Our small business customers are heavy branch users: 84% of them visit a branch at least once a month.

Chase has the largest branch network in the United States and is the only bank to have branches in all lower 48 states. In February 2024, Chase announced a multi-billion dollar investment in its branch network with plans to open more than 500 new branches, renovate 1,700 locations and hire 3,500 employees over the next three years to provide greater access to banking and bring affordable and convenient nancial services to more customers and communities across the country.

What’s the rst step for other leaders to drive more inclusive growth?

It starts with being genuinely interested in what’s going on in the community. Before we decide to build a Community Center branch and hire dedicated Community Managers, we do a lot of work to understand the community needs. We work locally with community leaders to listen and incorporate feedback to drive better outcomes for residents, local business and the neighborhood.

220 E. Ninth St.,

Community Boards, to truly serve their purpose, must be open to change

An explosive boardroom battle for control of Community Board 5 spotlights the aws of the city’s most grassroots tier of government, where exclusivity and single-mindedness sometimes take precedence over improving neighborhoods.

In a surprise vote last month 29-yearold former software engineer Samir Lavingia unseated the board’s longstanding leader, sparking an outcry among veteran CB5 members, who felt misled about the new chairman’s day job: He is a campaign coordinator for the pro-housing group Open New York, a tech-industry-funded nonpro t fed up with stalled housing development. ere are four known members of Open New York on CB5.

“

ey have discovered the power of community boards, and I worry they will take over others around the city,” said board member Joseph Ma a, who, like other incumbent board members agrees with Open New York that more housing is needed, but wants more input over how and where and thinks the group should

disclose its intentions.

e uproar at CB5, which represents neighborhoods in Midtown, exempli es what’s wrong with many community boards: ey often provide a haven for unchecked NIMBY-like behavior. New York is in a housing crisis, and disruptors are necessary to break a cycle where opposition to new developments at the community board level too often serves as a death

knell to much-needed a ordable housing projects across the city.

Such diversity of thought is especially needed in CB5. It is one of the most in uential community boards and has a seat at the table when city or state policymakers tackle signi cant issues that impact all types of New Yorkers, such as the future of Penn Station or the rezoning of East Midtown.

Community boards aren’t supposed to be exclusive; positions are volunteer and open to anyone who feels passionate enough to dedicate their time to improving the community. For them to function at their best, they should usher in new members with new ideas often. Implementing term limits could also ensure those serving on their community boards best represent ever-changing neighborhood populations.

But openness is a two-way street. If newcomers looking to shake things up want their ideas to be welcomed, it would be wise to be forthcoming about their agenda, quali cations and backers to earn the trust of board members who have already dedicated years to their neighborhood.

Doing so will ensure that after board elections are over, the thorny debates around housing can unfold in good faith and give community boards the best chance at achieving their goal: to provide an opportunity for average New Yorkers to get directly involved in the issues they feel should be addressed in their neighborhoods.

Equity must guide the navigation of congestion pricing

In the ongoing discussions surrounding congestion pricing in New York City, one principle must remain steadfast, particularly for residents in upper Manhattan: As we navigate the policy’s complexities, equity must be our guiding star.

Congestion pricing proposes to levy charges on drivers entering certain parts of Manhattan during peak hours. Advocates tout its potential to alleviate tra c congestion, enhance air quality and generate revenue for vital transportation infrastructure projects.

At its core, congestion pricing is a concept rooted in equity. Its success hinges on ensuring that it does not exacerbate existing disparities for any signi cant segment of New Yorkers. To do otherwise would betray the very essence of its purpose. us, there is still much work to be done to re ne and optimize its implementation.

Looking back to the 1960s, when New Yorkers successfully thwarted the proposed Lower Manhattan Expressway, we see a precedent for community activism in the face of potential urban devastation.

Yet, the triumph of Lower Manhattan became a burden for communities in the Bronx and upper Manhattan, as increased tra c and imposed new challenges. Similarly, while congestion pricing heralds a victory for Lower Manhattan, its unintended consequences could further burden other New York City neighborhoods.

As we confront headlines highlighting soaring highway construction costs, record-setting tra c fatalities, and the looming specter of climate change, transportation experts emphasize the necessity of embracing alternative modes of mobility such as walking, biking, and public transit. Ironically, some of the most congested motor vehicle arteries in North America traverse communities already demonstrating the viability of sustainable transportation options. e juxtaposition is stark: bustling expressways coexist with neighborhoods advocating for greener, healthier alternatives.

Take, for instance, the Cross-Bronx Expressway, which funnels a staggering volume of vehicles — approximately 190,000

daily, including 27,000 trucks — through communities where car ownership is the exception rather than the rule. e health implications are dire, with asthma rates in the Bronx soaring well above the national average, disproportionately a ecting the most vulnerable, including young children. Moreover, beyond the environmental and health hazards, expressways serve as physical barriers, fragmenting communities and impeding access to public spaces.

Congestion pricing represents a significant step toward rebalancing transportation priorities in favor of modes that bene t the majority of New Yorkers. However, it also poses challenges, particularly in terms of diverting tra c, especially trucks, to already burdened areas like the Bronx and uptown Manhattan. Nevertheless, there are avenues for improvement.

For many residents in Harlem, Washington Heights, and Inwood, car ownership is not a luxury but a necessity for accessing employment, health care, and essential services. Implementing congestion pricing without acknowledging these unique circumstances risks deepening economic disparities and limiting access to opportunity for already marginalized communities. Policymakers must priori-

tize equity and inclusivity in congestion pricing policies. is entails reinvesting revenue into bolstering public transit infrastructure.

Moreover, inclusive transportation planning is essential, taking into account factors such as tra c diversion, equitable enforcement, and the long-term socioeconomic impacts of pricing policies.

Ultimately, our commitment to equity must remain steadfast. We cannot afford to prioritize convenience and efficiency at the expense of fairness and justice for all residents. Congestion pricing can emerge not as a barrier to opportunity, but as a catalyst for positive change; as Gandhi famously remarked, “The true measure of any society can be found in how it treats its most vulnerable members.” Let’s build a more equitable and inclusive city for all New Yorkers.

Samir Lavingia, wearing glasses, chairman of Manhattan’s Community Board 5 AARON ELSTEIN

Clayton Banks, left, is the CEO of Silicon Harlem, a professional collective building partnerships with the private sector, academia and nonpro ts. Peter Norton, right, is an associate professor in the department of engineering and society at the University of Virginia.

Congestion pricing is a signi cant step toward rebalancing transportation priorities to bene t the majority of New Yorkers, write Clayton Banks and Peter Norton. BUCK ENNIS

PERSONAL VIEW

Black New York residents still face a long road to parity, report shows

Our new report, “ e state of Black residents: e relevance of place to racial equity and outcomes,” explores how equity varies across American communities. As part of that research, we studied county-bycounty outcomes for the more than three million Black residents of the greater New York metropolitan area.

We found that they lag their white neighbors in meeting eight goals we all share: a basic standard of living, nancial stability, good job opportunities, long and healthy lives, educational opportunities, stable housing, virtual and physical connectivity, and stable communities.

rowing racial gaps will do more than help right historic wrongs: it will also tap huge wellsprings of energy and talent to the bene t of everyone in the region and across the country.

Linda Liu is a partner in McKinsey’s New York o ce, where Dominic Williams is also an associate partner. Williams served as chief policy advisor to New York City Mayor Bill DeBlasio and chief of sta to the rst deputy mayor of New York City.

Across these goals, the New York region has the lowest overall Black outcomes, on average, of the nation’s 12 largest metropolitan areas. And while many counties in the region have reduced racial disparities for Black residents, progress has been slow. Based on the pace of change over the last decade, reaching parity with white residents could take an average of 250 years across counties in our region. We can do better, and we must. Nar-

PERSONAL VIEW

Outcomes and parity vary widely by county. Like members of other racial groups, Black residents experience starkly di erent outcomes depending on where they live. e median incomes of Black households in the area range from a low of about $46,000 in the Bronx, for example, to a high of $130,000 in Hunterdon County in New Jersey. Only about 16 percent of Black residents of North Jersey’s Passaic County have bachelor’s degrees, compared to 48 percent in Putnam County in New York. e picture looks especially stark in Manhattan and Newark, which have some of the largest disparities of any large city in the nation, with overall Black outcomes less than 45 percent of white outcomes. Consider life expectancy: in Newark and Manhattan, white residents live four-anda-half to six years longer than Black residents, on average. While disparities are smaller in some

other places, in no county in the New York area do Black outcomes exceed 80 percent of white outcomes across economic, physical, and social well-being.

Closing the gaps

e New York area has the resources to provide opportunities for everyone: it produced goods and services worth more than $2 trillion in 2022, while Los Angeles, the nation’s second-most productive metro area, produced less than $1.25 trillion.

e region is even farther ahead in productivity per capita.

e gaps between Black and White well-being in the area re ect generations of discrimination in housing, lending, education, hiring, medical care, criminal justice, and other realms. ese disparities will not disappear overnight, but we can and should take more steps now.

e public and private sectors can support initiatives such as place-based investment in Black communities that have been underserved. ey can also invest in solutions that would help low-income households of all races while accelerating progress toward parity.

For example, Black families in every New York area county are less likely than

Hochul’s Empire AI plan will protect American leadership in innovation

Anew poll from Tech:NYC finds a groundswell of support for Govenor Kathy Hochul’s Empire AI initiative. While this groundbreaking proposal is aimed at accelerating artificial intelligence development and growing the economy in New York, it is also a smart strategic move to ensure that the United States remains at the forefront of innovation — especially in a world where technological prowess is increasingly synonymous with economic and geopolitical power.

However, the promise of Hochul’s AI plan is threatened by a swirl of short-sighted regulatory proposals both at home and from abroad. From the halls of state legislatures to the corridors of Washington, and across the ocean to the European Union, lawmakers are engaging in a misguided “race for regulation” that may seem well-intentioned, but actually risks sti ing innovation and ceding ground in the AI race to foreign adversaries.

Doug Kelly is CEO of the American Edge Project, an advocacy group focused on protecting and promoting American leadership in innovation.

Losing our edge to an authoritarian nation like China could have devastating and far-reaching consequences, not just for American technological leadership but for the advancement of democratic values around the globe. China is already misusing AI to tighten the grip of its surveillance state, focusing on censorship and social control instead of harnessing AI’s potential for social good. American leadership in AI is not merely about who owns the technology, but in helping set global standards in how it is used to advance freedom, democracy, and human rights.

e U.S. has been a cradle for AI innovation. Every day, American innovators are launching new transformative AI tools — many available for free — that have the potential to accelerate learning, create new job opportunities, and keep us ahead of our economic and ideological rivals. But the US can’t win the race against our competitors if we sideline ourselves with unnecessary, heavy-handed regulations.

e stakes in the global AI race are high.

e Empire AI initiative o ers a blue-

print for how government policy can catalyze and accelerate innovation. By forging publicprivate partnerships, harnessing the talent within our academic institutions, and fostering an entrepreneurial spirit, we can drive ethical AI development that reects our values and advances our national interests. is approach not only counters the practices of our authoritarian adversaries, but it also showcases an alternative vision of technology’s role in society — one that uplifts rather than oppresses. e enthusiastic response of New Yorkers to the Empire AI initiative should be a guiding light for policymakers. It re ects a broad recognition of AI’s pivotal role in shaping the future, from revolutionizing medical care and energy solutions to redening educational paradigms. As Governor Hochul aptly noted, dominance in AI will de ne the next era of human history.

white families to own their homes, more likely to have high rent burdens, and spend a larger share of their incomes on childcare. Expanding access to a ordable housing, quality childcare and preschool could meaningfully improve Black families’ well-being while helping low- and middle-income families of all races.

Stable housing, particularly in mixedincome neighborhoods, improves outcomes in children. Cognitive development, education, and future college attendance and earnings, families’ food security, and proximity to jobs. Highquality early childhood development programs can counteract the e ects of child poverty, increase parents’ and especially mothers’ ability to work, and bene t all students who attend preschool in diverse classrooms.

ese and other investments could help unlock vast untapped strengths in Black communities, and communities of all races, across the region and the country.

erefore, it is critical that the U.S. navigates the path of innovation with wisdom, ensuring that any regulatory measures foster growth rather than hindering it. e future of innovation, our values, and our global competitive edge depend on getting it right. e message from New Yorkers is clear: the U.S. must lead in AI, ensuring a future where technology advances the greater good and upholds the values of an open, democratic society.

Losing our edge in the global AI race could have devastating and far-reaching consequences, writes Doug Kelly, CEO of the American Edge Project. | OFF CE OF GOV. KATHY HOCHUL FLICKR

Narrowing racial gaps will do more than help right historic wrongs, write Dominic Williams and Linda Liu of McKinsey. | ISTOCK

Wednesday, May 1 | 12-2 PM | New York Marriott Marquis Meet the female leaders and organizations who are making a difference and inspiring change in New York City. SCAN THE QR CODE OR VISIT CRAINSNEWYORK.COM/WOIEVENT BUY TICKETS PRESENTING SPONSOR: GOLD SPONSOR: HOST SPONSOR: MEDIA SPONSOR:

City greenlights electric cargo bikes to deliver packages in effort to reduce number of trucks, vans on the road

Caroline Spivack

Electric cargo bikes that look like mini trucks may soon deliver your packages.

e Department of Transportation announced March 27 that the agency has authorized the use of beefed-up electric cargo bikes on city streets, a move that’s anticipated to get thousands of gas-guzzling trucks and other delivery vehicles o the road.

New rules unveiled March 27 permit the use of four-wheeled electric, pedal-assist cargo bikes

“Achieving a safer and greener transportation future includes reducing the number of large, high-polluting trucks on our streets.”

of up to 4 feet wide and allow for a maximum length, including bike and trailer combinations,

of 16 feet.

“Achieving a safer and greener transportation future includes reducing the number of large, high-polluting trucks on our streets,” said city Transportation Commissioner Ydanis Rodriguez in a statement shared with Crain’s “Authorizing these new delivery options will better protect our environment and all road users.”

Cargo bikes are just what the name implies: bikes that can be used to transport goods or perform other tasks to reduce the number of cars on the road. e electric pedal-assist version boasts a feature that activates a small motor to give riders a boost; the technology is used by Citi Bike’s popular pedal-assist models.

DOT o cials made several notable tweaks to the draft electric cargo bike rules originally proposed last summer, owing to feedback the agency said it received during the public comment period.

Among the changes is upping a proposed cap on the length of cargo bikes from 10 feet to 16 feet. Transit o cials have also raised the maximum height for

Since joining TD Bank more than 20 years ago, Andrew Bregenzer has been an integral part of the team driving the bank’s rapid growth in New York. Now, as executive vice president and regional president of the New York Metro, Bregenzer leads 320 stores and 3,500 employees throughout the tri-state area. In his role, he oversees retail distribution, commercial lending, small-business banking and community engagement— the latter of which, he says, is critical to TD Bank’s continued growth.

cargo bikes from 6.5 feet to 7 feet.

e seemingly small but crucial changes ensure that popular cargo bike trailers, already in use by e-commerce giant Amazon and others, wouldn’t be eliminated.

Logistics industry executives had raised the alarm last year that more restrictive dimensions would e ectively ban commonly manufactured bike and trailer models from city streets.

Addressing safety concerns

e expanded dimensions, DOT said, “will enable small businesses and logistics companies to replace larger trucks and vans with cargo bicycle models successfully deployed in other cities and countries.”

To address safety concerns, the speed limit for electric cargo bikes has also been reduced from an initially proposed 20 mph to 15 mph — the limit was previously 12 mph. A new provision in the rules prohibits electric cargo bikes from being parked or left unattended on a sidewalk for any reason. Cargo bike riders must also ensure that their vehicles are not overloaded with goods and

that they consistently comply with bike manufacturer weight restrictions.

As part of the electric cargo bike rollout, DOT says in the coming months it will update its safety educational materials for cargo bike operations, drawing on feedback from both cargo bike operators and businesses.

Today at least 450 cargo bikes

cruise on city streets, according to DOT. But in 2022, riders of the city’s few hundred cargo bikes managed to make more than 130,000 trips delivering more than 5 million packages. DOT says it’s still crunching the latest 2023 numbers.

By 2026 the city aims to have upwards of 2,000 cargo bikes operating across the boroughs.

Sponsored Content

NOTABLE SPOTLIGHT with Andrew Bregenzer

Achieving growth through customer service and community impact

What have been the biggest keys to TD Bank’s growth in the New York region?

The foundation of TD’s growth has been taking a holistic approach to our business, knowing that we have a diverse customer base that requires options for how they bank and then meeting those expectations. It’s also investing in our communities in an intentional and purpose-driven way and working with the local organizations that serve them. We are constantly striving to innovate our products, services and capabilities as our customers’ needs evolve.

How would you describe the commercial lending environment in New York right now?

Cautious but optimistic. Certain industries have been challenged, and others have been strategically opportunistic. Some businesses are well-positioned because they’ve had strong balance sheets and liquidity to withstand the headwinds the past few years of supply chain issues and a tight labor market. Now, there’s opportunity for those organizations to expand organically or to hire.

Others are still in a “wait and see” mode as borrowing costs remain higher. The environment spans the

gamut of opportunity and prudence. There is still ample capital being deployed across all industry segments and companies of all sizes. Obviously, in the metropolitan NY area, real estate has been under some signi cant stress, especially of ce space.

Although TD is one of the 10 largest banks in the country and the 3rd largest in NYC, what makes it feel like a close-knit community bank?

TD is a top 10 bank and part of TD Bank Group, a Global Systemically Important Bank (GSIB), possessing one of the strongest balance sheets, top tier-one capital ratios and a diversi ed portfolio and customer base that enables us to lend to all types of customers from small businesses to corporations. But TD’s ability to connect to our communities, whether supporting a non-pro t, leading a volunteer event or just being visible through our store network is what resonates with our customers and keeps TD ingrained in our communities.

TD recently announced a Community Impact Plan. How will this impact New York?

We believe that all our customers and communities should have similar economic opportunities, no matter

their background. With our new Community Impact Plan, we’re taking a bold step to provide approximately $20 billion in lending, philanthropy, banking access and other support to bene t underserved communities across 15 states and D.C., including the richly diverse metro New York area. Speci cally, small businesses in New York can bene t from TD’s commitment to lend to more women and minority business owners and to businesses with less than $1 million in annual revenue.

Looking ahead, what are your goals for TD Bank’s New York region?

TD Bank has the top three market share within the New York metro region, and my goal is to continue to grow that share year over year—but in a very purposeful and intentional way. To do that, we must adapt, invest in technology and listen to our customers. We must continue to challenge ourselves to be the better bank. The environment is getting tougher for our customers—both consumers and business clients—and we need to support them through that journey.

Ydanis Rodriguez, commissioner of the city’s Transportation Department

A delivery worker operates a four-wheeled electric cargo bike. DEPARTMENT OF TRANSPORTATION

Brooklyn lm studio seeks to permanently shut down two city blocks to use as a backlot

Nick Garber

A politically connected Brooklyn lm studio wants to permanently close o two city blocks to use as an outdoor backlot, seeking to add an amenity that some of its competitors have built in recent years. But an elected o cial who could determine the proposal’s fate indicated to Crain's that he is skeptical.

Broadway Stages led an application last month to close o Monitor Street between Greenpoint and Norman avenues — a two-block stretch that runs through the middle of the company’s Greenpoint studio complex. e company wrote that the closure would provide “safe access” between its nearby soundstages and also allow for lming in the street.

Building a backlot that could host outdoor shoots would give Broadway Stages access to a relatively exclusive club among New York City’s lm studios. Kaufman Astoria Studios similarly “demapped” a Queens street in 2013, creating what was billed at the time as the rst outdoor lm lot in

that closure, however, criticizing the privatization of what had been a public street.

Broadway Stages declined to comment through a spokesman, Judah Engelmayer, who said the proposal is only in the “very early stages” of a long review process.

“Generally, I believe public property should be for the public good — not private interests.”

Lincoln Restler, New York City councilman

New York City. Steiner Studios also has backlots on its sprawling Brooklyn Navy Yard campus. O cials including Sen. Chuck Schumer celebrated Kaufman’s 2013 project as a milestone for the city’s growing lm industry. Some neighborhood residents opposed

Kaufman Astoria pays rent to the city’s Economic Development Corp. for use of its own closed-o street, in monthly installments that began at $140,000 in 2015 and were set to increase every ve years. Engelmayer did not comment on whether Broadway Stages expects to pay for its own demapped street.

Broadway Stages is a powerful player in North Brooklyn, where the studio has been based since its founding in 1983. Founder Tony Argento and his sister Gina, who serves as CEO, have contributed a combined $13,200 to Mayor Eric Adams’ mayoral campaigns, and other Broadway Stages employees have given Adams about $8,000.

Since last year, the Argentos have played a major role opposing the city’s e orts to redesign nearby McGuinness Boulevard to improve pedestrian safety, which the family argued would slow truck tra c and hamper their business. A campaign led by Broadway Stages succeeded in persuading Adams to scale back the plan, angering some local o cials.

Two of those o cials, reached for comment by Crain’s, expressed skepticism about the project on March 26. Councilman Lincoln Restler said he has heard nothing from Broadway Stages about its request — “which is highly unusual for a land use project,” Restler said in a statement.

“Generally, I believe public property should be for the public good — not private interests,” added Restler, who could in uence the proposal’s nal outcome.

Broadway Stages will need to move through the city’s sevenmonth public review process and

Tracks Raw Bar & Grill to open new location at Grand Central Madison

may need to win approval from the City Council in order to demap the stretch of Monitor Street. ( e council can also choose not to hold a vote on changes to the city map.)

Separate construction

“After pouring tens of thousands of dollars into opposing the safety redesign of McGuinness Boulevard just a few blocks away, it’s ironic that Broadway Stages now wants to fully privatize a city street,” said Assemblywoman Emily Gallagher, who has likewise been critical of Broadway Stages’ e orts to block the McGuinness redesign.

e closure would run slightly less than the full two blocks, stopping about 430 feet north of Norman Avenue, according to documents led with the City Planning Department. e studio would build four new gates along the closed streets — “e ectively creating a campus for Broadway Stages,” the application states.

As many as 1,250 employees are present at the studio complex during a typical weekday production and need to cross Monitor Street frequently to walk between soundstages — often needing to dodge cars speeding down the street after exiting the Long Island Expressway, according to the company.

Broadway Stages is separately constructing two new, six-story studio buildings along Monitor Street, which will span a combined 358,000 square feet.

New York City’s growing lm industry generates some $80 billion in economic output and is seen by local leaders as a key source of economic development. e state pours hundreds of millions of dollars annually into a tax credit meant to spur production — despite evidence that the program is a net cost for taxpayers — while city o cials last year gave the developer Vornado an enviable deal to build a lm studio on a Manhattan pier.

e rst restaurant to open its doors in Grand Central Madison will be a familiar one to seasoned Long Island Rail Road commuters: former Penn Station watering hole Tracks Raw Bar & Grill, which was located at the West Side transit hub for nearly two decades before the oyster bar was forced to relocate due to construction.

e Metropolitan Transportation Authority plans to ink a 10year lease with Tracks for roughly 2,700 square feet in Grand Central Madison, according to lease documents published on March 22. e bar restaurant is expected to open sometime this fall on the main concourse level between 47th and 48th streets near the LIRR ticket window, transit ocials said.

Tapping into nostalgia

MTA Chair and Chief Executive Janno Lieber said he’s excited for riders to tap into the nostalgia of their former haunt at a new, modern location.

“If you talk to Long Islanders, they’ll tell you about the great times they had lifting a glass with friends and co-workers after a long day or following a Rangers or Knicks victory,” Lieber said in a statement. “Now they can create new memories at our beautiful East Side terminal.”

e MTA’s board approved the lease on March 27. Under the agreement the rst year’s rent is set for $216,000, along with 12% of gross sales that exceed $2.5 million, documents show. Tracks will also invest roughly $1 million to out t the space.

MTA real estate o cials said in lease documents that they expect the eatery “will establish a new and dynamic gathering spot that contributes to the aesthetics of Grand Central Madison, helps to de ne the overall sense of place, and enlivens the customer experience.”

e restaurant’s owner Bruce Caul eld has long eyed space at

Grand Central Terminal and in years past has bid for locations including Vanderbilt Hall, which is currently home to City Winery. Caul eld said in an interview that the new Tracks location will rst launch a “pop-up bar” where it will sell beer and wine, along with a signature raw bar, while the eatery awaits a full liquor license.

“I said I could pivot on this fast and they said, ‘Well, Gov. Hochul wants this to happen, so I think you’ll have less red tape than you’re used to,’ ” he said.

Caul eld expects the Grand Central Madison location to operate from 11 a.m. to 11 p.m. with plenty of grab-and-go options, including sandwiches, cups of clam chowder and oyster stew, a “walkaway shrimp cocktail” and possibly even lobster rolls. e new location will feature two seating areas and a bar, all with roughly 60 seats, Caul eld said.

“We’re thinking of di erent things that you can grab and go onto the train with, which we never did in the old Penn,” said Cauleld. “I’m thinking of it as a twobeer-and-a-snack customer as opposed to Penn Station where you could have a full sit-down meal because of the Garden.”

Tracks’ proposal for the location was the sole response to a July 2023 request for proposals issued by the MTA for a full-service bar and café in Grand Central Madison, transit o cials said. e call was purposefully timed ahead of an April 2 solicitation for a master lease for all 25,000 square feet of retail space at Grand Central Madison, according to David Florio, the MTA’s chief real estate transactions and operations ocer.

“We wanted that in advance of the master tenant because there’s still some construction going on within the retail spaces themselves, but the space for the barcafé, that’s pretty much ready now, so why wait?” David Florio said in an interview. “Let’s get rolling on that and that can only help attract a master tenant opportunity.”

Caroline Spivack

A rendering of the Tracks Raw Bar & Grill location coming to Grand Central Madison this fall. | MTA/TRACKS RAW BAR & GRILL

Broadway Stages wants to permanently “demap” about two blocks of Monitor Street, between Greenpoint Avenue and Norman Avenue, in the middle of its Greenpoint studio complex. GOOGLE MAPS

Meta-linked trust acquires Midtown penthouse for $50M

Julianne Cuba and C. J. Hughes

A trust registered to a tax consultant who has purchased real estate on behalf of some highranking executives at Facebook’s parent company is back at it at a luxury condo building on Fifth Avenue.

According to a deed that appeared in city records March 25, Wyoming-based limited liability company A7P Trust purchased the 6,296-square-foot four-bedroom unit on the 23rd floor of the Aman New York con -

ose ties seem to converge on nancial executive Tom van Loben Sels, who is both the director of A7P and a partner at Apercen Partners, a Palo Alto-based tax consulting rm that frequently handles real estate transactions on behalf of Facebook and Meta’s top brass, including Facebook founder and Meta chairman Mark Zuckerberg.

Indeed, Apercen was involved in the 2016 purchase of multiple townhouses on West 10th Street in Greenwich Village that reportedly later became the home of Facebook’s founding president, Sean Parker.

The condo features sweeping views of both the skyline and Central Park, and boasts a home theater, private elevator and three replaces.

do for $50.6 million.

Nearly everyone who purchases an apartment at the opulent building, located at 730 Fifth Ave., remains anonymous behind the screen of shell companies, and this one is no different, save for the trust’s longdocumented ties to Silicon Valley tech giant Meta.

Other properties in van Loben Sels’ orbit include the penthouse at 152 Elizabeth St., which sold in 2018 for $30 million and was later transferred to A7P. Former Facebook Vice President Matt Cohler apparently lived there.

Similarly, van Loben Sels signed the deed for 157 W. 12th St., a townhouse he acquired in 2015 for $22.3 million, according to the city register. After, it apparently became the home of Facebook co-founder Chris Hughes, who sold the property at a $3 million loss, for $19.5 mil -

lion, in 2020.

A7P is also listed as an owner of 118 W. 12th St., a Greenwich Village townhouse that sold at the end of 2023 for $17.9 million, the register shows.

Van Loben Sels, who declined to comment, is also listed as the representative on tax documents for Zuckerberg and his wife Priscilla Chan’s nonprofit the Openness Foundation. Meta and Facebook also declined to comment.

Whoever purchased the Aman condo, which features sweeping views of both the skyline and Central Park, and boasts a home theater, private elevator and three replaces, picked up the last remaining full- oor penthouse in the residential portion of a complex developed by Vlad Doronin, which also contains an 83-room hotel. e condo portion of the Billionaires Row residence, which is at the high-pro le corner of West 57th Street, is now complete-

ly sold out, according to its representatives.

The same reps declined to comment on the buyer’s identity but would say they are a “repeat” owner across the portfolio.

“Our owners feel a deep connection to the Aman brand’s DNA while exhibiting a collector’s mindset, having acquired multiple Aman private residences across the globe,” said Amie Buchanan, the global director of residential sales for Aman.

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NewYorkarea includesNewYorkCityandNassau,SuffolkandWestchestercountiesinNewYork,andBergen,Essex,HudsonandUnioncountiesinNewJersey.Allcompanieslistedwereheadquartered intheNewYorkareaandpubliclytradedasofApril23,2023,andtheyhadreleasedtheirmostrecentannualearningsdatabythatday.All nancial guresarefromthemostrecent10-Ksornewswire dataavailableasofApril23.Themostrecentdataforcompanieswitha scalyearendinginamonthfromMarchthroughDecemberarefor2022,andthemostrecentdataforcompanieswitha scal year ending in January or February are for 2023. Rankings and percentage changes are based on unrounded numbers.

BANKING

From Page 1

much more heavily exposed relative to their modest size. e $14 billion-in-assets Dime Community Bank, for instance, carries $7 billion worth of commercial real estate loans on its books. But its portfolio is more concentrated than any other bank with at least $5 billion in CRE loans, Morgan Stanley said, with those loans equaling 662% of the bank’s Tier 1 capital — a gure closely watched by regulators. at means the dollar amount of CRE loans on Long Island-based Dime’s books is nearly seven times larger than the capital held by the bank, potentially leaving little cushion to absorb losses should they materialize.

Loan-to-capital ratio

Several other New York-area lenders are similarly exposed. e CRE loan-to-capital ratio at Long Island-based Flushing Bank is 653%, 590% at New Jerseybased Valley National Bank, and 587% at New Jersey-based Con-

BY THE NUMBERS 4.9%

The delinquency rate will reach 4.9% next year for U.S of ce loans packaged into securities and sold to investors, up from 2.3% in February.

e biggest lenders tend to have lower CRE exposures because they serve a larger and more diverse customer base. JPMorgan’s $140 billion CRE loan book is big by any measure, but CRE loans amount to 64% of the giant bank’s capital. At Bank of America, it’s 42%, and Citigroup 18%.

Smaller banks that responded to inquiries from Crain’s insisted they are well-positioned to handle any di culties and have mostly avoided the troubled o ce market.

Dime’s commercial real estate portfolio is about half apartment loans, which are much less risky than the Manhattan o ce loans that account for only $200 million of the portfolio. e bank has no past-due or non-performing o ce loans.

“We don’t even have one 30-day delinquency,” Chief Executive Stuart Lubow told Crain’s. “We’ve always been a very conservative lender.”

Cash ows at of ce buildings are under pressure and loans written in the days of ultra-low interest rates are coming due.

nectOne Bank. It’s 545% at Long Island-based New York Community Bancorp, which required a $1 billion infusion last month after concerns grew over its CRE portfolio. ose exposures are large compared to the median gure for all banks of 215%, Morgan Stanley said.

Valley National says much the same thing.

“We remain comfortable with our granular commercial real estate portfolio which is welldiversi ed by property type and across our geographic footprint,” the New Jersey-based lender with $60 billion in assets said in a statement. “Nearly 50% of our commercial real estate loans are outside of New Jersey and New York.”

Flushing Bank said more than a third of its CRE exposure is to medical buildings and that Man-

hattan o ce buildings account for 0.6% of net loans. Neither NYCB nor ConnectOne returned a request for comment.

Breathing space

Many lenders have been reappraising properties and restructuring loans to give borrowers breathing space. at has helped keep CRE losses low so far, but pressure is mounting. e percentage of CRE loans that required an extension or some other modication steadily increased in 2023, ending at 1.3% of such loans after starting at just 0.1%, according to Evercore ISI.

But a deluge may be building. With cash ows at o ce buildings under pressure and loans written

in the days of ultra-low interest rates coming due, Fitch forecasts the delinquency rate will reach 4.9% next year for U.S o ce loans packaged into securities and sold to investors, up from 2.3% in February. e ratings rm said three out of four of these loans maturing in 2024 are likely to default.

Bleak outlooks such as these lead investors to conclude smaller banks will eventually be stuck with losses they can ill-a ord. Shares in Dime, Valley National, and Flushing Bank all trade about 40% lower than before the crisis last year that wrecked three regional banks. In contrast, the Keefe Bruyette & Woods Bank Index, which tracks larger lenders, has regained almost all its lost ground.

Dime’s Lubow said his bank is doing what it can to show investors it avoided the land mines.

“Shorter-term investors look at CRE because it’s in the headlines,” he said. “We just stick to what we do, make good loans, build our balance sheet.”

But proving doubters wrong could take a long time. Unlike past crises, such as in 2008, it will take years for the di culties in CRE to play themselves out.

“We expect CRE credit quality to deteriorate from here, at an accelerating rate for the next few quarters,” Morgan Stanley wrote. “We expect losses [to] eventually plateau at a higher level for the [banking] industry for multiple years as o ce and other CRE loans take time to work through.”

Source:

by Amanda Glodowski.

A Valley Bank branch in New York City | BUCK ENNIS

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Albany who are desperate for a deal — but, at the same time, unions’ growing power on housing has alarmed some policy experts, who fear that few apartments will get built if they are tied to high wages for workers.

“You can’t go out and say this stu without getting your head chopped o ,” said one housing expert, who requested anonymity to discuss the politically fraught topic. “Any of the solutions that push up the cost of building end up being self-defeating if your goal is to address both supply and a ordability.”

Labor has not always held such a kingmaking role on housing. Its in uence has grown, paradoxically, even as the rate of union labor membership has dropped steeply in New York.

Certain labor unions have much to gain from a housing deal — like 32BJ, which has long been involved in housing policy because it represents building workers, and the group of unions known as the building trades, which represent construction workers and are seeking a wage guarantee as part of the new tax break. But others involved in this year’s push are newer to the talks, like the Hotel and Gaming Trades Council and the city workers’ union DC37.

Unions like those have gotten involved for the simple reason that their members can no longer a ord to live in New York City because of the housing crisis, said Bhav Tibrewal, political director of the in uential hotel workers’ union. eir message to lawmakers across the ideological spectrum has been simple: “Don’t be the reason why the deal doesn’t come together,” Tibrewal said.

Prevailing-wage issue

State government is controlled by Democrats, and few in deepblue New York are willing to say a cross word publicly about labor unions, which also have the power to make or break political cam-

paigns. But multiple policy experts told Crain’s they worry about labor’s involvement if it means that a new replacement for the 421-a tax break is attached to so-called prevailing wages for unionized construction workers.

" ere are these questions of, where is policy directing money?” one housing expert said. “It's directing it away from low-income people and toward trades that are actually paid solid, middle-class wages."

she was hopeful a wide-ranging housing deal could be reached, but it remained far from clear what the terms of a new tax break would be.

Labor’s newfound in uence on housing owes much to the unions’ own decision to take up the issue. But Krueger pointed to an additional factor: Democrats’ 2018 takeover of the state Senate, which guaranteed more input from labor after decades during which business-friendly Republicans had more power.

“I don't think real estate thinks they can be that e ective with us, unless they're reasonable,” Krueger said. “And I think labor has an easier path to work with the Democratic Party than the Republican Party.”

very little, as it turns out.”

Closed-door setup

“We’re talking, to a certain extent, about a constructionunion jobs program that might make a few more places for people to live.”

Ken Girardin, research director at the conservative Empire Center think tank

Research by the Independent Budget O ce has found that prevailing-wage policies increase construction costs in the city by 23%. A 2019 study by the nonpro t Citizens Housing and Planning Council found that the construction workers who bene t from prevailing wages tend to have much higher incomes than typical city workers, such as the lowincome tenants that the a ordable housing is being built for.

Unions’ role in housing debates in Albany became more formalized starting in 2016, when then-Gov. Andrew Cuomo left it to labor leaders and developers — the latter represented by the Real Estate Board of New York — to come up with a new version of 421-a. e program they created was allowed to lapse in 2022, amid general agreement that it failed to produce enough a ordable housing.

“Real estate knew what they wanted: as large a tax credit as they could possibly get. Labor knew what they wanted: as much wages as they could possibly get,” recalled State Sen. Liz Krueger. “But nobody actually asked the question, how much affordable housing are we supposed to get for all this? Very,

Creating a new tax break is seen as crucial for stepping up the pace of housing construction as the state faces a severe shortage of homes. But to some observers, the current closed-door setup is bad governance, allowing well-heeled developers and powerful unions to decide the future of housing in New York without any formal seat at the table for tenants, policy experts or city o cials.

“We’re not talking about housing,” said Ken Girardin, research director at the conservative Empire Center think tank. “We’re talking, to a certain extent, about a construction-union jobs program that might make a few more places for people to live.”

But Hochul has only leaned more heavily this year on Cuomo’s hands-o model. Her budget proposal leaves the details of 421-a up to the “largest trade association of residential real estate developers,” referring to REBNY, and “the largest trade labor association representing building and construction workers," referring to the Building and Construction Trades Council.

In the ensuing weeks, though, talks seemed to stagnate. Labor unions last month rejected what REBNY called its nal o er, which would have set average wages at $72.45 per hour for workers on large projects below 96th Street in Manhattan and $56 per hour on similar projects in parts of Brooklyn and Queens, and created a phased-in structure starting at $35 for any project citywide with 100 or more units. (REBNY said the o er marked an increase from current wages, but unions call the claim disingenuous, since the “average” wage structure allows some workers to be paid well below the cited numbers.)

REBNY said it had negotiated “in good faith,” but eight building trade unions later called on the state Legislature to step in, saying that the real estate industry was offering only “scraps.” On April 4, Gov. Kathy Hochul told Crain’s that

Many lawmakers see merit in using the power of government to boost well-paying union jobs, and union labor is generally seen as safer and more reliable than nonunion. Unions, for their part, disagree with the notion that high wages will sti e construction. Kevin Elkins, political director for the New York City District Council of Carpenters, pointed to a recent announcement that a group of construction unions were contributing millions of dollars from their pension funds toward a new $400 million workforce housing initiative.

“Pension funds cannot make an investment in something like that unless there are guaranteed rates of return, enough to warrant the investment,” Elkins said. “How can, magically, union pension funds have the ability to build with union wages and earn signi cant pro ts but some of the smartest minds in real estate can’t seem to crack the code?”

New York’s labor unions are not a monolith. e carpenters, for example, have been known to stake out more aggressive positions than more institutional players like the Building and Construction Trades Council.

Such splits within the movement have led to breakthroughs elsewhere. California, which is seen as a model for how labor can push successfully for housing reforms, has managed to pass a wave of pro-development laws since 2022 thanks partly to a group of dissenting unions that have backed the bills even when fellow unions did not.

No doubt, labor’s growing interest in in uencing the housing debate has to do with concern for their own future. Union membership in New York state has declined from about 35% in the 1970s to 21% as of 2022. Nonunion labor has grown its share of the city’s construction market from about 10% of the industry to 40% today, while fully union projects have dropped from about 85% to 60% by some estimates, due to their higher costs.

Combined with New York’s housing crunch, which is forcing more working-class residents to leave the city altogether, the result is a serious threat to unions’ membership.

“More and more of our members are moving outside of the city,” said Tolliver, of 32BJ. “ at’s not good for us.”

For the latest news on the state budget, visit crainsnewyork.com.

Candis Tolliver (second from left) is vice president and political director for the powerful service workers’ union 32BJ SEIU. | BUCK ENNIS

Negotiations over a new housing tax break have largely been left to the Real Estate Board of New York, led by James Whelan (left) and the Building and Construction Trades Council, led by Gary LaBarbera (right). | BUCK ENNIS; KEVIN P. COUGHLIN/OFFICE OF GOVERNOR KATHY HOCHUL

Husband and wife nd success with focus on organic, fair-trade bedding

Since Boll & Branch launched in 2014, the company has opened six stores and has partnerships with Bloomingdale’s and Nordstrom

Abig idea wormed its way into Scott Tannen’s mind back in 2012, when he and his wife, Missy, began looking for new bedsheets. He realized he didn’t know which brand to buy — or what constituted good quality.

“Why do we have this category everybody plays in and nobody really knows anything about?” he said. “ at was just where my mind was going when I transitioned from, ‘I'm going to buy sheets for me’ to ‘I wonder if

“Why do we have this category everybody plays in and nobody really knows anything about?”

Scott Tannen

there's an opportunity here?’ ”

Tannen, an entrepreneur at heart with a marketing and consulting background, began immersing himself in the world of bedding. e couple wound up purchasing “literally everything,” from cheap sheets at Target and Walmart to boutique brands sold at department stores. He started

thinking of all the variables in sheet production that could be improved and meeting with textile importers to get answers about where cotton comes from and how bedding could be made better. He always left meetings unsatis ed. So in 2014 the Tannens started their own bedding company: Boll & Branch. e company, which got its name from the parts of a cotton plant that support its bers, strives to answer all the questions Scott Tannen had about cotton production by building an ethical process from the beginning. Most bedding manufacturers begin their work with fabrics that have already been picked, spun and dyed and don’t think about ethics, he said.

But Boll & Branch works with small partners in cities throughout India and the U.S. to farm organic cotton, spin and weave the raw material into fabric, and dye it without using chemicals or toxins before it’s cut into sheets and blankets. Everything is kept in-house, and the process is Fair Trade-certi ed to ensure all people involved in the supply chain are paid a living wage, he said.

By | Jacqueline Neber

e products quickly took o , rst sold on the company’s website and taking in $1.7 million in its rst year of business. In a decade the company has opened six stores and partners with Bloomingdale’s and Nordstrom.

“We ended up doing $1.7 million in sales in our rst year,” he said.

Supply chain investments

Missy Tannen, the company’s chief product o cer, wants the rm’s sheets to meet one criterion: to be softer after 20 washes than when a customer bought them. In the beginning, she washed fabric samples 20 times herself to see whether they stood up.

e result is bedding that isn’t cheap: Cotton sheet sets start at $229 and go up to $329 for linen. Quilt sets begin at $339. e Tannens say the price is worth it because customers are getting a durable product that comes from sustainable and ethical practices.

ose practices will continue to be the focal point for the company going forward, Scott Tannen told Crain’s, as it looks to open another six stores this year and launch new designs. Boll & Branch is now able to invest in

FOCAL POINTS

Company Boll & Branch

Founded 2014

Full-time employees 167

Locations The company’s corporate headquarters are in Summit, New Jersey. It also operates a Midtown of ce and six stores between New Jersey, Connecticut, Florida and Texas.

Leadership Husband-and-wife duo Scott and Missy Tannen are co-founders. Scott is the chief executive, and Missy is the chief product of cer. David Reid is the company’s chief operating and nancial of cer. Katia Unlu is the brand’s chief commercial of cer.

Product mix

The company sells sheet sets as well as pillows, blankets and mattresses. Sheet sets start at just under $200 and blankets start at $199. Mattresses begin at $2,400.

Funding The company has raised $114 million total.

Revenue More than $200 million annually.

its supply chain partners, with about $1.6 million having gone to Fair Trade contributions so far. e investments help businesses such as the woman-owned Paramount Textiles in India create more jobs.

“I think that's a real big point of di erence at Boll & Branch,” Missy Tannen said. “While, yes, we have high expectations of ourselves and our targets and goals and nancial outcomes that we are very well aware of … we do it with kindness, and do it with that spirit of partnership.”

Missy and Scott Tannen | BUCK ENNIS