GAMING the SYSTEM Landlords Are Exploiting a Key Loophole to Raise Rents on Thousands of Apartments by DANIEL GEIGER
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ASKED & ANSWERED Tina Brown on hosting “Woodstock for women” PAGE 11 ROBO GARAGES The future of parking CRAINSNEWYORK.COM | APRIL 8, 2019 | $3.00 PAGE 3 SPECIAL REPORT GAMING THE SYSTEM Landlords are exploiting a key loophole to raise rents on thousands of apartments BY DANIEL GEIGER n the fall of 2013, when apartment 1E at 171 W. 81st St. was vacated, the owner did what landlords have done with tens of thousands of other rent-regulated units in the city. Stellar Management claimed it had spent a bundle Ion renovations, which—combined with the 20% rent increase permitted when a tenant leaves—allowed it to push the $647 regulat- ed monthly rent above $2,500—to the threshold at the time to make it a BUCK ENNIS market-rate unit. A few months later Stellar See RENT REGS on page 20 HARRY PULVER HARRY FINANCE Chief Financial O cer John Weisenseel said. Mutual funds pivot to VC and PE, PDQ It’s a sign of the times. Although the stock market has gone pretty much straight up Even biggest asset managers are making substantial changes since the nancial crisis, the fortunes of Wall Street’s asset-management rms have gone in the opposite direction. Investors are pour- BY AARON ELSTEIN as investors continued to yank money out of e rm managed to secure temporary o ce ing money into low-fee passively managed mutual funds that try to beat the market, a space, so the majority of employees slated for index funds and have little patience for high- BUCK ENNIS llianceBernstein’s February confer- trend that last year prompted the Manhattan transfer will be moved before the permanent er-fee funds that aim to beat the market but ence call to discuss 2018 results was investment manager to cut costs by moving Nashville headquarters is ready next year. typically don’t. pretty somber. Assets under manage- its corporate headquarters to Tennessee. “Our relocation is going very well and pro- Ament fell by nearly $40 billion, to $516 billion, On that front, at least, there was good news: ceeding faster than we originally expected,” See MUTUAL on page 17 VOL. 35, NO. 14 © 2019 CRAIN COMMUNICATIONS INC. GOTHAM GIGS INFRASTRUCTURE Helping A tree grows … young execs over the BQE? PAGE 3 NEWSPAPER give back PAGE 23 P001_CN_20190408.indd 1 4/5/19 7:53 PM IN CASE YOU MISSED IT ity Leader Andrea A bridge too far? Outside the box Cuomo Stewart-Cousins to A $2 MTA toll increase makes the Former Pandora CEO Roger Lynch nominate him to the Verrazzano-Narrows Bridge the is set to become chief of Condé still fuming Public Authorities most expensive in the U.S. e $19 Nast’s domestic and international Control Board, where one-way non-E-ZPass price sur- operations April 22. He is replac- over HQ2 he would have had the passes the Chesapeake Bay Bridge- ing Bob Sauerberg, who has been power to block the Tunnel’s by a buck. e E-ZPass with the company for 18 years. GOV. ANDREW CUOMO says the col- project. Cuomo previ- rate is $12.24. Staten Islanders with lapse of Amazon’s Long Island City ously called that “a E-ZPass still pay $5.50. ‘Cause I’m the tax man’ headquarters has the private sector form of government Come June, Albany will require all scared of entering into economic- corruption.” Empire in waiting out-of-state online retailers to hit development deals with New York. His response was to For the fth time, the grand open- New Yorkers with the state sales “It cost us 25,000 jobs, and it cost update the PACB law ing of the Empire Outlets mall on tax. Major merchants such as us credibility,” Cuomo told a gath- to allow the chief Staten Island has been pushed Amazon have been applying the ering of the Association for a Better executive to remove back, to May 15, giving retailers levy since 2008. e projected rev- New York, a nonpro t business any member who another month to prepare. enue is $280 million annually. advocacy group. “I can’t tell you blocks a state initiative how many businesses that I’m try- for non nancial rea- Booking tables Cash and carry ing to bring to New York now say to sons—a power grab by Zagat’s restaurant guide will be With the statewide ban on plastic me, ‘Am I going to get Amazoned?’” the governor from the THE GOVERNOR back in book form in the fall, bags slated for next year, six mem- A question from an audience Legislature. blames local Democrats according to new owner e Infat- bers of the City Council plan to member about the possibility of Cuomo’s rant left for wrecking Amazon’s uation. Last year the restaurant- introduce legislation for a 5-cent “coalition building” around future unanswered what Long Island City plans. recommendation website bought fee on paper bags. For each bag, 3 projects triggered the extended rant JOHN KKUCZALA steps he plans to take Zagat from Google, which discon- cents would go to the state’s Envi- from the governor, who lashed out to allay the alleged tinued the print version in 2016. ronmental Protection Fund. at a pair of fellow Democrats with- state—instead go toward schools fear of being “Amazoned,” and he out mentioning their names. and subways. “It was just knee-jerk dismissed the entire notion of Worse for where Push pause First he lambasted Rep. Alexan- politics, and ‘Amazon is rich’ and future coalition building. “You Tommy Hil ger closed its 22,000- e Union Square area’s Irving dria Ocasio-Cortez, who once sug- ‘We’re anti-corporate’ and ‘We’re can’t reason with people who don’t square-foot Fifth Avenue agship, Plaza concert hall is set to close gested that the $3 billion incentive anti–rich people,’” Cuomo said. want to reason,” he said. joining the ranks of Lord & Taylor in July for extensive renovations. package—which consisted of e governor reserved special ire As ever, the only solution Cuomo and Henri Bendel in retreating Owner Live Nation plans to reopen roughly $2.5 billion in long-term tax for state Sen. Michael Gianaris, o ered was to increase his power. from the corridor’s high rents. e the venue early next year. relief from the city and who persuaded Democratic Major- — Will Bredderman closure a ects 79 employees. — Chris Kobiella Vol. 35, No. 14, April 8, 2019—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues Jan. 1, June 25, July 9, July 23, Aug. 6, Aug. 20 and Dec. 24, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing of ces. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2019 by Crain Communications Inc. All rights reserved. One of the highest rated kidney transplant programs— Now imagine what else we can do. North Shore University Hospital has one of the best kidney transplant programs in the state—and it shows. We’re one of only three hospitals to achieve a tier-ve rating*—the highest possible—for kidney transplant outcomes by the Scientic Registry of Transplant Recipients (SRTR). It’s no wonder more patients choose us than any other hospital on Long Island.+ Explore the possibilities at Northwell.edu/Imagination * Based on the Scientic Registry of Transplant Recipients for the period beginning in July 2017, ending June 2018, and reported January 2019. +Based on NYS SPARCS data from 2015 to Q2 2017 Filename: w32702_NSUH Bridge Campaign_Kidney Ad_HP_10.25x7 2 | CRAIN’S NEW YORK BUSINESS | APRIL 8, 2019 Size: 10.25” x 7”, HP, PC Publication: Crains P002_CN_20190408.indd 2 4/5/19 7:22 PM TECHNOLOGY GOLDBERG’S U-Tron automated garages can hold more than THE RISE OF THE 300 cars. ROBO GARAGE They save space and cost, and someday they’ll house self-driving cars BY MATTHEW FLAMM BUCK ENNIS n 2006 Yair Goldberg was sure automat- e systems o ered convenience to custom- has installed seven robotic garages across the ground to development or else struggling ed parking was about to take o . As an ers and let developers build garages that country and has orders for more than 20 oth- with rising labor costs and reduced business, executive at Israeli industrial-automa- could accommodate twice as many parking ers, including 15 in the metropolitan area. as visitors leave their car at home rather than tion rm Unitronics, he had just led its spots as a conventional arrangement in the e automated system, which moves a car grapple with congestion. rst project in the United States, a retro- same footprint. on a palette like a package in a warehouse, is For residential developers, there’s the ques- t of a troubled robotic garage in Hoboken. After the nancial crisis hit, Unitronics did becoming a prized amenity for builders at a tion of whether millennial residents will need I e technology had gained notoriety for not sign contracts for new systems until 2012. time when urban garages face uncertain parking, as the growth of ride-hail services snafus including cars being dropped o plat- Today, operating under the brand name prospects and a limited shelf life.